Performance Management in Microsoft Steve Dunn Finance Director Microsoft UK

Microsoft Overview Customers Organization Global presence 20K Large Enterprise 40M Small and Medium 1.2B Consumers Organization 85,000 Employees 40,000 Sales, Marketing, Services 38,000 R&D (dev, test, etc.) 7,000 G&A and Operations Global presence Business channels 117 countries Operations - US, Ireland, Reno, Singapore, PR R&D - US, UK, China, India, etc…. Partners LARS, Disti’s, VARs, OEMs,… ISVs, SIs, …. Retail, Online, …..

Our Products by Division Xbox Consumer software & hardware PC and Online games TV platform Microsoft Dynamics AX Microsoft Dynamics CRM Microsoft Dynamics GP Business Dynamics Windows Mobile Software Windows Embedded Device O/S Windows Automotive Microsoft Office Microsoft Project Microsoft Visio Exchange Server SharePoint Portal Server Live Communication OneNote Servers Commerce Server Content Server Speech Server SBS Server Terminal Server Windows Server SQL Server Biz Talk Other Servers Developer Tools Premier Product Support Services Microsoft Consulting Services MSN Search MSN Internet Access MSN Premium Web Services MapPoint Windows XP – Pro & Home Windows Media Center Edition Tablet PC Other standard Windows O/S

How technology helps me achieving my goals and manage performance…..

Daily Work …

Remote Business Review

Business Plan BUILD

Quarterly Business Update Business Rhythm People review (October) Focus on organization health and people development Seven business groups and staff functions Strategy review (December) Assess strategy in driving our multi-year business goals (by Business Div) Creates a framework for driving to investment decisions at Target Setting Mid-year reviews (January) Focus on CPE, market segment share, revenue and “go to market” execution Input to FY08 target setting Customer segments and geographies Monthly Rhythm Quarterly Business Update Target setting closure (February) Commitments on top-down revenue & CM for next year (By Business Div) Approval of major new investments Synch on approach to cross-company initiatives Our corporate wide business planning processes drive the link between Business Partnership and Operational Excellence…without one it is very difficult to achieve the other. We have a very disciplined approach. We have a people review in October, a strategy review in December, perform mid year reviews in January, target setting in February and finally conduct business plan reviews in may/june timeframe. You will also see later where how we gather information on a real time basis to support the business. Business plan review (May/June) Review commitments from last year Commit to next year’s plans –

Forecasting Backgrounder Revenue Models 25 dimensions ~75 subsidiary revenue templates 1480 entry combinations (rows), multiplied by number of open months – more than 14K data points More than 300 users world-wide Opex Models 26 dimensions 110 subsidiary P&L templates ~250 non field P&L templates ~23 Judgment templates More than 500 users world-wide Custom Grouped member sets highly leveraged (example, extensive groupings of Function Summaries to form ~250 Non Field templates) Our corporate wide business planning processes drive the link between Business Partnership and Operational Excellence…without one it is very difficult to achieve the other. We have a very disciplined approach. We have a people review in October, a strategy review in December, perform mid year reviews in January, target setting in February and finally conduct business plan reviews in may/june timeframe. You will also see later where how we gather information on a real time basis to support the business. 9

Corporate Forecast FY07 vs FY08   FY07 on XLS (custom)  FY08 on PPS (in XLS)  Timeliness  Submissions occur on set dates/times Day or more lag in consolidation Reporting at one layer Submissions can occur at any time during cycle Minimized lag in consolidation Data Consistency  Data refreshed by each individual user Inconsistent rules, definitions PPS sets the refresh schedule and logic Built-in consistency across like groups User Experience  User refreshes MSR queries, populates XLS, publishes to share User connects to PPS, refreshes latest info in XLS, populates XLS form, submits to server Flexibility   Changes require updated logic in offline spreadsheet Database changes on back-end Forms, dimensionality, rules managed server side Users stay fresh via assignments Security  File share permissions to “write” MS Sales and MARS permissions to “read” Permissions managed server side Grant read/write access by form or “slice” Manageability  Spreadsheet maintenance required Back-end changes required PPS GUI for management Centrally force form, dimension, rule updates Accountability and Line of Sight Planning tools operate in silos Ship loads of data around Reporting at one layer, days later Goal is to tie Targets to Budget to Forecast Single application, different models Reporting at multiple layers, some near real-time

Corporate Forecast Revenue Forecast Form in PPS

General Navigation on Revenue Reports Filters are available to select subset of the data based on dimension/hierarchy structure Functionality to collapse and expand data in published scorecards

Example: Business Metrics 1 2 1 2

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