no capex? no problem!! - honeywellprocess.com · don’t let your budget dictate your schedule!!...

Don’t Let Your Budget Dictate Your Schedule!!NO CAPEX? NO PROBLEM!!Jim Tramontana

25 Oct 2016

Honeywell Proprietary - © 2016 by Honeywell International Inc. All rights reserved.

So What’s the Problem?

No CAPEX???

• You want to upgrade…

• You need to upgrade…

• But you can’t upgrade…

• Why?

• Your system is running

• You lack the justification

• You lack the CAPEX

1


Expect CAPEX to Remain Stagnant…or Worse

CAPEX Challenges are Industry Agnostic

2

• Post Recession

investment was not

focused on equipment

refresh

• Commodity prices are

depressed

• USD remains strong

• Internal competition for

CAPEX heightens


The Lifecycle Solutions & Services Offering Family

So HOW do We Address this Problem?

Offerings

purchased on a

one time basis

to solve todays

needs

Spot

PurchasesOfferings

purchased on a

contractual

basis, typically

1-5 years that

provide

ongoing

support

Contracted

Service

Programs

Partnerships

with customers

that focus on

delivering the

support

required to

meet mutually

agreed to

outcomes with a

fee adjusted

schedule

Outcome

Based

Partnership

Comprehensive

automation

solutions with

elements of

financing, and

services linked

to asset

performance

Performance

Contracting

Problem:

How do we help

customers

upgrade their

systems given

the current

economic

climate?

???


Introducing Honeywell Evolution Services!!

Honeywell has a Continuum of Service Offerings to Meet Customer

Needs!!

Offerings

purchased on a

one time basis

to solve today’s

needs

Offerings

purchased on a

contractual

basis typically

1-5 years that

provide

ongoing

support

Contracted

Service

Program

designed to

enable

migrations

without the

need for

CAPEX!

Partnerships

with customers

that focus on

delivering the

support

required to

meet mutually

agreed to

outcomes with a

fee adjusted

schedule

Comprehensive

automation

solutions with

elements of

financing and

services linked

to asset

performance

Spot

Purchases

Contracted

Service

Programs

Outcome

Based

Partnership

Depth of Relationship

Customer

Value

Received

Performance

Contracting

Evolution

Service

Programs

• The industry’s first holistic

automation program!

• Designed to avoid the

required CAPEX investment!


What Do You NOT Get with Honeywell Evolution Services?

The Most Customer Friendly Program Honeywell Has EVER introduced!!

• NO BIG CAPEX bill!

• NO BIG annual price increases!

• NO BIG One Time Upgrade fee!

• NO BIG year 1 cash outlay!

• NO BIG obsolescence headaches!

5


So What do You Get with Honeywell Evolution Services?

A Single Affordable, Predictable Monthly Payment!!

• Multiyear service agreement aligned with your

automation roadmap

• It provides you…

- The system upgrades you need

- Predefined software maintenance & support

- Predefined hardware maintenance & support

- Maintains software at AGREED TO LEVELS!

- Full change management & tracking

- The ability to have remote diagnostics

- A dashboard to monitor system operation

- An annual health assessment to ensure

optimal performance

6


What are Honeywell Evolution Services?

Enables Implementation Through Pure OPEX Funding!!!

• A Service Agreement

- Provides your predefined hardware, software & maintenance

- Includes the predefined, scheduled upgrades

- Incorporates all change management

• Single invoice billed on your schedule

- Monthly, Quarterly, Semi-Annual

• Variable term, typically 5 years

- Can range from 3 to 7 years

• Non-Cancellable Contract

• Auto-Renews at contract end for 6 month increments

7


What Benefits Do I Get with Honeywell Evolution Services

No Price Surprises!!

• Keeps your software AT AGREED TO LEVELS!!

• Price increases fixed at the local CPI for contract term

• Manage system changes with Trace Gold Package

• Honeywell Service Node with Performance Analyzers

- Remote connectivity provides a discount but is NOT required!

• Annual validation that the system is performing at optimal

levels

• No need to worry about what software revision your system

is running today

8


What’s the Fine Print?

Grab It Before It’s GONE!

• This program will ONLY be available during 2017

- Based on financial performance & demand it will be

re-evaluated at year end

• Options at the end of the contract

- Do nothing

- Enhance and extend

- Return

9


Let’s talk about Ownership…..

Grab It Before It’s GONE!

• Does your company own your PC’s & Servers or are they

on a refresh cycle?

• If you have fleet vehicles, does your company own them?

• If you buy your upgrade, what do you need?

10


Let’s talk about Ownership…..

Don’t Let Your CAPEX Dictate Your Schedule!

• Does your company own its PC’s & Servers or are they on

a refresh cycle?

• Does your company own its fleet vehicles?

• If you buy your upgrade, what do you need?

• With Honeywell Evolution Services, you are paying for use

of the system

- If acquisition is desired you can purchase it at any time

11

CAPEX!!


Customer Expenditure Flow Comparison

Predictable Monthly Payments!

12

Honeywell Evolution Services Expense

Traditional CAPEX Acquisition

• Situations examined

SESP customers

Saved 5-10% over

contract term

Saved 20-30% year 1

Non SESP customers

Saw up to a 15% increase

over contract term

Saved 40-60% year 1


Questions??

13


Appendix

15


Solutions for Very Different Customer Needs

Honeywell Evolution Services is Designed to Deliver Migrations

• Assurance 360 is a support

agreement

• Customer owns the system

• Service is not predefined, they are

driven by agreed to outcomes

• Includes Performance Manager

• Honeywell is accountable

• Fee adjusted schedule based on

service level achievement

• Migrations are built into initial scope

to ensure a supportable platform

OPEX

CAPEX

Assurance 360

OPEX

Honeywell

Evolution Services

• Evolution Services is a migration

agreement

• Honeywell owns the system

• Services are predefined

• Performance is managed by the

customer

• Customer is accountable

• No fee adjustments

• Migrations ARE the objective


Three Offerings…Three Different Objectives

Why Put Off to Tomorrow, What You Can do Today?

17

Lifecycle Management Evolution Services Assurance 360

Contract TypeSupport agreement & payment plan

for a future migrationMigration agreement Support agreement

Component ownership Customer Honeywell Customer

Services providedSESP & Parts Management until a

migration can be performed.

Predefined services required to migrate

and maintain an optimized system

Whatever services are required to

meet mutually agreed to outcomes

Who is responsible for

System performance?Customer Customer Honeywell Performance Manager

Who is responsible for

System availability?Customer Customer Honeywell

Fee Schedule Fixed Fixed Fee adjusted based on performance

Objective of Contract Support until you can upgrade Execute a migration Support & maintain your system

Funding CAPEX/OPEX OPEX CAPEX/OPEX

no capex? no problem!! - honeywellprocess.com · don’t let your budget dictate your schedule!!...

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