Newport discussion   corporate sustainability reporting using sap grc v3
Upcoming SlideShare
Loading in...5
×
 

Newport discussion corporate sustainability reporting using sap grc v3

on

  • 678 views

 

Statistics

Views

Total Views
678
Views on SlideShare
678
Embed Views
0

Actions

Likes
0
Downloads
11
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

 Newport discussion   corporate sustainability reporting using sap grc v3 Newport discussion corporate sustainability reporting using sap grc v3 Presentation Transcript

  • FOR DISCUSSION Corporate Sustainability Reporting Strategies and Frameworks using SAP GRC Approaches Newport Consulting Group March 2010 Newport Consulting Group, LLC This document is confidential and is intended solely for the use and information of the client to whom it is addressed.
  • Agenda 1. Introductions and Firm Overview 2. Corporate Drivers of Sustainability Programs 3. Global Reporting Initiative Considerations 4. Enterprise Architecture using SAP Building Blocks 5. Considerations for Roles-based Process Controls 6. Framework for CSR Planning and Implementation 7. Summary and Next Steps Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 1
  • Introductions and Firm Overview / 1 Newport Consulting Group is an independent consulting firm founded by several leading consultants from DMR Consulting Group and strategy firm Booz & Company Our clients enjoy working with our experienced professionals who deliver large firm capabilities in the context of a boutique firm culture We function as top-end, high-touch advisors to our clients, unencumbered by large overhead cost models or downstream deployment agendas Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 2 View slide
  • Introductions and Firm Overview / 2 Our Experience and Capabilities Our Experience and Capabilities Our clients represent a broad industry base We retain our staff through teaming We retain our staff through teaming – Commercial agreements creating a business affiliate agreements creating a business affiliate Consumer Electronics & Products model with low model with low Automotive & Transportation overhead and high performance services overhead and high performance services Aerospace & Defense Experience and Education Profile of Staff Experience and Education Profile of Staff Industrial Equipment Minimum 20 years professional experience Minimum 20 years professional experience average per staff average per staff Medical Device & Health Systems Management experience at one or more Fortune Management experience at one or more Fortune – Non-commercial 1000 organizations 1000 organizations Practice and delivery management experience Practice and delivery management experience Electric and Water Utilities at top-tier strategy firms at top-tier strategy firms State Governments Client and delivery management experience at Client and delivery management experience at global system integrators global system integrators Municipal / County Governments International experience working with customers International experience working with customers Not for Profit Organizations and partners in Europe and Asia-Pacific and partners in Europe and Asia-Pacific Additional experience in medical device, Additional experience in medical device, We maintain strategic partnerships with consumer electronics, and high tech consumer electronics, and high tech leading enterprise software companies, We are the experts in the field of We are the experts in the field of service providers, and institutions enterprise performance management enterprise performance management – Under NDA with SAP America since 2005 bridging “classic SAP” and strategy bridging “classic SAP” and strategy – Under NDA with Dassault Systems since 2008 throughout the enterprise throughout the enterprise Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 3 View slide
  • Introductions and Firm Overview / 3 Newport Consulting is an “independent” firm aligned with SAP since our founding in 2005 Our Principals and staff have provided Program Advisory, Planning, OCM, and Governance services We have particular expertise in SAP Business Objects EPM and GRC solutions – We are writing the book on EPM for SAP Press – Under NDA with several clients to date Our staff maintains current knowledge and experience in additional areas of SAP including ERP (FI/CO, MM, PP, SD), SCM, PLM, SRM, and GTS Most of our clients operate in technologically diverse environments — as such, our staff is able to look at broad landscapes and topologies to consider the best solution Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 4
  • Introductions and Firm Overview / 4 William Newman, CMC, MBA William Newman, CMC, MBA Bill Rudiak Bill Rudiak Managing Principal Managing Principal Principal–Lead Consultant Principal–Lead Consultant Strategy & Technology Practice Strategy & Technology Practice Nearly 25 years of strategy and operations Nearly 25 years of strategy and operations planning with various technologies across planning with various technologies across Over 20 years of business and technology Over 20 years of business and technology multiple industry sectors multiple industry sectors consulting, software development, systems consulting, software development, systems Over 10 years experience planning and Over 10 years experience planning and integration, and managed services experience integration, and managed services experience managing complex, global enterprise programs managing complex, global enterprise programs for a broad range of clients for a broad range of clients (ERP, GRC, PLM, SCM) (ERP, GRC, PLM, SCM) Large-scale project and program management Large-scale project and program management Has developed recommended approaches for Has developed recommended approaches for for significant change initiatives including for significant change initiatives including operations readiness, value realization, change operations readiness, value realization, change workflow efficiency improvements, technology workflow efficiency improvements, technology management, global program structures, management, global program structures, deployments, and global shared services for deployments, and global shared services for innovation management, and business innovation management, and business multi-cultural/multi-national teams multi-cultural/multi-national teams transformation transformation Broad base of technology expertise including Broad base of technology expertise including Certified Management Consultant (CMC) since Certified Management Consultant (CMC) since IT systems management, ERP, PLM/CAD, IT systems management, ERP, PLM/CAD, 1995 1995 GIS, and digital video GIS, and digital video Joseph Stockemer, MBA Joseph Stockemer, MBA David Tharp, PMP, MBA David Tharp, PMP, MBA Principal–Lead Consultant Senior Program Manager Senior Program Manager Principal–Lead Consultant Operations Practice Risk & Program Management Practice Risk & Program Management Practice Operations Practice Over 20 years of business and strategy Over 20 years of business and IT professional Over 20 years of business and IT professional Over 20 years of business and strategy consulting, marketing, sales management, experience experience consulting, marketing, sales management, cost reductions, asset management, and cost reductions, asset management, and Responsible for managing all phases of Responsible for managing all phases of capital funding for start-up ventures capital funding for start-up ventures large-scale key global IT projects large-scale key global IT projects Recently served as interim COO for a high- Recently served as interim COO for a high- Has led multi-cultural/multi-national cross- Has led multi-cultural/multi-national cross- energy food and beverage client, responsible energy food and beverage client, responsible organizational team in application organizational team in application for protoconcept development, initial product for protoconcept development, initial product development and system implementation development and system implementation run, sourcing, and sales team hiring run, sourcing, and sales team hiring initiatives initiatives Held several interim management positions for Held several interim management positions for Certified Professional Project Manager (PMP) Certified Professional Project Manager (PMP) not-for-profit organizations, including not-for-profit organizations, including and IT Management Certified Professional and IT Management Certified Professional community service and faith-based institutions community service and faith-based institutions Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 5
  • Introductions and Firm Overview / 5 Newport’s Services Model (“SORT”) allows our Clients to benefit from a broad, holistic perspective on key business issues and challenges, while focusing on deep experience in one or more critical areas. What market and business strategies do IIneed to address What market and business strategies do need to address post-crisis scenarios? What KPIs govern my initiatives and post-crisis scenarios? What KPIs govern my initiatives and what do IIdo when KPIs are “out of bounds”? what do do when KPIs are “out of bounds”? Strategy How do create a culture of sustainability? How do create a culture of sustainability? How do IIstrategically manage intellectual property? How do strategically manage intellectual property? How do IIfit my organization to improve existing or introduce How do fit my organization to improve existing or introduce new operating models? new operating models? Operations How do IIstructure the functions, people, and resources in my How do structure the functions, people, and resources in my organization to drive strategic initiatives? organization to drive strategic initiatives? What approaches do IIuse to structure and prioritize initiatives What approaches do use to structure and prioritize initiatives inside my organization? inside my organization? Risk & How do IImanage and mitigate risk across my business How do manage and mitigate risk across my business Program Management operations? operations? How do IIdrive maximum value from my portfolio of initiatives? How do drive maximum value from my portfolio of initiatives? Based on my operations and existing technology investments Based on my operations and existing technology investments to date, how do IIselect and implement the best technology to date, how do select and implement the best technology Technology solutions to support my business? solutions to support my business? How do II manage that process from planning to go live? How do manage that process from planning to go live? Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 6
  • Agenda 1. Introductions and Firm Overview 2. Corporate Drivers of Sustainability Programs 3. Global Reporting Initiative Considerations 4. Enterprise Architecture using SAP Building Blocks 5. Considerations for Roles-based Process Controls 6. Framework for CSR Planning and Implementation 7. Summary and Next Steps Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 7
  • Corporate Drivers of Sustainability Programs / 1 A recent McKinsey study shows that while improved risk management may be one value driver, increased market opportunities, operational efficiencies, and brand equity are key on the minds of executives as companies position themselves for the post-crisis economy. Where CSR Value Comes From Percentage of respondents (%) Maintaining a good corporate reputation and/or brand equity 75 79 79 Attracting, motivating, and retaining talented employees 52 55 61 Meeting society’s expectations for good corporate behavior 30 43 39 Improving operational efficiency and/or decreasing costs 29 39 42 Improving new growth opportunities 35 24 36 Improving risk management 24 18 24 Strengthening competitive positioning 14 27 CFOs 24 Investment Professionals Improving access to capital 3 2 CSR Professionals 9 Source: Valuing Corporate Social Responsibility, The McKinsey Quarterly, February 2009 Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 8
  • Corporate Drivers of Sustainability Programs / 2 The Dow Jones Sustainability Index (DJSI) created in 1999 represents over $US 9 billion in total market capitalization. The DJSI STOXX40 has outperformed the nominal DJ STOXX50 by 7.5% to date (and up to 15-20% during the period preceding the financial crisis). The DJSI comprises publicly traded organizations that follow the Global Reporting Initiative (GRI) for Sustainability reporting The investment community is The investment community is giving increased weight to giving increased weight to Corporate Sustainability to guide Corporate Sustainability to guide rating and investment decisions. rating and investment decisions. Source: SAM Sustainability Annual Review, September 3, 2009 Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 9
  • Corporate Drivers of Sustainability Programs / 3 Sustainability has Three Pillars — we find that while there may be an immediate focus on one key area of Corporate Sustainability, attention must be given to how reporting and decision-making occurs. This increases value drivers, reduces redundancy, improves operations, and manages costs. Target Focus of Sample Fortune 500 CSR Programs Survey of Selected Cross-section of Industries 2007-2009 Economic and Company Environmental Social Responsibility Financial Improve the Human UPS Strengthen the Enterprise Protect the Environment Condition Minimize Environmental Local Community Starbucks Sustainable Coffee Prices Impacts Engagement Commitment to Ethical Kimberly-Clark Business Practices Environmental Stewardship Safety and Health Eliminate Adverse Impacts Lockheed Martin Perform with Excellence from Operations Safety of Every Employee Generally organizations focus on one particular domain of sustainability which needs Generally organizations focus on one particular domain of sustainability which needs immediate attention, however understanding the strategic interaction of the other Corporate immediate attention, however understanding the strategic interaction of the other Corporate Sustainability areas is essential and often required by reporting guidelines. Sustainability areas is essential and often required by reporting guidelines. Source: CSR documents from each organization, selected from 2007-9 supplier manuals and other internal corporate documents. Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 10
  • Agenda 1. Introductions and Firm Overview 2. Corporate Drivers of Sustainability Programs 3. Global Reporting Initiative Considerations 4. Enterprise Architecture using SAP Building Blocks 5. Considerations for Roles-based Process Controls 6. Framework for CSR Planning and Implementation 7. Summary and Next Steps Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 11
  • Global Reporting Initiative Considerations / 1 In 2006, the Global Reporting Initiative (GRI) was created to provide guidelines and audit recom- mendations for organizations participating in corporate sustainability reporting (CSR) activities. These guidelines ensure a level of consistency and governance in the practice of corporate sustainability. How does GRI consider CSR? How does GRI consider CSR? CSR “involves reporting financial and CSR “involves reporting financial and nonfinancial information to key nonfinancial information to key stakeholders on the company’s stakeholders on the company’s operational, social, and environmental operational, social, and environmental activities and its ability to deal with activities and its ability to deal with related risks.” related risks.” Considers the “triple bottom-line” of Considers the “triple bottom-line” of reporting reporting – – Economic Performance Economic Performance – – Social Responsibility Social Responsibility – – Environmental Compliance Environmental Compliance Considers broader set of Considers broader set of stakeholders beyond shareholders stakeholders beyond shareholders – – Financial Financial – – Regulatory Regulatory CSR as a practice in accounting areas is still emerging, CSR as a practice in accounting areas is still emerging, with general guidelines based on the objectives of the – – Political Political with general guidelines based on the objectives of the Corporate Sustainability program. Corporate Sustainability program. – – Others based on company program Others based on company program Sources: The Future of Corporate Sustainability Reporting, The Journal of Accountancy. The American Institute of Certified Public Accountants, 2006. Royal Dutch Shell, 2003 Corporate Sustainability Report (courtesy of AICPA). Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 12
  • Global Reporting Initiative Considerations / 2 GRI reporting for CSR is a function of confirming that program initiatives, principles, and objectives are tracked, monitored, and reported correctly. Few specific guidelines outside of the broad principles of GRI have emerged, leaving management free to “do what you say” from an auditor’s point of view. UPS is an exemplar in this area as shown by their reporting presentation. Areas of CSR program called out, then detailed against Key Performance Indicators (KPIs) in subsequent sections of the sustainability report. Overall graphic, such as a Venn diagram, communicates the areas of importance to various stakeholders. Interactive Web sites allow stakeholders including shareholders to create personalized reports, graphics, and tables. Source: 2008 Corporate Sustainability Report, United Parcel Service (used with permission). Newport Consulting Group record of client interviews and feedback, 2009. Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 13
  • Global Reporting Initiative Considerations / 3 Companies may have several reasons for implementing a corporate sustainability program. While the initial or primary focus may be on fixing “hygiene” problems, organizations may exploit the opportunity to achieve more strategic objectives in corporate sustainability and corporate social responsibility. Problems Problems Opportunities Opportunities Manual (spreadsheet-based) systems are Manual (spreadsheet-based) systems are Adopt a more proactive approach to supplier Adopt a more proactive approach to supplier siloed, error-prone, and do not reuse data in siloed, error-prone, and do not reuse data in management management enterprise systems enterprise systems Anticipate and mitigate risk events; develop Anticipate and mitigate risk events; develop Roll-up processes to support audits and Roll-up processes to support audits and response plans should these events occur response plans should these events occur other reporting needs are cumbersome other reporting needs are cumbersome Elevate profile of global corporate citizenship Elevate profile of global corporate citizenship Organizational accountabilities for Organizational accountabilities for and enhance competitive brand position and enhance competitive brand position sustainability are unclear sustainability are unclear Permeate sustainability initiatives and Permeate sustainability initiatives and Risk of being out of compliance with Risk of being out of compliance with a culture of social responsibility throughout the a culture of social responsibility throughout the changing global regulations changing global regulations organization organization No systematic way to respond to crisis or No systematic way to respond to crisis or Improve efficiency of adjacent core processes Improve efficiency of adjacent core processes other unforeseen event other unforeseen event (design, manufacturing, QA) (design, manufacturing, QA) No alignment with overall corporate No alignment with overall corporate Incorporate sustainability in strategic planning Incorporate sustainability in strategic planning sustainability goals sustainability goals and enterprise performance management and enterprise performance management Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 14
  • Agenda 1. Introductions and Firm Overview 2. Corporate Drivers of Sustainability Programs 3. Global Reporting Initiative Considerations 4. Enterprise Architecture using SAP Building Blocks 5. Considerations for Roles-based Process Controls 6. Framework for CSR Planning and Implementation 7. Summary and Next Steps Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 15
  • Enterprise Architecture using SAP Building Blocks / 1 SAP offers a number of solution approaches consistent with CSR program structure and GRI reporting requirements, based upon the operating model and existing IT footprint of the organization. SAP provides several platforms supporting CSR program goals – “Classic SAP” which provides real-time information around emissions, product/ material consumptions, supplier compliance via SAP ERP, SAP SRM, SAP SCM, and SAP PLM platforms – SAP BusinessObjects Enterprise Performance Management (EPM) which provides a platform for strategic formulation Strategy – SAP BusinessObjects Governance, Risk, and Operations Compliance (GRC) which provides a platform for program enablement and monitoring Strategic enablement with real-time decision-making capability – This is the “secret sauce” for SAP, not addressed in most other platform options MM MM QM QM Non-SAP data (which by and large are spreadsheet driven) SD SD SRM SRM and applications – Linkage to other strategic initiatives (balanced FI FI scorecard, KPI / KRI tracking) Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 16
  • Enterprise Architecture using SAP Building Blocks / 2 1 2 Enterprise Performance Management Enterprise Performance Management Governance, Risk, and Compliance Governance, Risk, and Compliance Better control performance Better control performance Aggregate and manage key risk activities Aggregate and manage key risk activities Increase organizational agility Increase organizational agility Automate controls across processes Automate controls across processes Provide improved context for decision making Provide improved context for decision making Monitor risk & controls across disparate systems Monitor risk & controls across disparate systems E Connectivity to… TIV TR A IL LU S SAP BusinessObjects SAP BusinessObjects ERP (MM, PP, SD, PS) ERP (MM, PP, SD, PS) Enterprise Performance Management Portfolio-driven Governance, Risk, and Compliance SCM (APO, SNP) SCM (APO, SNP) Value and Outcomes Ensure Proactively Create SRM (eSourcing) Trusted Manage Enterprise SRM (eSourcing) SAP BusinessObjects ™ Information Risk Visibility PLM (NPI, PPM) PLM (NPI, PPM) Business Intelligence Information Management Non-SAP Non-SAP Environments Environments 3 4 Business Intelligence/Business Warehouse Business Intelligence/Business Warehouse Information Management Information Management Access to all information Access to all information Trusted information Trusted information Intuitive experience for all people Intuitive experience for all people Operational excellence for IT Operational excellence for IT Single information infrastructure Single information infrastructure Flexibility and agility Flexibility and agility Source: SAP America, SAP BusinessObjects, as modified by Newport Consulting Group. Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 17
  • Enterprise Architecture using SAP Building Blocks / 3 The sustainability solution map for SAP BusinessObjects GRC comprises seven domains, each providing functionality across operating areas. Companies can “menu select” building blocks based on CSR program objectives and monitoring/reporting needs. Generally the SAP SPM solution is used with other EPM products to drive CSR program objectives. 1 2 3 4 5 6 7 Source: 2009 SAP AG public domain website, www.sap.com/sustainability. Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 18
  • Enterprise Architecture using SAP Building Blocks / 4 The SAP BusinessObjects SPM application provides a global view of a sustainability program. Risk officers and C-levels can easily track Key Performance Indicators (KPIs) deemed important for CSR purposes, fed by real-time operational data from back office “classic SAP” functionality. Performance settings based on KPIs thresholds (“triggers”) that can be dynamically linked to operational data. Drop-down KPI library Source: “Improve Your Corporate Sustainability Program using SAP BusinessObjects Sustainability Performance Management,” GRCExpert, 2009. Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 19
  • Enterprise Architecture using SAP Building Blocks / 5 KPIs generally are summarized by aggregating various individual indicators which can come from different areas in the organization. The relationship diagram of KPIs provides sustainability managers visibility into the decomposition of each top-level company KPI. The KPI “composer” feature allows for the networking relationship and mapping of source information to “build up” KPIs. Source: “Improve Your Corporate Sustainability Program using SAP BusinessObjects Sustainability Performance Management,” GRCExpert, 2009. Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 20
  • Enterprise Architecture using SAP Building Blocks / 6 SAP SPM offers balanced scorecard views which can be configured to specific goals of CSR programs. The scorecard view can also provide indicators for each goal area and specific goals for easy monitoring and reporting. The balanced scorecard feature can also be expressed as a strategy map, and tailored to the elements of each scorecard. Source: “Improve Your Corporate Sustainability Program using SAP BusinessObjects Sustainability Performance Management,” GRCExpert, 2009. Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 21
  • Enterprise Architecture using SAP Building Blocks / 7 SAP SPM can be linked to other SAP BusinessObjects EPM and SAP BusinessObjects GRC platforms, such as SAP BusinessObjects Strategy Management for strategic formulation of KPIs and SAP BusinessObjects Risk Management to view the impact of key risk indicators (KRIs) on financial targets and enterprise risk management (ERM). CSR Program Boundary KPIs, triggers SAP BusinessObjects Strategy Management KRIs, tolerances SAP BusinessObjects Sustainability Performance Management SAP BusinessObjects Source: “Improve Your Corporate Sustainability Program using SAP BusinessObjects Sustainability Performance Management,” GRCExpert, 2009. Risk Management Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 22
  • Agenda 1. Introductions and Firm Overview 2. Corporate Drivers of Sustainability Programs 3. Global Reporting Initiative Considerations 4. Enterprise Architecture using SAP Building Blocks 5. Considerations for Roles-based Process Controls 6. Framework for CSR Planning and Implementation 7. Summary and Next Steps Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 23
  • Considerations for Roles-Based Process Controls / 1 For sustainability initiatives, an approach that leverages roles, access, permissions, and processes in a structured Governance model, provides clarity in program design and execution. Program Area Responsibility Matrix fro Program Area A - ABC Company PUR PMO ENGR MFG Task # Task Requireme nt 1 Collect OE / Industry Requirements R, A A R C 2 Apply requirements to program objectives R, A R C 3 Determine information reporting gaps and needs A I C 4 Develop c losure plan for information reporting gaps and needs R, A A R C 5 Determine produc t information source list A R C … … … Legend Final Ac ceptanc e Review Product Business Unit Lead R S Review Support ENGR MFG Engineering Manufacturing (VP, GM, Director level) A Approve PUR Purchasing Environmental Compliance Environmental Compliance C Create PMO Program Offic e I Inform Management Processes Management Processes RASCI Diagram – Responsibilities by Work Step Rundown Role Program Compliance Manager Sales Account and/or Primary Resource Secondary Resource Program Administrator Purchasing Manager A history of requirements review suggests the need for strong product configuration management. Program Summary management presence is the single most critical factor in the successful delivery of compliance program at ABC. Key Process Key Activities Area 1. Refine and develop the project plan 2. Maintain the project plan 3. Monitor progress against baselines (scope, schedule, cost) and targets using EVM metrics Craft and manage communications plan Product and/or 4. Program Management 5. Conduct Project Status Meetings with Key Stakeholders 6. Brief leadership on Project Progress 7. … Quality Manager Playbook – Roles & Responsibilities … … Sustainability/Compliance Manager (enterprise-wide or per program area) 1 … … … … … … … Roles Defined in the Organization … … Compliance Process – Work Steps Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 24
  • Considerations for Roles-Based Process Controls / 2 From a solution architecture perspective, a compliance layer is used to define the stages, processes, and key activities for sustainability program compliance Key questions to ask: – Where are the data most persistent (i.e. system of record)? How are data governed and managed? – What are the process and access controls used for compliance? – For product companies, is compliance largely design or manufacturing BOM driven? Compliance Management Product Business Unit Lead Rundown Role Program Compliance Manager (VP, GM, Director) Primary Resour ce Secondary Resource Program Administrator A history of requirements review suggests the need for strong product configuration management. Program Processes Processes Summary management presence is the single most critical factor in the successful delivery of compliance program at ABC. Sales Account and/or Key Process Key Activities Purchasing Manager Area 1. Refine and develop the project plan 2. Maintain the project plan 3. Monitor progress against baselines (scope, schedule, cost) and targets using EVM metrics 4. Craft and manage communications plan Program Management 5. 6. Conduct Project St atus Meetings with Key Stakeholders Brief leadership on Project Progress Product and/or Quality Manager 7. … Playbook – Roles & Responsibilities Compliance Manager (Enterprise-wide or Program-level) – Can be unique to each company GRC Compliance Layer GRC Compliance Layer WHO (Data Content, Analytics, Reporting, Process Management, Governance) (Data Content, Analytics, Reporting, Process Management, Governance) Access OK by WHAT Role, Department, Access OK by and Cost Center? compliance process, SAP EH&S SAP EH&S GRC Controls GRC Controls product program? PLM PLM SAP ERP (MM, SD) SAP ERP (MM, SD) SRM SRM SAP ERP HCM SAP ERP HCM Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 25
  • Agenda 1. Introductions and Firm Overview 2. Corporate Drivers of Sustainability Programs 3. Global Reporting Initiative Considerations 4. Enterprise Architecture using SAP Building Blocks 5. Considerations for Roles-based Process Controls 6. Framework for a Corporate Sustainability Program 7. Summary and Next Steps Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 26
  • Framework for a Corporate Sustainability Program / 1 A sustainability program should be approached based on three fundamental premises, which guide all phases of the initiative. This optimizes schedule performance, controls the costs through manageable budget/decision gates, and applies sound architecture principles. 1 A hypothesis-driven approach differs from other approaches A hypothesis-driven approach differs from other approaches that are typically analysis-driven or even experimental that are typically analysis-driven or even experimental Follow a Hypothesis- The program team very quickly develops and confirms a set The program team very quickly develops and confirms a set of working understandings (i.e. hypothesis) during the initial of working understandings (i.e. hypothesis) during the initial Driven Approach weeks of the initiative weeks of the initiative This hypothesis serves as the basis for the preliminary This hypothesis serves as the basis for the preliminary design of the SAP solution and impacts to the organization design of the SAP solution and impacts to the organization 2 Adhering to a common SDLC methodology reduces risk, Adhering to a common SDLC methodology reduces risk, Leverage an Integrated optimizes schedule performance, and allows for a common optimizes schedule performance, and allows for a common Systems Life-Cycle Delivery vocabulary throughout all activities of the initiative vocabulary throughout all activities of the initiative Any SDLC methodology should be viewed as a “guidebook”, Any SDLC methodology should be viewed as a “guidebook”, (SDLC) Methodology not a “cookbook” – we have found success leveraging ASAP not a “cookbook” – we have found success leveraging ASAP 3 Utilizing numerous point solutions to achieve sustainability Utilizing numerous point solutions to achieve sustainability goals will create very high integration complexity and cost in goals will create very high integration complexity and cost in Focus on a Core Target the eventual solution architecture the eventual solution architecture Platform It is best to consider a small landscape of possible corporate It is best to consider a small landscape of possible corporate sustainability solutions, leveraging a core target platform (like sustainability solutions, leveraging a core target platform (like SAP) to satisfy the objectives of the sustainability initiative SAP) to satisfy the objectives of the sustainability initiative Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 27
  • Framework for a Corporate Sustainability Program / 2 Phases, tasks, and deliverables generally consider the following — starting with Planning and Project Preparation, which is the first phase of the ASAP methodology and approach. Generally successful sustainability programs follow ASAP, leveraging the planning phase to identify key objectives from the requirements documents – Select a preferred sustainability solution path – Develop an implementation plan Typically the Project Preparation phase may be reflected as a sequence of tasks defined by deliverables that meet key sustainability objectives At the end of the Project Preparation phase, the company should be ideally positioned to continue immediately with the subsequent phase (Business Blueprint) through the remaining phases of the sustainability program initiative, culminating in Go-Live and Support Key success factors to maximize value realization from an SAP solution – Scope management – Sound architectural principles – Stakeholder alignment – Organizational change management – Risk management Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 28
  • Framework for a Corporate Sustainability Program / 3 In Phase 2 of the ASAP model, the team develops the “Blueprint” — how conceptually and functionally the selected solution will support the business. Functional Specifications across key “work streams” are mapped to core technologies, OCM and risk plans, and “RICEF” estimates. Level 1 & 2 Level 3 Area Req # Business Requirement Business Reason for the Requirement Comments Req # Business Requirement Business Reason for the Requirement Comments (What) (Why) (What) (Why) 1 Ability to perform inventory overview and analysis 1 Ability to perform inventory overview and analysis Level 1 & 2 Level 3 Ability to view inventory The business needs to be able to view Storage locations Ability to view inventory A custom report will be developed serving as SAP transaction Area Req # Business Requirement Business Reason for the Requirement Comments Req # Business Requirement Business Reason for the Requirement Comments quantity and the following quantities and inventory statuses to perform the can have different quantity and the following an inventory dashboard. MMBE can be used to (What) (Why) (What) (Why) statuses at the plant, storage necessary replenishment and/or allocation shipping points data elements at the plant, view several of these 1 Ability to perform inventory overview and analysis 1 Ability to perform inventory overview and analysis location, item and batch level activities (due to being miles storage location and batch fields. However, it Ability to view inventory The business needs to be able to view Storage locations Ability to view inventory A custom report will be developed serving as SAP transaction apart) level for a specified material does not meet all of quantity and the following quantities and inventory statuses to perform the can have different quantity and the following an inventory dashboard. MMBE can be used to • Stock on-hand (booked, number: the Bridgestone statuses at the plant, storage necessary replenishment and/or allocation shipping points data elements at the plant, view several of these available) ‘Month-to-date’, requirements. A new T- location, item and batch level activities (due to being miles storage location and batch fields. However, it • Frozen/Blocked ‘Week-to-date’ and • Stock on-hand (booked, code, e.g. ZMMBE, will apart) level for a specified material does not meet all of • Quarantined ‘Today’ values refer available) be developed • Stock on-hand (booked, number: the Bridgestone • Reserved (available, unfilled to production data • Frozen/Blocked available) ‘Month-to-date’, requirements. A new T- reserved request) and P/O receipt • Quarantined Security will be • Frozen/Blocked ‘Week-to-date’ and • Stock on-hand (booked, code, e.g. ZMMBE, will 1.01 • Enroute (shipped, not data only. 1.01 • Reserved (available, unfilled developed to control • Quarantined ‘Today’ values refer available) be developed shipped) reserved request) who can view the • Reserved (available, unfilled to production data • Frozen/Blocked • O&S Enroute (“S” bldg) • Enroute (shipped, not inventory by storage reserved request) and P/O receipt • Quarantined Security will be • Overage and Short shipped) location. Specifically, 1.01 • Enroute (shipped, not data only. 1.01 • Reserved (available, unfilled developed to control • Month-to-date • O&S Enroute (“S” bldg) Bridgestone wants to shipped) reserved request) who can view the • Week-to-date • Overage and Short control who can view • O&S Enroute (“S” bldg) • Enroute (shipped, not inventory by storage • Today • Week-to-date the inventories in • Overage and Short shipped) location. Specifically, • Actual Production and storage location • Month-to-date • O&S Enroute (“S” bldg) Bridgestone wants to Purchase Order Receipt data ‘MISC’. • Week-to-date • Overage and Short control who can view (Month-to-date, Week-to- • Today • Week-to-date the inventories in date, Today) • Actual Production and storage location Purchase Order Receipt data ‘MISC’. 2 Ability to perform inventory valuation 2 Ability to perform inventory valuation (Month-to-date, Week-to- Ability to valuate inventory The business needs to accurately represent Ability to valuate inventory Inventory valuation will be in SAP. The country-of-origin of date, Today) appropriately the value of inventory. appropriately the batch will be 2.01 2.01 mapped to the country 2 Ability to perform inventory valuation 2 Ability to perform inventory valuation of the split valuation Ability to valuate inventory The business needs to accurately represent Ability to valuate inventory Inventory valuation will be in SAP. The country-of-origin of Ability to verify that the The business needs to accurately represent A material number Ability to verify that the Inventory valuation will be in SAP The country-of-origin of appropriately the value of inventory. appropriately the batch will be 2.01inventory valuation increased the inventory value for product/inventory with multiple 2.01inventory valuation is properly the batch will be mapped to the country by the split valuation amount produced in various countries. countries of origin adjusted as the inventory mapped to the country of the split valuation for the country that produced have the same changes at the batch level. of the split valuation Ability to verify that the The business needs to accurately represent A material number Ability to verify that the Inventory valuation will be in SAP The country-of-origin of this product transfer price if one inventory valuation increased the inventory value for product/inventory with multiple inventory valuation is properly the batch will be of the UPCs is by the split valuation amount produced in various countries. countries of origin adjusted as the inventory mapped to the country made in the U.S. If 2.02 for the country that produced have the same 2.02 changes at the batch level. of the split valuation a tire is made, for this product transfer price if one example, in Japan of the UPCs is and in Thailand and made in the U.S. If 2.02 is not made in the 2.02 a tire is made, for U.S., the transfer example, in Japan prices may be and in Thailand and different. is not made in the 3 Ability to monitor batch level inventory 3 Ability to monitor batch level inventory U.S., the transfer Ensure integrity of batch data The business needs to ensure the batch data When a warehouse Ensure integrity of batch data As changes to the inventory Class Codes are As inventory is moving prices may be accurately represents the UPC data/class reclassifies occurring in COPS, these changes will be from one class to different. d ithi th t l ti f th l t i t th SAP fl t d i SAP b i t ti d th l ( 3 Ability to monitor batch level inventory 3 Ability to monitor batch level inventory Ensure integrity of batch data The business needs to ensure the batch data When a warehouse Ensure integrity of batch data As changes to the inventory Class Codes are As inventory is moving accurately represents the UPC data/class reclassifies occurring in COPS, these changes will be from one class to d ithi th t l ti f th l t i t th SAP fl t d i SAP b i t ti d th l ( Level 1 and 2 Functional Design (multiple design paths) Program Communication and OCM Plan INT # P1/P2 OBJECT NAME AMTS -> SAP (Tire orders, auto parts, replenishment order tires, 1 2 replenishment order auto parts) 2 2 SAP -> AMTS (Order confirmation) 3 2 AMTS -> SAP (Order receipt from AMTS C&F stores) 4 1 BFDI -> SAP (ATB) s ync 5 1 BFDI <- SAP (Material Master Common Format) 6 1 BFDI <- SAP (Customer Master Common Format) 7 1 BFDI <- SAP (Zip Code Master) 8 1 BFDI / DR -> SAP (External billing input/billing credits - Common Format) 9 1 SAP -> BFDI (Government price books) 10 T COPS -> SAP (Item master synchronization) 11 T COPS -> SAP (Customer master synchronization) 12 T COPS -> SAP (Order reconciliation) 13 T COPS -> SAP (Customer orders) 14 T COPS -> SAP (Customer Change Orders) 15 T COPS -> SAP (Customer shipments) 16 T COPS -> SAP (Inventory receipts) 17 T COPS -> SAP (Bay lane inventory) INTERFACES 18 T COPS -> SAP (Inventory adjustments-scrap, lost inventory, etc) 19 T COPS -> SAP (Inventory reconciliation) 20 T SAP -> COPS (Deliveries) 21 T SAP -> COPS (New materials) 22 T SAP -> COPS (Customer Orders) 23 T SAP -> COPS (Item master synchronization) 24 T SAP -> COPS (Order master synchronization) 25 T SAP -> COPS (Customer Change Orders) 26 T SAP -> COPS (Customer shipments) 27 T SAP -> COPS (Inventory receipts) 28 T SAP -> COPS (Bay lane inventory) 29 T SAP -> COPS (Inventory adjustments-scrap, lost inventory, etc) 30 T SAP -> COPS (Inventory reconciliation) 31 1 DiForce (Warren) -> SAP 32 1 SAP -> DiForce (Warren - ASRS) 33 1 DiForce (LaVergne) -> SAP 34 1 SAP -> DiForce (LaVergne - ASRS) 35 1 DRP -> SAP (Stock transport orders) 36 1 SAP -> DRP (Finished tire/tube inventory) 37 1 SAP -> DRP (Finished tire/tube sales orders) 38 1 SAP -> DRP (Finished tire/tube enroute) 39 1 SAP -> Central Forecast 40 1 SAP -> MPS 41 1 MPS -> SAP Interface Scenarios, Analytics, Reports, Enhancements, Forms Program Implementation Risk Management Plan Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 29
  • Framework for a Corporate Sustainability Program / 4 In latter phases of the ASAP model, the project team will configure the core functional and technical elements, implement the OCM and Risk Management plans, ready the technical environment for Go- Live, and plan and execute testing, system cutovers, and “sunsets” (retirements) as necessary. T1 High (4-5) A1 S1 S3 T4 S2 A3 A4 A5 Likelihood of Occurrence P1 T2 T3 Medium (3) A2 1 2 3 n Go-live Low (1-2) P2 Quick win A - Accountability Execution T - Technical Strategic P - Program S - Scope Low (1-2) Medium (3) High (4-5) Inherent Impact Severity Functional & Technical Configuration Organization Change Readiness Program Risk Readiness (Playbooks, Procedure Enablement) Cost Value Capture Plan Outsourcer Contract buy Spot but Contract buy Ga Process steps # transactions (m n) nternal (m n Supp (m n) Internal (m n) Supp (m n) Internal (000$) Supplier (000$) Internal (000$) Value Stream Value Stream Value Capture Milestones Value Capture Milestones Months Months $ - $ - $ - 1. Inventory 1. Inventory Site Deployments // Process Site Deployments Process BF D BF Q B FP Reduction Reduction Improvement Update Source Strategic 1,330,000 4 0 0 0 Improvement Update D E VEL OPM EN T QU A LIT Y PR OD U C TION Exception <$500 1,820,000 6 0 0 Inventory Update Inventory Update Other 350,000 0 0 15 $ 10,150 $ - $ 3,281 030 0 30 03 0 Requisition and ap Strategic 1,330,000 0 0 0 2. Asset Utilization BU Equipment Utilization BU Equipment Utilization 2. Asset Utilization Exception <$500 1,820,000 0 0 0 Update Update D EV EL OPM EN T IN TE GR ATION PR OD U C TION Other Expert (client) 175,000 10 . Non-expert (clien 175,000 0 0 20 $ - $ - $ 3,281 . Order Vendor direct Expert (client) SAP Non-expert (clien 3,150,000 0 4 0 5 0 0 0 . Expert (client) 350,000 0 0 5 5 $ 7,875 $ 9,844 $ 1,094 15. Supply Chain 15. Supply Chain Forecast accuracy update Forecast accuracy update Ship / Receive Strategic 1,330,000 5 10 Efficiencies Efficiencies Exception <$500 1,820,000 1 2 Logistics --route Logistics route BF S B FT Other 350,000 5 10 $ 5,294 $ 10,588 $ 1,094 optimization update optimization update SA N D BOX Pr oto typ e Verify Strategic 133,000 1 0 0 0 Materials cost reduction -- Materials cost reduction Exception <$500 1,820,000 0 0 0 0 improved forecasts improved forecasts Other 350,000 0 0 0 0 $ 83 $ - $ - 03 0 040 030 16. Sales 16. Sales BU Call-Center BU Call-Center B FB Invoice None 35,000 0 0 0 0 Improvements Deployments Improvements Deployments Electronic 3,115,000 0 3 0 0 Paper 350,000 0 0 0 3 $ - $ 5,841 $ - Time-to-Repair reduction Time-to-Repair reduction SA N D BOX OTC update update 030 Match None 1,820,000 0 0 0 0 2 w ay 1,330,000 3 - 0 0 0 Pr io r S D So lu tio n vity 3 w ay 350,000 10 0 0 - 0 $ 466 $ - $ 2,188 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 BU GO Live Approval Required 1,330,000 3 2 0 0 0 Site 1 Site 2 Site 3 Site 4 Site 5 Site 6 Required 350,000 3 0 2 $ 4,156 $ - $ 1,094 Months Pay Electronic 3,150,000 0 0 0 0 Check 350,000 6 0 2 0 2 $ - $ 438 $ 1,313 4 .5B R el ea se Systems 3,500,000 $ 27,000 $ 3,000 Finance Charge $ - $ 132,559 $ - Syste m N OT in Tra n sp o rt Pa th Total $ 55,024 $ 159,268 $ 16,344 T ra n sp or t Pa th Technical Environment Readiness Cost Envelope Management Implementation Program Readiness Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 30
  • Agenda 1. Introductions and Firm Overview 2. Corporate Drivers of Sustainability Programs 3. Global Reporting Initiative Considerations 4. Enterprise Architecture using SAP Building Blocks 5. Considerations for Roles-based Process Controls 6. Framework for a Corporate Sustainability Program 7. Summary and Next Steps Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 31
  • Summary and Next Steps Newport’s planning phase consists of the facilitation of business and system requirements, and development of stakeholder buy-in, recommended internal processes and monitoring controls, metrics and indicator formulae and mapping, and solution “building blocks” for downstream implementation. Planning and Engagement Model 8-week timeline of activities 1 2 3 4 5 6 Develop Validate Align to Recommend Project Confirm Business Indicators to Landscape of “to be” Launch and Solution Blueprint Operating SAP Process and Scheduling Hypothesis Project Model Solutions Solution Set Charter Organization Change and Project Management Conceptual Conceptual Guiding Principles Guiding Principles Updated Balance Updated Balance Blueprint Blueprint Kickoff Kickoff Application Application Recommended Recommended Scorecard Scorecard Transition Plan Transition Plan Presentation Presentation Requirements Requirements Solution Set Solution Set Understanding Understanding of Existing of Existing Key Indicator Key Indicator High-level High-level Engagement Engagement Initial Data Initial Data Key Solution Key Solution Landscape Landscape Formulation Formulation Engagement Engagement Workplan Workplan Mapping Mapping Requirements Requirements Workplan Workplan Pro forma Pro forma Operating Model Operating Model Stakeholder Stakeholder Conceptual Conceptual Target Solution Target Solution Balanced Balanced Implementation Implementation Monitoring Monitoring Interview Schedule Interview Schedule Technical Technical Vision Vision Scorecard Scorecard Considerations Considerations Processes Processes Requirements Requirements Week 0 Weeks 1-2 Weeks 2-4 Weeks 4-5 Weeks 5-7 Weeks 7-8 Phase 1 Phase 2 “Strategic Alignment” Checkpoint “Solution Positioning” Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 32
  • Summary and Next Steps Newport’s experience has been that as we engage with our clients, we discover additional opportunities, challenges, ideas, and observations that are tangential or even unrelated to the initial scope of our engagement In these cases we will advise our clients of these areas and when appropriate will recommend staff and Newport partners who might be able to assist our clients in these areas: – Leadership development – Organizational conflict resolution – Strategic and Operational Planning – Lean Manufacturing Practices – Idea and Intellectual Property Management – Other Functional IT solution capabilities – Enterprise Performance Management Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 33
  • Contact Newport Consulting Group, LLC William Newman, CMC Managing Principal wnewman@newportconsgroup.com 7286 North Village Drive O 248-978-2000 Clarkston, MI 48346 USA M 248-635-9902 Newport Consulting Group, LLC Bill Rudiak Principal brudiak@newportconsgroup.com 7286 North Village Drive O 248-978-2000 Clarkston, MI 48346 USA M 415-601-3152 Newport Consulting Group, LLC Corporate Sustainability Reporting using SAP GRC 34