E&A review

Implementing new softwarefor 130 countries

Bernard Smith

Billing programme manager

DHL Western Europe and Emerging Markets

E&A review

Agenda

• DHL - Overview• What is the Import Express product?• Why the need for the project?• What were the original objectives?• How the project was managed• What happened?• 9 months post completion what has happened?

E&A review

Agenda

• DHL - Overview• What is the Import Express product?• Why the need for the project?• What were the original objectives?• How the project was managed• What happened?• 9 months post completion what has happened?

E&A review

Core Service Offerings• Core Service is to pick up and deliver shipment in the fastest

and most reliable way

• Particular expertise required in:

– Fast decision-making

– Relationship-building (customs, security)

– IT

• Also provide logistics services

• Many products available, depending on country of operation

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Express Services

• Express international door-to-door delivery of:– Non-declarable items (eg, documents, invoices, contracts,

reports)

• Express international door-to-door delivery of:– Declarable items (eg, samples, spare parts, finished

products) May have to pay duty at destination

• Europe, Asia, the US and Latin America have specific overnight delivery services

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Special Packaging

• Designed for specific types of shipment - for example,– Temperature-controlled packaging that keeps

medical shipments cool

– Shock-absorbing crating for wine bottles

– Jumbo Box (flat fee box, for consolidating numbers of small items)

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Service Options

• Saturday Delivery

• Same Day Service

• Delivery Duty Paid

• Special Clearance Services

• Banks & financial institutions

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Agenda

• DHL - Overview• What is the Import Express product?• Why the need for the project?• What were the original objectives?• How the project was managed• What happened?• 9 months post completion what has happened?

E&A review

Import Express product

• Import Express allows DHL customers to be billed at Destination for shipments sent by– their suppliers

– their staff travelling abroad

– anyone else they need to receive shipments from

• Customers are quoted a tariff at destination for shipments from 215 countries

• Some countries also allow Third country billing

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Business processing- Outbound

• Customers are allocated special account number for IMP shipments (96…)

• Many customers require a copy of the DHL paperwork (AirwayBill) before approving the invoice.

• DHL offices in the shipping country send data to a central sorting office.

• Copy paper work is sent from the shipping country to the Billing country

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Business processing - Central

• Central sorting office maintains tariff for each customer and prices each transaction

• The priced transactions are then sent to the billing country

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Business processing - Inbound

• Billing countries identify the IMP shipments and log them.

• When the centrally processed file is received the billing departments match the logged shipments to the received data file.

• The pricing of the shipments are then checked.• If the customer requires backup paperwork then

when it is received from the shipping country it is attached to the Invoice

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Agenda

• DHL - Overview• What is the Import Express product?• Why the need for the project?• What were the original objectives?• How the project was managed• What happened?• 9 months post completion what has happened?

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Why the need for the project

• The IMP business had grown by 20% pa since it was launched in 1995.

• Due to the business volumes the central sorting office could not maintain the tariffs accurately

• Data and paper transmission is on a monthly cycle which led to 60 m Euros being unbilled in the month of shipment

• Reduce the costs of the centralised processing unit, by de-centralising pricing.

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Agenda

• DHL - Overview• What is the Import Express product?• Why the need for the project?• What were the original objectives?• How the project was managed• What happened?• 9 months post completion what has happened?

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Business Objectives

• Top 17 countries to be FT compliant by Q3 2001• Reduce large revenue accruals for EXB• Improve I/B cash flow by 10%• Reduce errors for IMP• Harmonise O/B and I/B tariff maintenance• Easier account set-up• Replace BNF process• Reduce CB costs

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Agenda

• DHL - Overview• What is the Import Express product?• Why the need for the project?• What were the original objectives?• How the project was managed• What happened?• 9 months post completion what has happened?

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What did we have to do?

• Develop software to enable countries to price IMP shipments locally

• Amend billing software to be able to send and receive IMP files weekly

• Deploy software to 84 countries• Convert data from centralised tariffs to country

tariffs• Change business processes from monthly to weekly

cycles

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But...

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Number of countries

• 130 countries in Europe Africa and Middle East– 16 already had a compliant system

– 30 not allowed to sell Import Express product or had single tariff

– 84 countries to be deployed

• 17 Western Europe

• 25 Central and Eastern Europe

• 42 Africa

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Data conversion issues

• UK had 552,000 Origin-Destination pricing pairs• Took 5 days to run UK extract!

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How did we do it

• Software built and tested • Developed CBT Training module• Guidelines for implementing in countries

– User Guide/Test cases/Project plan

• Developed Harmonised procedures• Ran central workshop for top 17 countries• Ran training session in Ivory Coast and Kenya for

African countries

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Country groupings• Large/Medium sized country

– Extracted tariffs and converted to new structure

– Implemented reporting process

– Tracked individual country progress

– Visited to discuss planning and to help testing

• Small countries– Centralised training

– Countries re-keyed tariffs

– Tracked volume of countries live/testing

– Countries were clustered for communication with region

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Monthly reportingCountry Project Manager

identifiedProjectplanned

ProjectStartDate

TargetNBRlivedate

TargetERMlivedate

ERMinstalledin test

Inboundtariff

changesAgreed

CB Tariffconversion

into test

Tarifftesting

complete

Frequenttransmtesting

complete

Localmods

assessed&

solutionin place

Processimpacts

assessed

NBR2.8.2live

ERMlive

FTLive

Lasttariff

updatesend to

CB

Target Resource name 100% Date Date Date Date Date orn/a

Date or n/a 100% 100% 100% 100% Date Date OB+IB Date

Albania TBA Jan 2002 01/02/02 01/02/02 Dec2001 TBA N/A

Andorra Desiree Salman 100% 30/01/01 07/06/01 09/09/01 02/03/01 31/08/01 29/05/01 100% 100% 100% 100% 05/09/01 21/08/01 OB+IB 31/10/01

Armenia Svetlana Kiseleva 20% 09/10/01 01/01/02 01/01/02

Azerbaijan Svetlana Kiseleva 20% 09/10/01 01/01/02 01/01/02

Belarus Svetlana Kiseleva 20% 09/10/01 01/01/02 01/01/02

Bosnia&H TBA Jan 2002 01/02/02 01/02/02 Dec2001 TBA N/A

Bulgaria Valentina Nikolova 01/10/01 05/11/01 01/12/02 01/11/01 15/11/01 N/A

Canary Isl Desiree Salman 100% 30/01/01 07/06/01 09/09/01 02/03/01 31/08/01 29/05/01 100% 100% 100% 100% 05/09/01 21/08/01 OB+IB 31/10/01

Croatia Mirna Ana Kardum 100% 01/10/01 01/01/02 01/01/02 01/11/01 15/11/01 N/A

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Agenda

• DHL - Overview• What is the Import Express product?• Why the need for the project?• What were the original objectives?• How the project was managed• What happened?• 9 months post completion what has happened?

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Schedule

• Business Objectives agreed - Q1 2000• Software developed Q2/Q3 2000• Software tested - November/December 2000• Software deployed - top 17 - August 2002? • Software deployed Africa/Eastern Europe - Jan 2002• Frequent Transmission switch on - July 2001• Centralised Tariffs switched off - December 2001

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Regional Activities - Plan• IS development -

– budget 0.6 man years

• Deployment – budget 3.4 man years

• web site for the project • CBT on using new tariff tool• Incorporate EXB local modifications in regional s/w

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Regional Activities - Actual• IS development -

– actual 4.3 man years (0.6 budget)

• Deployment – actual 4.4 man years (3.4 budget)

• web site – (done - but access problem for African countries)

• CBT (done - but countries wanted on site training)

• Incorporate local modifications in regional s/w– (done e.g. CH rounding, multi-currency tariffs)

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Country activities - effort• 2000 estimate for deployment

– 5.4 man years

• Jan 2001 (post beta) estimate– 12 man years

• Actual effort– 13.7 man years

• Country effort plan actual– sma1l 58 man-days 60 man-days

– medium 118 man-days 120 man-days

– large 175 man-days 192 man-days

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Country activities - but• Projects took 2 months longer than planned due to other

priorities (Euro, EFSS transition, TI2000)• Tariff extract was difficult• Local modifications in large countries delayed

implementation• new Financial Service Center meant that:

– EFSS/Country/Region responsibilities unclear

– lack of EXB expertise delayed implementation

– EFSS transition countries lacked motivation

• Difficult to get 100% progress reporting

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What we will do differently next time• Standard project management - (Prince 2 for countries and region)

• Escalate non-reporting of progress• Get planning phase kicked off in advance (even if

implementation has to be delayed)

• Send African countries documentation on CD

• Make sure other impacted departments are pushing their country staff to be involved.

• Get dedicated Data Centre resource for technical work• Provide more on site support (if deadlines must be achieved)

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Agenda

• DHL - Overview• What is the Import Express product?• Why the need for the project?• What were the original objectives?• How the project was managed• What happened?• 9 months post completion what has happened?

E&A review

Business Objectives

• Top 17 countries to be FT compliant by Q3 2001• Reduce large revenue accruals for EXB• Improve I/B cash flow by 10%• Reduce errors for IMP• Harmonise O/B and I/B tariff maintenance• Easier account set-up• Replace BNF process• Reduce CB costs

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Follow up actions

• Get countries to bill I/B files within billing month.• Drive out productivity enhancements• Improve ERM functionality e.g. mass update• Harmonise procedures• Upgrade all countries to latest ERM version

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Overall Business Case

Q1 2000 plan Actuals

Development/Deployment cost

9.4 man years 22.4 man years

Central Bureausaving

1.6 m USD (16staff)

12 staff

I/B cash flow +10% +11%*

Reduce IMPrevenue accruals

75% 40%

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Overall assessment• Countries have improved their tariff structure• Quality of Billing has improved but limited

financial benefits to date • Cost savings from closing central tariff role were

absorbed by project effort• Country efficiency improvements were not large

enough to be reflected in reduced headcount.• Why de-centralise tariffs prior to re-centralising?

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Finally

• Any questions?

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Resourcing

• 1 Programmer (data conversion)• 1 Business analyst/trainer• P/T project management• P/T technical deployment support