Permission to reprint or distribute any content from this presentation requires the prior written approval of Standard & Poor’s.Copyright (c) 2008 Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. All rights reserved.

Standard & Poor’s

Jora Gill, CTO Standard and Poor’s International Systems

June, 2010

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Standard & Poor’s: $2.6b Revenue (2008)

Standard & Poor's, a subsidiary of The McGraw-Hill Companies (NYSE:MHP),is the world's foremost provider of financial market intelligence, including:

Independent Credit Ratings • Has rated more than 3 trillion in new debt – more than 1 million new and revised ratings.

Fixed Income Risk Management Services• Credit portal; pricing of 3 million fixed income securities representing $12 trillion in assets; integrated tools and data library for linked global data assets; credit risk, market rating and cash flow models; analytics and research services.

Equity Research • S&P Equity Research Services was the leading independent provider in The Wall Street Journal’s 2009 “Best on the Street”.

S&P Indices• Over $3.5 trillion was benchmarked to the S&P 500, with indexed assets making up ~$915 billion of this total. $247 billion in assets in over 217 listed ETFs linked to S&P indices.

Capital IQ • Comprehensive global coverage on 79,000 public companies, 1,000,000 private companies, 11,000 private equity firms and profiles on over 1.7 million investment professionals.

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S&P’s Strong Local Presence in Global Locations

North America Atlanta, GA Baltimore, MD Bethesda, MD Boston, MA Centennial, CO Charlottesville, VA Chicago, IL Dallas, TX Greenwich, CT Hightstown, NJ Houston, TX El Segundo, CA Los Angeles, CA New York, NY San Francisco, CA Toronto, Canada Washington, D.C.

Europe & Middle East Dubai, UAE Frankfurt, Germany London, U.K. Madrid, Spain Milan, Italy Moscow, Russia Paris, France Stockholm, Sweden Tel Aviv, Israel

Africa Johannesburg, South Africa

Offices Affiliates

Asia Beijing, China Hong Kong, China Jakarta, Indonesia Kuala Lumpur, Malaysia Seoul, Korea Singapore Taipei, Taiwan Tokyo, Japan

India Mumbai, Hyderabad,

Gurgaon and multiple other locations

Australia Melbourne Sydney

Latin America Buenos Aires, Argentina Santiago, Chile São Paulo, Brazil Mexico City, Mexico

S&P has 11,000 employees in 26 countries

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Standard & Poor’s Organization

Standard & Poor’s

Ratings Investment Services

Capital IQFixed Income

Risk ManagementServices

Equity ResearchServices

S&PIndices

Corporate & Government

Ratings; Structured Finance

• Criteria

• Quality

• Ratings Operations– Quantitative

Analytics– Originations– Ratings Market

Development– Ratings

Editorial– Ratings

Analytical Education

• Capital IQ Platform

• Xpressfeed

• Compustat

• ClariFI

• SystematIQ

• Money Market Directories

• Credit Portal

• Pricing Services

• Integrated Tools & Data Library

• Proprietary Models Library

• Analytic & Research Services

• MarketScope Advisor

• Global Equity Research

• Fund Management Ratings

• S&P Investment Advisory Solutions

• ETFs

• Index Licensing

• Listed Derivatives

• Custom Indices

• Index Data

Firewall

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Connect the Application Integration Hubs Worldwide

New York

London

Tokyo

Melbourne

Mumbai

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Why Agile

• One team

• Embrace change

• Value first and quickly

• Have fun!

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Agile tick box

• Business buy in

• IT buy in

• Investment

• Continuous improvement

• Partners

• Start small

• Larger projects lacked case studies and literature

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S&P EngineeringTM

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Code Dashboard

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Vendor Project Structure

Fixed Price / Fixed Scope

• Structure: Agree on the deliverables, deliver it. Customers like fixed price projects because it gives them security

• Scope changes: The change request game (correction: change request process) is intended to limit scope changes. This process is costly, and the changes are usually not preventable. Since the customer almost by definition wants more scope, ending the project can be difficult. The supplier wants the customer to be happy, so the supplier usually yields.

• Risk: Obvious risk is on the side of the supplier. If the estimates are wrong, the project will lose money. Less obvious risks are the change request game, through which the supplier negotiates additional revenue through scope changes.

• Relationship: Competitive to indifferent. Customer generally wants to have more and the supplier wants to do less.

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Vendor Project Structure

Time and Materials

• Structure: Work for a month, then send the customer an invoice.

Suppliers like it, because the customer carries the risk of changing

his mind.

• Scope: Not fixed. Sooner or later, the customer doesn't want to pay

any more, so the project comes to an end.

• Risks: carried 100% by the client. Supplier has little incentive to keep

costs down. Effort to ensure that only legitimate effort and expenses

are invoiced can be substantial.

• Relationship: Indifferent. The supplier is happy when more work

comes because more work means more money.

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Vendor Project Structure

Phased Development

• Structure: Fund quarterly releases and approve additional funds after

each successful release.

• Scope Changes: Not explicitly defined by the model. Releases are in

effect time boxed. The knowledge that there will be another release

next quarter makes it easier to accept postponing a feature to

achieve the time box.

• Risk: Customer’s risk is limited to one quarter’s worth of development

costs.

• Relationship: Cooperative. Both the customer and the supplier have

an incentive that each release be successful, so that additional

funding will be approved.

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Vendor Project Structure

Bonus / Penalty Clauses

• Structure: Supplier receives a bonus if the project completes early

and pays a penalty if it arrives late. The amount of bonus or penalty is

a function of the delay

• Scope Changes: difficult to accept because changes potentially

impact the delivery date, which is surely not allowed.

• Risk: Does the customer have an incentive for early completion? The

ROI arguments must be compelling and transparent. Otherwise the

customer gets a cheaper solution the longer it takes.

• Relationship: could be cooperative, but might degenerate into

indifferent if the customer does not truly need the software by the

date agreed.

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Vendor Project Structure

Mixed Model

• Structure: Initial sprints are T&M allowing the supplier to reach a

stable velocity then the project is fixed once the project velocity

levels off.

• Scope: can be changed. Planned but unimplemented features can be

replaced with other stories of the same size. Additional features cost

extra.

• Risk: Shared. Supplier has time to understand the complexity of the

project, customer can fix budget after a period of time whilst also

making changes.

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