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Slide 1: avansys solutions Avansys Field Intervention Automation Solution Case Study Innovation-driven management consulting Thought leadership Strategy vision Solution integration Performance architecture Transformation partners
Slide 2: Avansys brief overview Avansys Solutions © 2010 2
Slide 3: Avansys principles We see innovation as the main vehicle for value creation We maintain a respectful attitude towards change Avansys Solutions © 2010 3
Slide 4: Consulting ‘dimensions’ and Avansys consulting ‘space’ A-CUBE ™ Commercial focus Avansys consulting ‘space’ Dimension A Operational focus Dimension B Qualitative (human –centric) consulting focus Quantitative consulting focus Consulting ‘dimensions’ Practical experience (subject matter expertise) approach Dimension C Fundamental theoretical discipline approach Avansys covers a large consulting space with a balanced multi-dimensional perspective. Avansys Solutions © 2010 4
Slide 5: Avansys Field Intervention Automation Case Study Avansys Solutions © 2010 5
Slide 6: Avansys Field Intervention Automation Solution (FIAS) – brief overview FIA is… …a solution custom build and optimized for addressing the need for optimized activities related to critical infrastructure interventions with a high degree of geographical dispersion …a solution which ensures precise SLA and KPI-type contractual service performance indicators (intervention time, MTFB, AVBT, etc.) …a solution which allows for dispatching outsourcing services 6
Slide 7: Oil & Gas Energy and utilities Banks Insurance agencies Telecom Retail Carriers Logistics Pharma 7 FIAS – addressable market Main FIAS addressable market verticals
Slide 8: FIAS – customer benefits FIAS differentiators from a customer benefit perspective fixed total Intervention network optimally dimensioned for national coverage remedy time on the entire Romanian territory Spare parts stock is kept in the field time guaranteed intervention and remedy Remote equipment monitoring capability certain interventions can be replaced with remote diagnostics and remedy Automatic incident alarming for certain situations reduced customer involvement per incident reduced remedy time, 8
Slide 9: FIAS – the working mechanisms FIAS main components are.... …SLA / KPI-optimized spare parts and intervention “smart” procedures “Smart” = built-in self-calibration …national intervention network designed for SLA/ KPI assurance …SLA / KPI / business process-oriented IT Infrastructure 9
Slide 10: FIAS – design governance FIAS was developed using Enterprise Architecture and Systems Engineering methodology (KPI-procedures-processesIT-organization-value chains-business functions strong conceptual coupling) The IT architecture is strongly business process oriented for SLA/KPI assurance 10
Slide 11: FIAS – technical innovation Optimal spare parts stock dimensioning using statistics tools “Optimal” spare parts stock impact: stock too low: intervention-time KPI risk stock too high: financial inefficiency, competitive issues Business process management IT applications for real-time KPI monitoring and procedure exception handling 11
Slide 12: FIAS– the business case I Operational-financial modeling can be used to prove the business case for FIAS under different assumptions (scenarios) Supplemental income yielded by intervention capacity extension Operational limit of Operational dispatch limit of field function infrastructure without IT automation Capacity >4 * X (interventions/day) Capacity < X (interventions/day) IT Field infrastructure infrastructure IT and field investment investment infrastructure investment costs Extra income through capacity extension – IT and field infrastructure investment costs = FIAS economic feasibility In the case in which the financial indicators of the FIAS economic feasibility analysis are positive, the FIAS investments are justified by the concept of the “cost of lost income opportunity by not expanding the system capacity” 12
Slide 13: FIAS – the business case II Sample feasibility tests using operational-financial models: (A) IT infrastructure investment: - Is the investment in the IT infrastructure economically feasible? - What level of income assures the IT infrastructure investment sustainability? (B) Field infrastructure investment: -What is the optimal level of outsourcing (subcontracting) from a financial perspective? - What is the economic “cost” of the benefits yielded by using exclusively internal field infrastructure (intervention teams, etc.) ? Sample “what-if” scenarios which can be associated with A and B: Scenario I: customer has x major FIAS contracts and, no IT infrastructure investment, full field infrastructure investment Scenario II: customer has 4x major FIAS contracts, full IT infrastructure investment, full field infrastructure investment (aggressive development scenario) Scenario III: customer has 2x FIAS contracts, full IT infrastructure investment, full field infrastructure investment (conservative development scenario) Scenario I: customer has x major FIAS contracts; 100% field intervention outsourcing (no IT infrastructure investment, no field infrastructure investment) Scenario II: customer x major FIAS contracts; 0% field intervention outsourcing (full IT infrastructure investment, full field infrastructure investment) Scenario III: customer has x major FIAS contracts; 30% field intervention outsourcing (80% IT infrastructure investment, 70% field infrastructure investment) Scenario IV: customer has x major FIAS contracts; 70% field intervention outsourcing (50% IT infrastructure investment, 30%field infrastructure investment) 13
Slide 14: FIAS – the business case III Financial sustainability - lei MODEL A SCENARIO I (2010-2020) 4000000 3500000 3000000 2500000 2000000 1500000 1000000 500000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total cash-out Total chash-flow Total cash-in Sample results for “what-if” scenarios Financial sustainability - lei MODEL A SCENARIO III (2010-2020) Total cash-in Total cash-out Total cash-flow Total cummulated cash-flow Operational income 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 60000000 Total cummulated cashflow 50000000 Operational income 40000000 30000000 Financial sustainability - lei MODEL A SCENARIO II (2010-2020) 90000000 80000000 70000000 60000000 50000000 40000000 30000000 20000000 10000000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total cash-in Total cash-out Total cash-flow Total cummulated chash-flow Operational income 20000000 10000000 14
Slide 15: FIAS – the business case IV Sample business case results With only x dominant customers , IT and field infrastructure investment yields a IRR of y% and a NPV of z LEI over 10 years With only x dominant customers, field infrastructure investment but no IT infrastructure investment yields a IRR of a% and a NPV of b LEI over 10 years With 2x dominant customers, IT and field infrastructure investment yields a IRR of s% and a NPV of t LEI over 10 years With 4x dominant customers, IT and field infrastructure investment yields a IRR of u% and a NPV of v LEI over 10 years Outsourcing 100% of the field activity yields outstanding economic results (no IT and field infrastructure investment is necessary), but hurts operational (quality) and strategic (development) business objectives Outsourcing 0% of the field activity yields the worst economic results (IRR of y% and a NPV of z LEI) Somewhat unexpectedly, outsourcing 30% or 70% of the field activity yields almost similar economic results Sample business case conclusions All scenarios yield positive IRR, NPV, Cost-Benefit Ratios (CBR), thus FIAS is economically viable IT infrastructure investment is paid for tenfold with only 2x dominant FIAS customer, making the case for the cost of lost income opportunity by not expanding the system capacity (intervention capacity) Given the similar financial indicators that result from Model B Scenarios III and IV, 30% outsourcing is recommended (Scenario III) for the additional gains in operational (quality) and strategic (future development) business objectives 15
Slide 16: Ask us why… Liviu Nedelescu liviu.nedelescu@avansys.ro Mobile: +4 0730 619 073 Avansys Solutions Spataru Preda No.12, Bucharest, Romania Tel: +4 031 107 70 93 Fax: + 4 031 107 89 95 www.avansys.ro …Avansys is your best partner for solving your most difficult problems! Avansys Solutions © 2010 16