Vuoden toinen tapahtuma sarjassa Business Insight pidettiin 17.3.2016. Jyri Peltoniemi, Lead Enterprise Architect (Finance development), Tieto Oyj aloitti puheenvuorollaan Event Driven Business Planning. Miten suunnitella konkreettiset liiketoiminnan toimenpiteet, joilla päästään strategiassa asetettuun tavoitetilaan? Kuule miten Tieto teki kolmivuotissuunnitelman, jossa jokaisen suunnitellun toimenpiteen vaikutus mallinnetaan ja arvioidaan ennen suunnitelmaan mukaan ottamista. Adaptiven joustavuus tuki mallin kehitystä ja helppokäyttöisyys loppukäyttöä.

1. Public
Event Driven Business Planning
Case Tieto
2016-03-17
Jyri Peltoniemi
Lead Enterprise Architect
Tieto, Finance Development
jyri.peltoniemi@tieto.com

2. © Tieto Corporation
Public
Agenda
• Tieto as Company
• Starting point for development
• New approach for planning
• Prerequisites
• Event driven planning
• Future
2

3. Public
This is Tieto

4. ©Tieto Corporation4
Tieto is the largest company in the Nordics
that provides full lifecycle services in IT, as
well as product development, for private
and public organisations.
Building on our Nordic heritage and values,
we have global capabilities and
a strong presence where our customers
need it – in the Nordics or via global
delivery centres across the globe.
We employ over 13 000 experts in close to
20 countries.
Operating countries
in IT services
in Finland
#1
Among top
players
in telecom R&D
in Europe
in IT services
in Sweden
Among top 3

5. © Tieto Corporation
Financial facts
5
Financial Services 24%
Manufacturing, Retail and Logistics 21%
Public, Healthcare and Welfare 30%
Telecom, Media and Energy 15%
Product Development Services 10%
Managed Services 35%
Consulting and System Integration 27%
Industry Products 28%
Product Development Services 10%
Managed Services 29%
Consulting and System Integration 21%
Industry Products 41%
Product Development Services 9%
EBITbyServiceLine*)
Customersalesin2015:EUR 1 460 million
EBIT margin excl. one-off items*): 10.3%
Tieto’s market position:
Market leader in Finland
Among top 3 in Sweden
Among top 7 in Norway
SalesbyServiceLine
Sales by industry group
*) Excluding capital gains, impairments and restructuring costs

6. How it was?

7. © Tieto Corporation
Internal
TietoFacts
Planning process status was quite low due to scattered tools and
unclear roles
7
Strategic level
(3- 5 years )
Tactical level
(year )
Operational level
(Quarters)
Business
Managers
Finance
Partners
Customer/Delivery
Executives/Managers
Finance
Controllers
TietoPlanningTietoPlanning
TietoFacts
TietoPlanning
TietoPlanning
TietoFacts
What are your
personnel
expenses cost
center xx in Dec-
18?
Internal trade
between Sweden
and India during
Q3-17?

8. New approach for planning

9. © Tieto Corporation
Internal
Target is to have clear roles and adequate toolset for planning
9
Strategic level
(3 years)
Tactical level
(year)
Business
Manager
Finance
Partner
New Customers?
New Offering?
Production plan?
P/L
BS
Cashflow
Cost per FTE?
Capex investment?

10. © Tieto Corporation
Prerequisites for event driven planning
10
Source Data
- Deliveries
- Employees
- Customers
Model
- Offering
- Country
- Role
- Site
- Industry
Tool
- Data input
- Modelling
- Reporting
Operative Accounting (ABC)

11. ©Tieto Corporation11
External Revenue
Effort FTEs
Unit FTEs
Net Sales
Delivery Margin
Gross Margin
Operative Margin Contribution
Margin
Profit Margin EBIT
OPERATIVE ACCOUNTING
INTERRELATED
MEASURES
FINANCIAL
ACCOUNTING
Planning Model
ACT&FC
• Drivers
• Measures
• Scaling
USER INPUT
• Baseline
• Future events
• Scenarios
LONG-TERM
PLAN
BRIDGE TO FA
• Internal trade
• Other
Calculation of
FTEs

12. ©Tieto Corporation12
Planning Workflow
Kick-off
Business Mix, etc. TBD
Define L2 ambition
by Business Mix
Verify and
modify baseline
Plan Future
Events
Build Scenarios
Submit
Scenarios
Review/ Approve
Long-term Plan
TietoLTL2Businessunit
Feedback if ambition
should be changed
Change L2 ambition
Change selection
Create new;
change events

13. © Tieto Corporation
Internal
Role mix as part of baseline for Cost per FTE
13
20162016 2017
Adjustment is done on provider
country/offering portfolio level
Job codes are used for
defining role mix
Role mix change will impact
salary and social costs
1
2
3

14. ©Tieto Corporation14
Plan Future Events
Products Main Activities:
• Identify future event
• Select appropriate template type
• Name the selected template
• Plan the future event by using several
templates
SL (incl.IP):
Plans future events by using relevant template
(pls. see event type specific slides)
IG:
Plans future events by using ‘Generic’ template
(pls. see slide )
SF:
Plans future events by using ‘Generic’ template
Markets
• New Customer
• New Large deal
• Existing Contract ends
• Volume Change
• Divestment
• New Offering
• New Markets entry
• Efficiency
• GDM
• M&A
• Other
CURRENT
CURRENTNEW
NEW
Templates:
Revenue change
Revenue change Country Mix
Sourcing Mix change
Generic
Capex

15. ©Tieto Corporation15
FUTURE EVENT
 Modelling of future actions to evaluate financial outcome
 A set of planned actions to contribute to scenario creation
Manager view on needed
investment
Manager view on
expected new revenue
Model drivers based cost
and FTEs calculation
Manager view on model
drivers if different for the
specific future event

16. ©Tieto Corporation16
SCENARIO
 Baseline and set of selected future events reflecting different scenarios
of a long-term business plan
Manager view on future
events to be selected
Manager view on the need
to plan new future events
and/or change selection of
future events for scenarios

17. ©Tieto Corporation17
Activities for each of SL (incl. IP), IG and
SF:
• Select future events to be included in scenarios
• Evaluate if the defined ambition level will be
reached
• Plan new or revise already planned future
events
• Provide feedback to Tieto LT if ambition levels
should be changed
Build and Submit Scenarios
Future EventFuture Event
SCENARIO 1
Pessimistic
SCENARIO 2
Realistic
SCENARIO 3
Optimistic
Future Event
Future EventFuture EventFuture Event
Future EventFuture EventFuture Event
AMBITION
Difference Difference Difference
BASELINE

18. Future

19. © Tieto Corporation
Support for changes
19

20. © Tieto Corporation
Internal
Baseline for Planning units
20
Input Sheets: ‘Scenario 1’, ‘Scenario 2’, ‘Scenario 3’
Item Prior Year
Current
Year Plan Year
External revenue Data Data Calculation
Growth vs prior year, % Calculation Driver
Delivery costs (total) Data Data Calculation
Delivery margin; kEUR Data Data Calculation
Delivery margin; % Data Data Driver
Operative costs (total) Data Data Input
Operative margin; kEUR Data Data Calculation
Operative margin; % Data Data Calculation
NCV Data Data Calculation
Book to bill Data Data Driver
Head of
Planning Unit
REPORT
Dimensions for input:
• External revenue, book to bill ratio,
delivery margin %:
→Planning unit by Offering for SL
→Planning unit by Key Customer for IG
• Operative costs, kEUR
→Planning unit; offering ‘uncategorized’
1
2
3
4

21. Public
Jyri Peltoniemi
Lead Enterprise Architect
Tieto, Finance Development
jyri.peltoniemi@tieto.com