Driving Operational Excellence: Medtronic’s Business Transformation Program

Mike Stuedemann

Ken Cundari

Sr. IT Manager, Medtronic

Director Business Transformation, SoftwareAG

Driving Operational Excellence: Medtronic’s Business Transformation Journey The Medtronic Story Our Challenge… In the Beginning… The Journey Continues...

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The Medtronic Story

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A Company Founded on Collaborations

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A Doctor’s Desire to Overcome Power Outages

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1960: A Seminal Year

The First Implantable Pacemaker The Mission

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2010 Overview

Employees Countries Locations

38,000 120 270

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Treating Many Chronic Conditions Cardiac Rhythm Disorders

Cardiovascular Disease

Urological and Digestive Disorders

Neurological Disorders Ear, Nose and Throat Conditions Spinal Conditions and Musculoskeletal Trauma

Diabetes

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Our Challenge (Hint: “Medtronic’s Business Transformation Initiative matters to you.”)

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How we do meet these Challenges? Healthcare Trends • Aging World-wide Population • Increasing Lifeexpectancy • Increasing prevalence of chronic disease • Increasing healthcare costs

Impact • Increased focus on Innovation • Pressure to reduce healthcare costs by improving operational excellence

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Medtronic’s Business Transformation Initiative In the Beginning…

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Technical Proof-of-Value Medtronic and SoftwareAG Long-Term Partnership Objective: Prove that SoftwareAG Optimize will work at Medtronic Select Candidate Process: Order to Cash Duration: 4 Months Results:





Quick Set-Up using Existing Data Streams Made Processes Visible Can monitor SAP processes Little performance impact to monitored systems

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Order to Cash Background – The need for Global Order Monitoring Business Challenges • Time-consuming report creation, order research

• Increased priority shipping costs

• Difficulty in leveling workload • Need for dedicated reporting resources

• Limited insight into global

Project Objectives • Provide real-time visibility into orders

• Provide automated alerts • Provide visibility into global activity

• Allow the Customer Care organization to improve customer service

performance and capacity

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Global Order Monitoring Development Approach Iteration

Backlog Commitment Defect

Iteration Goals Sprint Planning

Enhancement

New Request

Retrospective

Product

Next Iteration Demonstration

Deliver highest business value items first. Expect changes. Continually improve. 27 June 2011 | ProcessWorld 2011 | 15

Global Order Monitoring Pilot: Process View

• Limited Process Scope

• Not built directly on transactional system

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Global Order Monitoring Pilot: Dashboard

• Business Objects

• Reproduced data available on current reports

• Multiple Proactive Alerts

• Multiple UserDriven Filters

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Global Order Monitoring Pilot – Results

• Utilized by both European and US Users in support Medtronic‘s Quarter-end activities

• Identified 30+ Enhancement Ideas • Built Credibility regarding BPM at Medtronic • Developed Business Cases and Plans for Future Releases

• Conducted Global Visioning Session....

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Global Order Monitoring Pilot: Lessons for Journey

• Go against the Transactional System • Focus on / isolate a portion of the process • Business Partnership is absolutely essential • Paradigm shift from “Data“ to “Process“ is challenging • Iterative Development will expose flaws in your Team‘s Skillset (but do it anyway)

• Constant Education – both Technical and Business Team • “Enablement“ is crucial “It is not the strongest of the species who survive, not the most intelligent, but those who are the most adaptive to change.” - Charles Darwin 27 June 2011 | ProcessWorld 2011 | 19

Medtronic’s Business Transformation Initiative The Journey Continues…

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How to get from a Pilot to a Roadmap? 70+ Overviews

Demonstrations

BPM Project Pipeline

BPM Awareness Courses

Global Order Monitoring Pilot

Visioning Session

16+ Months

Enhancement Ideas

30+ Enhancements

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Business Transformation “Foundation” Efforts: 3 major workstreams, 17 complementary deliverables, 3 months Month 1

Month 2

Month 3

Enterprise Enterprise Business Business Architecture Architecture Initial Reference Business Architecture (1) Architecture Management Strategy

(2)

BPM BPM Project Project && Portfolio Portfolio Management, Management, Roadmap Roadmap Initiatives Framework

(4)

Initiatives Analysis

(5)

Program Framework

Project Portfolio Management Framework (6) Project Value Case Framework Global Order Management Pilot Project

(10)

Roadmap

(12)

BPM Project Portfolio (7) (8)

Value Assessments

(9)

Cost / Benefit

(11)

(3)

Enablement Enablement

Team Skills Assessments (15)

Change & Stakeholder Mgmt Approach (14)

Education & Training Plan (16)

Communications Plan

(13)

Education and Training Events / Classes

(17)

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Business Transformation: Program Roadmap Framework Strategy: Strategy: 2011 - 2012 2012 - 2013 2013 - 2014 CapabilityO Mapping at an Enterprise Level M J J A S Mapping N D J F at M A J J A S O N Level D J F M A M J J A S O N D J F M A M J J A Capability anM Enterprise Strategy & Governance Program Sponsorship, Branding, Campaigns, Roadmap, AOP Program Sponsorship & Navigation Program Sponsorship, Branding, Campaigns, Roadmap, AOP Enterprise Architecture Evolution & Release Mgmt StakeholderEnterprise Commitments Business & Program Governance Framework Architecture: Executive Roadmap, Alignment & Governance StakeholderEnterprise Commitments Business & Program Governance Framework Architecture: Annual Operating Plan, Funding & Benefits Realization Enablement
to Increase & “clock-speed” ProcessOrganization’s (functional vs.skills end-to-end) Program Branding, Roadshows, Campaign Execution Enablement
to Increase & “clock-speed” ProcessOrganization’s (functional vs.skills end-to-end)
Performance, Metrics & Measurement
Performance, Metrics & Measurement Enterprise Business Architecture
Information (structured and unstructured) Process
Information (structured and unstructured) Performance
Human Capital (organization structures, roles & skills) Information (Structured and Unstructured)
Human Capital (organization structures, roles & skills) Organization
Applications / Information Systems Application
Applications / Information Systems Technical Infrastructure
Technical Infrastructure
Technical Infrastructure Delivery Infrastructure Services (Enterprise Business and Technical Services)
Physical / Delivery Infrastructure
Physical / Delivery Infrastructure Transformation Project Portfolio Management:
Program Services (Business, Information, Technical, Operational) Transformation &&Project Portfolio Management: Capability Design & Build: Program & Project Management
Program Services (Business, Information, Technical, Operational) Program Framework
Program Management Structure & Discipline
Program Management Structure & Discipline Ranking, Prioritization & Synchronization
Foundation Project vs. Capability Building Projects Value/Business Cases, Financials, Benefits Realization
Foundation Project vs. Capability Building Projects Implementation: Initiative & Project Portfolio, Roadmap Operations:
Value Measurement in a Portfolio Context Implementation: Resourcing Operations:
Value Measurement in a Portfolio Context Implementation: Deployment, Transition & Support
Planning, Monitoring and Control
Planning, Monitoring and Control
Transition & Deployment Operations
Transition & Deployment Operational Readiness
Duality of “Old” and “New” Business Capabilities Operational Monitoring & Control Enablement:
Duality of “Old” and “New” Business Capabilities Enablement: 2010 - 2011

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2014 - 2015 S

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As-Designed Maintenance

Enhancements / Upgrades / Break/Fix

Enablement & Change Management Knowledge Management Framework & Toolkit Stakeholder Map & Alignment Communications Framework & Plan Skills Map, Assessment & Strategic HC Sourcing Plan Education & Enablement Plan


Knowledge Management
Knowledge Management
Stakeholder Mapping & Alignment
Stakeholder Mapping & Alignment
Communication Framework & Plan
Communication Framework & Plan
Skills Mapping, Assessment, and Strategic Sourcing
Skills Mapping, Assessment, and Strategic Sourcing
Education & Skills Growth Plan
Education & Skills Growth Plan 27 June 2011 | ProcessWorld 2011 | 23

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Transformation Roadmap Framework 2010 - 2011 J

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2011 - 2012 M

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2012 - 2013 M

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2013 - 2014 M

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2014 - 2015 M

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Strategy & Governance Program Sponsorship & Navigation Enterprise Architecture Evolution & Release Mgmt

Design / Implement Ver 2.0 Capabilities

Design / Implement Ver 1.0 Capabilities

Executive Roadmap, Alignment & Governance Annual Operating Plan, Funding & Benefits Realization

Design / Implement Ver 3.0 Capabilities

Program Branding, Roadshows, Campaign Execution

Enterprise Business Architecture EA Gov

Process Performance Information (Structured and Unstructured) Organization Application Technical Infrastructure Delivery Infrastructure

Acquire & Configure “Base” EA Toolkit (ARIS)

“as-is” process baseline

On-going “One Medtronic” Process, Services, Information & Performance Measures: Architecture, Design, and Governance Evolution

Logical T2B Service Arch I MDM, ECM, User Exp Arch I

EA SS, CoP: III

EA SS, CoP: II

EA SS, CoP: I

Document EA “One Medtronic” ARIS Tool i.e. SAP, Siebel, Legacy “Redocumentation”

Application Modernization: Wave I:

Application Modernization Wave II: Infrastructure Rationalize; On-going w/ EA matures

Services (Enterprise Business and Technical Services)

Capability Design & Build: Program & Project Management Program Framework Ranking, Prioritization & Synchronization Value/Business Cases, Financials, Benefits Realization Implementation: Initiative & Project Portfolio, Roadmap Implementation: Resourcing

Global Supply Chain: Downstream (“Order to Cash”) Global Supply Chain: Upstream (R&D, PD, ECC, Mnftg, Clin, InvMgmt, DCs BPM Portfolio Toolkit

Transparency / Aggregate Spend Product Event Management (GCH + Compliance) Customer Relationship Enhancement (CRM + Front-Office )

Implementation: Deployment, Transition & Support

Operations Operational Readiness Operational Monitoring & Control As-Designed Maintenance

BPM IT Ops 1.0

Enhancements / Upgrades / Break/Fix

BPM Ops 2.0: Design

BPM Ops 3.0: Design BPM Ops 2.0: Regional Shared Service

BPM Ops 3.0: Global Shared Service

Enablement & Change Management Knowledge Management Framework & Toolkit Stakeholder Map & Alignment Communications Framework & Plan Skills Map, Assessment & Strategic HC Sourcing Plan Education & Enablement Plan

Wave I: Early Adopters, X-Func Leaders

Wave II: BPM CoP BPM Project Staff @ Rate Of Adoption

Wave III: BPM Guerillas T2B Depth in Ops, Functions, Regions

Wave IV: BPM MainLine T2B Depth in E2E, Global Processes

Wave V: BPM Sharpen the Saw, Stewardship, Maintain Phase

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Driving Operational Excellence: Medtronic’s Business Transformation Program Supplemental Slides

Mike Stuedemann

Ken Cundari

Sr. IT Manager, Medtronic

Director Business Transformation, SoftwareAG

Business Transformation “Foundation” Efforts: Landscape: • Enterprise Business Architecture • Methods, Conventions, Toolkit • Management Strategy

Foundation

Roadmap: • Project Portfolio – capability and initial population • Initiatives Analysis – framework and analysis of current initiatives • Value Case of selected projects • Roadmap – timing and sequence of initiatives and projects Enablement: • Education & Training – Assessment & Plan, plus Initial Events • Change Management – framework and initial stakeholder analysis • Roadmap ROM Cost / Benefit Analyses

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Enterprise Business Architecture – The Elements 1. Process (functional vs. end-to-end) 2. Performance, Metrics & Measurement 3. Information (structured and unstructured) 4. Organization (structures, roles & skills) 5. Applications / Information Systems 6. Technical Infrastructure 7. Physical / Delivery Infrastructure 8. Enterprise Business Services April 2011 | Software AG - Get There Faster | Slide 28

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Enterprise Business Architecture – Elements and Layers L1 L2 L3 L4 L5 WORK IN PROGRESS

Medtronic Entry Model (Structuring Model) - link to LabCase site

Capability/Functional Process View

L1

Enterprise Process Map (VACD)

End-to-End Process/Projects View

End-to-E nd Overview (VACD)

Organizational View

Implementation Overview (Structuring Model) Project on a Page (Whiteboard)

For each project

Application View

IT System Overview - by Domain (App. System Type Diagram)

Medtronic International (Org Chart) Program Overview (Structuring Model)

Overall Interface Diagram (Program flow chart)

Capability Overview by Domain (Application system type diagram)

Technology/ Infrastructure View

Information View

Services View

Architecture Set (IT Architecture Mapping)

L1 Data Model (Domains) (IE Data Model)

Enterprise Service Map (Domains) (Service Architecture Diagram)

Medtronic Objectives - by Domain (Objective Diagram)

Detailed Reference Architecture (IT Architecture Matrix)

L2 Data Model (Clusters) (IE Data Model)

Conceptual Business Service - CIM (Service Allocation Diagram)

Objective Breakdown - if needed (Objective Diagram)

L3 Data Model (Entities) (IE Data Model)

Conceptual IT Service - PIM (Access Diagram)

Performance View

KPI Overview - by Domain (KPI Allocation Diagram)

Risks Overview (Business Controls Diagram)

For each application

L2

L3

Project Schedule (Project Schedule) Main Process (VACD)

Business Process (VACD)

Main Process Structure Model (VACD)

Variant copy of L4 objects

End-to-End Scenario Overview (VACD)

This is the SAP End-to-End Scenario "Scenario" (VACD)

Process (EPC)

Variant of Process (EPC)

automatic assignment @sync L5

Function Allocation Diagram

(for SAP functions)

Project Deliverable Flow (EPC Instance)

Program Products (Product Tree)

Project Org Chart (Org Chart)

P rogram Organization (Org Chart)

Logical BPMN (BPMN Diagram for M2E)

KPI Definition (KPI Allocation Diagram)

Risk & Controls (Business Controls Diagram)

System Capabilities (App. System Type Diagram)

Department (Org Chart)

Map Business Functions to actual Org Units (Org Chart)

Project Objectives, KPIs & Risks (Task Allocation Diagram)

Application Instances (App. System Diagram)

Network Diagram (Network Diagram)

KPI Breakdown (KPI Allocation Diagram)

Interface Diagram (Program Flow Chart)

Detailed models if needed add measuring points

App. Module Breakdown (App. System Type Diagram)

Medtronic US (Org Chart)

- link project plan - link budget xls

Scenario KPIs (KPI Alloc. Diagram)

L4

Program Schedule (P roject Schedule)

L4 Data Model (Attributes) (eERM Attribute Allocation Diagram)

Mapping Positions to Roles (Org Chart)

Project Requirements (Requirements Tree)

- link compentecy profile XLS to roles

Detailed Interface Diagram (Program flow chart)

Project Requ. Description (Requ. Alloc. Diagram) Additional models to describe the individual projects

Additional models to describe the individual programs

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