1. COMMERCIAL IN CONFIDENCE © Copyright 2013 Fujitsu Services Limited
Apm Risk SIG Conference
Fujitsu’s Management of
Contingency
Dave Scarbrough

2. 1 COMMERCIAL IN CONFIDENCE
Agenda
Fujitsu
Risk in Context of our BMS
Bids and our business model
Delivery – Projects, Programmes and Portfolios
Summary
Fujitsu’s Management of Risk Contingency

3. 2 COMMERCIAL IN CONFIDENCE
A powerful presence in UK & Ireland
 >30 service locations
UK & Ireland CEO: Duncan Tait
 FTSE100 company equivalent by revenue & profit
 Largest Japanese employer in UK and Ireland
 Strength in public sector, financial services,
telecoms, retail and mid-market
Revenue: £1.8 billion*
>20,000 servers
kept secure &
fully operational
24/365
The first Tier III
certified data
centre in Europe
Managing >1 million
end user devices
(>2.5 million across
Europe)
Europe’s first Gold
Accreditation for data
centre operations
(Uptime Institute)
Manages Ireland’s
first Mobile Virtual
Network
Managing the
world’s third
largest Oracle
eBusiness suite
 Over 14,000 employees
* Revenue figure April 2011
Over 70% of the UK’s
broadband network is built on
Fujitsu infrastructure.
Delivering the UK’s largest
private cloud deployment
KEY
Fujitsu System Management Centres
Fujitsu Data Centres
Fujitsu Cloud Centres

4. 3 COMMERCIAL IN CONFIDENCE
UK & Ireland customers include…
Private Sector
Government

5. 4 COMMERCIAL IN CONFIDENCE
Rank Company
#1 IBM
#2 HP
#3 Fujitsu
#4 Accenture
#5 CSC
#3 in global IT services revenue
2011 IT Services Vendor Revenue.
Source: Gartner, "Market Share: IT Services, 2011" 9 April 2012

6. 5 COMMERCIAL IN CONFIDENCE
Agenda
Fujitsu
Risk in Context of our BMS
Bids and our business model
Delivery – Projects, Programmes and Portfolios
Summary
Fujitsu’s Management of Risk Contingency

7. 6 COMMERCIAL IN CONFIDENCE
Our Risk Process
Risk is integrated with our BMS and Review Framework
Every Framework review must review the risks

8. 7 COMMERCIAL IN CONFIDENCE
Hierarchical Enterprise Risk Management
UK
Ireland
Contract/Programme/
Service Portfolio
Bids ServicesCSLC reviews
Account reviews
BU reviews
Governance
Projects
Portfolio reviews
Accounts
Common & big risks
Risks @ this level &
Functional Risks
Business Review
Framework
Flow MTP objectives down
Report risks up
Service
Lines,
MFUs, RFAs
&
Communicate
risks down

9. 8 COMMERCIAL IN CONFIDENCE
Agenda
Fujitsu
Risk in Context of our BMS
Bids and our business model
Delivery – Projects, Programmes and Portfolios
Summary
Fujitsu’s Management of Risk Contingency

10. 9 COMMERCIAL IN CONFIDENCE
Risk Exposure is the overall level of risk (time and money)
calculated across the portfolio of risks
It is a function of the cost of the Reactive Actions (Fallback) not the
value of the contract
Need (reasonable) Max Risk Cost of the Reactive Strategy/Actions
(Fallback) i.e. direct cost not indirect
Use Post-Containment Probability/Impact values (assuming proactive
actions (containments) have ‘worked’ to level they can (i.e. residual
risk)
Contingency is a sum of money allocated above the base
estimate of the Activity
Management decision/judgement about the actual Contingency
allocated
Contingency is judged and held at higher level e.g. Account
Contingency Definitions and Calculations

11. 10 COMMERCIAL IN CONFIDENCE
Understand and manage the risks
Internal Excel macro tool – RiskPro
Automatic calculation of exposure
Assistance to judge contingency
Forecast contingency across contract length by months
Into Oracle Financials
Risk and Contingency in Bids

12. 11 COMMERCIAL IN CONFIDENCE
RiskPro Helps Understand Risk

13. 12 COMMERCIAL IN CONFIDENCE
Fujitsu Business Model
Service Lines –
aligned to how our
customers buy IT
Service Lines
Helen Lamb
Business &
Application
Services
Richard Bull
End User
Services
Andy Stevenson
Hosting,
Networks &
Security
Michael Keegan
Technology
Product Group

14. 13 COMMERCIAL IN CONFIDENCE
Allocating Contingency
 Contingency is a business judgement based on Risk Exposure:
 Probability x Impact Cost (Factored Exposure) across all risks
 Biggest single risk
 Experience
13

15. 14 COMMERCIAL IN CONFIDENCE
Allocating Contingency 2
 Contingency is a business judgement based on Risk Exposure:
 Probability x Impact Cost (Factored Exposure) across all risks
 Biggest single risk
 Experience
14

16. 15 COMMERCIAL IN CONFIDENCE
Conting by Capability with guidelines

17. 16 COMMERCIAL IN CONFIDENCE
Delivery Executive for the contract:
Agrees with Service Line/Capability budget holders their contingency
Judges an appropriate Contingency for the contract
Requests that Contingency from the Bid Approval Review management
Bid Approval Review management judges an appropriate
Contingency for the contract
RiskPro Helps Judge Contingency 2

18. 17 COMMERCIAL IN CONFIDENCE
Agenda
Fujitsu
Risk in Context of our BMS
Bids and our business model
Delivery – Projects, Programmes and Portfolios
Summary
Fujitsu’s Management of Risk Contingency

19. 18 COMMERCIAL IN CONFIDENCE
On a journey
Delivery Executive for the remainder of contract:
Agrees with Service Line/Capability budget holders their
• Their Contingency forecast
• Any change control to utilise, increase, release/reduce contingency
Judges an appropriate Contingency for the contract
Requests that Contingency/Changes from the Review management
Review management
Approves any change controls
Judges an appropriate Contingency for the contract
During Delivery (Project & Programme)

20. 19 COMMERCIAL IN CONFIDENCE
(Risk Process mandatory)
Business level risks harder to financially quantify direct cost
Request a ‘Business Impact’
Expressed in terms of orders, revenue, margin, cost or cash
Financial provision
Business Level Contingency (Portfolio)

21. 20 COMMERCIAL IN CONFIDENCE
Strong Processes
Management Commitment
Risk sits with business doing work
Tool support to judging contingency
Delivery - on a journey
Future:
Learn Lessons
• Judgement v actuals
• Contingency Guidelines by Capability
Management Reserve?
Quantification Analysis?
Summary