Company Confidential 1 Creating and Running a SAP Support Organization Bryant Bonner, Director - Textron September 21, 2004

1Company Confidential

Creating and Running a SAP Support Organization

Bryant Bonner, Director - TextronSeptember 21, 2004

2

Agenda

• Background on Personal and Work Experience

• Initial Building Blocks for Textron’s SAP Program

• Transforming the Textron Organization

• Key Accomplishments and Challenges

• Where to Next…

• A Little Advice to Students

3

Background and Personal Experience

• Grew Up in Texas

• Graduated from Tech in 1995

– Met My Beautiful Wife at School

– Now Have Two Great Kids

• Work Experience

– Ernst & Young LLP (1995-2001: US/Australia/NZ)

– Verizon (2001-2003: Dallas/Tampa)

– Textron (October ’03-Current)

4

Textron’s Business Profile – (NYSE: TXT)

• One of America's largest multi-industry companies

• Ranked 174th on the 2003 FORTUNE 500

• Company founded in 1923

• Revenues of $10 billion

• 43,000 Employees

TEXTRON

FASTENINGSYSTEMS

(16% of ‘02 Revenue)

INDUSTRIAL(28% of ‘02 Revenue)

CESSNA(30% of ‘02 Revenue)

FINANCE(6% of ’02 Revenue)

BELL(21% of ‘02 Revenue)

Cessna AircraftCompany

TextronFasteningSystems

Bell Helicopter

Lycoming

TextronSystems

E-Z-GO

Jacobsen

Tools &Components

Kautex

Greenlee/Tempo

- Greenlee- Tempo- Klauke

Fluid & Power- Textron Fluid Handling Products- Textron Power Transmission

TextronFinancial

5

0

100

200

300

400

500

600

700

800

Textron Average 1st Quartile

Application maintenance Application development

FTEs supporting applications Number of applications supported per thousand end users

0

10

20

30

40

50

60

Textron Average 1st Quartile

Vs. 1st Quartile, we have 33% more resources supporting 200% more applications

2001 HACKETT DATA

To reduce support costs we must dramatically reduce the number of applications AND source support resources more cost effectively

6

• Making our customers successful

• Leveraging our enterprise scale and talent

• Building and deploying:

– World-class operating capabilities

– Common processes and tools

• Focusing on high-impact initiatives in 2003:

– Textron Six Sigma

– Value Pricing

– Supply Chain Management

– IT Shared Services

– Organizational Design

Enterprise Management

Customer

• Powerful global brands

• High-value, differentiated products and services

• Successful customers

Process

• World-class process capabilities providing competitive advantage

• Fully leveraged expertise and resources

People

• Employer of choice

• “Customer-first” mindset

• Growing and developing self-actualizing people

What Does Premier Look Like?

Performance

• Lead our peers in key financial metrics such as: ROIC, NOP, Cash Conversion and Total Shareholder Return

What Does an I.T.Application Strategy Need to Contain to Support This?

Common

• Application Systems must be enterprise-wide vs. Business Unit specific

• Specific solutions must be leveraged across all businesses in order to enable common processes

Flexible

• Applications Strategy must support Business Unit – unique business strategies and priorities, while linking to overall corporate strategy

• Application Systems must be flexible and configurable to support evolving business process and changes in business portfolio

Manageable

• Application change must be implemented incrementally in order to effectively manage risk and cost

• Application support must be consolidated in order to control deployment and support costs.

Our Focus on Enterprise Management and Best Practices

Creates the Criteria for Our I.T. Applications Strategy

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This strategy will create an application environment that is flexible and scalable to Textron’s business needs

• Unique applications minimal common data

• Multiple application organizations

• Significant translation / interface applications

• Mainly in-house development

• Cost / time to implement business change is high

• Groups of related applications sharing common data

• Centralized deployment organization (COEs)

• Moderate use of offshore outsourcing

• Functional / industry change less costly

• Portfolio management leverage investments

• Core information common and accessible across the corporation

• Centralized data / process management

• Centralized sustainment organization (COEs)

• Extensive use of offshore outsourcing

• Companywide change faster / minimal cost

FragmentedFragmented IntegratedIntegrated ArchitectedArchitected

2003 20072005

8

My Initial Actions on Job (First 100 Days)

1. Educated Self on Textron Business Strategy

2. Developed the SAP COE Mission / Business Model

3. Hired SAP Core Leadership Team

4. Gained Approval on Funding for Operating Budget

5. Implemented Key Support Processes

6. Where We are Headed & Key Lessons Learned

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Our SAP Strategy Must Align to Our Business Strategy and IT Direction

• To be the premier multi-industry company

• Ensure Industry-Leading Operational and Customer Performance

• Promote an integrated application environment that is flexible and scalable

– Integrated (2005)

– Architected (2007)

4

OUR VISION

To be the premier multi-industry company, recognized for our network of powerful brands, world-class enterprise processes and talented people

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Our SAP Strategy Should Support Textron’s Core Competencies / Key Initiatives

Lean Operations

BU Brand Management

Portfolio Management (Diversity)

Integrated Supply Chain

Su

pp

ort

sSAP Strategy

• JIT Inventory Systems

• Cost Reductions Through Capital Investments

• Forum for Continuous Improvement Ideas

• Drive the BPx3

– Best Practice

– Best Process

– Best Performance

Service SupportProduct Dev / R&D

Smart Technology Spend and Shared

ServicesTextron 6

12








13

SAP COE Mission and Business Model

• Ensure operational support service levels, and key business KPIs/metrics are being met or exceeded while continuously improving business processes (by leveraging SAP)

• Leveraging best practices for SAP implementation and ongoing support in order to reduce risk, improve project quality, and reduce costs

• Promoting common business processes across the enterprise

• Providing cross project coordination among concurrent and planned SAP projects

• Defining and maintaining standards for key SAP architectural design elements.

• Leveraging internal and external resources and expertise

“…“…Ensuring efficient application delivery and support to enable the smooth flow and continuous Ensuring efficient application delivery and support to enable the smooth flow and continuous improvement of business operations for Textron business units using SAP by…”improvement of business operations for Textron business units using SAP by…”

SAP PMOSAP PMO

PlanPlan

BusinessBusinessUnitsUnits

Requirements

BU SM

Es

Config masters

DesignDesign

ImplementImplement

OperateOperate

Support Teams

Meth

od

olo

gy

BPR

Des

ignOptim

ized Solution

Cont

inuo

us

Impr

ovem

ent

GovernanceBusiness Alignment Assurance

COECOE

SAPSAP

Business UnitOwnership

Co

nfi

g m

aste

rs

Reusability /Best

Practices

Reu

sab

ilit

y /

Best

Pra

cti

ces

Reu

sab

ilit

y /

Best

Pra

cti

ces

Reusability /Best

Practices

14

SAP Post Implementation Support Charter

Textron has embarked on deploying an SAP Post Implementation Support Model to deliver and sustain maximum reuse and support leverage for the SAP enterprise application…

…“This support model will focus on ensuring operational service levels, key business KPIs, and functional transaction metrics are being met or exceeded while continuously improving business processes”

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16

Staffing Strategy

• A Learning Community

• Educated Employees to Cope with Change and Competition

• Utilize Internal Staff for Strategic Knowledge-Capital

• Leverage External Staff for Commodity Support

17

SAP COE Organizational Chart

Currently 15 Individuals hired into SAP COE with 17 by end of 2004

Program / Cross Functional Technical Support Process Support

Tim HodgeIntegration / Interface Lead

Kevin Jackson Security / Controls Lead

Ali HazariBasis Administration Lead

Cheryl WeaverFI/CO Lead

Scott Leiding MM/PP Lead

Roger JohnsonSD Lead

Guy Gagne, DirectorSAP COE Projects / Arch

Enterprise Help Desk

Holly SheetsTesting / Change Control

John VelasquezSAP PMO

BW - TBD

Bryant Bonner, DirectorSAP COE Operations

Shankara SavendramABAP Specialist

Linda RileySecurity Specialist

Jeff ShoresSecurity Specialist

Skip MalkunsBasis Administrator

Neil MoranBasis Administrator

Chris RouschBasis Administrator

ABAP Specialist - TBD

Bennie Peek, VP Enterprise Applications

InfrastructureSupport

HRCOE

PLMCOE

SCMCOE

IntCOE

WebSSCOE

BU Integration / Project Teams

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Cumulative SAP Experience within the COE

• 80+ Years of SAP Experience

• 65+ SAP Projects Implemented

• SAP implementation experience spans across 23 Countries

• Cross industry expertise in 15 Industries (including A&D and Industrials)

• SAP Module Expertise and Certifications in:

– ASAP Methodology

– FI/CO/TR

– SD/SIS/LIS/S&OP

– BW

– MM/PP/WM/PM/PS

– ABAP Workbench

– Basis Administration

– Security Administration

We have Built a Solid FoundationWe have Built a Solid Foundation

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Key Staffing Lessons Learned

• Hire Highly Qualified Candidates and Pay 15% Higher than Market Rate

• Set Travel Expectations with Candidates during Interview Process

• Gain Business Unit Buy-in on Candidates

• Look to Supplement Your Weaknesses with Candidates’ Strengths

• Develop a Fun, Well-Rounded Team

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21

Gained Approval on Funding for Operating Budget

• Developed Value Proposition

• Look for Leveraging Opportunities

• Focused on Items that Drive Early Successes

• Built Credibility by Delivering as Promised

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23

Sup

port

SA

P

App

s M

gmt

Sup

port

Sup

port

• Executed Business Transactions

• Satisfied End Users

• Meeting Application SLAs / Metrics

• Uninterrupted Application Support

• Business Process Improvement

• Resolution of Incident Reports

• TCO Reduction

InputsProcess

Outputs

SupportingBusiness Operations

Business Process Owner (BPO)[Sets Strategic Direction for Business Process]

Break/Fix Requests(End-Users)

SAP Post Implementation Process Flow

Enhancement Requests(BPO, Super User, Functional Analysts)

Project Go-Live Deferred Work (Project Teams)

System Maintenance(SAP COE)

End User[Executes Process]

Super User[Supports End User]

ProcessSupport

TechnicalSupport

FunctionalSupport

Help DeskSupport

IT OpsSupport

Change MgtSupport

3rd Party SupplementalSAP Support

Str

ateg

y

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A Triad of Processes for Post Implementation Support

Problem ManagementSupport

EnhancementSupport

Change ControlSupport

• Problem Management (Break-Fix) Support improves enterprise performance by increasing end-user productivity and satisfaction associated with timely resolution of SAP related problems

• Enhancement Support provides a standardized way to identify, prioritize, add, and track additional functionality or processes to the system based on new and changing business requirements

• Change Control Support addresses the need to request, evaluate, communicate, schedule, and migrate changes to the SAP production environment

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26

Valu

e

Be

ll

DB

Gu

ina

rdM

aa

gK

au

tex K

lau

ke

TF

S D

E -

TV

D

FinancialShared Services

IT Savings

Strategic Sourcing

Phase I9 Scattered Instances

1 Appl. Service Provider

Current 9 Scattered Instances (by colors)Multiple Appl. Service Providers

Gre

en

lee

Ce

ss

na

Sy

ste

ms

TF

S U

K -

CS

GT

FS

DE

- C

SG

2004 2005 2006 2007Phase II

3 Instances1 Appl. Service Provider

Phase IIIOngoing Improvement

1 Appl. Service Provider

Aer

osp

ace

& D

efen

se

Au

tom

oti

ve

Ind

us

tria

l

BP Improvement

BP Improvement

BP Improvement

3-Year Strategy for Textron’s SAP Program…Linking US and EU Solutions

Disparate

Selective

Alignment

Improvement(BPx3)

27

Supplier Strategy

• Use a Target Costing Approach

• Create Strategic Relationships with Key Service Providers

• Take Advantage of Off-Shore Models

• Utilize Pooled Resource-on-Demand Models

28

Key Challenges

• Worldwide Program Management

• Rapid Delivery of SAP Solutions

• Business Unit Solution Alignment by Industry

• BPx3 Focus

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Succeeding in College

• Go to Class

• Be Well-Rounded

• Work Hard but Play Hard

• Look to Learn not Make a Grade

30

Succeeding in Your Career

• Join an Organization that Makes You Better

• Leave the Nest – Take on Overseas Assignments

• Be a Team Player – “The first shall be last, and the last shall be first” (Matthew 20:16)

• Find Good Mentors for Career Guidance

• Choose Your Direct Reports Wisely

• Ensure Work / Life Balance

31

Succeeding in Life

• Never Lose Your Integrity

• Aim High in Life by Setting Stretch Objectives

• Seek Wisdom

• Care More for Others than Yourself

• Give and You Shall Receive (Acts 20:35)

Documents

Company Confidential 1 Creating and Running a SAP Support Organization Bryant Bonner, Director - Textron September 21, 2004