1 ©2010 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice

Deepak IyerDirector, AIG EPMO

Karen DicksManaging Director, Melillo Consulting, Inc.

AIG case study: improving governance and cost transparency with HP

About the Speakers

• 30+ years of experience in IT

• 20 years in IT management and

management consulting

• Diverse experience spans all aspects

of organizational transformation & the

SDLC including service mgt., ITIL, app.

Dev., QA, release & configuration mgt.,

& process engineering.

• Recognized thought leader for PPM

disciplines

• Expert in all aspects of HP PPM Center

including: solutions, elaborations,

strategic planning & systems integration

Karen Dicks Managing Director

• 12+ years of strategic execution &

change management experience, leading

engagements in manufacturing &

services industries

• Global experience including work in Asia,

Europe and the US

• Managed programs involving Process

Improvement, Shared Service Centers, IT

Governance & Delivery Management,

Supply Chain Management, Performance

Metrics

• Engineering degree from the Indian

Institute of Technology and an MBA in

Finance from New York University

Deepak Iyer Director

AIG Case Study

Session Objectives

• Highlight challenges faced by large multi-business global organizations in

governing & managing ‘business change’

• Describe how we turned things around

•Established cross-functional investment-decision boards

•Institutionalized standard project authorization and control processes

•Consolidated legacy tools into a single environment

•Improved IT cost transparency with an integrated project, resource, and financial

management solution

• Leveraging the strengths of HP PPM Center

•Business intelligence

•Managing IT as a business

•Creating a global IT infrastructure utility

•Rationalizing our application portfolio

•Managing large global programs of work

Challenges

2008 Landscape:Project Management

•Process and Methodology

•Suboptimal focus on ‘planning’

•Numerous inconsistent processes across multiple Business Units

•Governance

•Cross-functional (matrixed) management structure with limited oversight

•Management Information

•Post fact and reactive

•Subjective, with few metrics

•People

•PM & PMOs understaffed

•Under-resourced in required skills

2008 Landscape:

Process & Reporting

Top Business Unit

Initiatives

O&S Savings Program

Remediation Initiatives

OCIO Approval

Process

CAO Approval Process

Business Unit Approval

Process

O&S 2007 Savings

Program

Monthly

Corporate

Reporting

Process

Other

Reports

Business Unit A

Project Tracking

Business Unit B

Project Tracking

Business Unit C

Project Tracking

Other

Lack of consistency

No ability for horizontal or vertical consolidation of enterprisewide data

Multiple systems and processes

High degree of in-house customizations leading to high TCO

2008 Landscape:

Discrete PPM / ITG Environments

Shared PPM Server

Separate PPM 7.1

InstancePLD

Domestic

Life

AIG

Invest-

ments

Separate PPM

6.0 InstanceAIGRS AIGGS

Individual PPM Server

Separate ITG 6.0

InstanceDBG

Multiple Platforms & Tools

No PPM Instance

Ent

Apps -

ERM

Ent

Apps -

Corp

System

Ent

Apps -

eBus-

iness

HSB FSG AIU UGC

Management Objectives

Management Objectives

•Enhance project delivery capability with standard planning and control processes

•Establish effective demand estimation and resource planning processes

•Improve management visibility to global portfolio of proposals, projects and lights-on activities

•Establish and improve IT Cost Transparency

•Comply with accounting / audit requirements •SOP 98-1, AIG 55/ PWC

… and do all of the above at the lowest TCO

Define Standard Processes

4. Tools

HP PPM Center will be the standard tool for Project, Portfolio and Resource

Management and all Business Units will establish a plan by the end of 2008

to adopt the PPM tool

4. Tools

HP PPM Center will be the standard tool for

Project, Portfolio and Resource Management

and all Business Units will establish a plan by

the end of 2008 to adopt the PPM tool

Establish Standard Governance

Structures

Investment Decision Board(Accountable Executives for sub portfolios)

Program Management Office (PMO)

Program Manager

Business Sponsor

Project Manager

PROJECT A

Project Manager

PROJECT C

Project Manager

PROJECT B

PROGRAM

1. PORTFOLIO RECOMMENDATIONS

2. BENEFIT SUMMARIES

3. PROJECT PROGRESS

PORTFOLIO TARGETS

ISSUESSTATUS

COACHING ON VALUE CONCEPTS

PORTFOLIO (s) of INITIATIVESBUSINESS CASES

PROJECTS

DECISIONS

Adapted from The Information Paradox

e.g. AIU Executive Steering Committee,

AIA Strategic Initiatives Steering Group

Strategic Drivers (e.g. Improve Operational Efficiency)

Goals (e.g. Increase Operating Margin to 12%)

BENEFIT UPDATESCFO

1. Validate Financials

2. Adjust Operating Budgets for planned benefits

3. Performance Metrics for Business Goals

PMO Target State

Define Roadmap

5 Disciplines

Project

Visibility and

Oversight

Governance

and

Best Practices

Project Process

and

Risk Mgt

Coaching

and

Mentoring

Communication

and Lessons

Learned

Level 3 Predictive

• PMO oversight

within projects

• Project target

and goal

alignment:

PMO action

recommendations

• Independent and

Objective status

reporting

• Timely project

information

sharing

• Metrics & analysis

dissemination

Level 2 Analytical

• Standard,

repeatable

project

management

processes

• More predictable

project outcomes

• Methodical risk

analysis

Level 1

Administrative

• Provide guidance

to PMs on

policies and

procedures

• Support team

processes

• Collaborate with

project

leadership to

achieve goals

Level 2

Analytical

• Project

organization

model

• Cross project

coordination

• Post-

implementation

reviews with

measurement

and trending

• Establish

steering

mechanisms

• Benefits realization

Level 2

Analytical

• Business case

with benefits

realization

• Disseminate &

deploy AIG

standard practices

• Share knowledge

gained on other

projects

proactively with

PMs

• Multifaceted

project model

Solution

PMO Organizations Staffed

Solution

Define Standard Project Lifecycle

Solution: Standard Tool

Corporate Instance of HP PPM

Project Management

Track & Manage

workplans, issues, risk &

scope change & status

Time Entry

Track time against

projects & support work,

automate consultant

payment via Fieldglass

Project Authorization

Review, prioritize &

approve proposed

project work w/ proper

governance controls

Oper. Demand Mgt

Log, prioritize, approve &

report on tactical, one-

off, KTLO work required

to support products &

services

Program Management

Group & report on

related projects, incl.

milestones, issues, risk,

scope changes, status &

cost

Resource Planning

Understand resource

capacity by role, skill &

location. F/C headcount

demand for proposals,

projects & application

assets

Budgets & Actuals

F/C planned cost for

proposals, projects &

application assets.

Integrate w financial

systems (actual costs)

Interfaces

1. Financial Systems,

FIT, Fieldglass

2. IDM

3. Service Now

4. Quality Center

Management Reporting

Produce status, trend & analytical reports via PPM and Business Objects

Interfaces and Supporting Systems

AIG PPM Requirements Project

PPM System Interfaces v2

AIG Systems Interfacing with HP PPM

InSite Fieldglass Universe

1. Resources acquired for a project

2. Actual time entered/approved for

consultants

HR Systems Universe

HP Quality Center Universe

Requirement: Integrate PPM and HP

Quality Center for defect tracking and

reporting

Financial Systems Universe

Project Costing Universe

Labor Cost

Actuals

Fixed Asset

System(s)

G/L A/P

1

2

PPM Universe

Timesheet

DataProject

Data

Budgets &

Forecasting

Resource

Management

Financial

Management

Data

Blended average

cost rates per

resource per

region per role 3

IDM Data

6

Portfolio

Data

4

7

3

4

Required for Rollout

Resources Acquired for a Project

Extract of PPM Time Data (actual hours

on approved timesheets)

Data feed from PPM with chargeback

details and actual work effort details for

project costing

Data feed to create/update proposals

Data feed to create/update budgets and

project costs

Data feed for Resource Creation and

Maintenance of Roles and Skills

1

2

3

4

5

6

7

Future

HP Quality Center to PPM bidirectional

integration via HP’s Center Management

for Quality Center (CM4QC)

I N T E R F A C E S

Existing Systems

Future AIG Enterprise Systems

Possible Short-term Solution

Multiple SystemsL E

G E

N D

5

Phase 2

Data feed for Resource Creation and

Maintenance of Roles and Skills

Re

co

mm

en

de

d Im

ple

me

nta

tio

n S

tra

teg

y

PHASE ONE

1. Pilot BUs identified

2. Iterative Detailed Design Sessions with

PMO Working Groups Continue (wider

PMO representation, not just pilot BUs)

3. Socialization of Common Process

Framework and Design by AIG PMO

4. Build Cycle for PPM Pilot Deployment

5. Pilot

- Proposal, Project, Time Management

with Limited PPM Financial and Resource

Management

- Short-Term Tactical Solutions until

Data Hub is implemented in Phase 2 for

Labor Costing, Chargebacks, and Time

Normalization

- Rollout to Limited User Community

6. Pilot Review of Functionality and

Configurations

7. Parallel Design and Build of Post Pilot

Functionality

PHASE TWO

1. Configuration Updates from Pilot

Review

2. Configuration of Additional

Functionality

- Project Controls, Assets, Supporting

Demand Requests

- Full Time-Resource-Financial

Management with Data Hub Integrations

and Interfaces

3. Deployment of Pilot Fixes and

Additional Functionality

- Next Wave of BU onboarding

PHASE THREE

1. Onboarding of BUs with complex

migrations from legacy systems.

Proposal Process

Standard Project Management Process

Time Management for Projects

Financial Budget & Benefit Planning

Staffing Profile Role Planning

Project Control Processes

Asset Management, Lights-On Proposal

Supporting Demand Requests for Assets

Resource Pools

Data Hub, Integrations, Interfaces

3rd

Party Reporting System

Elaboration of Previously Deployed

Functionality

Additional Demand Management

Workflow

PPM Process Functionality

2008 2009

Implementation Roadmap Strategy

Su

pp

ort

an

d O

pe

rati

on

al S

up

po

rt R

eq

uir

em

en

ts

PHASE ONE

1. Pilot Groups Will Need (at least) One

Dedicated Onsite PPM Expert Each to

Assist Throughout the Pilot Phase

2. The PMO Working Group Will Need to

Continue to its Work with a Solution

Architect to Manage Design Refinement

3. The AIG PMO will Need to Add 3-4

(Short-Term) PPM-Knowledgeable

Resources to Support PMO Operations*

4. Build Cycle Requires Program and

Technical Project Managers (1 per Work

stream) and 1 Program Executive

5. AIG Needs to Implement an

Organization-Wide Training Program for

PPM**

6. O&S Finance Management Needs to

Provide Short-Term Tactical Solution for

Labor Costing, Chargebacks and Time

Normalization, and a Project Manager.

7. OS& Execs Need to Provide Resource

Classifications and Standard Per-Use

Costs

PHASE TWO

1. Corporate Systems Will Need to

Socialize Support Policies (No Additional

Headcount is Projected Until Mid-2009)

2. Organization-Wide Training Program

Must be in Place

3. AIG PMO will Need to Socialize Project

Controls, Assets and Supporting Demand

Requests Processes (Continue with Staff

Augmented Headcount or Decrease if Full

Time Staff are Hired)

4. A Development Team Must be

Established to Configure Data Hub,

Integrations and Interfaces

5. Financial Policies Must be Fully

Socialized and Adopted

6. Organizational Readiness Should be

Assessed in the AIG PMO and Corporate

Systems by early 2009 for the Next Wave

of Deployment

PHASE THREE

1. Support Organization Fully in Place

2. PMO Staff Reduced to ‘Run-Time’

Organization (estimated headcount: 5

FTEs)

3. Additional Training to Support Rollout

is Available as a PMO Service

Proposal Process

Standard Project Management Process

Time Management for Projects

Financial Budget & Benefit Planning

Staffing Profile Role Planning

Project Control Processes

Asset Management, Lights-On Proposal

Supporting Demand Requests for Assets

Resource Pools

Data Hub, Integrations, Interfaces

3rd

Party Reporting System

Elaboration of Previously Deployed

Functionality

Additional Demand Management

Workflow

Organizational Requirements by Implementation Phase

2008 2009

Notes

* Short Term Staff Augmentation Resources

** Approach Training as a Project and Sub the

Work

Implementation Roadmap Support Requirements

Organizational Capabilities Developed

We Support Global Users 24 x 5

•PPM Support Organization

•COE for centralized app dev, testing & support•Scalable onshore - offshore model with resources in NY & Chennai

•BU resources in regions managing Level 1 Support & Training

•Web based system for submitting & tracking requests

•Centralized PPM license administration for all BUs,

managed by PPM COE

•Hardware Upgrade•More robust architecture for increased user footprint

•Better recovery & DR capabilities

•PPM 8.0 upgrade for multilingual capability

20

Current Landscape – PPM Instance

# of

Users

Project

Mgmt

Project

Authorizati

on

Time

Entry

Program

Manageme

nt

Operational Demand

Resource

Planning

Budgets &

Actuals

Interface

with

Financial &

other

systems

Mgmt

Reporting

Chartis

USA2200

Chartis

SEA700

Chartis

EMEA150

Chartis

UK150

Domestic

Life450

AIGGS 600*

Enter.

App lns200*

Invest-

ments350*

Total 4800

KEYIn Production

In Progress

On Roadmap

Single global repository

* Projected #’s end of 2010.. AIGGS will grow to 2500 users as the global infrastructure utility gets built out

Examples of Our Better Outcomes

Project AuthorizationManagement Visibility to Project Delivery

Problem Statement AIG is a global organization with projects executed across the globe. Multiple levels of approval (country, region, BU, Corporate) would take months to obtain, leading to very low compliance and high incidence of redundant projects

Solution Governance requirements established; approval delegated to local &

regional levels. PPM used as the global repository for initiating proposals & approving

projects. Sr. Mgt. has visibility to pipeline of work

Business

Unit

Project

OrganizationProject Health Scope Budget Schedule Business PPM #

Project

Name

Estimated

One Time Cost

($K)

Approved

Funding

($K)

Actual

To

Date

($K)

Spent

% To

Date

Proj

%

Comp

Total

Cost

-

Forecast

($K)

Forecast

(% of Budget)

Planned

Start

Date

Planned

End

Date

Actual

Start

Date

Estmd.

End

Date

Notes on

Health

AIU

AIU Home

Office Red G  R  R  G  2.009E+09 AIG Travel Systems Re-branding 0 230 219 NA 65% 277 NA Jul-09 Jan-10 Jul-09 Mar-10

The project budget and schedule were extended to

accomodate countries with legal delays impacting

anticipated launch dates through Mar 2010. A funding

request ammendment is currently in process to address

additional costs to the project.

AIU

AIU Home

Office Yellow Y  Y  G  G  200815152 Generation 5 Extended Warranty System 2,421 2,421 2,482 103% 94% 2,482 103% Jan-07 Feb-10 Mar-08 Feb-10

A BCA has been submitted to cover Business CRs,

projected overspend due to extended implementation

timelines and to replace China with India as a charter

country. Project health will remain Yellow until the BCA

is approved.

AIU

AIU Home

Office Yellow Y  Y  G  G  200815718 AIG Travel Assist Corporate Internet Site 1 410 92 9200% 40% 308 30800% Sep-08 Dec-08 Sep-08 Sep-10

Project returned to active status. Analysis of Phase II

Business Requirements and assessment of costs is in

progress.

AIU

AIU Home

Office Yellow G  G  Y  G  2.009E+09

WAATS and TravelNet Reporting Tactical

Enhancements 278 278 229 82% 60% 229 82% Jan-09 Jun-09 Feb-09 Mar-10

Schedule health is Yellow due to the impact of personal

data security and re-branding code changes by the

Production Support team on the dates for UAT.

AIU

AIU Home

Office Yellow G  G  Y  G  2.009E+09 Daily Data for Captive Billing (Client Loss Reporting) 85 85 11 13% 30% 11 13% Jul-09 Oct-09 Aug-09 Feb-10

The project has been re-planned. A revised

implementation date of Jan 26 has been established.

AIU

AIU Home

Office Yellow G  G  Y  G  2.009E+09

Computron Global Upgrade & Version Standardization

Strategy 249 249 125 50% 65% 125 50% Apr-09 Oct-09 Apr-09 Jan-10

Project schedule has been adjusted to account for

additional time required to complete feasibility

assessment and creation of future Gate 2/3 business

case(s) - there is no anticipated impact to either Budget

AIU

AIU Home

Office Yellow G  G  Y  G  2.009E+09 CVV2 - Card Verification Value 2 181 181 165 91% 70% 165 91% Mar-09 Jul-09 Apr-09 Mar-10

Changes of the OS from Solaris8 to Solaris10 and the

move of the development servers from Parsippany to

Ft. Worth caused significant rework and delays.

Project Portfolio as on 01/20/2010Organisation: AIU Home Office

Software Capitalization

Problem StatementAccounting regulations require software capitalization to adhere to guidelines on what portion of the effort is capitalized and what should be expensed. There was no mechanism in place to ensure compliance.

Solution Rollout of PPM time tracking / project management functionality has established an auditable process to ensure compliance with accounting requirements

IT Cost Transparency to Business

Problem Statement

AIG spends $2Bln+ annually on IT. Business had very poor visibility into what they were being charged for projects & lights on activities

Solution

Integrated PPM – FIT solution provides drill down capability into IT spend by project & by application

Managing Global Transformation Programs

Problem StatementAIG has launched global transformation programs across the Claims, Finance, Application Development & Infrastructure. Process & mechanism was required to manage the governance, executive reporting, financials tracking, project & resource management

SolutionWe leveraged PPM’s program/ project/resource management/ time tracking/ multilingual capabilities

Managing Divestiture Transition Support Agreements

Problem StatementAIG has needed to manage an unprecedented divestiture effort over the last 12 months. Divesting business units have continued to use AIG’s services for several months after the deal and a mechanism was needed to measure the effort globally & charge it to the respective units.

Solution

PPM project & time tracking functionality were leveraged to capture the effort and allocate it appropriately

Resource Taxonomy & Labor Analytics

Problem Statement

As the company embarked on strategic initiatives to consolidate IT infrastructure (data centers, resources) and rationalize application spend, management was looking for consistent resource taxonomy across the global organization

Solution

PPM was established as the repository for the resource taxonomy

Application Demand Management / Application Rationalization

Problem Statement

CIOs lacked visibility into ‘lights on’ demand across applications. There was no standard approach to capturing, categorizing and analyzing the information.

Solution

Standard taxonomy for categorizing application demand was defined. Application value/risk scoring criteria were defined. PPM’s demand management & portfolio management functionality leveraged to automate the process.

  Regulatory

3%

  User Training

2%

  Audit & Compliance

1%

  Testing Support (for other

Apps)

1%

  User Workstation and

Hardw are Issues

0%

  Problem Investigation

20%

  User Requests

19%

  Analysis (Other)

26%

  Report Requests

8%

  Job Monitoring

7%

  Rates Maintenance

5%

  Bureau Reporting

5%

  DML (Adhoc)

3%

Lights-On Drill Down

Consultant ‘Procure to Pay’ Process

Problem Statement

Integrated process/ mechanism was established for requesting IT consultants, managing approvals, capturing time and paying vendor invoices.

Solution

Integrated process/ mechanism was established for requesting IT consultants, managing approvals, capturing time and paying vendor invoices through integrated PPM – FIT –Fieldglass solution.

Q&A / Contact Information

Karen Dicks

Managing Director

Melillo Consulting, Inc.

karend@mjm.com

215-378-0696

Deepak Iyer

Director, AIG O&S Enterprise

PMO

deepak.iyer@aig.com

212-770-3258

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