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Delivering Value: "Lifetime” Metrics Approach 

Delivering Value: "Lifetime” Metrics Approach . Sandeep Khanna Based on presenter’s article (Did Someone Say “Value?”: Delivering Enterprise Value the Metrics Way) – published in the July edition of ISACA’s “COBIT Today.”. About Speaker. Sandeep Khanna, CGEIT, PMP, ITIL-F, TOGAF.

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Delivering Value: "Lifetime” Metrics Approach 

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  1. Delivering Value: "Lifetime” Metrics Approach  Sandeep Khanna Based on presenter’s article (Did Someone Say “Value?”: Delivering Enterprise Value the Metrics Way) – published in the July edition of ISACA’s “COBIT Today.”

  2. About Speaker Sandeep Khanna, CGEIT, PMP, ITIL-F, TOGAF • IT Governance Professional • Speaker at PMI NA Leadership Congress & ISACA Washington DC Chapter • PMI: • Conceptualized & led first Int’l Metrics Congress (PMI Metrics SIG) • Served on PMI Board ERC • Leadership Institute Masters Class Graduate • PMI Distinguished Project Award Jury • PMP & PgMP Item Developer • Portfolio Management Standard Adjudicator • ISACA: • CGEIT Standard Setting Judge • Member, CGEIT Practice Analysis Task Force

  3. Value • The total life-cycle benefits net of related costs, adjusted for risk and for time value of money. • Strategic view of value: • Do organizations have a full grasp of the value of its resources: people, machinery incl. computers, other assets (real-estate etc.)?

  4. “Lifetime” Metrics Approach

  5. Activity 1 What’s Value for you/your organization? What can be done to ensure “Value Delivery.”

  6. Value Delivery Paradigm (VDP)

  7. Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we doing doing doing doing doing doing getting getting getting getting getting getting getting getting getting the right the right the right the right the right the right the the the the the the the the the things? things? things? things? things? things? benefits? benefits? benefits? benefits? benefits? benefits? benefits? benefits? benefits? Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we doing them doing them doing them doing them doing them doing them getting getting getting getting getting getting the right the right the right the right the right the right them done them done them done them done them done them done way? way? way? way? way? way? well? well? well? well? well? well? VDP - The strategic question Is the investment: In line with our vision? Consistent with our business principles? Contributing to our strategic objectives? Providing optimal value, at affordable cost, at an acceptable level of risk?

  8. Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we doing doing doing doing doing doing getting getting getting getting getting getting getting getting getting the right the right the right the right the right the right the the the the the the the the the things? things? things? things? things? things? benefits? benefits? benefits? benefits? benefits? benefits? benefits? benefits? benefits? Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we doing them doing them doing them doing them doing them doing them getting getting getting getting getting getting the right the right the right the right the right the right them done them done them done them done them done them done way? way? way? way? way? way? well? well? well? well? well? well? VDP- The architectural question Is the investment: In line with our architecture? Consistent with our architectural principles? Contributing to the population of our architecture? In line with other initiatives?

  9. Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we doing doing doing doing doing doing getting getting getting getting getting getting getting getting getting the right the right the right the right the right the right the the the the the the the the the things? things? things? things? things? things? benefits? benefits? benefits? benefits? benefits? benefits? benefits? benefits? benefits? Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we doing them doing them doing them doing them doing them doing them getting getting getting getting getting getting the right the right the right the right the right the right them done them done them done them done them done them done way? way? way? way? way? way? well? well? well? well? well? well? VDP - The delivery question Do we have: • Effective and disciplined management, delivery and change management processes? • Competent and available technical and business resources to deliver: • The required capabilities, • The organizational changes required to leverage the capabilities?

  10. Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we doing doing doing doing doing doing getting getting getting getting getting getting getting getting getting the right the right the right the right the right the right the the the the the the the the the things? things? things? things? things? things? benefits? benefits? benefits? benefits? benefits? benefits? benefits? benefits? benefits? Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we Are we doing them doing them doing them doing them doing them doing them getting getting getting getting getting getting the right the right the right the right the right the right them done them done them done them done them done them done way? way? way? way? way? way? well? well? well? well? well? well? VDP- The value question Do we have: A clear and shared understanding of the expected benefits? Clear accountability for realizing the benefits? Relevant metrics? An effective benefits realization process over the full economic life cycle of investment?

  11. Metrics

  12. Project (and Program) Value • State of Industry (Source: Gartner) : • 50% to 60% ERP projects are considered compromised. • 50+% PMOs fail on first try. • 90% virtual world projects fail within 18 months. • Only 52% of IT organizations have standards for project performance. • Only 73% of IT organizations have a prelaunch approval process. • Only 60% of IT organizations have their prelaunch approval process feed into a formal reporting/monitoring/escalation process during the project's life.

  13. Poll - Project Approval Business case used for all approvals? Stage gate approval or full approval? Is business case tracked thru out the life cycle?

  14. Activity 2 What Metrics would you adopt to ensure “Value Delivery” in your organization?

  15. “Lifetime” Metrics Approach

  16. Project (and Program) Value • Project manager must clearly understand “value” expectations • Before embarking on a project, • Throughout the life of the project. • Values can, and typically does, change over time • Market moves on you, • Organizational focus changes, • Overall costs become prohibitive.

  17. Elevate the Game: Value Delivery • Plan Governance • Develop the framework. • Define Success: Realizing intended benefits ? • Concept-to-retirement view: • Pre-project. • Project delivery. • Operations. • Dismanting/Closure (e.g., Nuclear power plant & its waste).

  18. Metrics • Roadblocks: • Walk the talk? • Lifecycle approach to metrics? • Implementation: • New org – build ground up. • Existing org – purely change management effort: • Evolution, • Revolution: Must address a pain point. • Value & Metrics Interconnect: • Measuring org assets for their lifetime value within the organizational context.

  19. Starter Pack: Top 5 implementation steps Commitment from leadership. Identification of key ”lifetime” metrics. Recognizing and following transparent lifecycle metrics approach. Maintain a fully reconciled inventory and cost of all organizational assets. Retire the cost center mindset. Strong metrics governance forms the backbone of “value delivery” framework.

  20. Summary • Organizational assets and activities must be viewed from lifetime perspective. • Metrics must clearly articulate the facts: • Outcome results, • Leading indicators. • Lifetime metrics have the potential to deliver breakthrough results.

  21. References ISACA, Glossary, “Value,” www.isaca.org/glossary ITGI, Val IT Framework 2.0, USA, 2008. The Val IT reference is based on the Four Ares as described by John Thorp in his book, The Information Paradox—Realizing the Business Benefits of Information Technology, written jointly with Fujitsu, first published in 1998 and revised in 2003, McGraw-Hill, Canada.

  22. Appendix Key Considerations

  23. Value Delivery: Key Considerations How are projects selected for implementation? • Is a portfolio approach followed? • What is the selection criteria? • Do the projects have incremental value delivery or big-bang value delivery implementations? How is accuracy of the costs and benefits ensured? • What is the confidence level of all the assumptions? • Are the assumptions validated along the way?

  24. Value Delivery: Key Considerations (contd..) What are the top metrics for the organization at each layer of the chain? • Does someone own metrics life-cycle management, i.e., introduction and retirement of metrics? • Is a documented definition of each metric and its usage available? • How frequently is it reviewed? Are the internal facing and external facing metrics in balance? Is the information available in real time, via a drill-down dashboard?

  25. Value Delivery: Key Considerations (contd…) How is value fraud prevented? • How is quality of data life cycle ensured? • If fraud is found, how is it handled? • Are there built-in mechanisms to prevent value leak? For are issues handled? • Is the true root cause identified and fixed? • Mature processes to address these issues?

  26. Value Delivery: Key Considerations (contd…) Project: 360-Degree View Is a 360-degree view available? Do all projects have a business case? Is the value tracked throughout the life cycle? Are there any stage-gate reviews? What happens if the results (or future forecasts) happen to diverge significantly from the plans? Organizational Assets: 360-Degree View Is a 360-degree view of organizational resources available? Are they effectively utilized to deliver positive outcomes? Is everyone in the organization on the same bus? Does a shared vision exist?

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