02-em the capgeminiway_the value of effective delivery - v3.1

Module 2The Value of Effective Delivery

EM the Capgemini Way

Engagement Management Curriculum Capgemini University 2010

2EM – The Capgemini Way© Copyright Capgemini 2010 All Rights Reserved

Good Delivery is a Fundamental Capability

115,000 people - India 35,000 - Rightshore in everything we do !

Creation of Group delivery (François Hucher , Bruno Dedieu, Aimery Fustier, Mark Standeaven)

Delivery on Group Management Committee and BU Leadership Teams

We don’t make money until we deliver. How much contribution we make depends on how well we deliver

Group target of <2% unplanned overruns

But Delivery continues to be uneven:

– Economy/Customer challenges

– Region/country/BU

– Service Line – “hot” services

– Staff turnover/New recruits


Team Exercise #1:

Spend 15 minutes identifying the 5 most common project issues that lead to failure. Include issues that arise on Rightshore engagements.

What is wrong?

Issues Failure


What Causes our Engagements to Get into Trouble ?

Poor Estimation Assumptions Lack of Adherence

to Methods, Tools, & Standards

Lack of Roles and Responsibilities

Definition

Incomplete Workplan,

Schedules, and Deliverable Definition Inadequate Scope

Definition & Change Management

Poor Execution of QA Processes

Unrealistic Month-end Estimate to

Complete

Staffing

Lack of Measurement and Tracking


2009 was a difficult year in terms of economy and customers

Numerous examples of poor delivery on complex projects

Still many small/medium size deals not under full control

EM’s are currently facing many challenges !Deteriorating Overrun situation in 2009

YTD Dec 08 YTD Dec 09 Variance

TS Overruns - 2,1 % - 3,1 % - 1,0 %

TS Underruns + 2,0 % + 1,9 % - 0,1%

TS (- Overruns + Underruns) - 0,1 % - 1,2 % - 1,1 %

TS DVI variance ( Red Eng.) - 18,2 M€ - 26,4 M€ - 8,2 M€

TS Flying Squads 72 64 - 8

OS GOP Variance to Budget +13,2 M€ +7,0 M€ - 6,2M€

OS Flying Squads 53 46 - 7


But EM Certification brings Value An example from NA TS

Increasing Engagement Management (EM) Competence

Baseline Case:Projects Run by “Red Ems”(no EM training or certification)

Average DVI:($31,334)

(234 projects)

Projects Run by Ems Trained

(nut not yet certified)

Average DVI:($2,838)

(70 projects)

Projects Run by Certified Ems

Average DVI:$36,681

(115 projects)

Analysis based on November 2009 NA DVI Report DVI > = 0 -$1000 < DVI < 0 DVI < -$1000


The EMs Delivery Challenge

Increase margin Reduce overruns

Customer and Market Pressures


Engagement Management consists of different roles:

Engagement and Program managers (mostly TS and CS)

Transition Managers (OS)

Service (Delivery) Managers (OS)

Engagement Management responsibilities:

Management of the Engagement costs and budget according to the BCS

Delivery of the Engagement to contract commitments and to Client satisfaction

Compliance with Engagement Delivery Mandatory Requirements

Forecasting Estimated Costs To Complete and the Estimated Completion Date

Maintaining and extending the powerbase within the client, together with Business Development

Deployment of appropriate productivity tools/methods etc.

Providing accurate engagement information to the delivery organization (e.g : KPI’s report)

Managing the engagement risks and issues and corresponding action plans.

Approving the assignment of key engagement roles and associated objectives (supported with KPI’s where appropriate).

Organizing and steering the engagement team

EM roles and responsibilities


What can EMs Expect by way of Support?

Current Group Delivery Initiatives:

GREAT - GRoup EstimAtion Tool (Module)

Rapid Start + (Module)

Shared PMO (More)

LEAN Program (More)

Tools deployment (Module)

Methods - Deliver 2.0 - and KM 2.0 (Module)

Deliver 2.0 & Deliver UPM V6.1 (Modules)

Tracking and Reporting/GFS/N2K/DVI (Module)

M (Monthly) Review (More)

Flying Squads (Module)

Delivery Diamond Awards (More)


Group Delivery Initiatives

Application IntelligenceCAST

RapidStart

GFS/N2KConsolidated Financial View

CAMSCIMS

GREATSAP, Oracle, BI, CSD/AI

Shared PMO

Collaborative Development: CoCoNet

Live Communications: LVIS & GIMS+

Sales Delivery

Go

vern

ance

Pro

du

ctio

nC

olla

bo

rati

on

DVIIncentive

One Team Maturity

Clarity + NOE

Global Staffing

Rapid Design & Visualization iRise


Searching globally who knows what, where, availability and contact person

Currently 46 000 CVs - Will be open to all

Global Search

Knowing who does what actual, future and proposed assignments

Global Retain

Posting requests to other units and search internally before going to

subcontractors

Request Mngt.

Global Staffing


Proven approach in manufacturing, assembly, and supply chain (JIT, Kanban, etc..):

– Reduced inventory/assets

– Reduced cycle time

– Reduced costs

– Increased margin

Now being applied to engagements/services in TS and OS

Lean Boot Camps performed for 50 Change Agents

External support from McKinsey and Capgemini Consulting

Pilot projects undertaken in Application Outsourcing, Application Life Cycle Services, and SAP Package Deployment

Pilots suggest possible elimination of waste between 15 - 25%

Potential 5 year horizon for full implementation

LEAN from a Delivery perspective


Why are we doing this ?

Actual findings

Inefficient resource on-boarding leads to 10% productivity loss due to 23+ days delay in on-boarding

Rightshoring is under-utilized with only 19% FTEs offshore

Re-use of standard tools: 30% of project team members spent 3 days creating templates for project use

High contractor ratio: 10% mandays, 25% resource cost

Incident Management: 14% of calls that go offshore require chasing the customer for additional information

Root Cause Analysis: 0% proactive analysis on P3 & P4 incidents

Time recording: duplicate entry of data into multiple time recording systems

Supporting our LEAN programme we have a number of delivery initiatives underway


15-25% capacity released in 3-9 months

LEAN - Proof of concept pilots!

14

│ Business As Unusual – Lean Supply Chain

LSC Benefits summary% Potential benefit for AO Support

Benefits (AO Support) by end 2011

Capacity Release (FTEs)

% Capacity Release *

7.6

16.0%

6.8

33.0Problem Mgt

Knowledge Mgt (Incident)

Shift left (Incident) 3.4

Opportunity Area

Potential Benefits

(Hours per day)

Total Capacity

Release57.2

2.4

2.3DTX/Clarity - NOE Lite

DTX/Clarity - Plan Mgt

Application release

window 0.7

Testing environment 4.1

2.6

0.4Test team KT

Change Mgt

1.5Batching of data fixes

Current FTEs 47.5

* Confidence of benefit delivery: Number of risks /mitigating actions identified to benefit realisation otherwise risk 30% loss

Cost/benefit – 36% ROI in Year 1

│ Business As Unusual – Lean Supply Chain

12 Month FTE capacity saving

Right first time

(Offshore)

Root Cause Analysis &

FMA (Offshore)

Knowledge Management

(Offshore)

0.15

1.4

0.4

Root Cause Analysis &

FMA (Onshore Service

Desk)

1

Knowledge Transfer

(On & Offshore)TBD

Cashable

Re-investmen

t of capacity

into account

Opportunity Area Potential benefits

Total 3.65 FTE

% Capacity Release:

13.5%* out of 27FTE

in scope

Other solution activities

(Onshore service desk)0.7*

Matalan Benefits summary

* Confidence of benefit delivery: Number of risks /mitigating actions identified to benefit realisation otherwise risk 10-25% loss17│ Business As Unusual – Lean Supply ChainLean ADM tradeshow Group Kick Off December 15th 2010

Pôle Emploi Benefits summary

Streams

1%

10%

1.5FTE

6%

21%

3 FTE

11% 1.5 FTE 27% 3 FTE+

Improve employee working conditions

Create a more flexible organisationBreak the silos (horizontal training)Strengthen employee skills (vertical training)

Create a more effective organisationMonitor and control production tightly Improve project governance

Implement best practices and rationalise production tools

Standardise and propagate best practices amongthe teamsRationalise the production tools Revise the resource estimation models

Improve client relations to reduce reworkincluding improvement of the billing process

+ +

Morale

AREA POTENTIAL BENEFITS

TOTAL (% Benefits) +

Ops

Management

MgtOps Mgt

Operations

HighLow

2

6

8

3

7

4

5

1

STREAMS

Already decided & planned to remove 10FTE in the next 5

weeks(according to the training sessions)

Operations

24

At OMV, translation to financial benefits is blocked by the contract structure

Source: summary of underlying analysis

OMV improvements

Over the last three years, the OMV project has proven to be a success from a project management perspective, given its delivery and DVI track record

IRIS IV and V have both been on budget, without using the risk buffer, resulting in a positive DVI

Operationally, most improvements can be gained regarding consultant competency, standardisation and Rightshore usage.

Within Rightshoring the primary focus is on the execution, competence and standardisation

Before effectively increasing the overall Rightshoreratio, the quality of work send and effectiveness in communication need to be improved

“Our contract is 5cm thick and specifies onshore resource… if we didn’t have that, with the implementation of the solutions identified and a redesign of the team, we could easily reduce the cost by 12%”

Michael Köllen

22

These can reduce implementation costs by at least 25% at Warner Bros.

1 Average improvement weighted by offshore/onsite hour split for effort and cost split for cost improvement2 Project effort only – Feb-Sept 2009. Includes month of project go-live support but not ASP. May not add due to rounding3 EMEA Wave 2 only – excludes Mexico. Includes labor cost only (Own, group, offshore, contractors) – does not include other expenses4 Total cost savings. Low end: 8% productivity savings and 18% unit cost improvement 1 – (1-.08) x (1-.18) = 25%. High end: also includes 50% volume savings: 1 – (1-.25)x(1-.17)= 38%

SOURCE: Team analysis

Offshore

Onsite

Effort (‘000 hrs)

Cost3

($ Millions)

Baseline (Wave 2)

Total2

36.7(54%)

68.1

31.4(46%)

0.5(12%)

3.9

3.5(83%)

Resource location

2. Project plan optimization

1. Inflexibility in on-boarding

3. Onsite-offshore mix

1. Inflexibility in on-boarding

Impact potential, Percent savings by resource location

OpportunityProductivity increase %

6. Senior resources overused

6. Senior resources overused

3. Onsite-offshore mix

4. Too many RICEFs

4. Too many RICEFs

2. Project plan optimization

6-7

5. Gaps identified late 4-5

7. Manual testing 7-8

5. Gaps identified late 4-5

7. Manual testing 7-8

Total improvement1 ~10

8. CHARM request optimization Not applicable as this does not affect Wave 2 baseline

8. CHARM request optimization Not applicable as this does not affect Wave 2 baseline

4-5

Volume decrease %

Unit cost decrease %

21

9

10+

15

15

4-5

~20 ~20


Flying Squads

Group Delivery Funded virtual team of Elite EM’s

Comprises Levels 2, 3, and 4

Provides review/coaching for complex projects anytime, anywhere e.g.

– How to fix major risks & issues?

– How to launch complex projects?

Up to 10 man-days per operation

More to come in Flying Squad module later in CGWay class

Each Flying Squad operation results in an action plan agreed between Group Delivery and local engagement/delivery

management


What are the Rewards for Successful Delivery ?

Primary focus for assessing EM performance is actual engagement contribution compared to budgeted contribution

The key measure is DVI (Delivery Value Improvement) of >0

EMs compensation will include an incentive based on engagement contribution compared to budget (DVI >0)

“Add on Sales” initiative for change requests and extensions

Successful delivery is also recognized annually by the Delivery Diamond Awards - 50+ high delivery achievers on a global basis:– 2008 - San Francisco ; 2009 - Barcelona

– 2010 – Geneva 2011 - Thailand

Recommendations are evaluated against the following criteria:– Completing a difficult and challenging engagement– Outstanding contribution to sales support– An exceptional testimonial from a client– Delivery innovation


….It’s not rocket science!

Do the basic day-to-day

blocking and tackling with the methods and

tools available

…. It’s the key to profitability

…. and the key to your success !

In Conclusion….

02-em the capgeminiway_the value of effective delivery - v3.1

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