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Enterprise Architecture Management (EAM)

Raymond Vuilliomenet, Swiss Post Solutions

Agenda

Swiss Post Solutions

• We connect the physical and the digital worlds

Enterprise Architecture Management (EAM)

• Is it possible to implement EAM in an international company?

• Is EAM an appropriate instrument to reduce costs?

Questions and Answers

2 Swiss Post Solutions - Enterprise Architecture Management (EAM)

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With the right structure, we can lay the foundations for our success.

PostFinance Ltd

Board of Directors Rolf Watter

Executive Board Hansruedi Köng

Post CH Ltd PostBus Switzerland Ltd

PostLogistics

Dieter Bambauer*

PostMail

Ulrich Hurni*

Swiss Post Solutions

Jörg Vollmer*

Post Offices & Sales

Franz Huber*

Finance Pascal Koradi* Human Resources Yves-André Jeandupeux* Communication Marco Imboden

Corporate Center Markus Schumacher

Information Technology Dieter Bambauer*

CEO Susanne Ruoff*

Chairman of the Board of Directors Peter Hasler

* Member of Executive Management

Group Audit Martina Zehnder

Real Estate Franz Huber*

Development & Innovation Claudia Pletscher

Swiss Post Ltd

Daniel Landolf*

Swiss Post Solutions

Local Operations

BD Sales Client Mgmt. Transition & PM

Mailroom Processes

CH GER UK US South/West

Europe

Global Solution Design

Document Input Processing / BPS & Technology

Document Output Processing

Go

To

M

ark

et

G

lob

al

Op

era

tio

ns

How we operate

Swiss Post Solutions - Enterprise Architecture Management (EAM) 5

Input & Output Management International Capabilities

Swiss Post Solutions - Enterprise Architecture Management (EAM)

Country Locations

Switzerland Kriens, Zurich-Glattbrugg, Zurich-Muelligen, Haerkingen

Germany Bamberg, Waltershausen, Dietzenbach, Dettingen, Prien

France Beauvais, Orleans, Péronne, Palaiseau, Tourcoing

UK Ashford, Salford, Swindon, Wewlyn Garden City

Slovakia Bratislava (nearshore)

Austria Vienna

Italy Milan

Country Locations

Canada Mississauga

USA Long Island City

Vietnam Ho Chi Minh City (offshore), Can Tho (offshore)

Input Management

Output Management

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Swiss Post Solutions - Enterprise Architecture Management (EAM)

SPS is an internationally successful company

mailrooms are operated worldwide, making SPS one of the largest mailroom providers internationally

In document management services in Switzerland, the UK and the Republic of Ireland

With over printed pages one of the top 3 players in Europe

languages are processed by SPS Vietnam

Processing of documents annually in Document Processing Centres in 10 countries 756 m

1.2 b

largest supplier of document management services worldwide (NelsonHall 2013) 6th

28

333

1.

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Enterprise Architecture Management (EAM)

First, you need to know where you come from, before you can start to reach your target.

Swiss Post Solutions - Enterprise Architecture Management (EAM) Page 9

SPS still operates many heterogeneous, partly end-of-life ICT platforms and applications with different service models (highly fragmented)

High complexity - 430 applications - 284 technologies

Major risks - lack of competitiveness - limited agility - growing ICT security issues

Situation SPS ICT SPS ICT has a local organizational focus

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ICT Program to improve efficiency and agility Transparency cross organisation units, foster standardisation, verifying selective sourcing (e.g. cloud services), cost efficiency

– Enterprise Architecture is broad – not deep

– The tool (iteraplan) provides a predefined range of functions to document the building blocks

– Architecture structure – transparency allows understanding and control

– The governance process secures updated data

– Structured information makes on-demand queries and ad-hoc analysis possible

– Once defined, reports can be provided on a regular basis

– EA delivers well-grounded coordination and decision support

– The EA documentation lays the foundation for foster standardization and consolidation, steering the ICT

– To be sustainable you mustn’t get lost in details

What we need – positioning of EAM SPS EA is structured and aligned with corporate guidelines

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Enterprise Architecture Management (EAM)

Is it possible to implement EAM in an international company? Structure follows Process follows Strategy Chandler, A.D. Jr. (1962).

Reason for a common EA inventory Strengthen the ICT operation to support the SPS business model

Swiss Post Solutions - Enterprise Architecture Management (EAM)

Heterogeneous EA inventory within SPS

Key benefits of the EA inventory

Transparency • Systematic overview of the business architecture and

IT landscape and how they interact Alignment of ICT & business • Bring together business and technical infrastructure Strategic ICT planning • Gear ICT towards corporate goals and business requirements Strategic ICT management • Have relevant information available for managing IT strategically

Governance / Processes

Transformation

Quality Assurance

Enterprise Architecture

Methodology

Strategy

Business Architecture (BA)

Information System Architecture (ISA)

Information Technology Architecture (ITA)

Governance / P

rocessGov

erna

nce

/ Pro

cess

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Strategic direction to foster standardization and consolidation

Swiss Post Solutions - Enterprise Architecture Management (EAM)

Systematic overview of the business architecture and IT landscape in terms of how they interact

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Architecture principles See also 6 EAM Community Schweiz http://www.eamcommunity.ch/

It is SPS’ ambition to help clients in their digital transformation and to be the global leader in document management combining the physical and digital worlds.

Business Premises Process

Swiss Post Solutions - Enterprise Architecture Management (EAM) 14 Page 14

South/West Europe SPS US SPS UK SPS DE SPS CH Swiss Post Solutions

Layer 3

Organizational structure within the ICT layers 1-3 Data and Information interchange between the layers

Swiss Post Solutions - Enterprise Architecture Management (EAM)

Layer 2

Layer 1

Internal Business Support Applications SAP, Sage, Time reporting systems, other accounting systems, outsourcing

Infrastructure, IT physical services Storage, Network, Environment, Operating System, Firewall

IT Basic Applications and IT Service Mgmt MS Office, commodity Applications

Rate

s A

ssess

me

nt

Tool

Quoting Engine

Manual Calculator

Legacy solution for an

acquired compan

y

SAP finance

Risk Reporting Tool 1

Risk Reporting

Tool 1

Product Reporting

Multiple systems services with the same purpose Fragmented tools, Reporting typically Excel or Access-based

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Data & Information

Multiple systems services with the same purpose Fragmented tools, Reporting typically Excel or Access-based

Arc

hitec

ture

Man

agem

ent

Secu

rity

Swiss Post Solutions - Enterprise Architecture Management (EAM)

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EAM in an international company

WHY? Contextual

Development of a comprehensive solution strategy (“marketing strategy”) Identification of general market trends / industry-specific requirements, as well as investment proposals for the development of the standardized offering modules

WHAT? Conceptual

Process model with the process flow composed of the main and sub processes Orchestration of the business functions according to the SOA principle

Overall view of all functional and non-functional features and options of the standard solution

Customer-oriented high-level service description for clients as basis for marketing output

Detailed descriptions of the business functions with defined pre-conditions, input, activities, output and post-conditions

HOW? Operational

WITH WHAT? Technical

Swiss Post Solutions - Enterprise Architecture Management (EAM)

Swiss Post Group governance and guidelines SPS country specific along legislation and customer requirements

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In everything that we do:

We focus on the needs of our customers.

We do our utmost to make life even easier for our customers in the future (simple yet systematic).

Yes, when

• the executive board is actively supporting the steering mechanism

• the organizational structure supports the business model

• clear responsibilities are defined and followed

• all employees in all countries are willing to handle accordingly

• customer requirements can be fulfilled within the set up when not, it requires strong leadership to say:

• We don’t make an offer or • We don’t deliver this kind of service

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Conclusion Is it possible to implement EAM in an international company?

Swiss Post Solutions - Enterprise Architecture Management (EAM)

EAM is one of the cornerstones within the SPS ICT Operations • SPS has not yet implemented the target EAM in all countries

• we have EAM, but on different maturity levels

• We have set up and implemented the Target Operating Model (TOM)

• We are in the process of defining the production suites for Document Input Management, Archiving, Document Output • transition, transformation on global (region) and local (country) level within core markets

• We have set up our global accounting plan and cost center structures

• transition is ongoing

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SPS’ situation today

A journey of thousand miles begins with a single step

Enterprise Architecture Management (EAM)

Is EAM an appropriate instrument to reduce costs?

Statements within the context of cost reduction the most common objective is to achieve financial benefits by reducing costs

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Do you have cost-reduction targets?

Get a solid foundation to start

managers often use inaccurate or incomplete data to track costs

Focus on how to cut, not just how much

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Using external benchmarking (on Swiss Post Group level) Services from Switzerland to Switzerland are competitive Services from Switzerland to other countries are not competitive to local service providers

– Cost reduction programs can loose effectiveness over time

– management kicks off the effort but then leaves decisions on how to meet those targets to individual line managers

– Multiple data systems make it difficult to aggregate and compare data from different geographies/countries

– Inconsistent accounting practices between businesses lead to significant distortions.

– Changes in organizational structure (as a result of acquisitions, or changes in the allocation of overhead costs) gave similarly distort tracking.

Link between cost management and strategy

– Strategy must lead cost-cutting efforts, not vice versa

– Each business unit does “its fair share”

– Mapping costs against business units and operational tasks

– We introduce the same cost center set up in all geographies/countries

– Cost-management program need to be scoped as two- to three-year initiative rather than as immediate-term efforts with one-year horizons.

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The two types of cost containment areas Goods and Services

– Revisit core spend areas and agreements (ex. Telephone and Travel Management) Online Meeting via Lync and Telepresence in all countries

– Review existing agreements to ensure that pricing is in line with current market conditions Benchmarking of ICT Services, using cooperate license agreements

– Turn Capex to Opex Projects Data Center consolidation (One IT), Office 365, use virtual servers

People and Processes

– Process Improvement with Quality Management Project management, communication

– Information Technology see next slide

– Other functional opportunities like Audit, Risk and Compliance

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Information Technology cost containment areas EAM can support in almost all areas

– Project and spending transparency [EAM Project Mgmt] – make sure you know what projects are being worked on – Reduce implementation time by becoming better at project management

– Shared Services [EAM Architecture inventory] – inventory all systems and processes to identify and eliminate redundancy – Take advantage of shared service departments.

– Selective Control – Use BI tools to better understand where revenue is produced and costs are incurred.

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Information Technology cost containment areas EAM can support in almost all areas

– Process & System Optimization [EAM Architecture Inventory, Servers] Asking “Is this required” or “Is this required by law or regulation” – review all non-revenue generating processes (e.g. Marketing) and the supporting systems

like ERP for inefficiency.

– Life Cycle Management [EAM Architecture Inventory, Technology, Servers] – retire underperforming hardware and software – Replace End User Computing (EUC) solutions (e.g. spreadsheets, access databases, etc.) with

already purchased ERP modules that have not been implemented or “turned on” (e.g. Implementing SAP FI/CO, SD, MM)

– Eliminate unnecessary system reports

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Conclusion Is EAM an appropriate instrument to reduce costs?

YES, but the

– cost containment requires reviewing areas that previously were considered “off limits” or “out of scope”

– CEO, CFO and Executive Board are expecting cost reduction results but without disruption of the SPS operations... and they want it now

– cost containment initiatives will require extreme COLLABORATION among the functional groups like Business Operation, Finance & Controlling, ICT Operation

– Governance policy can drive also cost reductions and in most cases is just as important as “price reductions”

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Thank you for your attention

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