Professional Documents
Culture Documents
Okaya Infocomm
http://www.okayainfo.com/it-consulting.asp
WIPRO Consulting
WIPRO Consulting
Scenario 1
Company X has submitted a bid for a project to
Specify, develop, and deliver a mobile
operating system. The work was to be done on
a time-and-materials basis, with regular stage
payments.
Scenario 2
Develop a statistical modeling engine for a
credit card company that creates a series of
models by analyzing historical data to predict
customer default. Then these models need to
be deployed, their success and failure tracked
in predictive outcomes, and replaced with
better ones.
Scenario 3
Extract, cleanse, and transform data. Integrate
multiple data sources and use analytics tools
to identify key patterns. Build on reporting by
visualization of data.
Scenario 4
Provide personnel and expertise to operate a
technical installation within the client
organization, which retains ownership of the
facility. Specific activities are:
database administration; creating databases;
midrange system administration; storage and
backup management; and business continuity/
disaster recovery services.
networks operation center services; monitoring
and service assurance; performance management;
and WAN/LAN Management.
Scenario 5
Application Support Services
production database management;
remote application monitoring and support; and
midrange and mainframes application
environment support.
Scenario 6
Business Process Management
an integration of client ERP procurement process
with that of their suppliers to deliver the most
effective automated process management.
Scenario 7
Help company to develop a three-tiered
governance model to provide the basis for a
close partnership with their clients.
Scenario 8
Transition Methodology
an ITIL-mapped transition methodology to deliver
uninterrupted services to clients during transition
phases.
Scenario 9
Service Level Management
a well defined Service Level Management process
ensuring that all operational services and their
performance are measured in a consistent,
professional manner across the infrastructure
operations according to the business
requirements defined by clients.
Scenario 10
Technology Transformation
support and guidance in identifying new IT
systems based on the business strategy;
rationalization and optimization of existing
systems and toolsets; and
implementation of software like HP OpenView,
BMC, IBM Tivoli, and more.
Scenario 11
Set up an
Offshore Development Center (ODC), and
Testing & Quality Assurance Center.
Scenario 12
Strategy formulation, Marketing plan, IT
infrastructure development and building a
website for an e-business retail organization.
Scenario 13
Scenario 14
full-scale systems integration, working as a
prime contractor or systems architect.
Scenario 15
Design and provide training in Project
Management.
IT Consulting
Advisory services to business, public and
other undertakings by independent and
qualified person(s) or organisation who
assists, in an objective and independent
manner, the client organization to identify ICT
problems, analyze such problems,
recommend solutions to these problems and
help when requested in the implementation
of solutions.
IT Consulting - Content
The consultant
identifies ICT problems
analyzes such problems
recommends solutions to these problems and
helps when requested in the implementation of
solutions.
IT Consulting
In consultancy, the client contracts a service,
not necessarily a person.
In consultancy the consultant assists the client
in performing a task. This involves a
knowledge transfer.
Important organisations
EVOLUTION OF IT CONSULTING
1950s-60s
Computer Industry
Computer hardware
and peripherals
Computer intangibles
Computer
software and service
1950s-60s
Computer
Software and
Services Industry
Programming
Services
Processing
Services
Facilities
Management
Teleprocessing
Leasing
Programming Services
Pioneers of computers underestimated the
efforts that would be required for
programming.
3 main sources of programs
users could write it for themselves,
could obtain programs from a computer
manufacturer,
could share programs among themselves (IBMs
SHARE) Fortran and Cobol
Software contractors
Defence Applications like SAGE gave rise to
such organisations.
Defence applications were followed by
business applications like real time reservation
systems of American Airlines called SABRE.
Software contractors
Margins 15%
Business Models of Engineering and
Construction
bidding for and winning contracts
Fixed price or T & M
Critical capabilities economies of scope, cost
estimation, project management.
History of IT Consulting
-Stages of Computer Growth
Richard L. Nolan, Managing the computer resource: a stage hypothesis. Communications of the ACM 16 (July 1973)
Programming Services
Programming Services
Programming Services
Advisory services
Data Processing
Outsourcing and Business Models (e.g. ADP )
Facilities Management
Managed Services and System Integration (e.g.
EDS)
Teleprocessing
Remote Infrastructure Management
History
Thus, IT consulting companies consisted of
Technology companies (IBM, EDS etc.)
Accounting and auditing firms (PWHCoopers,
Deloitte Touche, Ernst & Young, KPMG).
Management consulting firms (McKinsey, A.T.
Kearney etc.)
Important organisations
1990s
Introduction of network computing and
internet.
E-business and emergence of a host of
dotcom consultancies.
2000s
IT consulting and outsourcing services became
increasingly standardized.
Rapid commoditization and hence fall in unit
prices.
The dot com bubble burst, rapidly plunging
most of the dot com companies into
bankruptcy and sending IT consulting into a
tailspin, seriously stagnating growth.
Consolidation of the IT consultancy market.
Focus
Interactive agencies
Agency.com, Razorfish,
and Modem Media
Misc.
Reinvent themselves by spinning off
separate e-business consulting divisions,
acquiring smaller firms that had e-business
experience, and using aggressive hiring
programs to build Internet capabilities.
Focus
Misc.
Important organisations
Nature of firms
Smaller firms vs bigger firms
Different knowledge and capabilities
Different partners - market research firms vs h/w, s/w
service providers
Nature of services
Shorter projects than IT
Customisation vs Standardisation
Pricing of services: IT Consulting is more amenable to fixed
price contracts
Careers in IT Consulting
Types of IT Consulting
Opportunities
E-Commerce Study
The clientthe direct marketing division of a leading global retailerwas facing rapid growth and
expansion into e-commerce. The division realized its existing technology and processes would not
support this future business; the company needed to select, test, implement, and integrate new
facilities, new business and warehousing systems, and new processes. The client selected an IT
consulting firm to design new facilities with new procedures and technology applications.
Developing new business systems and integrating them with existing warehouse management
systemswas crucial to the clients transition to new operations, so the consulting firm worked
closely with client personnel to ensure that integration was seamless. Collectively, the client and
the consulting firm implemented and integrated the system very quickly, enabling the company to
ship holiday orders on time and compete at industry leading service levels.
The value of the firm is often embedded less in the firm and more in the
individuals.
The consulting firm, therefore, competes actively in two markets simultaneously:
the output market for its services, and
the input market for its productive resources, the professional workforce.
Leverage structure
The required shape of the organization i.e. the relative mix of juniors, middlelevel staff and seniors.
Finders - usually the most senior level, are responsible for bringing in the business, scoping
and designing the projects, and engaging in the high-level client relations necessary during
the work.
Minders - manage the projects and the team of people working on it.
Grinders - perform the analytical tasks.
If a firm brings in a mix of client work that requires more juniors, and fewer
seniors, than the firm has in place, higher-priced people will end up performing
lower-value tasks (probably at lower fees), and there will be an underutilization
of senior personnel. The firm will make less money than it should be making.
Managing the leverage structure is the key to managing a consulting firm.
Profitability
IT Consulting
Structure axes
Geography
Domain/ Industry
Technology
Business Process
Products
Career development
Need to focus
What happens when an IT Strategy consultant does ERP
implementation?
Entry - Activities
Who to meet?
Who should meet?
Continuity maintained
Preparation
Preliminary diagnosis
Period
1-2 days upto 10 days
Data collection
Largely secondary data
Client involvement
Assignment Planning
Summary of the problem
Phases and timetable
Role definition
Activities
Meetings
Reports
Training and information transfer
Proposal
Sections of the proposal
Entry
Diagnosis
Purpose
Restating the problem
Problem analysis
Substance or identity
Organisational and physical location
Problem ownership
Absolute and relative magnitude
Time perspective
Data collection
Quantitative
Existing data
Survey data
Qualitative
Interviews
Observation
Estimates
Form of feedback
Formal / Informal
Presentation / Written report
Diagnosis
Action Planning
Data requirements
Implementation
Gaining ownership and commitment
Ensure quality and accountability
Remaining flexible and adaptable
Encouraging learning and development
Termination
The consultant will be required to submit a final report on the
clients project
Evaluate the results achieved through the desired solution
Evaluate the client consultant relationship
Nurse / Pharmacist ?
Consulting engagement
An IT Consultant Research
Study
by
Shirley Bode and Janice Burn
Edith Cowan University, Australia
Choice of Consultant
Findings
None of the case SMEs utilized each of the steps in Gables model
SME #1 completed six steps and partially completed two, and SME #3
completed six steps; the remaining SMEs completed five or less steps.
Only one SME canvassed the market and developed a request for proposal
prior to using the consultant.
Six of the SMEs did not have a formal written contract with their
consultants
SME #1 had negotiated a verbal contract in relation to pricing for the
design of their site. The verbal contract was not adhered to, and when
presented with the final bill, SME #1 stated: that was a real shock,
because I told him from the beginning I had a really strict budget and it was
blown right out.
Findings Contd.
SME #3 had a written contract with their consultant and stated: Yes there was a formal contract;
it included a budget which got blown out, it included a timeframe which didnt work; to be honest
I think the contract was a complete waste of time because nothing in it has been stuck to (SME
#3).
SMEs #1 and #3 had engaged in a process of review with their consultants, whereas the others
had not.
Nine of the SMEs felt that they had been overcharged and did not receive value for
money from their Website design consultants.
SME #2 linked pricing and service provision several times throughout the interview:
if Ive got to constantly be telling them what to do, I think paying $90 an hour is a bit
ludicrous and I dont think I got value for moneybasically I think they charged me
an hourly rate for the work that they did, the fact that they had no ideas of their own
should have been taken into account when billing me.
SME #5 felt that pricing was inflated and service from the consultant inadequate: I
feel we were ripped off, its like buying a bicycle with no wheels.
Interestingly, all SMEs had, or were in the process of, severing the consultant/client
relationship.
Final finding
While, adhering to the process does not ensure Client-Consultant
engagement success;
Not adhering to it surely ensures failure!!!!!
Engagement Success
Prior to consultant engagement, an organization needs to have a clear
idea of their goals and objectives.
There needs to be clear communication of objectives between client
and consultant.
Both parties need to constantly work in collaboration.
Business IT Alignment
Session 5
A model of IT Consulting
Frameworks
Henderson and Venkatraman, IBM Systems Journal, 1993, Strategic
Alignment Model.
Luftman, Communications of AIS, 2001, Assessing Business-IT
Alignment Maturity.
Broadbent and Weill, Sloan Management Review, 1997, Management
by Maxim and Management by Deals.
IT Strategy External
IT scope New technology e.g. imaging, expert systems, mobile/internet
Competencies flexibility, reliability etc.
Governance Alliance, JVs, Outsourcing
IS Infrastructure Internal
Architecture h/w, s/w, communications
Processes system development, maintenance, monitoring and control
Skills acquisition and training in IS skills
Level 1
Level 5
Each of the criteria and levels are assessed using a Likert scale (say 1-5). Using a Delphi
approach helps to converge on the maturity level.
The relative importance of each of the attributes within the criteria may differ among
organisations.
Primary objective of the assessment is to identify specific recommendations to improve
the alignment.
Management by Maxim
Broadbent and Weill, Sloan Management Review
IT Systems portfolio
(MIT Centre for IS Research) Weill and Broadbent
i.
IT Systems
IT System Components
globality," explained Citicorp's senior technology officer, Colin Crook, "so that
wherever you touch us, the experience is consistent. This vision was captured in
the strategic intent to create "any time, anywhere banking" now branded as
"Citibanking.The Citibanking experience is now delivered to 20 million accounts in
41 countries and contributes more than 60 percent of the total consumer business.
Maxims
A series of short, sharp strategic statements
Statements that indicate a practical course of conduct to be chosen.
Business maxims express the shared focus of the business in
actionable terms and identify which activities must be centrally
coordinated.
Maxims, derived from the firm's strategic context, capture the future
concerns of the firm as a whole.
Achieve the highest level of global integration of products and services driving economies of scale
through shared best practice.
Maintain professional staff of the highest caliber, whose outlook and orientation are global.
Ensure substantial and sustainable growth in emerging markets.
Human Resources
Management Orientation
Leverage synergies throughout the firm.
Innovate continuously through new product development.
Create management culture of information sharing (to maintain or generate new business).
Create capacity to manufacture in any location for a particular order.
Identifying IT Maxims
Describes how a firm needs to
Maintain common information technology architectures across the firm, including
policies and standards.
Access, use, and standardize different types of data (financial, product,
customer).
Connect and share data sources across different parts of the firm.
Electronically process transactions
Connect, share, and structure information and deploy IT across the firm.
Connect and share data sources across the extended enterprise (customers,
suppliers, regulators, partners).
Identify appropriate measures for assessing the business value of information
technology.
Categories of IT Maxims
Expectations for IT investment in the firm
Centralised / Decentralised
Sample IT Maxims
(Copyright CSC Index), and M. Treacy and F. Wiersema, The Discipline of Market Leaders, 1995.
Strategy vs Systems
Citibanks IT Maxim
Customer information must be kept in a consistent form and be accessible to
both the customer and staff any time and anywhere the customer interacts with
Citibank.
A consistent architecture for hardware, software, communications, data, and
work flow is critical to the bank as the basis for the shared infrastructure and
shared services to provide the capability for the uniform customer experience.
Customer entry points to the bank (ATMs, branches, phone services, personal
computer access) must provide a consistent interface throughout the world.
Our network must enable our customers and our businesses easy access to a
wide range of applications essential to the delivery of customer-friendly banking.
Types of IT Systems
"None" view - No firmwide infrastructure needs
Utility view - Infrastructure investments based primarily on cost
savings
Dependent view - Some investments to meet specific business
strategies
Enabling view - Extensive investments indicating a long-term need
for future flexibility and for information technology as a key
component of an iterative strategizing process.
Management by Deals
IT Portfolio Management
IT Portfolio
The information technology portfolio of an organization is its entire
investment in information technology, including all the people
dedicated to providing information technology services, whether
centralized, decentralized, distributed, or outsourced.
The investments include all computers, telecommunications
networks, data, software, training, programmers, support
personnel, point-of-sale systems, databases, and local area
networks, point-of-sale devices, image-processing systems,
personal computers, scanners, databases, Internet home pages,
system software, and applications software.
IT Portfolio decisions
The objective of information technology investments is to provide
business value in two related ways:
to successfully implement current strategies and to
use the technology to enable new strategies.
Understand the strategic context of the firm. This context defines the focus of the technology
investments
Corporate strategy: operational excellence, customer focus, innovation
IT focus: Cost reduction, defined by strategy, strategy enabler
Update as necessary
IT Portfolio Management
Key Activities
Do an organization-wise IT Audit.
Business Value
Financial Value Measures
Return on Investment
Real Options Value
Total Cost of Ownership
Return on Investment
RoI Analysis
Hence
where the costs of the project C0, C1, C2, C3, . . . , Cn have been subtracted from the cash benefits
A1, A2, A3, . . . , An in the corresponding time periods 1, 2, 3, . . . , n.
The payback period, or payback, is the time it takes for the project to recoup the initial investment.
12%
Tax Rate
35%
Customers in Year 0
Transactions in Year 1
Average order size in Year 1
COGS as a % of sales price
1700
141000
$258
70%
3%
3%
Base Case
Average processing costper order
$30
$5,000,000
$1,000,000
20,000
10%
$3
$16.50
50%
Major assumptions
The increased transactions as a result of the web portal.
The fraction of customers migrating to the web portal.
Reduced transaction cost with web portal.
The cost of the project.
Sensitivity Analysis
Advantages
The balanced scorecard forces management to take a broad view on
ICT investments.
Many different evaluation techniques can be integrated into the
framework. The financial scorecard can, for example, contain the ROI,
NPV etc.
The framework can be used for the feasibility evaluation and also for
the follow up and ex-post evaluation.
Disadvantages
This needs substantially more input from the top management than
does any other technique. Traditional techniques can be designed and
overseen by finance or operations teams.
IT Systems portfolio
(MIT Centre for IS Research) Weill and Broadbent
i.
Strategy vs Systems
Portfolio
MDCM (A and B)
Atkins has hired you as a consultant for his task at hand.
You should help Atkins define the Strategic Context, the Business
Maxims (goals) matched to this strategy, and the related high-level IT
Objectives.
Also help Atkins prepare a recommendation for MDCM Corporate
Board. Prepare necessary scorecards and use the Portfolio Application
Model Matrix to back your recommendation.
Also provide the approximate sequence for executing the initiatives
after factoring in the dependencies.
Executive Summary
Problem Statement
Methodology and Frameworks
Data Analysis
Recommendations
Wherever relevant, please put down all assumptions explicitly. Also lay
down the process steps adopted for arriving at the recommendations.
IT Services Management
Structure of SLA
Parties to the Agreement
Term
Scope
A communication tool
An expectations-managing mechanism
A conflict reduction tool
An objective process for gauging service effectiveness
A living document
What it is not
A mandate
A unilateral decision making
A quick fix
A financial and technical contract
Service IT Objects
SLA DOMAINS
NETWORK SLA
HOSTING SLA
APPLICATION SLA
Nemmadi
Nemmadi was an e-governance project initiated in 2004 by the
government of the state of Karnataka. Aimed at improving the
transparency, accountability and efficiency of the government
administration at the village level, it was an ambitious project conceived to
offer digital services to rural citizens across 800 hoblis (cluster of villages) in
the state. The services included issue of certificates of several kinds, which
entitled the citizens belonging to economically and socially backward
sections of the society to avail of benefits and concessions under various
government schemes.
Telecentres were facilities/kiosks that offered government services (from
the application for a service to its final delivery) to citizens using internet
technology.
Services provided
Services issuing status certificates, which deal with the status of existence
of the citizen. For example, Residence certificate, Caste certificates for
different categories, Widow certificate, and Birth certificate and Death
certificates
Services issuing income certificates, which deal with level of income of
households. These consisted of Income certificate, Unemployment
certificate, Widow pension, Physically handicapped pension.
Services issuing land-related certificates, which deal with the ownership
and cultivation of land. These consisted of No tenancy certificate, Landless
certificate, Land holding certificate, Rights Tenancy & Crops certificate
(RTC), Mutations.
IT Architecture of Nemmadi
Nemmadi outcome
No Nemmadi at these centers, was how a popular Bangalore
newspaper described Karnataka governments high-profile egovernance initiative called Nemmadi.
Nemmadi means peace of mind in Kannada, the local language
spoken in the state of Karnataka.
RFP based
No agreement on the
terms
Rollout of telecentres
Device uptime;
Telecentre operator
present
Certificate issue?
Operator available
95% of the time. 95%
of a
day/week/month?
Payment of user
fees in 2.5 days
calculate 2.5days in
the current batch or
next batch.
Incomplete service
specification
Power outage
Floods affecting
telecentres
To increase operator
attendance or device
uptime, there will be
costs incurred.
Dead-end SLA
Penalty as an
outcome
Exit Clauses
Availability
Service objects
Issue of certificate
(S/W application)
Telecentre devices
State Data Centre
State WAN
Issue of certificate
Service processes
User Support
Enter data
Certify data
Update data
Issue certificate
Security
Maintenance
Performance
maturation
Functionality
Capacity
SLA Problems
Specification of effort vs specification of results
we will respond in minimum x hours vis--vis we will ensure you x certificate issue
Network availability of 98% - what does it mean? How is 98% availability different from 99%?
Successful SLAs
Attainable
Measurable (user response time vs device uptime)
Understandable (packet collisions; dropped packets)
Mutually acceptable
Meaningful (CPU utilization)
Controllable (power outages)
Affordable
Redressal
Litigation
Alternative Dispute Resolution
Ethical opinion
Profit-making cuts ethical limits:
to carry on consulting when useless,
to accept a job without a specific competence threshold,
to suggest a standard solution (with a low cost for the consultant) when the
situation needs a specific approach,
to subordinate the judgment to the client wishes,
to suggest solutions that need longer to be implemented,
to present new problems as relevant,
to subordinate judgment to external (third party) interests,
to use information or specific knowledge about a client to serve another
(competing) client,
to abandon a client for a (stronger and more profitable) competitor.
Ethical opinion
Strategy cuts ethical limits:
to transform the client in a guinea pig without provisions (consultant can have
theoretical competence but not sufficient experience),
to accept new clients when the capacity is fully engaged, especially if it is a big
client,
to serve clients in competition,
to promise more than what can actually be done.
Ethical Relationships
Fully ethical practices in which consultant and client are ethical,
Limited ethical practices (only perfect duties) in which the client is not
totally ethical.
Bidding Process
Eligibility criteria
Proposals will not be evaluated if the Proponents current or past corporate or
other interests may, in the Banks opinion, give rise to a conflict of interest in
connection with this project. Only proposals that comply with all the
requirements of this RFP will be considered.
Evaluation criteria
Evaluation criteria
Technical Proposal (TS a minimum of 70)
Commercial Proposal
Commercial Score of Bidder (CS) = (PC of L1/PC of the Bidder) X 100 % (rounded off
to 2 decimal places)
Final Evaluation
Evaluation Criteria
Evaluation criteria
Overall value; i.e. cost versus benefit to SIA Group of companies
Point-by-point responses in a compliance table as specified in Section 4 Part 5
Compliance to the Scope of Work
Compliance to Service Level Agreements
Adherence to policies, processes and guidelines
Support Model and Strategies
Governance model
Resource commitment
Long-term strategy for business value
Value added services
Flexibility and adaptability to technology, business and process changes
Technical Expertise
Prior experience
Standards of Performance
Consultant Personnel
Applicable Law
Intellectual Property Rights
Governing Language
Bank Guarantee
Prices
Terms of Payment
Subcontracting
Performance Assessment
Termination of Contract
Resolution of disputes
Standards of Performance
This RFP is for selection of the Consultants for execution of the assignments under the RFP
from time to time. If during execution of the contract, following problems are found, then a
penalty of 1% of the Contract value per week (subject to maximum of 20%) may be
imposed by the Department, which will be the part of the RFP:
a) Quality of deliverable is not up to the mark, (till the quality is improved to the required
extent).
b) Delays in deliverables.
c) Not assigning adequate resources in time.
d) Not deploying resources on a dedicated basis, when required.
e) Assigning resources that do not meet the departments requirements.
f) Inadequate interaction with the department.
g) The work is either not complete or not completed satisfactorily as per the approved
time schedule or the quality of deliverable.
Proposal Content
1. Cover Letter
2. Questionnaire (if any)
3. Vendor Personnel
4. Vendor Qualifications
5. Understanding of Engagement
Required System Features
Desired System Features
Proposal format
Note
"Consultant" to be appointed shall not bid later on for being appointed
as System Integrator for CBS . The successful bidder, who would be
appointed as Consultant for the CBS Project, shall not participate in the
bid that may be sought later for being appointed as System Integrator
for providing and implementing the CBS for the Bank.
IT Governance
IT Governance
Specifying decision rights and accountability framework to encourage
desirable behavior in the use of IT.
Who is responsible for IT investment activities?
Who provides input into IT investment activities?
What controls are in place to ensure IT investment activities are carried out
positively?
IT Governance Elements
IT Governance Elements
IT Governance Frameworks
Nolan and Mc Farlan - The IT Strategic Impact Grid
Weill and Cross - Governance Assessment Framework
Metlife Architecture
Infrastructure decisions
System Architecture
Case Du Pont
IT Principles
Input
Decision
IT Architecture
IT Infrastructure
Input
Decision
Input
Decision
Arch
team
IT Leaders
Compe IT Leaders
tency
Center
Business
Application
Input
Decision
IT Investment
Input
Decision
Senior
execs,
Business
Leaders
Corp IT,
Business
Leaders
Business
Monarchy
IT
Monarchy
Feudal
Busin
ess
unit
Business
Leaders
Federal
Duopoly
Senior
Execs,
Corp IT
Senior
Execs,
Corp IT
Decisio
n
IT Architecture
Input
Decision
IT Infrastructure
Business Application
Input
Input
Decisio
n
Corp.
Office
Decision
IT Investment
Input
Corp.
Office
IT
Monarchy
Arch.
Office
Project
Council,
Corp.
Office
CIO IT
CIO IT
Leaders Leaders
Feudal
Federal
Duopoly
Biz
Leaders
Biz
Process
Owners
Biz
leaders,
IT
leaders
Biz
leaders
IT
leaders
Decision
Biz
leaders,
IT
leaders
Communication Approaches
Implementation of
Decision Making Structures
Business Monarchy
Executive Committees
CEO works with a small team of top executives to ensure that IT aligns with corporate
objectives.
CEO directs the CIO.
A subset of the senior management team focuses on IT issues (IT Policy Board with a few
Executive Board members)
CIO is a part of the executive committee.
Federal
Senior Executive team drew members from all business units - desire for shared data and
IT infrastructures.
IT Leadership Teams
Architecture committees
Duopoly
Start making the transition from the 'current' to the 'desired' state.
The governance concept and structure forms the core of the enterprise IT governing body including
provisions for amending the structure for changes in enterprise strategy, organisation or new
technologies
SA Water - Questions
As a consultant help Johnston to evaluate Business-IT alignment and
IT Governance at SA Water.
What recommendations do you have for SA Water?
Outsourcing Perspectives
Outsourcing
SHORE
ON
OFF
OUT
SOURCE
IN
CAPTIVE
ONSHORE
IT outsourcing arrangements
Stage 1
Stage 2
Stage 3
Stage 4
Company
market
Business
units
Company
market
IT
market
IT
INHOUSE
Internal IT
projects
CAPTIVE
Offshore
IT gains market
orientation
INDEPENDENT
SERVICE PROVIDER
Market
Orientation
and free choice
Transaction Cost
Total cost = Production cost + Transaction cost
Production cost = cost of capital, labour,
material
Transaction Cost
Total cost = Production cost + Transaction cost
Transaction Costs
Exante:
Search costs: cost of searching for providers of the product
/ service.
Selection costs: cost of selecting a specific vendor.
Bargaining costs: costs incurred in agreeing on an
acceptable price.
Exposte:
Enforcement costs: costs of measuring compliance, costs of
enforcing the contract etc.
Costs of coordinating work: this includes costs of managing
the vendor.
Asset Specificity
Asset specificity refers to the degree to
which the investments necessary for a
transaction are specific to that particular
transaction.
Such a situation can lead to dependencies
between buyers and suppliers.
The transaction partner who invests in
specialized assets is vulnerable to
opportunism and will consequently make
special efforts to protect investments.
Frequency of transactions
TCE asserts that the frequency of transactions
influences both transaction and production
costs.
Firms have an incentive to internalize
production with increasing transaction
frequency
Uncertainty
Uncertainty, can come from different sources
environmental variability: such as technological
uncertainty, deals with the difficulty to foresee
and anticipate. (bounded rationality)
behavioural uncertainty : it is based on the threat
of opportunism and refers to the difficulty of
monitoring and evaluating the behaviour and
performance of the transaction partner. (small
number of suppliers)
Sourcing Strategies
Asset Specificity
Frequency
Non-specific
Mixed
Idiosyncratic
Occasional
Outsource
(with standard
contract)
Outsource
(with detailed
contract)
Outsource
(with detailed
contract)
Recurrent
Outsource
(with standard
contract)
Outsource
(with relational
contract)
Insource
Contracts
Types
Standard
Relational
Activities
Transaction Types
Systems development
Occasional
Systems maintenance
Recurrent
Systems support
Recurrent / Occasional
Recurrent
Analyst training
Recurrent
User training
Recurrent
Activities
Specificity
Non-specific
Idiosyncratic
Mixed-recurrent
Propositions of TCE
When production and transaction costs are
considered, outsourcing is more efficient than
insourcing for all transactions except:
(a) recurrent-idiosyncratic transactions; or
(b) asset-specific transactions with a high degree
of uncertainty; or
(c) transactions with a small number of
suppliers.
When the outcome is uncertain, the principal and agent are more
likely to sign behavior based contracts.
However,
Outsourcing is not an Economic Decision
alone!!!
Hence,
Perspectives of outsourcing
Perspective
Theoretical Frameworks
Economic
Transaction Cost
Economics
Agency theory
Strategic
What to outsource
Social Perspective
Social capital
Social exchange
Emerging Trends
Influential technologies
1.
2.
3.
4.
5.
6.
7.
8.
Personalisation
Experience sharing
Co-creation
Nike - Personalisation
The Unilever and eYeka partnership is a world-first because of its strategic nature
and ambition. This is a strong signal that confirms that crowdsourcing is being
recognised as a business accelerator. We have long advocated turning to
consumers for ideas and content with consumers as a source of competitive
advantage so we are thrilled to partner with Unilever to bring this approach to a
new scale. - Franois Ptavy, Chief Executive Officer, eYeka
The Problem:
What is the right Price?
Services are provided by monopoly industries.
Customers demand Want a voice on all issues that affect their bill.
Launched an open innovation challenge that fits its ecomagination (clean energy)
theme.
Committed $100mn of its own money to launch companies in the space of clean
energy.
Partnered with VCs to accelerate the development and deployment.
Involved participants, independent experts from the technology and business domain
along with teams from GE and VCs to evaluate the ideas in terms of the idea and
business potential.
75,000 people participated in the process either through submitting ideas themselves
or commenting on the submissions of others.
23 ventures were funded with roughly $140mn committed of the $200mn pledged.
IdeaConnection: R&D
Fluevog: Design
Sending money to a different location or state when you do not know the
recipients bank account number can be quiet a challenge!
A mobile number acts as a mobile money account, thus facilitating
money transfer without knowing the bank account number of a
recipient.
Provides instantaneous transfers, as opposed to slower means like using
money orders or friends and family and other informal means.
Increases convenience as it reduces travel time if sender physically travels
to the recipients location.
Brings potential informal money transfer into mainstream money transfer
channels.
Increases reach of the organization, as it can capture transactions that
were so far considered difficult to conduct through formal payment
channels.
Uses USSD technology to ensure availability of service across a variety of
Mobility
P&G introduces technology based inventory models to optimize each stage of the supply chain.
Uses mulitechelon inventory optimization software to minimize inventory costs across the endto-end complex supply chain..
Improved end-to-end visibility of information/ inventory/demand.
Created a Supply Chains Environment Sustainablity Scorecard to asses upstream impact of
supply chain.
Assess and help supplier sustainability issues, draw on innovative ideas.
Created a responsive supply chain by improving end-to-end visibility, began to produce and
supply products based on customer demand.
Benefits:
2
4
Benefits:
Enterprise
IT Consulting imperatives
Formulate and monitor new kinds of partnership and co-creation engagements (IT services)
Support new forms of e-sourcing (e-market sites, e-reverse auctioning)
Establish processes and team to ensure sustained and effective data governance
Transparency strategy
DBMS-based, structured content - RDBMS & data warehousing, ETL & OLAP, Dashboards & scorecards,
Data mining & statistical analysis.
Web-based, unstructured content - Information retrieval and extraction, Opinion mining, Question
answering, Web analytics and web intelligence, Social media analytics, Social network analysis, Spatialtemporal analysis.
Data Governance
Scale:
Rapid Digital Scale Up/Down as Strategic Dynamic Capability (Cloud model)
Network Effects Within Multisided Platforms Create Rapid Scale Potential
(Google with Android)
Scale Through Alliances and Partnerships (Aggregators like Bookmyshow,
Makemytrip)
4
1
IT Management Concerns
July 2016
AGENDA
Session I
RFP Introduction
Lifecycle of RFP
Structure of RFP
Response format
Evaluating response
Typical Issues & Challenges
Session II
IT Strategy
IT Governance
IT Portfolio Management
Consulting Skills
SESSION - I
RFP AN INTRODUCTION
Understanding RFI, RFQ & RFP
RFI I know what I want to solve my problem, but just need some information
RFQ I know what I want to solve my problem, but I need vendors to bid for the service (specifically price, payment
terms, and may include service quality aspects as well)
RFP I know I have a problem, but there could be multiple ways to solve it and hence need potential vendors to
explain how they would help me
LIFECYCLE OF RFP
Develop
Define problem
statement
Chart out the scope of
required service
Determine evaluation
criteria
Develop milestones &
timelines
Release
Shortlist vendors
Release the RFP to
respondents
Provide additional
clarity if required
Confirm the interest to
response
Receive responses
Evaluate
Award &
Finalize
Coordinate due
diligence if required
Evaluate the
responses
STRUCTURE OF RFP
Section Header
Summary / Overview
Section Description
Brief summary of what is present in the RFP
RFP Guidelines
High level guidelines about timelines, responses, general rules, sub-contract etc.
Contract terms
Organization Background
Key purpose of this RFP. This section will contain the details about the clients
problem, the kind of solution they look for, the type of services they require from
vendors etc.
Details about the organization such their structure or existing landscape etc. that will
help the respondents to understand the request better
Details about all the components of the service requested in the RFP. This section will
provide the detailed scope and the requirements to be satisfied by the vendors
solutions
Detailed timelines along with all the milestones associated with the RFP
Parameters based on which the responses will be evaluated
A sample format that can be used by the respondents to respond
RESPONSE FORMAT
Section Header
Vendor Profile
Understanding of the
requirements
Proposed solution approach
Case studies
Exclusions
Proposed timelines
Commercials
Appendix
Supporting documents
Section Description
Brief overview of vendors offerings and capabilities
Clear articulation of in-scope, out-of scope services/products as understood by the
vendor. All the assumptions are also stated to avoid ambiguity
Detailed description of the solution proposed by the vendor to meet the requirements
stated in the RFP by client
Sample case studies showcasing vendors experience in serving clients in similar
business as the one stated in RFP
Part of the services/product specifications that will not form a part of the solution
approach
Detailed timelines along with all the milestones associated with the solution approach
Details on the pricing of the product/services with all the cost elements in terms of one
time installation cost, manpower cost, license charges, recurring development,
maintenance and support charges. Service terms and conditions are also stated
explicitly in this section
Details on the topics covered in brief in the preceding sections of the response
Additional documents, references or other materials used during creation of solution
approach
EVALUATING RESPONSE
Responses to RFP are evaluated based on evaluation criteria decided by the sponsors. Following are
some of the attributes based on which responses from vendors could be evaluated
Functional fit
Technical fit
Cost
Vendor profile
Evaluation of the extent to which the vendors solutions/offerings are able to meet the stated requirements
Extent to which the proposal meets stated warranty requirements
A measure of technical attributes of the solution such as underlying platform, integration capabilities, security,
architecture, system scalability etc.
Estimation of Total cost of the solutions/services based on cost elements such as one-time cost, licensing fees,
annual fees, consulting fees etc.
A measure of product vendors financial stability, intellectual capital, experience in serving similar clients, ability to
support implementation and maintenance of their solution, availability of customer references etc.
Develop
Ambiguous statement of
problem and
requirements
Water tight specifications
limiting any out-of-box
solution (in case of
products)
Release
Inviting non-serious
vendors
Evaluate
Missing the
regulatory/legal
restrictions on working
with a vendor
Award &
Finalize
SESSION - II
IT Strategy Consulting
IT STRATEGY
IT Strategy
How should IT support the delivery of the business strategy?
How do we configure our resources to deliver?
Business Strategy
Where should we compete (markets, segments,
products etc.)?
Corporate Strategy
What business should we be in?
IT STRATEGY EXAMPLE I
Translating business priorities/objectives of an financial services company
Business Objectives
Business Capability
To become a bank
that is most preferred
by the customers in
South India
Ability to provide
online facilities for
customers to perform
banking operations
such as Opening a
Fixed deposit,
recurring deposit etc.
IT Capability
Online platform that
has multiple portals
and links to address
customer requests
IT Project
Develop an in-house
application with a
Java front end and
Oracle database all
hosted in Linux
servers
IT STRATEGY EXAMPLE II
Translating business priorities/objectives of a fashion retailer
Business Objectives
Business Capability
To deliver superior
customer shopping
experience through
all the channels of
interaction
An intuitive platform
that offers rich
features to aid the
customers while
shopping
IT Capability
IT Project
Mobile application
that displays the
catalog of products
along with customer
reviews and
discounts for bundled
products
Develop a mobile
application with a
HTML5 front end that
interacts with multiple
databases at the back
end with a fast
response time
Business Capability
To enhance global
operational efficiency
and reduce the
operational expenses
by 10%
IT Capability
A standardized ERP
package that is
centrally deployed,
that can provide the
necessary metrics to
monitor operations
IT Project
Perform an
assessment of the
manufacturing
business process and
execute a ERP
vendor selection
exercise
IT Strategy is all about defining the roadmap for the clients IT function to align their IT with
their business objectives
IT GOVERNANCE
IT Governance has many facets to it. Depending on the clients need and problem, the solution varies.
IT Governance
IT Supply
governance
IT Demand
governance
Domains: IT Performance
Management, Portfolio
Management, Strategic alignment
IT PORTFOLIO MANAGEMENT
What is IT Portfolio?
IT Portfolio represents a snapshot of the IT projects and programs that are linked to the strategic goals and objectives of the
organization
IT PORTFOLIO MANAGEMENT
Here are some of the key factors that drive portfolio management decisions:
Nature of the project: Enabler or Business Critical
Investment
decisions
Interdependency: Isolated business process or one that can impact several other
processes or applications
CONSULTING SKILLS
Following are some of the key skills and techniques that anyone will require to execute a consulting
assignment
Presentation skills
Story
boarding
Core
Consulting
Skills
Generating &
Validating
hypothesis
Interviewing
Skills
INTERVIEWING SKILLS
Interviewing is one of the key aspects of any consulting engagement. How we conduct interviews is of
utmost importance
How do you prepare before the
interview?
Initial hypothesis:
Finance department didnt have the right amount of staff to support the resolution of help desk tickets
Supporting hypothesis:
The resolution SLA & response SLA were constantly breached for many of the help desk tickets assigned to Finance
department
There was no formal handover of applications turned over to Finance department when there is a production release
Review the tickets resolved by Finance department and identify the number of tickets that breached SLA
Analyze the handover process that takes place between development & support teams
STORY BOARDING
What is the need for story boarding?
How we communicate our message and the structure we use will either help to transfer our ideas and message clearly to the
audience or leave them utterly confused.
The purpose and benefits of a storyboard are:
To structure and prioritize key messages
Support the messages with trustworthy information
Determine how you want to pitch the story
Ensure the presentation is client centric whats in it for me? (WIIFM)
STORY BOARDING
Factors that can influence your STORY:
OBJECTIVE
CONTENT
Is it formal / informal?
Do you have less time or more?
Is it a workshop session or a one-to-one discussion?
AUDIENCE
PRESENTATION SKILLS
What makes an impactful presentation?
PRESENTATION SKILLS
PREPARE
Agree on content
Allocate sections/slides to SMEs
Consolidate materials
Review flow & content
EVALUATE
Seek feedback
Identify areas of improvement
Reflect & improve
PRACTICE
Rehearse
Work on body language
Stress on key messages
THANK YOU