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Event driven business planning


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Vuoden toinen tapahtuma sarjassa Business Insight pidettiin 17.3.2016. Jyri Peltoniemi, Lead Enterprise Architect (Finance development), Tieto Oyj aloitti puheenvuorollaan Event Driven Business Planning. Miten suunnitella konkreettiset liiketoiminnan toimenpiteet, joilla päästään strategiassa asetettuun tavoitetilaan? Kuule miten Tieto teki kolmivuotissuunnitelman, jossa jokaisen suunnitellun toimenpiteen vaikutus mallinnetaan ja arvioidaan ennen suunnitelmaan mukaan ottamista. Adaptiven joustavuus tuki mallin kehitystä ja helppokäyttöisyys loppukäyttöä.

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Event driven business planning

  1. 1. Public Event Driven Business Planning Case Tieto 2016-03-17 Jyri Peltoniemi Lead Enterprise Architect Tieto, Finance Development
  2. 2. © Tieto Corporation Public Agenda • Tieto as Company • Starting point for development • New approach for planning • Prerequisites • Event driven planning • Future 2
  3. 3. Public This is Tieto
  4. 4. ©Tieto Corporation4 Tieto is the largest company in the Nordics that provides full lifecycle services in IT, as well as product development, for private and public organisations. Building on our Nordic heritage and values, we have global capabilities and a strong presence where our customers need it – in the Nordics or via global delivery centres across the globe. We employ over 13 000 experts in close to 20 countries. Operating countries in IT services in Finland #1 Among top players in telecom R&D in Europe in IT services in Sweden Among top 3
  5. 5. © Tieto Corporation Financial facts 5 Financial Services 24% Manufacturing, Retail and Logistics 21% Public, Healthcare and Welfare 30% Telecom, Media and Energy 15% Product Development Services 10% Managed Services 35% Consulting and System Integration 27% Industry Products 28% Product Development Services 10% Managed Services 29% Consulting and System Integration 21% Industry Products 41% Product Development Services 9% EBITbyServiceLine*) Customersalesin2015:EUR 1 460 million EBIT margin excl. one-off items*): 10.3% Tieto’s market position: Market leader in Finland Among top 3 in Sweden Among top 7 in Norway SalesbyServiceLine Sales by industry group *) Excluding capital gains, impairments and restructuring costs
  6. 6. How it was?
  7. 7. © Tieto Corporation Internal TietoFacts Planning process status was quite low due to scattered tools and unclear roles 7 Strategic level (3- 5 years ) Tactical level (year ) Operational level (Quarters) Business Managers Finance Partners Customer/Delivery Executives/Managers Finance Controllers TietoPlanningTietoPlanning TietoFacts TietoPlanning TietoPlanning TietoFacts What are your personnel expenses cost center xx in Dec- 18? Internal trade between Sweden and India during Q3-17?
  8. 8. New approach for planning
  9. 9. © Tieto Corporation Internal Target is to have clear roles and adequate toolset for planning 9 Strategic level (3 years) Tactical level (year) Business Manager Finance Partner New Customers? New Offering? Production plan? P/L BS Cashflow Cost per FTE? Capex investment?
  10. 10. © Tieto Corporation Prerequisites for event driven planning 10 Source Data - Deliveries - Employees - Customers Model - Offering - Country - Role - Site - Industry Tool - Data input - Modelling - Reporting Operative Accounting (ABC)
  11. 11. ©Tieto Corporation11 External Revenue Effort FTEs Unit FTEs Net Sales Delivery Margin Gross Margin Operative Margin Contribution Margin Profit Margin EBIT OPERATIVE ACCOUNTING INTERRELATED MEASURES FINANCIAL ACCOUNTING Planning Model ACT&FC • Drivers • Measures • Scaling USER INPUT • Baseline • Future events • Scenarios LONG-TERM PLAN BRIDGE TO FA • Internal trade • Other Calculation of FTEs
  12. 12. ©Tieto Corporation12 Planning Workflow Kick-off Business Mix, etc. TBD Define L2 ambition by Business Mix Verify and modify baseline Plan Future Events Build Scenarios Submit Scenarios Review/ Approve Long-term Plan TietoLTL2Businessunit Feedback if ambition should be changed Change L2 ambition Change selection Create new; change events
  13. 13. © Tieto Corporation Internal Role mix as part of baseline for Cost per FTE 13 20162016 2017 Adjustment is done on provider country/offering portfolio level Job codes are used for defining role mix Role mix change will impact salary and social costs 1 2 3
  14. 14. ©Tieto Corporation14 Plan Future Events Products Main Activities: • Identify future event • Select appropriate template type • Name the selected template • Plan the future event by using several templates SL (incl.IP): Plans future events by using relevant template (pls. see event type specific slides) IG: Plans future events by using ‘Generic’ template (pls. see slide ) SF: Plans future events by using ‘Generic’ template Markets • New Customer • New Large deal • Existing Contract ends • Volume Change • Divestment • New Offering • New Markets entry • Efficiency • GDM • M&A • Other CURRENT CURRENTNEW NEW Templates: Revenue change Revenue change Country Mix Sourcing Mix change Generic Capex
  15. 15. ©Tieto Corporation15 FUTURE EVENT  Modelling of future actions to evaluate financial outcome  A set of planned actions to contribute to scenario creation Manager view on needed investment Manager view on expected new revenue Model drivers based cost and FTEs calculation Manager view on model drivers if different for the specific future event
  16. 16. ©Tieto Corporation16 SCENARIO  Baseline and set of selected future events reflecting different scenarios of a long-term business plan Manager view on future events to be selected Manager view on the need to plan new future events and/or change selection of future events for scenarios
  17. 17. ©Tieto Corporation17 Activities for each of SL (incl. IP), IG and SF: • Select future events to be included in scenarios • Evaluate if the defined ambition level will be reached • Plan new or revise already planned future events • Provide feedback to Tieto LT if ambition levels should be changed Build and Submit Scenarios Future EventFuture Event SCENARIO 1 Pessimistic SCENARIO 2 Realistic SCENARIO 3 Optimistic Future Event Future EventFuture EventFuture Event Future EventFuture EventFuture Event AMBITION Difference Difference Difference BASELINE
  18. 18. Future
  19. 19. © Tieto Corporation Support for changes 19
  20. 20. © Tieto Corporation Internal Baseline for Planning units 20 Input Sheets: ‘Scenario 1’, ‘Scenario 2’, ‘Scenario 3’ Item Prior Year Current Year Plan Year External revenue Data Data Calculation Growth vs prior year, % Calculation Driver Delivery costs (total) Data Data Calculation Delivery margin; kEUR Data Data Calculation Delivery margin; % Data Data Driver Operative costs (total) Data Data Input Operative margin; kEUR Data Data Calculation Operative margin; % Data Data Calculation NCV Data Data Calculation Book to bill Data Data Driver Head of Planning Unit REPORT Dimensions for input: • External revenue, book to bill ratio, delivery margin %: →Planning unit by Offering for SL →Planning unit by Key Customer for IG • Operative costs, kEUR →Planning unit; offering ‘uncategorized’ 1 2 3 4
  21. 21. Public Jyri Peltoniemi Lead Enterprise Architect Tieto, Finance Development