Target Operating Model (TOM)

Discussion Document

Deloitte Consulting
LLP
July 2009

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Contents

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Meeting Objectives

§ Gain consensus on project objectives and goals

§ Share our perspective on developing and institutionalizing operating models and key success factors
§ Describe the proposed approach to develop and implement a new operating model
§ Provide an overview of how Deloitte’s methods can be used to accelerate the project
§ Discuss next steps to initiate the project

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Background – GIFT and TOM
The Target Operating Model (TOM) project is a key component of AIU Holding’s Finance General Insurance Finance
Transformation (GIFT) Program Guardian and will be targeted towards increasing capabilities and decreasing costs.
GIFT
Program Imperatives
§ Increase Transparency – Significantly improve walk-
back capabilities from financial reports to source
transactions
§ Greater Standardization of Technology - Create a
common financial language and technology platform
§ Improve Information - Improve quality and timeliness
of information available to stakeholders
§ Standardize Processes - Standardize accounting
processes, rules, and controls
§ Leverage Operating Model - Leverage shared
services and centers of excellences
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TOM
Project Objectives
§ Develop baseline – Develop single source of truth
“current state footprint” to support proactive future
workforce planning
§ Define future state operating model – Develop
future state Operating Model which meets the goals of
capability improvement and cost savings
§ Achieve business benefits – Demonstrate
measurable business value and success; realize
benefits through the rationalization of headcount,
locations, process and labor arbitrage
§ Create business and employee buy-in – Gain
leadership alignment around the Operating Model
design, benefits and roadmap; gain employee buy-in
to the new ways of working, roles and responsibilities
and governance
§ Implement future state design– Implement the
 Background – AIUH Finance Organization Design Project
Since the TOM project was originally scoped, in support of project ATLAS, a Finance Organization design initiative has been
started to conduct current state analysis, evaluate organization design options and define key function activities. Goals of
this initiative include:
§ Identify core responsibilities of AIUH Finance (i.e., which functions should exist at the AIUH level)
§ Conduct current state analysis to determine which functions exist within Domestic Insurance and Finance Insurance
§ Define governance and control model for AIUH functions
§ Develop recommendations for sub-functions that should reside with AIUH vs. Business segments
§ Support Function Leads in developing detailed organizational models and check against high level cost baseline

While the scope of the two initiatives might appear to overlap, we believe that both initiatives are complimentary and key in


achieving the organization’s goals as related to the future state operating model ,and the two initiatives in conjunction can
answer the following key questions:
§ How can Finance most effectively support / interact with the rest of the organization ?
§ What is the optimal global Finance organization / operating model (Local vs. COE vs. Shared Services)?
§ How will current on-going initiatives impact and optimally be integrated with the future Finance service delivery model?
§ What capabilities are needed to support the future Finance operating model?

SHOW APPROACH HERE?

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The broader landscape of in-flight and planned initiatives across the enterprise will
both be impactful to and impacted by TOM

Initiatives are underway that will demand significant time and attention of leadership and key knowledge resources

¡ GIFT Program will …

¡ ATLAS will…

¡ Separation will…

¡ Reinsurance will…

¡ Global Claims Initiative

GIFT Release 1: GIFT Release 2: GIFT Release 3: GIFT Release 4:

CFP for CI CFP / CD (UK) CFP / CD (EUR) CFP / CD (JAP)

Finance OneClaim (UK) –

Organizational Auto

2010 2011 2012 2013 2014

ATLAS – Treasury AIU Holdings ATLAS - Other

Separation (IPO)

ATLAS - Reinsurance – Reinsurance –

Investments Release 1 Release 2

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The objective of the Target Operating Model (TOM) project is to design a world-class
Finance organization for AIU Holdings

The project goals for TOM include the following:

¡ Design and implement the appropriate operating model which best meet the requirements, state of readiness and maturity of
both AIU and CI’s finance functions

¡ Identify key functions and/or processes for redesign to conform with the new organization model (e.g., CoE’s, Shared
Services) and enabling technology infrastructure

¡ Identify and realize business benefits through cost optimization, capabilities development and controls management

¡ Identify opportunities for outsourcing across the finance organization, including Finance IT, business processes, and functions

¡ Align TOM to overall corporate strategies, organizational vision, and impactful initiatives as necessary, as they affect the
design and implementation of the program

Now overlapping with slide 4 – Just a few

deltas that we maybe can incorporate
into the earlier slide

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Deloitte’s Point-of-View and Market Intelligence

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Deloitte is uniquely qualified to assist AIU Holdings with this TOM effort

Deloitte’s Finance Transformation offering has been recognized as the market leader by Kennedy Information’s evaluation
of the FT market and competitive landscape.

Key Highlights

§ Deloitte received the highest rating of

“Strong” across all Finance Management
Core Capabilities, across categories of
“CFO Vision & Strategy”, “Finance
Organization”, “F&A Processes”, “F&A
Technology”, “Execution”, and “Value
Enhancement”
§ Deloitte is a leader for global shared
services combining process, technical
knowledge, change management capabilities,
understanding of technology, and insight on
labor and tax issues
§ Deloitte is the only provider rated
strongest in 14 of 16 FT core categories and
assessed as having advanced depth and
breadth of capabilities
§ Deloitte has an advantage in meeting the
needs for clients to engage a tax strategy
advisor as they consider global business
integration strategies

*Source: Kennedy; Finance Management Consulting Marketplace 2009-2012; © BNA Subsidiaries, LLC; reproduced under license.

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From our experiences with AIG and in industry, we understand both the key success
factors and challenges in the design and execution of TOM

Cultural

Competing
Priorities

Unclear Scope
and Objectives

Alignment with
Other Strategic
Initiatives

Decision Making

Inability to
Execute Strategy

Complexity and
Speed of Change

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We have assisted many clients in redesigning their operating models, and are seeing a
trend towards a more centralized F&A Organization
Many Fortune 500 Companies Have Moved Or Are Moving To A Balanced And Centralized Finance Delivery Models To Gain
Synergies

Decentralized Semi-Autonomous Balanced Centralized

Time Warner Cable

MSO and Comcast
AT&T Rogers Communications
Communications
T-Mobile
Verizon
Cardinal Health
J&J
Pharmaceuticals Pfizer
BMS
Merck

Process DuPont
Manufacturing Air Products
Rohm & Haas
HP
Nissan NA
GE
Other
Honeywell Ford
Manufacturing IBM Textron
GM
Raytheon

Mars, Inc Limited

Levi Strauss
Consumer Nike
Business Gap
Hanes Brands

S.C Johnson Procter & Gamble

Land O’Lakes
Consumer Owens Illinois Campbell
Packaged Sara Lee
Goods Pepsi
General Mills
Agilent
Wells Fargo
Other Fortune 500 Shell
Aetna
Cargill

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Insurance companies have some unique learnings to gain from their operating model
redesign efforts

Within the Financial Service Industry, varying organization structures exists. Examples of decentralized, centralized and hybrid
models exists across leading insurance and finance companies.

Insurance Company #1: Insurance Company #2 & #3: Insurance Company #4:
Finance is decentralized by line of Financial reporting activities Strong control over external
business - each business unit centralized at corporate level but reporting functions and other key
submits its own 10K filing remaining functions decentralized functions centralized

Independent Controllership Centralized

Business Carve-out CFO
Unit

Finance Company #1: Finance Company #2: Finance Company #4:

An Independent product line BU An Independent product line BU Centralized organization with
Org structure with a strong focus Org structure with a strong focus strong CFO control over financial
on outsourced shared services on outsourced shared services and regulatory reporting

Finance Company #3:

Historically, an Independent
product line BU Org structure,
evolving into a centralized
finance function

Both Finance Company #1 and Insurance Company #1 are moving towards more centralized models:
¡ Finance Company #1: A finance transformation initiative underway, to move transaction activities offshore and allow onshore resources to
focus more advisory activities
¡ Insurance Company #1: While the current structure provides the opportunity to produce results quickly, there are multiple redundancies and
less consistency across the organization. As a result, the company is considering moving to a more centralized operating model

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We have also seen a growth in F&A outsourcing activity
F&A continues to grow because of the breadth of business processes that are sourcing candidates; the F&A business
outsourcing market size has grown to approximately $32 billion
§ AP, AR, and GA appear in more than 80 percent of right sourcing strategies, and more than 70 percent have an offshore component
§ Mainland Europe is currently adopting services as quickly as North America and the U.K.
§ Approximately 85 percent of Sourcing contracts have 5- to 10-year terms (the average is 6.8 years)

F&A Sourcing Scope

Transaction Processing External Reporting
Accounting to Reporting (General Accounting) Source to Settle Order to Cash

General Leger Monthly / Financial Requisition Purchasing / Legal Entity Statutory

Consolidations Order Entry Billing
Accounting Quarterly Close Reconciliation Materials Procurement Reporting Reporting

Fixed Asset Tax Planning / Benefits Admin. / Payment Accounts Regulatory Rating Agency
Inquiry Handling Cash Application Collections
Accounting Accounting Accounting Processing Payable Reporting Relations

Investment Daily P&L / Mark T&E

Premium Re-insurance Accounting/ Procurement. Bank Treasury / Trust
to Market /Middle Accounting / Investor Relations
Accounting (Ins) Accounting (Ins) Securities Pricing Card Admin Reconciliation Management
Office Reimbursement
(FS)

Business Decision Support Finance Management

Planning Control
Budgeting & Human
Strategic Accounting / Tax Internal Project Finance Function
Financial Forecasting Internal Audit Financial Analysis Performance
Planning Policy Consulting Management Management
Planning Management

Training &
Business Liaison
Management Reporting Specialized Expertise Development

Expense / Profit Center /

Performance Multi-Dimensional Acquisitions & Risk Management Actuarial Analysis Real Estate
Key:
Revenue
Allocations
Measurements Reporting
Customer /
Producer Divestitures (CM) / Reserving (Ins) Mgmt.
Profitability

Source: Deloitte Research, IDC

Key
Not Less Most
Typically Commonly commonly
Outsourced Outsourced Outsourced

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Our Approach and Methodology

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Deloitte has experience in implementing Target Operating Models, and can leverage
methodologies and toolsets that encompass people, process and technology

A proven toolkit of established TOM accelerators and tools: Deloitte has a significant knowledge base that will be invaluable for
this project. This includes best practice operating models, process models/processes, organization designs and governance
frameworks as well as numerous examples of these from recent client experiences. We also have a suite of tools and methods that
our teams use to ensure consistent quality outcomes on our engagements and often enable us to accelerate project timelines. The
table below outlines some of our key materials and tools which are relevant to this engagement.
Maturity Stages by Process

Organisation Design Maturity Stage by ITIL v3 Process Area Maturity Stage Summary

Rapid IT Service Diagnostic tool

ated benefit

Strategy Generation
The following provides su mmary descriptions

Deloitte IT Skills Framework

Vision and objectives of the TOM, e.g.:
• Business goals. IT strategy aims such as cost
Ogier IT Skills Assessment – Overall View
Service Measurement
Service Reporting
5 Financial Management
Service Portfolio Management
for the measu red maturity stages.
reduction, risk reduction, greater agility
Operating Model Definition, increasing detail, effort and associ

Vision & • Sourcing options, strategic sourcing, single source,

Ogier IT fun ction and Application Support Team (AST) were presen t ed with a skills assessment matrix to complet e. This consisted of an industry standard list of
applicat ion skills plus the option to add in additional skills , w hich were then inc orporated into the overall res ults. Staff we re asked to rat e them selves ac cording to

7 Step Improvement P rocess

4 Demand Management
their skills in each area i. e. Not Used, Beginner, Intermediat e, Advanced and Expert and results collat ed and charted ac ross overall s kills areas . The results are

Mission multi-vendor etc. available in their entiret y via the completed Skills Matrix.
Level 1 – Chaot ic

Target Operating Model Design

B ackground

Applications Management Service Catalogue Management Processes an d roles ar e not defined. Activ ities
Definition of the high-level principles e.g.: The skills available to the IT departm ents are diverse. These are mainly centred
around Inf rastructure and Ogier known applications (t hose n amed on Ogier’s
in this area ar e largely u nstructured and
3
App licat ion Matrix). However t here are als o many skills availabl e which are not
• Multi-supplier/Service Integrator model being used.

Target Operating uncoordinated.

• TOM design principles Obse rvations

• Lean management & control Model Principles The IT skills assessment identif ies those areas where training could be provided as
well as areas where s taff possess skills which are not being used. IT Operations Management Service Level Management
• ITIL-aligned processes etc The skills assessment uses a standard lis t of applicat ions from t he Deloitt e database.

2
This represents a wide-ranging skill set of pref erred skills .
The main skill set is centred around Infrastruc ture Applications and Ogier known
applic at ions (those named on Ogier’s Application Matrix). Level 2 – Reactive
Definition of the retained IT org: Definition of functional TOM: However, there are several areas of skills where staf f posses s s kills t hat they are not

Functional
Functional Operating
Target Model
Operating Model using. These are m ainly aro und Infras tructure, Development and Deskt op Tools, as
well as some Ogier known apps. Technical Management Capacity Management Basi c processes are defi ned and fol lowed to
• Level 1 Roles descriptions • Design of future state functional In some areas such as Securit y, there are no experts – but there are staff who have
some extent. P rocesses can often be byp assed
1
skills in that area and are not using them.
• Level 2 Role responsibilities, skills & groups in TOM In some areas such as Voic e Services, Requirements Gathering and Dat a

capabilities • Description of functions and key Warehous in g there are only basic skills with no Expert s or Advan ced level s taff.
Furt her det ailed inf ormat ion can be found in the Skills Matrix. This contain s a
and there is a lack of owne rship. Acti vities ar e
• Performance Measures & Targets responsibilities detailed breakdown of skills, graphs of skill levels and an over view of skill c lusters.
Access Management Availability Management largely reactive and ineffi cient in nature.
Ke y Recomm endatio ns

Organisation
0
Review skills matrix and identify areas where further training i s needed.
Each high level category (left) is broken down into specific applications.
Resources should centre on Ogier known applicat ions as these are t he A
Definition of processes e.g.: apps Ogier identified as necessary to the Business. There are al s o ‘Og ier

Definition of Governance: M
Level 3 – Proactive
added apps’ which are those applic at ion s identified by staff as being part
B
• Level 1 to 3 process design of their everyday skillset.

• Governance forums
• RACI responsibility matrix
For areas where further training or rec ruit ment has been identified, the
E
R Problem Management IT Service Continuity Management
Processes are agreed, wel l do cumented,
skills matrix has also highlight ed any staff who have skills in an area

responsibilities, escalation where they are not using them in their job role. This may fill a

• Process metrics & targets development need for Ogier in terms of utilising an existing skillset.

• Reporting requirements Process ©20 07 Deloitte MCS Limited. Private and Confidential. communicated a nd enforced. R oles are defi ned
• IT metrics & targets
• Balanced scorecard Request Fulfilment Information Security Management and individuals are suitably trained. S upporting
Governance & Performance Reporting technology is u sed to help deliver process
objectives. Ser vice Leve ls are in place an d
Event Management Supplier Management agreed

Deloitte has an established business

Incident Management Transition Planning & Support Level 4 – Service Driven
Processes have clear end-to-end service
500
Service Desk Change Management oriented targets assoc iated to the m, an d
efforts are made to continually improve.
Knowledge Management Service Asset & Config Mgmt

Deloitte’s diagnostic tool is an ITIL

450

400 Evaluation Release & Deployment Mgmt Advanced technologies are u sed to ass i st.

design group that specializes in the Deloitte’s Skills Framework tool assesses
350 Service Validation & Testing
300
Not Used
Key: Level 5 – Value Driven
Maturity Stage Sc ore by Proces s Area Processes are h ighly mature and ve ry well
Expert
250 Advanced
Intermediate

integrated into the Business requirements. T he

Beginner

Desired Stat e

version 3 aligned assessment tool which

200

150 Business and IT work together to i mprove.

detailed design and implementation of the skills capabilities in an organization,

100

Managem e nt

Requirement s A nalys is
Package I ntegrat ion
Business I ntelligence
50

apps
Data W arehousing

Ogie r added apps

Tools

Mobile S erv ic es
Desktop T ools

Voice S er vices
In frastruct ure

Test ing T ools

Development
Certif ication

Hardware

Security
IT SM
0

Ogier known
ID
Enterprise

Inf ormation
organizational structures and aligns this to the organization’s provides a structured and
Deloitte’s Target Operating methodology needs. comprehensive approach to quickly
provides an end-to-end view of the Our approach goes significantly beyond understanding current state maturity
required target functions and capabilities ‘wiring diagrams’ and job mapping. We We can also draw on a best practice across the entire IT process, control,
of an IT Organization. adopt a hypothesis driven approach that framework called Skills Framework for organizational, and supporting
defines the capabilities required to the Information Age (SFIA). technology spectrum.
deliver against strategic objectives.

Individual Prog ramme Desi gn & Control

Regional Changes t o
steps which SBU SBU CIO Global GSS Vendor Governan ce S tructure Strategy C hart

Leadership
Process Design
GSS IT activities not Vision D esi gn Board Control
link to other Column Column IT Column Activities

Deloitte Intelligent PMO

• 

Column yet reviewed Approach Assurance

processes
• 

Deloitte’s Cultural DNA assessment

Risk & Issue Management Program me Out come

Mission, Vision,
Best Practice/ Benchmarking
Track and Manage Vendor Risk Awaren ess Design & Cont rol Management
Risk and Issue s log Busi ness Case/
Contracts –managed by GSS IT

•

Investme nt Appr aisal

Values
•Escalati on pro cess Risk & Iss ue Outcome
Global GSS IT
Regional GSS

Key Performa nce

Regional Head

M itigation Activi ty
Infrastructure

Management Management

Services RM

Indicators
•

Continge ncy p l anning

AD Vendor
AS Vendor

R=Responsible, A=Accountable
of GSS IT

Metrics
•

Reporting
Vendor
Shared

Vendor

Realisation plan a nd
PE&O

•
F&OC

C = Consult, I = nI form
M&C


M&C

DCS

DCS
TRM

ADM

ADM
SBU

ADE

Business Strategy
S&A

S&A

tracking tool
CIO

IDS

IDS
RM

SM

SM
VM

VM
IT

PMO Owne r/Responsibility



alignme nt
1 Receive finalised contract after A, Post progr amm e re view

and Structure


I I I - - - - - A,R - I - - - - - I - - - - - - I - - - -
negotiation R Planning &
Program me
Planning & Progre ss Pro gram me Support
Pro gress Reporting Support
2 Receive vendor performance metrics A, Reporting
 Financial Control
- - - - - - - - - - - - R - - - I - I - - - - - - - - - Qual ity Control
and analysis from Service Management
•

R Scope M anage ment Stakeholde r Change Control

Brand Promise


Integr ated p lan Management & Configuration C ontrol

•

3 Discuss vendor performance between Depende ncy t racking Communic ations

\
•

Secretariat
A,
•

Deloitte’s process design approach

Resource Estima ting
- R - - - - - - - - - - - - - R C - - - - - - C - - - - •

Orga nisation Chart

SM & VM R
•

Reporting tem plates,

Filing Structure
•

process and s chedule

•

Contact List
4 Review performance (metrics) with Exce ption re porting
•

Programmes, Policies,
Deployment of a standard PMO often
•

A,
I I I I I - - I A,R I C C I,C C C - C - - - - - C C R R R R
vendors on a periodic basis R Stak eholder Ma nagement &

includes a number of tools to support

Communications

Processes, Practices
Stakeholder M apping
5 Analyse service level credit regime and 

A, Contact tracker and ca lenda r

•

- R - - - C - C A,R - - - C C C - C - - - - - C C - - -
identify applicable penalties / incentives

does not provide the necessary insight

R Communica tion produc ts
•

Physical Work 6 Discuss applicable penalties and

specific parts of the design process.

A,
C R R - C C - C A,R - - - - - - - C - - - - - - C - - -
incentives R

Environment
to steer a program intelligently and
7 Execute penalty / incentive payment - - - - - - - A,R - - - - - - -
A,
- - - - - - - - I I I I
R

People Profile, These include: Deloitte research and our substantial

8 Distribute financial impact of

Provides a “hard” and tangible way to

A,
C R R - R C - - A,R - - - - - - - C - - - - - - C - - -
penalties/incentives across SBU R

Assumptions 9 Evaluate contract value and adjust if

highlight the real risks and issues ahead
experience of IT organizations allow us
A,
C C - C - - - - A,R - - - - - - - C - - - - - - C C C C C

understand the “soft” and complex issue

necessary
and Behaviours
R

RACI modelling for establishing clarity of time.

of culture. It is a rigorous and around roles, responsibilities and to offer comparisons across all
statistically valid tool which provides Deloitte’s iPMO is designed to deliver industries, Our practitioners are highly
interfaces.
insights into behaviors, behavioral complex technology programs ensuring skilled in implementing leading practices
Governance structure design. integration, Information-lead and and technologies.
drivers and barriers for change.
Capability mapping tools. intelligent management of programmes.

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Approach framework
Our approach is designed to help you define options and gain stakeholder consensus

Design and completion of detailed

Create a common set of service delivery architectures for the selected Target
design principles, and formulate a Operating model, e.g. detailed IT, people,
Identifying and aligning the finance
supporting future state vision. Benchmark process etc. architecture underlying the
function behind an organizational
the vision to internal and external data TOM, including a detailed business case
strategy is the critical first step in
points. and financial impact assessment.
developing a Target Operating Model
strategy

Conducting an assessment across
functions within the Finance organization
will help identify opportunities and key
activities that need to be incorporated in
developing a future target operating
model
Determine the future shape of the
operation by using the previously defined
design principles and strategy to create
service delivery options. Analyze ,
prioritize and select the most viable
option for subsequent implementation.
With a target operating model design in
place, a detailed implementation plan
and roadmap clearly highlighting
responsibilities, dependencies and
sequencing of steps is needed to execute
and deliver the future state operating
model

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Organizational Strategy
Identifying and aligning the finance function behind an organizational strategy is the critical first step in developing a Target Operating
Model strategy

¡ Confirmation of the strategy, objectives and critical success Sample Output – Charter with Guiding
factors (CSFs) developed by the Finance Org Model project Principles
Holding Operating Shared
¡ Rationalization of functions across regions Company Company Services
Goals & Finance Finance Group
¡ Leadership consensus and alignment Possible
Objectives Locations
¡ Understanding the consistency with which these have been of Enterprise- Business Shared
communicated, understood & applied Required wide finance specific financial
Functions functions and finance processes
processes functions and
processes

¡ Objectives List: Conduct executive interviews and/or

workshops to identify and confirm strategy objectives Controllership
¡ Align Objectives: Review vision and organization structure
Activities & designs from the Finance Org Model team and revise to fit
Deliverables with finance strategy objectives Financial Planning & Analysis

¡ Voice of the Customer Analysis: Conduct surveys across

functions and business units to understand issues and needs
regarding Customers, Products and Channels Tax
Required
Functions
Treasury
¡ Organization Design
¡ Balanced scorecard
Risk & Compliance
Toolsets & ¡ Operation Model Value Chain
Accelerators ¡ Voice of the Customer Surveys
¡ Product & Service Segmentation Other

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Current State Assessment
Conducting an assessment across functions within the Finance organization will help identify opportunities and key activities that need
to be incorporated in developing a future target operating model

¡ Establish definition of current operating model and Sample Output – Functional Analysis
architecture (e.g., process, org, technology), including
opportunities to leverage shared services and outsourcing
Goals & ¡ Identify where existing initiates on-going/planned impact TOM
Objectives ¡ Capture key FTE, Business and Financial metrics and identify Shared
Role Function Location FTEs
duplications, costs, and system constraints Service
Audit External Audit Planning Bus. Unit 2 N

Internal Audit Corporate 5 N

Internal/External Audit Support Bus. Unit 3 N

¡ Current State Footprint Analysis: Understand, validate and General Executing the Corp/OC Close Corporate 3 N
map the current organization and processes to help in OC Consolidation Shared Svc 2 Y
developing the TOM definition
Enterprise Consolidation Corporate 1 Y
Activities & ¡ Change Management Documentation: Capture current and
Deliverables planned change management activities Manage G/L (Top Side JE) Corporate 6 N

Manage G/L (Initiating JEs) Bus. Unit 2 N

¡ Function Analysis: Assess performance across functions ip
h C
trle
n
o Manage G/L (Posting JEs)
s Shared Svc 5 Y
using an industry maturity model and identify deficiencies
Accounting Policies Corporate 1 N

Accounting Procedures Bus. Unit 1 N

Overhead Allocations Shared Svc 1 Y

¡ Cultural DNA Assessment
Foreign Exchange Translations Corporate 1 N
¡ Rapid IT Service Diagnostic Tool
Eliminations Corporate 1 N
Toolsets & ¡ Value chain analysis
Accelerators ¡ Maturity Model
¡ Resource/Skill/Function Database

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Future State Vision
Create a common set of service delivery design principles, and formulate a supporting future state vision. Benchmark the vision to
internal and external data points.

¡ Establish future state vision for service delivery channels Sample Output – 2x2
(e.g., COE, shared services, regionalization, etc.)
An operating model matrix, as shown below, can be used to illustrate the focus
¡ Align to Finance Org Model initiative vision and confirm of Finance’s strategic choices. For example, a cost efficient transaction
Goals & design principles for TOM processor’s likely focus will be the “Shared Services” quadrant.
Objectives
¡ Compare vision to industry practices through
benchmarking
Method Of Adding Value
Transaction Processing Knowledge-based
High volume, low value add Low-volume, high-value activities

¡ Confirmed Future State Vision: clearly defined operational

Site Support Business Partner
)
design principles and confirm through executive workshops n ¡ Distributed to location(s) for ¡ Aligned with a f unction or BU
io
ci g local service needs or management team
¡ Benchmarking Study: analysis of gaps in key design s fi e
r
Activities & s c ,t ¡ Specialized services for each
i ¡ Knowledge transf er services
principles as compared to industry leading standards e e n
Deliverables n
i p
S
u
,
site ¡ Decision/action Intensive
¡ Financial Model 2x2 Matrices: analysis of to-be states s te Manual or end-user Intensive
u i ¡
across all finance functions B S
(
o
T
p
i
h Shared Services Center Of Excellence/Corp.
s
n ) ¡ Consolidated organization ¡ Expertise focus — ability
o
it e
d to leverage
i ¡ Operational focus
¡ Finance Transform Maturity Matrices a
l icr w
e y ¡ Process intensive with ¡ “Best practice” development
e n
¡ Best Practice Benchmarking R n
e
a
standardized services ¡ Issue/knowledge intensive
p
G m
Toolsets & ¡ Sourcing Matrix o
C
¡ Could cover countries or ¡ Often organized by region
(
Accelerators ¡ Key Design Principles
region

--
Service Delivery Analysis & Selection
Determine the future shape of the operation by using the previously defined design principles and strategy to create service delivery
options. Analyze , prioritize and select the most viable option for subsequent implementation.

¡ Develop options based on previously defined vision and Sample Output – Process Rationalization
design principles
¡ Analyze the opportunity and costs implications associated
Goals & with each option and review with stakeholders
Objectives Maturity Lead Generation As -Is Value Stream Map
¡ Make the final selection for future state TOM model

Error – cannot 6
Actuarial

1.09 Maturity Team store other in Oddments

Change (5-10%)
26

1.08 Maturity Team amend record on

QA Actuarial

Webseries

Tub
¡ TOM Options: identify viable TOM options showing Name;
Address ;
Policy;
Error –
can
Change (c.20%)

functions, sub-functions, location / region and use of COEs

Slip per
Agency
customer
Number;
Estimated
Value

/ shared services 2 1 3 25 4 5 24

1.05 Maturity team receives & stores check

1.06 Maturity Team access EDM for legacy

1.11 Maturity Team store slips in cupboard

1.12 IS run report on OB and produce XLS

1.15 Maturity team pass to Actuarial Team

Activities &

1.07 Maturity Team compare check slip

1.10 Maturity Team sign off check slip

1.04 Post delivered to maturity team

1.13 IS produce authorisations slips

1.01 IS run a report on OB system
¡ Scorecard and Evaluation Criteria: create criteria for

1.02 IS check slips generated

1.14 IS pass to maturity team

1.03 IS pass to post team

against EDM document

Deliverables evaluation and prioritization of TOM options

documentation
Check passed (c.70- 75%)

report
Page 2

slip
¡ Prioritized Options List:: facilitate workshop with key Every
2 weeks
Every
2 weeks

stakeholders to discuss and rank options by priority

Report run on Previous claims Report run on Sample size 40
maturities in 4 Policy changes maturities in 2
months time months time

¡ Prioritization Matrix 2 days 1 day

2 days
(100 items per batc h tak es one pers on 1 hour to proc ess = 50
man hours to proc es s 5000)
1 day
(2 mins per K ey mas ter rec ord
amendments * c.1000 amendments )
1 hour 1 hour 2 days

¡ Process Rationalization

Toolsets & ¡ Location Feasibility Study Page 1

Accelerators ¡ Shared Services / COEs / Sourcing Strategy

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Design
Design and completion of detailed architectures for the selected Target Operating model, e.g. detailed IT, people, process etc.
architecture underlying the TOM, including a detailed business case and financial impact assessment.

¡ Based upon the selected service delivery option, develop Sample Output – Future TOM Design
the detailed IT, people, process etc. architecture underlying
the selected TOM
CFO
Goals & ¡ Identify the related metrics (cost, financials etc.), create a
Objectives cost / benefit analysis and create the detailed business
Finance Exec
case and funding request

Head of Head of
Head of
Business Head of FAC Transaction Head of Tax
Treasury
Partners Processing

Transactions
Financial Assistant Indirect Tax Direct Tax
Treasury Assistant
BP Exec. Controller Manager Manager
1 FTE

¡ Detailed TOM Design: create detailed organizational

Head of Process
charts showing functional, systems and resource Management
Accountant (Inv.
Financial
Control and
Improvement
Senior Transaction
Processing Accounts Assistant Direct Tax
accountant (VAT) Accountant
architecture models, including governance and Perpetual)
2 FTE
2 FTE 2 FTE

Activities & accountability Non IP UK

Systems Analyst
AP
Business Units 5 FTE
2 FTE

Deliverables ¡ Business Case: create opportunity cost and benefit

2 FTE

analysis, including financial impact assessment BP Exec.

AP/FA
1 FTE

Key
AR
1 FTE Corporate -
Management Corporate -
Accountant 2 FTE Aligned to Region
General
Business
Cash Processing
BP Exec. Offshore 1 FTE

¡ Operating Model Design Accounts Assistant

Management (Feesharing)
Accountant
¡ Diagnostic Process Blueprint (Offshore)
2 FTE

Toolsets &
Commissions
¡ Business Case / Financial Model Framework BP Exec. ESS &
EBS
1 FTE

Accelerators ¡ Key Metrics Measurement and Tracking Tool

BP Exec. ECS
2 FTE
¡ Lean 6 Sigma methodology

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Implementation
With a target operating model design in place, a detailed implementation plan and roadmap clearly highlighting responsibilities,
dependencies and sequencing of steps is needed to execute and deliver the future state operating model

¡ Design an implementation plan and roadmap based on TOM Sample Output – Implementation
analysis, highlighting sequencing and dependencies Plan
¡ Review project portfolio for consistency & alignment
Goals &
¡ Design authority established to govern the implementation and
Objectives identify milestones
Year 1 Year 2 Year 3 Year 4 Year 5
¡ Implementation work initiated Illu
Sales and Service Implement regional salary Regional salary weighting str
a ti
weighting introduced ve

Collections and Recoveries outsourced to

Outsource Recoveries
Recoveries low cost provider

Marketing
¡ Roadmap: Develop roadmap detailing activities, sequencing
of steps, desired outcomes, and dependencies Product Design Re-engineer product dev
processes for core products
Product development processes
optimised for core products
and Manufacture
Implement white-labelled product design and manufacture, White-labelled supplier utilised
¡ KPI Documentation: Identify key performance indicators Operations and IT and operations for non core products for non-core products

Activities & (KPIs) to track the success of the implementation IT Infrastructure Migrate processing to alternative supplier (TBC) for product
design and manufacture, IT and operations for non core products
Deliverables ¡ Project Management Office Charter: Agree / achieve Risk
Alternative sourcing (TBC) utilised for core
product design, manufacture, operations
and IT
roadmap sign off and establish project management authority
Payments Outsource Payments Payments outsourced to low
cost provider
¡ Deployment: Begin to execute on the roadmap by clearly
defining short-term next steps and responsibilities Shared Services Outsource simple, transactional processing
Simple Shared Service
processing outsourced
to low cost provider
Organisational
Change Re-organise functions to align with new organisational structure

¡ Portfolio management methodology (PMM)

¡ Program Interdependency Planning

Toolsets & ¡ Change Readiness Assessment

Accelerators ¡ Key Industry Benchmarks
¡ Prince 2???

--
Project Timeline and Resources

--
Project Timeline
1 2
§ Identify and confirm
strategy objectives
§ Align objectives to fit with
finance strategy objectives
§ Conduct surveys to
understand issues and
needs regarding
Customers, Products and
Channels
Timeline (weeks/months)
3 4 5 6 7 8
§ Understand, validate and
map the current
organization and
processes
§ Confirm Future State
§ Capture current and Vision through executive
planned change workshops
management activities
§ Conduct benchmark
§ Assess performance analysis of gaps in key
across functions using an design principles as
industry maturity model compared to industry
and identify deficiencies leading standards
§ Analyze of to-be states
across all finance
functions using financial
2x2 matrices
--
9 10 11 12
§ Identify viable TOM
options showing functions,
sub-functions, location /
region and use of COEs /
shared services § Create detailed
organizational charts
§ Create criteria for
showing functional,
evaluation and systems and resource
prioritization of TOM
architecture models,
options including governance and
§ Facilitate workshop with accountability
key stakeholders to § Create opportunity cost
discuss and rank options and benefit analysis,
including financial impact
assessment
Milestone
Organization chart

Descriptive

Labe

Line 1
Line 2

Label Label Labe

Line 1 Line 1 Line 1

Line 2 Line 2 Line 2

Labe Labe Labe Labe Labe Labe

Line 1 Line 1 Line 1 Line 1 Line 1 Line 1

Line 2 Line 2 Line 2 Line 2 Line 2 Line 2

--
Key Success Factor / Our Experience (Sameer Shah)

nGeneral market success factors

nPitfalls to avoid given our knowledge of AIU Holdings

nPotentially highlight regulatory and tax concerns (e.g., data may need to reside in Japan)

--
Copyright © 2008 Deloitte Development LLC. All rights reserved.

--