Transcript BearingPoint IT Operating Costs Analysis Five Year Period

BearingPoint IT Strategy
Evolution through 3-Year Planning Cycles
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Note: All data in this report has been released into the public domain by BE at various industry
conferences and vendor/partner events.
Author Chas M. White, MS
EVP & Corporate CTO
Date
12 January 2006
Business and Systems Aligned. Business Empowered.TM
BE IT Strategy – 3-Year Planning Cycles
Optimization
2005-2008 – IT focus shifts from separation activity
to engagement team support and cost reduction
focus shifts from IT operating costs to risk
management and corporate SG&A reductions
Consolidation & Integration
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Separation & Migration
Planning & Design
2003-2006 – Global applications launched
by IT (HR, CRM, APS/ACCPAC, EIB);
savings realized from network and
applications integration; MPLS & IPT
value demonstrated; savings harvest
continues; Separations complete
2002-2005 – Re-branded as
BearingPoint; creation of BE
computing environment completed
and migration of entities under
TSA’s begins; longest TSA is US
(4yrs); operating costs reduced due
to eliminating redundancy
2001 – KPMG Consulting
executes IPO and announces
separation from KPMGLLP
firms; adopts Greenfield &
Outsourcing strategy
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2001
Planning & Design
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Business Requirements
 Separate from LLP environments as they represent a loose federation of
national practices with no corporate architecture or infrastructure (e.g.,
inter-company accounting, engagement management, multi-currency
support, etc.); they are islands – no ‘best fit’ solution available
 Accomplish separations in a timeframe consistent with taking economic
advantage of the national Termination of Services Agreements (TSA)
 Optimize IT for the mobile user – move costs out of offices
 Must be a ‘one company’ enterprise solution (apps and desktop)
 Assume English language as core but accommodate presentation in
eight identified ‘native tongue’ languages
 Reduce aggregated IT operating costs 17% (against 2001 costs & joint
KPMG/KPMG Consulting Gartner study)
Design Parameters Adopted
 Architect network scalability and cost modeling to support 40,000 users
 Anticipate rapid growth through acquisitions in first three years
 Web enable all corporate applications and adopt MUI strategy
 Build cost model on ‘consumption based’ services
 ERP solutions should have single code base but dual instances
 ‘Maintain the Brain, Outsource the Brawn’ leveraged services model
 Must remain compliant with LLP Security requirements while on their
networks and applications
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2002 – 2005
Separation & Migration
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Defined MPLS as the WAN protocol in order to accommodate significant
network reconfigurations resulting from acquisition activity, mitigate pointto-point latency, support adoption of VoIP and lower data transfer costs
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Outsourced messaging to HP due to acceptability with the solution we had
implemented at KPMG International – a necessary interconnect point for
various LLP entities (adopted .com, .net, and .biz naming convention)
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Established ‘A’ & ‘B’ network architecture to remain compliant with LLP full
separation security requirements while permitting minimal BE support to
users still in an LLP environment
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Began migrations to new BE computing environment – terminating most
TSA’s with the first year where there were no early termination penalties
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Established HP’s CXO site as network core and began migrating BE
applications (e.g., PerForm/Reward$, Inside BearingPoint, APS/AccPac)
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Early terminations of TSA’s allowed savings to be harvested by eliminating
redundant services and solutions (US TSA language required full 4 years)
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Migrated every office, server, desktop, telephone, application, byte of data,
at every site on time, within budget and with no significant interruptions!
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2003 – 2006
Integration &
Consolidation
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Adopted an Active Directory (AD) enabled architecture that allows user
credentials to be passed between the network and applications as a means of
user authentication – an initial step towards a single sign-on environment
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Eliminated national systems providing messaging, HR, CRM, Finance, Payroll,
etc. which was complicated by the Andersen acquisitions as in many cases the
support infrastructure was collapsing along with the parent firm, in many cases
being acquired by BearingPoint competitors – global applications were placed in
the network core
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Undertook IT initiatives to define requirements for OneTeam (HR), OneView
(CRM), OneGlobe (F&A – which was deferred due to lack of ability to create a
steering committee), OneSuite (ancillary applications) – each was delivered by
BE professional services teams once IT Steering Committees defined
requirements – they were then outsourced for hosting and/or apps management
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Created the Enterprise Integration Broker (EIB) middleware platform to allow
parallel systems design while maintaining a design parameter that across
systems each discrete data element should have a single authoritative source – a
publish and subscribe databus to prevent re-keying, reduce errors and lower
operating costs
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Deployed IPT as a replacement for numerous disparate telephone systems and
created an AD-enabled platform to provide decision support applications
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2005 – 2008
Optimization
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This is the period where IT shifts its focus from migration to engagement support
– separations are complete, the need to fully segment ‘A’ & ‘B’ networks is past,
the opportunity to leverage the BE IT professionals, processes and technologies
presents the potential for increased revenue yield
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The focus area for IT cost reduction contributions similarly shifts from pure IT
operating cost to reductions in corporate SG&A (e.g., policy compliance,
consolidation & integration of IT services across the firm, best practices for
outsourcing, risk management with regard to engagement activity, etc.) SG&A
impacts should be approximately $8M-$12M/year through this planning period
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IT partners with the Business Units to define, repeatable solutions for client
delivery ranging from engagement office designs to remote user technologies;
from BE developed internal solutions to emerging technology support; and from
audit compliance support to improved financial system operations and reporting
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OneGlobe moves into IT in order to operationalize the environment and facilitate
creation of a successful Financial Transformation plan which charts a path
forward for consolidation and integration of financial systems
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The Office of the CIO should become an advocate for the business units,
reinforcing the message to the client and analyst communities, reestablishing
our credibility as a capable and trusted systems integrator and business partner;
internally IT is recognized as one of the primary business enablers
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IT Department 2006 Team Goals
Primary 2006 Goals:
Fully transition our IT focus from separation and migration to consolidation, integration and optimization
Support the reduction of corporate SG&A costs using the IT tools and processes we have developed
Work to stabilize the OneGlobe application into an ‘operations state’
Strengthen the end user computing focus by enhancing the employee-client interface
Leverage our internal solutions in support of market facing engagement teams (IPT, EIB, etc)
Transition IT procurement to the Procurement department
Continue 2005 IT Image Program – speaking at national conferences on BE Optimization activities
People:
Reestablish a 90%+ long term retention rate within our group – highlight value of IT team
Focus on end user satisfaction – accelerate Advisory groups & BU UAT implementations
Emphasize integration with OG, MSO, GDC, Infrastructure and engagement teams
Consolidate functional IT organizations where practical
Participate in the 3600 feedback program when available
Budget accountability rests with the Project leads as identified in OG
Process:
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Continue Operations Reports, Policy & Procedures, Controls documentation and postings
Expand Scope&Approach process as a critical tool for corporate IT Portfolio Management
Adopt a structured workplan management structure for OneGlobe modifications
Improve tools and processes in support of SOX 404 - emphasis on SDLC across major applications
Improve tools and processes in support of DCAA audit requirements
Institutionalize compliance monitoring processes to mitigate risk and reduce SG&A costs
Integrate Financial dashboards into our monthly review process (we are supposed to get them this year)
Elevate quality of IT planning documents for corporate wide disclosure – add new IT subcomponents (e.g., Finance Transformation)
Transition all IT procurement functions to the Procurement department to insure compliance with DCAA regulations
Technology:
Develop an IT Training program for end users in conjunction with CLD
- define role of IT, helpdesk, procurement, etc for employees
- identify technologies available for internal and external work
- emphasize current support for home, client site and other remote workspaces
- reduce IT support costs
Develop architecture templates for client facing environments (offices, BSC’s, GDC’s, on-site client teams)
Support adoption of an on-line procurement solution for IT items requiring no secondary approvals
Assist OneGlobe technical support in transition to an ‘operations team’
Complete execution of stabilization projects currently underway
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Industry Recognition!
Extract from BearingPoint Corporate Communications press release:
McLean, Va., September 12, 2006 – BearingPoint, Inc. (NYSE: BE), one of the
world’s largest management and technology consulting firms, today announced that
it ranked 38 on the 2006 InformationWeek 500 list. After ranking 297 in 2004 and
274 in 2005, BearingPoint earned top 50 status this year, moving up 236 spaces.
For the past 18 years, InformationWeek has identified and honored the nation’s most
innovative users of information technology with its annual listing. The list is unique
among corporate rankings because it spotlights the power of innovation in
information technology, rather than simply identifying the biggest IT spenders.
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“The InformationWeek 500 honors today’s leading companies who set the
benchmark for business technology strategies and projects,” said InformationWeek
publishing director, Fritz Nelson. “The companies on our list are some of the most
innovative users of technology.”
BearingPoint leaped ahead in InformationWeek’s ranking due to a major overhaul of
key internal IT services, including the successful launch of a company-wide VoIP
system and a leading-edge SAP implementation in Germany.
Additional details on the InformationWeek 500 can be found
at <http://www.informationweek.com/iw500/> www.informationweek.com/iw500/.
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