Annova Consulting - Final Presentation

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This is the slide deck we used for our final presentation at APEX Global 2010. We won 1st place in our division and the most innovative solution.

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Annova Consulting - Final Presentation

  1. 1. Terra Firma Medical Systems To: Stephanie Clark By: Annova Consulting William Trudau Awin Ye Matt Baril Date: April 20, 2010 Annova Consulting
  2. 2. Executive Summary Consolidate Applications Retain Essential Centralize Staff ERP STAR Strategy Outsource Outsource Data Center Network Management Annova Consulting 2 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  3. 3. Executive Summary Consolidate Applications Retain Essential $55 M Cost Savings Centralize Staff ERP Enable Technology to STAR Strategy Add Business Value Outsource Outsource Data Center Network Management Annova Consulting 3 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  4. 4. Executive Summary ―Cloud Projects Technologies‖ Consolidate Applications Retain Centralize Essential ERP Staff STAR Strategy Outsource Outsource Data Center Network Management Annova Consulting 4 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  5. 5. Executive Summary $7 Billion in Revenues in 2015 ―Cloud Projects Technologies‖ STAR Strategy Annova Consulting 5 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  6. 6. Agenda • Analysis • Symptoms and causes • Recommendation • Business process diagram • System architecture diagram • Project timeline & execution plan • Risk analysis & mitigation plan • Resource requirements & financial analysis • Conclusion Annova Consulting 6 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  7. 7. Terra Firma’s Operations Annova Consulting 7 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  8. 8. Terra Firma’s Operations • 22 field offices • Over 5200 employees • Will be merged with Siemens in August • Products and services • CT • MRI • X-ray • Nuclear medicine • Ultrasound • PET • Technical support • System integration services • Packaged software products • DigiRayZ Annova Consulting 8 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  9. 9. Terra Firma as a Public Company Being acquired by a publicly traded company means things will be different for Terra Firma now. Sarbanes-Oxley Act Greater management responsibility. A strong ERP solution to support compliance as paramount. Increased Exposure More transparency in the company’s operations. Financial information needs to be reported in Siemens consolidated report More Shareholders Possibility of more control over multiple owners, possibly with conflicting directions. Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  10. 10. Sustaining Profitability Current Line of Business Current CAGR Current Line of Business Current CAGR Flat panel X-ray detectors 7.28% System Integration Services 20.68% Other CT/PET/SPECT detectors 13.94% Packaged Software Products 51.19% Technical support contracts 8.57% DigiRayZ Product Line 48.36% Annova Consulting 10 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  11. 11. Terra Firma Revenue Breakdown Revenue (2005) Revenue (2009) Hardware Hardware Software and Services Software and Services 18% 33% 67% 82% Compound Annual Growth Rate (2005-2009) Hardware 9.45% Software and Services 15.15% Annova Consulting 11 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  12. 12. Terra Firma’s Core Competency High quality Terra Firma’s Core design Competency Knowledge Innovative of detector technology physics & generation the biological process processes Annova Consulting 12 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  13. 13. It’s the Iceberg The network crash and the discovery of the database issues are just the tip of the iceberg. They are merely symptoms of what is underneath. Annova Consulting 13 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  14. 14. Symptoms and Causes Communication Corrupted DB Inconsistent Standstill Data losses Missing logs breakdown tables data Symptoms Root Cause Annova Consulting 14 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  15. 15. Symptoms and Causes Communication Corrupted DB Inconsistent Network Architecture Standstill breakdown Data losses Data Missing logs Center tables data Symptoms Main & Router Network Second Failure Crash switch failure Application never Redundant tested in system Legacy systems production (architecture) environment Limited Not enough 200 budget staff applications Lack of Too much Lack proper emphasis on High attrition influence from PM standards IT executives IT is used to run the business and not grow Root Cause Annova Consulting 15 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  16. 16. Current Situation Where you want Current Situation Obstacles Recommendation to be Sales growing Router & at significant switch outage high rate Take away the STAR Strategy obstacles and increase Terra Firma’s competitive Network crash edge IT only used to 18 hours run the costing business NZD25M Annova Consulting 16 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  17. 17. Recommendation Consolidate Applications (with a 4-to-1 ratio) Retain Centralize ERP Essential Staff (with criteria laid out) (reduce regrettable STAR Strategy attrition) Outsource Outsource Data Center Network Management (Focus efforts into GTB) (to local external partners) Annova Consulting 17 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  18. 18. Integrate & Focus Set Central Criteria ERP Consolidate Core Data Select Applications Integrate Focus Competencies center Eliminate Network Annova Consulting 18 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  19. 19. Consolidation & Integration Reduce from 200 applications to 50 Complexity ROI Cost Resources Availability Risk Streamline Processes Annova Consulting 19 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  20. 20. Integration Criteria Example Criteria Proportion Visual Studio Eclipse Return on Investment 25% 15 25 Criticality 20% 20 20 Sustainable 20% 10 20 Frequency of Use 15% 15 15 Scalable 12% 6 12 Learning Curve 8% 8 4 Total: 100% 74% 96% Annova Consulting 20 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  21. 21. Integration Criteria Example Criteria Proportion Visual Studio Eclipse Return on Investment 25% 15 25 Criticality 20% 20 20 Sustainable 20% 10 20 Frequency of Use 15% 15 15 Scalable 12% 6 12 Learning Curve 8% 8 4 Total: 100% 74% 96% Recommend to keep Annova Consulting 21 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  22. 22. Moving on to Focus Set Central Criteria ERP Consolidate Core Data Select Applications Integrate Focus Competencies Center Eliminate Network Annova Consulting 22 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  23. 23. IT Architecture - Redundant Annova Consulting 23 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  24. 24. IT Architecture - Duplicate Annova Consulting 24 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  25. 25. Siemens Current Technologies Annova Consulting 25 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  26. 26. New IT Architecture Annova Consulting 26 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  27. 27. New IT Architecture Annova Consulting 27 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  28. 28. New IT Architecture Annova Consulting 28 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  29. 29. Outsourcing Issue: Router, primary and secondary switches failure Network • Release an RFP Management Issue: Missing log files, corrupted tables, inconsistent application data Data Center • Move to Siemens Data Warehousing By outsourcing non Core Competencies, Terra Firma will free resources to undertake more important value added projects Annova Consulting 29 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  30. 30. Value Added Projects Cloud Storage Cloud Collaboration Value Grid Computing Proposition Mobile Technology Analytics/Data mining Compression Tools Annova Consulting 30 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  31. 31. Mobile + ―Cloud-boration‖ Project MyCloud Support and collaboration between doctors and specialists which are location and time insensitive using virtual private cloud technology Annova Consulting 31 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  32. 32. Online Sharing Annova Consulting 32 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  33. 33. Mobile + ―Cloud-boration‖ Project My Cloud support and collaboration between doctors and specialists which are location and time insensitive using virtual private cloud technology Annova Consulting 33 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  34. 34. Grid Computing Annova Consulting 34 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  35. 35. Mobile + ―Cloud-boration‖ Project My Cloud support and collaboration between doctors and specialists which are location and time insensitive using virtual private cloud technology Annova Consulting 35 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  36. 36. Mobile Access Annova Consulting 36 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  37. 37. Reduce Regrettable Attrition Exciting Projects Work Life Reduce Incentive Balance Regrettable Attrition Programs Software Division Annova Consulting 37 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  38. 38. Implementation – Outsource Network Management Start date: April 30th 2010 End date: March 3rd 2011 Consolidate Applications Resource Allocation: 50 hcm Retain Centralize ERP Essential Staff Outsource Outsource Data Center Network Management Annova Consulting 38 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  39. 39. Implementation – Outsource Data Center Start date: April 30th 2010 End date: February 10th 2011 Consolidate Resource Allocation: 67 hcm Applications Retain Centralize ERP Essential Staff Outsource Outsource Data Center Network Management Annova Consulting 39 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  40. 40. Implementation - Centralization Consolidate Applications Start date: April 30th 2010 Retain End date: March 22nd 2011 Centralize ERP Essential Staff Resource Allocation: 53 hcm Outsource Outsource Data Center Network Management Annova Consulting 40 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  41. 41. Implementation – Consolidation Consolidate Start date: April 30th 2010 Applications End date: June 10th 2011 Centralize ERP Retain Essential Staff Resource Allocation: 135 hcm Outsource Outsource Data Center Network Management Annova Consulting 41 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  42. 42. Implementation Timeline ID T ask Name Duration April May June July August September October NovemberDecemberJanuary February March April May June July August September Octob 1 Outsource Network 222 days 2 Assign staff for task 2 days 3 Write RFP for Network Maintenance 14 days Assigned staff 4 Submit RFP for approval 7 days Assigned staff 5 Wait for Proposals and prepare change 21 days Assigned staff 6 Evaluation and Selection of network vendor 63 days Clark,others 7 Negotiations 21 days Assigned staff 8 Signature 3 days Clark 9 T ransfer Maintenance 91 days Vendor & Various 10 T raning and Seminar of new change 7 days Vendor & Various 11 12 Outsource Data Center 143 days 13 Discuss Data Centre Solution with Oracle 21 days Existing Data Center Head 14 Evaluate costs and benefits of options 21 days Existing Data Center Head & Clark 15 Negotiations 14 days Existing Data Center Head 16 Draft up SLA for Clark's Approval 7 days Existing Data Center Head 17 Signature of SLA and start transitioning 3 days Clark 18 Communication and T raining for users 14 days Various 19 Check and suggest improvements 63 days Various & Data Maintenance Team 20 21 Centralize ERP 227 days 22 Appoint porject team 3 days Clark 23 Analyze and Plan centralization 14 days Proj ect Team 24 T raining (phased by functional departments) 60 days Proj ect Team 25 Phased centralization (Melbourne) 120 days Proj ect Team 26 Initial testing and adjustment 30 days Proj ect Team 27 Phased centralization (HQ) 60 days Proj ect Team 28 Concurrent testing and adjustment 70 days Proj ect Team 29 Parallel Systems 210 days IT & Proj ect Team 30 31 Consolidate Applications 293 days 32 Pick consolidation team members (Committee) 14 days Clark & Keats 33 Gain consensus on selection criteria 7 days Consolidation team 34 Select engineering team 35 days Committee 35 Application analysis and score 91 days Committee 36 Confirm selected systems to keep, merge, or drop 21 days Committee 37 Communicate change to stakeholders 35 days Committee & Enginereing 38 Back up data on systems being modified 28 days Engineering & Various 39 Design and Look for Best Practice to consolidate 35 days Engineering 40 Decide on choice to implement 14 days Committee 41 Implement changes to systems 63 days Engineering 42 T hrough testing and maintenance 91 days Engineering Annova Consulting 42 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  43. 43. Business Risks & Mitigation Business Risk Prob. Impact Mitigation Increasing competition in Continuous innovation and L M medical imaging services valuable sales force Project requesting a total Apply criteria to determine budget over allocated M M priority to allocate budget amount Create magnet effect that Attrition for talented staff Terra Firma is the place to be L M stays high with exciting projects and incentives Discuss and create periodic Siemens IT control M M reports US Health Insurance Portability and M M Data encryption and SLA Accountability Act Annova Consulting 43 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  44. 44. Technical Risks & Mitigation Technical Risk Prob. Impact Mitigation ERP centralization Implement strict PM standards project over budget L H and increase frequency of senior over time management reporting Employee resistance Communicate corporate goals, M M for ERP change create champion program Make sure data backups are Data center outage L M usable SLA, ensure implementation Data security L M provided Network on-site Hire in-house network specialists M M support to manage vendor relationships Latency on cloud Data replication, synchronization, M M computing data de-duplication Annova Consulting 44 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  45. 45. Cost Estimation Component Cost in USD NPV in USD Outsource Network Maintenance 4M 5M Outsource Data Center 8M 6M Centralize ERP 3M 3M Consolidate Applications 3M 10M Annova Consulting 45 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  46. 46. Profitability Analysis Net Income Forecast $1,600 $1,451 $1,400 $1,200 $1,073 Millions of NZD $1,000 $792 $800 $582 $600 $375 $400 $268 $200 $- 2010 2011 2012 2013 2014 2015 Year Measure Performance CAGR 33% Discount Rate 16% Cost Savings $55 M Annova Consulting 46 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  47. 47. Growth Potential Emerging Cloud Technologies 35 30 25 Millions of NZD 20 15 "Cloud boration" Mobile Sharing 10 5 0 2012 2013 2014 2015 Year CAGR Performance “Cloud-boration” 35% Mobile Sharing 50% Business Value Considerations High Potential High Market Transferability Exceptional Annova Consulting 47 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  48. 48. Future of Health Care Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  49. 49. To London Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  50. 50. To Rio Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  51. 51. To Tokyo Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  52. 52. To Vancouver Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  53. 53. Health Care 2015 Leader Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  54. 54. Conclusion Consolidate Applications Retain Essential Centralize Staff ERP STAR Strategy Outsource Outsource Data Center Network Management Annova Consulting 54 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  55. 55. Conclusion Consolidate Applications Retain Essential $55 M Cost Savings Centralize Staff ERP Enable Technology to STAR Strategy Add Business Value Outsource Outsource Data Center Network Management Annova Consulting 55 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  56. 56. Conclusion ―Cloud Projects Technologies‖ Consolidate Applications Retain Centralize Essential ERP Staff STAR Strategy Outsource Outsource Data Center Network Management Annova Consulting 56 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  57. 57. Conclusion $7 Billion in Revenues in 2015 ―Cloud Projects Technologies‖ STAR Strategy Annova Consulting 57 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  58. 58. Index Additional Cloud Presentation Projects Computing Siemens Financials Others Merger At a Glance Annova Consulting 58 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  59. 59. Index - Appendixes  IT Merger Process  Priority matrix for cloud  Siemens  Project 1 – ―Cloud-boration‖  Siemens Merger History  More on ―cloud-boration‖  IT Merger Issues  Project 2 – mobile technology  IT Merger Tools  Project 3 – cloud storage  Cautions against cloud computing  Project 4 – grid computing  Risks of a public cloud  More on grid (private + public)  Private cloud benefits  Project 5 – non-lossy compression  Technical feasibility  Project 6 – data mining  Cloud technology (usable)  Common cloud adoption risks  Notes (Cloud tech could be used)  Spectrum of private + public cloud  Business Cloud  Determine if cloud is right  Selection of future IT projects  Cloud Computing - Latency  Partnering consulting  US health care regulations  Calculation of discount rate  Vendors and solutions  Stakeholder analysis  Commodity VS core competency  ―Cloud-boration‖ timeline  Integration criteria  BCG matrix star position  Network consultant selection criteria  Grid computing  No layoffs required  Questions for cloud computing  Financial information  Core competency criteria  IT budget  Company introduction  Industry beta value  HR Knowledge Management  Star strategy NPV Annova Consulting 59 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  60. 60. Index - Presentation  Terra Firma’s Operations  Outsourcing  Revenue Breakdown  Value Added Projects  Core Competency  Project MyCloud  Symptoms and Causes  Reduce Attrition  Current Situation  Implementation Timeline  Recommendation  Business Risk  Integrate & Focus  Technical Risk  Consolidation & Integration  Cost Estimation  Integration Criteria Example  Profitability Analysis  Decentralized Architecture  Growth Potential  Redundant IT Architecture  Conclusion  New IT Architecture Annova Consulting 60 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  61. 61. Index – New Projects  Risks of a public cloud  Project 1 – ―Cloud-boration‖  Private cloud benefits  More on ―cloud-boration‖  Technical feasibility  Info in MyCloud  Cloud technology (usable)  Project 2 – mobile technology  Cloud tech could be used  Project 3 – cloud storage  Business Cloud  Project 4 – grid computing  Selection of future IT projects  More on grid (private + public)  Partnering consulting  Project 5 – non-lossy  ―Cloud-boration‖ timeline compression  BCG matrix star position  Project 6 – data mining  Grid computing  Common cloud adoption risks  Questions for cloud computing  Spectrum of private + public  HR Knowledge Management cloud  Priority matrix for cloud  Determine if cloud is right  How to Add ―Smart‖ Value  Cloud Computing - Latency  Project Selection and  US health care regulations Profitability Analysis  Star strategy NPV Annova Consulting 61 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  62. 62. Index – Cloud Computing  Cautions against cloud  Priority matrix for cloud computing  More on grid (private + public)  Risks of a public cloud  Common cloud adoption risks  Private cloud benefits  Spectrum of private + public  Technical feasibility cloud  Cloud technology (usable)  Determine if cloud is right  Notes (Cloud tech could be  Cloud Computing - Latency used)  US health care regulations  Business Cloud  Vendors and solutions  Selection of future IT projects  Grid computing  Partnering consulting  Questions for cloud computing  ―Cloud-boration‖ timeline  Info on MyCloud Annova Consulting 62 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  63. 63. Index - Others  Technical feasibility  US health care  Selection of future IT regulations projects  Vendors and solutions  Partnering consulting  Commodity VS core  Calculation of discount competency rate  Integration criteria  Stakeholder analysis  Network consultant  BCG matrix star position selection criteria  Grid computing  No layoffs required  Core competency criteria  Company introduction  Top medical cancer  HR Knowledge centre Management  Science & Health daily  Action Plan for Today  Key Medical Statistics Annova Consulting 63 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  64. 64. Index - Financials  Calculation of discount rate  Financial information  IT budget  Industry beta value  Star strategy NPV  Sustaining Profitability  Peace of Mind – What does it Cost?  Peace of Mind- Why that Matters Annova Consulting 64 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  65. 65. Index – Siemens Merger  IT Merger Process  Siemens  Siemens Merger History  IT Merger Issues  IT Merger Tools  Vendors + Solutions  Siemens Data Center Annova Consulting 65 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  66. 66. IT Merger Process You are here Annova Consulting 66 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  67. 67. Why Partner with Siemens IT Solutions and Services • Subsidiary relationship • Early due diligence • Proven integrated tools and methods – reducing complexity, risk and costs • Post M&A support • IT harmonization and optimization Annova Consulting 67 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  68. 68. Siemens Siemens AG is a Germany-based company engaged in electronics and electrical engineering. The Company is an integrated technology company with core activities in the fields of industry, energy and healthcare. Siemens operates in more than 190 countries through six segments: Industry, Energy, Healthcare, Equity Investments, Siemens IT Solutions and Services, and Siemens Financial Services. Industry, Energy and Healthcare segments are reported along with 15 divisions, which comprise the divisions Industry Automation, Drive Technologies, Building Technologies, Osram, Industry Solutions and Mobility belonging to the Industry Sector, the divisions Fossil Power Generation, Renewable Energy, Oil & Gas, Energy Service, Power Transmission and Power Distribution belonging to the Energy Sector, and the divisions Imaging & Information Technology (IT), Workflow & Solutions and Diagnostics belonging to the Healthcare Sector. Annova Consulting 68 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  69. 69. Siemens Mergers History  Acquisitions and mergers  Power Technologies International (2005) — now  mergerd with Allis-Chalmers Electrical to form Siemens- Siemens Power Transmission & Distribution, Inc. Allis (1970s  AN Windenergie GmbH (2005) — now Siemens Wind  Shared Medical Systems Corporation (2000) Power GmbH  Chemtech Brazil (2001)  Wheelabrator Air Pollution Control, USA (2005); now  Atecs Mannesmann AG (2001) including Mannesmann Siemens Environmental Systems and Services Dematic, Mannemann Sachs, Mannesmann VDO  Bewator AB (Sweden - 2005) Security Automotive, Mannesmann Demag Krauss-Maffei  Flender Holding GmbH (March 2005)  Danfoss Flow Division (2003)  Diagnostic Products Corp. (2006) — now Siemens  Bonus Energy (2004) — now Siemens Wind Power A/S Healthcare Diagnostics  IndX Software (2004)  Kadon Electro Mechanical Services Ltd. (2006)—  Chrysler Group’s Huntsville Electronics Corporation now TurboCare Canada Ltd. (2004)  Kühnle, Kopp, & Kausch AG (2006) — now Siemens  USFilter Corporation (2004) — now Siemens Water Turbomachinery Equipment GmbH Technologies Corp.  Opto Control (2006)  Woodlands Technology (2004)  Bayer AG -Diagnostic branch (2006)  Photo-Scan (2004)  VistaScape Security Systems (2006)  DASAN (South Korea - 2004)  Vai Ingdesi Automation (Argentine - 2007) Industrial  Controlotron, USA (2004) Automation  Alstom Industrial Turbine Business (2005)  UGS Corp. (2007)  Jet Turbine Services (2005)  Dade Behring (2007)  Transmitton (2005) — now Siemens Transportation  Sidelco (Quebec, Canada - 2007) Systems UK  S/D Engineers, Inc. (2007); now Siemens  Shaw Power (2005) Environmental Systems and Services  Chantry Networks (2005)  Gesellschaft für Systemforschung und  Myrio (USA/Canada - 2005) Dienstleistungen im Gesundheitswesen mbH (GSD)  CTI Molecular Imaging (2005) (Germany - 2007)  Evoline (2005)  SG Wasseraufbereitung und Regenerierstation  VA Tech Group (Austria - 2005) GmbH (SG Water).[2] (Germany-2008) Annova Consulting 69 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  70. 70. IT Merger Issues Systems have been known to drop out, with key data simply vanishing. Imagine the repercussions if an overloaded system crashes at your company, losing all account statements and bringing your business to a halt. Problems such as these are caused by:  A poorly aligned IT and business strategy  Treating IT as an afterthought rather than an early priority  Insufficient IT due diligence  Poor IT integration planning  High IT complexity, risks, and costs  Lack of M&A IT experience  Seeing IT as merely another service to be provided Taken from Siemens IT Solutions Please see Getting-IT-Right_PDF_e.pdf in the package Annova Consulting 70 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  71. 71. IT Merger Tools Covering every step of the integration and divestiture processes, our M&A IT solutions and services package is a systematic, method- and tool-based offering comprising: • M&A IT consulting • IT due diligence • IT program management • HR M&A integration • IT solutions for carve-outs • IT solutions for M&A • IT transformation Annova Consulting 71 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  72. 72. Action Plan for Today 1. All changes in the system have to be approved by Clark 2. Only mandatory changes will be implemented 3. All changes will be tested in all environments 4. All changes must be reversible 5. Implementation of changes during off peak times 6. All implementation of changes have to be properly documented Annova Consulting 72 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  73. 73. Contingency Plan – Network Failure • Potential Risk: • What happens if the network crashes again? This time the cost will be much higher and your reputation goes down even more. • Contingency Plan: • Change management – disallow any untested changes in the system unless Clark personally approves it. Annova Consulting 73 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  74. 74. Contingency Plan – More Key Resignations • Potential Risk: • What happens if there are more key IT staff leaving the company? • Contingency Plan: • With a through performance review documentation, Clark should personally go to each individual high performers and talk to them in person with the exciting new projects coming up and incentive plans to keep them. Create a magnet effect. Annova Consulting 74 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  75. 75. Contingency Plan – Legislation Changes • Potential Risk: • What happens if the government changes the regulations (ex. US and Europe about health care?) • Contingency Plan: • Be flexible in the IT systems to adapt to any legislative changes and ensure full compliance in the systems. Annova Consulting 75 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  76. 76. Contingency Plan – Data Breach • Potential Risk: • What happens if some of the data were hacked and leaked outside of the organization? • Contingency Plan: • Immediately seal the security point, find out which information was stolen, create contingency plan. Annova Consulting 76 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  77. 77. Contingency Plan – Natural Disaster • Potential Risk: • What happens if the main data center just experienced a natural disaster? (ex. Earth quake) • Contingency Plan: • Ensure the SLA is being enforced. Back up data center in another geographic location should have been in effect. Annova Consulting 77 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  78. 78. Contingency Plan – Loss of Big Customer • Potential Risk: • What happens if one of the big customers in Terra Firma left ? • Contingency Plan: • Talk to all other customers to ensure them IT reliability and ensure them monetary compensation if it happens again. Annova Consulting 78 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  79. 79. Contingency Plan – Increased owner control • Potential Risk: • What happens if owners of the company (Siemens or Frost brothers) increases control over the IT operations? • Contingency Plan: • Ensure full compliance and create periodic reports. Clarify division of duties. Annova Consulting 79 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  80. 80. Contingency Plan – Reorganization • Potential Risk: • What happens if there is a reorganization in the IT department? • Contingency Plan: • Group personnel based on personal interest, knowledge and experiences to maximize productivity. Ensure documentation is available for smooth transitioning. Annova Consulting 80 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  81. 81. Contingency Plan – Competitive Announcement • Potential Risk: • What happens if one of the competitors announced an exciting project or product? • Contingency Plan: • Announce our own exciting projects and products to ensure customers will stay with us. Annova Consulting 81 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  82. 82. Contingency Plan – Major New Technology Announcement • Potential Risk: • What happens if there are major new technology announced out in the market? • Contingency Plan: • Fully analyze the viability of the solution and compatibility with existing systems. Carefully select the ones that fit and utilize them in systems or projects. • We are using the new technology, but not at the bleeding edge of the new technology. Annova Consulting 82 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  83. 83. Contingency Plan – Government Initiatives • Potential Risk: • What happens if the government announced initiatives towards medical industry? • Contingency Plan: • Fully utilize government initiatives and create contingency plan. Ensure full compliance and efficiency of existing operations. Annova Consulting 83 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  84. 84. Information in MyCloud  For privacy and security reasons, below are the information that will be stored in the project MyCloud • Patient’s scanned image • Patient’s gender, age, and region • Doctor’s diagnoses, treatment, and final result • Notice no such information as the patient’s name or health insurance number will be stored Annova Consulting 84 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  85. 85. Top Medical Cancer Centers Mayo Clinic, Roclester Duke Minn Taxas UCLA Top Medical Cancer Centers Annova Consulting 85 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  86. 86. Science & Health Daily • New Zealand has the lowest number of medical specialists in the world • That’s why our strategy makes sense because it enables fast and easy collaboration between specialists in the world and is time and location insensitive. Annova Consulting 86 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  87. 87. Key Medical Statistics • There are a total of 7 billion people in the world • 2179 medical schools in the world • Half of the medical facilities are in the US • 10% of US population is over 65 • The percentage is higher in Europe & Japan Annova Consulting 87 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  88. 88. Cautions Against Cloud Computing Google Tuesday August 28, 2009 LinkedIn Source: Information Week September 1, 2009 Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  89. 89. Cautions Against Cloud Computing Salesforce.com Phishing Salesforce.com Scheme Took Five Days to Disclose Information Monster.com Theft including Bank Account Numbers Over-promising and hype Vapourware on software demos Source: Information Week Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  90. 90. Risks of a Public Cloud Service Availability, capacity and performance guarantees Uncertain Failure remediation No transparency of provider; hidden supply chain Commitment requirements, lock-in Ability to customize Data ownership, security, and protection Provider security, privacy and disaster recovery Regulatory requirements Support and investigations Integration with on-premises systems Immaturity of vendors, standards Immaturity of application development skills Licensing Issues Unproven financial model and real costs Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  91. 91. Private Cloud Benefits Service oriented interface Low Barrier to Entry backed by virtualization and automation Shared architecture that Elastic and Scalable is virtualized and based on needs Lower Cost and Pay Per More efficient and enable Use economies of scale Transition to a public Ease of Sourcing cloud or hybrid model Migration with no central sourcing organization Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  92. 92. Technical Feasibility Maturity Level Status Product/Vendors Embryonic In Labs None Emerging Commercialization Highly Customized, Early Adopters Adolescent Uptake Beyond Early 2nd Generation Adopters Early Mainstream Proven Technology More out of the Box Mature Mainstream Robust Technology Several Dominate Vendors Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  93. 93. Cloud Technology Cloud Business Effect Vendors Maturity Technology Impact and Time Private Cloud Economies of High Oracle, BMC Computing Scale, Software, Adolescent minimize risk, Cisco, HP, manage IBM, VMware mission critical data Cloud Security Data security, High Symplified, Adolescent and privacy Zscaler Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  94. 94. Notes Cloud Technology Business Impact Effect Vendors Maturity and Time Cloud Governance Establish Policies and Transformational Inovis, Sonoa Systems, Emerging build trust SOA Software, Vordel SaaS Integration Reduce High Informatica, Bluewolf Adolescent Cloud Services Needed to lower cost of Moderate IBM Tivoli, Data Synapse Emerging, end to end Management Tools service delivery, maximize service still a vision the cloud Virtual Private Cloud Reduce risk and deploy High Terremark, Layered Emerging Computing wider range of enterprise Technologies applications Application Platform as a IT Solutions applied and Transformational Google, Bungee Labs Emerging Service composed by the enterprise, but executed and managed by expert third party providers Cloud Computing For the Reduced total cost of Transformational Amazon, Google, IBM, Emerging Enterprise ownership, accelerated Microsoft, Oracle, time to market, and Salesforce.com, SAP reduced utilities Cloud Based Email Free up internal capital Moderate Cisco, IBM, Microsoft, Emerging and resources Google Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  95. 95. Notes  Film less X-ray systems  Technical Support  Integration Services  Software • Analyze, Visualize, Store Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  96. 96. Notes  Positive NPV  Leverage on Core Competency  Technical Interests Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  97. 97. Notes If we need consulting services: Accenture, capgemini, CSC, EDS, IBM, HCL technologies, Tata consultancy, wipro technologies **** Some have made formal relationships with vendors such as Google and Amazon, have not completed pricing models, go to market strategies, and SLA’s (Service Level Agreements)***** Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  98. 98. Notes DISCOUNTED CASH FLOW MODEL 5 Comparable Companies  BETA = 0.968 WACC = 9.03%  Discount Rate Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  99. 99. Why this works: Stakeholder Analysis  Keeps decision making and technical expertise in New Zealand  Power is still with the brothers  Information can be freely distributed but managed in house  Maximize the distribution of knowledge into essential markets Annova Consulting Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  100. 100. ―Cloud-boration‖ Timeline Annova Consulting 100 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  101. 101. Best Position for Terra Firma Relative Position (market share) High Low Growth Rate High Question Business STAR Mark Low Cash Divest Cow Annova Consulting 101 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  102. 102. Grid Computing • Combination of computer resources from multiple administrative domains for a common goal • Applying the resources of many computers in a network to a single problem at the same time • Strength: not administered centrally, open standards • Weakness: Over reliance Annova Consulting 102 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  103. 103. Questions for Cloud Computing • Security: Are my business transactions and users safe? • Data: Is my data safe? • Reliability: will the service be available when I need it? Are the SLAs acceptable, and are they being met? • Cost: Are the promised cost savings being realized? • Integration: How will I integrate my on-premises services with cloud- based services? How will I integrate multiple cloud-based services with each other? • End-to-end process control: How will I control my business process when a mix of on-premises and cloud-based services is involved? • Vendor: is the vendor going to survive the eventual industry consolidation? Is the vendor trustworthy? Is there a possibility of vendor lock-in? • Culture: Can IT adjust to not owning the computing resources and people necessary to provide services to their customers? Annova Consulting 103 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  104. 104. Core Competency - Criteria  Three tests to identify core competencies 1. Access to wide variety of markets 2. Significant contribution to perceived customer benefits of the end product 3. Difficult to imitate Annova Consulting 104 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  105. 105. Terra Firma Medical Systems • New Zealand owned company operated internationally • Revenue of 2.5 billion New Zealand dollars in 2009 (CAGR 13.85% per year) • CAGR 16.9% on net income Annova Consulting 105 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  106. 106. HR Recommendations  Knowledge management • Documentation standards • Shadow program • Periodic checks • Group collaboration incentives Annova Consulting 106 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  107. 107. Priority Matrix for Cloud Computing Benefit Years to mainstream adoption Less than 2 years 2-5 years 5-10 years More than 10 years Application platform as a service Cloud advertising Cloud computing Transform- Cloud computing for the Cloud services governance enterprise Cloudweb platforms ational Public cloud computing/the Hybrid cloud computing Real-time infrastructure Cloud virtualization Cloud application development tools Cloud computing/SaaS Cloud security concerns integration Cloudbursting/overdraft Cloud storage Cloud-driven professional IT High Grid computing Compute infrastructure services and solutions Tera-architetures services Cloud-enabled BPM platforms DBMS in the cloud Virtual private cloud Elasticity computing Integration as a service Private cloud computing Cloud Service management tools Cloud-based email services Enterprise portals as a Moderate SaaS sales force automation service Business Process Utility In the cloud security services IT infrastructure Utility SaaS low Annova Consulting 107 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  108. 108. Suggested Project 1 – ―Cloud-boration‖  Description • Patients and doctors can check their scanned image on any device and share comments across the network  Approximation Cost • ~  Benefits • NPV Annova Consulting 108 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  109. 109. More on ―Cloud-boration‖ • Generalists can contact specialists around the world to get confirmation / information • Three levels of urgency: • Critical, urgent, second opinion. • Doctors can check or answer questions on the move (with any devices in any geographical location) Annova Consulting 109 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  110. 110. Suggested Project 2 – Mobile Technology  Description • Patients and doctors can obtain scanned images on mobile devices  Approximation Cost • ~ $46M (both ―Cloud-boration‖ and Mobile) • ~$5M (both ―Cloud-boration‖ and Mobile)  Benefits • NPV Annova Consulting 110 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  111. 111. Suggested Project 3 – Cloud Storage  Description • Offer customer scanned image backup  Approximation Cost • ~  Benefits • NPV Annova Consulting 111 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  112. 112. Suggested Project 4 – Grid Computing  Description • Apply resources of many computers in the network to a complex problem at the same time (such as image rendering) • Pilot in Singapore  Approximation Cost • ~  Benefits • NPV Annova Consulting 112 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  113. 113. More on Grid Computing Public Cloud Services Anyone Shared Dedicated Web search data/grid SaaS service instances Business Consortia- Targeted partner cloud owned industry Access services service service Internal Exclusive Virtual private dev/test provider (IT cloud service spinoff) Exclusive Users Third Party Ownership/Control Private Cloud Services Annova Consulting 113 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  114. 114. Suggested Project 5 – Compression  Description • Investigate in possible compression technologies that saves storage but does not compromise quality  Approximation Cost • ~  Benefits • NPV Annova Consulting 114 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  115. 115. Suggested Project 6 – Data mining  Description • Add data mining solutions to our customers. Such as grouping similar images together with treatment and results, greater collaboration with doctors around the world  Approximation Cost • ~  Benefits • NPV Annova Consulting 115 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  116. 116. Common Cloud-Computing Adoption Risk and Mitigations Risk Description Mitigation Risk-Testing Testing is difficult to arrange and Due diligence. Get a tour and conduct. develop assessment criteria Data Location May not know where your data is Push provider to offer simple stored (which disk farm or which level of control over locations country) Data Loss Provider may lose your data, Make sure data backups are sometimes non-recoverable usable Data Security Storing data externally could Have competent security and (Privacy) result in losing information information personnel vet your approach before you sign contracts Vendor viability Provider go out of business or Verify vendor viability via stopped offering the service common reasonable methods. Make sure you back up your data. SaaS escrow Source: Gartner Annova Consulting 116 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  117. 117. Spectrum of Private to Public Cloud Services Public Cloud Services Anyone Shared Dedicated Web search data/grid SaaS service instances Business Consortia- Targeted partner cloud owned industry Access services service service Internal Exclusive Virtual private Exclusive dev/test provider (IT cloud service spinoff) Users Third Party Ownership/Control Private Cloud Services Annova Consulting 117 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  118. 118. How to Determine if Cloud Computing is Right? In order to determine if cloud computing is suitable for the business, the following 5 point scale is used: 1. Misfit (banking over public cloud) 2. Poor fit (can force it) 3. Neutral (no particular benefit) 4. Good fit (positive contribution to business) 5. Perfect fit (maximum benefit) Annova Consulting 118 Analysis Recommendation Action Plan Risks & Mitigations Conclusion
  119. 119. Cloud Computing - Latency  Latency is hard to completely avoid  Three ways to help decrease the impact on latency • Data replication (during off peak times in data mart) • Synchronization • Data de-duplication Annova Consulting 119 Analysis Recommendation Action Plan Risks & Mitigations Conclusion

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