LKIN 17: Application Value Flow- Vandita

www.leankanbanindia.com

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Application Value Flow

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Vandita TiwariConsultant

Cognizant Technology Solutions

http://www.leankanbanindia.com/


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Value Introduction

Application value articulation steps

Benefits

Contents



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Application Maintenance … the current paradigm

Applications are developed to support a business process…

But what is the value of this

application?We have been running

improvement projects

in all quarters

However,

One of the prime challenge is to capture

Business’s perceived notion on strategic

level, co-think and derive Transformation

levers out of it on predictive manner

WHY



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The steps to get there..

Visualize the overall Strategic

value flow – By defining and

measuring the Perceived

Value, Managed Value, and

Predicted Value.

Application value tied up with

triggers/signals for potential value

change

COPIS Measures to measure

flow at operational level

Identify levers to improve value

HOW



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Define Value.. HOW

Perceived

Value

• Dimensions or attributes of

business value that represents

how an organization creates value

using IT.

• Based on the perceived value the

attributes and weightages are

assigned

Definition

• Specific outcome that the

customer wants.

• Measure the actuals for

assessment of the business

value and IT value achieved

• Calibrate IT and business value

Predicted

Value

Managed

Value



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Measure

Identify the stakeholders

Identify factorsSelect the Frequency

of the activity)Enter the actual and measure the change

Steps to follow:

FACTORS-SAMPLE PARAMETERS Perceived Dollar Value

COMMERCIAL VALUE A. 0-25% of total revenue through this channelAverage Loss of revenue due to non-availability of

applicationB. 26-50% of total revenue through this channel

C. 51-75% of total revenue through this channel

D. 75-100% of total revenue through this channel

UNIQUENESS A. There is no known commercial or internal application that provides similar functionality(i.e. totally unique in function)

Cost of application replacement

B. There is no known internal application that provides similar functionality

C. There is an internal application that would meet business needs with modification

D. There is an internal application that would meet business needs as delivered

HOW



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Triggers/Signals for value change WHEN

Predicted Value Managed Value

Perceived Value

Value Matrix

Macroenvironment.eg.

Technology ,Regulation

Competitors

Ownership,Restruct

ure,new mgmt. at

client side

Internal-Pricing

value change signals

Customer Experience Predictability



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COPIS Measures to measure flow at operational level

Flow/

Efficienc

y

Effective

ness

Sources of

variationCustomer Output Process Input Supplier

No. of defective details fetched from

upstream applications

Business KPI’s

Incoming Volume of transactions

IT KPI’s

Lead time

No. of transactions declined

Ageing

Why are we keeping things under-progress

and delaying them? Could we reject/cancel?

Could we process them?

Which steps are manual/Non-value

added/don’t comply with business rules



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Benefits

Before AfterLevers Applied (Solution)

Improved Perceived value

It helped in evaluating application portfolio in line with Fit

for Purpose

Identify levers of innovation to increase value – Predictive

value

Value articulation of IT in business terms

Be

ne

fits

Process

• Framework for measuring value

• Perceived value factors and

analysis

• Predicted value using VSM

and COPIS

• Perceived value score-

5.71

• Dollar value -XYZ

• Improve the perceived

score from 5.71 to 6.33



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About the Author

Vandita Tiwari, Process and Quality Consulting, Cognizant Business Consulting

Experience of more than 10 years in Process transformations, Business Process

Re-engineering through implementation of Lean Six Sigma and ITIL principles,

Statistical analysis, Performance & Process Improvements.

Vast experience in driving lean and Six Sigma projects speared across multiple

geographies.



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Thank You


Education

LKIN 17: Application Value Flow- Vandita