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Driving Value Through Data Analysis
Session C6
Wednesday, April 25, 2012
3:15 – 4:15 PM
Jennifer Schilke, Michael Tuck, & ...
MIS Training Institute Session C6- Slide 2
© Norfolk Southern Corporation
The views and opinions are those of the author a...
MIS Training Institute Session C6- Slide 3
© Norfolk Southern Corporation
The views and opinions are those of the author a...
MIS Training Institute Session C6- Slide 5
© Norfolk Southern Corporation
The views and opinions are those of the author a...
MIS Training Institute Session C6- Slide 7
© Norfolk Southern Corporation
The views and opinions are those of the author a...
MIS Training Institute Session C6- Slide 8
© Norfolk Southern Corporation
The views and opinions are those of the author a...
MIS Training Institute Session C6- Slide 10
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 17
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 18
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 22
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 28
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 29
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 30
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 31
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 32
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 33
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 34
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 35
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 36
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 37
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 38
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 39
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 40
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 41
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 42
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 43
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 44
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 45
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 46
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 47
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 48
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 49
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 50
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 51
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 52
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 53
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 54
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 55
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 56
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 57
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 58
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 59
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 60
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 61
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 62
© Norfolk Southern Corporation
The views and opinions are those of the author ...
MIS Training Institute Session C6- Slide 63
© Norfolk Southern Corporation
The views and opinions are those of the author ...
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SS12 C6 Driving Value Through Data Analysis - Combined v4 (final)

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SS12 C6 Driving Value Through Data Analysis - Combined v4 (final)

  1. 1. Driving Value Through Data Analysis Session C6 Wednesday, April 25, 2012 3:15 – 4:15 PM Jennifer Schilke, Michael Tuck, & Kevin Nicholson Norfolk Southern Audit and Compliance Dept.
  2. 2. MIS Training Institute Session C6- Slide 2 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Norfolk Southern at a Glance •Class 1 Freight railroad •Approximately 20,000 track miles – 3 Operating Regions –11 Operating Divisions •Approximately 29,000 employees •Operates in 22 states and the District of Columbia •Railway operating revenue - $11.2B •Net income - $1.9B
  3. 3. MIS Training Institute Session C6- Slide 3 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation I. Introductions II. Implementation of new system III. Long term vendor monitoring IV. Professional fees monitoring V. Continuous Monitoring – P Cards VI. Closing Summary and Questions Agenda
  4. 4. MIS Training Institute Session C6- Slide 5 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Data Analysis Model Analyze SimplifyCommunicate Listen
  5. 5. MIS Training Institute Session C6- Slide 7 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Implementation of New System Role Role Role Job Position Transaction Transaction Transaction Transaction TransactionTransaction Security in SAP
  6. 6. MIS Training Institute Session C6- Slide 8 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Implementation of New System Security in SAP Authorization Object Authorization + = Access
  7. 7. MIS Training Institute Session C6- Slide 10 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Implementation of New System AP Invoice Entering AP Displaying AP Payment Displaying A/P Clerk Enter & Park Invoice Correct Invoice Vendor Displaying Invoice Displaying View Payment History Security in SAP EBR
  8. 8. MIS Training Institute Session C6- Slide 17 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Implementation of New System Position Number Role Document Number EBR Build 30000000 017 017 30000000 033 017033 30000000 042 017033042 30000000 202 017033042202 30000000 239 017033042202239 30000000 253 017033042202239253 30000000 305 017033042202239253305 30000000 306 017033042202239253305306 30000000 317 017033042202239253305306317 30000000 320 017033042202239253305306317320 30000000 401 017033042202239253305306317320401
  9. 9. MIS Training Institute Session C6- Slide 18 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Implementation of New System AP Invoice Entering AP Displaying AP Payment Displaying A/P Clerk Enter & Park Invoice Correct Invoice Vendor Displaying Invoice Displaying View Payment History Security in SAP EBR=
  10. 10. MIS Training Institute Session C6- Slide 22 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Implementation of New System Position Title Total EBRs per Position 26 Positions with more than 10 EBRs 513 615 Positions with between 2 and 9 EBRs 1869 1370 Positions with one EBR 1370 3752 General Foreman 70 Mechanical Supervisor 50 Senior General Foreman 41 Business Analyst 9 Management Trainee Mechanical 2 Manager Administration 2 Bililng Clerk 1 Conductor 1 Account Manager 1
  11. 11. MIS Training Institute Session C6- Slide 28 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Background: • Management Assistance Project • Approaching the end of a long term contract • The company planned to extend the contract • The contract’s terms were very complex Long Term Vendor Monitoring
  12. 12. MIS Training Institute Session C6- Slide 29 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Long Term Vendor Monitoring What is a wheel set?
  13. 13. MIS Training Institute Session C6- Slide 30 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Long Term Vendor Monitoring Why is the contract complex? • Prices adjusted quarterly • Up to 10 price variations for each size wheel • Prices affected by volume • Prices affected by fallout • Prices affected by availability of 2nd hand components • Prices affected by multiple indexes
  14. 14. MIS Training Institute Session C6- Slide 31 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Long Term Vendor Monitoring Risk Assessment: Why do we care about wheel sets? • Safety • Efficiency • Replacement cost
  15. 15. MIS Training Institute Session C6- Slide 32 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Outsourcing Risk • Culture and knowhow associated with in- house production • Control of price and supply of a critical part Long Term Vendor Monitoring Risk Assessment:
  16. 16. MIS Training Institute Session C6- Slide 33 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Pricing Analysis • Basic trends over time showed steady increases • How did we determine what was driving the increases? • Trend analysis on individual pricing components Long Term Vendor Monitoring Integrating Data Analysis into the Audit:
  17. 17. MIS Training Institute Session C6- Slide 34 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Long Term Vendor Monitoring Integrating Data Analysis into the Audit: Trend Analysis of Price Inflation Related to Product Mix Change in Avg. Price Affected by Changes in Volume Price
  18. 18. MIS Training Institute Session C6- Slide 35 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Long Term Vendor Monitoring Integrating Data Analysis into the Audit: Are the Right Products Getting to the Right Places? • Pricing model impacts how wheel sets should be distributed • Some locations should have an above average distribution of certain wheel types • Use ACL to verify that the vendor appropriately distributes wheel sets
  19. 19. MIS Training Institute Session C6- Slide 36 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Long Term Vendor Monitoring Integrating Data Analysis into the Audit: • Verify wheel sets are shipped from appropriate locations • Verify cost efficient mode of transport  Wheels can be shipped by truck or rail  Perform regression analysis on freight charges to verify expected relationship between distance and cost
  20. 20. MIS Training Institute Session C6- Slide 37 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Long Term Vendor Monitoring Regression Analysis: Predicted Relationship Between Miles and Freight Cost 0 500 1000 1500 2000 CostofFreight Distance - Miles Recalculated truck rate Predicted Recalculated truck rate
  21. 21. MIS Training Institute Session C6- Slide 38 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Long Term Vendor Monitoring Regression Analysis: Actual Relationship Between Miles and Freight Cost 0 500 1000 1500 2000 CostofFreight Distance - Miles Predicted Freight_Amt Freight_Amt
  22. 22. MIS Training Institute Session C6- Slide 39 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Long Term Vendor Monitoring Management Communication: • How do you make sense of a complex pricing model?  A picture is worth 1,000 words  Focus on manageable components within a complex system
  23. 23. MIS Training Institute Session C6- Slide 40 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Why Professional Fees: • Management Assistance • Complexity • Legacy Vendor Professional Fees Monitoring
  24. 24. MIS Training Institute Session C6- Slide 41 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Develop an understanding: • Who are the players? • What do I have to work with? • Can we talk? Professional Fees Monitoring
  25. 25. MIS Training Institute Session C6- Slide 42 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Validate billing Process: • Are the bills accurate and supported? • Are we paying our share only? Professional Fees Monitoring
  26. 26. MIS Training Institute Session C6- Slide 43 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Mining for anomalies: • What don’t we know? • How do we find out what we don’t know? Professional Fees Monitoring
  27. 27. MIS Training Institute Session C6- Slide 44 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Value added results: • Identified higher billing hour trends  Potential “padding” by employees  Potential “padding” by event Professional Fees Monitoring
  28. 28. MIS Training Institute Session C6- Slide 45 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Professional Fees Monitoring
  29. 29. MIS Training Institute Session C6- Slide 46 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Professional Fees Monitoring
  30. 30. MIS Training Institute Session C6- Slide 47 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Value added results: • Identified “open” files that accrued overhead billings  Event aging by Action Date  Event aging by Submission Date Professional Fees Monitoring
  31. 31. MIS Training Institute Session C6- Slide 48 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Professional Fees Monitoring
  32. 32. MIS Training Institute Session C6- Slide 49 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Professional Fees Monitoring
  33. 33. MIS Training Institute Session C6- Slide 50 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Driving Value: • Timely information • Process Improvement • Future benefits Professional Fees Monitoring
  34. 34. MIS Training Institute Session C6- Slide 51 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation P Cards at NS: • Program Statistics • Policies and Processes • Program Risks Continuous Monitoring – P Cards
  35. 35. MIS Training Institute Session C6- Slide 52 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Prior Audit findings: • Lack of Proper Approval • Missing Documentation Continuous Monitoring – P Cards
  36. 36. MIS Training Institute Session C6- Slide 53 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Applying the knowledge: • Using the right tools • Developing the “red flag” indicators • Utilize Continuous Monitoring Continuous Monitoring – P Cards
  37. 37. MIS Training Institute Session C6- Slide 54 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Continuous Monitoring – P Cards
  38. 38. MIS Training Institute Session C6- Slide 55 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Continuous Monitoring – P Cards
  39. 39. MIS Training Institute Session C6- Slide 56 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Timely Monitoring: • 2006 3rd Quarter review • Red flag queries in the online system • A curious set of transactions Continuous Monitoring – P Cards
  40. 40. MIS Training Institute Session C6- Slide 57 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Continuous Monitoring – P Cards Time for leg work: • Look for trends • Validate your theory
  41. 41. MIS Training Institute Session C6- Slide 58 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Continuous Monitoring – P Cards
  42. 42. MIS Training Institute Session C6- Slide 59 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Continuous Monitoring – P Cards
  43. 43. MIS Training Institute Session C6- Slide 60 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Continuous Monitoring – P Cards Driving Value: • Discipline and Consequences • Process Improvement • Additional Monitoring opportunities
  44. 44. MIS Training Institute Session C6- Slide 61 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Closing Summary Analyze SimplifyCommunicate Listen
  45. 45. MIS Training Institute Session C6- Slide 62 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Questions?
  46. 46. MIS Training Institute Session C6- Slide 63 © Norfolk Southern Corporation The views and opinions are those of the author and do not necessarily represent the views of Norfolk Southern Corporation Jennifer Schilke – jennifer.schilke@nscorp.com Mike Tuck – mike.tuck@nscorp.com Kevin Nicholson – kevin.nicholson@nscorp.com Contact Information

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