Steve Lewin10 September 2009

Analyze Benefits Analyze Barriers Determine Time Criticality Assign Weighting Score Initiatives Prioritize Initiatives Assess Individual Initiative vs. Hurdle Reassess initiative performance

High Low

High Major Initiatives “Low-HangingFruit”

Low Non-justifiable Secondary Initiatives

Barriers(CSF’s, Costs, External Risks)

Ben

efit

s(Q

uan

tifi

able

, S

ub

ject

ive,

In

tan

gib

le)

High Low

High Major Initiatives “Low-HangingFruit”

Low Non-justifiable Secondary Initiatives

Barriers

Ben

efit

s

Rewards & Risks can change over time (note initiative A to A’).

Time

AA’

Quantifiable Incremental Revenue / Market Share ROI Profit Improvement Productivity Improvement Cost reductions Cost avoidance

Tangible / Non-Quantifiable Regulatory compliance Quality improvement Customer Satisfaction increase Service Level Improvement Cycle Time improvement

Intangible Environmental impact Public relations (external image) Employee satisfaction

Critical Success Factors Data Collection Technological Feasibility System Implementation Organizational Support Management Commitment

Cost or Difficulty of Implementation External Risk Factors

Competitor actions Economic conditions Obsolescence

Sensitivity to: Market Share implications Risk as a factor of timing Calendar implications Competitor initiatives Workload result on delivery Coincidental product and service

introductions Econometric variables

Use Relative Index (0-1) Utility application by consensus

Select “key” measures for initiatives Develop Analytical Hierarchy of Performance

Measures Adapt for Management priority Identify Mission-critical vs. “Nice-to-have”

Benefits Determine $’s and $ equivalents (for non-

quantifiable) Apply weight for relative importance Develop cumulative benefit index (1-100)

Barriers Determine cost or cost equivalence Weight by criticality Factor by risk Develop cumulative barrier index

Aggregate Index Build Matrix (Benefits to Barriers by initiative) Normalize Develop relative score

Synergy Incremental additive effort to perform one

analysis in conjuction with another (0 to 1) Default = 1 If synergy exists, subsequent effort for

secondary initiative reduced

Adapt factor weightings Group by time frame Prioritize by aggregate index Schedule based on available budget Reassess on quarterly basis

Methodology Quantify benefits in $’s by year

Expected / High / Low Estimate implementation and operating costs in

$’s by year Expected / High / Low

Determine ROI Range Compare to hurdle rate Assess Risk Determine Risk / Reward Value Recommend further study or table initiative

Post-Implementation review at quarterly intervals

Compare projected volume to actual Determine reasons for variance If applicable, revise forecast Update measures and weights based on

confidence levels