Unleashing Value Transforming While Performing

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(No Transcript)
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Unleashing Value - Transforming While Performing
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CIO Challenges Today
Leverage technology to close the competitive gap
Ensure robustness and security of IT
infrastructure and business operations
Lower absolute costs while getting IT to serve
the business more
Make sure the the initiatives we have are the
right ones
Keep IT staff excited
Extend the value of legacy assets while making
investments in new technology
Doing More With Less
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The Solution Transforming While Performing


Goal
Today
Application Maintenance 70
Application Maintenance 50
Application Maintenance 35
Amortization Expenses 10
Amortization Expenses 10
Discretionary Spending 55

Discretionary Spending 40
Amortization Expenses 10
Discretionary Spending 20
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Transforming while Performing
Phase I Performing
Phase II Transforming
Rationalize Portfolio
Manage Portfolio for Performance
Re-engineer for growth and competitive advantage
Optimize Portfolio Processes

• Maintain offshore
• Implement new system

• Identify offshore candidates
• Plan offshore transition program

• Consolidate systems

• Redesign IT processes and Business operations
  (BPO)

Budget Evolution
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Key Tool in Navigating Journey Portfolio Analysis

• A short-term, high-value assessment for
  identifying opportunities for lowering
  operational expenses, improving the performance
  of IT and IT-enabled business processes

Capture a step-function improvement Business
Productivity
Improve Development/ Maintenance Mix, IT
Operational Efficiency
Business Process Rationalization
Technology Rationalization
Offshorability Analysis
Immediate Cost Reduction or Avoidance
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When to Conduct a Portfolio Analysis

• Major Corporate Events
• How to merge systems in support of MA or unweave
  systems for a spinout?
• Need to know the benefits outsourcing and want to
  know what the total costs, timelines and internal
  commitments required?

• Immediate Earnings Pressure
• Want/need to cut costs or budgets?
• Need to know the benefits outsourcing and want to
  know what the total costs, timelines and internal
  commitments required?

Portfolio Analysis

• Step-function Productivity
• Improvement
• Has the number of business process become too
  unwieldy?
• Want to create a unified customer experience?
• Opportunity to re-engineer core business
  processes to take advantage of new technologies
  and capabilities (e.g., outsourcing)?

• IT Cleanup/Modernization
• Multiple applications in a system which may be
  duplicating functionality?
• Applications are being (or need to be) sunset
  over time?
• Need to review the health of the existing
  applications with respect to technical realities
  and business value capture?
• Too many applications or application releases
  becoming too complex?

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Guideposts in the Transformation Journey
Phase I Performing
Phase II Transforming
Offshorability PA
Technology Rationalization
Business Process Rationalization
Rationalize Portfolio
Manage Portfolio for Performance
Re-engineer for growth and competitive advantage
Optimize Portfolio Processes

• 30-40 savings

• 20-40 savings

• 20-40 savings

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Overview of Methodologies
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Value Creation via PA at Some Clients
Cost Savings (Year 1)
Cost Savings (Year 2)
Client
Nature of PA
Leading money Center bank
Combination of offshorability, TR process
redesign
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International Insurance Co
Straight offshorability
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Straight offshorability
Major Newspaper Publisher
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Top tier marketing communications firm
Combination of offshorability and technology
rationalization
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Cognizants Intellectual Property on PA

• Cognizant has created a rich set of tools and
  technologies to go through each task of portfolio
  analysis.
• A large number of templates and algorithms has
  been created and are used extensively during the
  engagements. This helps in speed-to-market and
  the shorter duration timelines while bringing in
  standard and uniformity in the approach and
  analysis.
• Iterative business process redesign methodology
  that takes a bifocal approach, delivering near
  term relief to major process pain points while
  designing the foundation for longer term systemic
  process changes

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Quantifying the Value of Outsourcing

• OPAT - The powerful tool from Cognizant
• Empirical formulas based on statistical
  normalization algorithms
• Different perspectives of the output for a
  thorough analysis

• Phases of outsourcing
• Timelines for each phase
• Resource Distribution
• Client
• Cognizant Onsite
• Cognizant Offshore

Maturity Analysis
Transition Analysis
Cost Analysis

• Suitability Identification
• Score impacts efforts for outsourcing

• Costs Distribution
• Cost Savings

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Application / Function Suitability Score
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Offshorability Matrix
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Case Study 2 - Retail

• Client Background
• Unable to respond quickly to new end user demands
  
• Project delivery not predictable nor standardized
• Non repeatable processes - CMM level 1
• Lack of tools and methodologies
• No architectural or technology standards
• High data center costs

• Key Elements of Assessment
• Thorough and methodical approach
• Review apps. by technology and skill requirement
• Provided roadmap to enable rapid staffing changes
• Developed plan to consolidate servers

• Results
• 35 Reduction in IT Expenditures
• 75 Reduction in Servers
• 59 Reduction in IT Staff
• 2.4M Re-investment in Initiatives
• Higher Productivity, Quality, and Agility

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A Year of Progress

• A powerful combination of PA expertise, tools,
  vertical experience, process re-design and IT
  technical skills
• Experienced architects and very senior technology
  thought leaders lead and participate in every
  engagement
• Core focus on all the aspects of a the
  organization (IT, non-IT)
• Knowledge of industry-wide spends and trends
• Proven track record in Portfolio Analysis
  engagements
• Have performed successful engagements with many
  clients and different industries
• Demonstrated significant cost savings, that our
  clients have used for re-deployment to new
  development or taken straight to the bottom line

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Quick Start

• Cognizants Business Technology Consulting Group
• provides portfolio analysis engagements in a
  rapid deployment mode Quick Start
• Engagements last from 6-10 weeks, depending upon
  scope
• Fees in 50-100K range, which are easily
  recoverable (1-2 months) from implementation of
  recommendations
• For information, contactKaushik BhaumikVP,
  Business Technology Consulting(925)
  790-2012Kaushik.bhaumik_at_cognizant.com

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Thank You

• www.cognizant.com