NITIE, Mumbai

Business Transformation through critical process redesign

Team Knowell

NITIE, Mumbai Team Details: Rohan Yengul @ rohanyengul@gmail.com, mob: 9860383073 Rohan Kudtarkar @ rohan.skudtarkar@gmail.com, mob: 9920363036

Business Transformation through critical process redesign

Overview of Building Material distribution industry
The building materials sector is extremely diverse and constitutes a sizeable chunk of the industrial base of developed countries. It includes a highly diverse range of suppliers, from cement manufacturers to specialty glass and steel manufacturers, as well as providing a large market to white goods manufacturers, furniture manufacturers, paint and wiring manufacturers, and a host of other related industries. The building materials distribution industry fulfils a key intermediary role by purchasing large quantities of homogeneous products from primary producers and then selling and shipping smaller, heterogeneous orders of building materials to their retail and industrial customers.

Challenges of Building Material distribution industry

To increase Productivity To Reduce Operational cost To maximize inventory efficiencies and product availability Efficiency in Logistics at low cost To manage and integrate diverse brands, process & Systems

Company Background
The European Building Materials Ltd. operates as one business segment distribution of building materials products in Europe. It does this through 18+ operating business units and 50+ brands with operations spanning across 4 countries. The European Building Materials Ltd. is one of the leading building material distributors in Europe with over 40 bn of revenue.

Challenges of The European Building Materials Ltd.

1. 2. 3. 4. 5. Operational inefficiencies within the group Existence of 50+ brands across 18+ business units Inefficient back office system Decentralized Business Processes Less flexible systems Minimal sharing of Knowledge

Selling Consultancy
As we have to offer Cognizant solution to client CIO, we will have to be very specific to point out problem areas of client and how we are going to help them to tackle those problems in a efficient and cost effective manner. Thus we must have an in-depth understanding of building material distribution industry. As we have to provide solution in respect of streamlining their business processes which are currently decentralized due to wide operations (50+ brands in 18+ business units spanning operations across four European countries). Cognizant Business Consulting provides solution in terms of Business operations and process transformation which aims at analysing and redesigning business processes to improve overall efficiency and effectiveness. Thus it will help client to centralize their business operations and increase operational efficiency. Additional information is needed to develop solution for problem faced by client. We will have to gather information about overview of different business units and of their respective brands of client. For this initial requirement gathering we can ask following questions to the CIO of client

1. What are different business units in your organization and their operations and location of front offices across four European countries ? 2. What are various brands you promote and classification of these brands in existing business units ? 3. What are the revenues generated by different business units in your organization ? 4. What are the revenues generated by different brands in your organization ? 5. What are the current processes employed in front and back office systems of different brands ? 6. What are current systems used for inter brand communications in your organization ? 7. How exactly you are losing on your operational efficiency due to decentralized business processes ? 8. What is your present strategy to increase margins and reduce operational inefficiency ? 9. Which technology platforms you are currently using for different core business processes ? 10. What are existing functionality for knowledge sharing ? 11. How dynamic is your customer service portal ? 12. How is your order placing and tracking system ? 13. How billing is handled across business units ? 14. Provide details about warehouse management and route management ? 15. How data accessed across business units ? 16. What is the procedure for policy implementation and process compliance ? For Q&A session with CIO we will thoroughly analyse general trends and information related to worldwide building material distribution industry. Particularly we will analyse and interpret about business operations of building material distribution industry in Europe. We will go through previous engagements and projects related to building material distribution industry. Also we will learn about general challenges faced by this industry in Europe. We will gain basic understanding of different business units and brands of client. We will understand different solutions provided by Cognizant in this domain. We will gain preliminary understanding of this industry with the help of different white papers, case studies and interaction with industry experts. We will use following sources to gain required domain knowledge to appear knowledgeable about building material distribution industry 1. Cognizant Business Consulting knowledge-base consisting of white papers, case studies, industry statistics , best practices etc. 2. Interaction with industry experts 3. In-house training in the field of building material distribution industry 4. External certifications in the domain of building material distribution 5. Web based training sessions 6. Knowledge sharing sessions with Process Excellence Group Apart from CBC below mentioned groups should be involved in the project 1. Business Operations and process transformation 2. ERP solutions 3. Business/IT strategy 4. Finance 5. Legal

CBS Proposal for The European Building Materials Ltd. Business Operation & Process Transformation Background
Cognizant Business Solution (CBS) is submitting this proposal in response to Request for Proposal for business redesigning and Process Transformation issued by CIO of The European Building Materials Ltd. for the Business Operation & Process Transformation

Approach CBS proposes to execute the Business Operation & Process Transformation project in following
phases to meet The European Building Materials Ltd. s objectives Requirements Finalization and Analysis Phase Lean Methodology May 2011 Migration of Existing back office systems and Automation System Design Phase Construction Phase Testing Phase Deployment Phase Warranty Support and Process and knowledge Transition Phase.

CBS Value Proposition

CBS appreciates the opportunity for submitting a proposal for Business Operation & Process Transformation project. CBS has evaluated The European Building Materials Ltd. requirements and has understood the CTQs. CBS can help you meet customer, supplier and sourcing needs quickly and efficiently while helping you keep a sharp eye on service, costs and margins. Key Highlights: Integration of key business processes of business units spread across multiple brands Streamline front and back office systems of different brands Optimize resources and refine business processes Re-engineering of following business processes 1. Order placing system 2. Order tracking system 3. Billing process 4. Warehouse management 5. Route management 6. Centralized database and data synchronization across business units Provision of communication portal across business units for real time operation Customer service portal Advanced order promising at point of sale, taking into account availability, lead times, capacity constraints, etc. Auto balancing of stock across facilities. Handles complex price and commercial conditions. Multi channel sales

Scope of the Engagement

In Scope
Following will be part of scope of the project for the functional requirements & scope of the project: Requirements analysis and documentation (Use cases and prototypes) AS-IS Process Analysis Process refining by removing MUDA Documentation of Re-designed Process (Use cases and prototypes)

High level Design and Architecture Integration / Interfaces Migration of existing Back office System & Automation Low-level design Database Modelling Co-ordination with Business Unit Head and IT Managers for design review Development Application set up Deployment and testing across Business Testing Production Release Coordinate with Business Unit Head and IT Managers for project execution Documentation for the project Knowledge Transfer to support team and Warranty support

Scope Control
Sign-offs will be taken for all the important phases to avoid scope creep. CBS will also put consultants/Business Analyst, which will be able to control the scope based on their knowledge. A weekly progress/status report of deliverables will be shared with Business to ensure that team is aligned with the scope of the project.

Project Management
As part of the project, project management will ensure all the timelines are met and that resources are in place to achieve agreed milestones. As part of the project management responsibilities, below are some of the key items that would be included in definition to go-live phases Defining objective and scope for each deliverable Preparing a detailed project plan and communicating the same to The European Building Materials Ltd. and the IT Department. Defining milestones, deliverables for each phase Weekly status report reviews with Business unit Head, IT cell as appropriate. Project team management, delivery coordination.

Out of Scope
Following items will not be included as a part of scope of this project: Anything not mentioned in the above scope in section

Project Execution Plan

This section describes the proposed approach and methodology for Business Transformation and Process re-designing of The European Building Materials Ltd.

Migration Approach
Based on its experience in Business transformation & Process Re-engineering for other clients and Building Material Distribution Industry, CBS proposes the following approach

Analyze Business Process & Back office Systems

1. 2. 3. 4. Analyze the existing business Process to identify workflow Interaction with Business head to get complete understanding of supply and distribution system Identify disparate back office tools and process mapping. Prepare list of business units and respective processes and links to Centralized Business Architecture

AS-IS Process Analysis

1. Identify NVA activities 2. Perform a thorough Process review to identify over processed activities. 3. Perform a review of all processes to identify cost effective alternatives and dependencies.

Designing of refined Business Process and Existing system Migration

1. 2. 3. 4. 5. 6. 7. 8. Create High level Design and Architecture Integrate existing and refined Back office System designs Create Low-level designs and Architecture Logical deployment for Key Functionalities mentioned in Value Proposition. Document Use Cases and prototype Database Modeling Estimate Software & Hardware requirement Procure required Software & Hardware

Development & Deployment of refined Business Process and Existing system Migration
1. Once the refined business process is signed off by business unit heads implement processes. 2. Hardware installation and configuration 3. Configuration of IT Environment and Customization and flexibility facilities

Project Execution Methodology

Based on its experience in executing similar projects for various clients CBS proposes following phases:

Phase
Requirements Finalization and Analysis Phase System Design Phase

Deliverables
Functional specification Document (updated) Test cases, Technical Architecture document (updated), Technical Design document (updated) System Setup, Analyzed and refined Business Processes and Architecture Deployment across The European Building material Ltd. Production Release, Deployment documents Defect fixes in the proposed solutions, caused by the development activity in this project, Training session with IT team

Construction Phase and Migration Phase Testing & Deployment Phase

Warranty Support and Knowledge Transition Phase

Requirements Finalization and Analysis Phase

CBS will appoint six consultants from Business operations and process transformation unit for business understanding and requirement gathering for 18+ business units. These consultants will interact with all

business users and business unit heads to gather required information and map all business processes on value stream map within four weeks. And engineers located at offshore will identify NVA(Non Value Added) activities and under the guidance of consultants will prepare refined business processes and test cases for next four weeks. Based on test cases CBS will prototype all business processes mentioned in value proposition provided by CBS and approved by The European building material distribution Ltd. During this phase, experienced CBS consultants will work with the Business Unit Heads and Business Users to do requirement analysis and understand the current process. CBS consultants will also analyze Functional/Technical requirements & Use case documents to understand the user requirements. Also, study the existing system. Tasks

Task
Assist CBS in understanding existing business logic and requirements Identify users who can provide additional information about the business functionality and arrange meetings between such users and the CBS team Provide necessary existing documentation Clarification of queries, issues regarding requirements Understand the requirements and create requirements analysis document Create Use Cases / Test Cases and optimized process mappings wherever applicable. Deliverables Following are the deliverables during this phase:

Business Units
X

CBS

X X X X

Deliverables
Functional specification Document

Business Units

CBS
X

Business Re Engineering Phase

During this phase, based on the Use case diagrams, Functional and Technical requirements, CBS will come up with a Prototype Design. The European Building Materials Ltd's Business Unit head will verify and approve the design approach. Tasks

Task
Assist CBS in understanding requirements Provide necessary existing documentation Clarification of queries, issues regarding requirements Understand the requirements Updating of Business re-Design Document Review and approval of design documents Deliverables

Business Units
X X X

CBS

X X X

Following are the deliverables during this phase:

Deliverables
Test cases Technical Design document (leverage existing)

Business Units

CBS
X X

Construction Phase
Development transforms the detailed design representation of a Business Functionalities into Business Modules and Processes. It is during this phase that the each module mentioned in the scope will be prototyped as per the requirements Tasks Task Develop refined Process and system configuration as per the design Integration Setting up environment Perform Testing Deliver the System Design and Documents to client Answer query if any Deliverables Deliverables Business Setup Tested modules Test Results Documentation Business Units CBS X X X Business Heads CBS X X X X X X

Acceptance Testing and Deployment Phase

CBS team will provide Acceptance Support and guide during this phase. The team will support in moving the application to Production environment. Tasks Task Perform User Acceptance Testing Fix User Acceptance defects Provide acceptance signoff letter Deliverables Deliverables Deployment across Business Unit's environments Production Release Deployment Documentation Business Units X CBS X X X Business Units X X CBS X X

Warranty Support and Knowledge Transition Phase

CBS would provide warranty support for 60 calendar days from the date of release.

Tasks Task Warranty Support Business Units CBS X

Deliverables Deliverables Defect fixes during Warranty Support period Knowledge Transition Business Units CBS X X

Responsibility Matrix
Following table shows general Business Transformation responsibilities of CBS and The European Materials Ltd.

Task
1. Project Management Set-up / Maintain CBS Project Organization Set-up / Maintain The European Materials Ltd. s Project Organization Report on project progress to The European Materials Ltd. Check project progress and identify bottlenecks Implement corrective measures at offshore Hold project review meetings Provide Business Systems Models and documents, office facilities to CBS at Sites 2. Hardware / Software Environment/Additional Support Systems Define hardware and software environment Provide access to Business environment for offshore team Provide access to Back office and Existing Systems for CBS 3. Standards and Procedures Development of Business standards and Guidelines If Business standards and Guidelines standards are not provided, use CBS project standards Implementation of standards

Business Units

CBS

X X X X X X X X X

X X X

X X X

Acceptance Criteria
CBS expects The European Building Materials Ltd. to provide acceptance for every deliverable made. Acceptance could be e-mail from Business Head/ CIO. If no errors are reported within two weeks of delivery, the deliverable is deemed to be accepted.

Change Management
Although CBS expects that the requirements of the application will not change significantly during the project, some amounts of changes are inevitable over its life cycle. Some of these changes may be minor while others may have a significant impact on efforts and schedules. In order to handle such situations smoothly, CBS suggests a Change Control procedure, which will allow either Business Units or CBS to initiate a change request at any point during the life cycle of the Business Transformation. Impact of each change on effort, cost, and schedules and on other modules of the application will be assessed. Once it is mutually agreed between The European Materials Ltd and CBS to implement a Business System, it will be incorporated into the CBS deliverable documents and CBS will proceed to make the modification. Request for changes will be processed using a Change Request Form. For an effective control on changes it is suggested that a priority level be decided for each of the change requests.

Team Size
CBS suggests the following model for the execution of the project.

Location
Onsite team members Offshore team members

Peak Size
6 Consultant 12 Engineers

Conflict Management
To Ensure equal and effective participation from each and every stakeholder following procedures will be followed: 1. All stakeholders will be involved in Requirement gathering and Business Analysis through meetings. 2. The training on redesigned Business processes will be provided along with Process Enhancement phase. 3. After Business transformation all Documents and Knowledge will be shared with concerned Business Users and Technical Knowledge will be shared with respective IT Staff. 4. CBS is using Lean Methodology to improvise Business structure which will reduce Human Effort Over Processing Cycle Time Waiting Time Rework This will help all business Units to cut down Operational Cost and Increase the Productivity. This approach utilise the available resources efficiently.

5. The European Building Materials Distribution Ltd can utilize the Human Effort and Operational Cost saved in Business transformation for new product development and also for streamlining mergers & acquisitions.

Tool and Techniques

The tools used for data gathering, Business analysis, AS- IS process analysis etc are attached with the proposal. Refer ANNEXURE.docx.