CSC Proprietary and Confidential 1
OLM NBF Model Guidance:
Costing
Steve Coxon
July 2013
2
• Context – Inform on a standard cost and pricing ‘capture’ process
• OLM Model Versions– Catering for simplicity / complexity
• Cost Construction – Cost Framework
• Cost Construction – Using CST Files
• Cost Construction – “Ten Commandments”
• Support Contacts
Agenda
CSC Proprietary and Confidential 3
OLM NBF Model
Context
4
Context• Each Offering environment for cost and pricing is unique………but a common framework
is required• Standardization is not possible at the ‘owner’ level……….but is at the OLM ‘process’ level?• Without guidance, a cost and pricing ‘smorgasbord’ will result…….so there is a need to
provide structure• The structure must facilitate each unique Offering……..provide direction not prescription
Concept• Standardize the offering OLM reporting requirement………..including Resource Unit (RU)
cost and price • Standardize the Financial Management (FM) methodology that delivers OLM reporting
and decision making information• Enable the ‘owner’ level to have cost & price build capability……..with the details
‘interfacing’ into the standard FM file structure
Solution• Use the existing CSC New Business Finance (NBF) files and methodology to provide
information structure, standardization and direction to enable a consistent financial output and OLM performance level
Purpose – Inform on ‘Standard’ Cost & Pricing ‘Capture’
5
Portfolio Management
Deliver BC / Updates
Prepare BC / Updates
Plan
Conceive
Cost & Pricing ‘Capture’: Conceptual Overview
Financial Management
PRC File (Pricing / Revenue)
CST Cost File
FM File
(Financial P & L)
Financial Overview
Offering Cost Management
Infra structure /
BOM
Third Party
CSC Allocation
CST Cost File
Offering Specific ‘Back End’
Preparation’
NBF Files:Interface to the OLM Standard
Process
Offering Price Management
Resource Units
Target Market
Target Price
PRC Price File
OLM Standard ‘Front End’
Delivery
Offering Lifecycle Management
Portfolio Management
Portfolio Strategy
Portfolio Optimization
Portfolio Realization
G2G1 G4G3 G6 G7G5G0
Early Adopters
Launch Offering
Scope Offering
Generate Business
Case
Develop Offering
OptimizeOffering
Retire OfferingConcept
6
Cost Model
Pricing Model
Finance Pricing
OLM Project Cost
Project Manager
Market Launch Operate
Early Adopter Operate
Billing (RU’s) WBS Structure
Project Costs
Early Adopter Revenue
Market Launch
Revenue GeographyIndustry
OrganisationPortfolio
Offering LineOffering
SAP Reporting & Performance Management
Record & Report
PerformanceMetrics
Create Legal & Commercial Framework
Legal Commercial
Supply Chain Alliance Partners
Investment Request
Investment Request
Financial Justification
Financial Justification
OLM Finance Overview
G2G1 G4G3 G6 G7G5
Scope Offering
Generate Business
Case
Retire Offering
Develop Offering
Early Adopters
Launch Offering
Optimize Offering
Gate 1Exec
Presentation
Gate 2Exec
Presentation
Gate 3Exec
Presentation
Gate 4Exec
Presentation
Gate 5Exec
Presentation
Gate 6Exec
Presentation
Gate 7Exec
Presentation
Offering Manager
Finance, Sales &
Marketing
Preliminary Business
Assessment
InvestmentRequest
PortfolioStrategy
Offering Metrics
Create Cost & Pricing Framework
Sales & DeliveryPerformance Management
Pipeline Management
NBF BC Models
CST
FM PRC
Sales & Marketing
Delivery
Performance Management
Financial Justification
Early Adopters& New
Customers
NBF Deal Models
CST
FM PRC
Business Case Business Case Business Case Business Plan Business Plan Retirement Plan
CSC Proprietary and Confidential 7
OLM NBF Model
OLM Model Versions
8
• Manual – using limited files to support direct input of cost / revenue• Direct input of Market price & volume to derive Revenue• Direct Input of cost details to derive Total Cost (inc. Overhead)
• Basic – using CST (cost) file(s) to supplement the ‘Manual’ version• Option to Use NBF CST (cost) file(s) to provide cost• Option to use Model ‘Fee’ based ‘mark up’ to derive Revenue
• Standard ***– using the full suite of NBF models• Option to use alternative cost summary file• Option to use additional files to derive bundled component item
prices
*** It is recommended that the additional functionality of the ‘Standard’ NBF model suite is only used with the support of an NBF team member
OLM NBF Model Versions
9
OLM NBF File Overview: Manual Version
Rates File
Input Required:
• Offering Name• Duration
• Country Location• $ Rate
Conversion
‘Manual’ Entry File Set:
• Rates File• FM File
• PRC File
FM File PRC File
Input Required:
• None
Input Required:
• Manual File Selection
• Price / Volume OR
• Revenue• Cost Summary
Financial Summary
Cost & Revenue Details
Standard Financial Output:
Executive Presentation Summary
10
OLM NBF File Overview: Basic Version
Rates File
Input Required:
• Offering Name• Duration
• Country Location• $ Rate
Conversion
‘Basic’ File Set:
• Rates File• FM File
• PRC File• CST File (For Replication)
FM File PRC File
Input Required:
• None
Input Required:
• Revenue / Cost File Use Selection
• Price / Volume OR
• Fee Based Revenue
• Cst Cost File(s) Link
Financial Summary
Cost & Revenue Details
Standard Financial Output:
Executive Presentation Summary
CST File(s)CST File(s)
CST File(s)CST File(s)
Input Required:
• Cost details ‘Mapped’ to
Standard CSC Cost Categories
Capital Summary Cost Summary
Cst File Replication
11
OLM NBF File Overview: Standard Version
Rates File
Input Required:
• Offering Name• Duration
• Country Location• $ Rate
Conversion
‘Standard’ File Set:
• Rates File• FM File
• PRC File• CST File (100)
• Advanced Analysis Files
FM File PRC File
Input Required:
• None
Input Required:
• Revenue / Cost File Use Selection
• Price / Volume OR
• Fee Based Revenue
• Cst Cost File(s) Link
Financial Summary
Cost & Revenue Details
Standard Financial Output:
Executive Presentation Summary
CST File(s)CST File(s)
CST File(s)CST File(s)
Input Required:
• Cost details ‘Mapped’ to
Standard CSC Cost Categories
Capital Summary Cost Summary
Cst Files (100 Available)
CCS_CURR File
PRC Unit Price
Volumes Master
Alternate Cost View
Advanced Pricing / Offering Breakdown – Contact NBF Team
in the USReview Detail
PRC Extract / Analysis
Files
CSC Proprietary and Confidential 12
OLM NBF Model
Cost Construction:
Cost Framework
13
Establish the cost ‘framework’ for the Offering under consideration
Cost Framework
• How we intend to deliver the Offering,the work activities involved and the associated risks
• Explanation of the value to be delivered by the Offering
• Consideration of the OLM project development costs to establish operating capability
• Operating and Technical assumptions which ‘drive’ the underlying cost base
• Businesss activity estimates for ‘run and maintain’ to support investment decisions
• The specific service & support levels required for the product / service / capability / solution
• The impact of Changes over time arising from productivity or technical improvement
14
Establish the Cost Detail ‘Foundations’ for the Offering
• How are we going to perform the work?• Who? (CSC vs. subs) How organized?• When? Over what timescale?• How? (What processes and tools?)• Where? (Consolidation? Remote support? “Your place or mine?”)• How can we leverage strategic relationships?
• What service levels will we be held to?• What? How measured? When?
• Who is responsible for what?• Operationally? • Financially?
• What OLM Project support is required for set up / transition
• What is the Capital structure• Capex / Opex• Lease / Buy / Utility• Hardware / Software
Cost Detail
vs.
CSC Proprietary and Confidential 15
OLM NBF Model
Cost Construction:
Using CST Files
16
A means of defining CSC capital and operating costs in a standard format for ease of reference, consolidation and evaluation in support of effective commercial decisions
• The NBF Model Suite is capable of handling up to 100 individual CST cost files
• The Model Suite comprising a series of linked excel files which support the consolidation of cost, both capital and operating, together with a means to derive a cost+ fee based revenue total which collectively enables a standardised view of Financial information to be established:
• Profit & Loss Account• Balance Sheet• Cash Flow Forecast• Investment Decision Metrics (OI, ROI, IRR, NPV)
• The Model Suite contains Overhead, both Operating and Corporate, Commissions, Royalties, and Commissions costs to ensure alignment with the requirements for actual Financial Reporting
• Regional or Local entities are catered for via a specific ‘Rates’ file for FX rate determination (to $) and local condition overhead and fee rates
CST Cost File - Outline
17
“Cost Model” – Three required types of input…
CST Cost File – Spreadsheet Structure
Source data option:
“Feeder” files?
Direct Input?
Offering Mgt. decide
Headcount / Salary
Cost Element
Detail Capital Expense
…Mapped onto Standard CSC
Cost categories…….
18
CST File - Cost Model Sheet – Element Detail
9293
9495969798
99100101102103104106110111112113114118119122123124128129132133134135136137138139140141
142
A B C D E F G H I J K L M
yellow Input to these cells is the responsibility of the estimator. All other cells are computed by this model.
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7Heads from "Headcount" Section 22.2 20.5 17.3 15.9 16.1 0.0 0.0Avg Salary from "Headcount" Section 57 58 59 60 61 0 0Direct Labor 1,257 1,184 1,019 955 987 0 0Fringe Rate 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00%
Total Labor 1,533 1,444 1,243 1,165 1,204 0 0Other Employee Related - Training 28 24 21 22 22 0 0Other Employee Related - CSC PC Support 23 19 17 17 18 0 0Other Employee Related - Business Travel 75 64 56 57 59 0 0Other Employee Related - Type 4 0 0 0 0 0 0 0Hardware Lease - Type 1 0 0 0 0 0 0 0Software Lease - Type 1 0 0 0 0 0 0 0Hardware Purchase Expense 6 5 4 4 4 0 0Software Purchase Expense 109 114 120 125 132 0 0Hardware Maintenance - Computers 188 171 161 172 175 0 0Hardware Maintenance - Printers 69 58 49 52 53 0 0Hardware Maintenance - Terminals 0 0 0 0 0 0 0Software Maintenance - Type 1 193 492 540 592 278 0 0Software Maintenance - Type 2 (No Inflation) 0 0 0 0 0 0 0Outside Services - Moves/Adds/Changes 0 0 0 0 0 0 0Outside Services - Remote/Dedicated Desktop Support 0 0 0 0 0 0 0Outside Services - Disaster Recovery 0 0 0 0 0 0 0Subcontractor 1 0 0 0 0 0 0 0Subcontractor 2 0 0 0 0 0 0 0Facility (office space) 23 21 18 17 18 0 0Facility (machine space) 0 0 0 0 0 0 0Facility (power & cooling) 0 0 0 0 0 0 0Taxes except sales tax on Capital 90 154 188 219 211 129 97Network - Data Services 0 0 0 0 0 0 0Network - Voice Services 0 0 0 0 0 0 0DCeS Allocation Per Desktop 7 7 8 8 9 0 0Other - Type 2 0 0 0 0 0 0 0Other - FINANCE USE ONLY 0 0 0 0 0 0 0LOS Allocation GIS 101 101 103 104 97 25 10
Total Direct Cash Expenses 2,443 2,675 2,526 2,555 2,279 154 107
Hardware Maintenance - Type 1 = ($A$2) * (1-G280) * G$187
19
CST File - Cost Model Sheet – Cost Element Cell
Hardware Maintenance - Type 1 = ($A$2) * (1-G280) * G$187
Price Performance factor
from RATE file
do NOT delete
Inflation Index factor
from RATE file
do NOT delete
Overwrite $A$2
Your Link to the estimate:
Feeder File?
Direct Input?
“Computers” more informative than “Type 1”
Automatic Model adjustment for Inflation and Price inclusion driven by type of expense and
linked Rates file for the Region / Location
20
CST File Standard Cost Model
File a
File c
File b
“CST_x”
Option 2: One or more separate “feeder” CST_ files
Mainframe
Midrange
Desktop
Servers
Applications
Option 1: Extra worksheets in a Single “CST_” file
Network
Help Desk
Account Management
Each Portfolio / Offering uses its own customized approach to “feeding” the CST-file……..
……but alignment of cost to the Resource Unit (RU) to be billed is advantageous and provides greater transparency
21
CST File Structure – Example
Sample Mapping of Cost Pools to “CST” Files – determined by Offering Portfolio Mgt, and solution leads at start of costing process
22
• Cost Model (Prime – The key bridge between Costing and Pricing)• Primarily linked from the customized supporting models• May be some manual input of key parameters• Established in ‘local’ currency
• CCS Local: Summary by Element of Cost (‘Cost Model ‘Mirror’ Image)• Formula driven - except “Monthly Volumes” which must be input / linked by user
• CCS is “Local Currency” converted to bid currency (Automatic via Rate-file)• CCS$ is “Local Currency” converted to $ (Automatic via Rate-file)• Depreciation
• Capital from Cost Model sheet, Depreciation Methods from RATE file• Completely driven by formula (No input required)
• Transition Summary• Seldom used anymore; transition is typically a separate model
CST File – Standard Cost Model Structure
Arrangement of the standard worksheets
CST Excel File extract
23
• We need this level of “insight”• Cost element expenditure by year• Capital purchase plan• Staffing summary by
• Offshore
• Onshore
• Vended labor
• Equivalent “allocated” labor
CST File - Standard CST Consolidation Summary (inside the PRC File)
Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Heads 0.00 0.00 0.00 0.00 0.00
Average Salary 0.000 0.000 0.000 0.000 0.000
Direct Labor 0 0 0 0 0 0
Fringe Rate 0.00% 0.00% 0.00% 0.00% 0.00%
Total Labor 0 0 0 0 0 0
Other Employee Related 0 0 0 0 0 0
Hardware Lease 0 0 0 0 0 0
Software Lease 0 0 0 0 0 0
Hardware Related 0 0 0 0 0 0
Software Related 0 0 0 0 0 0
Hardware Maintenance 0 0 0 0 0 0
Software Maintenance 0 0 0 0 0 0
Outside Services 0 0 0 0 0 0
Facility 0 0 0 0 0 0
Taxes 0 0 0 0 0 0
Network Charges 0 0 0 0 0 0
Other 0 0 0 0 0 0
Total Cash Operating Cost 0 0 0 0 0 0
CAPITAL EXPENDITURES
Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
New EDP Equipment 0 0 0 0 0 0
Used EDP Equipment 0 0 0 0 0 0
Desktop Equipment 0 0 0 0 0 0
Distributed Equipment (Servers, UNIX) 0 0 0 0 0 0
Telecom Assets - Data 0 0 0 0 0 0
Telecom Assets - Voice 0 0 0 0 0 0
Other Computing Asset (a) 0 0 0 0 0 0
Other Computing Asset (b) 0 0 0 0 0 0
Software Assets 0 0 0 0 0 0
Transition 0 0 0 0 0 0
TOTAL CAPITAL 0 0 0 0 0 0
Network
Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Heads 0.00 0.00 0.00 0.00 0.00
Average Salary 0.000 0.000 0.000 0.000 0.000
Direct Labor 0 0 0 0 0 0
Fringe Rate 0.00% 0.00% 0.00% 0.00% 0.00%
Total Labor 0 0 0 0 0 0
Other Employee Related 0 0 0 0 0 0
Hardware Lease 0 0 0 0 0 0
Software Lease 0 0 0 0 0 0
Hardware Related 0 0 0 0 0 0
Software Related 0 0 0 0 0 0
Hardware Maintenance 0 0 0 0 0 0
Software Maintenance 0 0 0 0 0 0
Outside Services 0 0 0 0 0 0
Facility 0 0 0 0 0 0
Taxes 0 0 0 0 0 0
Network Charges 0 0 0 0 0 0
Other 0 0 0 0 0 0
Total Cash Operating Cost 0 0 0 0 0 0
CAPITAL EXPENDITURES
Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
New EDP Equipment 0 0 0 0 0 0
Used EDP Equipment 0 0 0 0 0 0
Desktop Equipment 0 0 0 0 0 0
Distributed Equipment (Servers, UNIX) 0 0 0 0 0 0
Telecom Assets - Data 0 0 0 0 0 0
Telecom Assets - Voice 0 0 0 0 0 0
Other Computing Asset (a) 0 0 0 0 0 0
Other Computing Asset (b) 0 0 0 0 0 0
Software Assets 0 0 0 0 0 0
Transition 0 0 0 0 0 0
TOTAL CAPITAL 0 0 0 0 0 0
Midrange
Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Heads 0.00 0.00 0.00 0.00 0.00
Average Salary 0.000 0.000 0.000 0.000 0.000
Direct Labor 0 0 0 0 0 0
Fringe Rate 0.00% 0.00% 0.00% 0.00% 0.00%
Total Labor 0 0 0 0 0 0
Other Employee Related 0 0 0 0 0 0
Hardware Lease 0 0 0 0 0 0
Software Lease 0 0 0 0 0 0
Hardware Related 0 0 0 0 0 0
Software Related 0 0 0 0 0 0
Hardware Maintenance 0 0 0 0 0 0
Software Maintenance 0 0 0 0 0 0
Outside Services 0 0 0 0 0 0
Facility 0 0 0 0 0 0
Taxes 0 0 0 0 0 0
Network Charges 0 0 0 0 0 0
Other 0 0 0 0 0 0
Total Cash Operating Cost 0 0 0 0 0 0
CAPITAL EXPENDITURES
Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
New EDP Equipment 0 0 0 0 0 0
Used EDP Equipment 0 0 0 0 0 0
Desktop Equipment 0 0 0 0 0 0
Distributed Equipment (Servers, UNIX) 0 0 0 0 0 0
Telecom Assets - Data 0 0 0 0 0 0
Telecom Assets - Voice 0 0 0 0 0 0
Other Computing Asset (a) 0 0 0 0 0 0
Other Computing Asset (b) 0 0 0 0 0 0
Software Assets 0 0 0 0 0 0
Transition 0 0 0 0 0 0
TOTAL CAPITAL 0 0 0 0 0 0
Desktop
ooo
Each tower feeds data to its
summary matrix in its own manner
CST ‘Tower’ selection in PRC File enables Cost Consolidation to align with RU Pricing………
CSC Proprietary and Confidential 24
OLM NBF Model
Cost Construction:
10 Commandments
25
1. Use the current version of the Cost Model and always start with a “Clean” model
2. Submit the number of models agreed to by Pricing Lead and Solution Lead, and use the agreed-to model names
3. Link to the correct Rate-file
4. Do not hard-code inputs if possible – link to source data wherever possible
5. Do not add or delete rows / columns from the CCS sheets or “Cost Model” sheet
6. Assumptions matter. Document them, and do not wait until the end
7. Understand the “Core” portion of your service, and the incremental portion.
8. Understand how the Financial Responsibility Matrix relates to your solution and cost models.
9. Volumes must be consistent throughout the Offering forecast period, and easy to update and validate.
10. Always quality-check your work before submitting and always submit your supporting work as well as Cost Models to Pricing & Offering management
10 CommandmentsS
olut
ion
Mec
hani
cs
26
• Where can you get the current version of cost models?
The OLM NBF Suite of Models can be downloaded from the OLM Catalyst site – See Financial Analysis Section
The Finance Management (FM) File which is a prerequisite file for the correct use of these models is a protected file and is only available to Finance personnel. See instructions on the site for access to this protected file
1. Use the current version of the Cost Model and always start with a “Clean” model
27
• Emphasis will be on fewer Cost Models per stage of the project /’tower for ease of handling:• No need for one Model per Pricing Unit
• No need for one Model per CSC Catalog Service
• Each Cost Model can accommodate multiple Priced Services and/or catalog services.
• BUT: ENSURE THAT THE COST DETAILS ALIGN WITH THE DEFINED RESOURCE UNITS FOR THE OFFERING THAT ARE TO BE PRICED WHEREVER POSSIBLE
• Submit the agreed-to number of Cost Models, and consistently use the agreed-to Model names• Do not add “version” numbers to the end of Cost
Model names. (Version control can easily be maintained be embedding dates and versions in a directory structure)
• Changing names or submitting more models than requested adversely impacts the Pricing process.
2. Submit the number of models agreed to by Pricing Lead and Solution Lead, and use the agreed-to model names
DISTRIBUTED COMPUTING EQUIPMENT VOLUME WORKSHEETHeaders, Descriptions, and Calculations
Year 1 Year 2 Year 3Device Type Designation
PC Desktops - Standard 12,514 12,514 12,514PC Desktops - VIP 100 100 100PC WkStationsPC DesktopsPC Laptops - StandardPC Laptops - VIPPC LaptopsPC LaptopsPrinters - B&W NW AttachedPrinters - Color NW AttachedPrintersTerminals(custom device type)(custom device type)TOTAL Computers Yes 12,614 12,614 12,614TOTAL Printers No 0 0 0TOTAL Terminals No 0 0 0TOTAL Custom Devices No 0 0 0
TOTAL Devices to be shown 12,614 12,614 12,614
Costing Input Cells
Equipment Volumes
This Offering had separate: DT, LT, Wkstn, Printer, IMAC models.
• Five used, one needed.
28
• Controlled by NBF on a Global Basis
• Each “CST-file” must be linked to its required “RATE-file”
• Each Offering ‘may’ have multiple RATE-files if ‘component products / services / capability / solution cost construction is widely dispersed
• RATE-file controls cost factors such as those shown
3. Link to the correct Rate-file
OverheadsGroup and Divisional OHCorporate G&AOverhead on Subcontractor 1Overhead on Subcontractor 2Overhead on Offshore India LaborOverhead on Secondary Low Cost Center Labor
InflationOnshore Labor InflationInflation on Offshore India LaborInflation on Secondary Low Cost Center LaborODC Inflation
TaxesProperty Tax - Client SiteSales Tax on CSC Purchases - Client SiteSales Tax on Leases - Client SiteSales Tax on Maintenance - Client Site
Price Performance FactorsMaintenance Price PerformanceSoftware Lease (IBM) Price PerformanceSoftware Maint (ISV) Price Performance
29
• Hard-coding makes validating input data more difficult – adds to churn.• Source data seldom flows to only one destination – by linking to the source data,
updates can be made once.• It is very easy, in the heat of development / validation / presentation / update to
forget all of the places where numbers have been hard-coded
4. Do not hard-code inputs if possible – link to source data wherever possible
30
• These standard sheets feed the standard PRC (Pricing) models.• However, adding additional worksheets to Cost Models (as backup), or linking
additional workbooks to Cost Models, is not only fine, but sometimes a very good idea in order to link to source data – see Item 4
5. Do not add or delete rows / columns from the CST ‘CCS’ sheet or “Cost Model” sheet
31
6. Assumptions matter -document them - and do not wait until the end of the development process
Technical CostIntegral to Offering
These align with Technical material (LTM / PTM / LSM etc) and ‘drive’ the underlying cost structure of a
technology Offering.
Assumptions intent should be:
“If these are not true, CSC’s derived price may not produce a sufficient
financial return.THEREFORE, they need to be outlined
in the PRC (Pricing) File with an indicator of potential risk of variability”
– Prioritized– Clear, whole sentences– For Client or “CSC only”?
Ideally, included in cost model, but also submitted for consolidation to Solution
Manager for a complete, integrated list.
Identify Financial Risk – checklists are not good enough.
32
• Know what functional services are “Core” to your Offering / Tower (respective cost component that collectively make up the Offering), and understand the client volumes that drive our Target Core Costs.
• Know the sorts of functional services that are non-Core, and be prepared to participate in team discussions around the cost and benefit to the client in order to ensure that the ‘standard’ Offering is appropriately priced
7. Understand the “Core” portion of your service, and the incremental portion.
Sales &Mgmt
PricingTechnicalsolution& costs
33
• Participate in team discussions around which solution elements should be included in CSC’s cost and price, and which should be retained by the client.
• Make sure that your costs align with CSC’s strategy around:
• Resources
• Hardware
• Software
• Consumables
• Facilities
• Network carrier lines
• The inclusion of additional Offerings from a variety of Portfolio’s within a ‘Bundled’ Offering
8. Understand how the Financial Responsibility Matrix relates to your solution and cost models.
34
• Very often (but not always) volumes will be dictated by the client / market evaluation in a Pricing / Market Strategy
• Volumes in models must tie to our forecast Offeringv olumes, and if our solution volumes differ from the ‘market expectations’, we must be:
• Clear with the Portfolio Management about what we’ve changed, and why
• Consistent internally• Please summarize the key volumes in your model in Row 65 of the CCS Local
worksheet.
• For example, sum of all PCs, sum of all Server instances
• Break down volume to align with CSC price points if at all possible - don’t necessarily sum all volumes in the model (ie, a volume that includes both PCs and IMACs is meaningless)
• Providing these volume links exposes the possible price points for the Offering and enables appropriate pricing / valuable analytic analyses , system set up and contract management details for the Offering to be transparent
9. Volumes must be consistent throughout the Offering Cost model, and easy to update and validate.
35
• NBF peer-review our Pricing Tables for all deals. Offerings are no different.. We all need some level of self-review or peer-review before we submit material to CSC executives.
• A good start:• Understanding what drives the core costs for your Tower, and seeing how those costs look
in total and on a unitized basis
– Note: Linking volumes to Row 65 of “CCS Local” will simplify this for you.
10. Always quality-check your work before submitting to pricing, and always submit your supporting work as well
36
• Core Services “P x Q” approach will provide early “Target Guidance” for each Component / Tower and for the Offering in total
• Be clear on what the right level of value-additive services within each Offering is based on the Business Value to the client don’t make it bullet proof if not required
• Knowing the “Target Core” solution elements and costs and properly following the “10 Commandments” will better enable you to validate the alignment of your costs to the Portfolio Offering (and help CSC craft better solutions).
• You will spend:• Less time on the mechanics of modeling and in churning data, and • More time helping CSC build compelling Offerings that clients will value.
……… And finally…..what does success look like……
Sales &Mgmt
PricingTechnicalsolution& costs
CSC Proprietary and Confidential 37
OLM NBF Model
Support Contacts
38
• For further Information or support for the use of this model please contact in the first instance:
• Steve Coxon• [email protected]• +44 (0)7760 494977
• For further information or support for the use of the New Business Finance (NBF) standard templates please contact:
• Victor Smiroldo• [email protected]• +1 703 641 3176 (Office)• +1 571 213 1057 (Mobile)
OLM NBF Model Support
CSC Proprietary and Confidential 39
OLM NBF Model
Thank You