Fujitsu’s management of contingency

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Fujitsu’s management of contingency

  1. 1. COMMERCIAL IN CONFIDENCE © Copyright 2013 Fujitsu Services LimitedApm Risk SIG ConferenceFujitsu’s Management ofContingencyDave Scarbrough
  2. 2. 1 COMMERCIAL IN CONFIDENCEAgendaFujitsuRisk in Context of our BMSBids and our business modelDelivery – Projects, Programmes and PortfoliosSummaryFujitsu’s Management of Risk Contingency
  3. 3. 2 COMMERCIAL IN CONFIDENCEA powerful presence in UK & Ireland >30 service locationsUK & Ireland CEO: Duncan Tait FTSE100 company equivalent by revenue & profit Largest Japanese employer in UK and Ireland Strength in public sector, financial services,telecoms, retail and mid-marketRevenue: £1.8 billion*>20,000 serverskept secure &fully operational24/365The first Tier IIIcertified datacentre in EuropeManaging >1 millionend user devices(>2.5 million acrossEurope)Europe’s first GoldAccreditation for datacentre operations(Uptime Institute)Manages Ireland’sfirst Mobile VirtualNetworkManaging theworld’s thirdlargest OracleeBusiness suite Over 14,000 employees* Revenue figure April 2011Over 70% of the UK’sbroadband network is built onFujitsu infrastructure.Delivering the UK’s largestprivate cloud deploymentKEYFujitsu System Management CentresFujitsu Data CentresFujitsu Cloud Centres
  4. 4. 3 COMMERCIAL IN CONFIDENCEUK & Ireland customers include…Private SectorGovernment
  5. 5. 4 COMMERCIAL IN CONFIDENCERank Company#1 IBM#2 HP#3 Fujitsu#4 Accenture#5 CSC#3 in global IT services revenue2011 IT Services Vendor Revenue.Source: Gartner, "Market Share: IT Services, 2011" 9 April 2012
  6. 6. 5 COMMERCIAL IN CONFIDENCEAgendaFujitsuRisk in Context of our BMSBids and our business modelDelivery – Projects, Programmes and PortfoliosSummaryFujitsu’s Management of Risk Contingency
  7. 7. 6 COMMERCIAL IN CONFIDENCEOur Risk ProcessRisk is integrated with our BMS and Review FrameworkEvery Framework review must review the risks
  8. 8. 7 COMMERCIAL IN CONFIDENCEHierarchical Enterprise Risk ManagementUKIrelandContract/Programme/Service PortfolioBids ServicesCSLC reviewsAccount reviewsBU reviewsGovernanceProjectsPortfolio reviewsAccountsCommon & big risksRisks @ this level &Functional RisksBusiness ReviewFrameworkFlow MTP objectives downReport risks upServiceLines,MFUs, RFAs&Communicaterisks down
  9. 9. 8 COMMERCIAL IN CONFIDENCEAgendaFujitsuRisk in Context of our BMSBids and our business modelDelivery – Projects, Programmes and PortfoliosSummaryFujitsu’s Management of Risk Contingency
  10. 10. 9 COMMERCIAL IN CONFIDENCERisk Exposure is the overall level of risk (time and money)calculated across the portfolio of risksIt is a function of the cost of the Reactive Actions (Fallback) not thevalue of the contractNeed (reasonable) Max Risk Cost of the Reactive Strategy/Actions(Fallback) i.e. direct cost not indirectUse Post-Containment Probability/Impact values (assuming proactiveactions (containments) have ‘worked’ to level they can (i.e. residualrisk)Contingency is a sum of money allocated above the baseestimate of the ActivityManagement decision/judgement about the actual ContingencyallocatedContingency is judged and held at higher level e.g. AccountContingency Definitions and Calculations
  11. 11. 10 COMMERCIAL IN CONFIDENCEUnderstand and manage the risksInternal Excel macro tool – RiskProAutomatic calculation of exposureAssistance to judge contingencyForecast contingency across contract length by monthsInto Oracle FinancialsRisk and Contingency in Bids
  12. 12. 11 COMMERCIAL IN CONFIDENCERiskPro Helps Understand Risk
  13. 13. 12 COMMERCIAL IN CONFIDENCEFujitsu Business ModelService Lines –aligned to how ourcustomers buy ITService LinesHelen LambBusiness &ApplicationServicesRichard BullEnd UserServicesAndy StevensonHosting,Networks &SecurityMichael KeeganTechnologyProduct Group
  14. 14. 13 COMMERCIAL IN CONFIDENCEAllocating Contingency Contingency is a business judgement based on Risk Exposure: Probability x Impact Cost (Factored Exposure) across all risks Biggest single risk Experience13
  15. 15. 14 COMMERCIAL IN CONFIDENCEAllocating Contingency 2 Contingency is a business judgement based on Risk Exposure: Probability x Impact Cost (Factored Exposure) across all risks Biggest single risk Experience14
  16. 16. 15 COMMERCIAL IN CONFIDENCEConting by Capability with guidelines
  17. 17. 16 COMMERCIAL IN CONFIDENCEDelivery Executive for the contract:Agrees with Service Line/Capability budget holders their contingencyJudges an appropriate Contingency for the contractRequests that Contingency from the Bid Approval Review managementBid Approval Review management judges an appropriateContingency for the contractRiskPro Helps Judge Contingency 2
  18. 18. 17 COMMERCIAL IN CONFIDENCEAgendaFujitsuRisk in Context of our BMSBids and our business modelDelivery – Projects, Programmes and PortfoliosSummaryFujitsu’s Management of Risk Contingency
  19. 19. 18 COMMERCIAL IN CONFIDENCEOn a journeyDelivery Executive for the remainder of contract:Agrees with Service Line/Capability budget holders their• Their Contingency forecast• Any change control to utilise, increase, release/reduce contingencyJudges an appropriate Contingency for the contractRequests that Contingency/Changes from the Review managementReview managementApproves any change controlsJudges an appropriate Contingency for the contractDuring Delivery (Project & Programme)
  20. 20. 19 COMMERCIAL IN CONFIDENCE(Risk Process mandatory)Business level risks harder to financially quantify direct costRequest a ‘Business Impact’Expressed in terms of orders, revenue, margin, cost or cashFinancial provisionBusiness Level Contingency (Portfolio)
  21. 21. 20 COMMERCIAL IN CONFIDENCEStrong ProcessesManagement CommitmentRisk sits with business doing workTool support to judging contingencyDelivery - on a journeyFuture:Learn Lessons• Judgement v actuals• Contingency Guidelines by CapabilityManagement Reserve?Quantification Analysis?Summary

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