Continuity planning    9th April 2013
Continuity planning• Supermarkets must support wide spread operations continuously    – Successful acquisitions spread ope...
Discontinuity disrupts key value levers,    so you can put a value on continuity                                          ...
Discontinuities need to be assessed consistently for             consequences and likelihoodConsequences    People        ...
Continuity planning mitigates risks thatare severe by decreasing their likelihood                                         ...
IT governance for continuity  Strategy goals and objectives of the business                                               ...
Batch (offline)                               Technical infrastructure                             Online (users)         ...
Application/data architecture                                                             Hard to justify strong          ...
Application/data architecture – Post Merger                                                                               ...
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Continuity planning

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Continuity planning

  1. 1. Continuity planning 9th April 2013
  2. 2. Continuity planning• Supermarkets must support wide spread operations continuously – Successful acquisitions spread operations across brands and countries, with limited management attention to ensure continuity – Process-by-process effort to identify continuity risks grind to a halt after mapping a few processes• Legacy of acquisitions makes it hard to guarantee service levels – Acquisitions leave a patchwork of legacy systems which complicate warm backup and other workarounds – Hard to cost justify rationalizing legacy with synergies• Supermarkets need to put a value on continuity and propose a blueprint for legacy systems that makes service levels cost-effective – Put a value on continuity by identifying which value levers are at risk – Blueprint a rationalized legacy to make it feasible to buy warm backup and other workarounds
  3. 3. Discontinuity disrupts key value levers, so you can put a value on continuity Customer demand Basket size Lost sales due to Sales out of stocks Customer visits Price/unit from 3rd party Price/unit Net operating profit after tax Cost of Goods Price/unit for Sold own label Units sold Operations Costs (stores, logistics)Economic Value Added Taxes Losses/shrinkage Weighted Average Cost of Days of inventory Capital Cost of capital Inventory Days of payment Capital employed terms to suppliers Real estate (stores, logistics)
  4. 4. Discontinuities need to be assessed consistently for consequences and likelihoodConsequences People Safety Partnership MarginCatastrophic Event Multiple Severe long term NPV > $1BN attracting fatalities environmental impact international High level of concern Cash flow > attention from community and $100M NGOs # LikelihoodMajor Event Single fatality Environment > 3 years NPV $500M-1BN 1 Certain to occur attracting recovery national Large complaints from Cash flow $50- 2 Possible in attention community 100M 1-5 yearsModerate Event Occupational Environment 1-3 NPV $250-500M 3 Possible within life attracting injury with years recovery of operation provincial permanent Repeated complaints Cash flow $25- 4 Possible beyond life attention disability from same area, NGO 50M operation interest 5 PracticallyMinor Event Treatable lost Minor environmental NPV $100-250M impossible attracting time injury or impact onsite regional occupational Legal compliance Cash flow $10- attention illness requires reporting 25MInsignificant Event Minor injury Low environmental NPV < $100M attracting or illness with impact company medical Cash flow <$10M attention attention
  5. 5. Continuity planning mitigates risks thatare severe by decreasing their likelihood he ft of le eo s e ib ar lif ss lif ye nd po r cu n 5 io yo io ithi im 1- oc at be in er e w lly l to ta le e ica n n To in op sibl op sibl ib t rta at ss ac d s s an er Po Po Po Ce Pr Gr D A B C E A Catastrophic 4 1 3 8 B Major 22 36 12 1 71 Consequences C Moderate 11 37 25 1 74 D Minor 1 2 15 1 19 E Insignificant 1 4 3 8 Grand Total 1 40 92 42 5 180 Frequency / Likelihood
  6. 6. IT governance for continuity Strategy goals and objectives of the business Organization Structure, skills, style, roles and which define IT capabilities required and the responsibilities that allow IT to strategic role of IT in the industry effectively deliver technology and information capabilities Performance Application/data management architecture Business contextProcesses and Applications and data thatmeasurements to drive support the business’s executionefficiency, of core activitieseffectiveness, qualityand productivitythroughout IT Governance & Technical processes infrastructure Technology infrastructure that support development and production environments for Key management processes that applications assure effective delivery and sustaining a high performing IT function Exhibit 6
  7. 7. Batch (offline) Technical infrastructure Online (users) EXEMPLO Norte Daily batch Nordeste Core Satélite banking São Paulo End of ATM month Transactions growing 15%-26% p.a. due to Records growing 10%-12% p.a. internet channel & MIS, while current accounts growing just 11,5% p.a. 50,7M Outros SAT-pagtos. 44.000 Serviços MIS Poupança 19.000 OnlineCarteira 7,9MContas Contascorrentes corrente s 2000 01 02 03 04 2005 2000 01 02 03 04 05 2006 7Fonte: Exemplo
  8. 8. Application/data architecture Hard to justify strong Modules with many Modules with few customisation because records require records can use a PC low visibility and few scaleability LAN records Administrative modules are Administration invisible to end users Produtos Channel modules Channels are highly visible toEasy to justify end userscustomisationbecause highvolume and visible 8to customers
  9. 9. Application/data architecture – Post Merger EXEMPLOMapa de sistemas de x COBIS/Sybase/Visual Basic(número de arquivos 2005, crescimento médio a.a. 2000-2005) Sybase Solaris/Visual Basic Recursos humanos (?) Contabilidade (?) Câmara (?) Remessas (?) SQL NT/Visual Basic Garantias (?) Cobranças (308) 16% Firmas (?) Digitalização (?) Pagamentos (?) InternetAdministração Intranet (?) Administração (?) Cheques (?) Finanware (?) NT/Oracle MIS (438.891) 14% Armazenamento de dados (?) Oracle NT/ Delphi BPM (?) Contas correntes (32.126) 10% Contas poupança (102.990) 7% Comércio exterior (4.886) 18% Adm. cartões (166.621) 14% Transferência de capitais (?) Administradora fundos (?) Cartão corporativo (?) Carteira (12.767) 12% Mesa de dinheiro (?) Factoring (88) 14% Seguros (371) 23% Leasing (701) 18% Investimentos (?) Câmbios (?) Crédito (?) Produtos Canais Escri- 24 24 SAT 24 Caixa IVR tórios online Celular faturam. Telefone autom. 9Fonte: Entrevistas com desenvolvimento

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