PARIS for Participations &
Entertainment Partners for Residuals Outsourcing
Green light deck
February XX, 2013
Agenda
►Executive Summary
►Business Problem Statement
►Inception Phase Status Update
►PARIS for Participations - Assessment
►PARIS for Participations - Project Plan
►PARIS for Participations - Financials
►EP for Residuals Outsourcing - Assessment
►EP for Residuals Outsourcing - Project Plan
►EP for Residuals Outsourcing - Financials
►10-year Cost Benefit Analysis
►Project Funding Needs
Draft for discussion
2
Executive Summary
•
The Participations and Residuals systems are outdated, lack
integrations with key enterprise systems and promote many
manual, in-efficient and error prone processes increasing the
risk of inaccurately paying the Participants and the Talents
(Guilds).
•
The total estimated cost to convert Participations to NBCU
PARIS and outsource Residuals to Entertainment Partners is
estimated at approximately $14.9M.
Draft for discussion
3
Problem Statement – Participations
● Very manual, time-consuming and inefficient
processes are employed for Data Sourcing, Payout
Calculations, Paper copying and filing.
● The OPUS system is not enabled to model participant
contracts, calculate payouts and to directly generate
participant statements. A mix of manual
procedures and excel manipulations are
employed to prepare Talent Statements.
● The volume and type of products and the complexity
of talent deals are ever increasing which results in
keeping up with the statement generation schedule
very difficult. Additional headcounts are
required to keep up with the ever growing
volume of work. To deal with the work load, for
the deals which are forecasted to not pay do not
have statements created (i.e. statements are
“bugged”)
● Upstream data sources lacking governance
and consistency in usage providing data in a form
that lacks the appropriate level of granularity and
attributes. Lack of complete understanding of the
information flowing into and filtered out of the data
feeds into the department.
● Unable to focus on value-add activities (e.g.
breakout projections, proactive buyout assessments,
‘What-if’ analysis, impact assessment & feedback to
Business Affairs across title, market & media types).
Draft for discussion
4
Problem Statement – Residuals
● Very manual, inefficient, and error-prone
processes employed for data sourcing, payout
calculations, guild reporting, paper copying/filing.
● Majority of the data sourcing and systems
feeding is done manually by the clerks which is
error-prone. Data reconciliation processes are
not rigorous and error prone due to human
involvement.
● The volume and type of Products, the complexity of
guild rules along with expansion of the reuse
markets and the manual departmental procedures
results in keeping up with the workload very difficult.
This in turn results in un-recoupable
overpayments, late fees and penalties on the
department.
● The increasing workload and the lack of a system
results in the work being handled by the staff
through overtimes and by outsourcing to third
party providers. This has also resulted in
temporary staff being used permanently.
● Unable to focus on value-add activities (e.g.
projections, analysis for negotiations and ultimates).
● Recurring errors in payouts and the accompanying
claims might strain relations with the Talents.
Draft for discussion
5
Current Challenges and Issues by Area
IT
Audit
Participations
Residuals
•
•
•
•
•
•
•
•
•
Difficult to manage the volume with time-consuming manual calculations
Changes to the guild agreements cannot be accommodated; system is not equipped to support current guild
agreements
Unable to capture pension or pension ceilings so often overpaying or underpaying
Cannot adjust tax rates as the change will be applied retroactively and recalculate all previous statements/payments
Payments are manually tracked on a spreadsheet
Retrieve data from 12 different feeds/sources; input data manually from hard copy reports
Electronic reporting to the guilds and talents requires improvement
•
Difficult to manage the volume with time-consuming manual calculations
Statement generation is manual and very cumbersome; OPUS does not produce “headsheets” or statements,
only the data to support them
18-month limit on detailed monthly data in OPUS; difficult to calculate historical point-in-time data
Spends a significant amount of time responding to queries from other groups; lack any type of estimation/modeling
tools for calculating “what-if” scenarios
No system support for payout calculations for the digital markets, and complex talent deals
•
•
•
Spends a significant amount of time researching data discrepancies, statement adjustments, etc.
System “tricks”, dummy numbers, and manual adjustments (“one-sided entries”) pose risks during audits
Lack of formal checks and balances
•
Residuals system is inflexible and has several system limitations (e.g. field sizes are limited to $99,999) as it was
implemented in the 1960’s
IT support for the Residuals mainframe system is very limited due to aging technology. The team has recently lost
one-half of the IT support team –resources who had been supporting the department for several years. Additional
turnover events (like retirement) will poses serious risks to IT operations and the obsolete technology makes it harder to
find suitable replacements.
•
•
•
Draft for discussion
6
Inception Phase
•
An Inception phase was funded with the primary objective of assessing the functional fit-gap
of NBCU PARIS against SPE requirements and assessing the feasibility of Residuals BPO.
•
Phase Timeline: August 2011 to August 2012
Phase Cost: $949,600
2011
Jul – Sep
2012
Oct – Dec
Jan – Mar
Apr - Jun
Jul - Sep
Data & Interface
Assessment
NBCU PARIS Impact Assessment
PARIS Impact
Assessment Report
Residuals Outsourcing Assessment
BPO Due Diligence
BPO Business
Case
Comparative
Review
•
Executive
Debrief
Phase Scope and Deliverables:








Delivered selection of Software Platform and Operations Model using PARIS for Participations
Delivered Business Case Assessment and subsequent Due Diligence for BPO with Entertainment Partners
Gathered High Level Requirements through Focus interviews and Workshops with key stakeholders
Finalized Overall Project Scope
Developed High-level Project Budget, Schedule and Timeline, Resource Plan (including backfill requirements)
Developed Data Conversion & Migration Strategy and Plan
Developed Data Sourcing & Interface Strategy and Plan
Developed Greenlighting Material for full project funding
Draft for discussion
7
PARIS for Participations - Impact Assessment
Participations module of NBCU-PARIS has a good level of functional fit relative to
SPE’s requirements.
● The Business Process automations delivered by PARIS far exceeds the current automation levels at SPE.
● PARIS capabilities and feature-set for Participations & Audit scored at over 86% and 81% respectively
by SPE stakeholders.
● PARIS provides a strong coverage for most of the requirements.
● The Participations, Data Staging and Audit modules are quite robust, flexible and more mature than the
Residuals module.
● PARIS architected on the latest Microsoft technologies including the .NET framework.
NBCU facilitated 4 sessions with SPE:
•
PARIS overview and orientation
•
Admin features (Data staging and Administration) demo
•
Residuals demo
•
Participations demo
The NBCU demonstrations of PARIS were based on scripted demo scenarios :
•
These scenarios were based on SPE’s high-level functional requirements.
•
The scenarios represented a selection of high- and medium priority processing requirements.
•
Demos were attended by SPE stakeholders across Participations, Residuals, Input Consolidation,
Audit, Finance and IT groups.
Draft for discussion
8
PARIS for Participations - Project Phases
Planning
Implementation
• Impact Assessment
• Hands-on Evaluation
• Conversion planning
•
•
•
•
Installation and Configuration
Development and Integration
System & Parallel Testing
Training and Change management
• Impact assessment
 Requirements
 Functional fit
 Estimates
• Hands-on evaluation
► Early design
► Support model decision
► Refined estimates
• Conversion planning
► Approach and priorities
► Resources and backfill
► Controls and Acceptance
► Planning for Parallel Ops.
• Installation and Configuration
► Data loads (migration)
► Lookups/mappings
► Templates and hierarchies
• Development and Integration
► Interfaces
► Reports
• Testing
► Functional tests
► Parallel tests
• Training and Change management
► Org and process design
Draft for discussion
Conversion
• Participations Conversion
• Parallel Operations
• IT Support
• Participations conversion
• Parallel operations
► Data refreshes
► Porting converted titles
• IT support
► Hypercare
► Systems maintenance
► User support
9
PARIS for Participations - Project Timeline
Years
Quarters
1
1
2
2
3
4
1
2
3
3
4
1
2
4
3
4
1
2
5
3
4
1
2
3
4
Program management/planning
Hands-on evaluation
Implementation model decision
Go Live
Implementation
Hypercare
Participations Conversion
Planning
Conversion
Parallel operations
IT Support
Decommission
legacy systems
Conversion
Complete
Key Estimation Drivers and Project Considerations
● The PARIS Configuration within the Implementation phase is the key design activity to prepare the system for Participations
usage.
● The detail- and research-oriented nature of Conversion makes it the most intensive phase in time and effort. Issues
unearthed demand strong decision making skills and Standard Exception Handling procedures need to be instituted.
● Resource planning and Department alignment is critical to the success of the project. Determining backfill, ratio of SPE-tocontractor resources and regular training will help mitigate the risk of PARIS knowledge being confined to contractors.
● There exists a steep learning curve to PARIS, and the departmental functions will become more analytical and less data entry
/ processing type.
Draft for discussion
10
PARIS for Participations - Project Costs & Benefits Summary
Cost Categories
PARIS License cost
Planning
Costs- $
$3,500,000
$2,539,459
Conversion
$2,550,161
Total
Benefit Categories
Cost Savings
Cost Avoidance
Risk Mitigation and
Improved Controls
Total
Licensing cost for one module
$116,706
Implementation
Equipment Costs
Cost Description
Includes initial allocation for planning,
management
Includes costs for Evaluation,
Installation, Configuration, Development,
Testing & Go-Live
Includes costs for Contract conversion,
Parallel Operations
Includes costs for Hardware, App/Web
Servers, Storage, SW Licenses
$411,000
$9,117,326
Benefits - $
Benefits Description
$200,000
$523,035
$5,000,000
$ - Detail
Savings in Temporary Help Staffing
$200,000
Avoidance of SCA Hosting Cost
$230,535
Headcount Avoidance due to Staff
Efficiency Improvements
Prevention of Over Payments (calculated
at 0.5% error rate)
$292,500
$5,000,000
$5,723,035
Draft for discussion
11
EP for Residuals Outsourcing - Assessment
Entertainment Partners selected as the leading vendor from a Business Process
Outsourcing RFQ concluded in 2012.
A detailed due diligence assessment of the EP proposal was conducted. The
assessment included review of - Organization & Transition approach, Conversion
approach, IT Systems, Timeline and Level of Effort. The goal of the due diligence was
to craft the future state organization for SPE and EP, create the BPO Business Case
and confirm the Pricing.
● EP proposes to completely take over certain functions, including product and cast setup, residuals
calculations and payment processing.
● SPE would retain ownership over interpreting agreements, determining triggers, supporting audits,
forecasting and reporting,
● Improved Data Staging is the key to Productivity gains. Options include – building in-house, leveraging
PARIS, using EP proposed new feeder system (implementation expected in 2013).
● There is a potential to offshore 2 FTEs in the retained organization.
Draft for discussion
12
EP for Residuals Outsourcing - Project Phases
Implementation
Conversion
Transition
Operations
Future State
• Implement Organization,
Processes & Infrastructure
• Import historic data and recreate
balances between SPE & EP
• Business-as-usual interaction
between SPE and EP
Finalize Contracts, SLAs, and KPIs
Define Processes & Controls
Build Data Enrichment Platform
Build Interfaces for triggers &
payments
• Design Organization and Change
Management
• Conduct recruitment for Backfill
and retained Organization
• Build the SPE system sunset
roadmap
• Title/cast setups for 1,442 features
and 52,714(*) episodes
• Revenue and air date history
import
• Reconciliation of historic SPE
payments with EP system results
• Document collection for new
setups
• Review/approval of setups,
triggers and payments
• Audit & forecast support
• New acquisitions processing
• Residual payment processing
• Infrastructure maintenance
•
•
•
•
* = library size as of August 2012
Draft for discussion
13
EP for Residuals Outsourcing - Project Timeline
Months
1
2
3
4
5
6
8
9
10
Process
Transition
• Finalize KPI/SLA
• Review and finalize
MSA
• Finalize new Air
Date vendor
• Confirm final
process design
• Future process
documentation &
desktop
procedures
• Vendor introductions
• Account setups
• Finalize EP client
profile
• User access rights
(hosted environment,
VPO)
Planning and
Administration
11
12
13
15
16
17
18
IT Design & Development
• Build interface for revenue /run
data
• GL interface from EP
• Reports development
• Reconciliation reports
IT Design &
21
22
23
24
Game Shows
Pay Cable /
Video
• Develop and
approve cutover
approach
(business and IT)
• Decommission
transition backfill
Confirm Data Enrichment requirements
Configure Data Enrichment requirements
Develop Data Enrichment rules
Test enrichment rules
Deploy enrichment rules to production
20
Basic Cable
Network / Soaps
Fox
Syndications
Data Staging / Enrichment
•
•
•
•
•
19
Emplo
yee
Master
s
Cutover
Plan
• Finalize transition
plan
• Confirm transition
team
• Obtain resources
14
Data Conversion
EP Client
OnBoarding
Contract
Negotiations
Signed Contract
with EP
7
Other Non Networks
Foreign
Organizational
Transition
• Roles & responsibilities
• Identify skillsets for
retained organization
• Identify key process
Data Enrichment / owners
Staging Complete • Coordination with HR
Initial
(compensation,
termination, recruitment)
• Interview potential hires
• Identify resource
transition plan and
timeline
Development
Complete
Features
Cutover
Data Conversion
Complete
Training
•
•
•
•
Hosted environment
VPO
Conduct future state process training
EP work shadow and knowledge transfer
Project
Closure
Integration Testing
• Revenue
triggers
• Run triggers
• GL feed to SAP
Integration
Testing Complete
Data Reconciliation
Communication
Transition
Complete
• Review and finalize communication requirements
• Draft communication to internal organization
• Draft communication to external organizations (talent, guilds, etc.)
• Project completion
planning
• Implement retained
organization
• Archive historic data
• Decommission
conversion backfill
• Decommission RP00
EP for Residuals Outsourcing - Project Costs & Benefits
Summary
Category
Planning
Implementation
Conversion
Equipment Costs
$
Description
$300,000
Includes initial allocation for planning,
management
Includes costs for Transition
$776,024
$1,499,414
Includes costs for Conversion
Severance/
Retention
Duplicate Payroll Tax
$230,929
Includes costs for Hardware, App/Web
Servers, Storage, SW Licenses
Includes costs for
$306,436
Duplicate Payroll Tax costs
Data Enrichment
Platform
Data Reconciliation
$550,000
Includes costs for building Staging &
Enrichment platform
Residual SME
Total
Category
Recoupments &
Reduction in
Overpayments
Cost Savings
Cost Avoidance
$68,000
$1,209,820
Includes costs for reconciling Revenue &
Guild / Talent calculations
$780,000
Costs for Residuals Subject Matter
Expertise
$5,720,623
Benefits - $
Description
Reduction in Overpayments
Recoupable Overpayments
Over-reported Foreign Remittance taxes
$2,463,079
Reduction in Late Fees / Handling Fees
Print Savings
DGA Pension Employee Contributions
SCA Mainframes Hosting
$656,901
$57,634
$ - Detail
1,138,838
415,241
909,000
590,910
42,296
23,695
57,634
$3,177,614
Draft for discussion
15
Summary of Costs & Benefits projected over 10 years
Draft for discussion
16
Project Funding Needs Over 10 years
PARIS for
Participations
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
$6,229,466
$942,839
$864,454
$864,454
$216,113
-
EP for Residuals
Outsourcing
$4,355,418
$1,209,205
$156,000
-
Draft for discussion
Total
$10,584,884
$2,152,044
$1,020,454
$864,454
$216,113
-
17
Questions ?
Draft for discussion
18