Fujitsu’s management of contingency

COMMERCIAL IN CONFIDENCE © Copyright 2013 Fujitsu Services Limited

Apm Risk SIG Conference

Fujitsu’s Management of

Contingency

Dave Scarbrough

1 COMMERCIAL IN CONFIDENCE

Agenda

Fujitsu

Risk in Context of our BMS

Bids and our business model

Delivery – Projects, Programmes and Portfolios

Summary

Fujitsu’s Management of Risk Contingency


A powerful presence in UK & Ireland

>30 service locations

UK & Ireland CEO: Duncan Tait

FTSE100 company equivalent by revenue & profit

Largest Japanese employer in UK and Ireland

Strength in public sector, financial services, telecoms, retail and mid-market

Revenue: £1.8 billion*

>20,000 servers kept secure &

fully operational 24/365

The first Tier III certified data

centre in Europe

Managing >1 million end user devices

(>2.5 million across Europe)

Europe’s first Gold

Accreditation for data

centre operations

(Uptime Institute)

Manages Ireland’s

first Mobile Virtual

Network

Managing the world’s third

largest Oracle eBusiness suite

Over 14,000 employees

* Revenue figure April 2011

Over 70% of the UK’s

broadband network is built on

Fujitsu infrastructure.

Delivering the UK’s largest private cloud deployment

KEY Fujitsu System Management Centres

Fujitsu Data Centres

Fujitsu Cloud Centres


UK & Ireland customers include…

Private Sector

Government

http://www.whitbread.co.uk/index.cfm


Rank Company

#1 IBM

#2 HP

#3 Fujitsu

#4 Accenture

#5 CSC

#3 in global IT services revenue

2011 IT Services Vendor Revenue.

Source: Gartner, "Market Share: IT Services, 2011" 9 April 2012


Agenda

Fujitsu




Summary



Our Risk Process

Risk is integrated with our BMS and Review Framework

Every Framework review must review the risks


Hierarchical Enterprise Risk Management

UK

Ireland

Contract/Programme/

Service Portfolio

Bids Services CSLC reviews

Account reviews

BU reviews

Governance

Projects

Portfolio reviews

Accounts

Common & big risks

Risks @ this level &

Functional Risks

Business Review

Framework

Flow MTP objectives down

Report risks up

Service Lines,

MFUs, RFAs

&

Communicate

risks down


Agenda

Fujitsu




Summary



Risk Exposure is the overall level of risk (time and money)

calculated across the portfolio of risks

It is a function of the cost of the Reactive Actions (Fallback) not the

value of the contract

Need (reasonable) Max Risk Cost of the Reactive Strategy/Actions

(Fallback) i.e. direct cost not indirect

Use Post-Containment Probability/Impact values (assuming proactive

actions (containments) have ‘worked’ to level they can (i.e. residual

risk)

Contingency is a sum of money allocated above the base

estimate of the Activity

Management decision/judgement about the actual Contingency

allocated

Contingency is judged and held at higher level e.g. Account

Contingency Definitions and Calculations


Understand and manage the risks

Internal Excel macro tool – RiskPro

Automatic calculation of exposure

Assistance to judge contingency

Forecast contingency across contract length by months

Into Oracle Financials

Risk and Contingency in Bids


RiskPro Helps Understand Risk


Fujitsu Business Model

Service Lines – aligned to how our

customers buy IT

Service Lines

Helen Lamb

Business &

Application

Services

Richard Bull

End User

Services

Andy Stevenson

Hosting,

Networks &

Security

Michael Keegan

Technology

Product Group

http://sites.cafevik.fs.fujitsu.com/communities/Sites/10009/Picture Library/RKO 2012/Employee Pictures/Helen Lamb 1.jpg

http://sites.cafevik.fs.fujitsu.com/communities/Sites/10009/Picture Library/RKO 2012/Employee Pictures/Richard Bull 1.jpg

http://sites.cafevik.fs.fujitsu.com/communities/Sites/10009/Picture Library/RKO 2012/Employee Pictures/Andy Stevenson 2.jpg


Allocating Contingency

Contingency is a business judgement based on Risk Exposure:

Probability x Impact Cost (Factored Exposure) across all risks

Biggest single risk

Experience

13


Allocating Contingency 2

Contingency is a business judgement based on Risk Exposure:

Probability x Impact Cost (Factored Exposure) across all risks

Biggest single risk

Experience

14


Conting by Capability with guidelines


Delivery Executive for the contract:

Agrees with Service Line/Capability budget holders their contingency

Judges an appropriate Contingency for the contract

Requests that Contingency from the Bid Approval Review management

Bid Approval Review management judges an appropriate

Contingency for the contract

RiskPro Helps Judge Contingency 2


Agenda

Fujitsu




Summary



On a journey

Delivery Executive for the remainder of contract:

Agrees with Service Line/Capability budget holders their

• Their Contingency forecast

• Any change control to utilise, increase, release/reduce contingency


Requests that Contingency/Changes from the Review management

Review management

Approves any change controls


During Delivery (Project & Programme)


(Risk Process mandatory)

Business level risks harder to financially quantify direct cost

Request a ‘Business Impact’

Expressed in terms of orders, revenue, margin, cost or cash

Financial provision

Business Level Contingency (Portfolio)


Strong Processes

Management Commitment

Risk sits with business doing work

Tool support to judging contingency

Delivery - on a journey

Future:

Learn Lessons

• Judgement v actuals

• Contingency Guidelines by Capability

Management Reserve?

Quantification Analysis?

Summary