Bio-Doug McCutcheon• NZ for 3 years

– Won the Computerworld Best Project Implementation 2005

• Europe and USA for 5 years, SAP Project Manager, in manufacturing, retail,energy and telecommunications

• Project managed the rollout of Microsoft client/server to Shell UK, 2 years.

• Banking industry, HSBC, 5 years• I.T. Hardware/Software vendors 3 years

Prime/Wang

Organisational Objective

To generate sustainable growth in shareholder value through

successful business change .

Business Challenges Faced by the Organization

ChangingMarkets

Technical Advances

Economic/Regulatory Pressures

Increasing Competition

Current Value of Organisation

Future Value of Organisation

Stra

teg

y

B

usin

ess

FinanceFinance

CustomersCustomers

ProcessesProcesses

People & ToolsPeople & Tools

Strategic Strategic ManagementManagement

Optimise investment decisions based on objectives against and capability and maturity

ProgramProgramManagementManagement

PortfolioPortfolioManagementManagement

Manage project inter-dependencies & resources

ProjectProjectManagementManagement

Manage time, resource & scope

ProgramProgramManagementManagement

Setting of Strategic Goals

Define objectives from strategic goals

Priortising delivery of Objectives

Integrated Delivery

Enterprise Project ManagementFramework for Meeting Challenges

Project Work“Welcome to the new economy where most of the world’s work will be done in semi- permanent networks of small project oriented teams.”

- Tom Peters - Tom Peters

Liberation ManagementLiberation Management

New Product DevelopmentThe best, the rest…

BEST REST

Profits from new products

49.1 % 21.2%

Ideas per one success

4 9.2

First-to-Market Strategy

1995 – 2004

44% - 49.5%

1995 – 2004

30% - 25.3%

Source: PDMA Foundation Comparative Performance Assessment Study, 2004

“the right focus on management of the product development process combined with the best technology and tools to support that will enable more new product introductions, higher profits and a better “hit” rate”

The pain, without an approach

• STRATEGY. – .. a strategy that can not be implemented is of little use — many times the link

between investments in programmes and projects and the direction of strategy is often weak or invisible.

– 89% of companies are flying blind, with virtually no metrics in place except for finance

• PORTFOLIO. – 84% of companies are unable to adjust and align their budgets with business needs

more than once or twice a year

• PROJECTS. – Over 50% of organisations, in recent surveys, have experienced project failures in

the last 12 months….. the average cost of a project failure is $US10M– 84% of companies either do not do business cases for any of their IT projects or do

them only on select/key projects

Metagroup/Deloitte Ltd

STRATGEY : Sometimes strategic direction is lost

FINANCEFINANCE

CUSTOMERSCUSTOMERS

PROCESSES (INTERNAL)PROCESSES (INTERNAL)

PEOPLE AND TOOLSPEOPLE AND TOOLS

Strategy Map – Balanced Scorecard

Human CapitalSkillsTrainingKnowledge

Information CapitalSystemsDatabasesNetworks

Organization CapitalCultureLeadershipAlignmentTeamwork

Improve coststructure

Increase assetutilization

EnhanceCustomer value

Expand revenueopportunities

Price Quality Availability Selection Functionality Service Partnership Brand

OperationsManagement

CustomerManagement

InnovationRegulatoryand Social

Kaplan, R., Norton, D. (February, 2004)Measuring the strategic readiness of Kaplan, R., Norton, D. (February, 2004)Measuring the strategic readiness of intangible assets. intangible assets. Harvard Business Review, 52 - 63Harvard Business Review, 52 - 63

Financial Perspective

Customer Perspective

OperationalPerspective

Employees &Technology Perspective

Theme: Smart, Profitable Expansion

Increase Sales efficiency

Revenue per FTE

50% Revenue from New Storesby Year 3

% revenue from storesopened in last 3 years

Revenue from newstores

Avg. # days to breakeven

Great New Locations

Avg daily customersat new stores in first

6 months# repeat customers

Avg purchase amount

Fact-based site selectionLag between market

selection and siteacquisition

Development Project Management

Project duration: siteacquisition to opening

day

% of stores openedon schedule

Corporate Digital NervousSystemBusiness Intelligence Use

# Eligible EmployeesTrained

Strategic Theme: Smart, Profitable Expansion

Objective Measure Target Initiative % Revenue from stores opened in last 3 years

> 30% year 1 > 50% year 3

Marketing to new target markets Increase % of revenue

from new stores Avg. # of days to breakeven

< 180 days year 1 < 130 days year 3

Operations review Site selection

Fin

an

cia

l

Increase sales efficiency

Revenue per FTE

> $ X year 1 > $ Y year 3

Self-service checkout pilot

Avg. # daily customers > X in first 6 mos., > Y in first year, > Z by year 3

Local marketing/PR campaigns

# of repeat customers

> X in first 6 mos., > Y in first year, > Z by year 3

Customer loyalty program

Cu

sto

me

r

Acquire new locations

Avg. $ customer purchase

> $ X year 1 > $ Y year 3

Coupon program In-store promotions & classes

Fact-based site selection

Days lag between market selection and site acquisition

< 90 days year 1 < 70 days year 3

GIS mapping National brokerage contract

Project duration, site acquisition to opening

< 365 days year 1 < 300 days year 3

Standardize design/build processes

Pro

cess

Streamline development process % stores open on

schedule > 93% year 1 > 95% year 2

Web-based project management

Use business intelligence systems

% eligible employees trained

>90% year 1 >99% year 2

In-house system training

Le

arn

ing

&

Gro

wth

Integrated knowledge management

# paper forms used < 200 year 1 < 100 year 2 < 5 year 3

Corporate digital nervous system

STRATEGY MAP TRANSPARENCY

PORTFOLIO Sometimes

portfolio management and strategic direction are not aligned and carried out by the

wrong person

You tell him we want our

resource back

PM

PORTFOLIO ARTICULATION

PROPOSED BUDGET

$

FY0x

# PortfolioStrategic

ValueTotal EBIT

Original Selection 51% $389 M

Optimal Selection 82% $564 M

Final Selection (includes mandated projects)

75% $526 M

2

3

1

Strategic Value Gain = 24%

EBIT Increase = $137 MM

3

1

2

Gaining Control: Portfolio Optimization Led to Gains of $137mm EBIT, 24% Strategic Value for Same Budget

PROGRAM ARTICULATION

Integration Management

Scope Management

Time Management

Cost Management

Risk ManagementProcurement Management

Quality Management H R Management

Communications Management

Nine Knowledge areas PMI

PROGRAM TRANSPARENCY

russellf@datacom.co.nz

PROJECTS: Are your Projects Behind Schedule?

PROJECTS: Are your Projects Behind Schedule?

Dilbert: Scott AdamsDilbert: Scott Adams

PROJECT ARTICULATION

QUALITY

RE

SO

UR

CE

TIME

PROJECT TRANSPARENCY

PROJECT TRANSPARENCY

Why Microsoft for Enterprise Project Management?

• Microsoft has never had stronger proposition in the area of Enterprise Project Management processes as it does now.

• The products be aligned EPM areas as a stand alone or in an integrated stack.

• The products are scalable and can be grown both technically and from a user capability point of view.

• The products competitively priced

Strategic Strategic ManagementManagement

ProgramProgramManagementManagement

PortfolioPortfolioManagementManagement

ProjectProjectManagementManagement

ProgramProgramManagementManagement

Setting of Strategic Goals

Priortising delivery of Objectives

Integrated Delivery

The ProductsFramework for Meeting Challenges

PROFIT

COST

Office Project Portfolio Manager

The pleasure: Business Strategy + Enterprise Project Management = Sustainable Shareholder Growth

“Organisations with enterprise PM standards will experience half the project cost overuns, delays and cancellations of those that don’t” –

Gartner Group

“In large “projectised” organisations, the lead time to market has been reduced by as much as 60%, development costs have declined, and

forecasting accuracy has increased” – PMI “Best Practises” Benchmarking Report

“Existing project costs can be reduced 10 – 30% by eliminating redundancies, conflicting initiatives, and projects not paying dividends” -

PMI “Best Practises” Benchmarking Report

A minimum 2% (often 2-5%) improvement in the total annual costs of project-related resources. - Aberdeen Group

Thank You – there will be a lunch time session that demonstrates aspects of the EPM solution, please attend it will be the

best session

Doug McCutcheondoug.mccutcheon@microsoft.com

021-749-151

References:Web Sites

Balanced Score Carding, http://www.microsoft.com/office/previous/xp/business/intelligence/scorecard.asp

Portfolio Management. http:// www.pmi.org, http:// www.microsoft.com/epm, http://www.mpug.org/

Program management http:// www.pmi.org, http:// www.microsoft.com/epm, http://www.mpug.org/

Project Management http:// www.pmi.org, http:// www.microsoft.com/epm, http://www.mpug.org/

Books

Strategy Maps Robert S. Kaplan, David P. NortonEnterprise Programme Management – Delivering Value, Tim Parr, David Williams