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Sustainability Value Methodology_Deloitte, 2007
 

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    Sustainability Value Methodology_Deloitte, 2007 Sustainability Value Methodology_Deloitte, 2007 Presentation Transcript

    • DeloitteSustainability Value Methodology Copenhagen, 28 June 2006 Preben Soerensen Sam Vaseghi © Deloitte & Touche Weidekampsgade 6 2300 Copenhagen V Denmark Tel.: +45 (0) 33 76 32 39 Fax: +45 (0) 33 76 39 40
    • Leading companies understand that there is not always a trade-off between Shareholder & Stakeholder value Positive Create pure Environmental & Create Social Value Sustainable At the expense of ValueStakeholder Value: economic value Social & Environmental Value Create pure Economic Value Destroy At the expense of Value environmental and social value Negative Shareholder Value: Negative Economic Value Positive Our approach aims at maximizing the benefits of converging value drivers in order to create sustainable value for both shareholders and stakeholders. Source: Adapted from Sustainable Value Partners Seite 2 © 9/27/2005 Deloitte & Touche
    • Our Sustainability service offerings span across allStakeholder and Shareholder Value Drivers SHAREHOLDER VALUE Revenue Operating Asset Expectations Growth Margin Efficiency Operational Corporate Impact Strategic Environment, Governance & Planning for Health and Transparency Sustainable Safety VALUE Development Products & Services Reporting & Disability & Performance Work Measurement STAKEHOLDER Attendance Management Production Efficiency Human Capital Management & Enterprise Employee Operational Productivity Excellence Sourcing Material Seite 3 © 9/27/2005 Deloitte & Touche
    • Our Sustainability service offerings span across allStakeholder and Shareholder Value Drivers SHAREHOLDER VALUE Revenue Operating Asset Expectations Growth Margin Efficiency Operational Impact VALUE 1. Map Stakeholders’ Values 4. Map Shareholder Value Products & Services STAKEHOLDER 2. Define Sustainability Issues 3. Design Business Case Production Efficiency Sourcing Material Seite 4 © 9/27/2005 Deloitte & Touche
    • The Sustainability Value Methodology 1. Map Stakeholders’ Values 4. Map Shareholder Value •Identify/reassess and characterize stakeholders • Apply ValueMap to map value from business cases • Proactively identify/reassess stakeholder expectations • Apply ValuePrint to evaluate/assess business cases •… •… 2. Define Sustainability Issues 3. Design Business Case • Define/Refine key issues from stakeholder perspective • Track via ValueMap • Translate definition of issues into shareholder perspective • Assess Risks and Opportunities •… • Design appropriate business cases by ValueMap •… Seite 5 © 9/27/2005 Deloitte & Touche
    • First StepMap Stakeholders’ Values and Define Sustainabilty Issues SHAREHOLDER VALUE Revenue Operating Asset Expectations Growth Margin Efficiency Operational Impact VALUE 1. Map Stakeholders’ Values 4. Map Shareholder Value Products & Services STAKEHOLDER 2. Define Sustainability Issues 3. Design Business Case Production Efficiency Sourcing Material Seite 6 © 9/27/2005 Deloitte & Touche
    • Deloitte Generic Catalogue of Sustainability IssuesGlobal trend:1. Changing demographics and the emergence of new consumer and labour markets.2. Boosting innovation for efficiency and reduced impact on environmental and climate systems.3. Preserving the natural resource base.4. Doing business in a globalized, interconnected economy.5. Earning the license to operate.6. Changing geopolitical risk landscapes. Seite 7 © 9/27/2005 Deloitte & Touche
    • Deloitte Generic Catalogue of Sustainability IssuesGlobal trend: Environmental Issues1. Changing demographics and the  New markets for environment-friendly and energy-efficient products in emergence of new consumer and emerging economies labour markets. Social Issues2. Boosting innovation for efficiency and reduced impact on  New markets for emerging consumer needs in emerging economies environmental and climate systems.  Workplace health and safety*  Labour standards*3. Preserving the natural resource  Human rights issues* base. Corporate governance issues4. Doing business in a globalized, interconnected economy.  Complying with local laws, while upholding global corporate5. Earning the license to operate. governance and responsibility standards6. Changing geopolitical risk landscapes. Seite 8 © 9/27/2005 Deloitte & Touche
    • Deloitte Generic Catalogue of Sustainability IssuesGlobal trend: Environmental Issues1. Changing demographics and the  Carbon constraints (climate change) emergence of new consumer and  Environmental liabilities labour markets.  Pollution prevention2. Boosting innovation for efficiency  Reducing emissions and resource use and reduced impact on  New markets for environment-friendly environmental and climate and energy-efficient products systems.3. Preserving the natural resource base.4. Doing business in a globalized, interconnected economy.5. Earning the license to operate.6. Changing geopolitical risk landscapes. Seite 9 © 9/27/2005 Deloitte & Touche
    • Deloitte Generic Catalogue of Sustainability IssuesGlobal trend: Environmental Issues1. Changing demographics and the  Product stewardship emergence of new consumer and  Waste and toxic release management labour markets.  Accident and spills management2. Boosting innovation for efficiency  Efforts to incorporate external costs in planning and accounting and reduced impact on environmental and climate systems.3. Preserving the natural resource base.4. Doing business in a globalized, interconnected economy.5. Earning the license to operate.6. Changing geopolitical risk landscapes. Seite 10 © 9/27/2005 Deloitte & Touche
    • Deloitte Generic Catalogue of Sustainability IssuesGlobal trend: Social Issues1. Changing demographics and the  HR management (including compensation, training, etc.) emergence of new consumer and labour markets.  Attracting and retaining employees  Workforce diversity and equal2. Boosting innovation for efficiency opportunities and reduced impact on environmental and climate systems.3. Preserving the natural resource base.4. Doing business in a globalized, interconnected economy.5. Earning the license to operate.6. Changing geopolitical risk landscapes. Seite 11 © 9/27/2005 Deloitte & Touche
    • Deloitte Generic Catalogue of Sustainability IssuesGlobal trend: Environmental Issues1. Changing demographics and the  Environmental governance and management systems emergence of new consumer and labour markets.  Accidents and spills management2. Boosting innovation for efficiency Social Issues and reduced impact on  Community and NGO relations environmental and climate  Government relations systems.  Investor relations3. Preserving the natural resource  Management of crisis situations* base. Corporate governance issues4. Doing business in a globalized,  Board structure and accountability interconnected economy.  Accounting and disclosure practices5. Earning the license to operate.  Audit committee structure and independence of auditors6. Changing geopolitical risk  Executive compensation landscapes.  Management of corruption and bribery instances  Business ethics policies Seite 12 © 9/27/2005 Deloitte & Touche  Corporate citizenship engagement
    • Deloitte Generic Catalogue of Sustainability IssuesGlobal trend: Social Issues1. Changing demographics and the  Human rights, community and government relations in politically emergence of new consumer and unstable countries/conflict zones labour markets. Corporate governance issues2. Boosting innovation for efficiency and reduced impact on  Policies and systems to manage risk in politically unstable environmental and climate countries/conflict zones systems.3. Preserving the natural resource base.4. Doing business in a globalized, interconnected economy.5. Earning the license to operate.6. Changing geopolitical risk landscapes. Seite 13 © 9/27/2005 Deloitte & Touche
    • Example: Identifying together with youyour relevant and material Sustainability Issuesaligned with your corporate strategy Aligned with the Strategic Planning for Sustainable DevelopmentEnvironmental Issues  Environmental and safety management of production processes  Declining capacity of eco-systems to sustain intensive harvesting and production methods  Business in a carbon-constrained worldSocial Issues  Changing consumer preferences, new needs in emerging markets  Management of global workforce  Labour practices and HR management  Community relations, corporate citizenship engagementCorporate Governance Issues  Corporate governance framework  Transparency in relation to sourcing and production methods  Government relations, business ethics Seite 14 © 9/27/2005 Deloitte & Touche
    • Second StepDesign Business Case and map shareholder Value SHAREHOLDER VALUE Revenue Operating Asset Expectations Growth Margin Efficiency Operational € Impact VALUE 1. Map Stakeholders’ Values 4. Map Shareholder Value Products & Services STAKEHOLDER 2. Define Sustainability Issues 3. Design Business Case Production Efficiency Sourcing MaterialSeite 15 © 9/27/2005 Deloitte & Touche
    • Proposed value framework for integration of key stakeholder issues 3. Design Business Case 4. Map Shareholder Value Issue Litigation and regulatory risks Risk premiums Issue Operational risks Reputation and brands Issue Costs WACC Operational efficiency StrategyStakeholder Policies Shareholder value Innovation value Management- Systems Access to new / Free cash Existing markets Revenues flows Access to knowledge Issue and skills Access to ressources Other (tax, Issue reinvestment Others rates) Issue Seite 16 © 9/27/2005 Deloitte & Touche
    • How to address Economic, Social and Environmental imperatives all together Deloitte Enterprise Value MapTM It’s easy to say shareholder value is important. Not so easy to make it influence the decisions (Practical paths to increase shareholder value) Here are two simple ways to use it:  Start at the top. Working your way down, Shareholder Value that are made every day: where to spend time and resources, how best to get things done, and, at each step ask yourself, How will we ultimately, how to win in the competitive improve this? This will help ensure that your marketplace. tactics support your objectives. This Map is designed to accelerate the connection between actions you can take and  Start at the bottom. Working your way up, shareholder value. It is not rocket science and it at each step ask yourself, Why are we doing is not complete, but it can jump-start the this? This will help ensure that every tactic process of focusing on the things that matter leads to shareholder value. most and then choosing practical ways to get them done. Revenue Growth Operating Margin Asset Efficiency Expectations (after taxes) How Value is Created (Value Drivers) Selling, General & Cost of Goods Sold Property, Plant & Receivables Volume Price Realization Administrative (COGS) Income Taxes Equipment Inventory & Payables Company Strengths External Factors (SG&A) (PP&E) Improve Improve Improve Improve Improve Improve Improve Improve Improve Acquire New Customers Retain and Grow Current Leverage Income- Strengthen Pricing Customer Interaction Logistics & Service Management & Governance Improve Customers Generating Assets Corporate/Shared Services Development & Production Income Tax PP&E Inventory Receivables & Payables Execution Capabilities Efficiency Efficiency Efficiency Provision Efficiency Efficiency Efficiency Efficiency Effectiveness Efficiency What You Can Do Improve Production (Improvement Levers: Business Processes, Assets and Organizational Capabilities) Procurement Accounts, Accounts, Marketing & Product & Account Cross-Sell/ Cash/Asset Demand & Price Marketing & Customer Order IT, Telecom & Human Business Financial Product Logistics & Service Income Tax Real Estate & Equipment & Finished Work in Notes & Notes & Business Program Business Operational Partnership & Relationship Agility & Strategic Service Retention Supply Sales Service & Fulfillment & Real Estate (Excluding Production Materials Production Merchandising Process & Governance Performance Sales Innovation Management Up-Sell Management Management Optimization Advertising Support Billing Networking Resources Materials & Management Management Development Distribution Delivery Management Infrastructure Systems Goods Raw Materials Interest Interest Planning Delivery Management Excellence Collaboration Strength Flexibility Assets Merchandise) Efficiency Receivable Payable Commu nities & develop ment Consolidate and/or Consolidate and/or Improve coordination Increase emphasis on Increase focus on Increase focus on Increase focus on Increase focus on Increase emphasis on Rationalize and/or Rationalize targeted Rationalize and/or Differentiate treatment Implement integrated Consolidate or Manage procurement align business align financial Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or Increase emphasis on Rationalize and/or Rationalize and/or Rationalize and/or Rationalize and/or Strengthen corporate of operational, invest- enterprise-wide Increase emphasis Establish a culture Increase focus on Increase focus on Increase focus on Change What You Do high-value/high- potential customers Broaden product and service offerings high-value/high- potential customers high-value/high- potential customers high-value /high- potential customers generating revenue from company assets Acquire competitors refocus product and service portfolios Rationalize targeted customer segments markets and customer segments refocus product and service portfolios of customers/ segments applications across organizational Consolidate company real estate/facilities outsource recruitment functions on a national/global basis planning, management and planning, management and refocus product and service portfolios refocus product portfolio refocus product portfolio refocus product portfolio refocus product portfolio refocus services offered permanently lowering the companys refocus product and service portfolios refocus product and service portfolios refocus product portfolio refocus product portfolio Refine credit/days- receivable strategy Refine days- outstanding strategy governance structures (composition, selection, ment, financial, M&A, and tax strategies program planning and collaborative program on continuous, proactive perform- centered on operational partnership, merger and acquisition stakeholder relationships business agility and flexibility Increase focus on strategic assets boundaries effective tax rate roles, etc.) ance management excellence opportunities Govern ment a nd bu siness reporting functions reporting functions across business units delivery Community, Society, Community, Society, - What you provide Development Development Refine and/or align Improve communi- Improve alignment of ethics Increase focus on Increase focus on Increase emphasis on Increase use of lower- Consolidate or Consolidate or Improve alignment of Consolidate and/or Increase emphasis on Increase emphasis on Integrate tax oppor- Increase emphasis on Coordinate Coordinate Establish process Establish Improve identification Establish Increase focus on Increase focus on Increase emphasis Rationalize and/or Rationalize and/or Improve focus on Consolidate or Increase emphasis on Increase emphasis on merchandising Develop business cation between the customer, product, Establish program/ Improve effectiveness Establish agility and - Whom you target and serve most profitable R&D, product innovation, and Rationalize customer portfolio most profitable Increase emphasis on customer retention developing and protecting intellectual on differentiated differentiated pricing across customer refocus product and refocus product and segments with lower cost delivery/ installation channels Rationalize IT application portfolio outsource design and development outsource learning and development outsource business unit strategies with align financial accounting and modular, extensible, designing for Improve focus on higher-value products designing and packaging strategies service prevention / Reduce need for tunities and issues into business planning models with low real Outsource business functions Develop low-Inventory business models designing for manufacturing management of credit/receivables management of payables across board, management, advertising, sales, project delivery as a of organizational improvement and innovation as key cross-company collaboration as a key of stakeholder groups and establishment of flexibility as key development of strategic assets as a products and services products and services products and services service portfolios service portfolios average cost-to-serve procurement functions scalable designs materials efficiency (central vs. local estate requirements shareholders and the service, support, and key competency structures competencies - How you compete product leadership capital segments (self-service, partners, etc.) functions functions enterprise strategies analysis functions for distribution merchandising, etc.) service processes efficiency across business units business units public fulfillment strategies competencies competency priorities key competency - Where you deploy resources Improve alignment of Establish Consum ers Maximize tax benefits Improve materials efficiency Increase focus on Increase emphasis Increase emphasis on Increase focus on Increase focus on Improve focus on Increase focus on Rationalize and/or Increase use of lower- Differentiate service Increase use of lower- Consolidate IT, Consolidate or Consolidate or organization struc- Improve alignment of Consolidate or Rationalize/ Increase emphasis on Refine/align Manage purchasing Improve focus on Reduce number of Consolidate Rationalize and/or Increase emphasis on Improve management Increase focus on Strengthen and Increase emphasis Increase emphasis on Increase focus on Improve effectiveness Increase proactive management of key Establish product, Increase emphasis on most effective sales on design for most effective sales Create barriers to telecom and network outsource outsource benefits Refine vendor financial strategies outsource product associated with major data centers, branch IT systems, refocus customer vendors with communicate mission, on risk-informed, continuous, proactive of organizational pursuit of service and process refocus channel/ cost sales channels treatment of cost billing channels - Which operations you outsource and advertising configurability/ account/relationship development and advertising switching divestiture and reinvestment price-insensitive customer segments pricing effectiveness/ price optimization media usage (telesales, outlets, self- customers/segments (automated, self-service, equipment and improvement and administration strategies tures and governance models with business with corporate development consolidate vendor portfolio design for production efficiency logistics and distribution strategies on a national/global basis higher-value customer relationships business decisions (M&A, consolidation, out- offices, dealerships, production lines and segments and use of common components of credit risk across business units favorable payment vision, values and scenario-based management of managerial, forward- looking information structures and partnerships, mergers stakeholder relationships as innovation as key leveraging strategic assets channels customization channels service, etc.) etc.) facilities deployment functions strategies functions retail outlets, etc. service mechanisms distribution channels terms ethics planning investment portfolios governance models and acquisitions competencies strategies sourcing, site selection, etc.) organizational priority Utilize tax-effective Security practi ces Increase focus on Consolidate or Consolidate or Consolidate or Improve alignment of Strengthen Increase use of lower- Increase focus on Consolidate or Increase emphasis on Increase focus on Increase emphasis on Improve relationship Improve agility and corporate structures Improve platform and Improve account Refocus and/or refine Improve focus on Improve focus on Consolidate or outsource order Consolidate or Rationalize/ Consolidate or Increase focus on Increase emphasis on Rationalize/ Build values and Improve integration of Improve effectiveness Increase emphasis on Target new portfolio strategies for management expansion of retention priorities and Increase focus on Convert free services higher-value higher-value outsource service and outsource design, outsource property outsource payroll consolidate vendor capital budgets and enterprise-wide cost product materials-efficient outsource production higher-value products outsource designing for service Accelerate or defer Rationalize Defer/change timing Increase emphasis on designing for customer segments consolidate vendor ethics into corporate short- and long-term of program/project Increase focus on key cross-business-unit operational integration management flexibility of for ownership/licens- geographies customer product innovation to fee-based services fulfillment functions development and management program plans with financial reporting development production merchandising efficiency and self- income/expenses production facilities of capital investments high-turn products with low credit/loan performance metrics and cross-company strategies for key organizational ing of intangible products and services strategies strategies segments customers/segments support operations (pick, pack and ship, functions portfolio functions and partners materials efficiency portfolio culture business planning governance models with partners relationships install, provision, etc.) deployment services functions business priorities standards channels mechanisms functions service needs collaboration stakeholder groups structures assets (patents, trade of production processes names, IP, etc.) Increase emphasis % suppli ers wi th 1,2 ,3 Increase emphasis on Consolidate or Increase use of lower- Standardize product Improve focus on Consolidate/ Increase emphasis on Improve alignment of Target new segments time-to-market and Increase emphasis on on supply chain Increase use of Increase focus on Focus sales efforts on Improve emphasis on Consolidate or outsource operations cost real estate and Improve focus on Align M&A strategies Rationalize portfolio of higher-value customer Design products to Increase use of lower- outsource logistics Refine vendor/ Increase use of Migrate income to Outsource business design for Increase emphasis Rationalize raw Increase focus on Improve focus on HR and technology Increase focus on Increase emphasis Increase emphasis on Improve agility and within current higher-value products higher-margin product quality and outsource billing catalogs with business financial services use cost-effective cost production cheaper service creditworthy customer internal controls and project quality and on people/talent quality management flexibility of time-to-production- customer satisfaction management promotions and maintenance facilities / Relocate employee retention (equipment, office supplies, segments and and distribution supplier strategies low-tax jurisdictions functions manufacturability and on build-to-order materials strategies with geographies volume (production, distribution and and services products and services ease of service operations services business operations promotional materials, etc.) objectives providers products materials channels functions channels service segments regulatory compliance business strategies risk management development and benchmarking governance models sales pipelines) Utilize tax-effective Improve focus on Outsource property Develop/integrate Increase focus on Rationalize and/or corporate structures Increase emphasis Increase number and Bypass current Design products for Improve emphasis on Consolidate or Increase quality and Increase use of lower- Rationalize/ Consolidate or Manage materials Increase emphasis on Increase considera- Increase focus on Increase focus on risk Increase focus on labour tax administration Increase use of lower- Child Expand sales and quality of product and higher-value channels / Sell ease-of-use / self- design for packing/ outsource end-user global HR practices business insight and realign product Increase focus on consistency of cost logistics and consolidate vendor outsource service for ownership/licens- on preventive sourcing on a risk identification and tion of M&A and realization of targeted management and business continuity activities cost channels Human Social advertising channels advertising channels/ forward-looking development component reuse equipment Social rights (internal/external, onshore/ ing of intangible Human Social rights service launches directly to customers service shipping efficiency support (compliance, assessment, (self-service, etc.) materials distribution channels portfolio operations national/global basis management divestiture options business benefits regulatory compliance planning • Design products that allow in- media negotiations, etc.) offshore, etc.) information efforts assets (patents, trade maintenance names, IP, etc.) 3.VALUE associati Freedo Improve Improve understand- m to ons Improve total Tailor account Improve total Improve Improve Increase use of Improve product Improve Improve identification Improve ordering and Improve Improve Improve focus of tax Leverage credit rating Strengthen and Improve identification Improve structuring Improve Improve assessment Improve ability to customer experience Increase utilization of customer experience Improve identification Improve investment Improve brand understanding of Improve design, Improve real estate Improve Improve receipt processes Improve inventory Reconfigure facilities / Utilize more ing of stakeholder Improve flexibility Develop and leverage modular, reusable management of valuable customer returns on cash/ awareness / Elevate understanding of customer, product relationship/account Improve service and vendor-managed/ development and design and develop- recruitment and procurement strategic planning cash/treasury and discontinuation of production scheduling receipt and storage merchandise Improve service and function/department Increase utilization of efficient production Improve Improve Tighten credit/loan to lengthen payment communicate and prediction of and launch of determination of key and benchmarking of identify and assess interests (customers, of business strong/unique partner (purchasing, fulfillment, approaches to (purchasing, fulfillment, customer price development support processes vendor-warehoused management unsuccessful (raw materials, intermediate and staging ordering and receipt support processes on proactive tax demand forecasting demand forecasting terms cycles and reduce governance policies industry and market cohesive program performance metrics business process partnering usage, support, service, designs usage, support, service, relationships treasury funds brand image and channel testing processes ment processes orientation processes processes processes materials, finished processes facilities equipment shareholders, regulators, processes relationships etc.) customer segments etc.) sensitivity processes inventory (equipment, supplies, etc.) practices efforts components, etc.) processes processes planning interest rates and procedures trends portfolios and targets performance opportunities employees, suppliers, profitability 2. partners, alumni, etc.) Improve workforce Improve Improve ability to Improve discrimin creased use of recycled Improve collaboration Improve Obtain exclusive Improve Improve processes Improve selection, Improve real estate Improve service Improve Improve accuracy and Improve customer Leverage breadth of Improve/implement Improve alignment of Increase focus on Improve identification Develop and utilize ation Non Improve Improve identification License or sell agreements with Provide staff with Improve workforce Improve credit Improve Improve Improve debt and Improve product Improve materials Improve focus on planning, dispatch Increase use of Improve Improve Improve identification measurement and structure and communication and Improve value / with design, understanding of of cross-sell/up-sell understanding of intellectual capital to understanding of better market and for generating, planning and dispatch analysis acquisition and selection, acquisition training procurement program planning equity management conception/initiation efficiency of manufacturing and Improve retrieval higher-value vendor and assignment timeliness of tax Increase use of flexible/expandable collaboration with collaboration with incentives for vendor relationships internal control of opportunities and projects with program reporting of post-merger synergy implement durable, of opportunities to knowledge transfer unique physical Decrease prices development and churn/defection partners product/service value qualifying and contracting and contracting processes quality control processes provision and cash flexible facilities accelerated/on-time to lengthen payment frameworks and and business and cost reduction increase value to resources customer needs opportunities other enterprises (licenses, distributorships, customer information processes and tools processes processes processes processes processes production processes relationships processes production equipment vendors/partners vendors/partners threats operational and mutually beneficial across organizational production partners drivers etc.) to customers assigning leads processes processes (travel, contract labor, etc.) processes and tools outflow forecasts payment cycles policies objectives financial performance programs partnerships stakeholders boundaries (facilities, land, etc.) Do What You Do Better 1. Improve effectiveness Improve Implement proactive Improve Improve capacity/ Improve real estate Improve salary and Improve contract Improve Improve capacity/ Improve ability to Align internal audit Improve strategy Increase integration of Improve ability to Improve agility and Develop and utilize Improve reuse of Improve identification Increase use of Improve installation/ benefits administra- Improve operational Improve financial Provide staff with Improve transport and Improve Increase utilization Differentiate credit development capa- Structure programs/ Improve analysis of Improve of marketing, understanding of and reactive cross- Sell appreciated Align advertising with differential pricing Improve analytical field sales and demand planning Improve pick, pack improvement and management design and Rationalize order Improve coordination demand planning utilize offshore cash/ Increase use of Improve logistics/ Improve management practices with business processes integrate merged flexibility of partner unique human Use of Recycled product and service of churn/defection deployment tion processes / processes risk management risk management better production delivery processes/ effectiveness of plant of standardized treatment of bilities at corporate projects to deliver managerial communication with resources - Strengthen governance approaches advertising and sales processes components current customer satisfaction sell and up-sell campaigns candidates assets pricing strategies mechanisms (based on processes and tools telesales processes processes, skills and tools and ship processes processes deployment processes Increase employee (negotiation, execution and processes processes development processes quantities and timing information and tools algorithms with vendors processes, skills and tools assets and move between geographies leased real estate maintenance distribution efficiency components customers/segments of debt portfolio business and risk objectives and business-unit benefits progressively information across organizational boundaries and acquired organizations stakeholder groups organizations and networks (thought leaders, managers, Health & safet y customer value, risk, etc.) self-service compliance) levels subject matter experts, etc.) materials: use procurement - Align resources with strategiesSTAKEHOLDER Improve operational Improve identification Improve Improve Improve Improve processes for Improve audit and Utilize international Improve quality and Improve and Improve alignment of Implement/enhance Improve coordination Improve focus on - Improve business processes Increase time spent Acquire new product responsiveness to Improve cross-sell and up-sell Improve adherence to contracts and Develop, spin-off and communication and Improve tailoring of offerings to customer Provide staff with better competitive Improve utilization of Improve utilization of Improve provisioning/ managing system processes (administration, security, Improve payroll Improve demand planning processes Improve capital budgeting compliance Improve prototyping, piloting Provide staff with better product Improve capacity planning processes, Improve design/ structure of Provide staff with better information and Improve utilization of financing opportuni- Improve terms on property and consistency of Rationalize production Shorten production standardize credit A/P systems and anonymous employee Improve development and analysis of and communication most important and mitigation of operational risk understanding of partner strengths, Improve value delivered to Improve product Develop and leverage political relationships selling and service offerings customer complaints/ approaches/models agreements sell new businesses coordination with needs information sales staff service staff installation processes operations, mainten- processes and tools processes management and testing processes information and tools skills and tools distribution networks tools service staff ties to minimize after- facilities manufacturing quantities and timing cycles assessment processes with days- reporting and feed- business cases across programs and managerial weaknesses and customers innovation processes and alliances - Hone strategic capabilities feedback distribution centers ance and changes energy, HVAC and processes tax borrowing costs materials processes outstanding strategy back mechanisms projects information (people, process, tech- Industria l relati ons maintenance) nology, data, etc.) interests Labour Labour - Manage tax impacts and opportunities Improve product/ Proactively manage Sell or lease excess Improve Provide staff with Provide staff with Improve end-user Improve Improve Improve business Improve demand Improve demand Improve demand Provide staff with Improve Improve Improve Improve business Improve integration of Improve flexibility Tailor marketing and service R&D Improve effectiveness Improve retention and capacity to other communication and Align product and Improve definition of better customer better customer Improve invoicing/ support and Improve capacity/ performance Provide staff with program case development Improve product and forecasting forecasting Rationalize production forecasting better customer Improve management Divest low-utilization Increase Rationalize Rationalize production Improve management Improve coordination Improve under- communication of accountability/ communication continuity planning business processes Improve value and versatility of IT Develop and cultivate - Improve control / reduce risk sales approaches to and deployment transition points of cross-sell/up-sell win-back processes enterprises coordination with service prices with product and service information information billing processes administration demand planning assessment better product and management and analysis service introduction/ processes, skills and processes, skills and quantities and timing processes, skills and information of transfer pricing real estate use of leased merchandise order quantities and timing of delinquent of payments across standing of regulatory strategic directions authority of program around improvement and disaster recovery across partner delivered to systems and good will deals and partnerships to (life events, ends of customer segments processes (production capacity, service value to customers specification (demographics, inquiry (profiles, transaction processes and tools service information launch processes (profiles, transaction production equipment quantities and timing accounts business units requirements shareholders capabilities contracts and leases, etc.) sales channels processes processes processes processes tools tools tools and priorities and project resources priorities capabilities networks platforms - Collaborate more effectively capacity, etc.) history, etc.) histories, etc.) histories, etc.) Conditio ns of work Materials Improve tailoring of - Satisfy customers, employees and Improve access to Adapt current Improve tracking of Improve Improve structuring marketing and Provide staff with Provide staff with Improve policies and Improve dispatch, Improve assignment Improve Improve tax manage- Improve utilization of Focus efforts on Rationalize Provide staff with Optimize accounting Improve assessment Improve monitoring Improve alignment of Improve program/ Improve ability Improve manage- Improve quality Improve value Improve breadth, Develop and utilize products and services customer interactions Solicit and respond to Improve managerial Improve demand better product, service diagnostic, resolution Increase utilization of Improve employee of procurement accounting and ment processes Rationalize production Rationalize order better product, service methods and selec- Increase use of Increase utilization of Divest low-demand/ Divest obsolete Improve collections budgets and capital and speed of depth, quality and unique information other stakeholders information and analytical tools for new segments/ (purchases, support understanding of customer needs customer feedback methods and tools forecasting and pricing of promotions advertising approaches to and competitive better product and service information processes around merchandise returns and replacement real estate retention programs transactions to measurement (direct and indirect tax product development channels higher-value vendor relationships quantities and timing merchandise order quantities and timing quantities and timing and contract tion of accounting leased infrastructure production equipment obsolete inventory materials processes and benchmarking of A/P performance and management of regulatory compliance programs with project management methods and tools to launch improvement efforts ment of regulatory compliance communication with delivered to employees timeliness of business resources (customer, channels requests, etc.) information processes appropriate staff processes management) information periods strategic priorities partners planning information product, market, etc.) biodiver-si ty customer segments & biodiver-si ty Land us e &Land us e Improve visibility of Improve Coordinate pricing of Optimize valuation Improve identification Improve Improve quality and Pursue joint-venture, customer Improve understanding of Improve use of Improve product and Route low-value Provide staff with Improve technology Provide staff with Increase focus on Improve business Improve asset Improve collaboration Improve coordination Align production and Improve assignment Differentiate treatment and costing methods Increase understanding of Improve tracking and Improve assignment Improve Improve value Improve terms with assure the quality and supply Maintain competitive competitiveness of complementary Consolidate/realign and data risk management Reduce procurement merchandise ordering use of flexible and Divest low-utilization Improve terms on Increase use of just- Improve management and assessment of communication of Improve physical delivered to partners Improve versatility of Develop and leverage assignment of sales partnership and OEM relationships and business unit supply- and capacity- products and services service launch transactions to lower- better customer and service providers better HR information higher-value vendor performance reporting with partners and with business of transactions to of customers/ for inventories risk (strategic, operational, internal value and of accountability and management of leads arrangements functionality and value interactions across all product and service performance and driven promotions processes sales territories cost sales channels order information management (security, energy, etc.) and tools partnerships processes processes customers cycle times partners schedules with appropriate staff segments (LIFO, FIFO, uniform expandable equipment merchandise in-time procurement of credit/loan portfolio market value of program/project authority security of people partner relationships (vendors, channel partners, managers and staff strong brand (razors v. blades / product v. investment, financial, com- channels offerings market values shipping charges, etc.) processes (fixed and variable assets) distribution schedules capitalization, shrinkage, infrastructure pliance, data/privacy, etc.) business units progress etc.) & Servi ces obsolescence, etc.) Products & Servi ces Products Improve Improve product and Improve sales Improve forecasting, Increase utilization of Improve terms on Optimize depreciation Improve assessment Improve identification, Improve quality and Improve sharing of Improve sharing of Improve value Improve product, Develop strong Improve brand Improve management responsiveness to Tailor cross-sell/up- Offer value-adding Divest non-performing Improve product and Improve execution of service withdrawal forecasting and Improve routing of planning and IT, telecom and purchased and leased Improve capacity/ Improve collaboration Improve/standardize Improve budgeting License or acquire Improve terms on Shorten production Provide staff with Improve use of Route low-value methods/lives for Improve terms Utilize more efficient Consolidate Improve terms on and benchmarking of Improve risk planning, assessment and Improve assignment consistency of knowledge across knowledge across delivered to other service and process customer strength and good will of product lifecycles customer requests sell offers to customer product and service and non-strategic service lifecycle market- and supply- and retirement campaign execution service requests to prioritization skills and network resources real estate, furniture demand planning with vendors M&A processes and forecasting products and materials purchases cycles better information and national/global transactions to lower- property, plant and on infrastructure IT systems inventory materials credit/receivables mitigation and control execution of of resources to performance organizational organizational stakeholders innovation skills of relationships and (launch through retirement) and inquiries needs bundles business units management driven promotions processes processes and tools appropriate staff tools (servers, routers, network and fixtures processes and tools capabilities intellectual property tools purchasing power cost sales channels equipment performance approaches M&A/divestiture projects assessment methods boundaries boundaries (public, alumni, analysts, staff communities capacity, etc.) opportunities etc.) Supplie rs Supplie rs Implement/improve Improve monitoring • Return wastes to process for Implement pricing and Proactively manage Improve ability to Improve campaign Increase use of lower- Improve demand Increase use of Improve routing of Ensure full utilization Increase use of Increase use of Improve performance Improve conversion of Develop and leverage Tailor products and Evolve product and cost service and Consolidate device Improve terms on company-wide Improve terms on Improve compliance Improve skills of Improve terms with Improve utilization of Utilize more Improve company- Improve ability to Improve involvement and management of and reliability of IT Improve integration of services to new service features, Improve quality affinity programs transition points utilize offshore cash/ Shorten time-to- Improve price/margin design and Improve terms with Improve due-date management processes and tools equipment and management Improve financial product development production channels / forecasting vendor-managed/ service requests to of tax carryforwards Divest low-utilization flexible/expandable IT vendor-managed/ vendor-managed/ wide monitoring and develop and spin-off of operational staff in risk and compliance IT systems across strong relationships intellectual capital assurance programs based on volume and (life events, ends of assets and move market knowledge of staff management sales channels information channels reliability improvements reporting efficiency service providers processes, skills and vendor-warehoused appropriate service (credits, net operating infrastructure vendor-warehoused vendor-warehoused systems/platforms into sources of com- (copyrights, patents, (strategic, operational and BUSINESS PROCESS GROUPINGS customer segments functionality and value breadth contracts and leases, etc.) between geographies processes and tools (contact centers, automated voice response, web, etc.) information and tools (HVAC, cabling, etc.) for assessing staff performance supplies processes staff (delivery, warehousing, etc.) Reduce downtime tools inventory channels losses, capital losses, etc.) systems inventory inventory management of risks new businesses project delivery financial risks; regulatory and tax compliance) (applications, equipment, networks, etc.) partner networks petitive advantage trademarks, etc.) Transport Discharg es to Transport Improve breadth, Improve quality of water Business Strategy and Management Shorten order-to- Utilize tax opportuni- Improve real estate Improve terms with depth and quality of Improve incentives Consider tax implica- Improve breadth, Improve focus of Increase account- Improve breadth, Improve information provided Develop and utilize delivery cycle time / Remove barriers to Improve account Improve brand Implement affinity ties around risk man- Improve features and Improve coordination Improve channel Improve skills of Improve skills of Improve skills of order Consolidate and/or performance Improve skills of HR Provide staff with around product Improve collaboration Improve incentives Improve skills of Improve skills of Improve skills of tions in the location/ Improve maintenance depth, quality and company resources Improve identification ability of business depth, quality and partnership and unique production (Business and Financial Strategy, Mergers and Acquisitions, Tax management skills of functionality of with suppliers and management management and re-architect data service providers better managerial financial information around production inventory and and management of to stakeholders Management, Risk Management, Compliance Management, Program Improve product and switching strength and good will programs agement activities sales staff service staff management staff (equipment maintenance, (asset, budget, price/cost, development with vendors merchandising staff service staff selection of facilities of IT systems timeliness of manag- on high-priority unit leaders for tax timeliness of business collaboration skills of (accuracy, timeliness, resources staff (hedging transactions, products and services sales channels processes and tools billing staff stores information and tools efficiency distribution staff (distribution centers, service program/project risks (methods, equipment, Quantity of wa ste Management and Performance Management) service availability methods and tools delivery, warehousing, etc.) treasury, debtor/creditor, efficiency erial information initiatives impact of decisions information staff transparency & returned to commodities trading, etc.) centers, branches, etc.) facilities, etc.) recycling, reuse or market performance, tax, risk, etc.) predictability) sEmission, Effl uent Emission, wa stes s Build tax opportunities Environment al Environment al Ensure tax planning and Effl uent Environment al Customer Strategy, Relationships and Interactions Defer and reduce Improve incentives Improve incentives Improve Consider tax Improve cost Increase use of Improve anticipation Dynamically cancel or Improve benchmark- Improve mechanisms and wa stes Improve sales and Apply brand to new Improve incentives for Offer value-adding Improve quality and Build product Improve staff Increase use of Improve skills of Improve definition of Improve incentives Improve incentives Improve staff into real estate activities and tax Improve access to Develop and utilize (Marketing, Sales, Delivery/Provisioning, Billing and Service) Improve brand federal, state and Improve terms with around service around order establishment of and incentives in location Utilize national/global accounting and vendor-managed/ Improve skills of transactions Increase utilization of and understanding of redirect ineffective/ ing of global effective for soliciting and marketing skills of and unbranded account/relationship product and service reliability of products margins/profitability incentives around distance/on-line business product and service around inventory/ around merchandising incentives around filings comply with and distribution of Total wa ste fo r strength and good will local quarterly esti- advertising channels efficiency and management adherence to service- and selection of purchasing power allocation of shared/ vendor-warehoused production staff IT systems current and potential obsolete programs tax rate against addressing unique IT resources disposal staff products development bundles and services into sales incentives sales efficiency learning management staff specifications distribution efficiency efficiency service efficiency (income deferral, location regulatory environ- business information (applications, networks, etc.) mated tax payments effectiveness efficiency level targets facilities overhead costs inventory credits and incentives, regulations/legislation and projects industry peer group stakeholder feedback Product Strategy, Development and Production leasing terms, etc.) ment (Innovation and Design, Supply Chain Management, Production Improve product Shorten order-to- Improve methods and Improve terms with Improve terms with Improve terms with Improve technical and Reduce salary and Increase use of Improve ability to Improve terms with Improve terms with Improve consideration Clarify governance Improve breadth, Improve asset Operations and Logistics) gas emis sion greenho use Improve alignment of Improve product- and Improve account Improve methods and Ensure proper Improve incentives development Improve contracting Improve terms Improve terms with Improve effectiveness Improve management Improve security of Reducin g delivery cycle time / Establish customer tools for managing Improve skills of service providers service providers service providers project management benefits costs / vendor-managed/ utilize offshore cash/ service providers service providers of tax implications in Divest low-utilization roles and responsi- depth, quality and development skills of staff incentives with service-innovation management tools for managing valuation of property around business performance and negotiation skills on equipment service providers (outsourced services, bilities (delegation of of legislative/lobbying of vendors/service applications, systems Human Capital Strategy and Management Improve product and communities demand/supply marketing staff (network services, airlines, (network services, (delivery services, skills of staff Improve value of vendor-warehoused assets and move (transport, warehousing, the acquisition and IT systems timeliness of perform- management and remanufacturing reducing the strategic objectives skills of staff methods and tools pricing performance for tax purposes planning efficiency management of purchasing staff purchases (delivery, warehousing, etc.) network services, authority, segregation of efforts providers and data service availability performance information services, etc.) outsourced functions, etc.) outsourced functions, etc.) employee benefits inventory between geographies etc.) information services, etc.) disposition of assets ance information staff (Recruitment, Development, Administration and methods and tools duties, etc.) (preserv ation) Performance Management) natural p lant practices for Harvesti ng Improve profitability of species Acquire companies Improve terms with Improve logistics Optimize tax benefits Improve incorporation Continuously track Improve access to Improve incentives for Improve cross- Improve customer Improve staff Improve terms on Improve terms on Improve terms on Improve incentives third-party product Improve contracting Improve terms with Improve skills of R&D efforts through Improve incentives Improve terms with Improve terms on Improve terms on associated with self- Strengthen training/ Improve Improve incentives IT Strategy and Management with relationships in product development selling/up-selling service and retention incentives around around IT/network and negotiation skills service providers financial management utilization of tax and around procurement performance merchandise Improve terms on education of board of risk analysis in and manage the and distribution of process innovation around asset targeted customer leased sales assets leased service assets leased assets and service providers service providers management leased service assets constructed assets production equipment business planning realization of project performance (Design, Development, Deployment, Operations and and innovation skills of staff skills of staff marketing efficiency (computers, vehicles, etc.) (computers, vehicles, etc.) (computers, vehicles, etc.) efficiency (payroll, benefits, training, of procurement staff (information services, staff economic develop- efficiency (outsourced functions, etc.) purchases (computers, vehicles, etc.) (plant, facilities, internally- and audit committees skills of staff development segments consultants, etc.) methods and tools (internal and external risk) benefits information Substitut ing Performance Management) ment incentives hazardo us etc) used software, etc.) chemical s ls Materia ls Materia Other Shared / Corporate Services Improve management Build customer Improve terms with Improve service and Improve terms with of international staff Improve incentives Improve materials Improve management Optimize expense vs. Align compensation Integrate tax oppor- Improve management Acquire companies Improve staff Improve management Improve tax collection Improve incentives Improve depth quantity of materials (Real Estate, Procurement and Other) Acquire companies in satisfaction and service providers support performance service providers around financial performance Improve management of trade and indirect Improve management capitalization of costs Improve terms on IT and incentive systems tunities and issues of organizational Improve career Develop and utilize aligned with product incentives for cross- and remittance costs around procurement and breadth of staff Use of recycle d targeted geographies retention into staff (researchers, information of trade/indirect taxes management management management of transfer pricing of transfer pricing systems with strategies, values into business planning change in support of options and paths unique tax expertise taxes (sales/use , VAT, material s (contractors, network (immigration, payroll, staff (M&A costs, R&D costs, All Process Groupings strategies selling/up-selling incentives services, advertising (sales/use, VAT, GST, etc.) methods and tools processes services, consultants, etc.) support, international equity, efficiency efficiency methods and tools GST, etc.) etc.) and ethics processes initiatives technical skills channels, etc.) (Action may apply to all processes) etc.) Improve marketing Improve terms on Manage payroll tax Improve Improve tax benefits Improve methods and Improve methods and Improve sales Improve retention Improve sales Improve tracking and Improve production Improve service Align management Total fue l used and advertising purchased and leased impacts of business Optimize utilization of Improve terms with merchandising of compensation and Improve leadership Improve program/ Note: Many actions could logically be associated with tools for managing tools for managing performance performance performance performance recovery of indirect available sales/use financial services performance performance performance benefit programs and management project management and staff incentives Improve recruiting other or multiple process groupings. For example, sales and marketing innovation management management management taxes (sales/use, VAT, assets (PCs, servers, initiatives management management with company effectiveness management network equipment, leased (M&A, consolidation, tax exemptions providers management (deferred and equity-based skills of executives skills of staff many customer and product actions are likely to have performance performance methods and tools methods and tools methods and tools GST, etc.) methods and tools methods and tools comp; retirement and performance Energy methods and tools lines, etc.) restructuring, relocation etc.) methods and tools Energy healthcare benefits, etc.) Renewa ble en ergy heavy IT and HR components. Improve/consolidate initiative s purchased and the cost of Improve profitability of Utilize available Improve executive Improve monetary Improve mechanisms R&D efforts through Improve order IT performance Improve management Improve identification Improve vendor management federal, state and of indirect taxes development, and non-monetary for collecting and utilization of tax and management local employment/ and application of recruiting and management skills of recognition of staff implementing economic develop- methods and tools methods and tools (sales/use, VAT, customs R&D tax incentives staff training incentives duties, etc.) succession planning contributions employee ideas Self-gen erated (utilization, performance, ment incentives electricit y capacity planning, etc.) Ensure adequate Improve HR Improve procurement documentation of Improve talent Build innovation and Improve utilization of performance performance improvement into telecom tax incentives significant tax management models management management positions rewards and (credits, exemptions, etc.) methods and tools methods and tools and programs incentives (earnings & profits, transfer disposal pricing, tax opinions, etc.) © 2004. All rights reserved. Confidential. 0104 Seite 17 © 9/27/2005 Deloitte & Touche
    • How to address Economic, Social and EnvironmentalImperatives all together to create Shareholder Value Improve Development & Production efficiency •Rationalize and/or realign product development efforts Improve Product & •Increase emphasis on modular, Services Cycle extensible, scalable designs •Improve prototyping, piloting and testing processes •Ensure the use of recyclable packaging •Improve recovery, reuse, and recycling of packaging •Manage the entire product life cycle / products sold that are reclaimable at the end of the products’ life (recycle or reuse of the product materials or components)Seite 18 © 9/27/2005 Deloitte & Touche
    • Shareholder Value Tracking of Sustainability Issues Add sensitivity analysis, if available The company objective is to Many issues appearEven if aligned with increase Grow to have negativethe objectives, these Constituent Base by financial returnprojects may double 10% However 70% of thecount benefits portfolio is focused on Asset EfficiencySeite 19 © 9/27/2005 Deloitte & Touche
    • Design Business CaseThe ValuePrint Approach focuses on how to develop a business case using ValuePrint. In the broadercontext of Deloitte’s commitment to provide professional services that deliver measurable business value, thePath to Value method represents an approach to managing the engagement life cycle to target, identify, anddeliver value-creating opportunities for our clients. The ValuePrint Approach is included in the Path to Valuemethod Assess ClientInitiation Strategies and Issues** The ValuePrint Approach 1 2 3 4 Develop Business Conduct Business Prepare Business Develop Business € Case Scope Case Financial Case Executive Case Workplan Statement Analysis Report Monitor Result Monitoring Seite 20 © 9/27/2005 Deloitte & Touche
    • Components of The Value Methodology Enterprise Value Map: provides a simple conceptual framework that relates client issues and activities to shareholder value; a powerful visual interface for discussing how actions and strategies align against value drivers. ValueAnalytics: provides user friendly but rigorous financial analysis, both over time and compared to client competitors, across key value drivers. ValueLink: is an on-line portal which provides access to firm thought leadership and intellectual property using the Enterprise Value Map framework as the primary navigation approach; helps match Deloitte capabilities to client issues ValuePrint: is a business case development tool which aligns to the Enterprise Value Map structure; financial impact templates (FIT’s) reside in ValueLink and are assembled into consolidated project business case MapIt (part of Portfolio Landscape): is a simple tool that provides a quick portfolio view of projects (ours or others) and illustrates how they align against client issues and strategy as they are mapped onto the Enterprise Value Map. Portfolio Landscape: is a service offering and approach that provides a rigorous portfolio view of a companies programs/projects, relating them back to the Enterprise Value Map, showing how they align against company strategy, needs and priorities. The Value Initiative e-Learning CDROM: is a multi-media learning program which provides more detailed awareness and learning related to the use of The Value Initiative enablers Value Based Billing: is a means of establishing a value-based pricing and deal structure on selected projects Value Tracking: is a means of identifying, tracking and communicating value delivered to the clientSeite 21 © 9/27/2005 Deloitte & Touche
    • The Path to ValueSeite 22 © 9/27/2005 Deloitte & Touche
    • Seite 23 © 9/27/2005 Deloitte & Touche