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© Copyright 2010 Hewlett-Packard Development Company, L.P.1© Copyright 2010 Hewlett-Packard Development Company, L.P.
Arnab Chakraborty- Analytics Service Delivery Leader
Global Business Services - Hewlett Packard
22nd September 2010
SHARED SERVICES AS A KEY LEVER FOR SUCCESSFUL MERGER INTEGRATION:AN HP-EDS EXPERIENCE
2010 SSON Conference: Singapore
© Copyright 2010 Hewlett-Packard Development Company, L.P.2
AGENDA
Mergers & Acquisitions at HP
HP Shared Services and its role in M&A
HP-EDS Integration Case Study
Key Learnings
© Copyright 2010 Hewlett-Packard Development Company, L.P.3 v
WE DO AMAZING …Largest Technology Company in the world, with
$115Bn revenue in 2009
#10 Rank on Fortune 500
2PCs
shipped every second
2 printers
shipped every second
1 server
shipped every15 seconds
#1 or #2 in IT Services across every geography and industry globally
1Bn customers
in 170 countries served by HP Supply chain
106 of the
world’s 120 stock exch powered by HP
70% of SMS
messages sent enabled by HP SW
#1 on
Newsweek 2009 list of Greenest US Cos.
© Copyright 2010 Hewlett-Packard Development Company, L.P.4
MERGERS AND ACQUISITIONS (M&A): ENGINE FOR DRIVING HP’S GROWTH
1958 1989 2002 2006-081939
HP Garage –Journey Begins
Acquired F.S.
Moseley Co.
Enters the plotter business
Foundation for printer business
Acquired Apollo
Computers
Leadership in workstations
Leadership in the PC Industry
Leadership in digital publishing
Acquired Compaq &
Indigo
Acquired Mercury
Acquired EDS
Doubled HP’s software business
Strengthened Services business
© Copyright 2010 Hewlett-Packard Development Company, L.P.5
EDS ($22 Bn)
SIGNIFICANT EXPERIENCE OF INTEGRATING COMPANIES
Complexity
IntegrationTimeline
3 Months 6 Months 9 Months 12 Months
High
Medium
Low
PolyServe$16M
Colubris$23M
Neoware$100M
ColorSpan$70M
AOME$70M
EYP MCF$50M
NUR$86M
Exstream$82M
Tower$45M
LeftHand Networks
$74M
3COM$1.3 Bn
Knightsbridge$140MOpsware
$102M
© Copyright 2010 Hewlett-Packard Development Company, L.P.6v
v
KEY FOCUS AREAS DURING MERGER INTEGRATION
Customer Relationship
Benefit Realization
People Integration
Rationalize Assets
Communicate Progress
Process Integration
11 22
33
4455
66
Shared Services Organization has opportunity to deliver value in each area of Merger Integration
© Copyright 2010 Hewlett-Packard Development Company, L.P.7
SHARED SERVICES PLAY AREAS IN MERGER INTEGRATION PROCESS
Customer Relationship
Shared call centers
Central Campaign Ops
People Integration
Employee On-boarding
Integrate HR processes
Rationalize Assets
Tools & Technology
Facilities &Locations
Process Integration
Consolidate process
Standardize & simplify
Communicate Progress
Central PMO to report metrics
Centralized communication
Benefit Realization
Rationalization of support functions
Reduction in overhead costs
HP has invested in shared Services (Global Business Services) which has enabled various merger integration activities
© Copyright 2010 Hewlett-Packard Development Company, L.P.8
Global Business Services (GBS) Portfolio of Services
HP SHARED SERVICES CAPABILITY
8
Marketing Support
Quote to Cash
Finance & Accounting
Supply Chain
Service Admin
Hire to Retire
GLOBAL OPERATIONS (APJ – AMS – EMEA – INDIA)GLOBAL OPERATIONS (APJ – AMS – EMEA – INDIA)
REPORTING AND ANALYTICS SERVICESREPORTING AND ANALYTICS SERVICES
STRATEGY & PLANNINGSTRATEGY & PLANNING
COMPLIANCE & CONTROLSCOMPLIANCE & CONTROLS
GLOBAL SHARED SERVICES SOLUTIONSGLOBAL SHARED SERVICES SOLUTIONS
Combining process & functional expertise with actionable insights for driving better outcomes for various business groups in HP
© Copyright 2010 Hewlett-Packard Development Company, L.P.9
San Jose
Bangalore
Singapore
DalianBuchares
t
Wroclaw
Chennai
Wuhan
GuadalajaraBeijing
AMS
EMEA
APJ
IndiaCordoba
Pontiac
16000 employees across 12 centers globally
24X5 support for all BU’s and functions
Supporting more than 30 languages
GBS DELIVERY GLOBAL FOOTPRINT
© Copyright 2010 Hewlett-Packard Development Company, L.P.10
Experience of closing over 20+ deals in last two years …
GBS ROLE IN MERGER INTEGRATION
• Accounts Payable• Accounts Receivable• General Ledger
• Expense Reimbursement
• Payroll
• Master Data• FITR• Intercompany
Integrate process & systems of acquired company into HP
Building New capabilities for the acquired company
Optimization of delivery centers and workforce
Transition of Process Management into
GBS Operating Model
Subject Matter Experts
Tools & Methodologies
Program Management
M&A Experience
Key Enablers and accelerators for Merger Integration
11
22 33 44
55
© Copyright 2010 Hewlett-Packard Development Company, L.P.11
GBS APPROACH TO MANAGE INTEGRATION
Due Diligence
Integration Planning
Integration Execution
Integration Close
• Develop initial integration strategy
• Identifying key complexities
• Assess initial Trading Structure model
• Assessing accounting impact
• Assess potential impact to GBS
• Consulting on Q2C process
• Interlocking integration plans with other functions
• Coordinating the implementation of Trading Structure
• Drive transaction processing integration
• Managing integration-related costs
• Managing exceptions
• Incorporating lessons learned into tools and processes
• Providing resolutions for ongoing issues
Involved across the M&A Deal Cycle as a Tier 1 Organization
© Copyright 2010 Hewlett-Packard Development Company, L.P.12
•Revenue: $22Bn
•Services portfolio spanning ITO, Application services and BPO
•140,000 employees globally with 41,000 in low cost locations
•12,000 sales professionals
•Revenue: $100 billion
•Diversified product and services portfolio
• 175,000 employees globally and over 70,000 in services
•22,000 sales professionals
HP-EDS INTEGRATION: 2008
+
Process Integration
Finance + Payroll + HR
Optimization of Resources
New capabilities in Analytics
Employee Communication
Global Business Services (GBS)
500 full time employees, 1000 part-time with 250 plus projects with over 10,000 milestones!
© Copyright 2010 Hewlett-Packard Development Company, L.P.13
Phased integration process ensured smooth integration – Finance, HR, Payroll
GBS LED INTEGRATION OF PROCESSES
Accounts PayableAccounts ReceivableGeneral Ledger
PayrollHR OperationsEmployee Reimb
Master DataIntercompanyIndirect Tax
Wave1 14 Countries
Wave 2 23 Countries
Wave 3 44 Countries
GBS Scope of Process Integrations
Consolidation of payroll processes
Selection of single payroll system/ vendor
New global ERP baseline for finance processes
Transition of L&D and staffing processes to GBS
HR Ops processes consolidation and migration
Outcomes of the Integrations Efforts
© Copyright 2010 Hewlett-Packard Development Company, L.P.14
• Addition of approximately 1,500 employees
• Optimizing ABM cost structure and service level by leveraging GBS shared Service Center capabilities
Account Business Mgmt
• Retain domain knowledge on services supply chain & translate to HP
• Training ongoing for smooth integration into HPs Supply Chain Process
Global Supply Chain
• Addition of 140 FTEs to ensure consistent HR and L&D services to all HP employees post integration
HR and Learning & Development
GBS LED INTEGRATION OF PEOPLE
• Addition of approximately 1,000 employees and contractors
• Efficient, effective transaction processing that saves hundreds of millions of dollars in operating costs annually
Finance & Accounting Operations
© Copyright 2010 Hewlett-Packard Development Company, L.P.15
HP + EDS Delivery Centers for Transactional Process at time of integration
OPTIMIZATION OF DELIVERY CENTERS
Bangalore, Chennai
San Jose
Barcelona
Guadalajara
Singapore
DalianBucharest
Wroclaw Pontiac MichiganBudapest
Buenos Aires
Plano
Cardoba
Kuala Lumpur
HP centers
EDS centers
1 2 3 4 5 6 n
Accounts Payable x x x x
Employee Reimb x x x x
Cash Application x x x x
General Accounting x x x x x
Fixed Assets x x x x x
Payroll x x x
Intercompany x x x x
© Copyright 2010 Hewlett-Packard Development Company, L.P.16
HP + EDS Delivery Centers Optimized Post Integration
OPTIMIZATION OF DELIVERY CENTERS
San Jose
Bangalore
Singapore
DalianBuchares
t
Wroclaw
Chennai
Guadalajara
Cordoba
Pontiac
1 2 3 4 5 6 n
Accounts Payable x x
Employee Reimb x x x
Cash Application x x x
General Accounting x x x
Fixed Assets x x
Payroll x x
Intercompany x x
© Copyright 2010 Hewlett-Packard Development Company, L.P.17
Research & Analytics helped identify new revenue opportunities
BUILDING NEW CAPABILITIES
Customer Intelligence
Market Intelligence
Sales Analytics Pricing Analytics
Customer References
Campaign Ops Big Deal Analytics
Industry & Solutions
End state today - multiple Research & Analytics CoEs for Enterprise Services
GBS Research & Analytics SS
Pre-integration Post integration
• Pipeline Analysis• Deal Support• Pricing Intelligence
• Competitive Analysis• Installed Base Analytics• Market Sizing & Growth
Leverage GBS Analytics for EDS
© Copyright 2010 Hewlett-Packard Development Company, L.P.18
Facilitating Smooth Integration and Management of Change
DRIVING STRONG COMMUNICATION
Online “Getting Started @ HP” (Day 1 guide) top changes, FAQs)
HP+EDS Welcome Portal with Country pages and Buddy Program
Global to region downloadable Welcome Kits with posters and videos
Systems & Tools training
Pulse Survey and Portal poll
Region/country follow-up
Manager alert
Integration summary e-mail
Audience segmentation
Integration Portal – What to Expect
Integration Inquirer with change readiness focus and Wave alerts
Change Readiness systems , decks and tools training available (global to regions)
Regional/country training forums to cover all major training
© Copyright 2010 Hewlett-Packard Development Company, L.P.19
Merger Integration CoE• Subject Matter Experts
• M&A Playbook
• Tools & Templates
KEY LEARNINGS …
Program Management
Process Ownership• Process Simplification
• Process Improvements
• E2E accountability
Involve Early
Recipe for Successful Integration
• Involved from Due-diligence stage through deal closure
• Elevated status as Tier 1 organization in an M&A
• Communication
• Dashboards/Scorecards
© Copyright 2010 Hewlett-Packard Development Company, L.P.20 © Copyright 2010 Hewlett-Packard Development Company, L.P.20
THANK YOU !!
Arnab Chakraborty
Tel: [email protected]