Delivery Documentaries are a behind the scenes look at how our Architects in the field perform Value Realization activities for customers. The documentaries are raw and real, and the purpose is to share what actually happens on the ground. They are always a learning opportunity, and we hope that over time we can help bridge the state of the art with the state of the practice, and continue to move the ball forward.
How can a business mitigate risk when considering transformational initiatives, and then accelerate the widespread adoption of new tools and technology? This example, provided by Luanne Middleton-Cross, an Architect, describes how she and her team helped a business evaluate initiatives and promote adoption of new ways of working among employees.
This is a Delivery Documentary of an engagement led by the Microsoft Enterprise Strategy Program (ESP), which provides services to help customers realize the most value from their technology investments. In this engagement, an Architect helped a company assess business and IT strategy for several initiatives, and then designed training and conducted road shows to promote the adoption of new devices, applications, and new ways of working.
In this engagement, employees and management alike had been hampered by old technology when considering a vision for the future and deciding how best to perform work. The vision was constrained by obsolete assumptions. We demonstrated new possibilities to the business users, showing real changes in work techniques. Employees quickly became enthusiastic when seeing the technology come to life and understanding the options for transforming the way they work.
We began our work during a time when management changes were occurring. Consequently, our first efforts to promote our engagement stalled until new management was in place.
It soon became clear that the previous focus of our proposed initiatives did not resonate with the goals of the new CIO. We had originally considered methods for using a shared service model to build out and scale services so that the business could expand in the region.
The new CIO, who had experience transforming business services, was less interested than the prior CIO in our strategic guidance along these lines. To address the interests of the new management, we changed the focus of our participation. We began having conversations with the CIO about his prior successes, in which our products had played a role, and offered to help make the new strategy successful by first ensuring that it aligned with licenses held and could proceed from the state of technology currently in place. Then we focused on minimizing risk and accelerating adoption.
During this engagement, I worked as part of a very effective team that included an Architect (consulting services), an Account Technology Specialist (sales), and a Technical Account Manager (support). We worked closely together, though I was the single point of contact with the CIO. When the CIO needed something, I was able to relay the information to the correct side of our organization while presenting “One Microsoft” to the customer.
Compared to a typical assessment using the Value Realization Framework, which supports strategy development, this was a short piece that transitioned more into a validation of the various streams of strategy, such as:
We created several position papers assessing the business and IT strategy of the proposed initiatives, which included topics such as the transformation of the document management systems, data center transformation, upgrading desktops, enabling communication/collaboration, remote access, improving security, and adding more cloud-enabled features.
We engaged with a variety of stakeholders to validate the positioning. We met with HR and the Change Management team with regard to new ways of working; and we met with the Chief Security Officer about preparing for cloud migration.
Some of the technology streams were already running: for these our focus was on helping accelerate and remove risk from the initiatives. For others, rather than conduct the work ourselves, we participated in helping with the initiative planning phases. For example, we helped create an RFP to select a partner to use to implement communication and collaboration initiatives. We then participated in doing Technical Quality Assurance (TQA) reviews of the submitted proposals.
Although we are often only involved in initiative planning and delivery, we worked on a number of adoption and change management projects to help the business understand the new technology, prepare for deployment, and support the success of the initiatives. We performed this additional work during the value realization phase of the initiatives.
One of our first objectives was to counter obsolete assumptions held by employees and management when considering a vision for the future and deciding how best to perform work. Employees became enthusiastic when we demonstrated new possibilities and helped them understand their options for transforming the way they work.
We conducted persona analysis to identify and provide the most effective training for different roles at the business. We designed and delivered materials for presentation in a variety of local and remote settings, including face-to-face, online, videos, and self-service training. We also worked with our internal WorkSmart training team to provide useful “Tips and Tricks” sessions to the customer.
One effective driver for employees was the collection of available tools and apps (such as currency conversion, mapping, and so on) that users could run on their new devices. We provided several team members from Premier and Microsoft Consulting Services to discuss, implement, and deploy a company app store that made available a number of approved apps from the Windows App Marketplace, as well as custom apps.
We worked with our customer’s Business Engagement leads to develop and conduct a series of road shows about the new technologies being introduced, since our primary goal was to help ensure that people didn't have a negative experience when first using the new tools.
To this end, we created a “road show” that we held at each of the regional offices. A hardware vendor supplied a variety of devices configured with the new software from which employees could choose. During the road shows, we guided employees in trying out the new technology, and showed employees how to take advantage of new features, including communications and collaboration.
Having worked in an environment that previously restricted the types of devices available, employees were very excited to be able to have a choice of computers, and we assisted employees in understanding the benefits of different devices, and the tools to use to increase productivity.
The road shows were focused on making people comfortable with the new technology, and aware of how to best to get value out of it. For example, if a user was concerned about a new ribbon in the interface, we highlighted how to accomplish tasks with it, provided helpful tips for using the new applications, demonstrated how to get around, and even showed how to use shortcut controls that were customized for the business.
After only a few minutes of hands on tutoring, with just a few pointers about using line-of-business applications in the new environment, employees gained confidence and enthusiasm for the changes.
Some aspects of this engagement that were particularly noteworthy, and from which I learned, were:
Delivery Documentaries are a behind the scenes look at how our Enterprise Architects (EAs) in the field perform Value Realization activities for customers. The documentaries are raw and real, and the purpose is to share what actually happens on the ground. They are always a learning opportunity, and we hope that over time we can help bridge the state of the art with the state of the practice, and continue to move the ball forward.
What steps does a rural university take to begin meeting begin serving a more widely dispersed and larger student body? This example, provided by Nashreen Hofmeester, describes how a Microsoft Architect helped the university assess capabilities and develop a roadmap for their journey into 21st century learning.
This is a Delivery Documentary of an engagement led by the Microsoft Enterprise Strategy Program (ESP), which provides services to help customers realize the most value from their technology investments. In this engagement, an Enterprise Architect helped a university create a roadmap for improving capabilities necessary to expand educational opportunities to a broader community. Work supporting the roadmap included researching global trends in higher education; assessing existing challenges, drivers, capabilities; and aligning business objectives and technology enablers.
I recently participated in an engagement with a rural university that sought to provide higher education to a widespread student body. I was part of a Microsoft Consulting Services team, and was brought in to help assess IT service capabilities and maturities, align business objectives with technology, and help ensure that the university achieve value from current initiatives, as well as chart the way forward to place the university at the forefront of rural higher education.
To learn about the existing challenges and objectives of the university, we held a series of discovery meetings. Some of the meetings used the Value Discovery Workshop approach we have established in our Value Realization Framework. Other meetings were focused group interviews.
The main objective of the university was to transform from traditional offerings and infrastructure to a "comprehensive university" that enabled a broad range of educational opportunities for a larger and widespread student body. The transformation has two phases, of which we are currently helping with the first.
As we continued our discovery, we quickly found that the existing infrastructure was out of date, many components were obsolete and no longer supported, existing services were not stable, and users experienced connectivity issues.
There was no simple path to migrating infrastructure, services, and data. In addition, the university was finding it very difficult, due to their location, to get access to people with the kinds of skills needed to transform and operate the infrastructure.
The university needed to improve the quality of services delivered to comply with government guidelines, attract and accommodate more students, and obtain more funding from students and the government.
We participated in many conversations about making the university more accessible to the surrounding communities, offering online education along with other forms of education, making the university more attractive to prospective students, and increasing enrollment.
In the national educational context in which this university operates, the government is encouraging traditional universities to expand offerings to include more technically-enabled education. The goal is especially pertinent to this university, which operates in a rural area where there is a need to contribute to regional economic growth.
The university was not geared up to interact with students using modern channels and infrastructure. The drivers for change were commonly understood and accepted at the university, but the means to reach them had not been identified.
The primary transformational goal of the university is to change to a “Smart University” in order to make teaching accessible to students attending online classes, as well as students that attended classes in person.
The value of this change is reflected not only in expanding the influence and availability of the university, but in the associated increase in revenue from government, students, and businesses.
Operational value is defined and measured differently in the domain of higher education than in a purely business environment, although increasing revenue is significant driver in both areas.
The university receives government funding based on student headcount, as well as tuition fees from students. In addition, the university receives funding to perform Research and Development work on behalf of local industries.
The university’s overriding business objective for modernizing infrastructure is to drive up the number of students, resulting in increased support from the government, and driving the agenda for Research and Development.
One of the most important activities we performed during this engagement was ensuring that we aligned business and technology goals early in the process.
Right from the start of the engagement, we focused on business objectives and mapped them to technology enablers. We used Benefits Dependency Networks (BDNs) to map from business drivers to investment objectives, and to help identify the benefits that would be achieved for various scenarios.
We also needed to determine how we would measure the success of initiatives, identifying quantifiable metrics that were meaningful to the university. We used many performance indicators identified by the university itself in a comprehensive business strategy document.
Unlike some public sector environments, we were able to work with hard metrics, such as:
To validate that we were correctly aligning business and technology goals, we identified primary stakeholders to review the documented alignment, as well as conducted face-to-face review validation meetings with executives.
One of the first steps on the road to meeting business objectives, prior to enabling a full set of innovative features, was to establish a new baseline infrastructure and solve connectivity issues. We gained the support of many sponsors, including the Vice Chancellor Operations of the university, by speaking about making it unnecessary to acquire updated hardware and support personnel by moving productivity applications to the cloud.
To better understand and evaluate the transformation plans from an operational point of view, the university was very dependent on the Dean of Information Technology.
The Vice Chancellor pulled the Dean into our work, and from the beginning he was open to engaging with us. In the end, the Dean was a strong advocate for our initiatives and played important roles in adoption and change management.
The Vice Chancellor was also instrumental in helping us identify and work with the relevant stakeholders for research and planning. We were fortunate that the university had, through resources in the business school, a good understanding of the value of business planning.
A great deal of remediation was necessary to support connectivity, communications, and collaboration. Even with enthusiastic support, we found the university did not have mature enough capabilities to conduct remediation themselves, or even to plan remediating initiatives. We realized that simply giving the IT department a remediation checklist was not enough – we had to find another mechanism to help ensure success at the end of the day.
Devices to support were seemingly endless. The university had hundreds of devices, and though many students still used the computer labs on campus to perform work, more technologically saavy students were rapidly introducing new and remote devices.
We had an existing Premier support agreement with the university, under which we actively helped drive remediation, including sending skilled personnel to the campus and IT facilities, and to assess and automate remediation.
After performing remediation to ensure that the infrastructure was capable of supporting the more innovative initiatives, we began assessing the capabilities of the data center to determine maturity, gaps, and needed changes.
To evaluate maturity and perform the assessment, we formed a multidisciplinary team that included an enterprise architect and a solution architect with a specialty in modern data centers, in addition to members of the Microsoft Global Practice for modern data centers, and Premier.
As I conducted the maturity assessment, I determined where the client was with capabilities, what workloads needed to be supported, and what levels of maturity were required to support the workloads.
We held a number of workshops and provided questionnaires to gather the background information necessary to understand the environment. During the process, I helped guide our team and the participants from the university, I facilitated workshops and interviews, and helped validate information among stakeholders and sponsors.
To validate our assessment, we prepared detailed review materials, with a strong emphasis on semantics, and provided information in a form that was familiar to our sponsors.
Prior to creating the planned deliverables relating to a transformation roadmap, we found that our sponsors and stakeholders had few clear cut ideas about the architectural principles that would guide them in making decisions about planning and solution delivery. I helped them identify their objectives by explaining the benefits of pertinent principles that have been useful in my experience. For example:
The primary deliverable we created was a roadmap that identified the components in place, the changes necessary, the investments for the next three years, and ongoing value realization activities. In addition, the roadmap points the way to future opportunities for leveraging the cloud, such as enhanced mobility and device support.
The roadmap is supported by a reference architecture from the perspective of the business (higher education), and a reference architecture from a technology perspective.
To encourage sharing and discussing the roadmap, we created poster size versions of it for displaying in strategic locations. These posters attracted a lot of attention, furthered discussion about the projects, helped us refine our deliverables, and supported adoption and change activities.
One of our main goals was to rapidly deliver value in terms of useful features and connectivity, even prior to data center transformation and migrating activities.
We first enabled the university to stay in touch with staff, students, and alumni by creating mailboxes and a collaborative environment supported in the cloud. With these tools, teachers can work online with students, and students can work online with each other. Students can also prepare projects for delivery, and can carry on discussions around topics of interest.
All of these features were delivered prior to sorting out the on premise data centers, modernizing, migrating, or refactoring applications – tasks that the university is still carrying out.
Several aspects of this engagement were notable, including:
The considerable value of a fully engaged client executive sponsor: Having the wholehearted support and active participation of the executive sponsor was key to our success for opening doors and decreasing the barriers to engagement from a business side, particularly with the academic staff of the university.
Remediation challenges: It was important for us to understand the skill set, capability level, and maturity of IT service delivery for the university. We knew we should be prepared to provide actual remediation assistance in those cases where there was not sufficient skill. The initial position of the project team was that the client would be responsible for remediation, but it became evident at an early stage that this would delay the project.
Multiplier effect of embedded Enterprise Services Program (ESP): Embedding the Enterprise Services Program in a Microsoft Consulting Services project has provided us the opportunity to accelerate value realization, as well as identify additional opportunities for value realization for the university.
How do we measure value and value realization in the public sector? Public projects are typically conducted for the benefit of social welfare, quality of life, citizen safety, or other dimensions that can be difficult to quantify in the traditional sense of ROI.
This post, drawn from a paper by Stephen Kell, presents ideas about considering social value while comparing the impacts of various initiatives.
Social value metrics are often useful for representing the performance of a government or the social impact of an organization. Social impact may also be an important consideration when an Enterprise Architect compares the value and risk of an array of initiatives. Some examples of the practical situations that social value modeling can apply to include:
Evaluating Impact for Upgrading Metropolitan Digital Capabilities
Applying social value metrics to work done to date for the digital on such initiatives can be used to provide a basis for prioritizing and calculating the return on investment for future digital initiatives.
Choosing Between Initiatives of Change
In one engagement, business leaders compared the relative merits of spending money to upgrade hospital computer systems vs. spending money on a new hospital wing. Though expanding the hospital at first seemed the best option for expanding care, the quality of care was more impacted by improving physician access to patient information. This increase in efficiency reduced the length of patient stays and increased hospital capacity. Improving quality of care was a more important dimension than the capacity of the hospital. A detailed social analysis gave a different picture than an initial impression based on traditional ROI.
Representing Performance of Social Enterprises and Charities
Social Enterprises in this context are enterprises set up for reasons other than purely profit. They tend to have objectives such as reducing unemployment or employing people with certain disabilities or a marginalized section of the community, therefore their value needs to be expressed in term of the social impact as well as the P&L.
Charities are set up with specific social aims in mind so that the value add has to be in terms of social impact and not the P&L. Indeed, for a well-run charity the P&L will be close to zero.
Generating Corporate Citizenship Reports
Many companies such as Microsoft, now publish citizenship reports that are intended to represent the positive social impact of the company. Social value modeling can be used to assess such impact and the citizenship agenda of these companies.
Planning for Extreme Events
Extreme value theory, a type of mathematical analysis, can be used when considering the social value of implementing various initiatives to see how each of a set of proposed initiatives affects the risks associated with extreme events. The benefit will be the difference between the current Value at Risk and the Value at Risk after the initiative has been implemented.
Characterizing Full Value of Consulting Services
The value of consulting services has largely been assessed on the basis cost savings or risk reduction. Using a social value model, value can additionally be expressed in terms of social impact.
Value dimensions are, like beauty, very much in the eye of the beholder. Dimensions that are well-defined for the commercial sector are often more difficult to define or less relevant when applied to the public sector.
Often the main driver in the public sector is not money, but a desired social impact. Many government departments and charities have to balance budgets, while still achieving the social outcomes they pursue. To identify the most important value dimensions for a project, we need to understand how an organization is measured, how it is judged, and what it wants to achieve.
Increasingly, commercial companies are looking at their corporate citizenship and therefore are starting to have value dimensions other than financial. The techniques and methods outlined here are applicable to those situations as well.
Some value dimensions typically applied in the commercial sector include:
For the public sector, we need to consider additional value dimensions, such as:
These value dimensions are often obtained by consolidating multiple KPIs according to a social value model.
Many models exist defining KPIs for government regarding social impact investing and performance. Though some models attempt to be general, no model is definitive or correct for all governments and all initiatives, as social values vary. Corporations have also defined KPIs to reflect corporate citizenship, demonstrating how social modeling can be applied to corporations as well as government departments and charities.
Consolidating KPIs into Core Value Dimensions
To aid in comparison, the KPIs for public initiatives can be consolidated into the following core value dimensions:
Other dimensions to consider for core value include:
One of the issues when creating consolidated dimensions is that KPIs are measuring different units using different scales, so some way of normalizing them to a common unit and range needs to be used.
One method of doing this is to use an intermediate value (T-Value) as proposed by Charles Taylor (“Composite Indicators: Reporting KRIs to Senior Management.” The RMAJournal, 16-20. April, 2006). T-values are calculated by identifying thresholds for strongly positive, positive, neutral, negative, and strongly negative ranges within a KPI, normalizing the values among KPIs, and then averaging them.
Using this method, the T-Value can take values from -2 to +2, which can then be visualized using Spider diagrams.
The traditional Spider diagram, or more accurately the Kiviat chart, normally has a scale from 0 to 5. In the case of the value dimensions we are talking about, they can be both positive and negative. Therefore we use a scale from -2 to +2.
Anything outside the circle is positive; anything within the circle is detrimental to the value dimension. For example, a large construction project might produce the following chart, showing that the economic impact is very positive but the environmental impact is very negative.
In order to compare different investment initiatives, we can produce Spider diagrams for each initiative and then place them on a grid of costs against risks, as shown in the following figure. This helps us compare and analyze the relative benefits of the initiatives in order to make investment decisions.
A social value model has two parts: the Financial Benefits and the Social Impact. We mathematically model social value to enable us to evaluate, in a pseudo financial way, different initiatives or investment opportunities. We can apply analytical techniques to investments in social value in a similar way as commercial companies assess investments in increased revenue or productivity.
The basic social value model is a way of including non-financial benefits into the ROI and IRR calculations in order to do a comparison of investment opportunities where the main objective is not financial.
The benefits to consider are:
Financial Benefits
The purely financial benefits for an initiative form one side of the picture. The financial benefits need to be identified, weighted and then added up. Such benefits are generally in terms of cost savings or more efficient collection of revenue (taxes).
The steps to quantify the financial benefits are:
These benefits can be spread out over time and be represented by a series of time-related value measurements. We can work out the value per time interval (monthly, quarterly or yearly) and then apply discounted cash flow analysis.
Note also that some “benefits” may be negative because the effect of implementing the initiative may be to derive benefits in one area at the cost of benefits in another area.
Social Impact
The social impact is much more difficult to put a figure on, as well as being more emotive. The approach taken is as follows:
In the same way as the Financial Impact can be spread out over time, the Social Impact benefits can also be spread out over time. We can calculate the benefits per period, monthly, quarterly or yearly, and then apply techniques such as discounted cash flow.
Note also that some “benefits” may be negative because the effect of implementing the initiative may be to derive benefits in one area at the cost of another area. For instance there may be initiatives that have large economic benefits at the cost of the environment.
Calculating ROI and IRR
The methodology for calculating both ROI and IRR or indeed other financial measures uses a combination of the above Financial Benefits and Social Impacts in order to take into account the social impact of the investment or initiative. The process follows for the index values we use in our calculations, based on US dollars (other currencies would produce different scaling).
Alvarado, E.; Sandberg, D. V.; Pickford, S. G. “Modeling Large Forest Fires as Extreme Events.” Northwest Science, Vol 72: 66-75. 1998.
Franklin, J. “Operational Risk under Basel II: A model for Extreme Risk Evaluation. Banking and Financial Services Policy Report.” Volume 27, Number 10, 10-16. 2008.
Franklin, J., Sisson, S. A., Bergman, M. A., & Martin, J. K. “Evaluating Extreme Risks in Invasion Ecology: Learning from Banking Compliance.” Diversity and Distributions, Blackwell Publishing, 14, 581-591. 2008.
Abarbanel, H.; Koonin, S.; Levine, H.; MacDonald, G.; Rothaus, O. “Statistics of Extreme Events with Application to Climate.” McLean, Virginia: The Mitre Corporation. 1992.
Taylor, C. “Composite Indicators: Reporting KRIs to Senior Management.” The RMAJournal, 16-20. April, 2006.