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BOOK - Enterprise Transformation - A Pragmatic Approach Using POET


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Here we see two final lines - Blue and Orange. They essentially answer the question:

“If I utilise Transformation Debt™ how much money will I save?”

The lines are shown negative as negative = savings, positive = costs.

The Orange line shows the direct savings made by managing Transformation Debt. Essentially it is the Green line minus the Red Line. Although the Orange line does show savings over time, the important thing to note is that actually costs us more initially. It is only when the first “panic” is averted later (because we managed Transformation Debt over time) that the savings kick in. This initial increase in costs is what needs to be “sold” to management.

The Blue line shows the savings of the Orange line added to the additional indirect savings we make by not incurring as much Transformation Debt™. Essentially it is the Orange line plus the difference between the light green dotted line and the light red dotted line.


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Questions to ponder...

Does your Enterprise have the will to bear the small increase in costs required until the first crisis is averted?

Which line most closely resembles your Enterprises Transformation cost profile?

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