1. SIAC Vendor Management Office Robert Durso Director - Vendor Management Office October 8 th 2002

2. Mission Expand and improve the use of third party vendors throughout the NYSE and SIAC To improve time to market capabilities To augment technical and domain competencies To improve operational efficiencies and reduce costs

3. Vendor Management Office Maintain Master Services Agreements (MSA) with Preferred Vendors Maintain Vendor Relationship & Qualify additional Vendors Maintain Program & Project Measurement Metrics Provide training workshops for Project Managers Assist Project Managers in: the evaluation and selection of projects, developing and evaluating proposals, statements of work, service level agreements and other support documents, monitoring vendor performance

4. Critical Success Factors Careful Selection and Planning of Projects Competencies of Preferred Vendors Strong Support Mechanism for Project Managers Well planned Knowledge Acquisition Phase Close monitoring of Vendor Performance Well Defined Outsourcing Infrastructure

5. Vendor and Project Selection

6. Selection Criteria Vendor Selection Criteria Corporate Profile – Revenue, number of employees, listing Enterprise Competencies or Boutique Technology Domain Expertise Quality Initiatives (CMM Level 3 or higher) HR Policies Offshore Development Center Experiences Offshore Contingency Plan and Infrastructure Flexibility, Reliability and Peer Organization References

7. Selection Criteria Project Selection Criteria Projects with resource constraints Projects with clearly defined requirements Conversion Projects Maintenance and Enhancement Projects Support Projects

8. Setting the stage for a successful launch Offshore Feasibility Assessment PROJECT EXECUTION PREPARATION KNOWLEDGE ACQUISITION QUALITY ASSURANCE USER ACCEPTANCE PARALLEL RUNNING (PRODUCTION SUPPORT ONLY) NEW DEVELOPMENT MAINTENANCE TECHNICAL UPGRADES An assessment should be performed prior to launch

9. Competitive Bidding Verification Competitive Bidding - RFP's will be sent to preferred vendors as is stated by SIAC Procurement and the Competitive Bidding Procedure. Phased Bids - It is recommended that each project is broken down into smaller phases. Each bid response should include all associated fees for each phase. This will give us the ability to evaluate each Vendor's phased bid response. Internal Verification of Effort*Cost - the VMO and the project managers will work together to calculate and verify bids by estimating effort and multiplying by Fees within the MSA (Exhibit F - "Fees".).

10. Project Management Workshops Course is a scaled down version of a 3-semester hour graduate level software engineering class offered by SMU. It builds on the best practices from both Government and Industry to provide Project Managers with essential information needed to either solicit bids for a development project or to respond to a request for proposal (RFP) for a development project. It introduces the Project Managers to the most common legal issues that are encountered in a software acquisition.

11. Managing the Metrics

12. Five Views For Managing The Program Measuring Organizational Commitment Measuring Project Status Measuring Time-to-Market Measuring Skills Augmentation Measuring Costs

13. Measuring Organizational Commitment In Pipeline Active Projects Project Size 5 10 15 20 25 30 35 40 45 50 Off-Shore Onsite Vendor Data Vendor A: No of Projects: $$ of Projects: Vendor B: No of Projects: $$ of Projects: Vendor C: No of Projects: $$ of Projects: Vendor D: No of Projects: $$ of Projects: Portfolio Data No. of Engagements = Type of Projects Development = Maintenance = Technical Upgrades/Conversions = Other = Total FTEs Under Program On-Site = Off-Shore = Total $$ Committed to Projects = Total $$ in Local Equivalent = Total $$ VMO = % Offshore $$ to IT Budget = Project Name TOTAL

14. Measuring Project Status Project Type: Technologies: Project Phase: Scheduling Variance: Resource Variance: Vendor Costs To Date: Original Vendor Budget: Revised Vendor Budget: Major Achievements Aug- {Replace with Major Achievements either for current month or previous months. Sep – {This section is indented for 7 characters. Outstanding Issues: {Replace With Outstanding Issues} {Insert Major Statement Regarding Project For Current Month} Project Description: {Replace with Brief Project Description} Business Objective: {Replace with Cost Savings, Revenue Generation, Compliance, Governance, Quality}

15. Actions To Accelerate Throughput And Measuring Their Impact Re-engineer Delivery Process Adopt a Service-Based Requirements/Design Model Employ Parallel Development Process (24x7) Add additional resources, I.e. Skills/Staff Augmentation ActionsMeasurement Backlog Size Backlog Duration Average Elapse Time for Work-Unit, e.g. Function Point Elapse Times against Fixed Delivery Time- frames Measuring Time-to-Market

16. Measuring Skills Augmentation Local Staff Augmentation versus Offshore Staff By: Environment Work (Mainframe, Internet, Client/Server, Other) Project Type (Development, Maintenance, Upgrade, Conversion, Other) Skills Mix (SAP, COBOL, Websphere, C/C++, Other) Functional Area (Administration, Trade Support, Q/A, Other) Offshore Functional Area Local Staff Augmentation Project Type

17. Example for Measuring Cost [T & M]Gross Billing Savings = (Local Equivalent Rate x #Man Days/Hours) – (Vendor Rate x #Man Days/Hours) [Fixed Price]Gross Billing Savings = (Local Equivalent Rate x #Man Days/Hours) – (Contracted SOW)

18. Outsourcing Status

19. Offshore Status 6 Active projects at the NYSE with 3 Off-Shore Vendors Master Service Agreement negotiated with several Off-Shore Vendors MSA Supporting Documents Available Request For Proposal Template Statement Of Work Template SOW Change Request Document Service Level Agreement Template Project Evaluation & Cost Analysis Template developed Vendor Management Office Intranet Site

20. Speed to Market 2 time-zone prototyping Strong Project Management coupled with CMM Level 5 company Active defect containment measures Skills Augmentation Ramped-up 25 skilled developers in 6 weeks Resulting Time and Cost Savings 18 modules, with significant process re-design 10 months Approximately 50% Gross Billing Savings (excluding transition, communication and other overhead costs) Measuring our Mission 1 Project - Requirements through Implementation

21. VMO Lessons Learned Senior Level Sponsorship Define a Clear Mission Communicate and Educate Early and Often Define VMO Infrastructure Early (Even before first pilot) Continuous Process Improvement Establish Achievable Goals Define Program/Project Metrics early Solid Risk Management Strategy Plan Transition in/Transition Out for all projects VMO ease of use is as important as a delivery model

22. SIAC Vendor Management Office