© HCL AXON 2012 – Commercial in Confidence1

HCL Benefits Approach Presentation

High-Level Overview January 2013

© HCL AXON 2012 – Commercial in Confidence

2Companies that explicitly use Benefits Realisation techniques perform better

2 xMORE LIKELY

to attain value “on” or “ahead of” time

1.9 xMORE LIKELY

to deliver “on” or “below” budget

benefits achieved

53%HIGHER

return on investment

60%HIGHER

Companies with high benefits realization best practice adoption realize:

(1) Performance of companies with high level of best practices adoption compared to those with low levels of adoption

…and execute projects that are:

© HCL AXON 2012 – Commercial in Confidence

3Failing to Address Benefits is a Key Lesson

Concerns Pre Implementation Mistakes Noted After Implementation

The State of ERP Services Multi-Client Study source META Group (now Gartner)

Scale 1=Unimportant, 5=Very Important

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The Role of Benefits Realisation

• Technology-enabled transformation programmes support business strategy and improve business outcomes.

• These programmes are costly. – Costs are managed within the programme– There is pressure on costs to increase– Programme Governance supports cost control

• Benefits are realised within the business;– There is pressure on benefits to decrease– Controls of benefit are not generally part of the programme

• Benefits realisation:– Ensures the programme enables the anticipated benefits; and– Actively manages the realisation of benefits through changes across the business

4

Cost

Benefit

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Benefits Realisation and Programme Delivery

Programme dimensions

and the role

benefits

Programme dimensions

and the role

benefits

Time

Scope

Cost Value

Directly links the programme with the

realisation of business outcomes

Shapes program scope through benefits-led

design

Maximises return on investment by aligning

scope and costs around benefits

Facilitates investment approval

© HCL AXON 2012 – Commercial in Confidence

6From the outset a non-emotional, objective story needs to be developed

Align Top Management

Agree the key business drivers for benefits

Sign off top down to get accountability

Ensure Accountability

Understand the detailed benefits areas Sign off benefits cards Agree benefits realization plans Agree review and tracking mechanism

Integrated Process Design

Ensure functional design optimizes the realization of the identified benefits

Use SMEs to prove the benefits with business owners

Top

Do

wn

Bo

tto

m U

p

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7The HCL Benefits Realisation process goes beyond identifying Benefits to deliver value to the client P&L

Benefits Tracking and

Reporting

Benefits Management

Change Control

Programme Governance

Benefits Recognition

Benefits Identification

• What are the benefits

• How much are they worth

• How will they be delivered

The actual process of delivery i.e.:• Strategic

sourcing• FTE reduction• Rolling out

Direct Debits and P Cards

• Changing the way client investments decisions are made

• Weekly reporting on a exception basis focuses efforts

• Based on performance there may be a change in approach mid flight

• How and when are the Benefits realised

• How does Benefit recognition get communicated and actioned in the client

• Benefits will report into the programme on a regular basis and follow the programme governance requirements

Any material change to Benefits levels gets managed through Change Control

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8Our Benefits Realisation Method

Identify Understand Realise Operate and Improve

Design

Identify Embed Enable Validate Deliver

Identify strategic objectives and develop associated benefits hypotheses and tactical performance improvement opportunities

Validate benefits opportunities and test hypotheses through detailed operational analysis. Secure stakeholder agreement to benefit targets

Design benefit driven Target Operating Model. Specify drivers for realisation and incorporate into programme planning activities. Enable benefits through prioritisation and delivery of technology & business activities

Manage benefits realisation through programme delivery, stakeholder management, operational management and business problem solving Tracking & monitoring in place.

Embed the benefits realisation approach and management mechanisms into BAU. Implement continuous improvement mechanisms

© HCL AXON 2012 – Commercial in Confidence

9Our Benefits Realisation Method

Identify Embed Enable Validate Deliver

Benefits Strategy

Outline Benefits Inventory

Outline Benefits Case

Validated Benefit Inventory

Agreed Benefit Cards

Governance Model

Dependency Maps

Realisation plans

Solution & reporting design review & sign off

Benefits Baseline

Solution sign off

Adjusted performance objectives

Performance Reports & Trend Analysis

Targeted interventions

Improvement opportunities

Target business outcomes agreed

Agreed business outcomes confirmed and owned within the business

Business solution enables business outcomes defined in business case.

Business ready realise benefits

Benefits realised

Benefits realisation best practice adopted

Activ

ity

Key

Task

sO

utpu

tO

utco

me

Identify strategic objectives and develop associated benefits hypotheses and tactical performance improvement opportunities

Validate benefits opportunities and test hypotheses through detailed operational analysis. Secure stakeholder agreement to benefit targets

Design benefit driven Target Operating Model. Specify drivers for realisation and incorporate into programme planning activities. Enable benefits through prioritisation and delivery of technology & business activities

Manage benefits realisation through programme delivery, stakeholder management, operational management and business problem solving Tracking & monitoring in place.

Embed the benefits realisation approach and management mechanisms into BAU. Implement continuous improvement mechanisms

© HCL AXON 2012 – Commercial in Confidence

10Detailed Activity

Phase ActivitiesIdentify • Agree opportunities

• Identify Owners• Confirm scope (eg business unit and geography, other organisation scope issues)• High-level estimates for prioritisation• Create initial benefits inventory

Validate • Review existing documentation• Determine data availability]• Define data required, gather & analyse data• Confirm baseline• Agree targets• On-going stakeholder meetings – benefits owner(s)• Document dependencies – system (validation against blueprint), process, organisation etc• Benefit specific risks• High-level benefit strategy (eg how will benefit be recognised – headcount reduction, improved efficiency

through growth• Sign-off benefit cards

Enable • Develop dependency maps & realisation plans• Dashboard design – (Data entity, Data source(s) & validation, Calculations, Format, Timing etc)• Mock up, iterate & sign-off prototype• Determine on-going benefits realisation governance

Embed • Tracking realisation plans – establish process & handover• Financial/Performance target changes defined and embedded• Test scripts validated against benefits requirements/dependencies (would like to understand the test

strategy to ensure we integrate effectively)

Deliver • Realisation reporting• Benefits management – stakeholder engagement, identification of mitigation actions, driving action plans.• Continuous improvement

© HCL AXON 2012 – Commercial in Confidence

11Stage 1: Identification of Benefits

Identification

• Corporate Objectives• Executive Objectives• Key Business Contacts

• Peer Group Benchmarks• Business Knowledge• Industry Benchmarks

• Executive Input

Activities • Top down analysis of corporate / executive objectives and alignment with potential benefits

• Analysis of tactical and near term operational performance issues

• Establish scope & timeframe• Establish required analysis

levels & data availability• Identify & initiate key stakeholder

engagement

• Obtain data & business insight• Bottom up analysis of potential

benefits in each segment, i.e. Customer Service, Billing, IT

• Provide assumptions for 1st cut benefits

• High level analysis of current performance vs internal and external benchmarks

• Validate & update benefits with key personnel

• Identification of benefit owners• Identification of associated

operational management• Planning for the next phases

Deliverables • Strategic and tactical benefit drivers

• Engagement with key personnel

• Outline Benefits Inventory• Initial benefits case, to be

confirmed by review process

• Benefits Strategy - agreed framework and measures of success

• Outline benefits case• Key risks & assumptions

Outcome Target business outcomes , associated outline benefits case and benefit strategy agreed

Objectives & Key Stakeholder Engagement

Data Analysis & Initial Benefits Profile

Steering Group Presentation – Approach & Outline

Benefit Case

Inputs

Steps in Identification Process

Identify Understand Realise Operate and Improve

Design

© HCL AXON 2012 – Commercial in Confidence

12Stage 2: Validating Benefits

Validation

• Project Scope• Business Unit Data• Outline Business Case

• Updated Benefit Cards• Realisation Schedule

• Executive Input

Activities • Agree benefits types• Validation 1-2-1 meetings with

key stakeholders• Agree scope of improvement• Agree benefit multipliers• Agree baseline definitions

• Define and document detailed dependencies, risks & assumptions

• Interview key personnel• Ensure that benefits (and

baselines) can be measured• Agree benefits cards

• Sign off cards and benefits case

• Understand and include benefits as a key driver for business transformation

• Refresh benefits inventory• Define benefits governance

Deliverables • Validated Benefit Cards• Cash flow of benefits delivery

• Required reporting structure for benefits

• Signed off benefits cards

• Validated Benefits Inventory• Finalised benefits case• Governance Model

Outcome Agreed business outcomes confirmed and owned within the business

Detailed Benefits Analysis Sign-Off with Benefits Owners

Steering Group Presentation – Full Benefit Case

Inputs

Steps in Identification Process

Identify Understand Realise Operate and Improve

Design

© HCL AXON 2012 – Commercial in Confidence

13Stage 3: Enabling Benefits

Enablement

• Project Scope• Benefits Inventory• Full Business Case

• Benefit Dependency Maps• Benefit Realisation Plans• Executive Input

Activities • Document detailed benefits dependencies

• Identification of “Quick wins” that are not dependent on other specific deadlines

• Creation of reporting requirements to allow measurement of ongoing benefits areas

• Obtain business understanding of challenges

• Validate challenges of potential benefits; identify solutions to challenges

• Agree and embed benefit realisation requirements within technical design & documentation

• Presentation / agreement on actions to overcome the top challenges to achieve the identified benefits

• Ensure that identified dependencies are being addressed by the business

• Develop benefits reporting approach

Deliverables • Benefits Dependency Maps• Quick win implementation plan

• Agreement on owners and responsibilities to overcome the challenges identified.

• Benefits Realisation Plans

• Agreed action plan• Migration strategy• Transformation dashboard &

benefit reporting defined

Outcome Business Solution enables the outcomes defined in the benefits caseSuccess can be measured and reported on by the business solution

Develop Dependency Maps & Identify Quick Wins

Agree Realisation Challenges

Steering Group Presentation – Full Benefit Case

Inputs

Steps in Identification Process

Identify Understand Realise Operate and Improve

Design

© HCL AXON 2012 – Commercial in Confidence

14Stage 4: Embedding Benefits in the Transformed Organisation

Embed

• Realisation Plans• Challenges to Realisation• UAT output

• Benefit Cards• Realisation Plans• Challenges to Realisation

• Strategic Roadmap

Activities • Confirm ongoing benefits governance approach

• Review assumptions and dependencies against solution test output.

• Finalise performance baselines• Identification of issues that still

hinder benefits delivery• Integration with business

readiness

• Report against benefits realisation• Escalate benefits realisation

issues as appropriate• Extend ownership of ongoing

activities and capability for continuous improvement

• Assess and sign off [programme owned] benefits that have been delivered

• Assess new opportunities for improvement

• Ensure benefits targets are reflected in budgets and performance objectives

• Move to “business as usual”

Deliverables • Agreed action plan to ensure the benefits delivery

• Benefits baseline

• Progress and performance tracking

• Communication plans for stakeholders

• Continuous improvement approach and tools

• Identification of new strategic priorities

Outcome Business ready to realise benefits

Review of Challenges & Benefit Realisation Plans

Agree Actions to Ensure Delivery of Benefits

Identification of Next Phase of Benefits Realisation

Inputs

Steps in Identification Process

Identify Understand Realise Operate and Improve

Design

© HCL AXON 2012 – Commercial in Confidence

15Stage 5: On-going Benefit Delivery

Delivery

• Realisation Plans• KPIs

• Performance Reports & Trends

• Realisation Plans

• Strategic Roadmap• Benefits Methodology

Activities • Identification of performance issues against target

• Historical trend analysis of operational and benefit measures

• Detailed analysis on performance issues where out of tolerance.

• Focused intervention plan to address performance issues

• Training and coaching key stakeholders in performance challenge impacts and need for intervention

• Clear results plan for success

• Hold “awareness and understanding” sessions on performance management

• Review and revise performance targets and tolerances

• Training in Benefits methodology to support ongoing programmes

Deliverables • Performance reports• Trend Analysis

• Results plan• Communication plans for stake

holders

• Training and communication sessions

Outcome Benefits RealisedBenefits management adopted as standard business practice

Ongoing Performance Review

Escalation & Targeted Interventions Driving Cultural Change

Inputs

Steps in Identification Process

Identify Understand Realise Operate and Improve

Design

© HCL AXON 2012 – Commercial in Confidence

Case Studies: IT Delivering Business Solutions

Global Leader in Document Management Products and Services

Business Solution: Automation of service management and scheduling process• drive engineer efficiency through optimised

routing•Real time data means 2hr response time can be

met without increasing headcount•Customer service levels increase while costs

decreaseBenefits:•Direct, easily measurable benefit in cost to serve –

major contributor to a package of benefits contributing to £5M a year in savings.

•Less tangible benefit in customer loyalty and business growth

$30Bn Diversified Technology Manufacturer

Business Solution: Real time visibility of materials to support best practice supply chain and manufacturing processes•Reduction in warehouse headcount by a 19%•Reduction in stock levels of 10%•Reduction in cycle time of 2-5%•Financial Benefits Exceeded original benefits case

and validated base target.

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• 12,000 Users• 80 Locations• 18 Countries

•Integration of acquired business on a common platform

•$250m in projected benefits

• $5.4 Bn revenues• 22,000 Employees• 90 Facilities• 16 Countries

•Build and deploying long term SC solution including Demand Planning, Supply Planning and Available to Promise

•Forecasting to link flying hours and cycles with spare parts forecast

•Planning master data cockpit to provide a single point to monitor data like safety stock, lot size.

• $475 in projected benefits

• $450 Mn Revenues• 1,350 Employees• 9 Mfg Dist Svc Ctrs

•Served as the lead integration partner for implementing SAP’s TP/VS Solution

•Project completion in 4 months•Integrated 2 third party products:

•Ortec LEO VSO for stacking rules and load building of shipments

•Rand McNally for practical miles (versus generic geo-coding) input for route optimisation

• Reduce number of stops by 10%

•Reduce total number of miles travelled by 2%

•$5.6 Bn Revenues•19,000 Employees•24 Manufacturing Centres•200 Distribution Centres

•Increased visibility to inventory availability at various locations and customer requirements

•Improved visibility of inventory, response time to order requests was reduced. This resulted in higher fill rates and on time deliveries

• $32m in projected benefits

• $250 Bn Revenues• 1000 Users• 7 Countries in scope

•Global transformation and IT implementation for BP’s Trading Settlement and Finance teams.

•>$00M’s Capital Reduction benefits realised over 5 years.

•Procurement benefits realising >$80m per year

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• $4.2B Revenues• 12,000 Users• 14 Countries

•Strategic ERP implementation.•Benefits focus on Procurement and Partner & Customer support performance and cost reduction

•$54m annual benefits

• 35,000 Employees• £3.5B budget

•Full scope ERP (Finance, Procurement, HR) & CRM Implementation

•Business transformation of core organisation

•£1.56b projected benefits over 10 years

•£942m cashable savings•£646m cashable realised to date (2 years)

• $6.2B Revenues• 2,000 Users• 2.4 M Customers

•SAP ERP implementation•Benefits focus on Customer Revenue Growth, Supply Chain & Finance Processes, Improved speed to market

• $250M benefits over 5 years•Revenue growth, service cost reduction & capital savings for services to 2.4M customers

•$980M Revenues•3,000 Employees

•Full scope ERP implementation•Supply chain transformation

• £49m benefits realised

• $46B Revenues• 84,000 Employees• 1000 Users• 14 Countries in scope

•Global HR Shared Service Centre Implementation •??

• £44B Revenues• 36,500 Employees

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HCL AXON delivers results

Full scope SAP-enabled transformation “Axon delivered $250M of financial benefits” – David Snowden, Program Sponsor, Transport for London $50m budgeted benefits case $250m realized benefits case

Full scope SAP-enabled transformation “Axon is great at project delivery and benefit realisation ” – Brendan Arnold, Director of Finance, Birmingham City Council $1.56 billion target 10 year benefits target $942 cashable - $646m realized to date

SAP-enabled Supply Chain transformation “Axon delivered a structured approach to

accelerated benefits realization” – Mike Jones, CIO $49m cashable benefits realized to date

© HCL AXON 2012 – Commercial in Confidence

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HCL AXON Have Used IT to Deliver Measurable & Sustainable Benefits for Many of Our Clients

Global Transformation and IT implementation for BP Trading’s settlement and finance teams

• >$100Ms of Capital Reduction benefits currently being realised over a 5 year period

• Procurement Benefits of $80M p.a. being realised

Strategic ERP implementation: benefits focus on Procurement and Partner & Customer Support performance and cost reduction

• £5M / year: Simplified pricing, service provision and logistics

• $47m / year: $4m resource efficiency, $18m compliance, $25m contract re-negotiation

Major IT implementation: benefits focus on Customer Revenue Growth; Supply Chain; Finance Processes

• £10 M / year working capital savings;• £25 M / year cost reduction benefits;• £35 M / year of revenue generation benefits

SAP ERP implementation: benefits focus on Customer Revenue Growth; Supply Chain; Finance Processes

• $250 M of benefits being realised over 5 yrs - revenue growth; service cost reduction and capital savings for services to 2.4m customers

Full Scope SAP ERP Transformation • £1.56 Billion benefits target over 10 years• £942 M Cashable savings with > £646 M realised

IT enabled Supply chain Transformation• £50 Million budgeted benefits case• £250 Million of supply chain and capital savings actual

benefits case