Bod Draft Kiedaisch V3

Strategic transformation business process redesign and interlock Presenter October 27, 2009

November 6, 2009 PBI Confidential

1

Transforming the Enterprise “Big T” Enterprise Transformation

Transforming the Enterprise

Process Transformation

Changing the Technology Platform

Process Optimization and Standardization

Standardizing Business Processes

Technology Upgrade / Implementation

Transforming Selected Business Processes

November 6, 2009 PBI Confidential

2

Program Evolution Vision

Vision

Strategy

Affordability Model

Strategies & Goals Business Practices & Policies Business Requirements

Operating Model & Business Rules

180 new practices 400 revised policies 5000 business requirements

End-state Architectures

Architecture

(IT, Capabilities, Customer)

Capabilities Roadmap

Planning

Governance

Risk Assessment Business Case

November 6, 2009 PBI Confidential

3

Program Evolution

Strategy

Define Business Practices, Policies & Requirements

Operating Model & Business Rules

Vision Affordability Model

180 new practices 400 revised policies 5000 Requirements

Policy

Leadership Commitment

Leverage

Practice

Output

Workstream

Input

2

1

0

P o lic ie sR e q u ir e d

ID

1

1

2 .1 .1

1

2

2 .1 .2

2

1

5

2 .1 .5

2

1

6

2 .1 .6

2

1

7

2 .1 .7

2

1

8

2 .1 .8

2

1

9

2 .1 .9

2

1

1 3

2 .1 .1 3

2

3

0

2 .3 .0

A s -Is P o lic y

P r o p o s e d P ra c tic e D r iv ec u s to m e r stot h ew e b f o re n dto e n dc a p a b ilitie s ( e .g .,re s e a rc h ,p u r c h a s e p r o d u c ts /s e r v ic e s ,& c u s to m e r s u p p o r t)

2 .1 .0

2

2

P o lic y S u m m a ry D e s c rip tio n

A c tu a lD a teP o lic y P u b lis h e d

1 9 -M a y ItisP itn e y B o w e sp o lic yth a tM a rk e tin g w illc r e a tec a m p a ig n sa n d e v e n tsto d r iv e c u s to m e rstot h ew e bfo re n d toe n d c a p a b ilitie sth r o u g h o u tth ec u s to m e r 's life c y c le . A ll c u s to m e rfa c in g o r g a n iz a tio n sw ill b ere s p o n s ib lefo re n c o u r a g in gc u s to m e r s tog oto th ew e b fo re n dt oe n dc a p a b ilitie sth ro u g h o u tth ec u s to m e r 'slife s c y c le

1 9 -M a y

2 2 -M a y ItisP itn e y B o w e sp o lic yth a ta ll c o m m u n ic a tio n sto c u s to m e rsth r o u g h o u tt h e c u s to m e rlife c y c lefro m a llc u s to m e rfa c in g o r g a n iza tio n sw ill in c lu d eth eP itn e y B o w e sw e b s itea n d re le v a n tlin k sb a s e do nth ety p eo fc o m m u n ic a tio n a n dfo rm a t o fc o m m u n ic a tio n(e le c to n ic ,p a p e r ,p r o d u c t ,e tc ). P itn e yB o w e sp o lic yisth a ta llc u s to m e rf a c in go r g a n iz a tio n sw illc re a tea n d e n s u r eaw e be x p e rie n c eth a tisc u s to m e rfrie n d lya n d d o e sn o te x p o s ein te rn a l c o m p le x itie s .T h ew e b s itew illb ee v a lu a te dr e g u la rly .C o n te n tw illb er e fr e s h e d a n du s a b ilitye n h a n c e m e n tsw illb eim p le m e n te d .

1 9 -M a y

-S im p le-m a k eth em e s s a g ea n d d ia lo g u eu n d e rs ta n d a b lefo rth ec u s to m e r(e lim in a te m a rk e tin g /p ro d u c t/s e r vic e /s a le sja rg o n ;d o n 't re q u ireaP h Dtog e tit) -H e lp fu l-fu llya d d re s sth ec u s to m e r'sn e e d /o b je ctiv e(rig h tin fo rm a tio n ;n oo v e rlo a d ; s o lv eth ep ro b le m ;re le v a n t) -A lte rn a tiv e s-g iv eo p tio n s ;p e rs o n a liz e d ;b ea b letos e rv einy o u rc u s to m e r'sc h a n n e lo f c h o ice -R e lia b le-c o n s iste n to u tc o m e sa ll th etim e , ine v e ryc h a n n e l -E a sy-e a s ytou s ea n d d o(n ou n n e c e ss a ryc o m p le xity ;in tu itiv ed e s ig n ;fe a tu re s ) P itn e yB o w e sw illp r o te c tth ep riv a c ya n d c o n fid e n tia lityo fp e r s o n a lin fo rm a tio n a b o u titsE m p lo y e e s ,C u s to m e rs ,B u s in e s sP a r tn e rs(in c lu d in gc o n ta c tsw ith in C u s to m e r sa n d B u s in e s sP a r tn e rs )a n d o th e rid e n tifia b lein d iv id u a ls .U n ifo r m g u id e lin e sfo rc o lle c tin g ,u s in g ,d is c lo s in g ,s t o r in g ,a c c e s s in g ,tra n s fe r r in g o r o th e r w is ep ro c e s s in gs u c hin fo r m a tio n a s s is tsP itn e yB o w e sto p r o c e s sP e r s o n a l In fo rm a tio nfa ir lya n d a p p r o p ria te ly ,d is c lo s in g ita n d /o rtra n s fe r r in g ito n lyu n d e r a p p ro p ria tec ir c u m s ta n c e s . P itn e yB o w e sm a yc o lle c tp e r s o n a l in fo r m a tio n fro m v is ito rsto P itn e yB o w e s In te rn e tW e bp a g e s .T h ein fo r m a tio nc o lle c te d m a yin c lu d en a m ea n d a d d r e s s e s (p o s ta lo re -m a il),te le p h o n en u m b e rs ,o ro th e rin fo r m a tio nn e c e s s a r ytofu lfill o r d e r s ,p ro v id ere q u e s t e d s e r v ic e s ,o rfo ro th e rP it n e yB o w e sb u s in e s sp u r p o s e s . E s ta b lis h in g u n ifo rm p r o c e d u r e sfo rth ec o lle c tio na n d u s eo fp e r s o n a l in fo rm a tio ninafa ira n dla w fu lw a yw ille n h a n c ec o n s u m e rtr u s ta n dc o n fid e n c ein d e a lin gw ith P itn e yB o w e so n -lin e . P itn e yB o w e sw illd e v e lo pa n dim p le m e n ts p e c ificp ro c e d u r e sre la te dto th e tre a tm e n to fp e r s o n a lin fo r m a tio na n d p riv a c y .T ra in in gm a te r ia lsw ill b e d e v e lo p e d a n dd e liv e r e d toa lle m p lo y e e sw itha c c e s st oo rr e s p o n s ib ilityfo r c u s to m e rin fo r m a tio n .E m p lo y e e sm u s tc o m p le tec e r tific a tio n fo rtre a tm e n to f p e rs o n a l in fo r m a tio na n dp r iv a c ya tle a s ta n n u a lly . In o rd e rto s im p lifya n ds tr e a m lin ep r o c e s s e s ,P itn e yB o w e s w illc r e a teo n e s ta n d a r d iz e dp r o d u c tid e n tifie rfo ra p r o d u c to rs e r iv c ew h ic h w illb ec o n s is te n t a c ro s sm a s te rd a taa n d u tiliz e d b ya llo r g a n iz a tio n s , in c lu d in g th ec u s to m e r .

2 2 -M a y

1 9 -M a y

1 9 -M a y

1 9 -M a y

2 2 -M a y

P r ic in gw illb em a n a g e da n d c o n tro lle db ym a rk e tin g w ith t h eg o a lo fm in im iz in gm a n u a l e x c e p tio n s .

2 6 -M a y

Customer Maturity Model 5

End-state Architectures (IT, Capabilities, Customer)

3

Target Current

2 1

Res po m nd m to en em da tio ai l Vi n fro sit mar C ke m th du all fo tin an e Res ct ne r pr ot w eb g po ed e- he si sa r cu te nd s to as se les st web ss in om fo er m m en rm at es io sa t vi n a M ak ging on Cho e lin os on (non e e Buy lin -P bu e B) p nd from Bu urch le via a fie y vi as Pr a e on ld ov sa ph ide on M line le a cc Ac ake pr s pe e od Rec ount cept paym uc rson t eive in fo term en sele t no rm at s an se ctor le tic ct d e io Rec Con of n an con ions ei du orde d pr ditio As ve ct ef su in se r/s er ns en re -f ie lf -in hip m ce us ld in st al en s er s co st al l an t st at m la tio d us Con n star Ret fort a ur able nd t up ta n ct an w it train PB h d pr ing M re Rec for o du bi ak p la ct eive lli ng e on ce pr bi an line od lli d ng pa pa uct ad ym ym M an ju en en a ge stm t ts Se su e “p ent pp Rec k di os or o rt ta Rec Se ei agno Bu ge refu ve si y ” nd eive e k te re s fo su ac no ch plac r pr pp coun tic nica em o du li es t e of l su ent ct ___% a pp or p ro As sa se Ad fe ort onsi b le f o ss te m pt ty or or M p ro su s ra ak PB pr e al te an od du p po a uc ct rt m tern o di at d re t re us fic iv es gu ca age la at to ll is to io su ry n to imp ch e an ro an ge ex ve Can bu R istin si s en R ce ne es l ew g ag ss po a bu re nd si an em Ac to ness ag ce re en a pt P ar em t th e Part B cu rang en ro t le icip st om em at of en pu e in er su t bl us rv ic ey ad er vo tr ai ca ni te ng fo rP B

0

Rec ei

ve

re

co

Clear Architecture

Con

Capabilities Assessment

Maturity Level

4

Channels & Portals

Planning

Q2

. Fast Tracks (see right)

Logical Layer Scenario Comparison Proposed vs Current ($ Exact) (in millions)

Annual Costs: Capital Investment

Current Year Actual Baseline $ -

$

Yearly Expense - Proposed

$

-

$

Yearly Expense - Current/Do Nothing

$

-

$

Year 1 Year 2 Year 3 Year 4 (3.979) $ (35.218) $ (30.720) $ (13.187) $ (0.050) $ -

(45.109) $

$

-

$

(42.098) $ -

$

Annual Expense Variance favorable/(unfavorable)

$

(0.050) $

(45.109) $

(42.098) $

Incremental EBIT

$

(0.050) $

(33.167) $

(21.549) $

November 6, 2009 PBI Confidential

(29.046) $

Year 5 Thereafter (0.151) $ (0.860) $ (20.926) $

Q3

Care: - Partner/facility consolidation - NA telephony network

(90.046) $

Call Cente (Siebel)

Q4 Service: - Workforce Optimization

Total (84.115)

2011 Q1 OTC: - Standard order - 2 Bills, 2 A/ Rs - 1 collection (platform) Service: - Case Mgmt

Q2

Care: - Universal Ca - Case mgmt IVR: Care self Web: Care se Data: Custome

Phase II ($TBD)

(227.274)

Sales & Mktg : Single PQC $ $ $ Web: -E-com (20.926)merce $ (90.046) $ (227.274) 45.080 -B2B $ 63.670 $ 340.484 $ 394.469 Credit: - Real -time risk -based credit pricing/collections - US MSM exposure -

(29.046) $

OTC: Expand to US Managed, DMT, MVS, Secap Care/OTC: Shutdown legacy processes Web : Technical Support Data: MSM customer, product, offer, pricing IT: Shutdown Unisys, IMS, CIS, SCM legacy, Pathfinder All: Knowledge Base Management Service: Remote diagnostic

Fast Tracks Sales: Sell more on pb.com Sales: Grow Inside Sales Care: Drive customers to myBill OTC: Property Tax OTC: Drive ACH Credit: Collect TINs Service: Shift more tech support to the phone Service: Shift more tech support to the web Supply Chain: Enact Portfolio Management Team (end -of -life)

na

Governance

Roadmap Risk Assessment Business Case

IVR, CTI & Segmentation

Sup -AT -Mu -En -Clo R -Inte F -No

Servic - Fie - Cas Expan Credit Data: IT: Sh

4 Field Sales (Siebel or SFDC)

Simplifying Through Transformation Customer Experience

• Predictable and transparent offerings • One commercial relationship • Convenient, multi channel engagement

• Hardware, software • Service, supplies • Financial Services

Product Transactional Model Servicing Model

Infrastructure

• Simple, standard and cost efficient • Customer choice and convenience • Re-vamped customer oriented practices

• Simple, highly automated transactions • Standard contracts • Common and shared technology

November 6, 2009 PBI Confidential

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Simplifying the Transactional Model through Transformation Customer Experience

Product

Servicing Model

Infrastructure

November 6, 2009 PBI Confidential

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Program Management Model

CORE TRANSFORMATION TEAM

Core Mailing Business Operations

Other LOBs Business Operations

Staff Management

Vendor Management

Business Expertise User experience (Web, Contact Center, IVR)

Consultants

Business & Process Integration Master Data Management

Program Governance Customer Change Management

Business IT Data Telephony

PMO & Governance / Value Realization Quality, Testing & Compliance Employee Change Management & Training

Technology Staff Technology Architecture Telephony Technology Data Cleansing & Conversion

Externally Recruited employees

Information Technology

November 6, 2009 PBI Confidential

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Web Enabled Customer Centered Framework User Experience Marketing & Communications

Discover Service

B2B eCommerce

Sign-Up Buy Order

Support & Service

Activate

Use Service

Pay for Service

Resolve Issues

Stop/ Change Grow

SAAS / On Demand Services

Function

Goals and Benefits

Marketing & Communications

 Life-cycle communications  Optimized selling & marketing  Digital Merchandising & PB Digital Experience  Increased PB wide cross selling  eMail & Community Management  Lower communication cost / contact

B2B eCommerce

 eCatalog Configuration, eCommerce  Enterprise Client Bonding  eSignature & Subscriber Management

 Increased B2B channel revenues  Clean & accelerated order management  Compliance to contracts

 Call Avoidance / Productivity Support & Service  Enterprise Relationship Mgt  Self-service content & knowledge development  Increased customer satisfaction  Self-Service capabilities deployment  Increased A/R velocity, lower print costs, lower collection costs

SAAS/ On Demand

 Develop experience and capabilities to

integrate and deliver new on demand and information based offerings

 New offerings to new segments

November 6, 2009 PBI Confidential

8

Impact

Capability

Reduction in Complexity

Drivers

Price Quote and Configuration

80%

Single Price Quote and configuration engine for all channels

Order Management

60%

Streamlined Order Management systems and processes

Contract Administration

75%

Unified contract creation and maintenance

Billing and Cash Application

80%

Dramatic reduction in number of bills generated and managed

Inquiries

80%

Elimination of systems needed to respond to customer’s requests

Contract Terminations

30%

Reduction in contract systems

November 6, 2009 PBI Confidential

9

Risk Profile Traditionally

At Pitney Bowes

1. Identify 5. Monitor

Talent Change Mgmt.

Realization of Strategic Objectives: Simplification & Globalization Improvements to the Customer Experience

Project

Compliance

Business Risk

4. Operational Mitigate

Culture

2. Assess

Competence Realization of Strategic Objectives: Simplification & Globalization Improvements to the Customer Experience

Data

Technical

3. Assign

Capacity Realization of Strategic Objectives: Simplification & Globalization Improvements to the Customer Experience

November 6, 2009 PBI Confidential

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Key Considerations Realization of Strategic Objectives

Increasing Importance

Simplification & Globalization Improvements to the Customer Experience

Avoidance of Organizational Fatigue Capacity to Deal With Technical Complexity Pace of Financial Costs and Benefits Degree of Organizational Disruption Organizational Readiness for Change

November 6, 2009 PBI Confidential

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Critical Issues to Address

Need for speed!!....and the gravity of history…. Capacity to absorb change...and challenge to drive growth Lack of process expertise...functional view vs. E2E view.. Accountability model…Ownership and empowerment… Global leverage…..how to tap into diverse talent pools….

November 6, 2009 PBI Confidential

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Backup

November 6, 2009 PBI Confidential

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Program Management Model CORE TRANSFORMATION TEAM Tailor & Sell

Business Expertise Order To Cash

Service & Support

Procure to Pay

Manage Finances

User experience (Web, Contact Center, IVR)

Core Mailing Business Operations

Consultants

Business & Process Integration Master Data Management

PMO & Governance Quality, Testing & Compliance Employee Change Management & Training

Vendor Management

Staff Management

Program Governance Customer Change Management

(i.e. Business IT Data Telephony Etc)

Value Realization

Other LOBs Business Operations

Technology Staff Technology Architecture Telephony Technology Data Cleansing & Conversion

Externally Recruited employees

Information Technology

November 6, 2009 PBI Confidential

14

Program Evolution Vision Vision Strategy

Operating Model & Business Rules

400 revised policies 5000 business requirements

P o lic ie sR e q u ir e d Policy

Workstream

Business Practices & Policies

180 new practices

Practice

Affordability Model

Strategies/ Goals

ID

2

1

0

2 .1 .0

2

1

1

2 .1 .1

2

1

2

2 .1 .2

2

1

5

1

6

2 .1 .6

2

1

7

2 .1 .7

2

1

8

2 .1 .8

2

1

9

2 .1 .9

2

1

1 3

2 .1 .1 3

3

0

P o lic y S u m m a r y D e s c r ip tio n

A c tu a lD a teP o lic y P u b lis h e d

1 9 -M a y ItisP itn e yB o w e sp o lic yt h a tM a r k e tin gw illc r e a tec a m p a ig n sa n d e v e n tsto d r iv e c u s to m e r stoth ew e b fo re n d to e n dc a p a b ilit ie st h ro u g h o u tth ec u s to m e r 's life c y c le . A llc u s t o m e rfa c in go r g a n iz a tio n s w illb er e s p o n s ib lefo re n c o u r a g in g c u s to m e r s to g ot oth e w e b fo re n dto e n dc a p a b ilitie s th ro u g h o u tth ec u s t o m e r'slife s c y c le

1 9 -M a y

2 2 -M a y ItisP itn e yB o w e sp o lic yt h a ta llc o m m u n ic a tio n stoc u s to m e r sth r o u g h o u tth e c u s to m e rlife c y c lef ro m a llc u s to m e rf a c in g o r g a n iz a tio n sw illin c lu d eth eP itn e y B o w e sw e b s itea n dr e le v a n tlin k sb a s e do nth ety p eo fc o m m u n ic a tio n a n dfo r m a t o fc o m m u n ic a tio n(e le c to n ic ,p a p e r,p r o d u c t,e tc ). P itn e yB o w e sp o lic yisth a ta llc u s to m e rfa c in g o r g a n iz a tio n sw ill c r e a tea n d e n s u r eaw e be x p e r ie n c e th a tisc u s to m e rfr ie n d lya n dd o e sn o te x p o s e in te rn a l c o m p le x itie s .T h ew e bs itew illb ee v a lu a te d re g u la rly .C o n te n tw illb er e fre s h e d a n d u s a b ility e n h a n c e m e n tsw ill b eim p le m e n te d .

2 .1 .5

2

2

A s -Is P o lic y

P ro p o s e d P ra c tic e D riv ec u s to m e r sto th ew e b fo re n dto e n dc a p a b ilitie s (e .g .,r e s e a r c h ,p u rc h a s e p r o d u c ts /s e r v ic e s ,& c u s t o m e r s u p p o r t)

1 9 -M a y

-S im p le-m a k eth em e s s a g ea n dd ia lo g u eu n d e rs ta n d a b lefo rth ec u sto m e r(e lim in a te m a rk e tin g /p ro d u c t/s e rv ic e /s a le sja rg o n ;d o n 'tre q u ireaP h D tog e tit) -H e lp fu l-fu llya d d re s sth ec u s to m e r'sn e e d /o b je c tiv e(rig h tin fo rm a tio n ;n oo v e rlo a d ; so lv eth e p ro b le m ;re le va n t) -A lte rn a tive s-g iv eo p tio n s ;p e rs o n a liz e d ;b ea b letos e rv einyo u rc u s to m e r'sc h a n n e lo f ch o ic e -R e lia b le-c o n s is te n to u tc o m e sa llth etim e , ine v e ryc h a n n e l -E a s y-e a s ytou s ea n dd o(n ou n n e c e s s a ryc o m p le x ity ;in tu itiv ed e s ig n ;fe a tu re s ) P itn e yB o w e sw illp ro te c tth ep r iv a c ya n d c o n fid e n tia lityo fp e rs o n a lin fo rm a tio n a b o u titsE m p lo y e e s ,C u s to m e r s ,B u s in e s sP a r tn e rs(in c lu d in gc o n ta c tsw ith in C u s to m e r sa n dB u s in e s sP a r tn e r s )a n do th e rid e n tifia b lein d iv id u a ls .U n ifo rm g u id e lin e sfo rc o lle c tin g ,u s in g ,d is c lo s in g ,s to r in g ,a c c e s s in g ,tr a n s f e r r in g o r o t h e rw is ep r o c e s s in g s u c hin f o rm a t io n a s s is tsP itn e yB o w e sto p r o c e s sP e r s o n a l In fo r m a tio n fa ir lya n da p p r o p r ia te ly ,d is c lo s in gita n d /o rt ra n s fe r rin g ito n lyu n d e r a p p r o p r ia tec irc u m s ta n c e s . P itn e yB o w e sm a yc o lle c tp e rs o n a l in fo rm a tio nf ro m v is ito rstoP itn e yB o w e s In te r n e tW e b p a g e s .T h ein f o rm a tio n c o lle c t e d m a yin c lu d en a m ea n da d d re s s e s (p o s ta lo re m a il),te le p h o n en u m b e r s ,o ro th e rin fo r m a tio n n e c e s s a ryto fu lfill o r d e r s ,p ro v id er e q u e s te ds e rv ic e s ,o rfo ro th e rP itn e yB o w e sb u s in e s s p u r p o s e s . E s ta b lis h in gu n ifo rm p r o c e d u re sfo rth ec o lle c tio n a n d u s eo fp e rs o n a l in fo r m a tio n in afa ira n dla w fu lw a yw ill e n h a n c ec o n s u m e rtru s ta n d c o n fid e n c ein d e a lin gw ithP it n e yB o w e so n lin e . P itn e yB o w e sw illd e v e lo pa n dim p le m e n ts p e c ificp ro c e d u r e sr e la te d toth e tr e a tm e n to fp e r s o n a l in fo rm a tio n a n dp r iv a c y .T r a in in gm a te ria lsw ill b e d e v e lo p e d a n dd e liv e re dt oa lle m p lo y e e sw itha c c e s sto o rr e s p o n s ib ilityfo r c u s to m e rin fo rm a tio n .E m p lo y e e sm u s tc o m p le tec e rt ific a tio n fo rtr e a tm e n to f p e r s o n a l in fo r m a tio na n dp riv a c ya tle a s ta n n u a lly . Ino r d e rto s im p lifya n d s tre a m lin ep r o c e s s e s ,P itn e yB o w e sw illc r e a teo n e s ta n d a r d iz e d p r o d u c tid e n tifie rfo rap r o d u c to rs e r iv c ew h ic hw illb ec o n s is t e n t a c ro s sm a s te rd a taa n d u tiliz e d b ya llo rg a n iz a tio n s , in c lu d in gt h ec u s to m e r.

2 2 -M a y

1 9 -M a y

1 9 -M a y

1 9 -M a y

2 2 -M a y

P ric in g w illb em a n a g e da n d c o n tro lle d b ym a r k e tin gw ith th eg o a lo fm in im izin g m a n u a l e x c e p tio n s .

2 .3 .0

2 6 -M a y

Customer Maturity Model 5

Maturity Level

4

Business Requirements

3

Target Current

2 1

End-state Architectures

m m

co

Q2

Roadmap

Governance

Con

re

Channels & Portals

Planning

Risk Assessment

. Fast Tracks (see right)

Q3

Care: - Partner/facility consolidation - NA telephony network

Logical Layer

Sales & Mktg : Single PQC Web: -E-commerce -B2B Credit: - Real -time risk -based credit pricing/collections - US MSM exposure

Scenario Comparison Proposed vs Current ($ Exact) (in millions)

Business Case

IVR, CTI & Segmentation Q4

Fast Tracks Sales: Sell more on pb.com Sales: Grow Inside Sales Care:Year Drive customers to Year 4myBillYear 5 1 Year 2 Year 3 Thereafter $ Property (3.979) $ (35.218) (0.151) $ (0.860) OTC: Tax $ (30.720) $ (13.187) $ $ Drive (0.050) $ACH (45.109) $ (42.098) $ (29.046) $ (20.926) $ (90.046) OTC: Cre dit: Collect $ $ - TINs $ $ $ $ Service: Shift more tech support to the phone $ (0.050) $ (45.109) $ (42.098) $ (29.046) $ (90.046) Service: Shift more tech support to the(20.926) web$ $ (0.050) $ $ (21.549) $ 45.080 $ 63.670 $ 340.484 Supply Chain: (33.167) Enact Portfolio Management Team (end -of -life)

$

Total (84.115)

Yearly Expense - Proposed

$

$

(227.274)

Yearly Expense - Current/Do Nothing

$

November 6, 2009 PBI Confidential

Q3

Phase II ($TBD)

Current Year Actual Baseline $ -

Incremental EBIT

Ca

Care: - Universal Care Agent - Case mgmt IVR: Care self -serve Web: Care self -serve Data: Customer & product

OTC: Expand to US Managed, DMT, MVS, Secap Care/OTC: Shutdown legacy processes Web : Technical Support Data: MSM customer, product, offer, pricing IT: Shutdown Unisys, IMS, CIS, SCM legacy, Pathfinder All: Knowledge Base Management Service: Remote diagnostic

Annual Costs: Capital Investment

Annual Expense Variance favorable/(unfavorable)

Q2

2011 Q1 OTC: - Standard order - 2 Bills, 2 A/ Rs - 1 collection (platform) Service: - Case Mgmt

Service: - Workforce Optimization

$

-

$

(227.274)

$

394.469

Supply Chain: -ATP for quote and -Multi -Location Fu -End to End Order -Closed Loop RMA Returns) -Integrated Invento Forecast & Plan -No touch order pr

Service: - Field & phone sup - Case managemen Expand to Canada: Credit: NA exposur Data: Installed Base IT: Shutdown CICS,

Antenna

Capabilities

ve

(IT, Capabilities, Customer)

Rec ei

Architecture

en

da

Res po nd to em tio ai l Vi n fro sit mar C ke m th du all fo tin an e Res ct ne r pr ot w eb g po ed e- he si sa r cu te nd s to as se les st web ss in om fo er m m en rm at es io sa t vi n a M ak ging on Cho e lin os on (non e e Buy lin -P bu e p ur B) nd from Bu le ch via a fie y vi as Pr a e on ld ov ph sa ide on M line le a cc Ac ake pr s pe e od Rec ount cept paym uc rson t eive in fo term en sele t no rm at s an se ctor le tic ct d e io Rec Con of n an con ions ei du orde d pr ditio As ve ct ef su in se r/s er ns en re -f ie lf -in hip m ce us ld in st al en s er s co st al l an t st at m la tio d us Con n star Ret fort a ur able nd t up ta n ct an w it train PB h d pr ing M re Rec for o du bi ak p la ct eive lli ng e on ce pr lin bi an e od lli d ng pa pa uct ad ym ym M an ju en en a ge stm t ts Se su e “p ent pp Rec k di os or o rt ta Rec Se ei agno Bu ge refu ve si y ” nd eive e k te re s fo su ac no ch plac r pr pp coun tic nica em o du li es t e of l su ent ct ___% a pp p ro or As sa se Ad fe ort onsi b le f ss o pt ty m or or p te su s M ra ak PB ro pr e al te an od du p po a uc ct rt m tern o di at d re t re us fic iv es gu ca age la at to ll is to io su ry n to imp ch e ro an an ge ex ve Can bu R istin si s en R ce ne es l ew g ag ss po a bu re nd si an em Ac to ness ag ce re en a pt P ar em t th e Part B cu rang en ro t le icip st om em at of en pu e in er su t bl us rv ic er ey ad vo tr ai ca ni te ng fo rP B

0

Field (Siebel

15

Field

Transforming the Enterprise “Big T” Enterprise Transforma tion

Transforming the Enterprise    

Process Transforma tion

Process Optimizatio n and Standardiza tion

Technology Upgrade / Implementa tion

Scope: Cross-functional program for paradigm-shift to meet corporate strategic objectives or commitments to Wall Street Leadership: C-Suite Value Realization: Comprehensive business case. Baselines and robust mechanisms to monitor value creation, often with risk-sharing / gain-sharing arrangements Critical Delivery Competencies: Strategy, Program Management, Change Management, Strategic Outsourcing, Process Reengineering, Technology Implementation, Technology Hosting and Support

Transforming Selected Business Processes    

Scope: Optimization of a selected business function(s) with marginal change for interdependent functions Leadership: Selected Functional Leaders and Customer Operations Transformation Executives Value Realization: Robust business case validated against benchmarks Critical Delivery Competencies: Strategy, Program Management, Change Management, Process Reengineering, Technology Implementation

Standardizing Business Processes    

Scope: Standardization of processes (typically on embedded best practices within COTS packages) and consolidation of systems for a selected business function(s) Leadership: Senior Business Managers and IT VPs, with oversight by Group VP Customer Operations and CIO Value Realization: Budget, Schedule, and Functional Specifications Critical Delivery Competencies: Project Management, Change Management, Process Reengineering, Technology Implementation

Changing the Technology Platform    

Scope: Incremental, if any, process change with upgrade or implementation of technology platform Leadership: IT Value Realization: Budget and Schedule Critical Delivery Competencies: Project Management and Technology Implementation

November 6, 2009 PBI Confidential

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Simplifying The Transactional Model Through Transformation Customer Experience

Product

• Predictable and transparent offerings • One commercial relationship • Convenient, multi channel engagement

• Hardware, software • Service, supplies • Financial Services

Servicing Model

Infrastructure

• Simple, standard and cost efficient • Customer choice and convenience • Re-vamped customer oriented practices

• Simple, highly automated transactions • Standard contracts • Common and shared technology

November 6, 2009 PBI Confidential

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Risk Assessment

Talent & Operations

Change Management

Project & Scope

Com

Insufficient

Design does not deliver

Already ambitious

GAA

resources with end to -end business knowledge The business cannot support and sustain a multi -year roadmap (2 - H/H) Multi -vendor staffing model too complex to manage (3 - M/H) Insufficient quantity and quality of talent (4 -H/H) Leadership management chooses to allocate key talent to day -to day business operations rather than transformation (5 -H/M)

desired Customer Experience (8 - M/M) Failure to implement transformational practice and policy changes (9 H/H) Poor execution of employee and customer change management results in lost customers (10 -M/H)

scope continues to expand (11 - M/H) Quality sacrificed for timeline and budget (12 -M/H) Cross -functional governance approach for project not sustained (13 M/H) No capacity for unexpected events (14 - M/M) Too many defects discovered late in the project phases (15 - M/H)

not ad (FASB (16 -

High

-

USP

requir comp M/H)

SO

requir violat

Ban

are im M/H)

Established a Risk Framework

Identified and assessed 108 Business and IT risks Established mitigations actions for all Monitoring 34 H/H & H/M risks November 6, 2009 PBI Confidential

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Potential Impacts

Fi na Pl li an ze e In

Risk

Ho pu m ts e O

Potential Risk

 Bias for speed  Resistance to change-fear of failure  Functional focus

Competence

 Process expertise  Program management  Change management  Technical expertise

Capacity

 Competing initiatives  Staff reductions

Mitigation

 Field Service Equipment Repair

Customer Care – Leasing Customer Care – Billing Customer Care - P-Power Supplies Orders via phone*

Product Support – Hardware Product Support – Legacy Product Support - Software

CRU – Service by Replacment

W

ill

Culture

n

Risk Profile

November 6, 2009 PBI Confidential

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Roadmap (v6.6) ’08-’09 Phase 0 $6.1MM 2008 As-is (OTC) IT Upgrades Flow vision 2009 •Practices •Policies •Reqs. •Roadmap •IT Costing •Web screens

2010 Q1

Q2

. Fast Tracks (see right)

Q3

Q4

Q2

OTC: - Standard order - 2 Bills, 2 A/Rs - 1 collection (platform) Service: - Case Mgmt

Care: - Universal Care Agent - Case mgmt IVR: Care self-serve Web: Care self-serve Data: Customer & product

Q4

2012 Q1

Q2

Q3

Q4

2013 Q1

Phase I ($TBD) Care: - Partner/facility consolidation - NA telephony network

Service: - Workforce Optimization

Phase II ($TBD) Sales & Mktg: Single PQC Web: -E-commerce -B2B Credit: - Real-time risk-based credit pricing/collections - US MSM exposure

OTC: Expand to US Managed, DMT, MVS, Secap Care/OTC: Shutdown legacy processes Web: Technical Support Data: MSM customer, product, offer, pricing IT: Shutdown Unisys, IMS, CIS, SCM legacy, Pathfinder All: Knowledge Base Management Service: Remote diagnostic

Fast Tracks Sales: Sell more on pb.com Sales: Grow Inside Sales Care: Drive customers to myBill OTC: Property Tax OTC: Drive ACH Credit: Collect TINs Service: Shift more tech support to the phone Service: Shift more tech support to the web Supply Chain: Enact Portfolio Management Team (end-of-life)

Other Projects

Q3

2011 Q1

All Mailstream1

OTC -Move lockbox

Supply Chain -Post sale globalization -Increase drop ship capability -Facility consolidation

Supply Chain: -ATP for quote and order -Multi-Location Fulfillment -End to End Order tracking -Closed Loop RMA (Intelligent Returns) -Integrated Inventory, Order, Forecast & Planning -No touch order processing

Included in the CIP

Phase III ($TBD) Service: - Field & phone support re-platform - Case management Expand to Canada: Sales, OTC, Care, Credit, SCM, Service, Web Credit: NA exposure Data: Installed Base, NA material, offer, pricing, NA customer IT: Shutdown CICS, Siebel, and Canadian systems Phase IV ($TBD) OTC: TBD Credit: Global Exposure Web: Expand to EAME Data: Global customer, Care: Global (Phone) material Service: IT: TBD - Global Web Support - Global Knowledge Base

Other Projects, schedule TBD: Web: B2B E-commerce (supplies, ink & toner) Supply Chain: Demand planning OTC: EAME Leasing FASB13

November 6, 2009 PBI Confidential

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Flow Operating Model - Vision Two Bills

Phase I Phase II & III

Current transformation roadmap covers vast majority of business practice changes Exceptions due to missing self-service capabilities in product roadmap and no asset management owner/strategy

November 6, 2009 PBI Confidential

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Framework ORGANIZATIONAL ENABLERS Service Delivery Teams VOE

Sales

Care

VOC

Service

FSS

Collections

Customer Experience

VOP

Global Process Management

Globalization

Darwin

TRANSFORMATION MODEL

PHASED IMPLEMENTATIONS

VOE

MSM Requirements

Listening Posts VOC

GFS

VOC

Cross-BU Globalization

VOP November 6, 2009 PBI Confidential

22

Customer Transactional Satisfaction Structure - 2010 Overall T-Sat Index

STRATEGIC GOAL: CHANNEL SHIFT

Purchase Experience INDEX

Field

Phone

Customer Care Experience INDEX

Field Sales – Equipment and Solutions Field Install – Equipment Field Install – Solutions

Inside Sales New Small Customer phone buying experience Retention

Self Service

New Small Customers Self Install Customer upgrade self install

Web

New Small Customer online buying experience

Technical Support INDEX

Field Service Equipment Repair

Customer Care – Leasing Customer Care – Billing Customer Care - P-Power Supplies Orders via phone*

Product Support – Hardware Product Support – Legacy Product Support - Software

CRU – Service by Replacment

Online billing processes Supplies Orders via web*

Web Self Service Technical Support

November 6, 2009 PBI Confidential

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Risk Assessment Talent

Change Management

Project &/or Business will not have sufficient qualified resources #1 H/H

Inside out design does Scope l becomes not deliver improved CE unmanageable  # 4 M/M  #7 H/H

Failure to implement new practices and Building & managing policies #6 successful, matrixed M/H teams will be difficult ( PB, Bus. Consulting, Data Poor execution of Consulting, Wipro customer and/or org. etc.) change mgmt. #2 M/H  # 5 M/H Loss of key resources both during & after implementation # 3 M/M

Project

Operations

Compliance

Technical

Organizational fatigue USPS reporting SAP will not deliver is driven by a multiand /or /financial promised functionality year roadmap transactions are within required #9 H/H disrupted # 11 timeframe #16 M/H L/H

Quality, timeline & budget targets are not Inability of business achieved or are traded- to operate in a transitional off for one another environment #10  #8 H/H M/H

Proposed technology PB Bank regulations/ architecture will not compliance affected support new PB # 12 L/H business environment #17 M/H

Data

Cleansing, conversion, migration and interim state will be complex #21 H/H

Financial

Benefit not achieved due to reliance on technology alone #19 M/H

Design/execution Focus on data quality negatively impacts wanes after go live financial results resulting in more #20 M/H fragmented environment # 22 M/H

FASB 13 re-write is not supported #13 H/H Wipro business analysis & programming skills are SOX compliance is not achieved # 14 not adequate #18 M/H M/H GSA and other buying contract terms are violated #15 L/M

High level risks have been assessed based on likelihood of occurrence and severity of impact November 6, 2009 PBI Confidential

24

Risk Assessment Approach Risk management methodology utilized by IT and the business for Business Transformation

itor remaining High or um Severity risks

ude risk management as part oject planning activities and off criteria identifying mitigation High and Medium ks

st mitigation Heat Map

Compile list of risk prior experience, le learned, best practi input from stakeho

Assess all risks b likelihood of occu severity of impac

1. Identify

High Severity : H/

5. Monitor

Medium Severity:

Talent Change Mgmt.

Compliance

Business Risk

4. Operational Mitigate

Low Severity: Re

Project 2. Assess

. Assign all risk bracket

. High sev

. Medium

. Low sev

Data

Technical

3. Assign

November 6, 2009 PBI Confidential

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