BOWERS_EngageTheBusiness_SPSat_STL_2013

Report
sharepointsaturdaystl.com
Matthew Bowers
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http://spsaturday.cloudapp.net
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| SharePoint Saturday St. Louis 2014
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http://spsaturday.cloudapp.net
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| SharePoint Saturday St. Louis 2014
Bio
• Matthew Bowers – [email protected]
– Covenant Technology Partners
– Partner
– Infrastructure Architect (SharePoint and CRM)
– Project Manager
– Practice Manager (CRM and Cloud)
– 12 years CIO / CTO experience
– 21 plus years in corporate IT
Engage the Business!
Why Does SharePoint Matter?
• Does SharePoint Matter?
SharePoint Doesn’t Matter!
• Business Matters!
• Why is a business in … well… business?
• What is the relationship between
– Risk
– Value
• Will SharePoint increase value and decrease
risk?
Ask Yourself
Some thought provoking questions
• Is this an IT or a business project?
• Who “owns” the project?
• Who “owns” the processes?
• Who will “own” the environment when
complete?
• How will management of the environment
take place?
Other questions…
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How will you measure success of the project?
What are your KPIs for success?
Why do projects fail?
Why SharePoint?
How Will SharePoint Support The
Business?
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People
Devices
Social
Cloud?
Control? Governance? Security?
Other areas?
What are people doing today, that they were
not doing in 2006? 2007?
Consumerization of IT
• What is the role of this trend in SharePoint
adoption?
• Who drives?
• What drives your business?
• What drives requirements?
• Understanding what has made this important
• Understanding why it is relevant
Why Does SharePoint Fail
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Politics
Not knowing what SharePoint is
Lack of information and knowledge management skills
Vision, the business case, and measuring success
Executive support
User adoption
Individual choices derail SharePoint initiatives
Information Management
Defining requirements
Technical skills
Why Does SharePoint Fail
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No Vision Statement
False expectations
Showcasing features instead of building solutions
Lack of proper planning
Lack of proper staffing
Undefined success measurement
No adequate support
Ambiguous requirements
Poor stakeholder involvement
Poor communication
Lack of governance
Why Does SharePoint Fail
Almost ALL of the above go back to 2 broad
categories
• Business engagement
• User adoption
Failed Approaches
• Field of Dreams
• Network Nazi
• Usually when IT is driving!
How To Engage the Business
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Proper project planning
Requirements gathering
Business analysis and process mapping
Steering committee
Working committees
Departmental Working groups
Governance committee
Establish BUSINESS VALUE
Establishing Business Value
Methodologies
Engaging the Business through approaches to
the project
• Agile
• Six Sigma / Lean
• Kaizan
• JAD
• Other quality initiatives
• Establishing the Business Case
What is a Business Case
• A business case captures the reasoning for initiating
a project or task.
• Often presented in a well-structured written
document
• May also sometimes come in the form of a short
verbal argument or presentation.
• The logic of the business case is that, whenever
resources such as money or effort are consumed,
they should be in support of a specific business
need
What is a Business Case
• Business cases can range from comprehensive and
highly structured, as required by formal project
management methodologies, to informal and brief.
• Information included in a formal business case could
be the background of the project, the expected
business benefits, the options considered (with
reasons for rejecting or carrying forward each
option), the expected costs of the project, a gap
analysis and the expected risks.
Why use a Business Case?
• SharePoint like every business technology is an investment
• Before making an investment you should always know your
expected return
• Business Case Formulas:
– Net Present Value (NPV)
– Return on Investment (ROI)
– Rate of Return (ROR)
– Internal Rate of Return (IRR)
– Cost Benefit Analysis
Why use a Business Case
• Focus requirements/scope on capabilities that will
deliver Value
• Useful for managing scope change
• Beginning of the Organization Change Management
Process – Ensure Users will use the system
• Level of Precision
– Depends on Maturity of the Plan
– Organization Culture – what is your culture?
– Make and document assumptions
SharePoint Business Scenarios
• The business doesn’t care about SharePoint
• Intranet
– Collaboration
– Communication
– Content Management/Search
– BI
– Forms/Workflow
• Extranet
• Public Facing Websites
SharePoint Business Scenarios
• Upgrade
– Functional Enhancement
– Consolidation
• Point Solutions
– HR Portals
– M&A Portals
– Board Portals
– Product Development Portals
– Workflow Solutions
Identifying the Business Problem
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Enterprise Search
End user adoption
Desire to make portal part of the virtual desktop strategy
Navigation and ease of use
Communication
Collaboration
Employee Information and organizational structure
Forms and paper reduction
Centralized vs. Distributed Content Management
Document and Content Management
Reporting
Examples
• Search – in the legacy intranet, people search did not
work. Could not locate information about specific
people. Document search was inefficient.
• End user adoption – web trends statistics showed
that less then 10 percent of the organization ever
came to the site (due to most of the reasons cited as
the problem)
• Navigation – difficult to navigate system of pages
with numerous links to other pages. No cohesive
information architecture to define the experience
Examples
• Virtual desktop – in order to drive end user
adoption, as well as making SharePoint part of
the over all VDI strategy.
• Collaboration –in the legacy environment, non
existent. No document repository, workflows,
check in or out etc.
• Employee information – desired a
comprehensive, centrally located environment
for finding employee information and
understanding organizational structure
Examples
• Communication – no central or focal point for
disseminating news and information. Driving
the right content to the right audience at the
right time.
• My Sites
• Social Media – organization embracing social
media
Why SharePoint?
Gartner Quadrant for Portals
SharePoint Strengths
• Majority are internal facing and departmental, focus
on collaboration
• Initiatives center on Microsoft technology stack (BI,
CRM, other integration)
• Microsoft sweet spot (collaboration, integration,
other stack components)
• High prevalence in enterprises puts rival vendors in
position to accommodate as well as compete
• 2013 wave shows great promise
Where to Begin - Requirements
Requirements
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Business
Technical – security, scalability
Functional – business process flow
UX – user interface, design
Content
SharePoint Solution Components
• Usability
– Branding
– Navigation and Taxonomy
• Content
– Web Content
– Documents and Records
– Digital Assets
• Functions
• Infrastructure
– Hardware
– Software
– Security
Information Architecture/Taxonomy
Intranet
Home Page
Departments
Locations
Business
Units
HR
Branches
Retail
IT
Processing
Center
Commercial
Finance
Buy vs Build
• SharePoint is an Application Template with
Components
• Five ways to do anything in SharePoint
• Commercially available plug-in components
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Component Addins
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Metalogix
Nintex
K2
others
Risk Analysis/Sensitivity Analysis
• Risk Assessment – Understand and manage the risks from the
beginning
• Sensitivity Analysis – Illustrates the sensitivity of model results
to model assumptions
– Assumptions: Hurdle Rate, Adoption Rate, Rate of KPI
Improvements, Deployment Cost Estimates
– Outputs: Payoff period, NPV, ROI
1 yr ROI = %20
Return
1 yr ROI = %10
1 yr ROI = %5
Time
Positive project return given a range of potential costs and benefits
will ease customer concerns that an analysis is over aggressive
Key Metrics By Stakeholder
Stakeholders
CFO
BDM
CIO
Metrics
Desirable Results
NPV - Net Present Value
$ > Zero
Payback Period
Ideally < 12 months
IRR - Internal Rate of Return
% > Company Hurdle Rate
Any Customer KPIs
Company Specific
TCO
Lower
Beware unreasonable results:
• IRR, ROI >500%
• Instant Payback
Beware undesirable results:
• IRR < hurdle rate
• ROI < 0%
• Payback > 24 months
Business Process Value Modeling:
Best Practices
• Study one process at a time – Survey to understand best
opportunities
• Prerequisite: Work directly with the end user
• Physically map business process metrics to get buy-in
for process change
• Business managers are the source for pains and benefit
equation variables
• Pain/KPI discussion drives business value versus productivity
• Keep equations simple
• Estimate process change metrics and then present them for
approval if you can’t get the numbers you need
– Get buy-in to defend numbers before presenting
It Starts at Measurable Pains
• Key Performance Indicators (KPIs) are
measurable pains
• Pains have no quantitative value if they
cannot be measured
Common Reasons For Pain
Missed Deadlines
Overflowing Pipeline
Insufficient Staff
Competition
Budget Constraints
KPIs
Revenue
Employee Utilization
Customer Retention
Number of Customers
Poor Cash Flow
Cost Analysis: Best Practices
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Group costs into buckets
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For example, desktop and server solutions usually
have different cost buckets
The key to effective costing is identifying the time spent on
each activity - Work Breakdown Structure
Recognize costs that should not be included in analysis
– Costs that would be incurred anyway
• e.g.., normal hardware refresh
– Costs not directly related to the project
• e.g., additional system changes
– Costs already incurred (sunk costs)
• e.g., operating system upgrades already completed
Cost Analysis: Best Practices
– Costs already incurred (sunk costs)
• e.g., operating system upgrades already completed
• Be sure to include all components
• Always perform “what-if” analysis
• Like benefits, get buy-in to defend numbers before presenting
business value study
Common Costs Elements
Cost Element
Info Sources
Example Calculation
Software
MS Account Manager
Licenses * cost of license
Hardware
Vendor/Partner
Hardware components * cost
Planning Time
Vendor/Partner
IT hours * cost per hour
Pilot Program
Vendor/Partner
Cost of labor, hardware, software
Development Time
Vendor/Partner
Partner cost + IT hours * cost per hour
App Testing/Remediation
Vendor/Partner
IT hours * cost per hour
Image Engineering
Vendor/Partner
IT hours * cost per hour
Installation Time
Vendor/Partner
IT hours * cost per hour
Employee Downtime
Vendor/Partner
Install time * cost per hour
Training
Vendor
Training class expense + employee
training time
Support Costs
Vendor/Partner
IT hours * cost per hour
Ongoing Maintenance
Vendor/Partner
Desktop & Server
The Cost Line
Financial Measures
Year 0
Implementation Costs
($764,000)
Additional Operating Costs
Year 1
Year 2
Year 3
Total
($764,000)
($15,200)
($15,200)
($15,200)
($45,600)
Benefits (one-time)
$0
Benefits (on-going)
$1,279,487
$1,279,487
$1,279,487
$3,838,462
$3,028,862
Net Cash Flow
($764,000)
$1,264,287
$1,264,287
$1,264,287
Cumulative Cash Flow
($764,000)
$500,287
$1,764,574
$3,028,862
Discount Rate
Net Present Value (NPV)
NPV per User
Payback (months)
Internal Rate of Return (IRR)
15%
$2,000,000
$4,000
7
150%
Value Equations Examples
Reduced Operating Cost =
Change in work time per unit (hours) X number of units annually
X Fully burdened cost/hour
= Extra $ Saved
Increased Revenue =
(Target close rate – Current close rate) X Number of
Opportunities X Average Revenue per closed sale X Profit Margin
= Extra $ Earned
The Benefit Line
Financial Measures
Year 0
Implementation Costs
($764,000)
Additional Operating Costs
Year 1
Year 2
Year 3
Total
($764,000)
($15,200)
($15,200)
($15,200)
($45,600)
Benefits (one-time)
$0
Benefits (on-going)
$1,279,487
$1,279,487
$1,279,487
$3,838,462
$3,028,862
Net Cash Flow
($764,000)
$1,264,287
$1,264,287
$1,264,287
Cumulative Cash Flow
($764,000)
$500,287
$1,764,574
$3,028,862
Discount Rate
Net Present Value (NPV)
NPV per User
Payback (months)
Internal Rate of Return (IRR)
15%
$2,000,000
$4,000
7
150%
Pulling Financial Metrics Together
Financial Measures
Year 0
Implementation Costs
($764,000)
Additional Operating Costs
Year 1
Year 2
Year 3
Total
($764,000)
($15,200)
($15,200)
($15,200)
($45,600)
Benefits (one-time)
$0
Benefits (on-going)
$1,279,487
$1,279,487
$1,279,487
$3,838,462
$3,028,862
Net Cash Flow
($764,000)
$1,264,287
$1,264,287
$1,264,287
Cumulative Cash Flow
($764,000)
$500,287
$1,764,574
$3,028,862
Discount Rate
Net Present Value (NPV)
NPV per User
Payback (months)
Internal Rate of Return (IRR)
15%
$2,000,000
$4,000
7
150%
Value Proposition
Low
High
Yr1-Low
Yr1-High
Yr2-Low
Yr2-High
Yr3-Low
Yr3-High
Benefits
Optimize Troubleshooting
Increase 1st call resolutions
Reduce search time
Decision trees
Mapping (sorting by distance to pymt cntr)
Bookmark/quicklinks to favorites
Interteam communication
Content management/consolidation
Email with customers
Trouble shooting
Improve Sales
Reduce costs
Free up dev resources (forms)
Virtualization
Ease of report generation
Enterprise-wide Portal Architecture
Shadow IT (One Source & others)
Total Benefit
$700,000
$800,000
unquantified
unquantified
unquantified
unquantified
unquantified
unquantified
unquantified
unquantified
$0
$800,000
$950,000
$700,000
$800,000
$800,000
$950,000
$700,000
$800,000
$800,000
$950,000
$30,000
$50,000
$30,000
$50,000
$30,000
$50,000
unquantified
unquantified
unquantified
$250,000 $350,000 $250,000 $350,000 $250,000 $350,000
$0 $1,780,000 $2,150,000 $1,780,000 $2,150,000 $1,780,000 $2,150,000
Costs
Hardware
Servers
Software
Microsoft
People
Infrastructure Setup
Application Development
Application Support *
Total Costs
Total Hard Benefit-Cost per Period
Breakeven
* No net new support costs
$5,000
$90,000
$10,000
$40,000
$0 $60,000
$400,000 $750,000
$0 $30,000
$415,000 $970,000
$3,000
$12,000
$3,000
$12,000
$3,000
$12,000
$0
$0
$0
$0
$0
$0
$3,000
$12,000
$3,000
$12,000
$3,000
$12,000
$1,777,000 $2,138,000 $1,777,000 $2,138,000 $1,777,000 $2,138,000
$1,362,000 $1,168,000 $3,139,000 $3,306,000 $4,916,000 $5,444,000
The Business Case is Compelling
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