© BMGI. You may freely modify, distribute and/or reproduce this only if BMGI's logo is not altered or removed. Finance Process 22 May 2006

© BMGI. You may freely modify, distribute and/or reproduce this only if BMGI's logo is not altered or removed. 2 Agenda Objectives5 Minutes The Role of the Finance Rep.5 Minutes Valuation Guidelines5 Minutes Classifications of Benefits 10 Minutes Validating Results 10 Minutes Finance Timeline 5 Minutes Case Studies 5 Minutes WhatDuration

© BMGI. You may freely modify, distribute and/or reproduce this only if BMGI's logo is not altered or removed. 3 Objectives Finance’s Contribution to a Successful Deployment  Second only to Senior Management commitment  Allows project prioritization through estimates of benefits opportunities  Provides validation of all claims relating to financial improvement  Allows administration of accountability toward the Process Excellence effort  Supports a rewards and recognition program for project teams Finance Core Team Deliverables  Define Finance’s role and responsibility in supporting the Deployment  Define the project support timeline and valuation guidelines  Provide Q&A to topics supporting Lean Six Sigma financial analysis  Define rules for validation of savings and examples through Case Study  Create a universal Financial Worksheet for conducting project analysis  Utilize the power of ProjX for tracking financial benefits

© BMGI. You may freely modify, distribute and/or reproduce this only if BMGI's logo is not altered or removed. 4 The Role of the Finance Rep Provide the project team support by:  Establish the forecast value of a project with Project Champion  Serve as project team consultant  Validate the forecast of a project throughout the all project phases  Track and report the financial results of a project Principle Responsibilities:  Act as a resource to Project Champions in support of their efforts to define and prioritize projects  Work with the Project Leaders (Project Mgr., Black Belt, Green Belt) to: Identify financial metrics and project impact Validate financial results Track benefits after project complete Not a full-time position, but a key role within each project  Anticipated to be 8-12 hours per project over 3-4 months Finance Reps maintain current positions / reporting relationships

© BMGI. You may freely modify, distribute and/or reproduce this only if BMGI's logo is not altered or removed. 5 Valuation Guidelines Measurement  Project Leader defines process metric that will be used to determine that defects have been eliminated and documents method used to track  Finance Rep defines associated financial metric(s) and uses them to quantify costs of defect and validate benefits from eliminating defects Finance Rep Meeting Guidelines  Meet with Project Champion to create a high level original forecast  Meet with Project Leader as necessary to discuss project updates  Meet with Project Team, Project Champion or Project Leader as requested Project reviews, brainstorming, control plan Reporting and Documentation Tools  Financial Worksheet  Financial Tracker within Project Tracking Tool

© BMGI. You may freely modify, distribute and/or reproduce this only if BMGI's logo is not altered or removed. 6 Classification of Benefits Each project must classify it’s benefits into one of the following categories: Hard Benefits:  Realizable and quantifiable savings that can be attributed directly to the project Soft Benefits:  Intangible benefits that could not be measured and tracked directly to the project  Project can be successful without realizing any soft savings “Unrealized” Hard Benefits:  Benefits that will require an action on the part of management to be realized.  Will remain “Unrealized” until appropriate action is taken Example 1 – A capital improvement will increase sales, but is deferred until a later time Example 2 – An improvement creates available capacity (labor, equipment, etc), but no action is taken to remove the resource.

© BMGI. You may freely modify, distribute and/or reproduce this only if BMGI's logo is not altered or removed. 7 Original Forecast Begin during scoping and complete when project is loaded Obtain supporting documentation from Project Champion, Sub Process Owners and SME’s Enter in Project Tracking Tool Explain issues to Project Champion and Project Leader Revises as many times as necessary. Review with Project Leader prior to implementation Revisit supporting Documentation Enter in Project Tracking Tool Explain issues to Project Champion and Project Leader For 1 st 3 months of Realization, review with Project Leader Next 9 months of Realization, review with Sub-Process Owner Enter in Project Tracking Tool Audit that process changes remain controlled after 18 months into Realization Validating Results Initial Validation Revised Validations Including Final Validation Realization Review with Project Leader early in project Obtain Supporting Documentation from Project Leader Enter in Project Tracking Tool Explain issues to Project Champion and Project Leader