0 McGraw Hill Financial | Presentation Taking our GBS Organization on the Next Step of its Journey Tom Hallett, Vice President of Global Business Services

1McGraw Hill Financial | Presentation

• Taking our GBS Organization on the Next Step of its Journey

• Tom Hallett, Vice President of Global Business Services

• 9+ years at McGraw Hill • Finance, Accounting, Consulting/Project

Management roles at Accenture and Ernst & Young• CPA, PMP, MBA

Introduction


McGraw Hill Financial is a Leading Provider of Ratings, Benchmarks, Analytics & Research

Premier provider of high quality data, analytical tools and ratings information

The leading index provider

Principal provider of commodity price assessments and information

Primary quality benchmark provider with deep auto expertise

Leading rating agency

Leading Indian rating agency, analytics and knowledge process outsourcing


A Truly Global CompanyNorth America

Headcount 5,000

Revenue $ 3.1B

31 Countries 96 Global Offices

EMEAHeadcount 2,000

Revenue $ 1.2B

Asia PacificHeadcount 9,500

Revenue $ 0.5B

Latin AmericaHeadcount 500

Revenue $ 0.1B~17,000 Employees

3


From Transition to Transformation – A "Brief" History at McGraw Hill Financial

ERP Implementation

Outsourcing and Op Model Standup

GBS?

CPI & Transformation

• Core Financials • 3 “go lives” in 18 months• Legal entity restructuring• New chart of accounts• No customization

• 350+ positions in scope• Contract signed in May; first

transition in July • “Lift and Shift” approach

2010 - 2015

Portfolio Rationalization


If it worked the first time for Finance……

Transitioned from Lawson HR to a Workday solution; a mix of “fix and shift” and “lift and shift”

HR BPO on a smaller scale relative to finance focused on Workday capabilities, call centers and some other “odds and ends”

Applied learnings on vendor management and cutover planning from FAO projects

Understood how to take a global system implementation and outsourced services live in a single deployment

Moving to GBS?


Transition LearningsPEOPLE: Assign a leader; manage expectations (e.g., the watermelon rule), understand cultural differences; over communicate

TECHNOLOGY: Don’t underestimate connectivity lead times and application access requirements

PROJECT MANAGEMENT: Not everyone is cut out to be a Project Manager. Understand how a tollgate should work

PROCESS: Assess how your internal controls are impacted. If lifting and shifting don’t expect a different result

GEOGRAPHY: Understand international requirements (e.g., consultation, language and localizations)

GOVERNANCE: Assign decision rights, RACI’s are great tools


Governance starts early and runs through the entire transition process

Phase 3 – “Transition Planning”

Key Deliverables and Timeline

Phase 1 – “Baseline, Opportunities identification & RFP Development”

Phase 2 – “Provider Selection & Contract Negotiation”

MM/DD MM/DD MM/DD

$3.3

$9.8

TOTAL

$6.6

LATAM

$0.3$0.1 $0.2

APAC

$0.8

$0.1$0.6

EMEA

$0.9

$0.2$0.7

USA

$7.9

$2.9

$5.0

MHE

MHF

HR Shared Services Global In-scope FTEs

HR Shared Services Global Cost ($M)

1

2

1

3

TOTAL

86

26

60

LATAM

4

APAC

13

11

EMEA

9

8

USA

60

22

38

MHE

MHF

• Refreshed baseline

7.7

-33%

Future StateReset Levels/Optimize Spans & Layers

0.4

Push Envelope on Outsourcing

1.2

Right size to support post

spin workload

2.3

Revised HR SS Baseline

11.6

HR Estimated Savings ($M)

# of FTEs 100 23 30 0 47

PRELIMINARY

MHE Contributes to ~ 25% of annual work volume

Includes call center, payroll

Service delivery is assumed onshore

Re-grade existing positions above grade 21

Six positions are impacted

• Preliminary opportunities• Business Case• Outsourcing scope

• Vendor Shortlist• RFP released

Through strategic investments in the F&A services, Genpact has operationalized a suite of superior tools to drive transformation: Akritiv, Proflow and Questor

Transition plan targets completion in Q4 2012 & was supported by a very detailed knowledge transfer approach which minimizes risks by supporting Atlas launch1

Has outperformed all suppliers across all towers and all solution components during solution sessions, India site visits and BAFO solution responses

Genpact’s Six Sigma approach has created a transformational culture that will drive continuous improvements (committed FTE productivity rate of 22%2)

Reasons for Selecting ABC

Strategy & Tools

Consistent Leader

Transition Plan

Transformation Plan

2.69

3.44

3.74

2.91

3.56

3.85

1.65

ABC

14.96

3.67

3.70

V2

12.52

2.40

3.12

V3

9.77

2.52

Solution Session I

Solution session 2

Site Visit

BAFO • Provider down select• Provider due diligence• Deal economics

Executive SponsorMichelle Ferguson

People Retention & TransitionTBD

Change Management & Communications

TBD

Contract NegotiationsKevin GiblinJeff Mitnick

Executive SponsorMichelle Ferguson

Transition Mgmt. Ofc.Tom Hallett

Finance & Contracts Mgmt.Rae Ann Wroblewski

MHE Specialty Accounting Mgr.

TBD

MHE Order-to-Cash Manager

TBD

MHF Order-to-Cash Manager.

TBD

MHF/MHE Record-to-Report

ManagerTBD

MHF/MHE Purchase-to-Pay

ManagerTBD

Transition LeadTBD

MHE Payroll Manager

TBD

MHE HRMS Manager

TBD

MHF Payroll Manager.

TBD

MHF HRMS Manager

TBD

Transition LeadTBD

Transition LeadTBD

Transition LeadTBD

Transition LeadTBD

Transition LeadTBD

Transition LeadTBD

Transition LeadTBD

Transition LeadTBD

Steering CommitteeJack CallahanJohn Berisford

BU Presidents/

CFOsAdvisory

Board

HR Leadership

Team

100%Commitment

50% TimeCommitment

HR OutsourcingMary Beth DrakeMaryellen Valaitis

Finance & Accounting Outsourcing

Bernie Drackwicz

50% TimeCommitment

• Governance structure, processes, decision rights

ProcessWorkload

driver# of

FTEs

Total Annual Volume

MHF Annual Volume

Total Man-hours

requirements per year

Man-hour per unit

Reduced FTE

Call CenterRemedy Tickets

7 20195 13127 12950 0.6 2

Data MgmtRequest

handled5 11802 7671 9065 0.8 2

HRIS AdminSimple Request Handled

3 11015 7490 5550 0.5 1

HRIS AdminComplex Request Handled

3 8629 5868 5550 0.6 1

Payroll Services

[Total Annual Payments 2011]

11 2367 1184 20350 8.6 6

Other Processes

N/A 6

Sub - Total 18

• Target state design

Baseline

Opportunity Identification

Providers Down Selection / Due Diligence

Contract Readiness / LOI

Governance Model Defined

Transition Plan & PMO Stand Up

Retained Organization Right-sized, Right skilledRFP Issued

• Detailed Transition plan/timing

• Risks & Mitigation Plans

• Key deal terms• BAFO• Letter of intent executed


Moving to GBS

So what’s next?


Our focus is to move from a “back office” service provider to trusted partner

Develop relationships and credibility with the business; help business understand the value proposition

Go beyond SLAs and leverage process health metrics to evaluate performance

Provide self service tools that are intuitive and easy to use

Leverage data to produce insight and analytics to support decision making

Design for global, localize where supported by legal and regulatory requirements

Create transparency around costs and services; run like a business, benchmark against peers

Look at the process through an end to end lens; standardize and automate


Process Focus Areas

• Consolidate Procurement and Disbursements teams to support E2E process• Redesign internal website to simplify buy, pay and travel for employees• Expand Ariba footprint • Implement master data management solution• Provide tools to increase transparency and enhance business unit reporting and

analysis

• Transition from regional model to COEs• Deploy BlackLine to enhance visibility and control over account reconciliations• Create operational dashboards to drive better decision-support capabilities

S2P

RTR

Project Priorities


Reporting and Analytics Focus (sample)

• Create Transparency across the company, awareness of policy and processes to take action and manage spend


Process Focus Areas

• Reorganize to reflect as a global business service• Implement self service tools (electronic invoicing and payment)• Consolidated end-to-end OTC operations for some key businesses • Transition strategic accounts to offshore collections team• Implement and enforce suspension policies • Prepare for the big one…

• Evaluate shift from FTE to piece based pricing approach • Revisit business continuity planning• Evaluate impact of incentive programs on attrition and performance• Develop service catalogs to communicate with the business and measure our

performance

OTC

Overall

Project Priorities


Added “smart” T&E Audits

Transitioned Financial System Security offshore

Moved customers off “do not call list” into collections scope

Closing our Latin America delivery center

Established a buying center to support compliance, tactical buying, system management and helpdesk support

In addition to optimizing existing scope, we expanded and adjusted the portfolio


Make Six Sigma and Lean a part of our DNA

Evolve metrics beyond SLAs and process health to focus on customer experience and satisfaction

Redefine what “talent” means in shared services / GBS

Manage knowledge vs. attrition

Become a destination for enterprise services across the organization

Looking Further Ahead

Documents

0 McGraw Hill Financial | Presentation Taking our GBS Organization on the Next Step of its Journey Tom Hallett, Vice President of Global Business Services