Transcript Customer Needs & Challenges

Application Services Business Plan
Software Engineering Operation
Application Services Business Plan
Fast Track Business Plan v.2
May 18, 1998
This version includes the following revisions since the 4/29 Management review:
• A revised segmentation model (same information) (pg. 9-11)
• Fine tuning of the service offerings (pg. 21-23)
• Adjustment on 3 Year Objectives (pg. 32)
• New forecasting scenarios (pg. 36-38)
• New sales assumptions and guidelines (pg. 43)
• Sales and marketing success tracking indicators (pg. 44)
SWEO
5/4/98
1
Application Services Business Plan
Contents
Customer Needs and Challenges......3-7
Segmentation....................................8-16
Offer & Services.............................17-30
Goals, Financials & Resources.......31-40
Required Issues and Actions...........41-48
Appendix of Misc.. Slides................49-66
Contributors:
Gary Gujral, Joe Martinez, Helmut Bentsche, Terry
Ash, Donnie Foster, Matt O’Donnell, Michael
Dautel, Mike McGarry, Satish Varma (TCS)
Business Plan written by :
Jeri Crittenden, Consultant
SWEO
5/4/98
2
Application Services Business Plan
Customer Needs & Challenges
SWEO
5/4/98
3
Application Services Business Plan
F1000 Top Service Initiatives - ‘97
% of Respondents
Customer’s resources and skills are stretched across a wide range
of initiatives, technologies, and implementation timelines.
51.10
Internet
43.60
E-Messaging
39.30
Security
38.70
CPE Maint
33.90
Y2K
30.50
Intranet
28.00
NT Migration
27.90
BRS
25.50
Ent. Appl. Solns
22.30
Help Desk
21.80
CMS
21.30
Mobile Computing
18.20
Asset Mgmt
17.80
ECOM
16.60
DW
12.40
Collaborative Computing
11.40
SC
9.90
KM
1.10
Euro Plan
3.80
None
0
SWEO
5/4/98
10
20
30
40
50
60
Source: Dataquest end-user budget survey , 7/97 as quoted in Y2K Market Analysis
4
Application Services Business Plan
Client Needs and Application Services
Key needs where customers look to application developers, systems
integrators and outsources.
Services
Achieve competitive advantage, accelerate TTM, increase
profits, obtain new skills, accelerate BPR efforts
Data warehouse and mining
Business performance & customer needs analysis improvements
Package Implementation
Management
Transitioning
Year 2000 Services
Integrate w/ current environments
New development
Emerging & Internet
technology
SWEO
5/4/98
Needs
Change customer and supplier business models, accelerate TTM.
Integrate with legacy environments.
Integrate business functions, improve TTM& functionality.
Conversions, migrations, re-hosting, transformation to new
architectures for performance, capability or cost improvements
Assess problem, obtain resources, convert or replace
Retooling
Teach staff new processes, technologies, methodologies
Support
Application help desk, 24X7 troubleshooting
Maintenance
Fix bugs, reduce costs, improve operational performance or
productivity, shift of internal resources to new development
5
Application Services Business Plan
IT Staffing Dilemma
Finding & retaining skilled resources has become a major IT challenge
Competition with providers for resources
Service provider as a solution
to resource shortage
• Recruiting network
• Skills database
• Subcontractors
• Offshore
• Colleges
• Retention
• Interviews
Skills Transfer
• Skills tests
& Assessment
• Mentoring
• Project knowledge transfer
Service provider as a
competitor for resources
Staffing &
Recruiting
Training
& Reskilling
• Methodologies
• Processes & tools
• Service delivery model
• Management training
• Certification
• Career paths
Three most important elements of the staffing dilemma
SWEO
5/4/98
Source: Gartner Group 1997 from Deloitte & Touche survey of 1400 CIO’s WW
6
Application Services Business Plan
Competitive Landscape
Many Players
Package Management
New Development
Andersen Consulting
EDS
Price Waterhouse
CSC
Andersen Consulting
Gap Gemini Sogeti
MCI Systemhouse
Cambridge Technology Group
EDS
IBM Global Services
CSC
Perot Systems
SAIC
Unisys
Staff Augmentation
Offshore
Computer Horizons
Keane
Computer Task Group
Accustaff
IMR
CBSI
HCL America
Mastech
Syntel
Infosys
Legacy Maintenance
Keane
Coopers & Lybrand
Andersen Consulting
Cap Gemini America
IMR
SWEO
5/4/98
Full Service
Year 2000
Transitioning
MCI Systemhouse
Lockheed Martin
Andersen Consulting
GE Capital
Entex
Vanstar
PKS
Gap Gemini
Ciber Inc.
Cognizant Technology Solutions
IBM Global Services
Computer Horizons
Compuware
Data Dimensions
Mastech
IMR
Keane
Source: Gartner Group, 7/97
* IDC Top Providers, 1997
7
Application Services Business Plan
Segmentation
SWEO
5/4/98
8
Application Services Business Plan
Application Services Segmentation Approach
SWEO’s target segment for application services -- “Value Seekers” -enterprises aggressively applying technology for new or improved business
capabilities - and are resource constrained.
• Implement beta
/emerging
technologies
• Proof of concept
technology does
what is promised
Emerging technology
“Value seekers”
• Wants help to
apply technology
• Lower risk
• TTM - Increase
speed of
implementation
• New functionality
for competitive
advantage
New Solutions
Segment F
Segment C
“Cost conscious”
• Focus on cost savings
and improved
operations
• Free in-house IS to
work on strategic
initiatives
Low or no Gap
“Early adopter”
Segment E
Segment B
High Gap
Segment D
Segment A
Deployment
Capability
“The Gap”
Routine/standardized
Stage of Technology Integration in Marketplace
SWEO
5/4/98
9
Application Services Business Plan
Services for the Target Segment
Focus: Which Needs? Which Services?
Where can SWEO
- Add the most value to solving customer’s business problems
“Early
adopters”
“Cost
conscious”
- Earn profit (premium price)
- Set direction for future growth
- Leverage our strengths & experience
“Value seekers”
• Wants help to
apply technology
• Lower risk
• TTM - Increase
speed of
implementation
• New functionality
for competitive
advantage
New Solutions
SWEO
5/4/98
- Establish credibility
- Position w/ channel & competitors
Possible Services to Meet Needs....
•New development
•Data warehouse and mining
•Emerging & internet technology integration
•Package Implementation Management
•Transitioning
•Year 2000 Services
•Retooling
•Support
•Maintenance
10
Application Services Business Plan
“Early
adopters”
“Cost
conscious”
“Value seekers”
• Help apply
technology
• Manage risk
• TTM - Increase
speed of
implementation
• New functionality
for competitive
advantage
New Solutions
SWEO
5/4/98
Services Mapping to the
Target Segment
* SWEO Primary Application Services
• Address urgent business needs
• Add significant value for premium
• Leverage India expertise
• Differentiate on lowering risk and TTM
• Align w/ ISBU role
Key Customer Services to Meet Needs....
*Integrate with
existing/legacy
environments
* New development
* Emerging & internet technology integration
Secondary Services
Transitioning
Year 2000 Services
Retooling
Support
Maintenance
11
Application Services Business Plan
Competition: How Differentiate?
Legend:
Provider Focus
SWEO Target
Provider Direction
Offshore Co.
Vendor’s Value
Propositions:
Resources, skills at low cost
IT Outsourcers
Improve processing
efficiencies, manage costs
Mgmt Consultants
SI’s/AC/ ISSC
SWEO
5/4/98
Emerging technologies
Integrate anything
New /existing technology;
know-how to use/ manage it
Product Vendors
Different value
for services over time
Management expertise
moving into technology
Help apply technology,
increase speed of
implementation
Provide cost savings and to
free in-house IS
12
Application Services Business Plan
SWEO Internet Focus
Application Services helps drive HP emerging software into the....
Internet Solution Landscape
Access
Collaboration
Transaction
Internal
publishing
Collaboration,
workflow
Home
pages
Dynamic
Web pages
Internal & businessBusiness-to
to-business apps.
consumer apps.
Intranet
Internet
ISBU Emerging Solutions
SWEO
5/4/98
*Source: SWEO modified from International Data Corporation 1997
Use ISBU & SSG
software for depth of
integration with
enterprise legacy
operations, applications,
and databases
SWEO
Target for
Internet
Solutions
13
Application Services Business Plan
SWEO’s Target Client
“Our strategic business initiatives require more IS resources
with the right skill set and experience than we have or can
reasonably hire and train in the next 1-2 years.”
•
•
•
SWEO
5/4/98
IS has a significant delivery gap: they are lacking 50+ person years of
development capability and are in pain.Gap may be due to numerous reasons:
– Lacking IS resources and skills to manage business unit demands for
applications to achieve strategic/competitive advantage
– Backlog of application revisions for new capabilities or performance
improvements
– Year 2000 projects have consumed resources
Organizations undergoing business initiatives to take advantage of emerging
internet technologies - but concerned about implementation risk
Concerned about loss of control through outsourcing
14
Application Services Business Plan
Target Opportunity - Checklist
Primary Criteria
•
•
•
•
•
•
•
Customers in SWEO targeted, named enterprise accounts
– Focus on financial services market with FSBU & EAO
Major delivery gap: 50+ man years of development
Skills gap for emerging technologies
IT methodologies and tools dated - struggling with move to new technologies
Planning to use internet and open systems (UNIX) & NT technologies to improve
business to business or business to consumer performance
Better than 50% chance to evolve from a projects-to-alliance relationship
Open to or exploring India resources
SWEO is NOT Targeting
•
•
SWEO
5/4/98
Stand alone Year 2000 projects
Stand alone maintenance projects
15
Application Services Business Plan
Target Opportunity - Checklist
Current
Environment
High degree of custom
S/W development
(COBOL; M/F’s)
Target
Account s
Financial
Services (‘98)
Delivery Gap
+ 50 man years
Skills Gap
in newer
technologies
Using IT for
competitive advantage
Legislative or
Industry pressure
(deregulation)
Primary
Criteria
Legacy to......
•Internet/
•Emerging
•UNIX
•NT
High probability
for long-term S/W
partnership
Additional
Qualifiers
•HP relationship at IT &
LOB
•Open to or exploring
India for resource
•Possible to use SSG
S/W products
•Dated IT Infrastructure
& Processes
•No entrenched SI or
Outsourcer - or not
satisfied with current
partners
No Standalone Y2K or
Maintenance projects
SWEO
5/4/98
16
Application Services Business Plan
Offer & Services
SWEO
5/4/98
17
Application Services Business Plan
SWEO Offer
Our Application Services Alliance Program (ASAP), offers an
approach to strategic application development that reduces risk and
accelerates solutions deployment when compared to staff
augmentation, project based contracts, or outsourcing alternatives.
Partnership
Knowledge
Transfer
Deep knowledge
of HP’s
technologies
SWEO
5/4/98
ASAP
HP-Quality Application
Development Services
Access to large
pool of skilled
resources
18
Application Services Business Plan
Key Differentiation
ASAP is a collaborative approach that allows the client to maintain
contol of strategic applications, provides access to large pool of skilled
resources, and reduces per project start-up time and risks.
Resource
Augmentation
• Requires Customer
management
oversight as the prime
• High per project
start-up time
• Customer must find
skilled resources
•Increases on-site
infrastrucutre costs
• Ranges from bodies
to SI projects
SWEO
•T&M to Fixed price
5/4/98
ASAP
(IT Extension Approach)
• Joint Project Office primes
• Manage multiple project streams
• Provides access to very large
quantities of skilled resources
• Global, off-site resource
infrastructure
• Consistent application of tools &
methods
• Deliverables based pricing
IT
Outsourcing
• Vendor primes and
contols
• Long specification &
bidding process for 5-10
year outsource contract
• Vendor buys assets
• Continue on-site
infrastructure costs
• Fixed price with
renegotiations
19
Application Services Business Plan
Services-to-Alliance Strategy
What we’re after:
Clients we can engage 2-3 times and evolve to a multi-year “Alliance”
3
Customer
Business
Drivers
• Changing
business models
• Competitive
advantage
• Multiple
strategic
application
projects
SWEO
5/4/98
Project 1
2
Alliance
Application
Services
Supporting Services : we do these in support of
application development engagements
Platform Transitions
Code Conversions (Y2K)
Application Support
• 3+ year
relationship
• Minimum 50 man
years of resources
annually
• $10++ million
annual revenue
minimum
• $2-4M annual minimum per project to get started
• 2-3 projects that lead to alliance within 2 years
20
Application Services Business Plan
ASAP Services
SWEO’s primary service focus is strategic application development. We provide
three complementary services to support the delivery of the strategic application. For
all four service areas, integrating internet and newer technologies into existing
environments is a major focus and significant part of our value added.
ASAP Methodology
Strategic Application
Development & Deployment
Application &
Platform Migrations
Internet
Enabled
Legislative,
Year 2000, Euro ‘02
Application Enhancements
SWEO
5/4/98
21
Application Services Business Plan
ASAP Methodology
ASAP Methodology
Strategic Application
Development &
Deployment
• Establishes and manages joint Client-HP software
development alliance and project office
• Establishes a process to meet business priorities
• Provides rigorous project management and processes to
manage software engineering resources on multiple project
streams simultaneously
Internet
Enabled
Legislative,
Application &
Year 2000
Platform Migrations
• Provides on-site design and large-scale (hundreds) off-site
software engineering resource ramp and management
Application Enhancements
• Establishes a distributed, physical environment for quality
software development and support
• Implements a communication & equipment infrastructure
• Applies integrated process management (i.e. forecasting,
production planning, quality, documentation, etc.)
• Applies client’s tools and methodologies as required - or HP’s
• Implements appropriate practices (re-use,tools use)
SWEO
5/4/98
• Provides for knowledge transfer
22
Application Services Business Plan
Strategic Application
Development & Related Services
¤ Application Development Service - Application
ASAP Methodology
Strategic Application
Development &
Deployment
Internet
Enabled
Legislative,
Application &
Platform Migrations Year 2000
Application Enhancements
design, development and deployment for HP and NT
platforms
¤ Application Transition Service - Application and
platform migrations from any current mainframe or
server environment
¤ Application Compliance Service - Assessment and
code conversions for legislated situations like Year
2000 or Euro currency, during Application
Development or Transition Services
¤ Application Enhancements Services - Continued
support for developed or re-hosted applications
SWEO
5/4/98
23
Application Services Business Plan
ASAP Methodologies & Tools
.....Form the foundation for quality application initiatives
Methodologies
–IT Extensions (ASAP)
–Project Management (Focus PM)
–Software Development (CPLC)
–Migrations
–Year 2000
–Application Enhancements
–Quality
Documenting each...
SWEO
5/4/98
Tools
–Project Management tools
–Software estimation tools
–Software defect tracking tools
–ISO 9000 based software process definitions
–SEI based process improvement methods
–Knowledge management
24
Application Services Business Plan
Migration
Methodology
Example.....
Customer Site
Planning &
Investigation
Activities
• Application
Analysis
• Environment
Investigation
• Alternatives
Analysis
HP Site
Tools
Development/
Customization
Pilot
Migration
• Tools
•
Specification
•
• Application
Migration
•
Tools
•
• Establishing
Project Objectives
& Scope
•
• Developing
Data
Conversion
Tools
• Migration Guide
• Implementation
Proposal
• Tools
Customer Site
Application
Migration
Acceptance
Tools Testing • Program
Conversion
DB
Conversion
• Unit Testing
• Functional
Verification
Pilot
Migration
• Integration
Testing
• System Testing
• Documentation
• Interface
Development
Testing
Implementation
& Product
Support
• Installation
• User Training
• Maintenance
Support
• Stress Testing
• Performance
Tuning
Deliverables
Environment
Project Estimates Conversion
Tools
& Plans
SWEO
5/4/98
• Migrated
Pilot
Application
• Migrated Code
• Data Migration
Tools
• Environment
Migration Tools
• Test Results
• Final System
25
Application Services Business Plan
ASAP Expertise
Deep technical expertise and critical resources
to support strategic initiatives
HP Emerging Technologies
• Open Pix
• Security
• Future....
Platforms
Languages
• HP-UX
• MPE/iX
• MVS/CICS
• Windows NT & Windows 95
•
•
•
•
•
•
Databases
•
•
•
•
•
SWEO
5/4/98
• Change Engine
DB2
Informix
SQLServer
Allbase
IMS
• Oracle
• Sybase
• Ingress
• Image
• IDMS
COBOL
• FORTRAN
C++
•C
Java
• Oracle*Forms
Basic
• VB
PASCAL
• PowerBuilder
Proprietary languages
Case Tools
• Oracle
• ParadigmPlus
Need to be able to describe depth...
• IEW
26
Application Services Business Plan
HP/ SWEO Contributions Summary
Partnership
• Multi-year commitment
• Account Team local presence & relations
• Lower risk
• Reliable partner
Knowledge Transfer
• For application of emerging
technologies
• Two-way for processes,
tools, methodologies
Deep knowledge of HP’s
technologies
• HP R& D Alliances
• Broad & deep technology base
SWEO
5/4/98
ASAP
HP-Quality Application
Development Services
• Multi-vendor experience
• Globally distributed S/W
development methodologies
• Global support
Access to large pool of skilled
resources
• Software Competence Center
• Rapid ramp of skilled resources
• Global communications infrastructure
27
Application Services Business Plan
Market Positioning
Perception and reality we are after....
• HP technologies competence
• Large scale Project Management experience
• Large pool skilled resources
• Global distributed SW Eng’g
SWEO
ASAP
TTM Ability
High
Integrator
Med
Offshore
company
Low
High
SWEO
5/4/98
Med
Low
Risk
• Management systems
• Global infrastructure
• HP - reliability & experience
28
Application Services Business Plan
Customer Examples
Need to find the optimum balance to premium price
‘Valueometer’
State Farm - Falcon
M/F
HP 3000
Claims Processing Migration
• Deadline; 10 day close
• Needed 130 COBOL developers in 2-3 months
• GM 33%,NOP 21.9%; completed ahead of schedule
Ability
to
ramp
resources
Technology
competence
Amadeus
IBM TPF
UNIX; Networking
Reservation System Consortium
• 200K terminals through Europe; 2500 TPS
• High cost of maintenance; 200 IS personnel
• Used 40 Europe & India developers
• $4M to PSO (~$1,304,000 ESO costs); 18 months
SWEO
5/4/98
Resource
Technology ramp
competence
29
Application Services Business Plan
Projects Summary
Where we are....
Status
BBB
SF Falcon
Amadeus
SF ICAT
SF Alliance
AllTel
Ford
complete
complete
complete
implement
prospect
assm't
implement
Project
Type
App Dev
App Dev
App Dev
App Dev
alliance
Migration
embedded
EHPT
CoCreate
implement
implement
R&D ext
R&D ext
SWEO
5/4/98
$M # Years Peak Competition
Lead
Sales
H/C
Cycle/Mo
28
1.5
150
IBM/AC
PSO
3
8
1.5
118
IBM SF21/PSO
10 days
4
1.5
40
IBM
PSO
?
6?
- SF21/PSO
6?
3+
300
IBM/Sat
SF21
6?
1.5
IBM
PSO
6?
600K
2+
10
PSO
?
1.4
1.3
2+
2+
18
17
-
-
-
30
Application Services Business Plan
Goals, Financials & Resources
SWEO
5/4/98
31
Application Services Business Plan
Statement of Purpose
• SWEO Purpose is to provide software engineering,
enterprise infrastructure integration and custom support. We
team with
–the Internet Software Business Unit (ISBU) product and
operation groups to bring software products to market to
help create a profitable software business for HP, and
–EAO organizations to help build a strategic presence in
targeted enterprise accounts.
•
SWEO
5/4/98
• SWEO Vision is to be a global,
premier provider of strategic internet
enterprise solutions enabled by HP
software products.
The ASAP purpose is to help build HP’s strategic presence in our target accounts.
We’ll do this by providing application services that support our client’s business
needs for competitive advantage. We will focus on:
– helping our clients achieve better time to market and functionality on new or
redesigned enterprise applications,
– reducing the risk of the transition to newer or emerging technologies
– and integrating existing environments with emerging internet/e-business
software and solutions.
32
Application Services Business Plan
Three Year Objectives
1998 - 2000
Objectives
• Build multi-year (3 year minimum)
annuity revenue ‘application alliances’
with a portfolio of clients.
• Become a preferred software engineering
partner to targeted clients for integrating
HP internet SW and emerging
technologies into existing environments.
Key Strategies
• Focus on implementing ASAP and
supporting methodologies.
• Target Financial Services in 1998, and two
additional industries by 2000.
• Develop a team with competencies in
delivering premium software engineering
services (emerging technologies; TTM;
functionality, re-use).
• Leverage the India competency center for
large scale, skilled resources.
SWEO
5/4/98
Goals / Performance Tracking
• Evolve application services delivery to 50%
internet/emerging technology development and
integration services by 2000.
• Earn a “top three” position (HP, IBM, ?) as a
hardware vendor that provides internet
integration and development services.
• Build annuity revenue via 1 new client
“alliance” in 1998, 2 in 1999 and 3 in 2000.
• Continuously evolve our value added to be able
to premium price services to achieve a
minimum 40% overall profit margin annually
1998-2000.
• Achieve resource utilization rate of 85% in
1999.
• Achieve Application Services ‘98-’01
orders of US$ 20M, 32M, 58M, 76M
revenue of US$ 15M, 27M, 52M, 73M.
33
Application Services Business Plan
May ‘98 REVENUE Forecast
(US$000)
‘98
‘99
‘00
‘01
Current Customers
Americas
-State Farm ICAT
-AllTel migration
-Ford
-Disa
Europe
Japan
Subtotal
3,000
150
750
150
1,000?
-05,050
Funnel
-State Farm Alliance*
-AllTel Alliance*
3,000
3,000
5,000
5,000
10,000
10,000
15,000
15,000
Subtotal
6,000
10,000
20,000
30,000
Total
11,050
10,000
20,000
30,000
*Americas SERC annual revenue forecast goal for SF & AllTtel Alliances is $5M, 12M, 20M, 20M respectively.
The writer of the business plan is taking a more conservative view.
SWEO
5/4/98
34
Application Services Business Plan
Project Size Scenarios
*Alliance = 3 years; 50 man years / year
Alliance*
Annual Revenue $5.5M
Medium
$4.0M
Small
$2.0M
Assessment
$200K (3 Mo.)
COGS @60%
On-site
Project Director
Project Admin
Clerical
$3.3M
$2.4M
$1.2M
$0.18
1
1
1
1 (Proj Mgr)
1
1(Proj Mgr)
1
2
1
1
1
Off-shore
Project Managers 2
Technical Leads 4
Programmers
38
2
3
26
1
1
10
Profit @ 40%
Total H/C =
$1.6M
36
$0.8M
16
On-site - From India
Project Mgr
1
Technical Leads 2
Software Eng
SWEO
5/4/98
“The Perfect World”
$2.2
50
1
2
1
$0.12
4
35
Application Services Business Plan
ASAP Forecast Scenarios
•
•
•
•
•
SWEO
5/4/98
The following forecasts are provided as a way of opening the discussions with
each SERC to determine what is possible.
There are three forecast scenarios:
– Aggressive
– Stretch
– % of SWEO SCALE
The forecasts will be reviewed with each SERC Manager and goals will be set
by the Management team.
Each team will be asked to develop a bottom-up forecast using current sales
leads in the sales cycle for forecasting.
Each team should consider and work towards validating:
– What are the sales cycle phase time frames?
– What are the percentages to be used for tracking between the phases?
– What are the project sizes we are seeing in the regions?
36
Application Services Business Plan
ASAP Forecast Scenarios
"AGGRESSIVE" - ORDERS ($M)
Customer
98
Americas
StateFarm
6
Alltel
6
WF/NWM/CiticCorp 6
4
2
5
2
6
7
8
9
10
11
12
13
14
Total
22
Year
99
"STRETCH" - ORDERS ($M)
00
01
10
10
6
4
4
2
2
2
20
15
10
6
6
4
4
4
2
2
2
40
75
20
20
20
10
10
6
6
6
4
4
4
2
2
2
116
4
4
2
2
6
6
4
4
2
2
2
10
10
6
6
4
4
4
2
2
2
15
10
10
6
6
6
4
4
4
4
2
2
2
12
26
50
75
Europe
Total
Year
99
00
01
10
6
4
4
4
2
2
2
15
10
6
6
4
4
4
4
2
2
2
34
59
20
10
10
6
6
6
4
4
4
4
4
2
2
2
84
4
2
2
2
4
4
4
2
2
2
2
6
6
6
4
4
4
4
2
2
2
10
6
6
6
6
4
4
4
4
4
2
2
2
10
20
40
60
Europe
1
2
3
4
5
6
7
8
9
10
11
12
13
SWEO
5/4/98
Customer
98
Americas
StateFarm
6
Alltel
6
WF/NWM/CiticCorp 2
4
2
5
2
6
7
8
9
10
11
12
13
14
Total
18
Total
Europe
1
2
3
4
5
6
7
8
9
10
11
12
13
Total
"% of SWEO SCALE" - ORDERS ($M)
SWEO Forecast 40M
60M
90M
120M
ASAP Target
20M(.5) 30M(.5) 54M(.6) 72M(.6)
Year
Customer
98
99
00
01
Americas 60%
StateFarm
4
6
10
10
Alltel
4
4
6
10
WF/NWM/CiticCorp
2
4
6
6
4
2
2
4
6
5
2
4
4
6
2
4
7
2
4
8
2
2
9
2
18
34
44
2
2
2
4
2
2
2
6
4
2
2
2
6
6
4
2
2
2
6
10
16
22
30%
1
2
3
4
5
6
7
Total
12
37
Application Services Business Plan
Japan
Japan
1
2
3
4
5
6
7
8
9
10
11
Total
ORDERS Total
REVENUE
Americas
SF
Alltel
Rest 98-10M
Rest 99 - 20M
Rest 00 - 40M
Rest 01 - 78M
Total
Europe
98 - 12M
99 - 26M
00 - 50M
01 - 75M
Total
4
2
6
4
2
2
2
10
6
4
4
4
2
2
2
6
40
16
82
34
159
5
5
7
17
9
9
8
8
3
15
34
3
20
23
15
12
5
30
62
6
38
44
15
10
6
6
4
4
4
4
2
2
2
59
250
Japan
1
2
3
4
5
6
7
8
9
10
11
Total
ORDERS Total
10
59
99
REVENUE
Americas
SF
Alltel
Rest 98-6M
Rest 99 - 18M
Rest 00 - 34M
Rest 01 - 54M
Total
12
57
69
Europe
98 - 10M
99 - 20M
00 - 40M
01 - 60M
Total
15
15
2
2
4
2
2
2
2
6
4
4
4
2
2
2
2
4
32
12
66
26
125
5
5
5
15
7
7
8
5
1
14
28
3
15
18
Japan
Japan
98 - 6M
5
1
98 - 4M
3
1
99 - 16M
12
4
99 - 12M
9
00 - 34M
26
8 00 - 26M
01 - 59M
44 01 - 48M
Total
5
13
30
52
Total
3
10
Total Revenue
31
70
136
220 Total Revenue
25
56
Resource Est:
280
636 1236
2000
Resource Est:
230
510
Note: Revenue - Assume 75% of orders in year booked, 25% in following year
Note: Resources = (Revenue / 5.5M ) X 50 people
SWEO
5/4/98
12
8
4
26
50
5
30
35
3
20
23
108
980
10
6
6
4
4
4
4
4
2
2
2
48
192
10%
1
2
3
4
Total
ORDERS Total
8
40
71
REVENUE
Americas
SF
Alltel
Rest 98-4M
Rest 99 - 8M
Rest 00 - 20M
Rest 01 - 28M
Total
10
45
55
Europe
98 - 6M
99 - 10M
00 - 16M
01 - 22M
Total
15
8
6
36
42
168
1527
Japan
98 - 2M
99 - 4M
00 - 8M
01 - 10M
Total
Total Revenue
Resource Est:
2
2
2
4
2
2
4
2
2
2
2
20
4
32
8
58
10
76
3
3
3
5
3
1
6
8
5
8
8
9
15
5
1
7
5
8
1
1
3
1
15
155
4
27
280
2
15
30
3
12
15
1
6
7
52
480
5
21
42
4
17
21
2
8
10
73
665
38
Application Services Business Plan
Global Deployment
Americas
USA
Canada
Mexico
Brazil
ROA
Europe
Germany/Austria/Switz
UK
France
Scandinavia
Italy
Iberia
Eastern Europe
Benelux
Japan
‘98
‘99
Build
Grow
Opportunistically only
‘00
Grow
‘‘99 Country strategy should
be determined by leverage of
target accounts we have
done projects in as well as
the types of solutions.
‘‘99 add 1 country
Build
Build
Grow
Grow
Grow
Grow
‘‘99 add 2-3 countries
Opportunistically only
Build
Grow
Grow
AAA
SWEO
5/4/98
39
Application Services Business Plan
Business Development
Minimum Resource Considerations
Americas
‘98 ‘99
Europe
‘98 ‘99
BD
2
+2
2
+2
1
+1
Solutions Architect
3
+3
2
+2
1
+1
Project Managers
3
+3
2
+1
1
+1
India Technical Scope
& Proposal Support*
4
6
4
4
2
2
Business Development
Japan
‘98 ‘99
Program Marketing
1 for Global
Projects
Project Managers for each SERC on board in advance of project start dates.
India* + US based Project Team
per revenue targets 1998 = 194
SWEO
5/4/98
1999 = 370
Assumptions:
1 BD/SA for every 8-10 Proposals (Not all qualified leads make it to proposal stage)
Cupertino Marketing provides Program Marketing Director
1 PM for every 1 small and 1 medium projects
40
Application Services Business Plan
Example Business Development Data
• Canada Government Y2K bid:
• Approximately 270 hours of presales for proposal development
• Cost about $24,000 for SERC ($88 avg. HC hourly cost)
• Assume about 3X that cost for HP (field resources, proposal marketing team, etc.)
•State Farm Alliance effort:
• January through March about 600 hours (Donnie, Terry, Darryl, Mike)
• Will require about another 3 months of 3 FTE for 1500 hours
• Total about 2100 hours to evolve to an Alliance over 6 months or +$185,000
Assumptions
• State Farm is a ‘mature’ HP client. This effort could double for accounts with no HP
project oriented experience (to 4000 hours)
• SWEO gains experience after 3-5 Alliance proposals and reduces costs to 3 FTE for 3
months
SWEO
5/4/98
41
Application Services Business Plan
Required Issues & Actions
SWEO
5/4/98
42
Application Services Business Plan
Sales Assumptions & Guidelines
Assumptions
• Sales cycle for small and medium projects is 3 months from qualified lead through
proposal acceptance to project start date.
• Alliance pre-sales is 6 months.
• Assume must complete at least 2 projects to pursue Alliance in order to establish
credibility of performance, build relationship, and prove value.
Guidelines
• SERC SBM’s need to be able to find the balance on project sizes:
• Only targeting small projects ($2M range) won’t leverage India SW center.
• Only targeting “killer” projects $6M+ require a long sales cycle and higher
risk if we fail to develop a project
• Best target is to start with $2-4M project size starting points and continue to sell
into the account for the follow-on projects.
• If the account doesn’t have the ability to grow to “Alliance” status (50+ man years
of resources/year; $10M of revenue/year) in three years, don’t pursue.
Note: The assumptions and guidelines need to be tested for each region.
SWEO
5/4/98
43
Application Services Business Plan
Sales & Marketing
Success Tracking Indicators
•
•
•
•
•
•
•
SWEO
5/4/98
Qualified leads - ability to get field to sell SWEO capabilities and pull SWEO
in.
Orders -ability to consistently build annuity stream that meets or exceeds the
SCALE forecast
Revenue - ability to achieve SCALE revenue targets. Forecast assumptions:
25% of order in quarter booked; 50% in 2nd quarter; 25% in 3rd quarter.
IP/Value - our value for creative solutions using internet and emerging
technologies, ability to resource large development projects, ability to manage
down risk of using offshore resources for TTM and implementing new
technology. Our IP value for pricing purposes should be in the 20% range.
Profit Margin - Target is 40% minimum, in addition to the IP value.
Utilization rate - Target overall utilization rate for project resources is 85%.
Sales Cycle percentage monitoring (see following page) - track how many
contacts it takes to find qualified customers, propose, close, and conduct
subsequent projects. See initial target percentages on following page.)
44
Application Services Business Plan
Issue: Sales & Delivery Lifecycle
•Leads - are everything. (EAO)
•Closing high % is critical. (Right solution - SBMs & SAs)
•Ruthlessly manage the timeframes down! (No slop)
Know your segment
Avg Time in Mo. 2
Phase &
target
% phaseto-phase
Targets
C/F*
Offer value solutions Meet client need Improve client’s business Build repeat business
1
Sales
Contacts
100
1
Qualified
Leads
(75%)
10
50
1
Solution:
Negotiate
Proposal/SOW (75%)
(50%)
4
38
9-12+
3
19
Selection
(90%)
Delivery
(100%)
1
15
.75
14
14
New
Projects
(90%)
.25
12
Q1
Q2
Q3
Q4
*C=current
F=future
SWEO
5/4/98
Funnel Management:
• track numbers & percentages
• types of projects (target segments/hit criteria?)
• size of projects
• watch for trends
45
Application Services Business Plan
Critical Success Factors
SWEO
5/4/98
•
TEST the strategy - with field and with customers. Are we positioned
properly? Is this a credible offer? Do customer’s believe we can deliver? Will
they buy from us? Is this the right way to meet customer’s needs?.....etc.
•
Marketing and sales - focus to grow the lead pipeline in the target market.
Shorten the sales cycle; achieve repeat business
•
Hiring, training and retention of skilled resources
•
Making the Global development approach work - every time
•
Increase HP knowledge content and value (knowledge retention; increase
skills)
•
Leverage re-use
•
Developing synergies and smooth working relationships with other HP
organizations to gain more of the services market
•
Careful not to get positioned as a body shop/staff augmentation for
maintenance!!!! Mantra...we must add value.
46
Application Services Business Plan
Critical & Follow-on Actions
SERC’s
Marketing
• Recruitment of SAs, PMs
• Assign & focus SBMs on ASAP selling
• Become Proposal Guru’s: Ability to efficiently
create an incredible, credible “marketing” document
•Target account planning with EAO & FSBU
(w/Marketing)
•Systematic approach to begin reuse approaches
•Assess how SERC’s can retain more revenue
•Cost tracking of Business Development
• Hire ASAP Program Manager
• Work with FSBU and EAO to target the top
50 and next 50 - lead generation and account
planning
• Develop customer presentation
• Plan & develop collateral/sales tools
• Continue work on business plan: more
detail around solutions opportunities and
industries. Find the leverage points.
•Teaming agreement with OSD
India Competence Center
• Fine tune & document methodologies & areas of expertise
• Lead/train on technology assessments for internet and emerging applications
• Lead on identifying systematic approach for reuse
Office of Project Management
SWEO
5/4/98
•Knowledge Management: Funnel, Proposal & Project Tracking Databases
47
Application Services Business Plan
SWEO
Alignment
FSBU
Alignment
YIKES!! Action Timeline
EAO
Alignment
Phase 1:
Go-To-Market
Strategies
•SERC’s assign
resources &
hiring process
•Agree to target
segments
support ASAP
•Teaming
agreements
•Target
customers
•Develop
account plan
•Plan sales
training
•Draft
collateral
May
Roles
Marketing/Ron
SWEO
5/4/98
Phase 2:
Field
‘Training’
Phase 3:
TEST w/ 10
•1x1 ‘training’
for target
account reps
•Provide
customer
presentation
• Supporting
sales tools
•Sales contacts
and
qualification of
first 10 accounts
•Feedback on
message,
collateral, etc.
June
Marketing
SERC/BDE
Marketing
BDE
Phase 4:
Correct, launch
•Program
adjustments
•Launch
contacts with
the next 40
accounts
•Track program
results
July
Field
BDE
Marketing
Field
BDE
Marketing
48
Application Services Business Plan
Fit with other SWEO Services
Use ASAP to form the foundation for targeted solutions
Finance
Phase 1 - 1998
Application
Services
Evolve to a solution
focus?
Primary target is :
• Named target accounts - the “SWEO
target 50 + 50”- with sales
• Work strategy w/FSBU & EAO
• Target clients: enterprise HP accounts
with a 50+ man-year IT gap.
• Opportunity has internet possibilities
Phase 2 - 1999
CSD???
(EBanking/Comm)
•Leverage into:
•Emerging internet opportunities
•Customer Service Delivery
Phase 3 - 1999
Supply Chain???
•Leverage into:
•Customer services via supply
chain
•Financial transactions
SWEO
5/4/98
Telecom
Other
•TBD
•Next 50accounts
•Telecom
version of CSD
•Customer &
Vendor supply
chain services
Arrow direction indicates SWEO AD approach. Dotted arows are secondary.
49
Application Services Business Plan
Appendix of Additional, Miscellaneous Slides
•
•
•
SWEO
5/4/98
Customer Profiles
WIP on SWEO capabilities
Additional detail on ASAP services - customer presentation fodder..
50
Application Services Business Plan
Current Capabilities
Need India input
•
•
•
•
•
•
SWEO
5/4/98
Broad technical skill set in legacy and distributed systems environments
Have in-depth knowledge of HP technology
– HP R&D alliances
– Access to source code
Experience in managing large software development projects
Ability to manage distributed development world-wide: on/off-site; India
Tools & methodologies
– For development, migration, Y2K
– Can develop needed tools for the environment/situation
Additional capabilities
– Have a global communications infrastructure
– Provide access to scalable resources (hundreds of programmers)
51
Application Services Business Plan
Amadeus Reservation System Consortium
•
•
•
•
SWEO
5/4/98
Situation:
– IBM Transaction Processing Facility environment (asssembly language
high throughput operating system) Migration
– 2500 TPS
– 200,000 terminals over Europe managed by 2 TPF switches protocol
conversion connected to backend systems
– 200 IS personnel for maintenance
HP - used R&D extension team in India for Unix and Network solution
Influenced R&D to make changes to meet customer requirements
$4M (loss); 18 months; completed project
52
Application Services Business Plan
State Farm
Overview:
•
IT not able to meet LOB needs
– TTM on products/services
- Legislative issues
– Y2K pressure
- Rework-business updates/mainenance
•
4000 IT employees; 7% turnover
•
Post LOB research found needed 1000-1500 resources to meet needs
•
Tried project based work - found the start-up time too high
•
Chose 4 ‘partners’: IBM, HP, company in India, a local bodyshop
Projects
•
Claims Processing Systems
– Needed 130 COBOL SW developers for HP 3000 migration in 2-3 months
– Closed the deal in 10 days
– Finished ahead of schedule- project ran 1996 through January 1997
– $10M revenue?
– Most profitable project to date for SWEO (50% PM)
•
ICAT
– Contract not signed; interim order in place
– GUI onto regional claims offices PCs
– SF scrapping $6M worth of development that didn’t work
– $5-10M over 2 years?
SWEO
5/4/98
53
Application Services Business Plan
Sarasin Bank
•
•
•
•
•
•
Tele-banking application?
Use object base to build 3 tier client/server?
Offered free development; thought we’d “make lots of dollars”
2 year project - still going
$$?
Environment?
Banco Bamerindus do Brasil
•
•
•
•
SWEO
5/4/98
Mainframe to client/server reengineering using OO technology
No application development
$30M? Loss? Break-even?
Project canceled when customer ran out of money; customer didn’t use change
management practices.
54
Application Services Business Plan
AllTel Information Services
•
•
•
•
•
•
•
•
SWEO
5/4/98
Company sells a m/f version of the Virtuoso 2 (V2) billing system for wireless
services.
Current environment is a IBM m/f; migrating to HP9000
Goal is to sell a marketable billing system WW.
Drivers are TTM, cost and business opportunity
Phase 1) 300K assessment complete 4/24
Phase 2) $3.5-4M migration to be proposed on 4/24; start 5/15-6/1
Will perform a Y2K impact analysis as part of the project
Future strategy - propose a ‘global’ version (GPS); localization services for the
billing system; toaster and maintenance.
55
Application Services Business Plan
ALLTEL
Business Relationship
>$10M
$6M
$300K
Investigative
and Pilot Phase
Migration
Phase
Migration
SW Development
Y2K
Virtuoso II
Competency
Center
>$20M
IT
Alliance
SW Development
Support
Maintenance
Intl Localization
R&D
SW Development
Support
Maintenance
Migration Analysis
Orders and Revenue ($)
HP CO and ALLTEL Strategic Alliance
SWEO
5/4/98
56
Application Services Business Plan
Application Services Alliance Program (ASAP)
Internet Integration Service Elements
• Assessment of internet and related technology for internal,
business-to-business and consumer-to-business applications
• Integration of internet and current environments
• Secure networks design
Benefits
• Risk management in the use of emerging technologies
• Early review of emerging HP internet technologies
• Access to resources trained in the technologies by the R&D
organizations
• Implementation teams that support continuing HP development
on released products
SWEO
5/4/98
57
Application Services Business Plan
Application Services Alliance Program (ASAP)
Platform Migration Service Elements
• Server consolidation
• Re-hosting from mainframes
• Applications redevelopment
Benefits
• Knowledge and experience to port numerous
applications from multiple environments to HP
platforms
• Performance improvements via new technology
• Improved operations
SWEO
5/4/98
58
Application Services Business Plan
Application Services Alliance Program (ASAP)
Application Enhancement Services
• Software enhancements to address changing business
needs and improve operations
• Software enhancements to improve operations
• Establish service level and reporting metrics
Benefits
• Quickly address business unit needs
• Improve software operations management
• Access to resources with knowledge and experience in
all platform and environments
SWEO
5/4/98
59
Application Services Business Plan
Application Services Alliance Program (ASAP)
Year 2000 Services
•
•
•
•
Strategy Development (fix, update, replace)
Analysis
Conversion & Pilot Tests
Implementation & Compliance testing
Benefits
• Methodologies and tools specific to the Year
2000 problem
• Ability to design tools for legacy
environments or use a chosen vendor’s tools
• Ramp resources to the project size
• Access to large pool of COBOL resources
SWEO
5/4/98
60
Application Services Business Plan
Application Services Alliance Program (ASAP)
Accelerate (the client’s) benefits:
•
•
•
•
•
Transform information systems into a competitive advantage - take on major
initiatives and implement strategic IS programs faster knowing you have the
knowledge and resource depth needed
Reduce the risk of integrating emerging technologies into existing
environments
Gain access to technology experts skilled in multiple platforms, the newest
development tools, and software development quality programs
Implement a development management process that will align and prioritize
business units needs
Tap into a virtually unlimited resource that is experienced and focused on
your environment.
~ Go Forward Faster ~
SWEO
5/4/98
61
Application Services Business Plan
Year 2000
Customer Need
•
•
•
•
•
SWEO
5/4/98
Legacy systems were not designed for full 4-digit year representation
Systems may fail with the millennium date change
Failures will be in:
– Date arithmetic
– Date comparisons
– Sorting
Areas affected will include:
– File formats
– User interfaces (screens and reports)
– Program logic
Examples
– Order fulfillment systems may not accept orders beyond Y2K
– Expiry date for a new credit card may set as 1900 vs. 2000, disallowing
any transactions on the “expired” card
62
Application Services Business Plan
Year 2000 Methodology
Customer Site
Strategy
Development
• Existing applications
& data
HP Site
Customer Site
Analysis
Conversion
Implementatio
n
• Selected
applications & data
• Updated
applications & data
• Updated applications
& data
• System Software
manual inputs
Pre-analysis
Toolkit &
Services
Analysis
Toolkit &
Services
Conversion
Toolkit &
Services
•Retrofit production changes
•Change user interfaces
•Implement
•Compliance Test
Repository
SWEO
5/4/98
Risks to the business
are assessed and an
enterprise-wide Y2K
strategy is evolved and
documented.
Impact Analysis Report
is generated and
strategies for resolution
are finalized
Application software
and other related items
are changed and tested
Updated application is
made to function in a
‘live’ environment
63
Application Services Business Plan
Year 2000 Tools
Analysis
• Scanners for languages; like COBOL, C
• Repository Loader to load cross reference
data - attributes and relationships between
various objects
• CASEPAC repository with extensions to
support XREF information
• Special reporting tools on CASEPAC for
Year 20000 inpact analysis
• Provision for storing into the repository,
inputs regarding selection of date fields
and identification of changes to be made
• Analyzer to determine changes to user
interface files
• Load Modeule Analyzer to scan the load
module and determine the language of
each component program
SWEO
5/4/98
Conversions
• Conversion Tool (filter) based on
compiler technology for carrying out
changes to date variables. Affected
variables and the changes will be
automatically picked up from the
repository
• Tools for generating file conversion
programs
• Date Translation Tools for generating
test data for simulating runs in the next
century
• Date Simulation Tools for simulating
system dates of the next century
• Data Comparator Tools for comparing
data in corresponding output and I-O
files before and after conversion
64
Application Services Business Plan
Year 2000
Experience & Tools in HP Platform
Experience
• MPE/UNIX/IBM mainframes and AS400
• COBOL or C languages
• Over 1 million lines of code (6-8 person years of effort minimum)
• Strategic HP accounts
– MPE/iX operating systems
– Databases (IMAGE, IMAGE/SQL, ALLBASE/SQL)
– Networking products
– OpenVew client and WEB server products
Tools
• Tools are based on parser and repository technology which makes development
of Y2K tools for any language or platform possible
• Current tools handle standard languages such as COBOL and C with embedded
SQL
• Tools for HP 3000 and HP 9000
SWEO
5/4/98
65
Application Services Business Plan
Year 2000
Cababilities Summary
•
•
•
•
•
•
•
Capability for over 5000 person-years and 1 billion
lines of code
Need HP projects vs.
Proven methodology and processes
TCS
Support for any date strategy
Tool-based migration: extensive tool set including
HP3000 and HP9000 expertise
Access to HP’s technology groups
HP - WIN Project
Factory approach for maximum efficiency
• HP WW Orders, Shipments and Invoices
• HP9000; HP-UX
Value additions: language conversions,
• COBOL; ORACLE; SQL; C; PERL;
enhancements, performance tuning
HP - OASYS Project
• Impact analysis and conversion
• HP3000; MPE; COBOL; VPLUS; IMAGE; BRW
• 88 programs, 36 datasets
• 165,000 LOC
SWEO
5/4/98
SHELL;PJCL
• 2607 programs
• 463 datasets and flatfiles
• 550,000 LOC
Insurance Project
• Impact analysis and conversion
• IBM AS/400; ILE; DB2/400; COBOL
• 16 person years
66
Application Services Business Plan
Application Services
HP Channel Alignment
New development
SWEO
Transitioning/Migration
SWEO & PSO
Offshore capabilities
SWEO
Inter/Intra/Extranet
SWEO & PSO
Year 2000 Services
SWEO limited
Retooling
SWEO limited, & PSO
Support
Partner
Maintenance
SWEO
5/4/98
SWEO limited
Data warehouse and mining
PSO & SWEO
Package Implementation & Management
OSD
Outsourcing - any & all above
OSD, SWEO supporting
67