This blog is for sourcing and procurement professionals to discuss and share perspectives, point of views, ideas and best practices around key sourcing and procurement topics.

« April 2009 | Main | June 2009 »

May 7, 2009

Business Platform Benefits: Part 2

I was posed with a question in one of the discussions, which I am raising again in this post. What should be the primary metric of evaluation for business benefit realization, for an enterprise which is on-boarding on the platform?

While I organize my thoughts let me put some numbers around the definition of the enterprise for more clarity in my thoughts as well the question, let a small size enterprise be less than USD 1bn in revenue, mid size ranging from USD1 to 10bn in revenue and large size be more than USD 10bn in revenue.

When I tried to answer the question raised above considering the classification of enterprise defined, I had an equal number of team members favoring centralization of processes and reduced on-boarding time respectively as primary metrics for consideration in case of small size enterprise. However, our views were just not getting contained in the conference room when we discussed this for a mid size or a large enterprise customer. What is the defining metric which would be the primary yardstick for business benefit realization?

Options being discussed included savings generated, revenue maximization, process maturity, adaptability to customer’s IT landscape, from dedicated layers in platform to dedicated platform itself. We were just not able to align and say “yes” there it is, “the metric” which an organization should use for measurement.

Let me try and propose an approach here for arriving at the metric; let me call that approach as – SCP, where S stands for segment in which customer operates, C for customer herself and P for platform. Let me now try and explain how I want to define this approach. Whenever a customer would attempt to arrive at a metric or a set of metrics for evaluation of business platform fitment in its business growth plan let the customer define the segment (S) of its business operation and map herself in the segment against leading and future trends in the segment and also against leaders and challengers in the segment. Next step would be of mapping future state (of C) where the customer wants to be in next 12 months and in next 5 years. This mapping activity would complete SC part of the SCP approach. As a concluding step the customer will have to map the business platform (P) and identify whether the business platform with its features and the benefits it brings, enables the customer to meet defined business objectives arrived in SC part of analysis, both in short and long term. While doing this analysis the metric or the set of metrics which the customer uses would be the primary yardstick with which the evaluation of business platform needs to be undertaken.

A question which is now coming to my mind is that wouldn’t this approach be equally applicable for small size enterprise as well.

Subscribe to this blog's feed

+1 and Like

Follow us on

Infosys Edge on Twitter