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Agenda
> Introduction
ESS Organization Update IT Strategy Communication
> Offshoring, Project SDI > 2005 Objectives and Themes > Merck News
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2005 Objectives
> Shared Services IT:
Complete the implementation of the IT shared services operating model including organizational design, service levels, operating procedures and funding model (4Q). Realize approximately $750k in operating expense savings through application co-location and the elimination of redundant activities (4Q). (Scope: Finance/HR Trans Systems, Owner/Plan: Sheridan, Establish Engineering/Ops capability: Piscitello, Id/Effect Opportunities: Lotier/Blair) (stratmap intersection: OPEX/Internal Process)
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Value Proposition
Value Proposition
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2005 Plan
1Q05
Operating Model Savings Opportunities
2Q05
3Q05
4Q05
Org Design, Processes, Governance, Service Levels, Funding Model Application Co-location and Elimination of redundant activities Implementation of Integration, Decision Support and IM Services Canada JDE Consolidation Global Consolidation Plan Consolidation
Finance
Restructure IT Support for PTP Finance IS Integration EZ-Expense Upgrade for Corp HRIS Integration EZ-Expense Upgrade for USHH Global Consolidation Plan Consolidation
HR
MRL PeopleSoft time tracking supporting CLPA US PeopleSoft time and labor implementation for US PeopleSoft Payroll for US requirements, development and testing for 1Q06
Integration with GI Shared Services Plan and Implementation of Integration, Decision Support and IM Shared Services
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Strategy
Financial Perspecti ve
If we succeed, how will we look to the corporation High Value/High Strategic IT Cost Structure as a whole? (How will Optimized assessUse of Assets Merck our Return Initiatives Focused Optimized Focused contribution to its success?)
Worldwide Service Attributes BusinessQuality Driven Focused To achieve our Relationship Image
Manage Investment
Drive Efficiencies
Custome r Perspecti ve
vision, how must we look to our Value-Driven Integral customers? (How will our customers understand Trusted Predictable, & Innovative Partner Cost- our contribution?) Reliable &
Responsive Effective
Breakthrough To Opportunities
Leadership
what
Innovative Thinking
Benefits
Business Clients
Financial Savings
ESS
Cost Efficiencies
Quality of service
Delivery time-to-market
Time savings
Time Efficiencies
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Benefits Realization
Financial Savings and cost efficiencies
Benefits
Year
Activity
Savings
Status
HRIS Integration Finance SLAs and SOPs PeopleSoft Payroll Puerto Rico JDE North America consolidation Global JDE Licensing Optimization
Document Management Shared Services 300K PeopleSoft Payroll US PeopleSoft Banyu integration 500K 100K
Organization Model
* Focus on economies of * Separates governance * Market based pricing scale and service functions
* Profit is retained
* Services charged out to * Services charged to * Possible external sales if * Multiple organizations recover fully loaded recover fully loaded surplus capacity as customers costs costs * Objective is to reduce * Objective is to reduce costs and standardize costs and improve processes service quality * Objective to provide * Objective is to generate clients choice of most revenue and profits cost effective supplier for service company
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IT Shared Services
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Operating Model
Business Business
Corporate Functions
Finance HR Legal/PA Procurement MRL
Organization Model
Business Divisions
MMD HH
Division IT Division
Corporate RIS A&IT HH
Support Run Services
Application Services
(Development & Maintenance) (Development & Maintenance)
Architecture Services
Manage GI Strategy
ESS ESS
Build Services
Relationship Management
Client Services
Organization Model
Client Services
Finance, Global Procurement, Legal, IS & Public Affairs
Client Services HR
Architecture Services
Application Services
Information Management Services Policies & Procedures Standards development Usage guidelines Training & Education Enterprise IM requirements IM Strategy and planning Enterprise reference consultation IM Innovation Consultation
ESS Services
Project Management Application Engineering (inc web application & IM development) Application Support Service Management
Financial management Comm. Human Resources Administration processes Measurement and Reporting
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Services
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Services
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Services
>
>
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Services
Responsible for providing policies, procedures, reusable assets and specific solutions in support of Mercks enterprise integration needs.
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Services
Responsible for managing and deploying shared compliance, system testing, release management and resourcing (staffing) services to ESS Projects. Compliance will be monitored according to both regulatory and internal Merck requirements. Release Management is the coordination of the overall release of new technologies / functionalities. Resource Managers will administratively manage and deploy resources from a single resource pool. Deployment will be based on matching resource competency with client demand. Resource managers will not be responsible for formal staff (performance / development) management functions
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> Assess education/skill relevant to role > Invest in team building > Capture lessons learned and develop action plans (continuous process improvement) > Define workflows by projects in relation to project size and roles > Work with Global Infrastructure to strengthen integration points > Build and leverage shared service capabilities (testing, PMO,)
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Small
ESS Client
Medium
ESS Client
AM/PM
Architect
AM/PM
BA
Architect
AM/PM
BA
PM/Dev
GI
PM
GI
TL
PM
TL
GI
Dev Team
Dev Team
Dev Team
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AM
BA
GI
PrgM
Architect
TL
PM
PM
TL
PM
TL
Dev Team
Dev Team
Dev Team
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ESS Client
GI
PrM
Architect
Ops Team
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1 2 3 4
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Location
India
Vendor
Tata Consultancy Services (TCS)
Comments
400-700 FTEs in IT worldwide by beginning 2006 Dedicated offshore development center
Top 10 Pharma - 1
Top 10 Pharma - 2
Top 10 Pharma - 3
India
mPhasis
Top 10 Pharma - 4
India
Infosys mPhasis
Top 10 Pharma - 5
IT systems management
India
Satyam
Top 10 Pharma - 6
20 million of IT services
Application development and maintenance
TBD TBD
TBD TBD
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Top 10 Pharma - 7
Source:
Location
India India
Operating Model
Outsourced Outsourced
Vendor
mPhasiS
Infosys
India
Outsourced
mPhasiS
India
Outsourced
Satyam
Dedicated offshore development center Applications for mainframe, AS/400, Lotus Notes, Domino, SAP Data management for clinical trials Systems development, maintenance and outsourcing
India
Outsourced
TCS
Montevideo (Uruguay)
Outsourced
TCS
Source:
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Capital
Expense
Contractor
~100
~90
Identified 2.8-5.1 in contractor expense savings Need to identify additional opportunities in this category
Employee
~50
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>Activity groups
>USHH
>MMD-A&IT
>Infrastructure DBA
>Total
20.5
>ESS
29.2
34
Portfolio Applications Support: 60* MMS Impact: 3 QRIS LIMS: 4 124 7 7 DBA: 7
60*
14
207.7
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1 2 3 4
How Does SDI Support The ESS PSM? How Does SDI Support The ESS PSM?
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Budget Planning Day-To-Day Activities Organizational Support Large Capital Projects Small Projects (Capital Or Expense)
A c c o u nt M a n a g er
ESS Centers Of Excellence Technology Contractors Other Merck Centers Of Excellence Package Vendors Offshore Vendors
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Program Manager #1
CLIENT
Program Manager #2
1 2 3 4
Recent Activities
How Does SDI Support Career Development In ESS? How Does SDI Support Career Development In ESS?
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Grade 4 Grade 5
Candidate
Grade 6
Grades 7-9
Grades 7-9
Contractors
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Grade 4 Grade 5
Candidate
Grade 6
Grade 6
Grades 7-9
Grades 7-9
Strategic Outsourcing
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1 2 3 4
Recent Activities
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