• Save
Cost Reduction
 

Cost Reduction

on

  • 639 views

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/Cost-Reduction-93

This document discusses various cost reduction methodologies and concepts, including the following: Process Optimization, Strategic Sourcing, Shared Services, Business Process Outsourcing.

Statistics

Views

Total Views
639
Views on SlideShare
639
Embed Views
0

Actions

Likes
1
Downloads
0
Comments
1

0 Embeds 0

No embeds

Accessibility

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…
  • Please email this presentation on a_b_amin@yahoo.com
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Cost Reduction Cost Reduction Presentation Transcript

  • Cost Reduction PresentationThis document discusses various cost reduction methodologies and concepts,including the following: Process Optimization, Strategic Sourcing, Shared Services,Business Process Outsourcing
  • 3Cost Reduction Strategies have become the focus of executive managementdue to global economic challengesThe Burning Platform: $1 = $6.87$1 of cost reduction = $6.87 of new sales when viewed from the impact to thebottom lineExternal Drivers for Cost Reduction Increased Marketplace Competition– Competitors providing similar products at lower prices Fear of Recession– Less cash flow in the marketplace Rising Costs of Production– Increasing cost of Energy and Material Inflation– Declining value of currency and/or rising prices of goods and services Increased pressure from Investors and Boards of Directors– Missed Revenue Targets– Mergers and Acquisitions
  • 5The Savings Realization Matrix may reveal a focus on several cost reductionstrategies… for example, Strategic Sourcing In many cases, there is lost costmaximization simply due to a lack ofcentralized insight into which suppliers areproviding work to each business unit– This insight would lead to opportunities toconsolidate vendors to deliver the same workbut for less based on volume discounting Typically, there is inconsistentaccountability tracking of whethersuppliers are meeting deliverables withinagreed upon Service Level Agreementswhich can lead to excess costs Most importantly, organizations may lackan understanding of the contractual costdrivers that would otherwise give theclient clear insight as to what “levers” canbe pulled to reduce costsStrategicSourcingVisionValueBasedOutcomeStandardizedRepeatableProcessesRiskManagementInnovationTechnologyEnablementVisibleLeadershipCommitmentKey Elements of a SuccessfulStrategic Sourcing ProgramStrategic Sourcing assessments typically identify a variety of “quick-wins”and measure the alignment of key elements against best practices
  • 7Agenda Overview of Cost Reduction Process Optimization Strategic Sourcing Shared Services Business Process Outsourcing
  • 9Process Optimization:• Measures the cost and financial performance ofactivities, resources, and cost objects• Assigns resources to activities and activities to costobjects based on their use, and recognizes the casualrelationships of cost drivers to activitiesHow muchdo wespend?Whatdo wedo?For whichproducts dowe do it?CostCenter 1Total BankExpensesProductAProductBProductCActivitiesProductDProductECostCenter 2CostCenter 3CostCenter 4CostCenter 5Activities ActivitiesActivities ActivitiesBook costs toappropriatecost centersDrive costcenter coststo activitybasedprocesscost poolsDrive poolcosts toobjectsActivity-Based Costing indicates the Costs ofActivities and ObjectsA ctivity-B ased C osting indicates theC osts of A ctivities and O bjectsA ctivitiesR esourcesC ost O bjectsW hat is used to dow orkT o w hat, or forw hom is w ork done(W hat w ork) is done A ctivitiesC ostD riversP erform anceM easuresW hy? W hat? H ow W ell?W hyis w ork done orw hat im pacts anactivity’s cost,tim e, or quality(W hat w ork)is done H ow w ellis w ork doneA ctivity B ased M anagem entfocuses on understandingW H Y and H O W W ELLA B C A B MCost Inputs Process Costs Cost Objects ReportingRaw MaterialCostsManufacturingCostsPackaging/DistributionCostsDirect BusinessCenter/MarketingCostsR&D CostsCorporateChargesCustomerRelatedActivitiesPackage /DistributionActivitiesProductRelatedActivitiesManufacturingActivitiesSupportActivitiesNew ProductDevelopmentActivitiesManufacturingPackaging/DistributionProduct GroupsProduct ProfitabilityCustomer ProfitabilityProcess CostsProduct 1Product 2Product 3Product 4Customer 1Customer 2Customer 3Sales & Mktg.R&DPkg/DistMfgCustomer GroupsProcess Optimization assessments across people & process has become abasic focus cost reduction
  • 11Level 3Level 1Internal FocusInterviewsInsights DeliveredDetailed discussionUnderlying issue discoveryHeadline cost reduction opportunitiesHypothesis guidanceExternal CustomerFocus InterviewsInsights DeliveredFocused discussionPrioritization of key value add areas acrossexperienceMapping to costs of operation for cost/ valuemappingQuestionsEvolveManageDeliveryPurchaseServicesAwarenessWhat is theawarenessperception ofservices offered?What is theawareness ofbroader servicesuite?How docustomersperceive thecompetitivelandscape?What are tier 1must haveservices?Which servicesdoes customerbelieve can beeffectivelyenabled?How willcustomerpurchasingpatterns evolve?Where doespurchasingreside?Who are the keydecision makers/Influencers?What is thespendbreakdown?What is thepreferred deliverymodel?What part(s) ofthe overallservice suitedoes thecustomer wish tokeep internal?How shouldaccounts bemanaged?What push vs. pullservices should beenabled?What are the keyService LevelAgreements tomaintain?What opportunitiesare there to tightenthe relationship?What are thebroader priorityservices that couldbe streamlined?Level 2Subject MatterInterviewsInsights DeliveredBroader opportunities in cost reductionPriority cost components and watch outsDetailed option flesh outComponentsIncluding internal and SME inputs to shape thediscussion helps open up customer experienceinsights and areas where spend is not valuedPhase 1 Focus Interviews help spotlight where costs do not align with value
  • 13SKUManagementSalesCreative ServicesConsumerResearchMarketingPlanningAssetManagementAcquisitionAcquisitions, Marketing & SalesPromotionsPre- ProductionManagementProductPlanning“Prod. Config”InventoryPlanning PrereleaseSourcingProcurementBus. DecisionFrameworkCollaborativeForecastingData IntegrityPost EventAnalysisKnowledgeManagementBudget / Planning CategoryManagementManufacturing Assembly& Distribution PlanningWIP InventoryVisibilityDemand &Supply MatchingFG InventoryVisibilityManufacturingAssembly &DistributionPick, Pack &Ship PlanningPlanning“Outbound”Transformation“Inbound”OrderManagementReplenishmentVMI DeliveriesNon VMIDeliveriesCustomerServiceInvoicingVMI RetailMerchandisingReturnsManagementCredit &Deductions MnmtManufacturing Distribution MerchandiserBusiness IntelligenceSupply ChainIllustrative Macro Process OverviewMedia Advertising& PublicityPlanning= IndicativePain PointsInterviewing, benchmarking, and other techniques are used to identify bottomup savings opportunities measured against your current state processes
  • 15The end result is a Transformation Roadmap based on a series of prioritizedproject plansPersonal ProductivityTools & InfrastructureCurrent StateAnalytics & Data Mining Int. Training Ext. TrainingHumanResourcesFrontOfficeProductDevelopment1 2 3 4ABCD E FA 1 -1 P o lic y & P ro c e d u reD o c u m e n t a t io n via M S W o rdA 2 -1 M a jo r H R fu n c t io n so u t s o u rc e d t o T O G . In p u t s viafa x a n d e m a ilA 3 -1 T ra ve lS e rvic e s n o tfe a t u re dA 4 -1 B a c k o ffic e F T E / R e s o u rc ee x p e n s e t ra c k in g via E x c e lA 5 -1 In t e rn a l C o m m u n ic a t io n slim it e d t o a d h o c e m a ilsA 6 -1 E x t e rn a lC o m m u n ic a t io n svia e m a ils &in t e rn e t c o n t e n tA 7 -1 P e rf m g t s y s t e m h e ld b yT O G , m e t ric s u n d e fin e dA 8 -1 C o m p s y s in e x c e l b yE le m ic a & W a t s o n W y a t t -S a le s fo rc e n o t c o ve re dB 1 -1 H e lp D e s k p ro c e s s flo w s d e fin e da n d s u p p o rt e d via m a n u a l p ro c e s sB 2 -1 C a ll C e n t e r fu n c t io n n o t y e tfe a t u re d . S o lu t io n t o b e d e fin e dB 3 -1 e M a rk e t p la c e t ra n s a c t io n a c it ivit ym a y n o t b e fu lly fu n c t io n a l b u t a d h o ca n a ly s e s c o n d u c t e d in E x c e lB 4 -1 S a le s c a lls o r le a d s t ra c k e d viam o d ifie d M S O u t lo o k a p p lic a t io nB 5 -1 O ve ra ll C R M t o o l n o t y e tid e n t ifie d b u t b e in g e x p lo re d ,e x p e c t e d d e c is io n w it h in 2 m o n t h sB 6 -1 C o n t ra c t m a n a g e m e n t h a n d le do n p a p e rC 1 -1 P ro je c t G a t e w a y u s e d fo rb u ild m g t (is s u e s , ris k m g t ,c h a n g e lo g s a n d s t a t u su p d a t e s )C 2 -1 R e le a s e p la n n in g a n dm a n a g e m e n t via E x c e ls p re a d s h e e t / M S P ro je c tC 3 -1 M S P ro je c t & E x c e l t o m a n a g ein d ivid u a l w o rk s t re a m s fo r a ll E le m ic ain it ia t ive sC 4 -1 V e rs io n m a n a g e m e n tc o n t ro l a n d d o c u m e n t a t io n viaP ro je c t G a t e w a y . A file s e rve ris a c c e p t ib le in t e rim s o lu t io nC 5 -1 R e s o u rc e a llo c a t io na n d p la n n in g via m a n u a lp ro c e s s & E x c e lD 2 -1 B a s ic H R a n a ly t ic sc o n d u c t e d via E x c e lD 3 -1 O p e ra t io n a l a n a ly s is n o ta c t iveD 6 -1 M k t R e s e a rc h o nE le m ic a D a ta n o t a c tiveD 7 -1 B a la n c e d s c o re c a rd fo rb u s in e s s m e t ric s u n d e fin e dD 1 -1 S t ra t e g ic a n a ly s is s y s t e mn o t a c t iveD 4 -1 C o m p e t it ivein t e llig e n c e b a s e d o n n o n -s t ru c t u re d a d -h o c s e a rc h e s .N o c e n t ra l re p o s it o ryD 8 -1 O p e ra t io n a l &S t ra t e g ic s y s t e m s d a t aa rc h ivin g n o t a c t iveE 2 -1 In t ra n e t s it e & s h a re dd rive s e x is t a s a d a t a re p o s it o ryE 1 -1 In t e rn e t s it e e x is t s b u ts e rve s t o p o s t d a t a o n lyE 3 -1 In te g ra te dk n o w le d g e m a n a g e m e n ts y s te m n o t s e le c te dE 4 -1 In t e rn a l E le m ic a t ra in in gp e rfo rm e d in p e rs o n viap o w e rp o in t & s t o re d ins t ru c t u re d d ire c t o rie sF 2 -1 T a rg e t e d e x t e rn a lt ra in in g (o n b o a rd in g )p e rfo rm e d in p e rs o n viap o w e rp o in t s t o re d ins t ru c t u re d d ire c t o rie sG 1 -1 C re d it & C o lle c t io n sn o t fe a t u re dG 2 -1 A c c o u n t in g s y s t e m n o ty e t s e le c t e dG 3 -1 F in a n c ia ls m o d e le din E x c e l b u t m o d e l n e e d st o b e m a d e m o re g ra n u la r,e s p e c ia lly t h e e x p e n s ec a t e g o rie sG 4 -1 B illin g & In vo ic in g n o tc u rre n t ly fe a t u re d ine M a rk e t p la c e s o lu t io n .G1-2 Credit &Collectionscould beconducted byphone and faxG2-2Accountingsystem selectedand beingim plem entedG3-2 Financialsystemselected andbeingim plem entedG4-2 Billing &Invoicing systemselected andbeingim plem entedE 4 -2 Tra in in g d o c u m e n t a t io na n d m a t e ria ls a va ila b le viain t ra n e tF 2 - 2 E x t e r n a l t r a i n i n go u t s o u r c e d , m a t e r i a l sa v a i l a b l e t o E l e m i c a v i ai n t e r n e tF1-2 Training system identifiedfor remote training deliveryD 1 -2 S t ra t e g ica n a ly s is via S A PB W w it h C o g n o sfro n t e n d . C a n n e dre p o rt s o n lyD 8 -2 O p e ra t io n a ld a t a & s t ra t e g ics y s t e m s a rc h ivin gs t o re d b yin d ivid u a l s y s t e m sD 7 -2 B a la n c e ds c o re c a rd sb u s in e s sm e t ric s d e fin e dD 2 -2 H Ra n a ly t ic s d o n eb y T O GD 6-2 M k t R es earc h onE lem ic a D ata m ay bes upported byC om m erc eO ne.D 3 -2 O p e ra t io n a la n a ly s is via e 4 P La n d G A T XC 3 -2 In t e g ra t e d w o rk p la n fo r a llc o m b in e d E le m ic a in it ia t ive se s t a b lis h e dC 2 -2 R e le a s e p la n n in gin t e g ra t e d in t o P ro je c tG a t e w a yC 5 -2 M S P ro je c t is in t e rim t o o l fo rR e s o u rc e p la n n in g a n d a llo c a t io n . Itc a n b e lin k e d t o P ro je c t G a t e w a yB 1 -2 H e lp D e s k s y s t e md e fin e d b y 0 1 / 3 1 B 2 -2 C a ll C e n t e r m a y b eo u t s o u rc e d b u t w ill lin k in t ok n o w le d g e m a n a g e m e n ts y s t e m sB 3 -2 e M a rk e t p la c es o lu t io n t ra c k sin fo rm a t io n o nt ra n s a c t io n a c it ivit yB 1 -2 H e lp D e s k s y s t e m inp la c e b y 0 3 / 0 1B 5 -2 O ve ra ll C R M to o lid e n tifie dA 1 -2 P o lic y & P ro c e d u reD o c u m e n t a t io n m a n a g e d a n dp u b lis h e d e le c t ro n ic a lly viain t ra n e tA 2 -2 A ll H R p ro c e s s e ss u p p o rt e d b y w e b in t e rfa c e ,lin k s t o fin a n c ia ls n o t d e fin e dA 4 -2 B a c k o ffic e F T E / R e s o u rc ee x p e n s e s d a t a re q u ire m e n t sd e fin e d fo r fin a n d a c c t s y sA 7 -2 T O G P e rf. m g t s y s t e mt ra c k s q u a n t / q u a l d a t a lo a d s ,m e t ric s d e fin e dA 6 -2 E x t e rn a lC o m m u n ic a t io n s in c lu d efo rm a l fe e d b a c k m e c h a n is mA 3 -3 T ra ve l S e rvic e so u t s o u rc e dA 6 -3 E x t e rn a l C o m m u n ic a t io n slin k s t o h e lp d e s k &C o m m e rc e O n e s it e sA 8 -3 In t e g ra t e d C o m p . s y sd e ve lo p e d w it h lin k s t ot ra in in g a n d p e rf m g t s y sB 5 -3 C R M t o o lb e in g im p le m e n t e dB 6 -3 C o n t ra c t m a n a g e m e n th a n d le d e le c t ro n ic a lly . M a ylin k t o c le a rin g h o u s e s y s t e m sB 1 -3 H e lp D e s k lin k e d t oS o lu t io n C e n t e r w it h fu t u relin k s t o k n o w le d g em a n a g e m e n t s y s t e m s &in t e rn e t s it eB 4 -3 M S O u t lo o k a p p lic a t io nfo r c a ll t ra c k in g m ig ra t e d t oC R M t o o l d e s c rib e d in B 5 -3C 5 -3 M S P ro je c tlin k e d t o P ro je c tG a t e w a yC 4 -3 V e rs io n m a n a g e m e n t c o n t ro la n d d o c u m e n t a t io n m ig ra t e d t o aro b u s t re p o s it o ry w it h e ffo rt s t o ro ll in t oC 1 -4 b y y e a rs e n dD 1 -3 S t ra t e g ica n a ly s is le t s p o w e ru s e rs h a ve c lie n tp ro p rie t a ry q u e ry in gc a p a b ilit ie sD 3 -3 O p e ra t io n a la n a ly s is s y s t e m s(e 4 P L a n d G A T X)lin k t o S A P B WD 4 -3 C o m p e t it ive in t e llig e n c e fo rm a liz e dvia file s e rve rs , d a t a b a s e , w e b a c c e s s a n ds u b s c rip t io n s t o d a t a s o u rc e sD 7 - 3 B a l a n c e ds c o r e c a r d sb u s i n e s s m e t r i c sfe d v i a d a t ar e q u i r e m e n t s t oS A P B WD 8 -3O p e ra tio n a ld a ta a rc h ivin gs y s te m s inp la c eE 2 -3 In t ra n e t s it es h o u ld b e m a d ere a d y t o in t e g ra t ew it h k n o w le d g e m g td a t a b a s e d e t a ile din E 3 -4E1-3 Internetsite providescontent from livefeedsF 1 a - 3 T r a i n i n ga v a i l a b l e t h r o u g h w e ba c c e s sF 1 b -3 T ra in in gm o d u le s d e ve lo p e dG 1-3 C redit &C ollec tions viaautom ateds y s temG 2-3A c c ountings y s temintegrated tofinanc ial s y s temG 3-3F inanc ialss y s temfinaliz ed link edto A c c t s y s temG 4-3 B illing &Invoic ingintegrated w ithac c ounting &financ ials y s tem s(pos s ibly banks y s tem s )G 1 -4C re d it &C o lle c tio n sm a y b eo u ts o u rc e d. C o n s id e ra n S A Pm o d u le .G 3 - 3 F i ns y sh a n d l e sm u l t i -c u r r e n c yfu n c t i o n s& m u l t i -c o u n t r yP & L sG 2 -3 A c c ts y s h a n d le sm u lt i-c u rre n c yfu n c t io n sG 4 -3 B illin g& In vo ic in gin te g ra te dw ith m u lti-c u rre n c yn e e d sF1-4 Integratedweb based trainingsys links tosolution ctr, clients& Elemica withcerts and links toperf mgt sysE 3 -4 K -M g t s y sw it h w e b a c c e s sa n d lin k s t o t ra in in ga n d d vp t s y sE 1-4Internet s iteintegratesw ith K -M gts y s of E 3-4D 1 -4 D a t a m in in gw it h re p o rt s s o ld t oc lie n t s a n d p u b licD 2 -4 If in s o u rc e d , H Ra n a ly t ic s p e rfo rm e d b y S A PB W w it h lin k s t o T O G s y sD 7 -4 S c o re c a rdlin k e d to e x e c g o a lsa n d p e rf m g t s y sD 4 -4 C o n s id e rc o n tra c tin gc o m p e titivein te llig e n c e toe x te rn a l firm sD 8 -4 O p d a ta& s tra te g ic s y sa rc h ivin g s y s inp la c eC 1 -4 S e le c t a n in t e g ra t e d p ro d u c td e ve lo p m e n t s o ft w a re a p p lic a t io n t oin c o rp o ra t e c o s t a n d re ve n u ea s s u m p t io n s / im p a c t s a n d t ie t o C R Mt o o l. Is s o u rc e s y s t e m fo r S A P B WC 5 -4 E x a m in e E R Ps o lu t io n o p t io n sB 5 -4 O ve ra ll C R M t o o l fu llyfu n c t io n a lA 7 -4 P e rf m g t s y s lin k s t oc o m p s y s a n d t ra in in g & d vp ts y sA 7 -4 P e rf m g t s y s m a y b ein s o u rc e d w it h in 2 y e a rsA 2 -4 W it h in 2 y e a rs , m a yin s o u rc e a ll H R fu n c t io n sA 8 -3 C o m p s y s m a y b ein s o u rc e d w it h in 2 y e a rsB 5 -2 A c c e s s p o te n tia l in te rimC R M to o lB 5 -2 In te g ra te O u tlo k &A c c e s s to o lsB5-4 Overall CRM globallyintegratedC 6 -1 C G E Y m a n a g e ss o u rc e c o d eC 7 -1 D e fin e p ro b le mt ra c k in g t o o l & lin k t o C R M ,H e lp D e s k & C a ll C e n t e rt o o lsD9-2 Track webusageD 9 -3 L o o k t oc u s t o m iz e w e bre p o rt in gE 1 -2 In te rn e t s ite fu n c tio n a lityb ro a d e n e d to re c e ive s im p led a ta fro m e x te rn a l s o u rc e s ,c lie n t d a ta p h a s e d in a fte r ay e a rE1-2 Training system identifiedfor remote training deliveryE 1 - 3 T r a i n i n ga va i l a b l e t h r o u g h w e ba c c e s sE 1 -3 T ra in in gm o d u le s d e ve lo p e dVisionAcct & FinanceG HH1-1 P lan trans ition for offic em ove of infras truc ture variablesH 2 - 1 P l a n s e t u p o fC h e s t e r b r o o k O ffi c eH 3 - 1 P l a n s e t u p o fF r a n k fu r t O ffi c eH 1 - 2 E s t a b l i s hp r o c e s s e s f o rg l o b a l i z a t i o n o fi n f r a s t r u c t u r ec o m p o n e n t s f o rE l e m i c a - I n c l u d i n gC o m p u t e r s , C e l lP h o n e s , E m a i l ,V o i c e m a i l , P r i n t i n g e t cH1-3 Im plem ents y s tem s forglobaliz ation ofinfras truc turec om ponentsH 1 -3 L in kg lo b a liz e ds y s t e m s o fin fra s t ru c t u rec o m p o n e n t s t oe ffo rt s t oc e n t ra liz e C R M ,A c c t , & F in a n c ia lS y s t e m sH 2 - 2 I m p l e m e n ts y s t e m s e t u p s o fF r a n k f u r t &C h e s t e r b r o o k o f f i c e sH1-4 Infrastructureof globalizedpersonal productivitytools in placePersonal ProductivityTools & InfrastructureCurrent StateAnalytics & Data Mining Int. Training Ext. TrainingHumanResourcesFrontOfficeProductDevelopment1 2 3 4ABCD E FA 1 -1 P o lic y & P ro c e d u reD o c u m e n t a t io n via M S W o rdA 2 -1 M a jo r H R fu n c t io n so u t s o u rc e d t o T O G . In p u t s viafa x a n d e m a ilA 3 -1 T ra ve lS e rvic e s n o tfe a t u re dA 4 -1 B a c k o ffic e F T E / R e s o u rc ee x p e n s e t ra c k in g via E x c e lA 5 -1 In t e rn a l C o m m u n ic a t io n slim it e d t o a d h o c e m a ilsA 6 -1 E x t e rn a lC o m m u n ic a t io n svia e m a ils &in t e rn e t c o n t e n tA 7 -1 P e rf m g t s y s t e m h e ld b yT O G , m e t ric s u n d e fin e dA 8 -1 C o m p s y s in e x c e l b yE le m ic a & W a t s o n W y a t t -S a le s fo rc e n o t c o ve re dB 1 -1 H e lp D e s k p ro c e s s flo w s d e fin e da n d s u p p o rt e d via m a n u a l p ro c e s sB 2 -1 C a ll C e n t e r fu n c t io n n o t y e tfe a t u re d . S o lu t io n t o b e d e fin e dB 3 -1 e M a rk e t p la c e t ra n s a c t io n a c it ivit ym a y n o t b e fu lly fu n c t io n a l b u t a d h o ca n a ly s e s c o n d u c t e d in E x c e lB 4 -1 S a le s c a lls o r le a d s t ra c k e d viam o d ifie d M S O u t lo o k a p p lic a t io nB 5 -1 O ve ra ll C R M t o o l n o t y e tid e n t ifie d b u t b e in g e x p lo re d ,e x p e c t e d d e c is io n w it h in 2 m o n t h sB 6 -1 C o n t ra c t m a n a g e m e n t h a n d le do n p a p e rC 1 -1 P ro je c t G a t e w a y u s e d fo rb u ild m g t (is s u e s , ris k m g t ,c h a n g e lo g s a n d s t a t u su p d a t e s )C 2 -1 R e le a s e p la n n in g a n dm a n a g e m e n t via E x c e ls p re a d s h e e t / M S P ro je c tC 3 -1 M S P ro je c t & E x c e l t o m a n a g ein d ivid u a l w o rk s t re a m s fo r a ll E le m ic ain it ia t ive sC 4 -1 V e rs io n m a n a g e m e n tc o n t ro l a n d d o c u m e n t a t io n viaP ro je c t G a t e w a y . A file s e rve ris a c c e p t ib le in t e rim s o lu t io nC 5 -1 R e s o u rc e a llo c a t io na n d p la n n in g via m a n u a lp ro c e s s & E x c e lD 2 -1 B a s ic H R a n a ly t ic sc o n d u c t e d via E x c e lD 3 -1 O p e ra t io n a l a n a ly s is n o ta c t iveD 6 -1 M k t R e s e a rc h o nE le m ic a D a ta n o t a c tiveD 7 -1 B a la n c e d s c o re c a rd fo rb u s in e s s m e t ric s u n d e fin e dD 1 -1 S t ra t e g ic a n a ly s is s y s t e mn o t a c t iveD 4 -1 C o m p e t it ivein t e llig e n c e b a s e d o n n o n -s t ru c t u re d a d -h o c s e a rc h e s .N o c e n t ra l re p o s it o ryD 8 -1 O p e ra t io n a l &S t ra t e g ic s y s t e m s d a t aa rc h ivin g n o t a c t iveE 2 -1 In t ra n e t s it e & s h a re dd rive s e x is t a s a d a t a re p o s it o ryE 1 -1 In t e rn e t s it e e x is t s b u ts e rve s t o p o s t d a t a o n lyE 3 -1 In te g ra te dk n o w le d g e m a n a g e m e n ts y s te m n o t s e le c te dE 4 -1 In t e rn a l E le m ic a t ra in in gp e rfo rm e d in p e rs o n viap o w e rp o in t & s t o re d ins t ru c t u re d d ire c t o rie sF 2 -1 T a rg e t e d e x t e rn a lt ra in in g (o n b o a rd in g )p e rfo rm e d in p e rs o n viap o w e rp o in t s t o re d ins t ru c t u re d d ire c t o rie sG 1 -1 C re d it & C o lle c t io n sn o t fe a t u re dG 2 -1 A c c o u n t in g s y s t e m n o ty e t s e le c t e dG 3 -1 F in a n c ia ls m o d e le din E x c e l b u t m o d e l n e e d st o b e m a d e m o re g ra n u la r,e s p e c ia lly t h e e x p e n s ec a t e g o rie sG 4 -1 B illin g & In vo ic in g n o tc u rre n t ly fe a t u re d ine M a rk e t p la c e s o lu t io n .G1-2 Credit &Collectionscould beconducted byphone and faxG2-2Accountingsystem selectedand beingim plem entedG3-2 Financialsystemselected andbeingim plem entedG4-2 Billing &Invoicing systemselected andbeingim plem entedE 4 -2 Tra in in g d o c u m e n t a t io na n d m a t e ria ls a va ila b le viain t ra n e tF 2 - 2 E x t e r n a l t r a i n i n go u t s o u r c e d , m a t e r i a l sa v a i l a b l e t o E l e m i c a v i ai n t e r n e tF1-2 Training system identifiedfor remote training deliveryD 1 -2 S t ra t e g ica n a ly s is via S A PB W w it h C o g n o sfro n t e n d . C a n n e dre p o rt s o n lyD 8 -2 O p e ra t io n a ld a t a & s t ra t e g ics y s t e m s a rc h ivin gs t o re d b yin d ivid u a l s y s t e m sD 7 -2 B a la n c e ds c o re c a rd sb u s in e s sm e t ric s d e fin e dD 2 -2 H Ra n a ly t ic s d o n eb y T O GD 6-2 M k t R es earc h onE lem ic a D ata m ay bes upported byC om m erc eO ne.D 3 -2 O p e ra t io n a la n a ly s is via e 4 P La n d G A T XC 3 -2 In t e g ra t e d w o rk p la n fo r a llc o m b in e d E le m ic a in it ia t ive se s t a b lis h e dC 2 -2 R e le a s e p la n n in gin t e g ra t e d in t o P ro je c tG a t e w a yC 5 -2 M S P ro je c t is in t e rim t o o l fo rR e s o u rc e p la n n in g a n d a llo c a t io n . Itc a n b e lin k e d t o P ro je c t G a t e w a yB 1 -2 H e lp D e s k s y s t e md e fin e d b y 0 1 / 3 1 B 2 -2 C a ll C e n t e r m a y b eo u t s o u rc e d b u t w ill lin k in t ok n o w le d g e m a n a g e m e n ts y s t e m sB 3 -2 e M a rk e t p la c es o lu t io n t ra c k sin fo rm a t io n o nt ra n s a c t io n a c it ivit yB 1 -2 H e lp D e s k s y s t e m inp la c e b y 0 3 / 0 1B 5 -2 O ve ra ll C R M to o lid e n tifie dA 1 -2 P o lic y & P ro c e d u reD o c u m e n t a t io n m a n a g e d a n dp u b lis h e d e le c t ro n ic a lly viain t ra n e tA 2 -2 A ll H R p ro c e s s e ss u p p o rt e d b y w e b in t e rfa c e ,lin k s t o fin a n c ia ls n o t d e fin e dA 4 -2 B a c k o ffic e F T E / R e s o u rc ee x p e n s e s d a t a re q u ire m e n t sd e fin e d fo r fin a n d a c c t s y sA 7 -2 T O G P e rf. m g t s y s t e mt ra c k s q u a n t / q u a l d a t a lo a d s ,m e t ric s d e fin e dA 6 -2 E x t e rn a lC o m m u n ic a t io n s in c lu d efo rm a l fe e d b a c k m e c h a n is mA 3 -3 T ra ve l S e rvic e so u t s o u rc e dA 6 -3 E x t e rn a l C o m m u n ic a t io n slin k s t o h e lp d e s k &C o m m e rc e O n e s it e sA 8 -3 In t e g ra t e d C o m p . s y sd e ve lo p e d w it h lin k s t ot ra in in g a n d p e rf m g t s y sB 5 -3 C R M t o o lb e in g im p le m e n t e dB 6 -3 C o n t ra c t m a n a g e m e n th a n d le d e le c t ro n ic a lly . M a ylin k t o c le a rin g h o u s e s y s t e m sB 1 -3 H e lp D e s k lin k e d t oS o lu t io n C e n t e r w it h fu t u relin k s t o k n o w le d g em a n a g e m e n t s y s t e m s &in t e rn e t s it eB 4 -3 M S O u t lo o k a p p lic a t io nfo r c a ll t ra c k in g m ig ra t e d t oC R M t o o l d e s c rib e d in B 5 -3C 5 -3 M S P ro je c tlin k e d t o P ro je c tG a t e w a yC 4 -3 V e rs io n m a n a g e m e n t c o n t ro la n d d o c u m e n t a t io n m ig ra t e d t o aro b u s t re p o s it o ry w it h e ffo rt s t o ro ll in t oC 1 -4 b y y e a rs e n dD 1 -3 S t ra t e g ica n a ly s is le t s p o w e ru s e rs h a ve c lie n tp ro p rie t a ry q u e ry in gc a p a b ilit ie sD 3 -3 O p e ra t io n a la n a ly s is s y s t e m s(e 4 P L a n d G A T X)lin k t o S A P B WD 4 -3 C o m p e t it ive in t e llig e n c e fo rm a liz e dvia file s e rve rs , d a t a b a s e , w e b a c c e s s a n ds u b s c rip t io n s t o d a t a s o u rc e sD 7 - 3 B a l a n c e ds c o r e c a r d sb u s i n e s s m e t r i c sfe d v i a d a t ar e q u i r e m e n t s t oS A P B WD 8 -3O p e ra tio n a ld a ta a rc h ivin gs y s te m s inp la c eE 2 -3 In t ra n e t s it es h o u ld b e m a d ere a d y t o in t e g ra t ew it h k n o w le d g e m g td a t a b a s e d e t a ile din E 3 -4E1-3 Internetsite providescontent from livefeedsF 1 a - 3 T r a i n i n ga v a i l a b l e t h r o u g h w e ba c c e s sF 1 b -3 T ra in in gm o d u le s d e ve lo p e dG 1-3 C redit &C ollec tions viaautom ateds y s temG 2-3A c c ountings y s temintegrated tofinanc ial s y s temG 3-3F inanc ialss y s temfinaliz ed link edto A c c t s y s temG 4-3 B illing &Invoic ingintegrated w ithac c ounting &financ ials y s tem s(pos s ibly banks y s tem s )G 1 -4C re d it &C o lle c tio n sm a y b eo u ts o u rc e d. C o n s id e ra n S A Pm o d u le .G 3 - 3 F i ns y sh a n d l e sm u l t i -c u r r e n c yfu n c t i o n s& m u l t i -c o u n t r yP & L sG 2 -3 A c c ts y s h a n d le sm u lt i-c u rre n c yfu n c t io n sG 4 -3 B illin g& In vo ic in gin te g ra te dw ith m u lti-c u rre n c yn e e d sF1-4 Integratedweb based trainingsys links tosolution ctr, clients& Elemica withcerts and links toperf mgt sysE 3 -4 K -M g t s y sw it h w e b a c c e s sa n d lin k s t o t ra in in ga n d d vp t s y sE 1-4Internet s iteintegratesw ith K -M gts y s of E 3-4D 1 -4 D a t a m in in gw it h re p o rt s s o ld t oc lie n t s a n d p u b licD 2 -4 If in s o u rc e d , H Ra n a ly t ic s p e rfo rm e d b y S A PB W w it h lin k s t o T O G s y sD 7 -4 S c o re c a rdlin k e d to e x e c g o a lsa n d p e rf m g t s y sD 4 -4 C o n s id e rc o n tra c tin gc o m p e titivein te llig e n c e toe x te rn a l firm sD 8 -4 O p d a ta& s tra te g ic s y sa rc h ivin g s y s inp la c eC 1 -4 S e le c t a n in t e g ra t e d p ro d u c td e ve lo p m e n t s o ft w a re a p p lic a t io n t oin c o rp o ra t e c o s t a n d re ve n u ea s s u m p t io n s / im p a c t s a n d t ie t o C R Mt o o l. Is s o u rc e s y s t e m fo r S A P B WC 5 -4 E x a m in e E R Ps o lu t io n o p t io n sB 5 -4 O ve ra ll C R M t o o l fu llyfu n c t io n a lA 7 -4 P e rf m g t s y s lin k s t oc o m p s y s a n d t ra in in g & d vp ts y sA 7 -4 P e rf m g t s y s m a y b ein s o u rc e d w it h in 2 y e a rsA 2 -4 W it h in 2 y e a rs , m a yin s o u rc e a ll H R fu n c t io n sA 8 -3 C o m p s y s m a y b ein s o u rc e d w it h in 2 y e a rsB 5 -2 A c c e s s p o te n tia l in te rimC R M to o lB 5 -2 In te g ra te O u tlo k &A c c e s s to o lsB5-4 Overall CRM globallyintegratedC 6 -1 C G E Y m a n a g e ss o u rc e c o d eC 7 -1 D e fin e p ro b le mt ra c k in g t o o l & lin k t o C R M ,H e lp D e s k & C a ll C e n t e rt o o lsD9-2 Track webusageD 9 -3 L o o k t oc u s t o m iz e w e bre p o rt in gE 1 -2 In te rn e t s ite fu n c tio n a lityb ro a d e n e d to re c e ive s im p led a ta fro m e x te rn a l s o u rc e s ,c lie n t d a ta p h a s e d in a fte r ay e a rE1-2 Training system identifiedfor remote training deliveryE 1 - 3 T r a i n i n ga va i l a b l e t h r o u g h w e ba c c e s sE 1 -3 T ra in in gm o d u le s d e ve lo p e dVisionAcct & FinanceG HH1-1 P lan trans ition for offic em ove of infras truc ture variablesH 2 - 1 P l a n s e t u p o fC h e s t e r b r o o k O ffi c eH 3 - 1 P l a n s e t u p o fF r a n k fu r t O ffi c eH 1 - 2 E s t a b l i s hp r o c e s s e s f o rg l o b a l i z a t i o n o fi n f r a s t r u c t u r ec o m p o n e n t s f o rE l e m i c a - I n c l u d i n gC o m p u t e r s , C e l lP h o n e s , E m a i l ,V o i c e m a i l , P r i n t i n g e t cH1-3 Im plem ents y s tem s forglobaliz ation ofinfras truc turec om ponentsH 1 -3 L in kg lo b a liz e ds y s t e m s o fin fra s t ru c t u rec o m p o n e n t s t oe ffo rt s t oc e n t ra liz e C R M ,A c c t , & F in a n c ia lS y s t e m sH 2 - 2 I m p l e m e n ts y s t e m s e t u p s o fF r a n k f u r t &C h e s t e r b r o o k o f f i c e sH1-4 Infrastructureof globalizedpersonal productivitytools in place*CustomerValueSegmentationTargeted andClosed-LoopMarketingDifferentiatedSales andServiceAgentAssistantCustomerContact HistoryLog (CCHL)WorkflowCustomer FocusTransformationCRM ProgramGovernanceIntegrationYear 1 -2005Year 2-2006Year 3 -2007Define1. Executives2. Marketing / Sales3. Contact CentresEnhancements - ExecutivesEnhancements - Marketing / SalesEnhancements - Contact CentresProgram ManagementCTIDare&UsageIntegration to support CRM projectsRequirementsand PackageSelectionsBRDInitialContributionEnterpriseContributionsegmentationEnterprisesegmentationBasicIntegration with CCHLLaunch basic to 900 CSRsLaunch integrated to CSRsIntegration with other channelsTargeted Marketing* ** ** *Launch to 600 CSRsLaunch to additional 1500CSRsPilotIntegration with other channelsMktg automation with TM & DM channelsInbound channels Outbound channels Enterprise levelAdditional processesDefine and DeployChannel integration decisionvailable / launch* ******** *DevelopmentPhase/ ActivityTraining*Vendorrequirements& selectionDefineCRMTeamIntegrate with dealers, stores?Enterprise level integration?Expand CRM lities to Media?CapabilitiestobeImplemented The Roadmap shows expected delivery foreach capability per period It shows the high level view of thetransformation agenda The Project Plan shows detailed timeline,milestones and responsibilities The business case supports andsubstantiates the transformation map. It isused to prioritize initiatives and planexecution.EXECUTION PLANNING COMPONENTSProjectPlanRoadmapBUSINESS CASE
  • 17Why is a Strategic Sourcing strategy important? Ensure Cost Reduction Efforts are Realized Business Alignment– Ensures our sourcing decisions are being made based on where the business is going,not where it has been Compliance and Reporting Management Communication– Outlines performance objectives and mechanisms to ensure success Consensus Generation– Establishes a common set of objectives for all business units Prioritization– Establishes a road map for future activities
  • 19Below is a high level end-to-end sourcing methodology leveraging procurementorganization design and alignment4 Phase Sourcing MethodologyPhase 1 Phase 4Phase 3Phase 2AssessmentSnapshotSpendAnalysisCategorySourcing- Repeatable- SpecialtyImplementationOrganizationData AnalysisOrganizationAssessmentOrganizationEvaluation andRecommendationsImplementation4 Step Procurement Organization Design & Alignment Methodology
  • 21Sample DeliverablesCurrently unable to access informationBU #42.4%172$350,000$310,000$219,00036%LicenseVendor #4BU #30.1%918$24,250,000$21,100,000$18,000,78038%SubscriptionVendor #3BU #20.2%1759$4,250,000$3,750,000$3,543,00023%LicenseVendor #2BU #10.3%946$6,250,000$5,557,000$5,250,00039%LicenseVendor #1BU #1Cost ofMaintenance# ofEmployeesFY 2008ForecastedSpendFY 2007SpendFY 2006SpendSoftwareTypeAgreementtypeThirdPartyVendorBusiness UnitSupply Market AnalysisSpend Analysis
  • 23Shared Services will provide your company with continuous improvement byleveraging intellectual and capital assets resulting in reduced duplication Converging and streamlining of a servicewhich existed in many parts of theorganization to a single specialized group.Enterprise-Wide• Reduce overhead costs• Eliminate duplication of staff/system• Accommodate acquisition/growthobjectives• Improve earnings per share• Leverage technology and peopleinvestmentsLines of Business• Eliminate transaction processing• Increase time to support corecompetencies• Enhanced service levels• Single point of contact to addressadministrative needsCorporate• Leverage economies of scale• Cost efficient processing• Deliver higher value at lower cost• Data management and control• Quality of service improvementTotalCost ofSupportFunctionsBefore AfterValueCostBENEFITS Specialized group is internally owned and managed.0255075100%65%15%20%Before40%20%40%AfterEnterpriseDecision SupportManage Financial,IT & Human CapitalTransaction Processingand Reporting90%100%Areas WhereResources areUtilized
  • 25There are 3 key horizons of Shared Services developmentOur blueprint begins with the engagement of leadership and key stakeholders to establish key decisions and solutionparametersBreadth of Organization InvolvementLevelofDetailExecutiveAlignmentValidation &Buy InDetail Design &ImplementationBlueprintBlueprint: Executive AlignmentBlueprint: Validation & Buy-InDetail Design & ImplementationKey Executive Finance leadership evaluate solutionand implementation options in the context ofstrategic objectives, resulting in key decisions andparameters. Includes high level financial model,and organization alignment plans.Extended team (including Division/Business Unitstakeholders) develops additional detail in the ServiceModel, Organization Alignment, Business Case andImplementation options, resulting in scenario selectionand validation. Includes alignment with other initiatives.Design & Implementation team develops detailed designfor pilot business domains and processes, and managesmigration to the new Intelligent Leveraging servicemodelDecisions and parameters are used by a broader team to develop additionaldetail, validate the way forward, and achieve buy-in from key stakeholders
  • 27The Shared Services value map aligns to our proven methodology inimplementing successful shared services environmentsWORK STREAM OVERVIEW• Performance Management of Services stream focuseson shared services strategy and governance, serviceplanning and definition, financial allocation model, SLAsand KPIs, and performance feedback mechanisms.• Organization & People stream consists of assessmentand design of organizations, including: roles andresponsibilities, positions, organization structure,competency model definition, staffing, hiring, redundancy,benefits and compensation, and training strategy anddevelopment.• Process stream focuses on design and implementationfor all business processes and operational procedure.• Technology stream is focused on implementing thetechnology solutions to enable the future operating model.• Location stream evaluates and selects sites according tospecific criteria like labour markets, real estate values,government incentives etc.• Program Management stream focuses on managing thecomplete project plan, status, progress, business case,and project charters.SHARED SERVICES METHODOLOGYTechnologyLocation / InfrastructurePerformance Management of ServicesOrganization & PeopleProgram ManagementImplementationFuture StateDesignProcessVision &FeasibilityStudyCollaborative Change
  • 29Agenda Overview of Cost Reduction Process Optimization Strategic Sourcing Shared Services Business Process Outsourcing
  • 31Providers will understand how to more efficiently and effectively contractfor deals that are sustainable, evolve over time, and cost effectiveDramatic CostReduction• Deploy technology enablers (Work Management, Scanning)• Standardization• Offshore/distributed delivery• Implement best practice process methodologiesBusinessFlexibility• Rapid ability to scale business model up or down• Deploy mature Change Management process• Access network of global BPO service delivery centers• Multi-platform, multi-client capabilitiesManaged RiskExposure• Achieve SAS70 controls audit and report• Provide Sarbanes-Oxley compliance support• Implement Key Performance Metrics• Multiple BPO centers in diverse geographic regionsOperationalExcellence• Implement best practice process methodologies• Technology enhancement and enablement• High quality staff focused on continuous improvement• Deploy transition and transformation methodologiesVALUE ACHIEVEDThe result is greater business optimization and flexibility through coherent control of activities thathave previously been loosely linked.
  • 33In developing a offshore delivery model, it is important to determine the rightservice from the right location4 Elements to Offshoring Cost Reduction Best Quality / Lowest Cost DeliveryHeadcount(# of FTE’s)LeversdrivingefficiencyLevers driving labor rate benefitLow costlocationHigh costlocation1342Moving to lower cost and culturally compatible environments tobring reduced cost of inputs – such as labor and propertyMoving to an outsourced environment brings efficiency gains –through economies of scale etcGlobal, center-based distributed delivery brings furthereconomies of scaleWith some impact on average labor cost1234Services can be delivered from one ora combination of onsite, offsite,nearshore, farshoreFront Office• Onsite/onshorelocations• Services requiringclose proximity• Client interface• Client teamcollaborationBack Office(s)• Nearshore/farshorelocations• Low-cost delivery• Processing services• Remote support• Development