Leisure Destinations International

SUIT Case Competition Antaeus Consulting (Team: C3)

Subhankar Banerjee, Efesa Origbo, Martin Knaack

Agenda
Case Background Issues Analysis Candidate Solutions and Analysis Our Solution Questions

Case Background
Analysis of Current State

SWOT Analysis: LDI

STRENGTHS Regional structure promoting knowledge sharing Strong growth in resort club and operations . High customer satisfaction. Economies of scale WEAKNESSES Decline in real estate business revenues Lack of synergy between corporate and regional initiatives

OPPORTUNITIES Post-recession period marked with increased willingness to spend by customers. Cross selling and up selling opportunities to the loyal customer base.

THREATS Real estate markets continues to remain weak. Global warming and low snowfall posing threats to some segments of the company.

Issues Identified
Strategic Issues
1 2 3 4 Lack of standardized processes Role of Regional Information Officers unclear Conflicting priorities between business and IT Lack of synergy between corporate and regional initiatives

Impact
Multiple applications, security profiles and platforms built over time Responsibilities missed due to role absence IT strategy misaligned with business needs Inability to derive value from IT

Operational Issues
1 2 3 4 5 6 SLAs not defined for many applications Old and custom applications Lack of proper documentation practices Ownership of incidents not clearly defined Distributed and unconsolidated landscape Lack of proper security model

Impact
Inability to manage user expectations and risk of downtime Availability and Scalability issues Issues in knowledge management Creates confusion and accountability issues Scalability issues Multiple security profiles, Access management issues

Root Cause Analysis

Lack of synergy between corporate and regional initiatives

People

Conflicting priorities between business and IT Role of Regional Information Officers unclear Non-standardized processes Absence of proper security model

Process

Lack of SLAs for some applications Lack of proper knowledge management processes Ownership of incidents not clearly defined Distributed and unconsolidated landscape Network issues

Technology
Old and Custom applications

Risks Imposed by Current Situation

Implied Risks
1 Downtime Old applications posing risks of availability 2 Security Incidents In absence of proper security methods, probability of security incidents is high 3 Inefficient processes Significant loss of time and money 4 Non-Scalability Lack of standardization is posing risk to scalability of IT 5 Decreased service level Availability, reliability, maintainability and capacity risks 6 Expectation Management Absence of proper metrics and SLAs causing issues in Managing expectation

H H H H M L

March Madness Reflects Top 3 Risks

Downtime One hour downtime on major internal and external systems

Possible security breach (Denial of Service Attack?) Security Incident Possible loss of customer data integrity

Inefficient Processes

Poor crisis management procedures

LDI cannot afford another March Madness!

Analysis of Potential Solutions

Options Available

Potential Solutions
Alternatives
Standardization Data Consolidation Server Consolidation IT Service Management Web 2.0 Cloud Computing Outsourcing

Current State

Centralized Architecture

Distributed Architecture

Hybrid (Centralized/Distributed) Architecture

Evaluation Matrix
Evaluation Criteria
Addresses Current Issues
1. Non-standardized IT Infrastructure and processes 2. Lack of synergy between regions and headquarters 3. Absence of enterprise-wide solutions Score 30% 0 20% 0 10% 2 2 1 3 2 1 1 2 1

Weight

Status Quo

Centralized

Distributed

Hybrid

Resolves Symptoms
1. Strategic Level 2. Operational level Score 1 1 0 20% 0 20% 0 3 1 1

Respects Restrictions
1. Rapid business growth 2. Cautious post-recession IT investments Score

Accomplishes Goals
1. Improve IT service levels 2. Improve collaboration and knowledge utilization to drive future growth 3. Economies of scale for applications and data Score

Provides Long-term Benefits

Benefits: Scalability, Availability, Performance Score 0

Ranking

100%

0.2

1.6

0.8

2.0

Hybrid System Architecture

Current Architecture

Target Architecture

Database

Implementation Plan
Timeline

Measures
Consolidation Applications Databases Email Improve Network capacity Enterprise solutions Knowledge portal (web 2.0) Mobile Apps Video Conferencing Green-IT initiatives Evaluate Cloud Computing Outsourcing (HR, Finance)

Results
Consolidated IT landscape Better availability and security for applications like RESERVE Faster communication to remote sites Improved collaboration and knowledge utilization Economies of scale. Reduced cost for IT operations Focus on value providing services .

Short

Medium

Long

IT Service Management

IT Service Management
Service Continuity Knowledge Management Incident Management 5 4 3 2 IT Security Management 1 0 Change Management Problem Management Service Desk

Several process issues can be solved using ITSM Identified 12 ITIL processes to be implemented Phased approach

Capacity Management Availability Management Service Level Management

Release Management Access Management Service Assets

0- None 1- Weak 2- Fair 3- Capable 4- Mature 5- World Class

Current State Target State

ITSM - Roadmap
Setup Initiative Current State Analysis Strategy Development Process Re-Design Implement & Measure

Continuous Business Process Improvement Cycle

Business driven IT vision

Baseline assessment Identifying key pain points Prioritization depending on business criticality

ITIL processes to eradicate pain points Identify key metrics , policies , process owners and resources

Redesign identified processes to eliminate gaps Identifying key metrics, process owners and resources

Implement identified ITIL process Track key metrics to evaluate process efficiency

Prioritizing ITSM processes

Process
IT Security Management Service Continuity Management Problem Management Service Level Mgmt Incident Management Availability Management Capacity Management Access Management Asset Management Release Management Knowledge Management Change Management

Criticality
5 4 4 4 5 3 3 3 5 3 3 2

Vulnerability
4 4 4 4 3 4 4 4 2 3 3 4

Score
20 16 16 16 15 12 12 12 10 9 9 8

Implementation Timeline
Timeline Measures
Centralize service desks Implement ITIL processes: Incident Problem IT Security Service Level and Service Continuity Review and test all implemented processes Implement ITIL processes: Availability Capacity and Access management Implement Release, Change and Knowledge Management Evaluate other ITIL processes

Results
Disaster recovery plan Ownership of incidents Centralized help desk SLAs clearly defined for all applications Strong security procedures and policies

Short

Medium

Mature IT Service Management processes Optimized capacity plan and high availability Proper management of user profiles

Long

Proper developing and testing procedures. Optimized and flexible IT services.

Timeline
Current 1 year 3 years 5 years
Short Term Medium Term Long Term

Case in Point: March Madness

Type of Measures Measures Contingency plans Reactive Measures Tracking software Data backup Increased network security Preventive Measures Capacity planning IT risk management Coverage by our solution ITSM-Service Continuity Mgmt. Architecture Architecture Architecture ITSM-Capacity Management ITSM-Service Continuity Mgmt. Timeline Short Short Short Short Medium Short

Financial and Risk Analysis

Financial Analysis: Costs

Type of Investment Initial Investment Hardware / Software Consulting / Application Development Project Management IT Service Management TOTAL Annual Operating Costs Hardware/Software IT Service Management TOTAL (NPV 5 Years) $0.9million $0.07 million $4.8 million $0.2 million $1.2million $0.2 million $0.7 million $2.3 million Values*

* For detailed calculations see Exhibits

Financial Analysis: Benefits

Annual Gains Technology Benefits Operations Data Consolidation Availability Scalability Security Business Benefits Application development IT Service Management TOTAL ANNUAL GAINS
* For detailed calculations see Exhibits

Values* $0.09 million $0.25 million $0.62 million $0.05 million $0.10 million $0.10 million $0.94 million $2.15 million

Financial Analysis: Costs / Benefits

Summary Initial Investment Annual Savings Total Net Present Value (NPV) $2.30 million $1.18 million $1.51 million

Assumed Internal Rate of Return (IRR): 14.6%* 5 years time horizon ROI: 31.26%

Break-Even Analysis
Millions $4.00 $2.00 $$(2.00) 0 1 2 3 4 5

Year

* NSAA Research Highlights Ski Resort Industry Return on Equity, 2005/2006

Risk Analysis
Risk Insufficient user involvement Impact Probability Mitigation Gather user requirements Hold information sessions Provide required trainings Constantly communicate benefits Assign project champion Define clear transformation responsibilities and roles Align management goals to success of project Hire experts from inside or outside the company, Follow proper testing procedures Have clear escalation procedures in place Motivate employees with Carrot and stick approach. Regular processes and systems audit Transformation strategy, with rigorous cost-benefit analysis Tracking of transformation progress Focus on reusability, scalability and performance in architecture and service design

Lack of Management Support Technical implementation difficulties Undermining of defined processes

H M M

L L M

Unable to fully exploit benefits of standardized IT architecture and systems

Change Management
Measures Results

IT steering committee
Include business and IT leaders Prioritize projects and allocate budgets

Better business IT alignment Structured IT Organization IT Budget aligned to Business strategy

More strategic role for RIOs

Include in the steering committee

Restructuring IT to accommodate changes

Current Organization Chart

SVP, Financial Planning & Systems SVP, Technology & CIO SVP, Project & Corporate Finance Other VPs, Engineering & Technology Director, IT Solutions Retail Applications
Legacy Applications Team
Oracle Design and Support

VP, Information Technology

VP, Information Technology

Director, Infrastructure Technical Architecture

Regional Planning and Support Desktop Management
Server Capacity Management Network Management

Director, IT Operations Mainframe Operations Operation Shift Teams Central Help Desk
Server/ Desktop Operations Desktop Service Desk

Director, Strategy & Planning

Quality Assurance Testing

Budgets

Service Continuity

Microsoft Design and Support

Strategic Planning and Investment Analysis

Web Design and E-commerce

Technology Refreshment

Internet/Intranet Solutions

Database Management Infrastructure Monitoring and Control

IT Service Management
Quality Assurance Testing

Data & Assurance Services

Wrap-Up
ITSM raises IT Service Level Architecture transformation ensures higher security Standardization exploits economies of scale Proper change management reduces risks Opportunity to scale IT with business growth

Questions?
Thank you very much for your attention!

Appendix

Exhibit I: Investment Costs

Exhibit II: Investment Benefits

Exhibit III: Summary Investment

Cash Flows
$1.50 $1.00 $0.50 $$(0.50) $(1.00) $(1.50) $(2.00) 0 1 2 Cash Flows 3 4 5
Year

Millions

Exhibit IV: Mapping Solution to Problems

Synergistic opportunities from collaboration between corporate and regional initiatives Business/IT Organization alignment

People
Regional Information officers acting as regional project champions

Standardized processes and systems

Process

Robust and scalable security model Appropriate SLAs to ensure high system availability

Transparent and accountable project ownership

Economies of scale from enterprise solutions

Technology
Efficient, flexible, and high-performing systems