An HP-EDS Experience

© Copyright 2010 Hewlett-Packard Development Company, L.P.1© Copyright 2010 Hewlett-Packard Development Company, L.P.

Arnab Chakraborty- Analytics Service Delivery Leader

Global Business Services - Hewlett Packard

22nd September 2010

SHARED SERVICES AS A KEY LEVER FOR SUCCESSFUL MERGER INTEGRATION:AN HP-EDS EXPERIENCE

2010 SSON Conference: Singapore

© Copyright 2010 Hewlett-Packard Development Company, L.P.2

AGENDA

Mergers & Acquisitions at HP

HP Shared Services and its role in M&A

HP-EDS Integration Case Study

Key Learnings

© Copyright 2010 Hewlett-Packard Development Company, L.P.3 v

WE DO AMAZING …Largest Technology Company in the world, with

$115Bn revenue in 2009

#10 Rank on Fortune 500

2PCs

shipped every second

2 printers

shipped every second

1 server

shipped every15 seconds

#1 or #2 in IT Services across every geography and industry globally

1Bn customers

in 170 countries served by HP Supply chain

106 of the

world’s 120 stock exch powered by HP

70% of SMS

messages sent enabled by HP SW

#1 on

Newsweek 2009 list of Greenest US Cos.


MERGERS AND ACQUISITIONS (M&A): ENGINE FOR DRIVING HP’S GROWTH

1958 1989 2002 2006-081939

HP Garage –Journey Begins

Acquired F.S.

Moseley Co.

Enters the plotter business

Foundation for printer business

Acquired Apollo

Computers

Leadership in workstations

Leadership in the PC Industry

Leadership in digital publishing

Acquired Compaq &

Indigo

Acquired Mercury

Acquired EDS

Doubled HP’s software business

Strengthened Services business


EDS ($22 Bn)

SIGNIFICANT EXPERIENCE OF INTEGRATING COMPANIES

Complexity

IntegrationTimeline

3 Months 6 Months 9 Months 12 Months

High

Medium

Low

PolyServe$16M

Colubris$23M

Neoware$100M

ColorSpan$70M

AOME$70M

EYP MCF$50M

NUR$86M

Exstream$82M

Tower$45M

LeftHand Networks

$74M

3COM$1.3 Bn

Knightsbridge$140MOpsware

$102M

© Copyright 2010 Hewlett-Packard Development Company, L.P.6v

v

KEY FOCUS AREAS DURING MERGER INTEGRATION

Customer Relationship

Benefit Realization

People Integration

Rationalize Assets

Communicate Progress

Process Integration

11 22

33

4455

66

Shared Services Organization has opportunity to deliver value in each area of Merger Integration


SHARED SERVICES PLAY AREAS IN MERGER INTEGRATION PROCESS

Customer Relationship

Shared call centers

Central Campaign Ops

People Integration

Employee On-boarding

Integrate HR processes

Rationalize Assets

Tools & Technology

Facilities &Locations

Process Integration

Consolidate process

Standardize & simplify

Communicate Progress

Central PMO to report metrics

Centralized communication

Benefit Realization

Rationalization of support functions

Reduction in overhead costs

HP has invested in shared Services (Global Business Services) which has enabled various merger integration activities


Global Business Services (GBS) Portfolio of Services

HP SHARED SERVICES CAPABILITY

8

Marketing Support

Quote to Cash

Finance & Accounting

Supply Chain

Service Admin

Hire to Retire

GLOBAL OPERATIONS (APJ – AMS – EMEA – INDIA)GLOBAL OPERATIONS (APJ – AMS – EMEA – INDIA)

REPORTING AND ANALYTICS SERVICESREPORTING AND ANALYTICS SERVICES

STRATEGY & PLANNINGSTRATEGY & PLANNING

COMPLIANCE & CONTROLSCOMPLIANCE & CONTROLS

GLOBAL SHARED SERVICES SOLUTIONSGLOBAL SHARED SERVICES SOLUTIONS

Combining process & functional expertise with actionable insights for driving better outcomes for various business groups in HP


San Jose

Bangalore

Singapore

DalianBuchares

t

Wroclaw

Chennai

Wuhan

GuadalajaraBeijing

AMS

EMEA

APJ

IndiaCordoba

Pontiac

16000 employees across 12 centers globally

24X5 support for all BU’s and functions

Supporting more than 30 languages

GBS DELIVERY GLOBAL FOOTPRINT


Experience of closing over 20+ deals in last two years …

GBS ROLE IN MERGER INTEGRATION

• Accounts Payable• Accounts Receivable• General Ledger

• Expense Reimbursement

• Payroll

• Master Data• FITR• Intercompany

Integrate process & systems of acquired company into HP

Building New capabilities for the acquired company

Optimization of delivery centers and workforce

Transition of Process Management into

GBS Operating Model

Subject Matter Experts

Tools & Methodologies

Program Management

M&A Experience

Key Enablers and accelerators for Merger Integration

11

22 33 44

55


GBS APPROACH TO MANAGE INTEGRATION

Due Diligence

Integration Planning

Integration Execution

Integration Close

• Develop initial integration strategy

• Identifying key complexities

• Assess initial Trading Structure model

• Assessing accounting impact

• Assess potential impact to GBS

• Consulting on Q2C process

• Interlocking integration plans with other functions

• Coordinating the implementation of Trading Structure

• Drive transaction processing integration

• Managing integration-related costs

• Managing exceptions

• Incorporating lessons learned into tools and processes

• Providing resolutions for ongoing issues

Involved across the M&A Deal Cycle as a Tier 1 Organization


•Revenue: $22Bn

•Services portfolio spanning ITO, Application services and BPO

•140,000 employees globally with 41,000 in low cost locations

•12,000 sales professionals

•Revenue: $100 billion

•Diversified product and services portfolio

• 175,000 employees globally and over 70,000 in services

•22,000 sales professionals

HP-EDS INTEGRATION: 2008

+

Process Integration

Finance + Payroll + HR

Optimization of Resources

New capabilities in Analytics

Employee Communication

Global Business Services (GBS)

500 full time employees, 1000 part-time with 250 plus projects with over 10,000 milestones!


Phased integration process ensured smooth integration – Finance, HR, Payroll

GBS LED INTEGRATION OF PROCESSES

Accounts PayableAccounts ReceivableGeneral Ledger

PayrollHR OperationsEmployee Reimb

Master DataIntercompanyIndirect Tax

Wave1 14 Countries

Wave 2 23 Countries

Wave 3 44 Countries

GBS Scope of Process Integrations

Consolidation of payroll processes

Selection of single payroll system/ vendor

New global ERP baseline for finance processes

Transition of L&D and staffing processes to GBS

HR Ops processes consolidation and migration

Outcomes of the Integrations Efforts


• Addition of approximately 1,500 employees

• Optimizing ABM cost structure and service level by leveraging GBS shared Service Center capabilities

Account Business Mgmt

• Retain domain knowledge on services supply chain & translate to HP

• Training ongoing for smooth integration into HPs Supply Chain Process

Global Supply Chain

• Addition of 140 FTEs to ensure consistent HR and L&D services to all HP employees post integration

HR and Learning & Development

GBS LED INTEGRATION OF PEOPLE

• Addition of approximately 1,000 employees and contractors

• Efficient, effective transaction processing that saves hundreds of millions of dollars in operating costs annually

Finance & Accounting Operations


HP + EDS Delivery Centers for Transactional Process at time of integration

OPTIMIZATION OF DELIVERY CENTERS

Bangalore, Chennai

San Jose

Barcelona

Guadalajara

Singapore

DalianBucharest

Wroclaw Pontiac MichiganBudapest

Buenos Aires

Plano

Cardoba

Kuala Lumpur

HP centers

EDS centers

1 2 3 4 5 6 n

Accounts Payable x x x x

Employee Reimb x x x x

Cash Application x x x x

General Accounting x x x x x

Fixed Assets x x x x x

Payroll x x x

Intercompany x x x x


HP + EDS Delivery Centers Optimized Post Integration

OPTIMIZATION OF DELIVERY CENTERS

San Jose

Bangalore

Singapore

DalianBuchares

t

Wroclaw

Chennai

Guadalajara

Cordoba

Pontiac

1 2 3 4 5 6 n

Accounts Payable x x

Employee Reimb x x x

Cash Application x x x

General Accounting x x x

Fixed Assets x x

Payroll x x

Intercompany x x


Research & Analytics helped identify new revenue opportunities

BUILDING NEW CAPABILITIES

Customer Intelligence

Market Intelligence

Sales Analytics Pricing Analytics

Customer References

Campaign Ops Big Deal Analytics

Industry & Solutions

End state today - multiple Research & Analytics CoEs for Enterprise Services

GBS Research & Analytics SS

Pre-integration Post integration

• Pipeline Analysis• Deal Support• Pricing Intelligence

• Competitive Analysis• Installed Base Analytics• Market Sizing & Growth

Leverage GBS Analytics for EDS


Facilitating Smooth Integration and Management of Change

DRIVING STRONG COMMUNICATION

Online “Getting Started @ HP” (Day 1 guide) top changes, FAQs)

HP+EDS Welcome Portal with Country pages and Buddy Program

Global to region downloadable Welcome Kits with posters and videos

Systems & Tools training

Pulse Survey and Portal poll

Region/country follow-up

Manager alert

Integration summary e-mail

Audience segmentation

Integration Portal – What to Expect

Integration Inquirer with change readiness focus and Wave alerts

Change Readiness systems , decks and tools training available (global to regions)

Regional/country training forums to cover all major training


Merger Integration CoE• Subject Matter Experts

• M&A Playbook

• Tools & Templates

KEY LEARNINGS …

Program Management

Process Ownership• Process Simplification

• Process Improvements

• E2E accountability

Involve Early

Recipe for Successful Integration

• Involved from Due-diligence stage through deal closure

• Elevated status as Tier 1 organization in an M&A

• Communication

• Dashboards/Scorecards

An HP-EDS Experience

Documents

Transcript of An HP-EDS Experience