Batog

BATOG: The Client Agenda & Multi-Year Plan Approach Three Overlapping Steps Future Vision Current Reality Year 1 Year 2 Year 3  “ Snapshot” the Current Reality  Develop the Future Vision  Develop the plan to Close the Gap The Diagnostic Releases Making the Turn Up and Running

BATOG: Scope and Context The Client Agenda & Multi-Year Plan The client agenda consists of an understanding of the business and IT environment and conditions as they exist today, would like to be tomorrow, and a high level plan to close the gap along five dimensions (BATOG). What funding and G overnance are necessary to support the transformation? ,[object Object],[object Object],[object Object],IT Strategy What is the B usiness Context? What A pplications are required to support the business? What T echnology infrastructure is required to support the applications? What O rganization structure and skills are required to implement the technology and applications? B T O IT Strategy G A

BATOG: Client Current Reality Objectives ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],1 1 4 1 2 1 3 1 1 1 1 3 3 1 1 1 2 1 2 Source 15 Source 3 Source 7 Source 13 Source 11 Source 9 Source 5 Source 14 Source 18 Source 17 Source 19 Source 10 Source 6 Source 8 Source 16 Source 1 Source 12 Source 2 Source 4 1 1 1 1 1 4 3 1 2 1 1 2 4 3 1 1 3 Reporting 10 Reporting 2 Reporting 16 Reporting 14 Reporting 7 Reporting 3 Reporting 8 Reporting 13 Reporting 5 Reporting 1 Reporting 12 Reporting 11 Reporting 4 Reporting 17 Reporting 15 Reporting 9 Reporting 6 31 31 # of Connections # of Connections Source of Data Corporate Reporting B T O IT Strategy G A

BATOG: Client Future Vision Objectives ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],B T O IT Strategy G A

BATOG: Client Gap Plan Objectives ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],B T O IT Strategy G A Askjdhsakdjhka Aslkdjalsd Alkdj Aslkdjalkdjl Askjdhsakdjhka Aslkdjalsd Alkdj Aslkdjalkdj sajdhksdl Alkdj Aslkdjalkdj sajdhksdl Alkdj Aslkdjalkdj sajdhksdl 1 2 3 4 Askjdhs Alkdj Aslkdjal # Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Askjdhs Alkdj Aslkdjal Aslkdjalkdjl Aslkdjal Aslkdjal Aslkdjal Aslkdjal

What is the nature of the client relationship? Reach Acquisition Conversion Retention Loyalty New Logo Turnaround/Save Grow vs. Protect Unsolicited Proposal RFP Response “ B” Entree “ A” Entree “ T” Entree

How high is the target? Business Transformation Applications Transformation Technology Transformation Integrated Activities Enterprise Transformation Industry Frameworks Apps Modernization Apps Outsourcing Industry Solutions ITO Outsourcing ITO Transformation Service Oriented Architecture The transformed enterprise Integrated Perspective

Is it an end or a means to an end? Assess Investment rationalization model Business priorities “ Best Construction” sequence Business transformation steps IT transformation steps New business model framework New business process scenarios Options, cost models, strategic input Current Reality Clear the air on how “it” happened, learn from the past, and accurately define WHAT is going through a transformation Plan to Close the Gap Negotiate – both across the business, and between IT and the business – the sequence of funded transformation steps Shared context for decision-making Application retirement targets Initial opportunity analyses OUTPUTS Standardized model for characterizing the existing portfolio Application inventory Business gaps with existing inventory Technology gaps with existing inventory INPUTS Future Vision Achieve business/IT alignment on the future business processes, applications portfolio, and architecture A3 for manufacturing Application tiering model Application modernization targets Shared vision for the transformed enterprise Multi-year rationalization roadmap (prioritized and sequenced) Business transformation sequencing themes

Given: The need for something different ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Given: Transformation is hard work. Instance consolidations; Core Rationalization Re-Integrate and Re-Architect the keepers; retire the redundant Optimize portfolios and business value chains ,[object Object],[object Object],[object Object],[object Object],At the final iteration, the last retire/replace apps are turned off, and future changes occur in a more incremental and controlled manner At the first iteration, the new SOA footprint is established Transition Transform Sustain

Connected World Class Infrastructure Connected Salesforce Connected Factories Connected Engineering Connected Solutions & Services Connected Enterprise Support SUPPLIERS SERVICES PRODUCTS CUSTOMER HISTORY EMPLOYEES World Class Applications

Business value potential ,[object Object],[object Object],[object Object],[object Object],[object Object],100 150 200 250 300 350 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 0 50 COGS $38.6m R&D cost reduction $27.9m SG&A cost reduction $150m Revenue Growth $42.6m Accounts Receivable $7.2m Accounts Payable $4.7m Inventory reduction $23.5m RECURRING BENEFITS - $295m p.a.

BATOG is a Framework/ Lens to Understand Where Your Client is Going Operational Business Plan ,[object Object],[object Object],[object Object],[object Object],In order to achieve Goals… … you need to know your Client… … which should be supported by an account plan… B T O BATOG G A

Operational Business Plan—Components What does you have/ have coming that could help the account? What are the objectives and strategy of the account? What major work programs/ initiatives will the account execute? Financial Plan Operating Metrics Offering Demands Talent Demands Workforce Plan Relationship Plan 1 2 3 4a 5 6 7 8 10 Each of the Following Components over a Rolling 24-month View The Account Where is the account going with their business in the next 2-3 years? (Use BATOG for framework) Growth-Focused Initiatives 4b Productivity-Focused Initiatives Which Drive… 9

Multi-Year Plan 2006 2008 Renewal Themes Key Operating Metrics Competitors reducing costs via bankruptcy, fuel costs, product distribution model, labor relations vs. competitive offshore pressures Inability to segment effectively, cannot tell who’s who among the flying public Legacy technology prevents rapid implementation of marketplace initiatives No real time, accurate info; no single, consistent view of the customer with multidimensional analysis capability Stovepiped, non-integrated appliations; multiple versions of data Aged, disparate footprint makes it hard to integrate applications and data; drive IT cost inefficiences No business organization owns cross enterprise view of customer, data and underlying metrics – results in lack of focus on integration Annual spend view, both from business and IT, drives towards tactical productivity; no governance in place to promote the holistic customer view Too much spend on maintenance vs new development Well segmented, one view of the customer; which customer is of what value Streamlined & cross enterprise processes maximize asset utilization, drive cost efficiency & enable real-time response to unplanned events Integrated applications based on an enterprise view/model, streamlined footprint built around a service oriented architecture Near real time information readily available to whoever needs it (rev mgmt, sales, gate agents, res agents, flt ops, crew….) Streamlined technology footprint, with connectivity and edge technologies enabling information dissemination; robust high availability infrastructure drive efficiency IT org aligned to support business verticals, with a focus on driving value for the business Specific org owns an enterprise “single version of truth”, supported by corresponding IT org Funding and operating mechanisms support the enterprise view Funding is oriented towards new development vs maintenance, with decision rights exercised collaboratively across business priorities B T O G B A T O G A ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Key Strategies to Support Renewal Themes Maintain and improve historical advantage in this area 14.07 cents, slightly above average Yield 5 Average utilization would allow same schedule to be flown with 51 less aircraft 9.88 hours per day, .77 hours per day below average Block hours per Aircraft Day 4 Maintain and improve dispatch reliability Average to above average Completion Factor 6 Maximize RASM (the optimization of Load Factor and Yield) 79%, slightly above average Load Factor 3 Gap to average is worth ~$650 Million per year 10.88 cents, .44 cents higher than average CASM 2 Maximize RASM (improve revenue management capabilities) 12.07 cents, slightly above average RASM 1 Future Vision Current Ranking (10 U.S. major carriers) Metric

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