This document discusses a presentation by Gordon Wood of Sherwood Group Consulting on the topics of performance management, business intelligence systems, and their future directions. It provides examples of how both large and small organizations can leverage PM and BI applications to extract more value. The presentation covers definitions of key terms, trends in the industry, and a case study of Sherwood Group Consulting implementing a PM solution for an oil and gas client in Thailand.

1. Sherwood Group Consulting Performance Management Future Directions & Exploiting Performance Management & BI Systems value

2. Topics of Discussion Changes occurring in performance management Future directions of the PM software services. Share some large and small organisation experiences on how they to use their PM applications to exploit value. Sherwood Group Consulting

3. Gordon Wood, is the Executive Director of Sherwood Group Consulting, performance management & analytics consultants and solutions implementers Gordon has been working with clients in Asia-Pacific since 1993, on high profile projects for manufacturing, mining oil & gas exploration, retail and financial services sectors. About the Presenter Sherwood Group Consulting – Confidential

4. About Sherwood Group Consulting Sherwood Group Consulting – Confidential

5. Let’s start by sorting the jargon BI - Business intelligence IFRS - Inter’l Financial Reporting Standards OLAP - online analytical processing PM - Performance management SOA - service-oriented architecture SaaS - software as a service Sherwood Group Consulting –

6. Some PM definitions from the web Performance management links strategy with corporate objectives and aligns a company's resources by coordinating efforts of every member of the organization. The integrated process by which an agency involves its employees in improving organizational effectiveness in the accomplishment of agency mission and strategic goals. The process of quantifying, measuring, correcting and reporting system service levels PM is a business process application for managing outcomes from strategy thru to execution. Sherwood Group Consulting

7. BI, what exactly is it? Intelligence or information gathering in business terms broadly covers employment of analytical systems to retrieve process and present information for business use. BI tools now come with sophisticated analytically based graphics and intuitive interactive end user reporting and reduce massive online data sources to simple and decisive value. Performance management have embedded BI processes for transaction drilling Sherwood Group Consulting –

8. PM BI Systems Succinctly put, Business Intelligence (BI) systems present decision based information by systematically analyzing an organization's own business data directly from its source. Sherwood Group Consulting –

9. PM Software Today Execution Strategy Direct Align Control Planning Strategy Forecasting Consolidation Budgeting Process Workflow and Compliance A complete process end to end in a closed loop system

10. PM Understanding its value PM ROI – is dollars, but could be lives and safety. ROI calculations on PM projects are mostly subjective and not always necessary. The "soft" benefits of PM are the most important - The main benefits you get from PM are intangible benefits of strategic value, such as faster reporting, better management information, better decision making and more productive users. Executive sponsorship is key to sell and recoup these kinds of soft, intangible benefits. Sherwood Group Consulting

11. Assessing the Value Estimate what is be needed to revert to a manual spreadsheet system. How many people, Time taken Decision lead time and so on Result .. Yes it is not possible to revert But check you are not doing both – old habit die hard, believe me. Sherwood Group Consulting

13. Check how long it took and the quality Suggest revert and see reaction (That is everyone go back to the offline spreadsheet) Impossible so you know the value Sherwood Group Consulting

14. Live Experience -SME is MalaysiaPrivate Company $25 million Scenario All states logistics operation Very profitable Incentive based management style Budgets takes 6-10 weeks and painful Actuals take 17 days each month including reprocessing. Management issue Sources CPM ERP, Budget, Operations data. Vendors support difficult to find Business growth constrained by systems Sherwood Group Consulting

15. Live Experience -SME is Singapore Results – as we go approach Implemented PM system in 4 days Loaded data and budgets in 2 days & collaborating immediate value Live in development (parallel) fix as we go. Results now taking 4 days as issues dealt with Next year budget already planned top down. Growth plan is now in the design. restructuring issues solved on the fly. Operations are thrilled.. Can see the numbers Sherwood Group Consulting

16. Live Experience -SME in Malaysia Operation 12 months but formally still a POC internally As a Service no technology in-house (yet) Process focus and outcomes were the key Business rules adopted quickly to facilitate build Very focused finance team for results and buy-in Dedicated consultant working remotely One face to face meeting with Consultant Recommended by Accountants for growth and due diligence planning (always ready) No way back now.. Management ecstatic Sherwood Group Consulting

17. PM Users, who are they & why? An estimated 23% of business have a PM system. This is mostly high end organisations 99.9 % of all business have a spread sheets 75% manual 5% link then to sources directly. Small but significant growing number of SMEs taking up PM (3-5% but rapid take ) And about 35 % are using some form of BI or information extractions tool There is a big gap and huge demand growth with the software industry targeting that very hard Sherwood Group Consulting

18. PM and BI Trends & drivers & why? Sherwood Group Consulting –

19. Evolution of Capability Sherwood Group Consulting

20. Business Pressures Unrelenting-PM gets you proactively ahead Shortened Cycles Regulatory Scrutiny IFRS IAS Business Performance GAAP Global Competition Changing Markets 19

21. Performance Management Software Today is Highly Sophisticated Delivers Embedded disciplines knowledge foundation Intuitive Workflow based processes Pervasive ease of use and accessible Maintainable in open technologies Total business Applications not only tools. Functionally highly flexibility to change for growth business people can see and exploit the value Business and People adapt to change environments Sherwood Group Consulting

22. Software Expectations Software subject matter must perform like a A highly qualified graduate with 100 perfect pass park in the highest university level course in the world currently and have at least 25 years experience. Manager’s may not have the skill to manage this level of resource and get the value Specialist consultants are important Everyone wants support Sherwood Group Consulting – Confidential

23. Skill Shortages changes impacts Today there is a serious shortages of skilled financial controllers and financial management people Open market is generating massive demand for control World on move so quickly so no sustainable transitions Functional learning base rather logic based with problem solving skills changing or less sustainable Less focus on in-house formal manage training and leadership courses Smart management and BI software is picking up the gap as they manage the processes too Universities now teach use of software as a core Sherwood Group Consulting – Confidential

24. Consolidation Systems – Now Must have Organisation , including complex ownership structures Currency translation (including accounts valuation distinctions) Data Flow Standards (Opening Balances and automatic results re-balancing from inputs) Consolidation entries and audit process Intercompany and Investment elimination functionality Complex accounting automation (journals and adjustments) Sherwood Group Consulting –

25. Consolidation Systems - Future New breed smart systems in the works will : Automate movements analysis (attributed capability for structured movements analysis) Have Automated attributed outcomes for report generation (e.g. Cash flow) Handle transaction currency and Hyper inflation revaluation.. They do already actually Provide Functional currency switching . (What happens when you the rules change and you answer is different? ) Sherwood Group Consulting –

26. Example on Grand Scale Building the ultimate PM/ BI In Oil drilling information is rich in information but is scattered across the world Same for manufacturing and mining as with services banking and in fact every process Alternative energy and exploitation and conservation will depend on the ability to normalize and analysis this data form disparate sources and formats But how can we do this?. Sherwood Group Consulting –

27. Grand Scale Example – cont’dBuild the ultimate PM/ BI Chevron planning a PM /BI project that will take 5 years to complete. Largely in Asia with skills high capability at lower cost. It will provide indexing of data to a normalize BI data mart with search engine power And use high end visualization and simulation tools Data will stay where it is but available, real time Sherwood Group Consulting –

28. Emended Business intelligence Amazing Yes. but not really We do it every day now but with blinkers on. PM systems & embedded BI like Infor does this now But the scale is now becoming obvious as business people are seeing the value and expand the platforms away from just being finance focused Sherwood Group Consulting –

29. Futurist Maintenance Performance Use of Optical scanning on operator head gear fed back to central database will provide instant diagnosis of performance. This is real now in energy companies so imaging the impact on manufacturing automotive and general life operating life style if were harness that technology Six Sigma to identify and remove the causes of defects will look like quite a passé Sherwood Group Consulting –

30. Software as a service [Saas] Is it a real phenomenon or just a hype to sell software What does it mean? What is the value proposition? Who gets the benefit? What are the risks? What about the 2 sets of books? Do we really trust an outside computer? What is SAS70? Sherwood Group Consulting –

31. Just a few examples Google.com Range of services including, web services, email, photo news and many more Yahoo.com Try Finance for share portfolio management Salesforce.com Huge take up for sales pipeline management Many more .. And it is here to stay Sherwood Group Consulting

32. Live example Using PM as a change tool Thai company recently spent a year revamping their corporate performance management thinking. The sort is fantastic for this 100 year old consumer products company of 85000 employees, including 4000 in IT. You would think they would have all the tools but they chose just a Strategy Management tool for the task and it has had revolutionary results Sherwood Group Consulting

33. By Joining the dots in the strategy Sherwood Group Consulting –

34. What makes up the plan and what is the drag on the plan when it falters Sherwood Group Consulting –

35. Performance Contribution Value Sherwood Group Consulting –

38. Shernox Thailand Client A Top 10 Public Company in Thailand Oils and Gas industry International in Asian and other countries Operated and Non Operated Assets 65 + separate complex organisation Onshore and offshore operations Multi currency trading and reporting Several presentation currencies Cross functional structured with shares Sherwood Group Consulting –

40. Get Finance involved as information owners

41. Get IT involved as the infrastructure owners

44. 40 Shernox Oil Project Phases & Deliverables 3.88

45. Integrated of budgets and reporting Sherwood Group Consulting Earnings, Cash Flow, Capital Summary Reporting Performance Metrics, Net Sales/Production Statistics Other Expenses & Payment Planning Tax & Working Capital DD&A Rating Reporting SOE Cash Expenses Classification Capital Project & Reporting Analysis Net Cash Expenses & Analysis Drilling Performance Planning Revenue Planning Gas, Condensate & Oil Expense Allocation & Partner Recovery Allocation Capital Projects Detail Planning Production Planning Department Cash Expenses Planning Expenditure Production & Revenue Capital

46. 42 Budgeting Preparation - Overview Strategic planning Linking Budget Process & Function Budgeting time table and meeting information Budget assumptions / Global drivers Multiple budget version Multi-currency transaction budgeting Accrual budgeting / Cash budgeting Budget preparation workflow route Incrementalbudget capability Formats Non-monetary data Efficient budget preparation worksheet Efficient supporting sheet Different formula / budget item for each worksheet

47. 43 Budget Preparation – Functional Automated Alternatives Automate Work Programs Automatically calculate some certain budget e.g.. Salary & Traveling expenses Top-down budgeting route Closing forecast preparation Allocation process Processes & Budget Review Efficiency Consolidation Consolidated budget analysis and report Screen proposed budget analysis Standard analysis method for decision making.

48. 44 Budget Preparation-Work Flow Approval Process Approval & Communication Approved budget notification Change Control Request for Contingency workflow route Request for Budget reclassification workflow route Authority for expenditure and Internal authority for expenditures preparation workflow route Support Management Budget help desk workflow route Alert messages with e-mail report distribution.

49. 45 System Administration Organisation Management Dynamic organization and matrix organization view. hierarchical responsibilities. Security Easy to create, maintain user security accountability. audit trail. Data Management Easy to create and maintain dimension value. Easy to create and maintain formula. Processing & Control Quick calculating process (with reliable output). Efficient task scheduling and sequencing. Indicate error details and solutions in running result.

50. 46 Technical Requirements General System requirement Flexible Application Server based Databases; Oracle, Microsoft & others Network Open Software design Flexible Platform configuration Hardware design Open system architecture for industry interfacing. Fault tolerant. Architecture multi-tier Integrated auditable security

51. Technical Requirements Reporting Standard set of reports and analytical views Monthly cost control report A drilldown to transaction level report multidimensional reporting and analysis with annotations, flexible formatting, graph types. Ad-hoc reporting tools Two-ways communication Administration & Support List of available report with authorization Most frequently used report Quick access to reliable information. Good print-out. E-learning Sherwood Group Consulting

52. Best Practice Lessons Intuitive Solutions (If you can say it simply, it works) Simple scope…. (Don’t do too much at once.) Challenge bad practices (Don’t carry on mistakes) Exploit strengths. (Decide who does what best) Share knowledge. (Regular communication) Test, test, and test live well before going live Plan Good Support for “Go Live” Exploit valueas phase 2 project in Rollout …. 48