GOVERNANCE MODELAT DIAGEO BUSINESS SERVICES

25 May 2010 Edinburgh

Gergely Marko

About Diageo

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OUR SHARED SERVICES JOURNEY

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> 2001 decision Standard financial processesSingle technology platformOpened Diageo’s first – captive – service centre in Budapest, core financial processes (OTC, PTP, RTR)

> 2001-2006 Budapest operation rapidly grew in scale and scopeHigher value and complex activities

> 2007 Extended to create global network Hybrid model: internal (captive) and external (outsourced)Accenture as our outsource provider partner

DIAGEO BUSINESS SERVICES TODAY

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DBS Bucharest

> Front Office> Customer facing> Language

requirements

DBS Shanghai

> Front Office> Customer facing> Language

requirements

DBS Manila

> Global Delivery Hub

> English speaking services

> Accountable for performance of whole DBS

> Directly responsible for:> General Accounting> Cash Cycle customer

facing> FP&R> Treasury

DBS Budapest

DBS GLOBAL OPERATING MODEL

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ONE DBS MISSION

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CHALLENGES WITH OUR INITIAL GOVERNANCE MODEL

> Our operating model had changed, but our governance structure had not

> Different structure depending on captive/outsourced or hybrid

> Imbalance between needs of customers and governance

> Inconsistent performance reporting across customers

> Recurring issues, not resolved

> Duplication of effort in different parts of the organization

> Confusion and some frustration!7

WHAT HAVE WE IMPLEMENTED?

> Clear separation of Service Management from service delivery and process governance

> Up-weighted Service Management organisation

> Service Management covers captive and outsourced model

> Clear interface and accountability across Diageo regional structure

> Service Management spans all processes

> Process governance focuses on single process, but accountable for captive and outsourced delivery

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OPERATIONAL RISK MITIGATION

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Joint Review Board Bi Annual

Contractual Review Quarterly

Performance Review Monthly

Market Service Review Monthly

Market Service Review Weekly

All staff - Everyday

Serv

ice

Ope

ratio

nal

Managed by Transition team Managed by SM

SM CommencesSM

documentation shared

SM Structure introduced

Detailed SM discussions

SM Framework integrated into Transitions

SM Framework in operation

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METRICS

> Operational KPIs and SLAs in place and monitored

> DBS Dashboard

> Deliver Continuous Efficiency

> Manage Processes to Drive Business Outcome

> Lead Diageo's Control Agenda

> Demonstrate Great Customer Service

> Great Leadership & People

Development

> Transformation

OPERATIONAL RISK MITIGATION

OPERATIONAL RISK MITIGATION

CHANGE MANAGEMENT PROCESS

OTHER RISK MITIGATION

> Risk Management Committee> Risk Footprint

> SOX/Non-SOX Controls (CARM process)

> Business Continuity Plan

Implement

Change Idea Process Validation

Complete Change Note BPO review Final

Approval

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