LKIN 17: Application Value Flow- Vandita

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Application Value Flow
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Vandita Tiwari
Consultant
Cognizant Technology Solutions

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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 factors
Select 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 channel Average Loss of revenue
due to non-availability of
application
B. 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
variation
Customer 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
Benefits
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