1. Finance Support

2. Roles and Responsibilities of the Finance Support Team
Policy Setting
Define Savings/Benefits
Provide tools for financial analysts and BBs
DMAIC Process: Financial Support
Project Selection and Review
Project Evaluation
Track Savings/Benefits
Post Completion
Validate/Audit Financial Results
Forecasts
Management Reporting
Program costs and SSA relationship
Will cover key points of Finance role in Six Sigma Program:
Policy & Guidance
Finance involvement in projects – including monitoring & auditing benefits after project “Control” phase & Management reporting

3. Savings Definition
TFS6s definition of “project benefits” is grounded in P&L impact
“Hard” Savings
Measurable, controllable and contribute to earnings
Sources
Margin improvements directly attributable to Six Sigma projects
Reduction of operating expenses
Lower carrying cost related to CAPEX reduction
EBIT contribution from revenue enhancement projects
“Soft” Savings
Difficult to measure or not tied directly to earnings
Examples
Customer satisfaction
Safety or regulatory compliance
Cash impact of reduced CAPEX
This program is driven from the bottoms-up, project by project.
Each project will target specific benefits, usually more than one benefit.
Program emphasizes “Hard” savings that Tyco can Realize – bottom line. – Aligned with TFS goals.
“Soft” savings will be tracked, where applicable & appropriate for comparison purposes.

4. Savings Definition - Examples
Hard Savings
EBIT impact of Revenue increases from Six Sigma Projects
Decrease in Labor cost (FTEs) or Overtime Paid
Decrease in Office Supply Expense
Decrease in Travel Expense
Decrease in Late Payment Fees
Decrease in Rent/Lease Expense
Decrease in Utilities Expense
Decrease in Repair Costs
Soft Savings
Increase in Customer Service
Increase in Customer Satisfaction
Increase in customer/employee Safety
Aid in Regulatory Compliance
Give examples of Hard/Soft savings categories – use slide for reference.

5. Project Benefits Template
Project tracking system being developed, in the interim we will use a stand-alone Excel template to Charter projects & identify/quantify project benefits & cost.
Example To Be Tailored To Tracking System And Environment

6. Roles and Responsibilities Black Belt vs. Financial Analyst
Data Collection
Original Analysis
Cost Analysis
Financial Analyst
Provide Budget Information by Cost Center
Cost / Benefit Analysis
Review / Validation
Budget Adjustment
Finance supports and engages with Black Belt as project progresses through DMAIC process.
Black Belt’s responsibility to drive project, Finance Analyst assists with review & validation of benefits estimates & validation of actual benefits

7. Finance Involved At Every Stage Of Project
Project Process Map
DMAIC – Finance Involvement
Define
Measure
Analyze
Improve
Control
BB/MBB
Draft Charter
High Level Problem statement, process definition, potential financial benefits & cost
Update Charter as necessary while progressing through project phases.
Engage Finance, Process Owner as needed.
Request Steering Committee Approval if Method of measuring benefits OR significant change to benefits forecast is required.
Implements Control Plan
Validates benefits with Finance
Presents to Steering Committee for Sign-Off
Review assumptions,
High level estimates,
Consider up-stream/down-stream effects
Categorize as hard/cost benefits
Review measurement proposals
Identify appropriate sources & uses of financial data to measure, estimate & validate as project progresses
Engaged by BB as needed to update measurements, financials
Validate actual benefits with BB/MBB
Update forecast if necessary
Sign-off Project
Finance
In the define phase, the BB proposes a project including high-level financial estimates.
Finance reviews, validates or modifies accordingly – are the high level assumptions correct, sources & uses of data correct, scope of project benefits
make sure we understand the impact to Tyco, not just portion of company – e.g. inter-company sales do not necessarily increase Tyco sales
Review with Finance Champion prior to Steering Committee Meeting – Finance Champion Approves before Steering Committee Meeting
Measure Analyze & Improve phase
Finance Analyst may be called on to assist in updates and validation to measurements and/or resulting benefits/cost calculations
Control phase:
Final review by Finance Analyst of project Financials
Finalize plans to monitor/audit results
Validate “Actual” Hard Realized Net benefits. Where and how do I measure, which budget is impacted?
Review with Finance Champion prior to Steering Committee Meeting – Finance Champion approves before Steering Committee Meeting
Finance Champion Approves
Steering
Committee
Review
Approve or re-direct
Review
Approve or re-direct
Finance Involved At Every Stage Of Project

8. Finance Team Mark Schmitz Executive Steering Committee Steve Finney
Divisional Finance Champion
Ron Eicholtz
Divisional Finance
ADT
Finance Champion
SimplexGrinnell
Finance Champion
Tyco Safety Products
Finance Champion
Each Business Units has assigned a Finance Champion – Sits on BU Steering Committee
Finance Analysts will be identified to support individual BB projects as previously discussed
Financial Analyst
Financial Analyst
Financial Analyst
Financial Analyst
Financial Analyst
Financial Analyst
Financial Analyst
Financial Analyst
Financial Analyst