19
Value Network Analysis Breakfast Briefing, 17 November 2008 Optimice Proprietary 1
Value Network Analysisy
Breakfast Briefing, 17 November 2008
Optimice Proprietary 1
Introduction
• The business case for relationships skillsskills
– Trust, Speed and Cost– Networked economy: increased y
competition and globalisation demands increased collaboration
• Today we will cover:– What’s changing in the business g g
environment– What Value Network Analysis is
Demonstration of how it works– Demonstration of how it works
Sponsored by: Presented by: Supported by:
Delivering against the contract
• You deliver against the contract...do you have a happy
Area Sub-area Measure
You deliver against the contract...do you have a happy customer?
Incidents Response time 20 min. (severity 1)Resolution time 2 hours (severity 1)
W k d Ti t d li ti t 5 dWork orders Time to deliver estimate 5 daysOn time/budget Within 5%Satisfaction Above 80%Satisfaction Above 80%
Application Availability 98%Reliability Max 4 severity 1
incidents per yearExtract from Service Level Agreement
Sponsored by: Presented by: Supported by:
Delivering against the contract
• You deliver against the contract...do you have a happyClient ‘s initial response: Provider’s reaction:
Area Sub-area Measure
You deliver against the contract...do you have a happy customer?
Client s initial response:• “...but you are not actively
helping me reduce costs...”
Provider s reaction:• “...you didn’t tell me that was
important..last month it was all about innovation!”
Incidents Response time 20 min. (severity 1)Resolution time 2 hours (severity 1)
W k d Ti t d li ti t 5 d• “...whilst you fixed the
problem within the 2 hours
about innovation!
• “...then why didn’t you tell me what you thought the problemWork orders Time to deliver estimate 5 days
On time/budget Within 5%Satisfaction Above 80%
problem within the 2 hours, we know it could have been fixed in 30 min...”
what you thought the problem was..we feel like you don’t trust us...”
Satisfaction Above 80%Application Availability 98%
Reliability Max 4 severity 1 • “..yes, you did fix it, but we
think you are covering up the fact that you also caused it ”
• “...we are just following the agreed procedures if onlyincidents per year
Extract from Service Level Agreement
fact that you also caused it... agreed procedures...if only you did the same...”
Sponsored by: Presented by: Supported by:
IT Compliance vs Co-operation
Sweet Spot
Cooperative Approach
Compliance Approach
Sponsored by: Presented by: Supported by:
Value Network Analysis is…
• A business modeling method • Makes visible tangible and
intangible value flows across an organisation or businessorganisation or business relationship.
• Value flows are assessed and negotiated to maximise and sustain the value achieved from the network as a whole
• Integrated into ITIL v3
Sponsored by: Presented by: Supported by:
Applications of Different Modeling Methods
Business Process Modeling• BPR, Six Sigma, Lean Manufacturing• Remove process variation, Implement standard processes• Drive efficiency.
Social/Organisational Network Analysis• Improve communications and collaboration through• Improve communications and collaboration through
identifying existing trust networks
Value Network Analysis• Maximising the value achieved from business relationship
networks• Drive effectiveness
Sponsored by: Presented by: Supported by:
Reciprocity in relationships
• There must be reciprocity in our relationshipsrelationships
– Without a reasonable balance the relationship will fail
– There must be an exchange of ‘value’
• Value Network Analysis is a method to identify and map value exchanges:identify and map value exchanges:
– What someone is required to deliver, or entitled to receive : The contractual exchange.
– Non-contractual things which are important, but not in the ‘contract’
• Value Network Analysis now referenced in• Value Network Analysis now referenced in ITIL v3
– ITIL Service Strategy (v3) book.Sponsored by: Presented by: Supported by:
VNA Mapping Rules
• Ovals are Roles• Arrow identify a value• Arrow identify a value
flow• Solid lines are tangibleSolid lines are tangible
value• Dotted lines are
intangible value
Source: Verna Allee
Sponsored by: Presented by: Supported by:
Definitions
• Contractual (tangible)R i d– Required
– Must do– Would be considered a ‘breach’ if notWould be considered a breach if not
delivered– Typically specific such that a breach can
be sanctionedbe sanctioned
• Non-contractual (intangible)– Expected, but not necessarilyExpected, but not necessarily
documented– Should do
C l b ifi– Can also be very specific
Sponsored by: Presented by: Supported by:
The Exercise• Divide up into 2 groups• Brainstorm (facilitated) value flows between the BA and• Brainstorm (facilitated) value flows between the BA and
their respective collaborators; Identifying 4 value flows each round (1 tangible and 1 intangible each way)( g g y)
– Round 1 – BA and PM– Round 2 – BA and IT Developer– Round 3 – BA and End User
• Capture Value Flowsp• Negotiate deliverables
Sponsored by: Presented by: Supported by:
IT Development Partnerships
Sponsored by: Presented by: Supported by:
Developing a Partnership Scorecard™
• The Partnership Scorecard™ helps organisations manage the contractual and non contractual relationshipmanage the contractual and non-contractual relationship aspects of outsourcing, smart sourcing, alliances, joint-ventures and similar complex business frameworks.
• It measures Value, Cost and Performance of all aspects of a business relationships
d d l l t i it• …and develop plans to improve it
“Welcome aboard HMS RelationSHIP”HMS RelationSHIP
Sponsored by: Presented by: Supported by:
Developing a Partnership Scorecard
• Process for developing a Partnership Scorecard
• I would like to get l f h
2. Assess• Who should deliver? l f / d f
4. Clarify
get…• I can offer…
1 B i t
• Value of this to me, or
• My cost of doing
deliver?• Who should receive?
3 Di t ib t
• Clarify/modifyrequests
• Assess value/cost1. Brainstorm doing 3. Distribute value/cost
Sponsored by: Presented by: Supported by:
Example – Entitled/required
Work Orders
Estimated provided within 5 days. 5% budget variation and 80% satisfactionbudget variation and 80% satisfaction
IT Business Rep.
OOSponsored by: Presented by: Supported by:
Example – I can offer (non-contractual)
Follow escalation process
Will follow the helpdesk process rather than ili i l f kiutilising my personal ‘fast-tracking’
network contacts in IT
Business Rep.IT
OSponsored by: Presented by: Supported by:
What we think...
Sponsored by: Presented by: Supported by:
Stunning facts about relationships
Cost Performance Value
C t t lContractuals(20-30%)
Dearer Better Less
Non-contractuals
(70-80%)Cheaper Worse More
Sponsored by: Presented by: Supported by:
About Optimice
Optimice provides specialized consulting services to help organisations map and improve business relationships at multiple levels Optimice identifiesand improve business relationships at multiple levels. Optimice identifies relationship patterns between people, organisations or markets, and we have improved the basic techniques to optimise these relationships in a compelling business-focused context. • Our Partnership Scorecard™ helps organisations manage the intangible
relationship aspects of outsourcing, smart sourcing, alliances, joint-ventures and similar complex business frameworks.O i li d t l id lt t• Our specialized survey tool www.onasurveys.com provides consultants and other practitioners the most effective and user friendly tool available on the market to collect data on business relationships.
Optimice Pty Ltd. Laurie Lock Lee / Cai Kjaer23 Loquat Valley RdBayview NSW 2104Bayview NSW 2104Phone +612 8002 0035Fax +612 8213 6274www.optimice.com.auABN 92 123 562 854
Sponsored by: Presented by: Supported by:
