aig case study: improving governance and cost transparency with hp
DESCRIPTION
This session addresses the challenges of establishing a standard framework for project and IT governance, IT cost transparency, and IT demand and resource planning in a larges multi-business global organizations. The presenters will provide insights on establishing cross-functional investment-decision boards, institutionalizing standard project authorization and control processes, consolidating legacy tools into a single instance of HP Project and Portfolio Management Center, and improving IT cost transparency wit an integrated project, resource, and financial management solution. We’ll tell you how to use Project and Portfolio Management Center to provide the business intelligence and manage IT as a business by creating a global IT infrastructure utility, rationalizating your application portfolio, and managing large global programs of work.TRANSCRIPT
1 ©2010 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice
Deepak IyerDirector, AIG EPMO
Karen DicksManaging Director, Melillo Consulting, Inc.
AIG case study: improving governance and cost transparency with HP
About the Speakers
• 30+ years of experience in IT
• 20 years in IT management and
management consulting
• Diverse experience spans all aspects
of organizational transformation & the
SDLC including service mgt., ITIL, app.
Dev., QA, release & configuration mgt.,
& process engineering.
• Recognized thought leader for PPM
disciplines
• Expert in all aspects of HP PPM Center
including: solutions, elaborations,
strategic planning & systems integration
Karen Dicks Managing Director
• 12+ years of strategic execution &
change management experience, leading
engagements in manufacturing &
services industries
• Global experience including work in Asia,
Europe and the US
• Managed programs involving Process
Improvement, Shared Service Centers, IT
Governance & Delivery Management,
Supply Chain Management, Performance
Metrics
• Engineering degree from the Indian
Institute of Technology and an MBA in
Finance from New York University
Deepak Iyer Director
AIG Case Study
Session Objectives
• Highlight challenges faced by large multi-business global organizations in
governing & managing ‘business change’
• Describe how we turned things around
•Established cross-functional investment-decision boards
•Institutionalized standard project authorization and control processes
•Consolidated legacy tools into a single environment
•Improved IT cost transparency with an integrated project, resource, and financial
management solution
• Leveraging the strengths of HP PPM Center
•Business intelligence
•Managing IT as a business
•Creating a global IT infrastructure utility
•Rationalizing our application portfolio
•Managing large global programs of work
Challenges
2008 Landscape:Project Management
•Process and Methodology
•Suboptimal focus on ‘planning’
•Numerous inconsistent processes across multiple Business Units
•Governance
•Cross-functional (matrixed) management structure with limited oversight
•Management Information
•Post fact and reactive
•Subjective, with few metrics
•People
•PM & PMOs understaffed
•Under-resourced in required skills
2008 Landscape:
Process & Reporting
Top Business Unit
Initiatives
O&S Savings Program
Remediation Initiatives
OCIO Approval
Process
CAO Approval Process
Business Unit Approval
Process
O&S 2007 Savings
Program
Monthly
Corporate
Reporting
Process
Other
Reports
Business Unit A
Project Tracking
Business Unit B
Project Tracking
Business Unit C
Project Tracking
Other
Lack of consistency
No ability for horizontal or vertical consolidation of enterprisewide data
Multiple systems and processes
High degree of in-house customizations leading to high TCO
2008 Landscape:
Discrete PPM / ITG Environments
Shared PPM Server
Separate PPM 7.1
InstancePLD
Domestic
Life
AIG
Invest-
ments
Separate PPM
6.0 InstanceAIGRS AIGGS
Individual PPM Server
Separate ITG 6.0
InstanceDBG
Multiple Platforms & Tools
No PPM Instance
Ent
Apps -
ERM
Ent
Apps -
Corp
System
Ent
Apps -
eBus-
iness
HSB FSG AIU UGC
Management Objectives
Management Objectives
•Enhance project delivery capability with standard planning and control processes
•Establish effective demand estimation and resource planning processes
•Improve management visibility to global portfolio of proposals, projects and lights-on activities
•Establish and improve IT Cost Transparency
•Comply with accounting / audit requirements •SOP 98-1, AIG 55/ PWC
… and do all of the above at the lowest TCO
Define Standard Processes
4. Tools
HP PPM Center will be the standard tool for Project, Portfolio and Resource
Management and all Business Units will establish a plan by the end of 2008
to adopt the PPM tool
4. Tools
HP PPM Center will be the standard tool for
Project, Portfolio and Resource Management
and all Business Units will establish a plan by
the end of 2008 to adopt the PPM tool
Establish Standard Governance
Structures
Investment Decision Board(Accountable Executives for sub portfolios)
Program Management Office (PMO)
Program Manager
Business Sponsor
Project Manager
PROJECT A
Project Manager
PROJECT C
Project Manager
PROJECT B
PROGRAM
1. PORTFOLIO RECOMMENDATIONS
2. BENEFIT SUMMARIES
3. PROJECT PROGRESS
PORTFOLIO TARGETS
ISSUESSTATUS
COACHING ON VALUE CONCEPTS
PORTFOLIO (s) of INITIATIVESBUSINESS CASES
PROJECTS
DECISIONS
Adapted from The Information Paradox
e.g. AIU Executive Steering Committee,
AIA Strategic Initiatives Steering Group
Strategic Drivers (e.g. Improve Operational Efficiency)
Goals (e.g. Increase Operating Margin to 12%)
BENEFIT UPDATESCFO
1. Validate Financials
2. Adjust Operating Budgets for planned benefits
3. Performance Metrics for Business Goals
PMO Target State
Define Roadmap
5 Disciplines
Project
Visibility and
Oversight
Governance
and
Best Practices
Project Process
and
Risk Mgt
Coaching
and
Mentoring
Communication
and Lessons
Learned
Level 3 Predictive
• PMO oversight
within projects
• Project target
and goal
alignment:
PMO action
recommendations
• Independent and
Objective status
reporting
• Timely project
information
sharing
• Metrics & analysis
dissemination
Level 2 Analytical
• Standard,
repeatable
project
management
processes
• More predictable
project outcomes
• Methodical risk
analysis
Level 1
Administrative
• Provide guidance
to PMs on
policies and
procedures
• Support team
processes
• Collaborate with
project
leadership to
achieve goals
Level 2
Analytical
• Project
organization
model
• Cross project
coordination
• Post-
implementation
reviews with
measurement
and trending
• Establish
steering
mechanisms
• Benefits realization
Level 2
Analytical
• Business case
with benefits
realization
• Disseminate &
deploy AIG
standard practices
• Share knowledge
gained on other
projects
proactively with
PMs
• Multifaceted
project model
Solution
PMO Organizations Staffed
Solution
Define Standard Project Lifecycle
Solution: Standard Tool
Corporate Instance of HP PPM
Project Management
Track & Manage
workplans, issues, risk &
scope change & status
Time Entry
Track time against
projects & support work,
automate consultant
payment via Fieldglass
Project Authorization
Review, prioritize &
approve proposed
project work w/ proper
governance controls
Oper. Demand Mgt
Log, prioritize, approve &
report on tactical, one-
off, KTLO work required
to support products &
services
Program Management
Group & report on
related projects, incl.
milestones, issues, risk,
scope changes, status &
cost
Resource Planning
Understand resource
capacity by role, skill &
location. F/C headcount
demand for proposals,
projects & application
assets
Budgets & Actuals
F/C planned cost for
proposals, projects &
application assets.
Integrate w financial
systems (actual costs)
Interfaces
1. Financial Systems,
FIT, Fieldglass
2. IDM
3. Service Now
4. Quality Center
Management Reporting
Produce status, trend & analytical reports via PPM and Business Objects
Interfaces and Supporting Systems
AIG PPM Requirements Project
PPM System Interfaces v2
AIG Systems Interfacing with HP PPM
InSite Fieldglass Universe
1. Resources acquired for a project
2. Actual time entered/approved for
consultants
HR Systems Universe
HP Quality Center Universe
Requirement: Integrate PPM and HP
Quality Center for defect tracking and
reporting
Financial Systems Universe
Project Costing Universe
Labor Cost
Actuals
Fixed Asset
System(s)
G/L A/P
1
2
PPM Universe
Timesheet
DataProject
Data
Budgets &
Forecasting
Resource
Management
Financial
Management
Data
Blended average
cost rates per
resource per
region per role 3
IDM Data
6
Portfolio
Data
4
7
3
4
Required for Rollout
Resources Acquired for a Project
Extract of PPM Time Data (actual hours
on approved timesheets)
Data feed from PPM with chargeback
details and actual work effort details for
project costing
Data feed to create/update proposals
Data feed to create/update budgets and
project costs
Data feed for Resource Creation and
Maintenance of Roles and Skills
1
2
3
4
5
6
7
Future
HP Quality Center to PPM bidirectional
integration via HP’s Center Management
for Quality Center (CM4QC)
I N T E R F A C E S
Existing Systems
Future AIG Enterprise Systems
Possible Short-term Solution
Multiple SystemsL E
G E
N D
5
Phase 2
Data feed for Resource Creation and
Maintenance of Roles and Skills
Re
co
mm
en
de
d Im
ple
me
nta
tio
n S
tra
teg
y
PHASE ONE
1. Pilot BUs identified
2. Iterative Detailed Design Sessions with
PMO Working Groups Continue (wider
PMO representation, not just pilot BUs)
3. Socialization of Common Process
Framework and Design by AIG PMO
4. Build Cycle for PPM Pilot Deployment
5. Pilot
- Proposal, Project, Time Management
with Limited PPM Financial and Resource
Management
- Short-Term Tactical Solutions until
Data Hub is implemented in Phase 2 for
Labor Costing, Chargebacks, and Time
Normalization
- Rollout to Limited User Community
6. Pilot Review of Functionality and
Configurations
7. Parallel Design and Build of Post Pilot
Functionality
PHASE TWO
1. Configuration Updates from Pilot
Review
2. Configuration of Additional
Functionality
- Project Controls, Assets, Supporting
Demand Requests
- Full Time-Resource-Financial
Management with Data Hub Integrations
and Interfaces
3. Deployment of Pilot Fixes and
Additional Functionality
- Next Wave of BU onboarding
PHASE THREE
1. Onboarding of BUs with complex
migrations from legacy systems.
Proposal Process
Standard Project Management Process
Time Management for Projects
Financial Budget & Benefit Planning
Staffing Profile Role Planning
Project Control Processes
Asset Management, Lights-On Proposal
Supporting Demand Requests for Assets
Resource Pools
Data Hub, Integrations, Interfaces
3rd
Party Reporting System
Elaboration of Previously Deployed
Functionality
Additional Demand Management
Workflow
PPM Process Functionality
2008 2009
Implementation Roadmap Strategy
Su
pp
ort
an
d O
pe
rati
on
al S
up
po
rt R
eq
uir
em
en
ts
PHASE ONE
1. Pilot Groups Will Need (at least) One
Dedicated Onsite PPM Expert Each to
Assist Throughout the Pilot Phase
2. The PMO Working Group Will Need to
Continue to its Work with a Solution
Architect to Manage Design Refinement
3. The AIG PMO will Need to Add 3-4
(Short-Term) PPM-Knowledgeable
Resources to Support PMO Operations*
4. Build Cycle Requires Program and
Technical Project Managers (1 per Work
stream) and 1 Program Executive
5. AIG Needs to Implement an
Organization-Wide Training Program for
PPM**
6. O&S Finance Management Needs to
Provide Short-Term Tactical Solution for
Labor Costing, Chargebacks and Time
Normalization, and a Project Manager.
7. OS& Execs Need to Provide Resource
Classifications and Standard Per-Use
Costs
PHASE TWO
1. Corporate Systems Will Need to
Socialize Support Policies (No Additional
Headcount is Projected Until Mid-2009)
2. Organization-Wide Training Program
Must be in Place
3. AIG PMO will Need to Socialize Project
Controls, Assets and Supporting Demand
Requests Processes (Continue with Staff
Augmented Headcount or Decrease if Full
Time Staff are Hired)
4. A Development Team Must be
Established to Configure Data Hub,
Integrations and Interfaces
5. Financial Policies Must be Fully
Socialized and Adopted
6. Organizational Readiness Should be
Assessed in the AIG PMO and Corporate
Systems by early 2009 for the Next Wave
of Deployment
PHASE THREE
1. Support Organization Fully in Place
2. PMO Staff Reduced to ‘Run-Time’
Organization (estimated headcount: 5
FTEs)
3. Additional Training to Support Rollout
is Available as a PMO Service
Proposal Process
Standard Project Management Process
Time Management for Projects
Financial Budget & Benefit Planning
Staffing Profile Role Planning
Project Control Processes
Asset Management, Lights-On Proposal
Supporting Demand Requests for Assets
Resource Pools
Data Hub, Integrations, Interfaces
3rd
Party Reporting System
Elaboration of Previously Deployed
Functionality
Additional Demand Management
Workflow
Organizational Requirements by Implementation Phase
2008 2009
Notes
* Short Term Staff Augmentation Resources
** Approach Training as a Project and Sub the
Work
Implementation Roadmap Support Requirements
Organizational Capabilities Developed
We Support Global Users 24 x 5
•PPM Support Organization
•COE for centralized app dev, testing & support•Scalable onshore - offshore model with resources in NY & Chennai
•BU resources in regions managing Level 1 Support & Training
•Web based system for submitting & tracking requests
•Centralized PPM license administration for all BUs,
managed by PPM COE
•Hardware Upgrade•More robust architecture for increased user footprint
•Better recovery & DR capabilities
•PPM 8.0 upgrade for multilingual capability
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Current Landscape – PPM Instance
# of
Users
Project
Mgmt
Project
Authorizati
on
Time
Entry
Program
Manageme
nt
Operational Demand
Resource
Planning
Budgets &
Actuals
Interface
with
Financial &
other
systems
Mgmt
Reporting
Chartis
USA2200
Chartis
SEA700
Chartis
EMEA150
Chartis
UK150
Domestic
Life450
AIGGS 600*
Enter.
App lns200*
Invest-
ments350*
Total 4800
KEYIn Production
In Progress
On Roadmap
Single global repository
* Projected #’s end of 2010.. AIGGS will grow to 2500 users as the global infrastructure utility gets built out
Examples of Our Better Outcomes
Project AuthorizationManagement Visibility to Project Delivery
Problem Statement AIG is a global organization with projects executed across the globe. Multiple levels of approval (country, region, BU, Corporate) would take months to obtain, leading to very low compliance and high incidence of redundant projects
Solution Governance requirements established; approval delegated to local &
regional levels. PPM used as the global repository for initiating proposals & approving
projects. Sr. Mgt. has visibility to pipeline of work
Business
Unit
Project
OrganizationProject Health Scope Budget Schedule Business PPM #
Project
Name
Estimated
One Time Cost
($K)
Approved
Funding
($K)
Actual
To
Date
($K)
Spent
% To
Date
Proj
%
Comp
Total
Cost
-
Forecast
($K)
Forecast
(% of Budget)
Planned
Start
Date
Planned
End
Date
Actual
Start
Date
Estmd.
End
Date
Notes on
Health
AIU
AIU Home
Office Red G R R G 2.009E+09 AIG Travel Systems Re-branding 0 230 219 NA 65% 277 NA Jul-09 Jan-10 Jul-09 Mar-10
The project budget and schedule were extended to
accomodate countries with legal delays impacting
anticipated launch dates through Mar 2010. A funding
request ammendment is currently in process to address
additional costs to the project.
AIU
AIU Home
Office Yellow Y Y G G 200815152 Generation 5 Extended Warranty System 2,421 2,421 2,482 103% 94% 2,482 103% Jan-07 Feb-10 Mar-08 Feb-10
A BCA has been submitted to cover Business CRs,
projected overspend due to extended implementation
timelines and to replace China with India as a charter
country. Project health will remain Yellow until the BCA
is approved.
AIU
AIU Home
Office Yellow Y Y G G 200815718 AIG Travel Assist Corporate Internet Site 1 410 92 9200% 40% 308 30800% Sep-08 Dec-08 Sep-08 Sep-10
Project returned to active status. Analysis of Phase II
Business Requirements and assessment of costs is in
progress.
AIU
AIU Home
Office Yellow G G Y G 2.009E+09
WAATS and TravelNet Reporting Tactical
Enhancements 278 278 229 82% 60% 229 82% Jan-09 Jun-09 Feb-09 Mar-10
Schedule health is Yellow due to the impact of personal
data security and re-branding code changes by the
Production Support team on the dates for UAT.
AIU
AIU Home
Office Yellow G G Y G 2.009E+09 Daily Data for Captive Billing (Client Loss Reporting) 85 85 11 13% 30% 11 13% Jul-09 Oct-09 Aug-09 Feb-10
The project has been re-planned. A revised
implementation date of Jan 26 has been established.
AIU
AIU Home
Office Yellow G G Y G 2.009E+09
Computron Global Upgrade & Version Standardization
Strategy 249 249 125 50% 65% 125 50% Apr-09 Oct-09 Apr-09 Jan-10
Project schedule has been adjusted to account for
additional time required to complete feasibility
assessment and creation of future Gate 2/3 business
case(s) - there is no anticipated impact to either Budget
AIU
AIU Home
Office Yellow G G Y G 2.009E+09 CVV2 - Card Verification Value 2 181 181 165 91% 70% 165 91% Mar-09 Jul-09 Apr-09 Mar-10
Changes of the OS from Solaris8 to Solaris10 and the
move of the development servers from Parsippany to
Ft. Worth caused significant rework and delays.
Project Portfolio as on 01/20/2010Organisation: AIU Home Office
Software Capitalization
Problem StatementAccounting regulations require software capitalization to adhere to guidelines on what portion of the effort is capitalized and what should be expensed. There was no mechanism in place to ensure compliance.
Solution Rollout of PPM time tracking / project management functionality has established an auditable process to ensure compliance with accounting requirements
IT Cost Transparency to Business
Problem Statement
AIG spends $2Bln+ annually on IT. Business had very poor visibility into what they were being charged for projects & lights on activities
Solution
Integrated PPM – FIT solution provides drill down capability into IT spend by project & by application
Managing Global Transformation Programs
Problem StatementAIG has launched global transformation programs across the Claims, Finance, Application Development & Infrastructure. Process & mechanism was required to manage the governance, executive reporting, financials tracking, project & resource management
SolutionWe leveraged PPM’s program/ project/resource management/ time tracking/ multilingual capabilities
Managing Divestiture Transition Support Agreements
Problem StatementAIG has needed to manage an unprecedented divestiture effort over the last 12 months. Divesting business units have continued to use AIG’s services for several months after the deal and a mechanism was needed to measure the effort globally & charge it to the respective units.
Solution
PPM project & time tracking functionality were leveraged to capture the effort and allocate it appropriately
Resource Taxonomy & Labor Analytics
Problem Statement
As the company embarked on strategic initiatives to consolidate IT infrastructure (data centers, resources) and rationalize application spend, management was looking for consistent resource taxonomy across the global organization
Solution
PPM was established as the repository for the resource taxonomy
Application Demand Management / Application Rationalization
Problem Statement
CIOs lacked visibility into ‘lights on’ demand across applications. There was no standard approach to capturing, categorizing and analyzing the information.
Solution
Standard taxonomy for categorizing application demand was defined. Application value/risk scoring criteria were defined. PPM’s demand management & portfolio management functionality leveraged to automate the process.
Regulatory
3%
User Training
2%
Audit & Compliance
1%
Testing Support (for other
Apps)
1%
User Workstation and
Hardw are Issues
0%
Problem Investigation
20%
User Requests
19%
Analysis (Other)
26%
Report Requests
8%
Job Monitoring
7%
Rates Maintenance
5%
Bureau Reporting
5%
DML (Adhoc)
3%
Lights-On Drill Down
Consultant ‘Procure to Pay’ Process
Problem Statement
Integrated process/ mechanism was established for requesting IT consultants, managing approvals, capturing time and paying vendor invoices.
Solution
Integrated process/ mechanism was established for requesting IT consultants, managing approvals, capturing time and paying vendor invoices through integrated PPM – FIT –Fieldglass solution.
Q&A / Contact Information
Karen Dicks
Managing Director
Melillo Consulting, Inc.
215-378-0696
Deepak Iyer
Director, AIG O&S Enterprise
PMO
212-770-3258
31 ©2010 Hewlett-Packard Development Company, L.P.
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