1. 3 YEAR IT MANAGEMENT AND BUDGET PLANS Enterprise Value Chain and Application Maps 1 8/22/2015

2. VALUE CHAINS 2 8/22/2015

3. Objective 3  To give agency personnel a better understanding of Enterprise Value Chains.  To give agency personnel multiple examples in order to increase understanding and to find a starting point to create their own value chain  To give agency personnel techniques that could make creation of the value chain easier 8/22/2015

4. What is a Value Chain? 4  Value Chain theory comes from Michael Porter’s book Competitive Advantage (1985)  A model that breaks down an organization into a series of value-generating activities  A Value Chain is a  Business Model  High Level Model  Performance Feedback Model  Beginning stages of an Application Map  Beginning stages to look at the State’s business goals as one enterprise 8/22/2015

5. Parts of the Value Chain 5  Support Activities  Primary Activities 8/22/2015

6. Porter’s Model 6 8/22/2015

7. Support Activities 7  Do not directly add value, but are still necessary in providing the services or products  Close to universal for every agency 8/22/2015

8. Support Activities (continued) 8  Porter’s Breakdown of Support Activities  Firm Infrastructure: organizational structure, control systems, company culture, ect.  Human Resource Management: employee recruiting, hiring, training, development, and compensation.  Technology Development: technologies to support value-creating activities.  Procurement: purchasing inputs such as materials, supplies, and equipment. 8/22/2015

9. Support Activities (continued) 9  State of Kansas agencies have modified support activities to include:  Administration Management  IT Management  HR Management  Financial Management  Procurement  Supporting Assets 8/22/2015

10. Primary Activities 10  The links in the value chain are the “strategic relevant activities” that add value to the services or products you are providing.  Every agency is going to have unique “strategic relevant activities”  Some may be similar 8/22/2015

11. Primary Activities (continued) 11  Porter’s Breakdown of Primary Activities  Inbound logistics: the receiving and warehousing of raw materials, and their distribution to manufacturing as they are required.  Operations: the process of transforming inputs in finished products and services  Outbound logistics: the warehousing and distribution of finished goods  Marketing and Sales: the identification of customer needs and the generation of sales.  Service: the support of the customers after the products and services are sold to them. 8/22/2015

12. Primary Activities (continued) 12  Porter’s list does not have a direct one-to-one correlation to State government in many cases.  His focus is mostly directed to manufacturing companies that have a certain product they are producing  His primary goal is the get the company to get more value out of the sale of those goods.  Value chains give a good starting point to think about what your agency does to meet their goals  The services that our state agencies provide might in some cases do not have goods that are sold, but the services provided are still important  The benefits of the value chain can still be realized in the governmental arena. We care about getting the most out of our limited money. Value chains can help in that goal. 8/22/2015

13. Primary Activities (continued) 13  The value chain links are not independent activities  Links exist inside of value chains  Horizontal Links  Vertical Links  These links can help lead to optimization and coordination of activities  Also provide a basis for quality assurance and monitoring performance 8/22/2015

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15. 15 8/22/2015

16. 16 8/22/2015

17. 17 8/22/2015

18. 18 8/22/2015

19. 19 KBOR Value Chain Supporting Activities Primary Activities Core Business Process Management Quality Management Product Information Support Asset Info Supporting Processes Supporting (Financial, HR, IT, …) Assets User Feedback and Program Management Process Management New or Existing Program or Policy Budget Submission To Board Board Review Budget Review Board Approval Funding Request Policy & Procedure Develop. / Revision Funding Approval Review Funds dispersed Program and Policy Review Students, Citizens “ Through its diverse postsecondary education system, the KBOR seeks to provide educational opportunities for all of Kansas’ citizens to achieve their greatest potential.” Policy and Quality Programs HR Management Financial Management IT Management Administration Management Goal Customers Governance and Coordination of Public Higher Education Funding of Public Higher Education Adequate Funding for Programs and Services 8/22/2015

20. Fort Hays State 20 8/22/2015

21. Value Chain Template 21 8/22/2015

22. Why a Value Chain? 22  Uniform way of looking at all agencies  Start to look at how IT helps each one of the links of the value chain  netMBA.com has Information Systems at every level of the value chain  KDOT’s application maps prove this for their particular agency  Building block for Application Mapping 8/22/2015

23. Technology and the Value Chain 23  Technological change is not important for its own sake. It is important to the value generating activities of your organization  Technology is imbedded at every link of the value chain  Information / Data is becoming more pervasive  Overall technology is playing a greater roll in business strategy 8/22/2015

24. Value Chain Linkages 24  Activity to Activity  Business Unit to Business Unit  Agency to Agency  Department of Education to Regents Institutions  KCJIS 8/22/2015

25. Value Chain Linkages (continued) 25 8/22/2015

26. Vertical Linkages 26 There are easy to see vertical linkages between planning and real-time operations. They span the entire three chains But there are also be linkages between supporting activities and primary Activities that are harder to see with the model alone 8/22/2015

27. Horizontal Linkages 27 Changes made in each activity could change how other activities are performed 8/22/2015

28. Performance / Quality Assurance 28 At the Activity Level: When you start looking at advanced usage of the Value Chains one can begin to look how each activity is performing. At the lowest level you can look at each specific activity This metric will let you know if each activity is performing optimally. 8/22/2015

29. Performance / Quality Assurance 29 The same type of performance metric can be applied to an entire Value chain. Value chain level: At this level you can begin to start measuring the success of your process in meeting your high level business goal This could done via the results gained from each activity level evaluation, or done via a macro level approach 8/22/2015

30. Performance / Quality Assurance 30  Other ways to think about this  “White Space Gaps”  Prioritized Processes / Focus  Agency to Agency Performance  Pier Agency Performance Other Kansas Agencies Federal Partners Local partners Other state partners 8/22/2015

31. Where to begin? 31  Goals First  Define the goals of the agency Budget Documents, Strategic Plans, Responsibility and Authority documents, Organizational Charts, surveys  Determine what steps occur to carry out each goal Use Porter’s model along with other agency examples as a reference point 8/22/2015

32. Where to Begin (continued) 32  Application catalog  Group applications according to services they provide This should be a good alternative to finding goals of the agency  (If possible) Break down the group of applications into smaller links Again use Porter’s model and other agencies examples as a reference point 8/22/2015

33. Where to Begin? 33  Combination Approach  Define the goals of the agency  Find group applications based on the goals defined  Break down the groups into smaller links  Fill any holes in the value chain using other methods Document review, survey, organizational charts, ect 8/22/2015

34. Level of Detail 34  Collect at the level of Detail that works for you.  Include Summary level on the ITMB 8/22/2015

35. ENTERPRISE APPLICATION MAPS 35 8/22/2015

36. Objective 36  To give a quick review of Value Chains  To understand what an application map is  To understand the scope of the application map 8/22/2015

37. What is an Application Map 37  An Enterprise Application Map is an extension of the value chain  It seeks to categorize the applications and systems in your agency with links on the value chain.  It an application map is a  Business and technology hybrid model  High Level 8/22/2015

38. 38 8/22/2015

39. Application Map Example 39 8/22/2015

40. Map Example #2 40 8/22/2015

41. Regents: University of Kansas Medical Center

42. Regents: University of Kansas Medical Center (continued)

43. Secretary of State

44. Aging, Department of

45. Investigation, Kansas Bureau of

46. Education, Department of

47. Why an Application Map? 47  It will allow agencies to see where each specific application fits in relation to the high level business areas in the organization  To find gaps where IT does not have any applications in a particular business area  To find how pervasive technology is in your organization  Can be used to illustrate justification for IT spending  Starts the process to visually see IT / Business alignment. 8/22/2015

48. What Applications to include? 48  Applications that show up in Section 3 of the 3-Year Plan  Other things that do not show up in section 3.  Access databases  Big excel spreadsheets  Ad hoc software running in someone’s office  Applications that are shared by agencies  KDOT also added different goals and business areas to their map.  This model can be tailored to help your agency in a wide variety of ranges 8/22/2015

49. Creating the Application Map 49  Place each application / system / ect on the appropriate area of the value chain.  If it is used in multiple different functions then put it in all of them that apply  There is really not much more to it than that. Creating the value chain is the biggest hurdle. 8/22/2015

50. Level of Detail 50 Provide what ever level of detail you can realistically complete in the given time.  We would rather see a partial application map than no application map 8/22/2015

51. Reminder 51  Deadline for the IT Management and Budget Plan is August 29 th.  Contact us if you are having any problems, or have any concerns. The sooner the better, as we are getting busier by the day. 8/22/2015

52. Training Provided (9:00-11:00) July 1Radar Charts, Communication Models, Data Maps 52  All sessions are hosted in the Eisenhower Building’s 4 th Floor Auditorium and take place at 9AM  Conference Call capability will be available for all sessions. 8/22/2015

53. Questions? 53  Bill Roth, CITA, 785-296-2108  william.roth@da.ks.gov william.roth@da.ks.gov  Bryan Dreiling, 785-296-2809  bryan.dreiling@da.ks.gov bryan.dreiling@da.ks.gov  http://da.ks.gov/kito/3YR_ITPlans.htm http://da.ks.gov/kito/3YR_ITPlans.htm 8/22/2015