Opportunity Classification model for GTS deal segmentation

2 Given the wide range of opportunity sizes and complexities, a mechanism is necessary to manage processing scalability in GTS. BTT5 Very ComplexBTT4 ComplexBTT3 Medium ComplexityBTT2 Low complexityBTT1 Very low complexity BTT Opportunity Classification The BTT Opportunity Classification Model has been implemented differently in the different IOTs and LOBs. In some areas, only TCV is used to classify opportunities. Current implementation of this model is not consistently applied across all IOTs and LoBs and it will require adaptation and simplification to respond to the new mapping of services by Line of Business in GTS. Current implementation does not take into account the role of the SIH TCV Currently there is a variety of IOT implemented ways to classify opportunities by TCV size and BTT complexity for ITS, TSS and SO

3 A simplified opportunity classification model will be used to manage deal processing scalability The Global Opportunity Classification Model will provide structured and standard deal differentiation guidelines to consistently manage process scalability by multiple functions and players in the engagement process like Solutioning, Risk Management, Legal. Client deals will be classified by the Opportunity Owner at Opportunity Selection time. This will allow for an expedited way to determine early in the cycle the type of processing needed and the approvals path applicable for each deal. Opportunities having TCV over the SIH defined clip level will require an SIH Retain/Delegate decision prior to classification Pricing approvals path continues to be determined by the Pricing Delegation memo. RetainedComplexSimple Classification of incoming opportunities is to be based on a simplified global complexity model considering A.client opportunity TCV B.Services content and additional complexity factors C.SIH Retention Global Opportunity Classification Model

4 A. Global TCV Boundaries and SIH retention define basically the three categories Services TypeSimpleComplexRetained PROJECT BASED SERVICESTCV < 500K TCV = 500K – TCV < SIH Clip and/or SIH DelegatedSIH Retained MANAGED SERVICESTCV < 1M TCV = 1M – TCV < SIH Clip and/or SIH DelegatedSIH Retained Notes: 1.if a deal has a combination of both Managed and Project based services, the resulting category from this step is obtained from testing the aggregated TCV in the “Managed Services” line of this table. 2.RFS requests within the existing scope of the contract follow RFS process 3.A deal with TCV greater than the Simple/Complex boundary value is classified as Simple if it uses only standard offering components with no customization and no additional integration services (This is a simplifying factor) Values in US$

5 B. Complexity Factors add to the Global Opportunity Classification Model Complexity FactorsFORCING COMPLEX Geography conditionsLeading cross IOT/IMT Deal Industry / Client Conditions HR Transfers Industry regulatory requirements which will modify the solution design and content. Joint Venture / Acquisition Sales Complex Sales team involved Services Content DC Migration / Consolidation / Relocation Solution Scope Conditions First of a Kind, Unannounced Products or Offerings Deal involves content of two or more IBM Business Units, except Cloud and Security: (GTS, GBS, Commerce, Systems, Watson, Analytics, Health) OEM HW or SW outside from the list of commonly standard offered products, SW or HW development Deal is Managed Services and contains more than 30% of TCV covered by custom solution components The presence of the above described factors in the deal will determine the resulting category in this step. The final resulting category will be the highest from A and B results If the deal contains a number of these factors an evaluation flag will be set in the classification tool to notify users of the output that they need to pay close attention to the requirements

6 Section of Draft Deal Classification Tool

7 Instructions to OO/OI 1.If deal TCV is above SIH TCV clip then NO action on classification required UNLESS the SIH decides to delegate (above TCV Clip, SIH will retain, but could also delegate) 2. If deal TCV is below SIH TCV clip then OO runs tool 3. Normal qualification process then happens with classification as input (for deals above SIH clip its assumed retained at this stage) 4. After deal is qualified, those above TCV clip go to SIH for Retain/Delegate decision (except in US where all deals above clip are retained) 5. If the deal is SIH delegated then OO runs the classification tool.

8 Deal Classification Logic Flow SIH Retain Delegate Decision SIH West and East make this decision SIH US is purely based on TCV clip New Deal Retained ? Delegated ? TCV >1M & <SIH Clip Managed Services Simplification Factors ? Above SIH TCV Clip RETAINED TCV >500K & <SIH Clip Project Complex Complexity factors ?Simple No Yes TCV <1M Managed Services TCV <500K Project Yes

9 Deal Classification Process Flow IMT / IOT Sales Opportunity Selection: Deal Qualified SIH Retain Delegate Decision Pre-Qual SIH Control Point A (or similar coaching at IMT Level) Retained Delegated OO Runs Classification Tool Complex Simple OO Runs Classification Tool If above SIH TCV Clip Deals not subject to qualification process. Feeds into process, delegations, business rules, etc