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Program Mercury Design Overview Sessions Day 2 January 2014

Program Mercury Design Overview Sessions Day 2 January 2014. Overview Sessions - Agenda Day 2. Global Fee Sharing. Opportunity Plan. Opportunity is contracted – pricing plan end up with following parameters : 12,000 NSR 1,000 Expense 10,000 contracted billing amount (Fee & Expense).

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Program Mercury Design Overview Sessions Day 2 January 2014

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  1. Program MercuryDesign Overview SessionsDay 2 January 2014

  2. Overview Sessions - Agenda Day 2

  3. Global Fee Sharing

  4. Opportunity Plan • Opportunity is contracted – pricing plan end up with following parameters: • 12,000 NSR • 1,000 Expense • 10,000 contracted billing amount (Fee & Expense)

  5. Engagement Setup • Start of the enagementsetup in different countries US / AT / UK – No detail plan necessaryat this time. • All engagements will startforthe plan withthe same EAF% fromtheOpportunity. • Sharing group will be „opportunity #“ for actual sharing / „country“ for plan sharing.

  6. Fee Sharing Attributes

  7. Fee Sharing Plan without UK • Start ofthedetailedengagement plan in the US and Austria via MMT. • MMT NSR and Expenses per engagement will be used for sharing purposes in SAP.

  8. Final Engagement Plan Update EAF based on Engagement Plans 2 Update EAF based on Engagement Plans 2 Create Fee Sharing Plan 1

  9. Discretionary on Engagement Level Advised by Opportunity Partner Engagement discretionary 1

  10. Plan Update Based on Actual Billing over Plan Billing Update EAF based on total billingamount 1 Update EAF based on Engagement Plans 1 Redistribution of Sharing Plan tosharinglines 2

  11. Review Metrics and Approve Budget

  12. Metrics Audience • Metrics will be used by all PPEDs with Account, Engagement, Opportunity and/or organizational responsibilities Objective • To provide designated users a personal dashboard which contains the quantitative performance KPIs as defined in Vision 2020 • To provide links and drill-downs to more detailed reporting components which contain underlying information Scope Project benefits • Present metrics aligned with Vision 2020: • TER • Margin • Sales & Pipeline • Provide breakdown and details of metrics to allow a high level analysis • Direct link to other reporting components for further drill-down analysis • Provide PPEDs with multiple roles ability to examine relevant KPIs based on relevant role. • Enable users to view on their opening screen their progression towards their goals for key measures • Globally consistent definition and delivery of new key measures to all stakeholders • Important next step to further drive standardization and improve account reporting

  13. Metrics — Sample Dashboard for Business Unit Leader Option 1: Metrics Details to analyze top 3 accounts for all listed Metrics. Option 2: Global TER breakdown to analyze up to 40 accounts for one specific Metric. Option 3: Global TER Analysis icon to reconcile Global TER to Business Unit TNR. Conceptual wireframe - based on sample data, sums, ratios, etc. are not intended to be correct

  14. Create Engagements and Engagement Structures

  15. Design Features Continuity of Design • One GFIS engagement will convert to one Mercury engagement • Automatic creation of one “general” activity code for each engagement • Functionality to automate creation of pre-defined activity codes based on a combination of engagement attributes (e.g., SL – SSL - Service Code – Country) • Ability to add user defined activities as needed New Functionality • Creation of all external engagements will be initiated through CRM • Multiple engagements can be created from a single opportunity and linked by the Opportunity ID • Engagements will be Interoperable unless restricted based upon legal requirements • Engagements will be linked to two service codes: external and internal • External service code will be used for GTAC purposes and represent services sold to client • Internal service code will represent work effort and drive revenue recognition

  16. Design Features Pre Population Engagement Statuses • Data collected for the Opportunity will be pre-populated during creation of the engagement • Ability to revise some pre-populated information based on engagement specifics • Engagement statuses will be revised and expanded: • Created – allows soft tagging of resources based on probability of win • Released – allows T&E charges, GL charges, billings • Completed Pre-Closing – blocks all transactions (T&E, GL and Billing) • Completed – no transactions allowed • Cancelled – only engagements in created status can be cancelled • Ability to create Time only or Expense only codes

  17. Design Features Budgeting • Each engagement must have its own budget • Ability to aggregate individual budgets through use of Budgeting Eng ID User Defined Fields • Flexibility to customize roll ups through use of attributes for • Budgeting • Reporting • Billing • Ability to revise rollups as needed throughout life of project Reporting • Custom project reporting through use of user defined fields • Project teams can easily define and revise reporting rollups as required • Working with Reporting team to incorporate requirements with future enhancements to the My Portfolio / My Engagements standard reports • Consolidated invoicing through use of Billing Eng ID • Ability to bill across legal entities, countries, regions • Eliminates double counting of revenue from inter-firm invoices Billing

  18. Integrated Process

  19. Engagement Data Pre-Population ** Info Pre-populated **(E) Pre-populated and Editable

  20. Engagement Structure • Special Project • ITRA • Quarterly Review • Tax Provision • Special Project • Quarterly Reviews • FY14 Audit • FY14 Audit • Corporate Compliance • Benefit Plan Audit • Corporate Compliance • ITRA • Benefit Plan Audit • Tax Provision • Mercury Client Mercury - Individual engagements linked by Opportunity ID Current GFIS - Individual engagements linked only by Client ID • Opportunity A • Opportunity Line Item 1 • GFIS Client • Opportunity B • Opportunity Line Item 1 • Opportunity C • Opportunity Line Item 1

  21. ASU Budget Rollup • Budget Eng ID: E-AA00002 Budget Roll Ups • CRM Opportunity • Automatic Budget Roll Up Based on Opportunity ID • Opportunity Line Item - Germany • Automatic Budget Roll Up Based on Opportunity Line Item Benefit Plan Audit E-AA00001 FY 14 Audit E-AA00002 ITRA E-AA00003 Quarterly Review E-AA00004 Tax Provision E-AA00005

  22. Consolidated Invoice • Billing Eng ID: E-AA00002 Consolidated Billing • CRM Opportunity • Opportunity Line Item - Germany Benefit Plan Audit E-AA00001 FY 14 Audit E-AA00002 ITRA E-AA00003 Quarterly Review E-AA00004 Tax Provision E-AA00005 • Engagements that should be billed together in a consolidated invoice are linked through the Billing Eng ID field • Individuals with billing roles on the billing engagement will see inventory detail for all engagements sharing same Billing Eng ID • Billing Eng ID provides ability to bill across legal entities, countries and regions for centralized billing • Eliminates need for inter-firm invoices and eliminates double counted revenue

  23. Customized Reporting Groups • Four user defined fields can be utilized to customize reporting attributes as needed to provide more flexibility for multi-level reporting • Fields must be pre-defined per Opportunity • Objective of the reporting group feature is to identify engagement grouping information not captured elsewhere (e.g., client’s business division, geographic clusters, sectors, etc.) • During engagement creation user will select from drop down list of pre-defined reporting attributes and assign the appropriate attribute to the engagement • Reporting attributes can be revised throughout the life of the global project UBS AG Audit - Reporting Roll Up Investment Banking Corporate Centre Wealth Management CH CH US CH UK UK ADV ASU TAX ASU ADV ASU TAX ASU ADV ASU ASU

  24. Break

  25. Schedule Resources

  26. Spotlight on Resource Scheduling

  27. Resource Scheduling – Integration and Scope • Multi-Resource Scheduling (MRS) integration and scope • Integration between the different processes in Mercury enables the flow of relevant information to MRS to aide in identifying appropriate resources • Process of creating resource demands takes place outside MRS at a point in the opportunity or engagement lifecycle as appropriate • MRS is used to create resource assignments, once a demand has been sent to the tool from PPM • MRS time allocations will be used to manage availability when resources are carrying out activities like training or business development • Resource Schedulers will be able to create demands in PPM and create time allocations in MRS

  28. Resourcing Scheduling — Design Principles Met Globalized Enhanced • One global process to the demand and supply of staffing across the firm for both client facing and CBS staff • Single system and process globally for resource assignment • Global view of resource availability • Single system to request and modify resource assignment • Enables global resource management • Reporting benefits from improved data quality • Improves efficiency and eliminates duplicate entry of information • Ability for resource planners to model using soft tagging • Client servers requesting from opportunity stage • Cross border resource searches • Direct management of resource during maintenance of engagement economics • Direct access to resource schedule where appropriate • Reduced administration associated with resource request process (Resource Scheduler) • Integration between engagement set up, staffing and reporting process • Integration with other global tools • Enables consistency of resourcing data Streamlined Harmonized

  29. Creating a Demand - Design Features • *Creating a demand takes place outside MRS* Creation of Demand • Integration with MMT will allow Client Servers to enter their resourcing requirements when pricing or creating an engagement budget • Requests when pricing will support resourcing of opportunities • Resourcing information entered in MMT can be high level (e.g. resource rank) or low level (e.g. a specific named individual or a skill set) • This information will automatically populate the relevant fields in PPM preventing re-keying, and creating the demand, which is passed to MRS • There will be no approval workflow included in this process

  30. Creating an Assignment - Design Features Suitable Resource Search Requesting Named Resources Assignment Status • Integration with GHRS, My Competencies and My Development Site • Where data is present in these global tools it will be passed to MRS to support in finding a suitable resource • Possible to view resources globally (where there are no statutory requirements preventing this) • Cross border resources identified need to be confirmed / assigned with the local resource scheduler • Client Servers can specify a named individual to work on their engagement • Named requests will be soft assigned on the MRS planning board • Resources Schedulers will be able to decide if that resource is appropriate in the context of the other demands they are managing • Training will need to educate that naming a resource does not mean they will definitely be assigned • Soft assignments – used to support modelling of resources on the planning board • Hard assignment – used to confirm who will be working on the engagement

  31. Maintaining an Assignment - Design Features • Possible to use assigned hours in MRS to create as a starting point to create an ETC • Possible to pass any changes that relate to resource onto MRS as part of the ETC process • Modifications will be highlighted to Resource Schedulers in their demand work list Integration with ETC Viewing Schedule • Email notifications can be configured locally to push link to platform to view your own or a colleagues schedule • Email content can be tailored in accordance to SL or Area requirements, if necessary • Individuals with access to manage their own assignments will have a link to make direct changes (to be determine locally) • Where amendments are necessary individuals will need to contact the Engagement Manager or Resource Scheduler

  32. Create/Maintain Resource Assignment — Known Change Impacts People • Resource request will be generated by the engagement team as a part of their engagement set up • Global resource information will be available to resource schedulers • New standardized booking status Process • The proposed solution standardizes the request process globally • Amendments to resourcing requests can be incorporated as part of the Estimate to Complete process, if appropriate Organization and structures • This process designed to fit into any organizational structure either utilizing a local scheduling role, GSS or direct access for individuals Technology • Single source of data will results in elimination of existing databases  • Supports IT architectural strategy by integrating with global tools only Culture • Introduction of this process will change the method of requesting staff for client servers • Current state there is a lot of variation in the way resources are managed – MRS will impact this from a tool perspective Policies • Currently no global policy for creating assignment

  33. Lunch

  34. Manage Engagement EconomicsGTH + TER & TNR + GFS + ETC + EAF + Internal Advice + Approval

  35. Basedata

  36. Period 1 • Forecast EAF% column is reflecting color coding in MyEngagements • „Green“ if forecast EAF% > 5% of Planned EAF % • „Yellow“ if forecast EAF% <=5% and >=-5% of Planned EAF% • „Red“ if forecast EAF% < 5% of Planned EAF% • Actual NER is calculated still on Project Plan EAF%

  37. Period 3 • Actual Fees are still calculated on Project Plan EAF% because Forecast EAF% is „green“

  38. Period 4 • Actual Fees are still calculated still on Project Plan EAF% because Forecast EAF% still „green“ or „yellow“

  39. Period 5 • E0001 and E0002 will be changed automatically from system to Forecast EAF% because forecast indicates „high financial risk“ • E0003 and E0004 will still use Project Plan EAF% • All Engagements are move to „Preclose“ status by engagement responsible

  40. Closing Engagement • Project will be moved automatically "in Closing“ status because all Engagements (see slide before) were in „Preclose“. • EAF% will updated based on Actual Fees/Exps and Actual Billing • Further action see „Project Closing“ presentation.

  41. Current GTH/GSS Accounting Models • GTH operates today with at least with 6 different accounting models: • Charged Hour model: Hourly blended GTH cost rate per (sub-) service line and country / (sub-)service line specific multipliers to establish billing rate • Committed Hours model: Fixed price arrangement between GTH and internal customer • Expert model: Hourly cost rate, but calculated on GTH employee specialization (e.g. SAP basis expert, SAP functional expert asf.) • Charged FTE model: annually FTE related cost rate table • Legacy model: Time charges on legacy individual hourly cost rates for GTH usage, if EY member firm is in same country as GTH • Mixed charges model: Combination of charged and committed hour price model

  42. Future State One accounting model for GTH and GSS operations across all services and for all geographies Standardization of accounting model: Generates comparability of all GTH and GSS operation in respect to cost and hours in service lines and geographies Allows fully automated back-office by using standard in-house cash function, interoperability and interfirm billing Focus on GTH/GSS usage possibilities instead of GTH/GSS administration Minimizes GTH and GSS operation cost.

  43. General Model GTH/GSS Description • Calculate one blended cost rate over all GTH locations per sub-service line and employee • GTH employee books time directly on local engagement • GTH employee become “virtual” local employee of engagement country to derive bill rate and generate TER/TNR resp. to avoid blocking rules • Engagement (margin) and local Profit Center (gross margin) will reflect GTH cost rate • Billing from GTH to local profit center will be automatically triggered based on consumed hours (usage of global billing center is ensured) • Legacy employees working for GTH will generate bill automatic invoice between local entity and GTH based on delivered hours • GSS will adopt the same model

  44. GTH Revenue Recognition ModelExternal Projects

  45. GTH Revenue Recognition Model External Project 3 GTH CC to invoice Billing Center Hrs x GTH Empl. Cost Rate (1Hr x USD48 ) Hrs x India Empl. Cost Rate (1Hr x USD52) 1 GTH and India staff charging hours to an External WBS element GTH Hrs x NSR rate of the Country owning the WBS (1Hr x US$100) India Hrs x NSR rate of the Country owning the WBS (1Hr x US$100) 4 2 Billing Center invoice Virtual CC Both GTH and India hours at GTH Blended Rate Virtual CC is a designated CC within a country to centralize GTH transactions India to invoice GTH for staff of Indian Practice Hrs x India Empl. Cost rate (1Hr x INR3,200 =US$52) Billing Center (USD) India CC (INR) GTH CC (USD) Virtual CC (USD) External WBS (USD) 1 2 3 4

  46. Future Solution • Segregation of driver elements for GTER, Margin, TNR and Gross Margin • GTER and Margin should be driven by engagement coding • Service Codes for Service Line reporting • Regional code for Markets reporting • Role code for Performance reporting • Industry code of engagement client for Industry reporting • TNR and Gross Margin should be driven by people organization coding • Cost Center for Flash reporting • Profit Center for P&L reporting

  47. Global TER / TNR Reconciliation Regional/Area/Global Unit Leader TER Analysis

  48. Global TER / TNR ReconciliationMarket Segment Leader TER Analysis

  49. Analytical and Reporting DimensionsMarkets/Services/Industries

  50. Analytical and Reporting Dimensions People Organization • FTE, Chargeable Hours, Utilization will be used for “Flash Reporting”, other KPIs will be used in P&L and B/S)

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