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Value Chain Requirements Management (VCRM) Summary

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Most strategies fail to achieve their full potential value when moving into implementation. There are several barriers that consistently arise: * Vague strategic objectives or tactics result in conflicting business and customer requirements and measurements of success. * Requirements between the business, IT, partners and customers are brainstormed independently, are not linked together to remove duplication, or deal with symptomatic problems, not root cause issues. Requirements that are horizontal or go across multiple functions are lost or implemented differently by each team. * Value chain teams (e.g. IT system owners, process owners, external business partners) responsible for creating solutions do not understand the end customer needs and their business environment, and design solutions that do not incorporate business constraints or create the desired customer experience. * The business and IT solution designs are not validated with the appropriate internal and external customers before implementation, causing delays in roll-outs, and significant resistance to using the new solution.
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Value Chain Requirements Management (VCRM) Summary
A value chain requirements approach that assures customer focus and shortens
design and implementation cycle time, and reduces operational costs

Most strategies fail to achieve their full potential value when moving into implementation.
There are several barriers that consistently arise:
Vague strategic objectives or tactics result in conflicting business and customer
requirements and measurements of success.
Requirements between the business, IT, partners and customers are brainstormed
independently, are not linked together to remove duplication, or deal with
symptomatic problems, not root cause issues. Requirements that are horizontal or go
across multiple functions are lost or implemented differently by each team.
Value chain teams (e.g. IT system owners, process owners, external business
partners) responsible for creating solutions do not understand the end customer needs
and their business environment, and design solutions that do not incorporate business
constraints or create the desired customer experience.
The business and IT solution designs are not validated with the appropriate internal
and external customers before implementation, causing delays in roll-outs, and
significant resistance to using the new solution

VCRM starts with your strategic objectives or roadmap, and translates critical business and
customer objectives into clearly defined and actionable requirements usable by the value
chain partners. This process provides clear horizontal integration and alignment of
requirements versus a traditional silo/vertical focus. It involves several workshops around
defining the target segments and customers, identifying and prioritizing the important
customer experiences, and creating a linked set of business, customer and functional
requirements and metrics. Customer and process metrics linked to the strategic objectives are
developed concurrently with the requirements. For large complex initiatives, a requirements
project management office (PMO) can be established to manage the requirements change
management, facilitate the cross functional teams, structure management and check point
reviews, and own the horizontal requirements. Other roles include the documentation and
communication of changes and updates to the requirements.

Requirements gathering, creation and deployment can be accomplished in less than two
months, significantly shorter than the normal requirement generation process of two to six
months. For complex change implementations, VCRM provides:
enhanced value chain alignment due to collaborative involvement of stakeholders in
the requirements process
significant reduction of business solution design and deployment time due to fewer
requirement iterations
consistent processes and structure to create transparency of requirements across the
value chain as a result of traceable and well defined requirements
linkage of business and process changes back to the higher level strategic metrics by
aligning requirements metrics to strategic metrics
smoother change management process and implementation roll-out
higher customer satisfaction by focusing on the most important customer experiences
and priorities
1
strategiccrossroads.com
6/7/2007




Value Chain Requirements Process Overview

Traditional requirement processes are serial, have multiple iteration loops to refine
requirements and many handoff points that result in lost or unclear requirements. Limited
validation of the requirements or design is done with the users/customers of the system
before implementation. Business requirements tend to be more heavily emphasized than
customer requirements leading to optimization to internal company processes at the expense
of addressing customer needs.

Measure and
improve
Iterate and
refine req’ts
Value
Customer,
Value
Req’ts
Value
Strategic
Business
Chain
Market
Chain
Chain
Objectives
Req’ts
Business
Needs
Owners
Implem.
Design
2-6 months

VCRM is a proprietary and proven methodology that dramatically reduces the number of
requirement iterations, which are about 70% of the total requirements to design time. Unlike
traditional requirements processes, customer experiences become the focus for designing
business solutions that deliver competitive differentiation. Functional hand-offs are greatly
reduced because the business, customer, and IT stakeholders co-develop the requirements
and business design. Requirement metrics are linked directly to strategic business plans and
metrics, ensuring that improvements visibly impact the metrics that management reviews
regularly. For large IT system implementations, VCRM reduces the requirements to design
time by over 50-70%.

Measure and
improve
Req’ts + metrics
aligned to strategic

Customer,
Value
Strategic
measures
Market
VCRM
Chain
Objectives
Needs
Implem.
Target
Customer
Experience
0.5-2 months
2
strategiccrossroads.com
6/7/2007




Cycle time is shortened by the upfront and collaborative involvement of the business, IT and
customer participants. Cross functional teams (including end customers, key IT architects
and external business partners) go through a process of:
identifying impacted external and internal customers and their desired experiences
(e.g. how do these customers want their interactions to be like with the company?)
quickly generating clear and aligned business, customer and functional requirements
that are efficiently fed into IT and business process design teams
validating the requirements and high level solution design with customers and value
chain partners before proceeding to detailed design and testing

Costs are reduced due to:
the endpoint of the business and IT high level design is reached faster
less hours are spent on generating requirements
design validation results in fewer false starts and changes in the detailed design and
implementation phases


3
strategiccrossroads.com
6/7/2007





VCRM Case Example

Business Situation:
A Fortune 50 technology company needed to consolidate their multiple regional call center
systems to a new globally integrated CRM system. The current system consisted of over 10
different CRM systems. Management was given a short timeframe of only 15 months from
design to the initial roll-out to the regions.

Results:
VCRM was a critical process in the overall success of the project, resulting in:
• Shortened Cycle Time:
o The targeted roll-out date was achieved
o Significant decrease in CRM requirements generation time by a factor of 2-5X in
critical process areas with all regional call centers aligned on the same set of
global requirements.
o The business users were able to stress-test the system before release, uncovering
bugs and issues at a much faster rate. In addition, there was significantly better
buy-in and support to the requirements and resulting solution by the stakeholders.
As a result, the on-time launch of this global system was the smoothest and
problem-free release the call center organization had ever experienced for the
size, scope and impact of this CRM implementation.
• Reduced Cost
o Achieved cost savings from the CRM integration of roughly $30M+ over 3 years
o Cost savings result from resource savings, elimination/combination of processes
and/or systems
• Improved Customer Focus:
o Integration of all customer touchpoint processes across regions into a single
system (e.g. mail, web, chat, phone, etc.)
• Improved Business Buy-in and Alignment
o VCRM considerably reduced people’s time commitment involved in requirements
generation and increased the commitment, motivation and alignment for results.
Participants commented that while the initial workshops were time intensive, they
freed up to 20-30% of their time afterwards due to fewer iterations, clearer
requirements and buy-in to the process.


4
strategiccrossroads.com
6/7/2007

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