Engagement pricing, budgeting & economics Ready for approval

Engagement pricing, budgeting & economics Ready for approval

Page 2 Program mercury — November design review session

Engagement pricing, budgeting & economics — business requirements

Business need: opportunity pricingAccomplished through solution

Role based access

Price at weekly, monthly, summary level

Price at opportunity, opportunity line item, engagement and activity

Price by rank/grade (summary or individual) or named resource

Model alternative team structures to understand the impact on revenue and margin

Include expenses and single line adjustments in total or by period View key metrics View impact of irrecoverable expenses

Copy previous pricing plan or actuals

Handle cross border engagements

See impact of fee sharing arrangement

Enable consolidated view of engagements relating to single opportunity



Business need: engagement budgeting: as per pricing plus:Accomplished through solution

Retain visibility of “sold at” price for opportunity

Use pricing plan as starting point

Daily as well as weekly, monthly, summary level Weekly only

Model the impact of resource promotions

Create multiple versions; revert to previous versions if applicable Support automated approvals Automate resource requests

Finalize and lock original budget



Business need: engagement economicsAccomplished through solution

View Budget against Actual by:► weekly, monthly or summary level► Rank, rank-grade or named resource► specific period

View “forecast”: actuals to date plus most recent ETC (or original budget if no ETC)

Review engagement metrics

Include “action required” flags on same basis as automated EAF triggers

Retain visibility of original budget and “sold at” price Update ETC on identical basis to budget Use booked resource hours as basis for ETC if required

Send requests to engagement team for ETC collection

Add/remove resources with option to update resource schedules

Review latest ETC hours against resourced hours

Approval process to manage EAF adjustments


Update estimate to complete:

“delivering at”

► 1 plan per opportunity line item► All opportunities must have a

plan created using the Margin Modeling Tool unless they are below the SL threshold

► Client server (CS) launches price plan from line item

► CS selects time period & granularity

► Work effort added: rank / grade or individuals

► CS models alternatives and reviews metrics

► Deal review approval noted (optional)

► Resources soft tagged (optional)► When price agreed, opp partner

approves► Systems based approvals

workflow: approvals to be based on Account (G360) or market segment targets (Core)

► Final price and key metrics locked and displayed in opportunity info

► CS reviews budget to date v actual to date and latest forecast

► CS send requests to team members asking for ETC

► CS adds new resources and rolls off current resources

► CS updates forecast by revising estimate to complete hours or by importing resource booking data

► Additional fees added [in CRM]► Metrics can be reviewed and

updated► CS reviews forecast and booked

hours► Changes to resource hours can

be sent through to resourcing► Consistent visibility of original

plan as well as latest forecast and audit trail of forecast updates over life of engagement

Create engagement budget:

“planned at”

► Price plan forms the starting point for the budget

► Engagement budget required for every new engagement

► CS can “clone” plan, copy in full or part to support the creation of multiple budgets from one price plan

► CS can pull in plan / actual data from other engagements

► CS enters work effort per resource per activity (optional) per week

► CS models alternatives and reviews metrics

► CS sends resource request to resource manager; budget updated with allocated resources (new version)

► If GFS, system calculates EAF for all engagements linked to the opportunity

► EP, OP, GCSP / Market segment lead approves

► Once agreed, original budget is locked and stored in MMT and SAP

Create pricing plan:

“sold at”

Engagement pricing, budgeting & economics –process overview


Engagement pricing, budgeting & economics –process overview

Who we spoke to:

Program Mercury teams:

Opportunity Management

Finance

Revenue recognition

Architecture

Risk & Controls

Change Management

Reporting

Co-existence

SMRs:

SDA SMR Network

Localisation workshops

Tax: Stephen Day, Peter Sand, Alison Eaves

Assurance: Jon Pye, Estelle Billy, Cassandra Wolfe, Rod Grant, Ruchi Gupta, Robert Newton, Stephen Konenkamp (call to be held)

Time Tracker: Seth Golub, Michele Gianonne


Engagement pricing, budgeting & economics – Current State vs. Future State

Area Current State Future State

Visibility of metrics through life of engagement

Significant manual effort to report price, agreed budget and delivery metrics for an engagement

Manual effort required to consolidate results for all engagements related to an opportunity

Visibility and transparency of movements between “sold at” price, “planned at” budget and “delivered at” results.

Easy to update forecast and view audit trail of changes through life of engagement.

All engagements related to an opportunity linked by opportunity ID to support reporting and analysis

Tools Variety of tools: no standard SL or Area approach:

• MMT.net • B&PR• Time Tracker• Local SL/SSL tools• User spreadsheets

Single suite of tools supporting a globally standardized and harmonized approach

B&PR, Time Tracker and local tools to be decommissioned

Metrics Inconsistent metrics and calculations eg cost capping, mergin pre / post PNC

One set of key metrics calculated consistently

Rates Many tools only include local country rates, inconsistent rate data utilised

Single set of bill (NSR) and cost rates applied. Same rates used for plan and actuals

CRM No automated link with CRM Integration with CRM to support user experience and visibility of opportunity related engagement metrics

Resourcing No integration outside B&PR Plans, budgets and ETC can be used to send booking requests and budgets can be updated to reflect assigned resources

Page 8 Program mercury — January design review session

These changes require a significant extension of the current MMT scope

Area Current State Future State

Integration Data feeds from GFIS Integration with CRM, Resourcing and SAP systems

Support for pricing and budgeting process

Plans created for individual engagements

No linkage to opportunities or connected engagements

Supports creation of pricing plans and engagement budgets – separately identifiable

All plans tie back to an opportunity

All engagements related to same opportunity are linked and consolidated metrics can be viewed

User Experience

Functional screens

No mobile access

User interfaces to be redesigned to be consistent with mercury UX

Mobile (tablet) enabled

Resourcing No integration Plans, budgets and ETC can be used to send booking requests

Users can budget by rank/grade or select named resources

Budgets can be updated to reflect assigned resources

Approvals No automated approvals Workflow to support approvals

Record of approval and which version was approved

Supports deal review

Security model Single sign on: user can access own plans or those than have been delegated

Role based access based on opportunity / engagement roles

Additional access can be added

Activities No activity functionality Can be included in plan / budget

Fee sharing No support Supports automation of fee sharing: captures required information from plan and budget and calculates planned “common EAF”

Use of previous data

Copy plans Copy full or partial plans and prior year / other engagement actuals


► The future platform will align with the Mercury and EY User Experience standards being developed and therefore will be redeveloped in Sharepoint

We conducted a detailed fit/gap analysis to review how much of the current tool can be reused

We propose that replacement MMT should be built to align with Program Mercury and EY UX strategy by building it on the EY Standard platforms: including Microsoft SharePoint and .NET frameworks. This will support our approach to streamlined maintenance and operability, thereby keeping costs in line.

► The current application is tightly bound to GFIS source data org and metrics for the calculations it performs. In consequence, a large proportion will need to be reworked to support the new Mercury global processes.

User Interface Reuse 0%

Application Layer Reuse 10 – 20%

► The data layer is highly GFIS centric, therefore most objects will have to be re-worked to support the SAP data modelData Layer Reuse

10 – 20%

► The only existing interface is with GFIS, which will be decommissionedSystems Interface

reuse 0%


Interaction between MMT and Mercury

MMT

EDW

ECC

Exchange rates

PPM

CRM

Opportunity line item data

Pricing info

Org structure

NSR & cost rates

Employee data

Engagement budget;rate card(s)

Resource demand

Resource assignment

Predefined activities

Actuals & ETC

11

10

78

9

5

6

1

2

3

4

Ref #

Data transferred automatically by interface

1 Organisation structure

2 NSR and cost rates

3 Currency exchange rates

4 Engagement budget and rate cards

5 Opportunity line item information re client & account, roles, service code

6 Pricing information: sold at price & key metrics, production value, calendarization

7 Employee data to enable users to select named resources

8 Resource requests

9 Resource assignments: confirmation of booked resources

10 Pre-defined activities

11 Actuals / forecast data to use as basis for creating plan / budget


Ref # Interface SAP complexity

MMT complexity

Rationale for complexity of medium or high

Recommendation

1 Org structure Low MediumMMT – need to identify new or changed records

Essential

2 NSR and cost rates Medium Low SAP – pulls data from multiple tables Essential

3 Currency exchange rates Low Low Essential

4 Engagement budget; rate card(s) High MediumInterfaced data feeds multiple areas of SAP with updates and edits

Essential

5 Opportunity line item information High HighAdditional complexity arising from SAP cloud re middleware and data encryption

Defer to next release

6 Pricing information High High Same as interface #5 Defer to next release

7 Employee data Low Low Include

8 Resource requests High Low Multiple edits and updates in SAPInclude – can leverage development of interface #4

9 Resource assignments Medium Low TBC re SAP Include

10 Pre-defined activities Low LowUnder review to understand extent of usage

11 Actuals / forecast data Medium MediumPulls data from multiple tables. Data manipulation on receipt

Include

Recommendations re automated data transfers


Proposed Delivery Model: Combined EY and IBM team that utilizes existing EY knowledge and aligns to Mercury Governance structure.


Engagement pricing, budgeting & economics –SMR and user experience overview

• Client server representation for each Area and SL

• Day in the life overview

• Detailed “deep” dive sessions planned: NSR & EAF, T&E, Billing & collections

• In person meetings set up for Feb: will include Budget to Actual and ETC preparation

SDA SMR Network

• Being coordinated as part of UX workstream

• SDA SMR network invited to provide UX feedback across SDA workstream

• In addition, a number of experienced MMT users being identified to provide UX feedback

User Experience


Engagement pricing, budgeting & economics — outstanding items

► Detailed fee sharing design

► Out of scope fees

► Coexistence strategy

► Agreement re removal of surcharges

► Mechanism for booking resources at opportunity stage

► Process for collating the G360 approval thresholds and for establishing and collating approval thresholds for core accounts

► Establishment of “exemptions” from MMT usage: $ value per country / SSL or service offering per country?


People

► Client servers will need training to use new tools and understand new revenue metrics eg NSR and EAF

► For some countries, preparation of plans, budgets and ETC to shift from FMAs to client servers

► New processes include:• creation of pricing plan as part of opportunity creation• use of pricing plan to create engagement budget• preparation of ETC• automated resource requests and feedback

► Greater visibility of fee sharing arrangements and results

► New tools being introduced to support processes► Existing tools being decommissioned► Current MMT to change significantly

Technology

Policies

► Mandatory use of pricing and budgeting tool unless deal value is below country / SL thresholds

► All engagements connected to single opportunity will have same plan EAF► Approvals based on Account / market segment rather than country / SL

Culture

► Some local views of key metrics and margin calculations out of line with Mercury approach

► Linkage between “sold at”, “planned at” and “delivered at” is new concept► No longer possible to avoid creation of plans by entering metrics directly into system

(unless deals are below agreed thresholds)► Removal of surcharges will be a major change especially for the Assurance SL

Engagement pricing, budgeting & economics — Change impact

Process


Engagement pricing, budgeting & economics — key benefits:

► Globally consistent approach to modelling revenue and margin for pricing and budgeting

► Globally consistent calculation of key metrics► Tools support set up and management of larger cross border engagements

► Integrated solution reduces manual rekeying and ensures consistency of data between solutions

► Technical solution enables client server to move seamlessly between applications to support business process

► Scaleable process: client handler is only required to add detail if necessary► Enables data to be used for multiple purposes eg update forecast metrics and

resource bookings from one screen► Minimises effort required to update forecast metrics► Approvals and notifications minimised

► Supports focus on margin ► Transparency and visibility of “sold at”, “planned at” and “delivered at”

metrics encourages focus on management of engagement financials; early visibility of over runs supports corrective action

Streamlined

Global

Strategic Focus

Documents

Engagement pricing, budgeting & economics Ready for approval