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    2. 24/11/04 2 Contents UK IT infrastructure challenge UK acquisition and merger profile UK IT infrastructure challenge 2000-200 SSDO DCC project AXA Technology Services Global Company profile

    3. 3 UK IT infrastructure challenge

    4. 24/11/04 4 AXA - UK Growth through Acquisition and Merger

    5. 24/11/04 5 By the late 1990s, UK service delivery had become an amalgam of the remnants of Companies absorbed into AXA

    6. 24/11/04 6 How did we address this complexity..? Procurement cost challenge was trigger Defined a new organisation for Service delivery SSDO project SSDO = Shared Service Delivery Organisation Re-defined multiple functional roles into single groups Re-built our processes based on ITIL Established a new UK organisation called AXA Shared Services Ltd In 2002, this organisation was absorbed into a new Global organisation called AXA Technology Services (more later) Re-focused the various Service Delivery teams into 2 key locations Core funding for SSDO came from a number of key enabling projects one was to rationalise the data centres (a mix of in-sourced and outsourced facilities) What was our sourcing decision....?

    7. 24/11/04 7 Our simplified model implemented through 2000-2002 We insourced data centre hosting and support - Why? Overall strategy for Service Delivery sourcing model was to insource, but streamline Complexity of our infrastructure We had the data centre facilities and skills in both Bristol and Lytham Internal inefficiencies had to be address Operating costs were high Outsourcing was not considered a viable option while we were transforming the organisation Needed to maintain flexibility to the future

    8. 24/11/04 8 The data centre rationalisation & insourcing project - DCC Main focus was on UK MVS mainframe processing located in Lytham St Annes - Ex-GRE in 2 local data centres (hosting target) Andover - AXA Sun Life hosted by Sema Andover - AXA Insurance hosted by Sema London AXA PPP Healthcare hosted and supported by CGEY, Mix of hardware CPUs (IBM/HDS) Mix of storage (IBM/HDS/EMC/STK) Differing versions of the same software and different software performing the same function Different support groups with different processes and standards

    9. 24/11/04 9 DCC (data centre consolidation) project profile Executed thru 2000- 2001 Project cost est. (OTC) 4.5m Software changes, supplier contract changes, hardware relocation, project resources (internal & external) Project savings est. (BAU) - 7.5m 3rd party contracts, internal premises savings, resource optimisation, hardware configuration & software contract rationalisation, technical refresh Payback in year Supported and endorsed by business CEOs and CIOs Signed off by Paris CTO (Central Technology Office) Pressure from Paris to host IBM MVS services in Germany

    10. 24/11/04 10 DCC - Key challenges Different availability criteria and SLAs across Customers Needed to standardise on hardware/software to allow us to maximise benefits Network connectivity was complex (you name it we had it, in both protocols and physical hardware) Suppliers had to be briefed on contract breaks Customers agreed at Board level but line managers not bought in Managing the transfer of hardware and services without business interruption (SLA protection) Managing the transfer of knowledge to AXA staff Internally we changed scope of roles of AXA resources External contracts we had to absorb systems knowledge Limited opportunities to carry out what were major systems/process changes project key delivery dates driven by this Change management and prioritisation across 3 disparate customers New business functionality introduction

    11. 24/11/04 11 DCC - Issues during project lifecycle Management of customers expectations Came down to recognition, trust and communication Changes to MVS processor configuration with improved benefits Introduced mid project; technical refresh, bringing planned investment foreword; approval delays caused slippage and re-scheduling Some areas of business recognised staff and managers working on project, so had a level of in-built confidence/trust. And other areas didnt! Final stage was transfer of PPP Healthcare out of CGEY We were over-confident (CEO approval and 2 successes in bag) PPP pushed for micro level detail and extreme testing regime Functional & stress testing Requirement to provide safety net post cut-over Significant negative cost impact internal and external spend DR planning / testing received more focus than we anticipated

    12. 24/11/04 12 DCC - Lessons learned Dont assume Board approval is sufficient to make it happen We assumed this mandate was our over-riding argument to any challenge Too many people with their own agendas We had 3 customers, with significant differences of opinion and different cultures Good stakeholder management essential Be clear where the savings are coming from Who was claiming what savings (we were working in a transforming org) Visibility of benefits to our customers Forecast savings were met but customers did not recognise them on their bottom lines Internal cost/benefits vs. pricing to customer gives different answers Manage your suppliers and start negotiating pre-project They knew the agenda and we paid for it Software contracts need special attention processor configuration changes can cost you millions Manage the service variations they eat into the benefits

    13. 24/11/04 13 DCC - Was Insourcing the right decision..? Consider where this has led us AXA already had an ambition to consolidate data centres from as early as 1998 this has now been a major programme for the past 4 years The research work to establish AXA SSL (SSDO) was costly but the outputs from this project formed the foundations of AXA Tech today Similar, though evolving global organisation model now deployed Common drivers and target areas for generating savings ITIL-based processes and support functions aid integration Would the customer agree Yes at Exec level, where significant savings are being generated But, at line management level, they actually see a hardening of attitudes as we move from informal to formal relationships it is part of the commercialisation process of AXA Tech

    14. 14 AXA Technology Services

    15. 24/11/04 15 AXA Tech Global Company profile (Dec 2003)

    16. 24/11/04 16 AXA Tech profile

    17. 24/11/04 17 AXA Tech Established to co-ordinate IT Service Delivery at a global level, generating savings far beyond anything that can be achieved at local or regional level Has its own P&L within the Group We absorbed local SD organisations from AXAs G5 and formed AXA Tech AXA believes it is big enough to operate its own internal SD Key phases of activity Transition, cost reduction, standardization, service quality, business enabler We have developed a sourcing model that provides a balance between centralisation and outsourcing to support our ambitions We have established key global partnerships IBM mainframe/open systems processors and storage Dell/Getronics desktops and maintenance France Telecom/Equant global backbone & local network provision Office printing Xerox Mass printing - ?

    18. 24/11/04 18 We have the full support of the Board They recognise the significant contribution that AXA Tech makes to the AXA Group Boards strategy, via Cost reduction Drive to global standardisation and efficiencies They are strengthening AXA Techs position in the Group They are increasing the scope of AXA Techs operations to other parts of the AXA Group They are applying similar principles in the areas of Application / Business Systems Development and Maint A combined IT budget The CEO of AXA Tech and the AXA Group CIO have been given joint mandates to reduce IT hardware consumption and reduce the applications portfolio