Achieving Sustainable Growth in the Digital Age

Key Learnings:

- Discover strategies for successfully navigating the digital landscape by leveraging innovative tools, methodologies, and data analytics to maintain a competitive edge.
- Learn how aligning resource allocation with iterative product delivery can enhance the visibility of customer value and establish a clear link between expenses and value generation.
- Gain insights into the significance of evaluating non-traditional performance indicators to comprehend the intricate relationships between customer perceived worth, product launch strategies, and financial outcomes for sound business choices.

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Achieving Sustainable
Growth in the Digital Age
Aligning Customer Value,
Iterative Product Delivery, and
Financial Performance
GLOBAL IT CONSULTING ? SERVICES
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Housekeeping Items

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Meet the Panelists
Luke Hohmann
Chief IRa4i Ohce+
Konstantin Popov
VP? E4e+(+i.e Tech gY ?
Financial Management

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Agenda
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?What is Value
?Alignment of Enterprise and Product Strategy
?Pricing Impact
?The evolution of value streams to profit streams
?A software business model is a system
?Quantifying value
?The Profit Stream Pricing Model
?Connecting the dots

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Value
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What is Value?
Customer Value
Perceived value indicates how much a
customer is prepared to pay for a product or
service. This is determined by a product or
service's ability to meet the customer's needs
and inspire desire, especially in comparison
with competitors, including their total cost of
ownership.

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What is Value?
Enterprise Value
Profit is a company’s financial gain after
deducting all expenses from its revenue
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Product Strategy
Product
Strategy
The Real World
Market
Research
Customer
Demand
Business
Opportunities
Competitive
Advantage
Organizational Design
Continuous Improvement
Measure
Results/Financial
Financial Management
Execution
Agile Product Delivery
Align
Backlogs/Demand
Prioritization
Align Labor
Capacity/Supply
Lean Portfolio Management

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Aligning to Strategy
Align Labor
Capacity / Supply
Align Backlog
/ Demand
Measure
Results /
Financials
Execution
Product Strategy
Current Reality
The Real World
Market
Risks
Product
Strategy
Business
Opportunities
Strategic
Goals
Organizational Design &
Continuous Improvement
Objectives
Strategic objectives are purpose statements that
help create an overall vision and set goals and
measurable steps for an organization to help
achieve the desired outcome. A strategic objective
i. .4 effec4iRe She i4 i. *7a4ieab e ei4he+ bY
statistical results or observable data.
Strategic Intent
Strategies are directional and are a hypothesis about
where we need to go. They forge business
opportunities? risks? and regulatory compliance
ac4iRi4ie. i4 a Ri.i f+ 4he c (aY ? 4he highe+
purpose that drives all that a company does.
Key Results
“How will we know we’ve achieved the
objective?”
Key results are leading and lagging indicators that
show progress of an objective. We want to
*7a4ifY 4he .7cce.. f 7+ eff+4 Si4h e4+ic.?
They should refect outcomes? not output.

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Enterprise Strategy to Team Level Execution
Team
Level Tools
ERP
Systems
Targetprocess
Work
Mgmt.
ADO? Ji+a?
ServiceNow,
Sales Force
Planning
Costing
TBM Studio
ERP, CFM,
HCM, Others.
?Workday, SAP??Budgets
?Labor Data
?Objectives
?Labor Allocation Actuals
?Progress Against Forecast
?Key Results
LeaIX? CMDB da4a? EXce
Infrastructure components, Enterprise Architecture Assets
Expense Actuals
Financial Guidance
Hybrid Portfolio
Planning
Financial
Management
EAM
?Epics / Projects
?Resource
Assignments
?Progress
?Labor Actuals
Apptio One
Enterprise Operating Model
Cost optimization

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What is Value? Optimizing Expense?
?Starting with the MVP, we continue to
deliver incremental value to our
custo ers?
?ORe+ 4i e Se .ee ehciecie. f+
our teams and find ways to reduce
our overall expense? resulting in
positive impact on our overall TCO
ad P?L?
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Money
Releases
Expenses
Unit price
Profit
Value

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What is Value?
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Money
Releases
Expenses
Unit price
Profit
Value
1% decrease in variable cost
generates up to 4% increase
in operating profit

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Let’s get started,
ready? Go!
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What is a Value Stream?
A Ra 7e .4+ea i. 4he .e*7ece f
activities that an organization
undertakes to design? produce? deiRer?
and as needed? maintain and?or extend
a product or service to a customer.
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Value Streams are everywhere!
They define everything from buying milk
to a new couch, upgrading the software
in your car to recycling your old
smartphone.

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Value Streams and SAFe®
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Operational vs. Development
Value Streams
Operational
?Fulfillment of an order from the website to the dealership.
?P+ce.. 4 .ched7 e ? c ( e4e a +74ie ai4eace?
Development
?De.ig ? b7i d 4he (Se+4+ai?
?De.ig ? b7i d 4he P+.che Fiacia Se+Rice. . 74i?
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Software Profit Streams
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A software
business model
is a system.

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Systems Thinking
Designing a sustainable
Software-Enabled Solution (SES)
involves making -and remaking-
a system of interdependent choices.

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Systems Thinking
We want to license our
software on an annual basis
The term must be captured
in the license agreement
Compliance concerns may
if7ece da4a +e4e4i
policies when the license is
ter inated?
The technical
architecture must
enforce the terms
Customer

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Profit Streams are the Evolution of Value Streams
Quantify the economic value of the solutions they create?
Be sold through pricing and licensing choices that?
Ensure the revenue generated from these solutions exceed
the costs re*uired to serRe custo ers?
Not just once but
over time!

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Poll #2
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Quantifying Value
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24. RrRu C(+i e? Ic? A +igh4. +e.e+Red ad c(Yig Si4h74 eX(+e.. S+i44e (e+ i..i?
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What is Value?
Customer Value
Perceived value indicates how much a
customer is prepared to pay for a product or
service. This is determined by a product or
service's ability to meet the customer's needs
and inspire desire, especially in comparison
with competitors, including their total cost of
ownership.

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What dimensions of our solution
provide benefit to our customer?
Is a structured process designed
4 a.Se+ 4S eY *7e.4i.a
Customer
Benefit Analysis
What is the magnitude of these
benefits to your customer?
1
2

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Understanding Value:
Tangible Benefits
#1 consideration for B2B, B2P and some
B2C purchases
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B2B Example: Purchase EV trucks
?Reduce fuel consumption costs
?GRe+ e4 4aX c+edi4. ? +eba4e.

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Understanding Value:
Intangible Benefits
#1 consideration for many B2C purchases
B2C Example: Apple Watch
?Associate with a luxury brand
??Cool? factor

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The Profit Stream Pricing Model
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Uses Systems Thinking to identify and manage
all aspects of a value?based approach to
pricing that maximizes profit oRer ti e?
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The Profit Stream Pricing Model

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STRUCTURE SPECIFICS
POLICIES
The Profit Stream Pricing Model
Price Strategy defines how
you intend to compete and
position your product
STRATEGY
Price Strategy defines how
you intend to compete and
position your product
STRATEGY

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SPECIFICS
POLICIES
The Profit Stream Pricing Model
Price Strategy defines how
you intend to compete and
position your product
STRATEGY
STRUCTURE
Price Structure drives pricing
by different segments and
solution attributes
Price Strategy defines how
you intend to compete and
position your product
STRATEGY

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POLICIES
The Profit Stream Pricing Model
SPECIFICS
Price Specifics identify the actual
price levels offered to different
customer segments including all the
details related to the chosen value
exchange model.
Price Strategy defines how
you intend to compete and
position your product
STRATEGY
STRUCTURE
Price Structure drives pricing
by different segments and
solution attributes
Price Strategy defines how
you intend to compete and
position your product
STRATEGY

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POLICIES
Price Policies establish the
processes and procedures needed
to ensure the integrity of the price
structure under pressure from
customers and competition.
The Profit Stream Pricing Model
SPECIFICS
Price Specifics identify the actual
price levels offered to different
customer segments including all the
details related to the chosen value
exchange model.
Price Strategy defines how
you intend to compete and
position your product
STRATEGY
STRUCTURE
Price Structure drives pricing
by different segments and
solution attributes
Price Strategy defines how
you intend to compete and
position your product
STRATEGY

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Connecting the dots
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LeanIX? CMDB data? Excel
Infrastructure components? Enterprise Architecture Assets
MAXIMIZE
PROFIT
MINIMIZE PRODUCT TCO
OPERATE
EFFICIENTLY

Profit Streams
TM
Optimize customer value exchange value including pricing? package? profit? etc
SAFe
TM
Progression from Waterfall to Agile:
Moving to Value Streams, Shift from a Project to Product Management/Development Approach, Organizational design around team planning and
execution?Lean Portfolio Management and Governance? Move to the Cloud? etc
Enterprise
Architecture
Management
Team Level
Management
Enterprise Resource
Planning Systems
Apptio
Targetprocess
Work
Management?
ADO? Ji+a?
ServiceNow?
SalesForce
Planning
Costing
TBM Studio
ERP, CFM,
HCM? Others
?Workday?
SAP?
•Budgets
•Labor Data
•Objectives
•Labor Allocation Actuals
•Progress Against
Forecast
•Key Results
Expense Actuals
Financial Guidance
Labor Data Hybrid Portfolio
Planning
Financial Management
•Epics / Projects
•Resource
Assignments
•Progress
•Labor Actuals
Apptio One
IBM
Planning
Analytics

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What is Value?
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Money
Releases
Expenses
Value
Unit price
increase
Unit price
Profit
1% increase in price
generates 8% increase in
operating profit
1% decrease in variable cost
generates a 4% increase in
operating profit

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Keep the
Conversation Going
uz
●Reach out to us at
earn?c(ri e?co
●Check out additional resources at
cprime.com?resources
●Follow us on LinkedIn at
linkedin.com?company?cprime?inc
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Questions?
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GLOBAL IT CONSULTING ? SERVICES
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Thank You