Dave Honkanen Sr. Director, EPO Prime Therapeutics. The EPMO: Strategy to Execution
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1 Dave Honkanen Sr. Director, EPO Prime Therapeutics The EPMO: Strategy to Execution September 30, 2010
2 Speaker Background Intro 2 Honkanen Consulting, Inc.
3 Intro Prime Therapeutics is a thought leader in pharmacy benefit management (PBM) strategies. Our mission is to provide the highest quality care and service for members while focusing on delivering the lowest cost of care and empowering clients to make informed decisions in health care management. Our experience, combined with our long-standing commitment to act in the best interests of members and clients, makes Prime the right choice to meet your health care quality and cost management goals. Industry: Headquarters: Pharmacy benefit management Eagan, Minnesota Employees 1,700 Ownership structure: and Wyoming Number of covered lives: Privately held by organizations representing 12 Blue Cross and Blue Shield Plans in Alabama, Florida, Illinois, Kansas, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, Texas 17 million 3
4 Intro Focus of Presentation The New Normal puts a laser-focus on business to make sound decisions on their project investments and ensuring successful project outcomes. This presentation examines how an EPMO can take on this challenge by focusing an organization on making investments directly tied to its strategy, executing on those investments and measuring them via measurable success metrics. 4
5 Intro Agenda The EPMO Strategy Strategy to Execution Execution Measurement Summary 5
6 EPMO The Enterprise Project Management Office (EPMO) VS. PMO EPMO Business Alignment/Partnership There are no IT projects, only business projects with a high dependence on IT! Focus on results vs. process 6
7 Prime s EPMO EPMO 3+ years old (2 years of S2E) Started under the COO 20+ FTE s 25+ programs/projects 85% of hours directly to executing projects 7
8 Making Strategy Come Alive EPMO Strategy Strategy to Execution (S2E) Execution Measure/Inspect 8
9 Value Map Strategy High Emphasis Medium Low Attribute 9
10 Investment Principles Strategy Principle Target % Across F To address regulatory compliance requirements. X% 2. To ensure investment in strategic. Y%
11 Built on the Concept of Capability Management Strategy to Execution (S2E) Capability is to have the capacity or ability to do something, achieve specific effects or declared goals and objectives. A Business Capability is WHAT a company needs to be able to do to execute its business strategy (e.g., Enable epayments, Tailor solutions at Point of Sale, Demonstrate product concepts with Customers, etc.). A process is HOW the capability is executed. Much of the reengineering revolution or Business Process Reengineering focused on HOW to redesign business process. 11
12 Capability Management Strategy to Execution (S2E) Translate the organizations strategy into a clear and easy to comprehend value proposition Understand which capabilities are most important to executing on the strategy and which capabilities can be deemphasized Assess which capabilities are under performing and in the greatest need for investment Align investment across functional boundaries to improve capability performance Prioritize the project portfolio 12
13 All Capabilities are Important but Not Equal Strategy to Execution (S2E) Advantage: > Delivers the emphasized Value Map Attributes. > Distinction is assured when performed among top in peer orgs and at acceptable cost. Advantage Support: > Enables the advantage capabilities > Value Map Attributes are assured when performed above industry parity and at competitive cost. Business Necessity: > Value is maximized when performed at industry parity in a highly efficient manner. 13
14 Capability Management Steps Strategy to Execution (S2E) Client Requests Regulatory Internal Requests Capability Model Heat Project Intake Roadmap 14
15 Intake & The Rule Intersection of Top-Down & Bottom-up Strategy to Execution (S2E) Client Requests Regulatory Internal Requests No Fast Track Yes Roadmap 15
16 Capability Model Strategy to Execution (S2E) Manage Execution of the Investment Roadmap (MEIR) 1 Plan & Direct Project Management CoE 2 Manage Project Resource Capacity 3 Manage the 1 Year Roadmap 4 Manage & Execute Projects 4.1 Manage Project Initiation 4.2 Manage Project Planning 4.3 Manage Exec. & Control 4.4 Manage Project Closure 16
17 Heat Assessment Strategy to Execution (S2E) Value Map Heat results from gaps between desired performance and actual performance of a capability. 17
18 Building the Roadmap Strategy to Execution (S2E) 1. Heat 2. Investment Principles JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 3. Fiscally Constrained 4. Capacity Constrained 18
19 Roles Strategy to Execution (S2E) Business Solution Architect (BSA) Develop & Maintain Business Relationship Capability and Heat Assessments Roadmap Construction Project Initiation & Solutioning Success Metric Development Project Managers Successful Execution of Project Delivery On-time On Budget Accomplishment of Success Metrics 19
20 Initiating Roadmap Projects Execution INITIATION PLANNING EXECUTION CLOSURE BSA s PM s 20
21 Execution Defining Success Metrics Install CRM package solution by xx/xx/xx (because everyone else in industry has one). VS. Achieve a 15% in customer satisfaction ratings over the next 18 months resulting in a 90% customer renewal for This is tied to Strategic Objective #3 Retain Current Customer Base. 21
22 Execution Triumvirate of Project Responsibility (Circle of Trust) Business Owner IT Lead Project Manager 22
23 Measurement Measuring Success Metrics Owner 2010 OpEx 2010 Cap Ex (HW/ SW) Near Term Capability Improvement Longer Term Impact To Strategic Objectives Success Metrics Status Against Success Metrics Strategic Objective #1 Project A Smith $X $X 1. Revenue target of $100k in 2010; $500k in 2011, $1M in 2012; $1M annually from 2013 through the contract expiration date. 23
24 Summary Key Pieces I Really Like 1. The Capability Management (S2E) Concept 2. The Role of the BSA s 3. The Role of the PM as Executioner 4. Defining and Measuring Success Metrics 24
25 Summary Challenges 1. Developing a solid and meaningful strategy 2. Heat assessment not necessarily quantifiable 3. The care and feeding of capability management 4. Staffing the BSA Role 5. Defining Success Metrics 6. Success breeds scalability issues 25
26 Summary Continuing Need to Evolve 26
27 Questions 27
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