Hrvatski telekom

October 2016

Hrvatski telekom pruža uslugu za preko 3m priključaka mobilne i fiksne mreže

1.11.2016. – Strictly confidential, Confidential, Internal – Author / Presentation title 2 2

HT doprinosi najviše novostvorene vrijednosti u Hrvatskoj...

3

Ukupna novostvorena vrijednost (u mlrd. HRK), 2011. – 2015.

H T d.d. I N A H E P - O D S Z A B A PBZ KONZUM H E P d.d. PLIVA

6,3 6,1 5,6

3,7

1 Odnosi se samo na HT d.d., a ne na cijelu HT Grupu.

7,2

8,7

11,7

12,9

4

U 2015. godini HT Grupa generirala je 10,5 milijardi kuna, odnosno čak 3,1% ukupnog bruto domaćeg proizvoda Republike Hrvatske

inducirani učinak h t Grupe

∼ 2,6 mlrd. HRK

n eizravni učinak

izravni učinak na dobavljače

h t Grupe intermedijarnih

∼ 4,9 mlrd. HRK proizvoda h t Grupe

∼ 2,4 mlrd. HRK

n eizravni učinak na dobavljače investicijskih proizvoda

h t Grupe

∼ 0,6 mlrd. HRK

3,1 %

...a cijela Ht grupa ostvaruje više od 3% ukupnog BDP-a Hrvatske

5

Za svako radno mjesto

unutar HT Grupe

vezana su još 4,4 dodatna

radna mjesta u ostatku

ekonomije.

Ukupan doprinos HT Grupe stvaranju radnih mjesta

u kupno izravni, neizravni, i

inducirani učinci

inducirani učinak putem osobne

potrošnje

n eizravni učinak na dobavljače

intermedijarnih proizvoda

n eizravni učinak na dobavljače

investicijskih dobara

izravni učinak

27.230

10.195

8.792

3.230

5.013

HT Grupa svojim aktivnostima stvara preko 27 tisuća radniH mjesta u Hrvatskoj

6

Investicije HT Grupe činile su 2,3% ukupnih investicija u Hrvatskoj ekonomiji u 2015. godini.

Ukupna vrijednost investicija (u mlrd. HRK), 2011. – 2015.

INA HT d.d. H E P O D S + H E P PETROL KONZUM PLIVA

7,48

5,59 5,40

2,63 2,29

2,10

Državno vlasništvo

HT je ujedno i najveći privatni investitor u Hrvatskoj

Privatno vlasništvo

Mješovito vlasništvo

7

Ht grupa isplaćuje 54% veću plaću od državnog prosjeka te 16% iznad prosjeka sektora informacija i komunikacija

Prosječna isplaćena neto plaća (u HRK), 2015.

NETO PLAĆA U HRVATSKOJ

Republika Hrvatska H T Grupa Sektor HT Grupa

Napomena: Prosječne plaće zaposlenika HT Grupe po sektorima odnose se na kompanije HT Grupe koje su registrirane u tim sektorima, dok se prosječna plaća zaposlenika HT Grupe odnosi na prosječnu plaću cijele HT Grupe.

NETO PLAĆA U SEKTORU INFORMACIJA I KOMUNIKACIJA

5.594

8.616

7.364

8.546

+54% +16%

8

U 2015. godini HT Grupa svojim je aktivnostima doprinijela poreznim prihodima u iznosu od oko 3,2 milijarde kuna, što predstavlja 3,8% ukupnih poreznih prihoda konsolidirane opće države.

inducirani učinak h t Grupe

975,6 mil. HRK

n eizravni učinak izravni učinak na dobavljače h t Grupe intermedijarnih

1,6 mlrd. HRK proizvoda h t Grupe

475,4 mil. HRK

n eizravni učinak na dobavljače investicijskih proizvoda

h t Grupe

161,4 mil. HRK

3,2

mlrd. HRK

Sveukupno, HT Grupa izravno je i neizravno doprinijela gotovo 4% sviH proračunskiH prihoda u 2015. godini

Financije i kontroling u hrvatskom telekomu

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Reporting Section

Planning Section

Business Modeling Section

Cost Modeling Section

Financial Methodology

Section

Bookkeeping Section

Cash Management and

Corporate Finance Support

section

Tax Section

Risk Management Section

Billing Section

Revenue Assurance Section

Collection Section

CFO Area

Controlling Sector Treasury &

Accounting Sector Customer Finance

Department

Procurement Strategy and

Reporting Section

Marketing and Indirect

Procurement Section

Network and IT Procurement

Section

Logistics Section

Procurement & Logistic Sector

Finance organization

UNIQUE ROLE IN CONTROLLING IS existing: FINANCE BUSINESS PARTNER

interpreting and challenging performance within the business

understanding key drivers of value in order to determine which activities and outputs

are most valuable to the business

supporting and influencing key operational and strategic decisions

driving organization to consider future indicators and outcome

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Reporting

Sales increased to …

Costs decreased to …

Analyzing

Sales increased because …

Costs decreased based on …

Impacting

Sales will increase if …

Costs will decrease when …

…because the expectations are changing; there is a great demand from the business for the finance to drive performance…

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FINANCE DRIVEN ORGANIZATION

Controlling role must envolve:

Planning and forecasting in hrvatski telekom

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IN THE PAST YEARS, HT PLANNING PROCESS HAS BEEN CHANGED SEVERAL TIMES…

….

Cha

nge

1

Cha

nge

2

Cha

nge

3

So far prevailing Bottom-up

changed to mostly Top-down:

New FC framework emerged

from transformation process

(based on transformation

Measure Cards and existing

Budget baseline)

New FC process introduced to

create opportunity for last

minute actions in

management of YE result

(pure bottom up for 1 month

period)

Combination of Top-down

and Bottom-up: Hybrid

approach for sales, direct

costs and non financials, top-

down for indirect opex and

personnel

Hybrid scenarios –

combination of Bottom-up

and Secure measures and

risks

…ALL WITH THE SAME AIM TO:

Achieve more accurate, stabile and

aligned FC results – safeguard the

transparency of changes to original

baseline (SB approved Budget) in all

forecasting processes within one year

Unload organization from constant

never ending operational planning and

elimination of peak exposures

Ensure constant rationale challenge for

organization

Safeguard of target costing / and

alignment of opex budgets with revenue

trends

Facilitate the time to support business

to maximize usage of market momentums

and focus on business essence

Strictly confidential

Accuracy and consistency Unload of work

NOWADAYS!

Further improvement desired in:

• Accuracy and consistency

• Workload decrease –

company still significantly

occupied by planning

HOWEVER, SO FAR, NONE OF THE APPROACHES FULLY ENSURED THE DESIRED STATUS. ESPECIALLY NOT IN:

6.569 6.794 6.790

FC 5+7 FC 8+4

-131 -5

6.700

FC 2+10

+226

Budget

0

+16

BU 2

BU 3

-147

BU 1

+42

+90

+94

+42

+8

-54

FC 2 +10

vs B FC 5+7 vs

FC 2+10

FC 8+4 vs

FC 5+7

e.g. xxx planning category Budget FC 2+10 FC 5+7 FC 8+4 ….

Planning processes

Secure project

Status 1 Status 2 Status 3 Status 4

Similar cases can be found as well in other planning categories and business areas

Level of discipline and consistency in

planning steps should increase:

While parallel project organization should facilitate forecasting process, reality showed increased workload due to:

Constant evolution of total impact estimates due to baseline erosion

Reiterated reconciliation of ‘reported’ and ‘forward-looking’ perspective

New and additional risks impacts versus latest submitted

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Strictly confidential

Definition of planning process

decided to be used (MB decision)

A

Reduction

of planning

(forecasting)

dynamics

B

Introduction of

Forecast

accuracy

HT Planning processes

B

A

■ Defined planning process (ipf, Budget, forecast, YE

monitoring…)

− Processes and responsibilities are clearly defined to minimize time lost

in operational handling

− Deadlines and internal delivery stages are clearly defined and

communicated on time – at all levels

■ Forecast dynamics – supported by IPCE project

(Improvement of Processes, Complexity and Exchange)

− Lower frequency of FC iterations – since history showed cases with

more deviations in adjacent forecasts

− Skipping organizational involvement in some FC scenario - more time for

focus on business

■ Introduction of Forecast Accuracy and Consequence

Management

− Quality and consistency of inputs should be monitored, and

consequence management established (from MB down to operational

staff level )

Without project ownership responsibility and overall responsibility for input quality and

deadlines, improvement in FC result can not be achieved whatever process applied!

MODIFICATIONS OF FC PROCESS ALMOST EXHAUSTED WITHOUT FURTHER IMPROVEMENT. IF PROGRESS DESIRED, ADDITIONAL SUPPORTING SETTINGS SHOULD BE APPLIED

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FC accuracy

Forecast accuracy is one of those strange things: most people agree that it should be measured, yet hardly anybody does it. And the crazy thing is that it is not all that hard.

18

WHY TO DO IT?

We invest a lot of time into the forecast process, and utilize the final forecast to make sound business decisions, so the forecast should therefore be fairly accurate. Forecast accuracy has a major impact on business and increase their effectiveness to serve the demand while lowering overall operational costs. Tracking aggregate forecast accuracy within the organization provides insight into organization's overall forecasting process and enable it’s improvements and prioritization of forecaster workload. Due to overall experience that: as soon as a forecast accuracy graph is started to be reported, the overall trend is up for six months. After that time everyone is committed to the process and the real work can begin to fine tuning the already successful process.

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HOW TO DO IT

Measuring and communicating forecast accuracy must be set in a way that drives attention and focus and simply let us know how “good” or “bad” we are doing, and what progress we have made over time. A process for effective tracking of forecasting accuracy has a number of key steps:

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STEP 1: DECISION ON THE FORECAST ACCURACY METRIC AND TARGETS

• The forecasting result must be evaluated by upfront set forecast-accuracy metrics - For many forecasters the MAPE (Mean absolute percentage error) is the primary forecast-accuracy metric, also known as mean absolute percentage deviation (MAPD) - The MAPE is scale in-dependent and expresses accuracy as a percentage

:

where At is the actual value and Ft is the forecast value.

The absolute value in this calculation is summed for every forecasted point in time and divided again by the number of fitted

points n. Multiplying by 100 makes it a percentage error.

• The forecast accuracy must be evaluated by upfront set accuracy targets − When the target is expressed in percentage, there should be the different target (percentage scale) set for the different volumes/amounts in order to balance materiality, but defined metric (range) should be applied to all

Accountable amount (volume value) Accuracy target

above 2.000 HRK million +- 1%

above 1.000 HRK million +- 1,5%

above 500 HRK million +- 2%

above 100 HRK million +- 2,5%

above 50 HRK million +- 3%

above 10 HRK million +- 3,5%

above 1 HRK million +- 4%

below 1 HRK million +- 5%

MAPE is defined by the formula:

21

STEP 2: DETERMINATION OF FORECAST ACCURACY ITEMS AND THE LEVEL OF AGGREGATION which can be linked to single responsible •The items for FC accuracy tracing are related to relevant P&L and BS/oFCF positions • Effective measures should evaluate accuracy at different levels of aggregation (opex per organizational parts, sales per services) in line with organizational responsibility /accountability

It is not always possible to aggregate the revenues in a way to

assign it to single organizational responsibilities for B-1 level.

Direct and indirect cost structure enable separated single

responsibility on all organizations level, as well as aggregation to

currently targeted B-1 level

Residential

Marketing

COOR Revenue

Sector

Department

Go to Market

eChannel

Sales Shop

Push Channel

Res. Steering &

Channel Mngt

Rev 1

Rev 2

Rev 3

Rev 4

Rev 5

Rev 6

Entire B-1 share the responsibility for total revenues.

Single separated revenue responsibilities can not be assigned

values in HRK

Cost category Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD

CORI - Copyright fees 0 0 0 0 0 0 0 0 0 0 0 0 0

HAWA - Cost of goods sold 0 0 0 0 0 0 0 0 0 0 0 0 0

TKA - TK services costs international 0 0 0 0 0 0 0 0 0 0 0 0 0

TKI - TK services costs national 0 0 0 0 0 0 0 0 0 0 0 0 0

AFAR - Valuation adjustment of receivables 0 0 0 0 0 0 0 0 0 0 0 0 0

SACO - Selling Commissions 0 0 0 0 0 0 0 0 0 0 0 0 0

ENSA - Energy Sales Costs 0 0 0 0 0 0 0 0 0 0 0 0 0

ARRA - Arrangement Sales Costs 0 0 0 0 0 0 0 0 0 0 0 0 0

TONL - Online costs 0 0 0 0 0 0 0 0 0 0 0 0 0

Direct costs 0 0 0 0 0 0 0 0 0 0 0 0 0

SARE - SAC/SRC extended expenses 0 0 0 0 0 0 0 0 0 0 0 0 0

ENWA - Energy costs 0 0 0 0 0 0 0 0 0 0 0 0 0

LEID - Services costs 1.521.828 1.322.148 1.358.726 1.270.885 1.267.432 1.099.372 1.259.069 1.232.689 1.196.121 1.175.424 744.581 1.900.293 15.348.569

MAT - Cost of raw material and supplies 501 2.242 13.930 5.038 4.584 6.011 15.366 1.359 5.685 15.286 553 3.310 73.865

MOBU - Mobile phone usage costs 0 0 0 0 0 0 0 0 0 0 0 0 0

AFAV - Valuation adjustment of inventory 0 0 0 0 0 0 0 0 0 0 0 0 0

AUAN - Special Depreciation 0 0 0 0 0 0 0 0 0 0 0 0 0

BERA - Consulting fees 0 0 0 0 0 0 0 0 0 0 0 0 0

EDUC - Education costs 0 3.900 779 779 779 1.507 1.755 0 0 1.698 13.063 1.698 25.958

ENTE - Entertainment 587 1.316 2.015 2.152 1.597 415 2.169 168 1.959 1.671 1.373 1.312 16.734

INST - Maintenance costs 0 268.827 130.876 188.322 543.511 271.187 19.026 114.946 182.188 176.917 724.267 358.396 2.978.462

LEAU - Legal and audit costs 0 0 0 0 0 10.935 0 0 0 0 0 0 10.935

LIZK - Licences and consession costs 330 330 330 330 330 330 1.905 1.905 1.905 1.840 1.840 1.825 13.200

MIET - Rental costs 0 0 0 0 0 0 0 0 0 0 0 0 0

OTOT - Other taxes and contributions - miscelaneous 0 0 0 0 0 0 0 0 0 0 0 0 0

OTVA - Other taxes - VAT 0 0 0 0 0 0 0 0 0 0 0 46 46

PORT - Postal charges 2.181 881 1.048 818 862 1.304 992 1.218 757 1.350 1.410 2.977 15.799

PROV - Provisions 0 0 0 0 0 0 0 0 0 0 0 0 0

REIK - Travel expenses 4.035 3.302 8.908 14.114 12.896 7.073 5.631 9.801 10.631 10.277 4.662 7.289 98.620

RSCH - Research costs 0 0 0 0 0 0 0 0 0 0 0 0 0

SONK - Other costs 1.017 751 2.147 1.443 567 579 762 1.439 512 492 1.506 618 11.832

WOCO -Author's fees and Work contract costs 0 0 0 0 0 0 0 0 0 0 0 0 0

EXEM - External employment 0 0 0 0 0 0 0 0 0 0 0 0 0

WPHR - Advertising costs 0 0 22 0 0 0 0 0 0 0 0 397 419

XPAT - Ex-patriot expenses 0 0 0 0 0 0 0 0 0 0 0 0 0

ZINO - Interest expenses - operating 0 0 0 0 0 0 0 0 0 0 0 0 0

XCHR - Cross Charges 0 0 0 0 0 0 0 0 0 0 0 0 0

SALO - Sale of assets - Loss 0 0 0 0 0 0 0 0 0 0 0 0 0

Indirect costs without Personnel 1.530.479 1.603.698 1.518.781 1.483.881 1.832.559 1.398.713 1.306.674 1.363.525 1.399.758 1.384.954 1.493.255 2.278.161 18.594.438

OPEX EBITDA relevant 2.169.736 2.233.326 2.188.106 2.164.350 2.622.276 2.161.834 2.075.644 2.150.300 3.702.983 2.025.998 2.169.256 3.822.484 29.486.293

TOTAL COSTS 2.900.413 2.960.563 3.490.384 2.903.783 3.465.996 3.013.038 2.883.889 2.943.083 4.512.807 2.827.991 2.944.468 5.730.184 40.576.599

Total costs 2014

Actual

22

STEP 3: DECISION ON WHICH ATTRIBUTES OF THE FORECASTING PROCESS TO TRACK

• Choosing the right attributes facilitates a “forecasting autopsy,” which seeks explanations for failing to meet forecast targets – an important aid in identifying the routes to improved forecast accuracy

Budget

FC 5+7

FC 2+10

Set of goals

Realization and

target route

check 1

Realization and

target route

check 2

10 20 30 40 60 100 %

Baseline

Risks & Opportunities on top of Baseline

Transformation measures on top of

Baseline

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STEP 4: APPLYING RELEVANT BUSINESS WEIGHTS TO THE ACCURACY METRIC

• The forecast-accuracy metric should reflect the item’s importance through assignment of weights which permits the forecaster to prioritize efforts for forecast-accuracy improvement

40%

Check 2

Info to MB on Realization and risk & opportunities on top

Represent the starting point for iPF planning!

10% Check 1

Info to MB on Realization and risk & opportunities on top

50%

Annual target s

Approved by Supervisory Board

Outlined YE expectation

Overall Company targets for management and employees

Budget

FC 5+7

FC 2+10

Better accuracy is needed when

forecasting those items that, for

some reasons, are more important

than other

“All forecasts are equal, but some

are more equal than others”

BUSINESS WEIGHTS

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STEP 5: TRACKING THE AGGREGATED FORECAST-ACCURACY OVER TIME • After established, forecast accuracy should be monitored monthly – not all forecast scenarios will be in monthly focus. It is proposed that Budget scenario should be monitored monthly, while FCs scenarios only in periods relevant for reporting purposes – for all scenarios the YE result will me measured. •The practice showed that after 6 periods the items for forecast improvement can be clearly identified.

0,0%

2,0%

4,0%

6,0%

Feb Jan

2

Dec Nov Oct Sep Aug Jul Jun May Apr Mar

• The Monthly Reporting should be established presenting the forecast accuracy per MB area (and responsible persons if and where necessary) and suggest the areas of improvement • Setting the forecast accuracy as a key performance indicator for management ? Tied forecast-accuracy measurement to financial incentives - bonuses?

e.g. Opex deviations for xx area for Budget scenario

STEP 6: TARGETTING ITEMS FOR FORECAST IMPROVEMENT

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec EOY

Budget B B B B B B B B B B B B B

FC 2+10 FC2 FC2 FC2 FC2 FC2

FC 5+7 FC5 FC5 FC5 FC5 FC5 FC5 FC5 FC5

25

STEP 7: APPLYING BEST FORECASTING PRACTICES FOR FORECAST IMPROVEMENT

• Once, when the areas where forecast improvement should be concentrated, are identified, there is a numerous factors to check and improve if necessary

Evaluate individual forecaster performance Determine the problem in single forecast sub-processes Evaluate the input quality data Evaluate the historical trends if applicable Evaluate the accuracy of assumptions (driven internally or externally - assess environmental changes (recession) etc.) determine “special” adjustments that were made, or should have been made (e.g. government intervention) ….etc

• While the change might not be the forecaster’s “fault”, tracking accuracy enables a rapid response to deteriorating performance

While identification of “problematic” areas will come from measurement of forecast accuracy (Controlling), the responsible forecaster should initiate the forecast improvement in his area if and when necessary

26

STEP 8: REPEAT STEPS 4 THROUGH 7 EACH PERIOD

• Tracking defined metrics over time is critical to driving process improvement. • All of the factors in Step 7 form a deliberative, continuous responsibility for the forecasting team. • With the proper metrics in place, forecasters can be held accountable for the items under their purview • Steps 4-7 should be repeated each period, so that the aggregated forecast-accuracy metric is continually updated for management and new targets for improvement emerge.

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How the HT Planning really looks like

HT PLANNING PROCESS Forecasting, iPF, Impairment Test and Budgeting are having the same (or very similar) process steps in a different timeframe but their results should have links between each other

Planning Component Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

IPF

Budgeting

Strategic Planning

Impairment Test

Forecasting

29

WITHIN EACH PLANNING SCENARIO, THE SAME ORDER OF SUB-PROCESSES IS APPLIED – IN SOME SCENARIOS PARTICULAR STEPS CAN BE SKIPPED, OR ORDER CHANGED

Closing of Actuals

Adaptation of General Assumptions

Controlling led first plan version top down

Function led validation / bottom up plan version

Controlling led validation and challenge

Controlling & Function discussion on gaps

Intercompany Reconciliation

Approval and submission

Market

Strategy

Revenue & Direct Costs

Other Opex (indirect & personnel)

SeCo / Consolidation Bookings

Capex

Financials & Tax

30

FC approach Net revenue

Direct costs Personnel

FC

PR

OC

ES

S

FC process by planning elements

Indirect costs

Operating expenses Revenues

Combination of

top-down and

bottom-up

Non financials

OOI KPIs

Top-down

vs.

Bottom-

up

Combination of

top-down and

bottom-up

Combination of

top-down and

bottom-up

Combination of

top-down and

bottom-up

COOB/

COOR CFO

COOB

/COOR CHRO MB

COOB/

COOR

Re

spo

nsib

le

fo

r fin

al F

C in

pu

t

1. First draft based on trend - Controlling

2. Adjustment / final confirmation - Responsible for input

1. First draft - Marketing

2. Challenge - Controlling

3. Final conf. - Resp. for input

MAINLY HYBRID APPROACH IN ALMOST ALL PLANNING SCENARIOS– mix of bottom up and top-down approach

31

Combination of

top-down and

bottom-up

Combination of

top-down and

bottom-up

FC 2+10 Process timeline Main purpose Main tool activities Involvement

Starting point:7 WD Feb, with the availability of actual figures in CMIS

End point:16 WD Mar, with the delivery

Duration: 10 WDs

To give the Management Board an update were the company is standing

First forecasting of the year – all planners are involved by this forecasting

Current year is based on the budget data

Next year is based on iPF with a quarterly break down by current year Forecasting figures

Function involvement: The system produces only the first draft, the Functions have the task to review the planning results and perform adoptions according to the latest market developments

Controlling involvement: Leading the process and challenge the results

FOR EACH PLANNING SCENARIOS DETAILED ACTIVITY PLAN AND TIMELINE IS COMMUNICATED ON TIME

ILLUSTRATIVE

32

7 8 9 10 11 12 13 14 15 16 Responsible

Availability of Actuals in CMIS Controlling

Automatically draft of Forecast Planning system

Current year: Based on budget Planning system

Next year for Feb FC: Quarterly break down from iPF by the current year

planning (last FC)

Planning system

Iskon validation of data (only T-Com) Iskon Controlling

Function lead validation & adjustments for all planning areas Different Functions

Market KPIs Sales, Marekting

Usage & Revenues Marketing, Controlling

CAPEX T-Com: All departments, T-Mobile: Network, Public Affairs, Controlling

OPEX FUB responsibles, special role of HR in Personnel Cost planning

Headcount T-Com: HR, FUBs only approve data, T-Mobile: FUBs plan FTEs per role, HR

calculate the resulting Personnel Costs

Competitors information (only for T-Mobile) Strategy department

Intercompany transactions (reconcilations) Controlling, Functions

Secondary Cost Allocation (only for T-Com) Controlling

Calculation of financial results Planning system

Controlling & Function discussion on gaps Functions, Controlling

Central adjustments Controlling

Final calculation of financial results (including automatically tax calcualtion) Planning system

Approval and submission Head of Controlling, CFO

Controlling

Feb

ruary

Fo

recasti

ng

Feb

Business modeling

To respond to fast moving market, ht continuously adapts its business

34

Fast paced industry

Best investments with limited resources

Need to follow the market

Need to make rapid changes

Changes require investments

WHY we are doing it

• Customers’ requests

• Competition

• New idea we consider to be lucrative

• Improvement of previous projects

• Churn prevention etc.

Arguments backed up with data:

• Benchmarks (competitor, other networks)

• Market research

• In-house statistics (billing, cc, etc.):

• previous project’s evaluation

• similar projects evaluation

• target group behavior

NEW PROJECT

Ideation + WHY we are doing it

Business owner creates and develops a concept of an idea to improve certain business aspect.

He himself does the pre-assessment and sanity check of expected business gain

Business modeling

Business owner himself, or with the help of the controlling develops a business case focused on comparison between current business and future expected scenario with all efforts and benefits included

To assure we maximize the usage of the resources, prioritization process is in place

35

Independent effort assessment

Key owner of a resource assesses how much effort from his side is required to execute initiative

All efforts are then combined and calculated to calculate overall expected effort

Prioritization and scheduling

Taking into account all the available resources on the map and overall required resources for all initiatives with all their implementation criteria, several bodies make prioritization decisions and schedule of changes to be executed

1 – Define scenario

2 – Development of business model and analysis and input

review

3 – Effect/result calcullation

4 – Financial analysis and recomendations

5 – Impact analysis on Budget/Forecast

6 - risk assesment

7 - Postaudit

Business modeling undergoes seven steps process to assure maximum accuracy and fit

36

Controlling takes lead in most important projects modelling and supports other

37

Controlling takes the ownership of the business case in case:

• Project has material impact

• Revenues of target segment is over materiality line

• Included OPEX costs are over materiality limit

• Requires any capital expenditure

• Project has high risk attached

• Project includes innovation, new revenue streams or new services to be offered to customers

In all other cases, controlling supports the BC development and verifies inputs and final outcome of the business case, while the business owner, leading innovation takes ownership of business case as well

The end result works, however, future holds new challenges

38

Return on investment – maximized

Risks - mitigated

Financial results - remain high

? How do you asses return on innovation

? How do you asses what the future holds

? How do you account for experience

Thank you for your time!