UBS ServiceWorks Vision

ServiceWorks VisionWealth Management US December 15, 2006

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Discussion Topics¨ Current State¨ ServiceWorks

— Vision— Phases— UBS Reference Application – Journal Automation— Benefits— Deliverables— Costs— Project Governance

¨ Appendix

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Current State – Branch ApplicationsConsultWorks contains over 40 service related applications used for client servicing within the Asset Admin theme. The daily routine of entry and tracking of service requests is time consuming and manually intensive. ¨ Business Challenges

— Transactions are easily prone to human errors (i.e., data validation is performed manually)

— Applications are segregated/silo’d

— Tasks are manually intensive (e.g., cutting and pasting, re-keying of data)

— Status of outstanding service requests are difficult to track¨ Technology Challenge

— Current Workflow solution is End-of-Life in 2009/2010

Service Requests

CAI – Client Account Information

CDBA – Client Databsae

Housekeeping

DTC Instructions

EFT/Bill Pay Inquiry

Autopay

Check Request

Fed Fund

Periodic Dispursement

Stk Trf Add – Stock Transfer Add

Stk Trf Bust – Stock Transfer Bust

3rd Party Trf – Third Party Transfer

Check Inquiry - Request

Legal Transfer Inquiry

Check Deposit

Check Request

Sec Over Wire – Security Over Wire

Sec Over Wire (Bust)

Legal Transfer Docs

Journal Entry

Worklist

History

Generic Journal

ACAT – Automated Client Account Transfer

Security Exceptions

Corporate Action Notification

Voluntary Instruction System

Cash Exceptions

History

Security Glossary

Product Database Inquiry

Security Information

Mutual Fund Order Entry

Dividend Adjust Cxl

Cxl Trades – Cancelled Trades

Req Adjust Trade Date

Dividend Adjust

Fund Exchange

Bal Inq – Balance Inquiry

Trans Inq – Transaction Inquiry

RMA Fee Bill

Bal & Payout Info

STAR – Service Trac Action Request

LegendRUMBA (Mainframe)

Web-enabled

- LOA- Screen-prints- FA/Client requests

Client & AccountInformation

Disbursement &Deposits

Journal Entry

Corporate ActionRetirement

Security Info.Money Funds

Administration

4

Current State – WorkflowEach branch application entails its own workflow process. Service request and fulfillment processes frequently require manual intervention and are prone to human errors.

ServiceRequest

BranchApplications

Branch orHome Office Approval

RequestFulfillment

StatusNotification

¨ CSA selects the application that is germane to the service request (SR)

¨ CSA enters the transaction data into the appropriate Branch Application

¨ Branch/H.O. staff reviews the request for approval and approves (or rejects) the SR depending on the results of the review process

¨ Upon approval, the transaction data is re-keyed into the appropriate backend system (depending on the request, this is performed by either branch or H.O. staff)

¨ CSAs manually monitors the SR for status updates

¨ Most CSAs keep a paper version of their pending SRs

¨ CSA wants to perform a bill payment (Bill Pay) request

¨ CSA enters the Bill Pay service request (SR) through STAR

¨ H.O. staff receives and Bill Pay SR and reviews the request for approval

¨ Upon getting H.O. OK, H.O. staff enters the transaction in the Bill Pay/EFT system

¨ CSA has to manually query Bill Pay/EFT system for status updates

Service Request and Fulfillment Processes

Acti

viti

esEx

ampl

e

Service Requests



Housekeeping

DTC Instructions


Autopay

Check Request

Fed Fund







Check Deposit

Check Request



Legal Transfer Docs

Journal Entry

Worklist

History

Generic Journal

ACAT – Automated Client Account Transfer

Security Exceptions


Voluntary Instruction System

Cash Exceptions

History

Security Glossary

Product Database Inquiry

Security Information


Dividend Adjust Cxl



Dividend Adjust

Fund Exchange



RMA Fee Bill

Bal & Payout Info



Web-enabled

- LOA- Screen-prints- FA/Client requests


Disbursement &Deposits

Journal Entry



Administration

STARACAT

Check DisbursementBranchApplications

5

ServiceWorks – Vision

¨ Reduce transaction errors (e.g., cancels, corrections, resubmits, and returns) through data enrichment and enhanced data edits and validations

¨ Reduce reliance on Home Office support staff and improve time and accuracy of transactions by leveraging Straight-Through-Processing (STP) and workflow technology

¨ Decrease training costs and learning curve by creating an intuitive user interface with navigation that is consistent with firm standards (i.e., user interface conforms to or synergistic with Client Experience)

¨ Reduce service request lifecycle time by automating update of backend systems

¨ Simplify the tracking of service requests by delivering an integrated view of all transactions with real-time status

Transition the Asset Admin theme into a multi-tiered service framework to simplify and expedite the initiation, tracking, and fulfillment of service requests between clients, branches, and home office.

ServiceRequest ServiceWorks

Branch or Home Office Approval

Request Fulfillment

StatusNotification

¨ CSA selects a request from a comprehensive and intuitive menu of services

¨ CSA inputs the SR into ServiceWorks, where data enrichment and validation is automatically performed

¨ SR is auto-routed to the correct department based on request type and adherence to appropriate business rules

¨ SR is reviewed for approval¨ Requests flagged for straight

through processing automatically routed for fulfillment without need for manual approval

¨ Upon approval, the appropriate backend system is automatically updated

¨ CSAs have an integrated view of all SRs and their status on a real-time basis

Des

crip

tion

ServiceWorks Theme

Client & Account Information

Disbursement & Deposits

Journal Entry


Security InfoMoney Funds

Administration



Journal Entry



Administration

6

ServiceWorks – Vision (Continued)

Current

Service Request s



Housekeeping

DTC Instructions


Autopay

Check RequestFed Fund


Stk Trf Add – Stock Transfer AddStk Trf Bust – Stock Transfer Bust3 rd Party Trf – Third Party Transfer



Check Deposit

Check Request

Sec Over Wire – Security Over WireSec Over Wire (Bust)

Legal Transfer Docs

Journal EntryWorklist

History

Generic JournalACAT – Automated Client Account Transfer

Security Exceptions

Corporate Action NotificationVoluntar y Instruction System

Cash ExceptionsHistory

Security Glossary

Product Database InquirySecurity InformationMutual Fund Order Entry

Dividend Adjust Cxl

Cxl Trades – Cancelled TradesReq Adjust Trade Date

Dividend Adjust

Fund Exchange



RMA Fee BillBal & Payout Info



Web -enabled

- LOA- Screen-pr ints- FA/Client requests


Disbursement &Deposit s

Journal Entry

Corporate ActionRetirementSecurity Info.Money Funds

Administration

Service Request s



Housekeeping

DTC Instructions


Autopay

Check RequestFed FundPeriodic Dispursement




Check Deposit

Check Request


Legal Transfer Docs


History


Security Exceptions



Security GlossaryProduct Database Inquiry

Security InformationMutual Fund Order Entry

Dividend Adjust Cxl


Dividend Adjust

Fund Exchange

Bal Inq – Balance InquiryTrans Inq – Transaction Inquiry




Web -enabled




Journal Entry



Administration

Service Request s



Housekeeping

DTC Instructions


Autopay

Check RequestFed Fund





Check Deposit

Check Request


Legal Transfer Docs


History


Security Exceptions



Security Glossary

Product Database InquirySecurity InformationMutual Fund Order Entry

Dividend Adjust Cxl


Dividend Adjust

Fund Exchange






Web -enabled




Journal Entry

Corporate ActionRetirementSecurity Info.Money Funds

Administration

Service Request s



Housekeeping

DTC Instructions


Autopay

Check RequestFed FundPeriodic Dispursement




Check Deposit

Check Request


Legal Transfer Docs


History


Security Exceptions





Dividend Adjust Cxl


Dividend Adjust

Fund Exchange

Bal Inq – Balance InquiryTrans Inq – Transaction Inquiry




Web -enabled




Journal Entry



Administration

BranchAppl

BranchApproval

H.O.Approval

RequestFufill’t

StatusNotification

Future

ServiceWorks aims to integrate, automate, and streamline the branch service request and fulfillment processes.

Service Request s



Housekeeping

DTC Instructions


AutopayCheck RequestFed Fund


Stk Trf Add – Stock Transfer AddStk Trf Bust – Stock Transfer Bust

3 rd Party Trf – Third Party TransferCheck Inquiry - Request


Check Deposit

Check RequestSec Over Wire – Security Over WireSec Over Wire (Bust)

Legal Transfer Docs


HistoryGeneric JournalACAT – Automated Client Account Transfer

Security Exceptions


Voluntar y Instruction SystemCash ExceptionsHistory

Security Glossary

Product Database InquirySecurity Information


Dividend Adjust Cxl


Req Adjust Trade DateDividend Adjust

Fund Exchange



RMA Fee Bill

Bal & Payout Info



Web -enabled




Journal Entry

Corporate ActionRetirementSecurity Info.

Money Funds

Administration

BranchApproval

H.O.Approval

RequestFufill’t*ServiceWorks

• Disaggregated set of applications with separate workflows

• Disparate user interfaces• Manual data input (re-keying or cutting and

pasting)• No to minimal data validation• Non-intuitive usage scenarios• Service request tracking and status notification

is not automated

• Uniform user interface (synergy with Client Experience) for service request initiation, approval, and tracking

• Integrated view of all service request and their status on a real-time basis (STAR Replacement)

• Automated service request routing, tracking and status notification

• Advanced data validation and adherence to business rules

• Intuitive usage scenarios• No re-keying or cutting and pasting of data (auto-

update of backend systems)

STAR

ACAT

Bill Pay EFT

Check Deposit

Fed Fund

STAR Replacement

Journal Automation

Bill Pay EFT

ACAT

Fed Fund

StatusNotification



Journal Entry



Administration



Journal Entry



Administration

SRInitiation

SRApproval

SRTracking

Note: * Request Fulfillment involves automation of backend system update

ServiceWorks Theme

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ServiceWorks – PhasesServiceWorks realization is divided into two phases.

Current Phase I

¨ Scoping & Baseline— Conduct Cost Savings

Analysis— Finalize Work Process

Assessment and Project Plan

— Complete business requirements

— Select new Workflow platform

¨ Phase I— Replace STAR— Migrate Journal

Automation— Deliver integrated

view of all Service Requests with real-time status

— Integrate Bill Pay/EFT with ServiceWorks

Autopay

Check Request

Fed Fund





Check Deposit



Generic Journal

ACAT

Dividend Adjust Cxl


Dividend Adjust

Fund Exchange



Housekeeping

DTC Instructions


AutopayCheck Request

Fed FundPeriodic Dispursement



3rd Party Trf – Third Party TransferCheck Inquiry - Request


Check Deposit


Legal Transfer Docs


History

Generic JournalACAT

Security Exceptions


Voluntary Instruction SystemCash ExceptionsHistory



Dividend Adjust Cxl


Dividend Adjust

Fund Exchange



RMA Fee Bill

Bal & Payout InfoSTAR – Service Trac Action Request

¨ Phase II— Implement

targeted changes to front-end of Phase II candidate branch applications

— Implement auto-update of all targeted backend systems

— Emphasize data entry and approval branch applications; not inquiry branch applications

LegendPhase I

Phase II Candidate

To Be Considered Later

Phase II

Bill Pay/EFT

Journal Automation

STAR – Service Trac Action Request¨ 600 individual

tasks

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UBS Reference Application – Journal Automation (JA) JA is a prime example of the overall ServiceWorks methodology. It employs the major components of ServiceWorks – intuitive front-end, workflow technology, and streamlined approval and tracking processes – for Journal processing.

Journal Automation Request initiation Real-time

tracking/status History Request validation

Workflow Enriches data Routes requests Processes Provides metrics

Message Center Alerts Organizes Approvals

Journal AutomationIntuitive Front-end

Interface

Workflow TechnologyRules-based Routing

Workflow Management Engine

Message Center Approval

andWork Center

External Systems + Databases

GJOW, CRDB, etc.

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ServiceWorks – BenefitsClient

ExperienceRisk

Management

CostEfficiency

¨ Reduce labor Productivity gains and potential cost savings from rationalization of people, processes, and systems

¨ Improve customer service through time efficiencies Simple and intuitive user interface

¨ Minimize errors Improve accuracy of client data by leveraging existing sources of data (for data enrichment, validations/edits, rules evaluation/calculations, etc.)

¨ Institute automated control Extract business knowledge from branch staff and codify them into business rules that can be applied across all branch and home office processes

¨ Validate success metrics Enable establishment of targeted metrics for measurement and improvement of branch office administrative processes

¨ Increase client satisfaction Raise internal and external client satisfaction levels

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ServiceWorks – Deliverables

MilestoneTarget

TimeframeScoping¨ Present to EC to gain approval for initial project funding 11/06¨ Business Concept & Prototype 06/07

Baseline¨ Develop Phase I business requirements for ServiceWorks theme, STAR replacement, and

migration of Journal Automation and Bill Pay/EFT06/07

¨ Select Workflow platform* 06/07¨ Present refined Project Budget and Cost Savings Analysis to OC for authorization to

proceed06/07

¨ Formulate Workflow technology migration strategy* 09/07¨ Replace/migrate Workflow platform 02/08

Phase I Implementation TBD¨ Transition Asset Admin theme into Service theme with integrated view of all service requests

and real-time status¨ Incorporate STAR replacement (600 Tasks) into Service theme¨ Migrate Journal Automation and Bill Pay/EFT into Service theme

Phase II Implementation TBD¨ Implement targeted changes to front-end of Phase II candidate branch applications (e.g.,

ACAT, Fed Funds, etc…)

Business Case

Business Scope ISD Scope BRD Final ISD

Estimate

Scoping

Design Development QA Testing Implement-

ation

Baseline Implementation

Note: * “Must do” tasks (irrespective of status of ServiceWorks) because current IBM Workflow platform was announced to be End-of-Life.

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ServiceWorks – Project Governance

Mgmt Support

Kate Newcomb

Project Leaders

Steering Committee

Executive SponsorsOperations

Peter Stipp

ITI

William Pierotti

BCOO US

Valerie Rowland

MT US

Ramon Morales*

ISD

Doug BadeauCIO

Bella Allaire

BCOOTBD

ISDStephen Ferranti

Note: * To be discussed.

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Appendix – Estimated Resource Allocation & Scoping Costs

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Success Criteria (2003) Metrics Achievements Now Proof of Concept Success

Criteria POC & Journal Entry

Completion Future

FTE Savings – Productivity Ops

Re-keying Document review in home

office Many manual approval stops Excessive service calls

Elimination of re-keying Elimination of document review

at HO Reduction of manual approvals Reduction of service calls

10 FTEs x 55,700 = $557,000 Similar types of savings can be achieved with other workflow opportunities and standardization

Time to Market Each application builds workflow layer 3 FTEs x 115,000 = $345,000 20% fewer ISD resources for new

Workflow projects**

Significantly Improved Business Requirements

Many projects overshoot target dates and go beyond original scope

-Proof of concept delivered in 6 months with Specified Resources and no scope creep

Standardized requirements/modeling methodology enhances Business/Technology collaboration

2 FTEs x 115,000 = $230,000 10-15% fewer ISD resources for projects involving modeling**

Branch Productivity Savings

10 minutes (blended) per journal entry

2 minute reduction per journal entry

1.2MM Journals/yr = $950,000 (approx. 0.1 FTE per branch)

Accumulates towards branch savings

Cycle Time Next day standard Same day standard Improved service ROI-based improvements Metrics Limited and disjointed Process transparency: time, cost,

error, bottlenecks, etc. Effective measurement and management

Effective measurement and management

Errors Errors introduced due to re-keying No re-keying Reduced error rate Metric-driven error management

Infrastructure Compatibility 75 legacy systems

Middleware service layer API Bridging Common front-end

Eliminate GJOW 3270 front-end Common platform for service delivery

Business Analyst Role – Modeling/Standardization/Methodology

Captures 50% of document rules sets/process flows

Captures 85% of document rules sets/process flows Captures 95% of documented

rules sets/process flows

Total Savings $2,082,000

** If done under traditional approach to build workflow into JE process, approximately 15 ISD resources are needed

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Appendix – Journal Automation

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JA Usability Feedback from ClientsJournal Automation (JA) has been in all UBS branch offices since November 14th, 2006. Based on our polling and service call interactions, the feedback has been very positive.

“Great job on the entire system - those words weren't said to earn points. As far as any upgrades we have had recently, I feel this is the most improved of any platforms in our system and was done with the end users in mind.” Robert Cairns, Chicago Branch Office

“The “Journal All” [capability] was a great time saving feature.” Marsha Updyke, CSA Omaha Branch Office

“[JA is] User friendly, removes all the extra steps necessary to take with GJOW (opening star cases), It's like a one stop shop for journaling! From a management stand point, it's much easier to train new CSA's on this system.” Xandra Burnette, Virginia Beach Branch Office

“I LOVE the new journal entry system. I haven't had any problems with it. It makes our job so much easier when it come to processing journals.” Cheri Hubble, Farmington Hills Branch Office

“[I] think it's a great system. Very user friendly and a great way to save time. It's exactly what we needed.” Rachelle Zawinsky, Farmington Hills Branch Office

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Journal Automation – Lessons LearnedJA initiative had major issues around delivery, cost, and platform stability. Valuable lessons were learned which will be carried forward to the ServiceWorks project.

Issues

¨ Project management best practices were not followed

¨ JA projected positive ROI based on estimated results from Proof of Concept branches but no validation of results were performed during Pilot

¨ JA application did not meet scalability and performance targets during early pilot deployment

¨ IBM Workflow technology was announced End-of-Life in March 2006 (EOL effective 2010)

¨ Schedule slipped by 18 months due to vendor over-commitment, adoption of new technology, and overly optimistic schedule estimates

Action Taken

¨ Instituted project management process for both business and ISD teams

¨ Defined success metrics and operationalized their data collection and reports production for GA rollout

¨ Re-architected JA application to leverage mainframe CICS resources

¨ Issued RFP to solicit new Workflow technology platform; negotiated $500K credit from IBM for misinformed product recommendation to UBS

¨ Re-evaluated and changed people and processes and put in place new project leaders (Business and ISD). Worked with IBM to rectify scalability and production issues

17

Journal Automation – Production UsageJA is currently deployed to all UBS branches. To date, we have seen a considerable decrease of journal processing and Home Office approval time.

Journal Process Time

05

10152025

Overall Margin CRC Ret. Svcs. Doc. Rev. IS

Proc

ess

Tim

e (H

ours

)

STAR JA*

¨ Overall, the Home Office journal approval time has gone down significantly

¨ The Margin department has seen the largest improvement in journal approval times

Note: * JA process time averaged over the period of 7/17/06 to 10/23/06.

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Journal Automation – Production Usage

JA Production Volume

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

10/23 10/25 10/27 10/29 10/31 11/2 11/4 11/6 11/8 11/10 11/12 11/14 11/16 11/18 11/20 11/22 11/24

Date

Num

ber o

f Sub

mitt

ed

Req

uest

s / J

ourn

als

Requests Count

Journals Count

19

Appendix – Preliminary Screenshots

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Conceptual Mock-up – Service Request Entry

Account information pre-populated

Upfront edits, validations and data enrichment

Custom form generated based on initial search

We envisage replacing STAR with an web-based front-end application that simplifies service request entry through data enrichment and validation.

21

Conceptual Mock-up –Worklist

One worklist tracks all service request types:¨ Status¨ Request type¨ Easy access to retrieve details

ServiceWorks aims to deliver an integrated view of all service requests and their status on a real-time basis.

22

Conceptual Mock-up –Approval Screens

Approval queues with customized folders

Service request approvals to be centrally located and filtered and grouped base on approvers’ entitlements.

Data enriched approval screen provides all data needed to make approval decision

Standardized actions and approval functionality to quickly obtain SLA statistics

Approval data pulled from different systems to provide an integrated view of all information related to the request