Global Business Communication Systems
FINAL BUSINESS CASE
March 16, 1993
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Findings Indicate That A Re-Investment Model Is Appropriate
ITS benefits become one of the “sources” of funds to attain operations benefits.
ITS benefits become one of the “sources” of funds to attain operations benefits.
GBCS
ANALYSIS
OperationsFindings
Y
ITS Findings
Y
N
Y
“Cash out” ITS benefits, immediate shareholder profit
“Re-Invest” ITS benefits, shareholder
value growth
Business Case
OpportunitiesIdentified
OpportunitiesIdentified
Systems Related
OperationsBenefits
Business Case
N
N
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Benefits Of Project Will Be Both Financial And Intangible
INFORMATION
ITS will leverage the closing of the MOI gapITS will leverage the closing of the MOI gap
Financial
Intangible
Profit Growth
AssociateSatisfac-
tion
MOI
$(44 MM)‘92
$252 MM‘95
ShareholderValue
CustomerValue
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Intangible Benefits Will Drive Associate Satisfaction
• Enhance relationship/trust between ITS and users
– Foster teamwork
– Understand internal customer needs
– Establish accountability
– Provide clarity in roles and responsibilities
– Facilitate expectation meeting
• Transfer skills
• Understand external customer needs
• Reduce ITS organizational frustration level
• Focus initiative efforts throughout the company to optimize impact
04/19/23 @ 20:20
1993 Gemini Consulting Company
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ITS Can Impact Most Of The Levers Which Drive Customer Satisfaction
Source: Strategic Marketing Information Used To Focus Business Process - Why Improving Quality Doesn't Improve Quality, Kordupleski et..al.
Impact On
Overall Quality
PRODUCT SALES INSTALLATION REPAIR BILLING
30% 30% 10% 15% 15%
• Reliability• Ease of Use• Features / Functions
• Knowledge• Response• Follow-up
• Delivery Interval• Does Not Break• Installed on Time
• No Repeat Trouble• Fixed Fast• Kept Informed
• Accuracy / No Surprises
• Resolved First Call• Easy to Understand
ON
OFF
04/19/23 @ 20:20
1993 Gemini Consulting Company
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The Following Opportunity Streams Have Been Identified
XXXX Opportunities
ITSOpportunities
OperationsOpportunities
Redeployment
Effectiveness / Efficiency
Sales Force Effectiveness
Provisioning / Billing/Service Effectiveness
MOI
ITS
04/19/23 @ 20:20
1993 Gemini Consulting Company
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The Majority Of “Information” Opportunities Exist In Business Operations
ITS benefits will provide part of the “funds” to attain operations opportunitiesITS benefits will provide part of the “funds” to attain operations opportunities
• Redeployment• Effectiveness
• Sales Resource Productivity
• Tools Utilization
Sales Force Effectiveness
ITS Opportunities
Operations Opportunities
Total Opportunitiy
$220MMAnnually
++
• Provisioning / Billing Support• Installation / Service Costs
$140MM$20MM
$60MM
Provisioning/Billing/ServiceEffectiveness
++
04/19/23 @ 20:20
1993 Gemini Consulting Company
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ITS Could Make $20MM Available For Re-Investment
Re-investment model assumes that other spending will remain at current levelsRe-investment model assumes that other spending will remain at current levels
Source: 1993 ITS Budget
Assumptions:• FTE as of beginning of 1993• Based on $130MM ITS budget• $100K fully loaded cost per FTE• Includes 56 contract programmers• Excludes Dyer organization• All amounts are annualized
Maintenance
Production Support
Development
Management/Clerical
TOTAL
236
154
98
100
588
BaselineITS People CostsRange of
OpportunityFTE $ %Realizable Benefit
$ 23.6MM
15.4
9.8
10.0
$ 58.8MM
$ 11.3
2.3
3.9
1.5
$ 19.0
16.5MM
3.9
5.4
2.5
28.3MM
$ 11.3MM
2.3
3.9
2.5
$ 20.0MM
48%
15%
40%
25%
34%
-
-
-
-
-
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Focusing on Maintenance Will Drive Significant Benefits
Range of Opportunity
• 20 - 25% of NSSD maintenance are “enhancements”
• 10 - 15% of SBD maintenance are “enhancements”
• Excluding “enhancements” 20 - 30% of maintenance is avoidable
• Activity analysis / Organizational alignment findings suggests a 15 - 25% improvement attainable
$23.6MM
NSSD enhancements $3.0 - 3.8MMSBD enhancements .8 - 1.2Maintenance (both) 4.0 - 5.6
Range of opportunity $11.3- 16.5MMRealizable Benefit
Anticipate attainment of conservative opportunity $11.3MM
Activity analysis /
Organizational alignment
Redeployment
Effectiveness
Baseline
Spending
Redeploy
3.5 - 5.9
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Production Support Improvements Will Result In A Benefit Of $2.3 To 3.9MM
Range of Opportunity
• Activity analysis / Organizational alignment findings indicate a 15 - 25% improvement attainable
Realizable Benefit
Anticipate attainment of conservative opportunity $2.3MM
$2.3 - 3.9 MM$15.4MM Baseline
SpendingActivity Analysis/
Organization AlignmentEffectiveness
Note: Includes user, technical and operations support
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Improvements To The Development Environment Will Result In A $3.9MM BenefitRange of Opportunity
• 25 - 30% of effort in development group is wasted due to frequent stop/starts due to ineffective budgeting, prioritization and lack of business case support
• Activity analysis / Organizational alignment findings indicate a 15 - 25% improvement attainable
Realizable Benefit
Anticipate attainment of conservative opportunity $3.9MM
$9.8MM
Wasted development efforts $2.4 2.9MM
Activity analysis / 1.52.5
Organizational alignment
-
Range of Opportunity $3.9 5.4MM
Baseline
Spending
Redeployment
Effectiveness-
-
04/19/23 @ 20:20
1993 Gemini Consulting Company
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ITS Management And Clerical Opportunities Exceed $2.5MM
Range of Opportunity
• Activity analysis / Organizational alignment findings indicate a 15 - 25% improvement attainable
Realizable Benefit
Anticipate attainment of high end of opportunity band $2.5MM
$1.5 - 2.5 MM$10.0MM Baseline
SpendingActivity Analysis/
Organization AlignmentEffectiveness
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Sales Resource Productivity
$100MM
Tools Utilization$40MM
Provisioning/ Billing Support
$ 40MM
Installation / Service Costs
$20MM
ITS Investment In Operations Improvement Will Help Deliver Significant Returns
Sales Force Effectiveness
$140MM
Provisioning / Billing/Service Effectiveness
$60MM
OperationsProductivity Improvements
$200MMAnnually
• Increase value added work of sales force (“face-time”)
• Cost reduction in support activities
• Better information for sales force
• Increased effectiveness of targeting tools
• Enhance lead quality
• Reduction of low-value added work
• Significant $ spent on inspecting, reconciling, tracking, and expediting
• High degree of manual efforts
• Overtime $ reduction
• Travel cost reduction
• Productivity increases also possible
PRODUCT SALES INSTALLATION REPAIR BILLING
30% 30% 10% 15% 15%
• Reliability• Ease of Use• Features /
Functions
• Knowledge• Response• Follow-up
• Delivery Interval• Does Not Break• Installed on Time
• No Repeat Trouble
• Fixed Fast• Kept Informed
• Accuracy / No Surprises
• Resolved First Call
• Easy to Understand
ON
OFF
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Sales Resource Productivity
$100MM
Tools Utilization$40MM
Provisioning/ Billing Support
$ 40MM
Installation / Service Costs
$20MM
ITS Investment In Operations Improvement Will Help Deliver Significant Returns
Sales Force Effectiveness
$140MM
Provisioning / Billing/Service Effectiveness
$60MM
OperationsProductivity Improvements
$200MMAnnually
PRODUCT SALES INSTALLATION REPAIR BILLING
30% 30% 10% 15% 15%
• Reliability• Ease of Use• Features /
Functions
• Knowledge• Response• Follow-up
• Delivery Interval• Does Not Break• Installed on Time
• No Repeat Trouble
• Fixed Fast• Kept Informed
• Accuracy / No Surprises
• Resolved First Call
• Easy to Understand
ON
OFF
04/19/23 @ 20:20
1993 Gemini Consulting Company
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AEs Armed With More Time And Better Tools Will Enable MOI Attainment
Sales Resource Productivity
$100MM
Tools Utilization
$40MM
Provisioning and Billing Flexibility
Impact Not Quantified
• Activity analysis indicates that significant time spent on non-value work is driven by system deficiencies
• Improved utilization of targeting tools will enhance lead quality
NSSD Revenue MOI
-- 5$132MM $53MM
$132MM $58MM
7.5% AE productivity increase
30% Support productivity increase
SBD
$100MM
$100MM $40MM6.0% AE productivity increase
$232MM $100MM SBD Total
--
$42MM
30% Support productivity increase 2
Assumption: Revenue to MOI conversion at 40%, assuming 50% gross margin plus 10% variable selling costs.
Total
NSSD Total
NSSD$ 14MM $ 5MMSOS potential 100% lead increase
LOOT potential 40% lead increase
$109MM $40MM Total
95 35
See Appendix for detail computations.
Revenue MOI
SBD
04/19/23 @ 20:20
1993 Gemini Consulting Company
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ITS Will Provide Critical Time and Tools to AEs to Attain Financial Targets
• Enhanced targeting
• Improved customer database/access
• Enhanced inter-divisional coordination
• Streamlined configuration and pricing
• Improved information access/inquiry resolution
• Streamlined support databases (STS,PARMS)
Critical Time Enablers : Critical Tool Enablers:
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Significant Productivity Improvement Will Be Obtained Through System Enhancements
• AE’s estimate that 25-30% improvement in productivity through improved access to information and streamlining of system interfaces
• Branch administrative support positions are forced to compensate for the lack of information and integration of systems
• Branch managers have estimated as much as 15% of cost structure is driven by inefficient information and systems support
– Excessive manual work / redundant data entry
– Manual invoice tracking
– Excessive clerical work gathering data
20% 25% 10% 5% 5%30%
Customer Inquires and Problem Solving
OrderProcessing
Sales Tracking,
Forecasting and Admin
Direct CustomerInterface
Configuration/Pricing/
ProposalDevelopment
Lead Gen-
eration
Potential Productivity Improvement
Support ClerkMarket Analyst* BPA ParmsBPA
Compensations*Finance
Manager*Contract Manager
Percent
0
20
40
60
80
100
Activity Analysis
Activity Analysis
- Revenue impact of productivity improvement of $250 - 500MM
- Potential benefits on annual cost savings of $7MM
AEs spend more time reworking information issues than dealing with customers
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Utilizing Proper Targeting Tools Will Greatly Increase AE Productivity
SBD
• Suppling SBD branches with tools to more effectively target leads can generate revenues over $90 MM
NSSD
• Ready access to accurate customer information can improve SOS lead quality by 100% representing an additional $14MM in revenue
Estimated "Hot" Leads Generated Per Year Per TSM:
Actual
Potential
60 Leads/Year
120 Leads/Year
Estimated Annual Revenue Impact (Conservative):
Actual
Potential
$14M
$28M
AE Generated Leads
Sales
Leads
Increase in sales byattaining
Best-In-Classbenchmark
75th Perc
entile H
it Rate
}
0
200
400
600
800
1000
1200
1400
0 2000 4000 6000
04/19/23 @ 20:20
1993 Gemini Consulting Company
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The Stakes Are High If Customer Needs Are Not Addressed
Total “At Risk” Revenue: $490 million
Customers said 29% of their budget would be up for bid over next 3+ years
Annual71%
“At Risk”29%
Total Equipment Revenue: $1.7 billion
NewOpportunity
17%
NewOpportunity
17%
Customers said AT&T’s “share of wallet” (i.e. their budget) could increase 17% if
overall service quality improved
New Opportunity Revenue: $870 million (over plan horizon)
New Opportunity Revenue: $290 million (annual)
++
Customer Needs
• Equipment Reliability
• Service / Installation Responsiveness
• AE Knowledge of Account
• Billing and Order Efficiency
• Few Points of Contact
ITS Impact
Low
High
High
High
Medium
04/19/23 @ 20:20
1993 Gemini Consulting Company
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“What's My Service Level”
Sears response: “How can you help us when you don’t even know what equipment you sold us?”
Sears response: “How can you help us when you don’t even know what equipment you sold us?”
“What's My Installed Base”
ROLM Reports
• Provided information requested on a regular monthly report
AT&T Report
• Only provided part of information
• Required 6 people several months to tabulate
Summary of Equipment for
Business Groups
Equipment Type
_____
_____
_____
_____
Model
_____
_____
_____
_____
Quantity
_____
_____
_____
_____
ROLM Report
• Service incidents• Adds, changes, drops• Response time (repair)• Dispatches per alarm• Cost of materials • Time to repair
ROLM Reports• One day turnaround• Consolidated Sears and individual business units• Accurate and complete
AT&T Report• Did not foot• Took months to create• Inaccurate:
– Equipment already removed– Some equipment not shown
Field’s Perception That Inability To Provide InformationAt Sears Contributed To Loss Of Primary Supplier Status
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Information Limitations Contributed To A $12 Million Lost Opportunity To Become JC Penny’s Primary Supplier
XXXX has not committed to cleaning up JC Penny’s records until the fourth quarter of 1994
XXXX has not committed to cleaning up JC Penny’s records until the fourth quarter of 1994
• XXXX lost bid to GTE for two reasons:- Inability to coordinate efforts with Consumer Products Division on Trimline phones- Inability to provide accurate information
• XXXX has still not solved these information issues according to JC Penny contacts:
Source: Focus Group with JC Penny
“AT&T can’t find their own records”
“Please handle your internal issues transparently”
“There’s not enough time to do business with AT&T”
“Why can’t AT&T provide the final bottom line to me on purchases?
JC Penny
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Montgomery Ward Has Three People Cleaning Up Their AT&T Equipment Records
“If we had accurate information on what Montgomery Ward has we could sell them at least
$120K more per year!”
“If we had accurate information on what Montgomery Ward has we could sell them at least
$120K more per year!”
• Montgomery Ward NAM:- “I still can’t tell them what they are leasing, renting or own”- “They realize we don’t have the people to clean up their records so they’re doing it
themselves. ”
West Central East
04/19/23 @ 20:20
1993 Gemini Consulting Company
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ITS Has Not Been Able To Remedy This Situation
Entire Sears contract will be rebid in the next 12-18 months. What has been done to address their concern
on quality of information they review?
Entire Sears contract will be rebid in the next 12-18 months. What has been done to address their concern
on quality of information they review?
“...Nothing has happened to resolve this problem. ITS keeps changing (reorganizing). I don’t even know who at ITS to contact
anymore...”
04/19/23 @ 20:20
1993 Gemini Consulting Company
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One Of The Factors Contributing To Not Bidding On Government Contracts Was Inability To Meet Billing Requirements• XXXXs Customer Billing System (CBS) unable to meet most government
contract requirements for customer line item number (CLIN) billing
• XXXX has decided not to bid on FAA VTS contract (1990) worth $100MM
• Would have cost $3 - 4MM (at minimum) to build a billing system capable of meeting RFP -- project deemed risky
• Integration with other AT&T units an issue
• GTE won the contract
• Probability of winning if no billing problems: 50%
• ...as well as GSA ASP contract (1990) worth $50MM• Partnered with NYNEX, they were to create billing system -- killed bid due to
• $10MM cost to process the billing
• Pac Bell won the contract
• Probability of winning if no billing problems: 50%
“Billing alone has never kept me from bidding, but the added cost has at times has made me uncompetitive.”
- Federal Region Program Director
“Billing alone has never kept me from bidding, but the added cost has at times has made me uncompetitive.”
- Federal Region Program Director
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Separate Billing Systems Will Have To Be Created To Meet The Contract Requirements
RFPs XXXX Planning to bid on Estimated Cost Of Billing System
Navy VMS contract $30MMGSA ASP contract $10MM
$1.0MM$0.6MM
If AT&T wins these contracts, it will have to absorb the cost of the new billing systems.
If AT&T wins these contracts, it will have to absorb the cost of the new billing systems.
• “I know for a fact that our competitors like NTI and GTE don’t have to create separate billing systems to fulfill these types of contracts”
Federal Region Program Director
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Sales Resource Productivity
$100MM
Tools Utilization$40MM
Provisioning/ Billing Support
$ 40MM
Installation / Service Costs
$20MM
ITS Investment In Operations Improvement Will Help Deliver Significant Returns
Sales Force Effectiveness
$140MM
Provisioning / Billing/Service Effectiveness
$60MM
OperationsProductivity Improvements
$200MMAnnually
PRODUCT SALES INSTALLATION REPAIR BILLING
30% 30% 10% 15% 15%
• Reliability• Ease of Use• Features /
Functions
• Knowledge• Response• Follow-up
• Delivery Interval• Does Not Break• Installed on Time
• No Repeat Trouble
• Fixed Fast• Kept Informed
• Accuracy / No Surprises
• Resolved First Call
• Easy to Understand
ON
OFF
04/19/23 @ 20:20
1993 Gemini Consulting Company
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% Time % Time
Provisioning and Billing Resources Were Mapped to the Key Activities Identified in the Brown Papers
RESOURCES
# of People # of People
Billing
Activities Activities
Provisioning
This analysis provided a method for determining an approximate cost of each activityThis analysis provided a method for determining an approximate cost of each activity
Approach: Cost Reduction Opportunities
04/19/23 @ 20:20
1993 Gemini Consulting Company
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We Used Value Analysis To Assess The Value Of Each Activity To The Process
BVA and NVA are activities that do not contribute to meeting customer requirements . These could be eliminated without considerable disruptions to the process. Customers are not willing to pay for these activities
Is it necessary to produce an output?
Do we use it to
manage our business?
Real Value Added (RVA)
Business Value Added (BVA)
No Value Added (NVA)
Do we need to perform this activity to meet external customer
requirements?
RVA are activities that must be performed to meet specific customer requirements & customers are willing to absorb the additional cost
Does it contribute toBusiness Functions?
YES NO
NO
YES
NONOYES YES
Approach: Cost Reduction Opportunities
Activity
04/19/23 @ 20:20
1993 Gemini Consulting Company
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We Identified Activity Attributes To Facilitate Cost Analysis Of Various Types Of Work
Approach: Cost Reduction Opportunities
Inspection Expediting
TrackingManual
04/19/23 @ 20:20
1993 Gemini Consulting Company
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The Cost Of Low Value Work In Provisioning And Billing Is $95MM
MM MM MM
SBD
65.1
NSSD
81.9
Combined
930
70,000
1,170
70,000
2,100
70,000
147.0$ $
MM MM MM45.0 50.0 95.0$ $ $
%69.1
18.37.5
2.49.5
7.3
•Expediting
• Total cost of Associates $
• # Associates involved in support provisioning & billing processes (excludes techs)
• Fully loaded cost / employee
•Inspecting•Reconciling•Tracking
•Other
• Cost of low value added
61.1% 64.6%
22.58.0
7.04.0
8.5
40.815.5
9.413.5
15.8
04/19/23 @ 20:20
1993 Gemini Consulting Company
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SBD
7.3
$45.0MM
$18.3MM
7.5
2.4
9.5
NSSD
8.5
$50.0MM
$22.5MM
8.0
7.0
4.0
Inspections And Expediting Are The Key Drivers Of Low Value Activities
Combined
• Other 15.8
$95.0MMTOTAL
• Inspecting–Sales package–Orders–Invoices
$40.8MM
• Reconciliations–Billing Records–Completion Reports
15.5
• Tracking–Scheduling Status–Shipment Status–Missing Products–Staffing Status
9.4
• Expediting 13.5
Is it necessary to produce an output?
Do we use it to
manage our business?
Real Value Added (RVA)
Business Value Added (BVA)
No Value Added (NVA)
Do we need to perform this activity to meet external customer
requirements?
Does it contribute toBusiness Functions?
YES NO
NO
YES
NONOYES YES
Activity
04/19/23 @ 20:20
1993 Gemini Consulting Company
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$___MM Of The Total Cost Of Low Value Activities WillBe Realized In The Project
Total
SBD NSSD COMBINED
$ MM
$ MM$ MM
$ MM
TotalCost $
45.0 $ MM
Realizable- Benefit -
%
$ MM
TotalCost $
50.0 $ MM
Realizable- Benefit -
%
$ MM
TotalCost $
95.0
Realizable- Benefit -
%
Inspecting % % %18.3 22.5 40.8
Reconciling 7.5 8.0 15.5
Tracking 2.4 7.0 9.4
Expediting 9.5 4.0 13.5
Other
$ MM MM
7.3 8.5 15.8
$ MM
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Automation And Availability And Access To InformationWill Result In $__ MM Of Benefits For Value Added Activities
Cost of Low Value Activities
Cost of Business & Real Value Activity
Total Billing / Provisioning
MM$ MM$
MM$ MM$
SBD NSSD Combined
45.0
20.1
50.0
30.5
95.0
50.6
4.0 6.0 10.0MM$
MM MM MM65.1 80.5 145.6$ $$
MM$
Realizable Benefit@ 20%
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Sales Resource Productivity
$100MM
Tools Utilization$40MM
Provisioning/ Billing Support
$ 40MM
Installation / Service Costs
$20MM
ITS Investment In Operations Improvement Will Help Deliver Significant Returns
Sales Force Effectiveness
$140MM
Provisioning / Billing/Service Effectiveness
$60MM
OperationsProductivity Improvements
$200MMAnnually
PRODUCT SALES INSTALLATION REPAIR BILLING
30% 30% 10% 15% 15%
• Reliability• Ease of Use• Features /
Functions
• Knowledge• Response• Follow-up
• Delivery Interval• Does Not Break• Installed on Time
• No Repeat Trouble
• Fixed Fast• Kept Informed
• Accuracy / No Surprises
• Resolved First Call
• Easy to Understand
ON
OFF
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Analysis Identified $46MM In ITS Related Opportunities In Service / Installation
50 10 4 10 3 23
Direct Basic Product Hours Overtime
Admin.
Travel
Training
Vacation/Sick/Others
SBD%
NSSD%
44 9 9 19 3 16
Direct Basic Product HoursOvertime Admin. Travel
TrainingVacation/Sick/
Others
POTENTIAL ITS IMPACT
$14MM + $14MM + $16MM $30MM $46MM
Cost Reduction
Pro-ductivity Total
$32MM =
04/19/23 @ 20:20
1993 Gemini Consulting Company
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System Deficiencies Represent 26% Of Overtime Costs
Total Cost $31MM
Root Cause Of Overtime NSSD SBD
•Customer Demands (recovered) 4% 5%
•Improper Scheduling by System 3% 2%
•Uneven Distribution Of Work Load 2% 1%
•Inefficiency of Technician 1% 12%
Total Time 10% 9%
$23MM
Improper scheduling by system results in bad routing
Improper scheduling by system results in bad routing
Assumptions - 5,440 technicians @ $100K fully loaded cost, 3,100 in NSSD and 2,340 in SBD
Information Impact
$14MM
NSSD$9MM
SBD$5MM
$54MM
04/19/23 @ 20:20
1993 Gemini Consulting Company
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System Deficiencies Are Also A Major Cause Of Travel Time
Total Cost(People & Expenses)
$66MM
Root Cause Of Travel Time NSSD SBD
•Geographic Disbursement / Technician Density 6% 12%
•Scheduling Algorithm 3% 9%
•Training of Technicians 2% 3%
•Performance Measurement Process 2% 3%
•Wrong Location Data 2% 3%
Total Time 15% 30%
$87MM
Information Impact
$30MM
NSSD$9MM
SBD$21MM
$2MM
NSSD$.5 MM
SBD$1.5MM
$153MM
Finish
Productivity
Cost
•Start
Assumptions - 5,440 technicians @ $100K fully loaded cost, 3,100 in NSSD and 2,340 in SBD
04/19/23 @ 20:20
1993 Gemini Consulting Company
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$ MM $ MM
$ MM $ MM
$ MM
ITS Could Enable $20MM In Cost Reduction AndProductivity Improvements in Installation / Service
Cost
$ MM54 --• Overtime
Total %Cost
Reduction Productivity
14 26%
• Travel
117 -- 30– People 30 26%
36 2 --– Expenses 2 6%
153 2 30• Total Travel 32 21%
207 30Total 46$ MM 22%
Benefit from productivity improvement could be used to reduce backlog and deal with planned growth of business
Benefit from productivity improvement could be used to reduce backlog and deal with planned growth of business
$ MM
16
14
• Realizable Benefit
• Benefit %
$ MM8 $ MM12 $ MM20 10%
44%40%50%
04/19/23 @ 20:20
1993 Gemini Consulting Company
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The Proposed Project Will Address Some Key Hurdles To Plan Attainment
1992START
$(44)MM
ITS Effectiveness Sales Force
EffectivenessProvisioning /
Billing Effectiveness
Installation / Service
Effectiveness
$20MM$140MM
$40MM$20MM
1995 FINISH
$252MM
$220MM
APPENDIX
AT & T
AT&T
04/19/23 @ 20:20
1993 Gemini Consulting Company
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Sales Force Productivity Improvement & Tools Utilization Will Enable Revenue Enhancement Of Over $340MM Annually
Revenue to MOI conversion at 40%, assuming 50% gross margin, and 10% variable selling costs.Note: See Gemini Market Focus Assessment (2/25/93) for detailed assumptions behind cost/benefit estimates
NSSD
SBD
Possible Support Productivity
SOS Potential to Increase Leads
Possible Support Productivity
Loot Potential To Increase Hit Rate
Possible AE Productivity
Conservative Factor
Subset of Support Headcount
Current LeadsYear
Subset of Support Headcount
Current AnnualLead Volume
Revenue/AE
Conservative Factor
PotentialRevenue
$14
$146MM
Potential MOI
(30%) (.5) $2.2MM (.5) $132MM $53MM
(30%) (220)
-- $5
$5
(100%) 60$63MM
Possible AE Productivity
ConservativeFactor
Revenue/AE
Conservative Factor
(25%) (.5) ($1.1Million) (.5)
$100MM $40MM
(30%) (90)
$95
$2
(5.3%) (232,000)
Compensation
Compensation
Sale (1992)Revenue Per
Annual All In
Revenue Per
Annual All In
Lead (1992)
NSSDAEs
(800)
75,000
$233,000
SBDAEs
(1460)
75,000
$7,700
$35
$77MM
X
X
X
X
X
X
X
X
X
X
XX
X
X
X
=
=
=
=
=
=
XXXXRevenue/MOI
$341/$140MM
$195MM
X
04/19/23 @ 20:20
1993 Gemini Consulting Company
- 42 -
NSSD Can Expect To Reduce Provisioning/Billing Costs By $42MM
$40MMProvisioning / Billing
Costs
$82MM
$32MM
$50MM
Value-Added Activities
Low/Non Value-Added Activities
$42MMCost
Avoidance
04/19/23 @ 20:20
1993 Gemini Consulting Company
- 43 -
IT Will Have A Significant Impact On The Enhancement Of Provisioning / Billing Activities
%
ACTIVITY CATEGORY IMPROVEMENT POTENTIAL ENHANCEMENT
Communications To Customer Accurate Customer Data 25 - 50
Package or Information Review Reliable and Accurate Data 80 - 100
Status Tracking Information Available On-Demand 90 - 100
Internal Communications Reliable, Online, Available Data 80 - 100
Expediting Optimized Operations 90 - 95
Calculations Automate Task 80 - 95
Hand - Offs Close Loop Holes 50 - 100
Eliminate Redundant Systems