Implementing new software for 130 countries

1. Implementing new softwarefor 130 countries Bernard Smith Billing programme manager DHL Western Europe and Emerging Markets

2. Agenda • DHL - Overview • What is the Import Express product? • Why the need for the project? • What were the original objectives? • How the project was managed • What happened? • 9 months post completion what has happened?

3. Agenda • DHL - Overview • What is the Import Express product? • Why the need for the project? • What were the original objectives? • How the project was managed • What happened? • 9 months post completion what has happened?

4. Core Service Offerings • Core Service is to pick up and deliver shipment in the fastest and most reliable way • Particular expertise required in: • Fast decision-making • Relationship-building (customs, security) • IT • Also provide logistics services • Many products available, depending on country of operation

5. Express Services • Express international door-to-door delivery of: • Non-declarable items (eg, documents, invoices, contracts, reports) • Express international door-to-door delivery of: • Declarable items (eg, samples, spare parts, finished products) May have to pay duty at destination • Europe, Asia, the US and Latin America have specific overnight delivery services

6. Special Packaging • Designed for specific types of shipment - for example, • Temperature-controlled packaging that keeps medical shipments cool • Shock-absorbing crating for wine bottles • Jumbo Box (flat fee box, for consolidating numbers of small items)

7. Service Options • Saturday Delivery • Same Day Service • Delivery Duty Paid • Special Clearance Services • Banks & financial institutions

8. Agenda • DHL - Overview • What is the Import Express product? • Why the need for the project? • What were the original objectives? • How the project was managed • What happened? • 9 months post completion what has happened?

9. Import Express product • Import Express allows DHL customers to be billed at Destination for shipments sent by • their suppliers • their staff travelling abroad • anyone else they need to receive shipments from • Customers are quoted a tariff at destination for shipments from 215 countries • Some countries also allow Third country billing

10. Business processing- Outbound • Customers are allocated special account number for IMP shipments (96…) • Many customers require a copy of the DHL paperwork (AirwayBill) before approving the invoice. • DHL offices in the shipping country send data to a central sorting office. • Copy paper work is sent from the shipping country to the Billing country

11. Business processing - Central • Central sorting office maintains tariff for each customer and prices each transaction • The priced transactions are then sent to the billing country

12. Business processing - Inbound • Billing countries identify the IMP shipments and log them. • When the centrally processed file is received the billing departments match the logged shipments to the received data file. • The pricing of the shipments are then checked. • If the customer requires backup paperwork then when it is received from the shipping country it is attached to the Invoice

13. Agenda • DHL - Overview • What is the Import Express product? • Why the need for the project? • What were the original objectives? • How the project was managed • What happened? • 9 months post completion what has happened?

14. Why the need for the project • The IMP business had grown by 20% pa since it was launched in 1995. • Due to the business volumes the central sorting office could not maintain the tariffs accurately • Data and paper transmission is on a monthly cycle which led to 60 m Euros being unbilled in the month of shipment • Reduce the costs of the centralised processing unit, by de-centralising pricing.

15. Agenda • DHL - Overview • What is the Import Express product? • Why the need for the project? • What were the original objectives? • How the project was managed • What happened? • 9 months post completion what has happened?

16. Business Objectives • Top 17 countries to be FT compliant by Q3 2001 • Reduce large revenue accruals for EXB • Improve I/B cash flow by 10% • Reduce errors for IMP • Harmonise O/B and I/B tariff maintenance • Easier account set-up • Replace BNF process • Reduce CB costs

17. Agenda • DHL - Overview • What is the Import Express product? • Why the need for the project? • What were the original objectives? • How the project was managed • What happened? • 9 months post completion what has happened?

18. What did we have to do? • Develop software to enable countries to price IMP shipments locally • Amend billing software to be able to send and receive IMP files weekly • Deploy software to 84 countries • Convert data from centralised tariffs to country tariffs • Change business processes from monthly to weekly cycles

19. But...

20. Number of countries • 130 countries in Europe Africa and Middle East • 16 already had a compliant system • 30 not allowed to sell Import Express product or had single tariff • 84 countries to be deployed • 17 Western Europe • 25 Central and Eastern Europe • 42 Africa

21. Data conversion issues • UK had 552,000 Origin-Destination pricing pairs • Took 5 days to run UK extract!

22. How did we do it • Software built and tested • Developed CBT Training module • Guidelines for implementing in countries • User Guide/Test cases/Project plan • Developed Harmonised procedures • Ran central workshop for top 17 countries • Ran training session in Ivory Coast and Kenya for African countries

23. Country groupings • Large/Medium sized country • Extracted tariffs and converted to new structure • Implemented reporting process • Tracked individual country progress • Visited to discuss planning and to help testing • Small countries • Centralised training • Countries re-keyed tariffs • Tracked volume of countries live/testing • Countries were clustered for communication with region

24. Monthly reporting

27. Agenda • DHL - Overview • What is the Import Express product? • Why the need for the project? • What were the original objectives? • How the project was managed • What happened? • 9 months post completion what has happened?

28. Schedule • Business Objectives agreed - Q1 2000 • Software developed Q2/Q3 2000 • Software tested - November/December 2000 • Software deployed - top 17 - August 2002? • Software deployed Africa/Eastern Europe - Jan 2002 • Frequent Transmission switch on - July 2001 • Centralised Tariffs switched off - December 2001

29. Regional Activities - Plan • IS development - • budget 0.6 man years • Deployment • budget 3.4 man years • web site for the project • CBT on using new tariff tool • Incorporate EXB local modifications in regional s/w

30. Regional Activities - Actual • IS development - • actual 4.3 man years (0.6 budget) • Deployment • actual 4.4 man years (3.4 budget) • web site • (done - but access problem for African countries) • CBT (done - but countries wanted on site training) • Incorporate local modifications in regional s/w • (done e.g. CH rounding, multi-currency tariffs)

31. Country activities - effort • 2000 estimate for deployment • 5.4 man years • Jan 2001 (post beta) estimate • 12 man years • Actual effort • 13.7 man years • Country effort plan actual • sma1l 58 man-days 60 man-days • medium 118 man-days 120 man-days • large 175 man-days 192 man-days

32. Country activities - but • Projects took 2 months longer than planned due to other priorities (Euro, EFSS transition, TI2000) • Tariff extract was difficult • Local modifications in large countries delayed implementation • new Financial Service Center meant that: • EFSS/Country/Region responsibilities unclear • lack of EXB expertise delayed implementation • EFSS transition countries lacked motivation • Difficult to get 100% progress reporting

33. What we will do differently next time • Standard project management - (Prince 2 for countries and region) • Escalate non-reporting of progress • Get planning phase kicked off in advance (even if implementation has to be delayed) • Send African countries documentation on CD • Make sure other impacted departments are pushing their country staff to be involved. • Get dedicated Data Centre resource for technical work • Provide more on site support (if deadlines must be achieved)

34. Agenda • DHL - Overview • What is the Import Express product? • Why the need for the project? • What were the original objectives? • How the project was managed • What happened? • 9 months post completion what has happened?

35. Business Objectives • Top 17 countries to be FT compliant by Q3 2001 • Reduce large revenue accruals for EXB • Improve I/B cash flow by 10% • Reduce errors for IMP • Harmonise O/B and I/B tariff maintenance • Easier account set-up • Replace BNF process • Reduce CB costs

36. Follow up actions • Get countries to bill I/B files within billing month. • Drive out productivity enhancements • Improve ERM functionality e.g. mass update • Harmonise procedures • Upgrade all countries to latest ERM version

37. Overall Business Case

38. Overall assessment • Countries have improved their tariff structure • Quality of Billing has improved but limited financial benefits to date • Cost savings from closing central tariff role were absorbed by project effort • Country efficiency improvements were not large enough to be reflected in reduced headcount. • Why de-centralise tariffs prior to re-centralising?

39. Finally • Any questions?

40. Resourcing • 1 Programmer (data conversion) • 1 Business analyst/trainer • P/T project management • P/T technical deployment support