2015 momentum en vista hsn-final_20150518

HSN Case Study: Managing Large-Scale Business Process & Technology Transformation

Broc PittsfordDirectorenVista

Bethlee McLaughlinSenior Vice President, PMO & Partner RelationsHSN

#ManhMo

Copyright 2015 Manhattan Associates, Inc. Strictly Confidential. Not for Distribution.

Agenda

About Us

The Business Case

Our Methodology & Approach- Project Management- Change Management

Key Strategies for Success

2


About Us

3

DIVERSITY OF BRANDS, PRODUCTS, CHANNELS OF DISTRIBUTION

MULTI-CHANNEL DIRECT TO CONSUMER REACH

$3.6 BILLION IN REVENUE

50% DIGITAL PENETRATION

18% OF TOTAL SALES FROM MOBILE

(1)

(2)

(1)Twelve months ended 12/31/14(2) Three months ended 12/31/14

POWER & REACH HSNi

HSN

CORNERSTONE BRANDS

• 64M units shipped per year

• Customer database of 60M

• Mobile: fastest platform

(1)

• 42% digital sales penetration• 95M homes, live 24/7, 364• Shop by Remote - proprietary technology in 32M homes • HSN HD in 52M homes• First retail gaming destination - HSN Arcade

(2)

(1) Twelve months ended 12/31/14(2) Three months ended 12/31/14

(1)

• 70% digital sales penetration • 7 premiere lifestyle brands• 325M catalogs shipped

annually

(2)

GREAT PRODUCTS,GREAT STORIES, GREAT

STORYTELLERS

DELIVER THE JOY AND EXCITEMENT OF NEW

DISCOVERIES EVERY DAY

OUR MISSION

NEW BRANDS

NEW IDEAS

NEW EXPERIENCES

HSN’S BOUNDARYLESS RETAIL STRATEGYIN A FOUR SCREEN WORLD

TVPERSONAL COMPUTER

TABLET MOBILE

OUR PRODUCT OFFERING IS DIVERSE

Home52%

Beauty &Health24%

Apparel & Accessories

14%

Jewelry10%

80K+ UNIQUEPRODUCTS

16K+ NEW PRODUCTS

INTRODUCED IN THE LAST 12 MONTHS

70% PROPRIETARY PRODUCTS

Twelve months ended 12/31/14

TRANSFORMATIONAL COLLABORATIONS

4/15/2015


About enVista


A Few of Our Clients


20

© 2014 enVista, LLC

Solution Delivery Model


A Few of Our Clients


The Business Case

23


Customer-Centric & Omni-Channel

24

CUSTOMER

SellService

MarketBuy

MARKET

Targeted marketing of products and services across integrated channels to drive sales

SELL

Ordering and fulfillment of products across integrated channels to drive revenue

SERVICE

Servicing customer needs across all interaction channels to drive repeat sales and lifetime value of customer

BUY

Planning assortment and buying products to meet customer needs and market demands


4 Key Factors to a Successful Business Transformation

25

Moreno, K. (2014, March). 4 Steps To A Successful Business Transformation. Forbes

1

Letting go of past or current successes

Putting the customer in the center of the change

Being committed – execution is the hardest part

Having the right strategic vision

2

3

4


Supply Chain Optimization

26

2012 2013 2014 2015 2016 2017 2018 2019

Digital Asset Management

Enterprise Analytics & Customer Insight

Strategic Planning Integration

Merchandising Management*

Order Management*


*Note: For illustrative purposes. The timing related to kicking-off these future waves is pending approval.



27

• This slide can be used if room is needed where the logo should sit, but the preferred is with logo lower right.

• This slide can be used if room is needed where the logo should sit, but the preferred is with logo lower right.

Core Capabilities

• Goods to People Environment

• Enables Multi-Pack Optimization

• Increased Efficiencies

• Improved Service Delivery

Strategy & Objectives

Strategy

To further maximize efficiencies, cost savings and service delivery results through the consolidation, automation and regionalization of HSN’s supply chain network over the next 3 years

Business Objective & Operational Goals

To implement a new Material Handling Equipment (MHE) System, the Navette, and Warehouse Management System (WMS), the Manhattan iSeries, in the Piney Flats, TN facility that will support HSN in achieving the following operational goals:

• Reduce labor, transportation expense and fixed costs

• Consolidate operations

• Improve throughput and turn-time

Key Dependencies

• Business Process Redesign

• Integration of the WMS and MHE Systems

Key Outcomes

• Reduces labor dependency

• Maximizes cube utilization

• Creates more efficient, effective operation

• Improves service delivery times



28

Phase 1: Major Milestones

2014 2015 2016

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Design & System Requirements

Development & Configuration

QA Testing

Training Development & Delivery

Phase 1: Post “Go Live” Support

Change Management

Completed On Track

Begin “Go Live”

StrategyTo further maximize efficiencies, cost savings and service delivery results through the consolidation, automation and regionalization of HSN’s supply chain network

Business Objective & Operational GoalsTo implement a new Material Handling Equipment (MHE) System, the Navette, and Warehouse Management System (WMS), the Manhattan iSeries, that will support HSN in achieving the following operational goals:

• reduce labor & transportation expense and fixed costs; • consolidate operations; and• improve throughput and turn-time

Measures

Rating

Budget ●Scope ●

Timeline ●


Our Methodology & Approach

29


PMO Vision & Mission

30

To provide enterprise-wide oversight of large-scale, strategic transformation initiatives in partnership with the business and technology leaders to ensure business outcomes are achieved through effective project, process and change management methodologies and practices.

Res

pons

ibili

ties

• Project governance

• Project planning & controls

• Resource management

• Issues & risk management

• Financial management

• Process redesign

• Business requirements

• Workflow management

• Process measures

• Benefits realization

• Executive sponsorship

• Employee involvement

• Communication plans

• Training development & delivery

• Post-implementation support


Leading Large-Scale Change

31

Technical side of moving from current state to future state

People side of moving from current state to future state

Project Management

Change Management

CurrentState

TransitionState

FutureState


Project & Change Triangle

32

• Leadership / Sponsorship provides guidance and governance

• Project Management gives structure to the technical side of the change

• Change Management supports the people side of the change

All three elements must be present for project success

Prosci® PCTTM Model


Project Management

33


Program Management – The PMO

Primary PMO Functions

Outcome Management

Progress Management

Resource Management

Support Processes

– Communications

– Status Reporting

– Analysis and Decision Support

34

The implementation of Program Management involves a level of centralized control and management of all of the planning and reporting activities. The group responsible for this is often referred to as the “Program Management Organization” (PMO).

Outcomes

Progress Resources


Project Structure & Governance

35

*Workstreams are defined tracks within the project such as business process & workflow, environment & infrastructure, systems requirements, solution design & configuration, QA & Testing, Organizational Development, Reporting, Training & Communications, etc.

Executive Steering Committee(EVP Sponsor, COO, CFO, President, etc.)

Bethlee McLaughlinSVP, PMO & Partner Relations

Broc PittsfordProject Director

Project Managers

Meet Monthly to Review Project Status, Issues & Risks and Financials

Executive Liaison Between Steering Committee and Project Team

PMO/Change Mgmt

Finance Business Partner

IT Stakeholders

Workstream Leaders

Vendor Stakeholders

Consultant Stakeholders

Business Stakeholders

Responsible for Overall Planning & Execution of Project Deliverables

Responsible for Planning Activities, Resources and Deliverables for Assigned Areas


Project Roles

36

3rd Party Integration

• Program Management

• Testing/Training Leadership

• WMS SME• MHE SME

WMS Implementation

• WM for iSeries Implementation

• MHE Integration Design

Schaefer MHE/WCS

• NavetteTM 3D Matrix design, construction, implementation

• Goods to Person picking/packing

• Put Wall

Operations & IT Integration

• Operational Requirements

• Facility MHE Design

• Host Integration• Change

Management


Project Leadership Team Roles & Responsibilities

37

Functional Area Executive Sponsor Sr. Project Directors

Sr. Leader(s) Project Manager (PM)

Subject Matter Expert (SME)

Work Stream Leader

Warehouse Operations EVP, Supply Chain

Ken Mullen & Broc Pittsford

enVista

VP, Fulfillment VP, Engineering GM, FulfillmentB. Pittsford

enVista

Director, FulfillmentGM, Fulfillment

VP, Fulfillment PM, SSIVP, Engineering

B. GraceenVista

VP, EngineeringSr. Manager, Facilities

PM, SSIMaterial Handling Systems EVP, Supply Chain

SVP, IT E. HeltonManhattan

OVP, IT

SME, enVistaDirector,

Fulfillment

Director, FulfillmentM. Edmond

Warehouse Management CIO

SVP, IT OVP, IT SME, enVistaSr. Manager, IT

Sr. Manager, ITManager, IT

IT Integration and Infrastructure CIO

SVP, PMOVP, Fulfillment

SVP, IT

Director, PMO Change Mgmt

Manager, PMO

J. WalzenVista

Director, PMO Change Mgmt

VP, HR

PMO/Change Management EVP, Supply ChainCIO

B. Pittsford, enVista J. Walz, enVista Director, FulfillmentSSI TBD

Director, FulfillmentManager, IT

E. HeltonManhattan

Overall Testing and Training EVP, Supply ChainCIO

SVP, FP&A Director, FP&A VP, FP&A Director, FP&AFinance/Accounting CFO

• Sr. Leader: Provides leadership and expertise in areas of responsibility; ensures alignment and support of project charter and actively supports and participates in the appropriate phases of work to ensure success

• Project Manager: Responsible for coordinating all planning activities, resources and deliverables for their area

• Subject Matter Expert: Serves as an authority in a particular area or topic and possesses the special knowledge and skills

• Work Stream Leader: HSN resource responsible for the execution of the tasks related to that functional area


Project Plan Process: Overview

38

The Overall “Parent” Plan will contain tasks that span more than one track or all as well as overall project milestones. Examples are: Project Milestones Project Management tasks Project Planning tasks Integration Testing Dependencies within the Parent as well as linked to the Child plans The Track Specific “Child” Plans will contain tasks that are specific to that individual track. Examples are: Development Unit Testing Construction

Single Integrated Project Plan

MA WMS HSN IT HSN OPSSSI-Schaefer CHG MGMT


Project Communication

39

Weekly

• Project Status Meetings/Reports• Touch Base Meetings• Work Stream Team Meetings• Action Item/Issue Resolution Meeting (Led by PMO)

Bi-Weekly

• Project Plan Update• PM Planning Meeting (Led by PMO and Sr. Director)• Risk/Contingency Plan Review (Led by PMO)

Monthly

• Budget Update• Budget/Financials Review• Executive Steering Committee Meeting

Quarterl

y

• Celebrate Wins!!


Risk Management Process

40

1 PM’s Update Plans 2

Bi-Weekly PM Meeting

d3

Monthly Steering

Committee Meeting

PMO works with PM/Sr. Leadership

to execute mitigation/contingency if necessary

Risk will either be in “monitoring” status or “active” which constitutes executing either the mitigation or contingency plans

Review of plans and update Risk Management

Update Risks as “Active” vs. “Monitor”

Discuss risks with PM for clarity and accuracy

Highlight changes that signify increased risk

Discuss executing mitigation or contingency plans

Review increased risks with PMs and discuss actions

Share changes to risks

Review execution of mitigation/contingency

PMO works with PM/Sr.

Leadership to execute

mitigation/contingency if necessary


Change Management

41


Change Management

Transformation efforts are paced to ensure organizational readiness

Leadership support is constant and consistent throughout the implementation process

Workforce is engaged as needed throughout implementation and are prepared to adopt each transformation

Change Management efforts are proactively planned and executed

42


Why Change Management Matters

43

With Change Management

■ 96% of major initiatives succeed

■ 72% of initiatives are on schedule

■ 50% more productive

■ 44% of workforce more likely to remain; 143% of ROI is achieved

■ 70% of major initiatives fail

■ 56% of initiatives are behind schedule

■ 57% of companies face a decline in productivity

■ 37% of initiatives are over budget; 35% of ROI is achieved

Without Change Management

*Note: Data comes Prosci Benchmarking Report 2012, Economist Intelligence Unit and Celerant Consulting 2011 Report, Standish Group Research 2010 and Cap Gemini Research


Increasing the Pace of Adoption

44

Change Management directly addresses people related risks of change, thereby enabling the organization to realize benefits earlier than undertaking transformation without change management.

Pro

du

ctiv

ity

ChangeImplementation

Acceleratedadoption curve

Earlier attainment ofhigh adoption andutilization; benefits fully captured

Time

Reduced immediate

productivity fall-off

Expeditedefficiency ramp-up

Project without change management

Lower probabilityof success

Project with effective change management and

fast adoption speed

Applying change management to transformational efforts increases the speed of adoption within an organization, department or team.


Change Management Model: ADKAR

45

The underlying framework of the change management and communication plan is the Prosci ADKAR model, which describes the five goals that must be achieved within an organization in order to manage change successfully. The ADKAR model includes the following building blocks for change:

…of the need for change

…to participate in and support the change

…of how to change

…to implement required skills and behaviors

…to sustain the change


3-Phase Change Management Process

46

This change management process is a structured process for managing the “people side” of change. It integrates change management, communication, and feedback to effectively build stakeholder engagement by proactively executing change activities and carefully managing communications and feedback across a transformational project. The process consists of three primary phases: Preparing for Change; Managing Change; & Reinforcing Change.


Phase 1: Preparing for Change

47

• Understanding the nature of the change

• Understanding the groups being changed

• Creating the right sponsorship model and coalition

• Identifying risks

• Developing special tactics


Phase 2: Managing Change

48

• Communication plan

• Sponsor roadmap

• Training plan

• Coaching plan

• Resistance mgmt plan


Phase 3: Reinforcing Change

49

• Compliance audit reports and employee feedback

• Corrective action plans

• After action review

• Transition management


Levers of Change Management

50

Change management tools

Communications

Sponsor roadmap

Coaching

Training

Resistance mgmt

Awareness

Desire

Knowledge

Ability

Reinforcement

Awareness

Desire

Knowledge

Ability

Reinforcement

ADKAR phases of change

© Prosci


Managing Communications

51

Communication is a critical component of change management.

• Formal communication plan and timeline

• Process for review & approval

• “Branded” communications

• Key Messages Outline

• Messaging Structure

• Communications Tracker

• Institute feedback process to continuously improve


Managing Communications

52

• Executives and business leaders (including stakeholders)– Executive summary, objectives and scope, financials, strategy, key decision points, actions needed

• Mid-level managers and supervisors– Key messages they will communicate to their employees (keep them one step ahead), scope of change

(what’s in scope and what’s out of scope), expected action they need to take to support the change within their team or department

• Front-line employees– Impact of the change on the employee, let them know when more information will be available, provide

feedback about the change• Communication to all facilities when appropriate

• Customers– As appropriate

• Partners/Suppliers– As appropriate

• External/Public Relations– As appropriate

The communication plan includes targeted audiences, key messages, frequency of communications, delivery mechanisms, senders, and overall delivery strategy.


Training

53

Training is a critical tool for building knowledge and ability within the organization during a change. Training is focused on the specific skills and behaviors that are necessary for the change to be a success. The two focus areas of training are: (1) training on how to be successful during the change, and (2) training on how to be successful after the change.

For this project, training considerations include the following:

• Instructor-led (classroom) – best option

• Web-based training

• Job aids/procedures

• Specialized training

– Maintenance, reporting, planning when shows are, etc.

• Process & Systems

– WMS: all associates

– WCS: all associates

– WMS/WCS: exception clerks, cycle counters, QA

– Change: all associates, different level


Resistance Management, Coaching & Monitoring

54

The coaching plan defines how managers and supervisors will be supported during the change and how they’ll interact with front-line employees. The change management team’s role is to fully enable these managers and supervisors to: sponsor the change; support their employees during the change; & support their employees in the new, changed environment.

Coaching tools include:• Supervisor/lead post-support• SWAT teams• Communications/issues management and updates (continuous)• Round tables, start-up, SWAT, etc.• Change Management Guide for Managers & Supervisors• Employee’s Survival Guide to Change

Coaching activities:• Develop individual coaching plan (one-on-one opportunity for managers to work on change

with specific employees)• Develop team meeting plan (forum for distributing info, gathering feedback, building support

for change, and easing concern and resistance)


Feedback Analysis

55

It’s important to follow-up with employees to understand how the change is working. The feedback that we’ll gather will be helpful in developing corrective actions and post-implementation change management activities.

Feedback analysis tools include:

• Designated email resolution team (e.g., DIRT)• Compliance audits (observation, performance reports, system usage, etc.)• Issue/feedback tracker (issue type, owner, status, and resolution)• Defined issue buckets (Process, Technology, Training, Enhancements, etc.)• Corrective action plans based on ADKAR model• Employee feedback worksheets


Celebrate & Reinforce Change

56

Throughout the change management process, it will be important to constantly seek out evidence of progress in the project (e.g., achievement of major milestones, early successes— big and small, etc.) and use celebrations and public acknowledgement to reinforce the change. Ways to recognize teams and individuals that have achieved successes include:

• Public recognition at staff meetings• Public recognition at department meetings• Public recognition at town halls• Ensure key stakeholders are aware of achievements and celebrate with the team• Involve managers and supervisors to award recognitions to teams and individuals• Use the communications plan to develop successful celebration communications• Bulletin board announcements• Email blasts


Summary

57


Key Strategies for Success

58

Executive sponsorship and alignment

Integration of Project Management & Change Management

Key stakeholder commitment and involvement (HR, Finance, Ops, etc.)

Communicate, communicate, communicate

Keep your head up and get your hands dirty

Don’t trip over dollars to pick-up pennies


59

Questions?

Broc PittsfordDirectorenVista

[email protected] N. Meridian St. Suite 415Carmel, IN 46032+1 317-208-9100

Bethlee McLaughlinSenior Vice President, PMO & Partner RelationsHSN

[email protected] 1 HSN Drive St. Petersburg, Florida+1 727-872-4872

mailto:[email protected]

mailto:[email protected]

2015 momentum en vista hsn-final_20150518

Documents

manhattan associates

new products

great products

proprietary products

fulfillment of products

unique products

business case

digital sales penetration