At&t delivery model process-ips

Carter Brothers Security Services AT&T Delivery ModelDouglas O. Smith, SVP Operations

August 2013

Confidential – Please Do Not Copy

CONFIDENTIAL & PROPRIETARYThis material is confidential and proprietary to Carter Brothers Security Services LLC and/or third parties and may not be reproduced, published or disclosed to others without the express authorization of the General Counsel of Carter Brothers Security Services LLC.

Overview

This document contains an overview of AT&T account and potential revised Delivery Model efforts, including a process map on how we will assist teams identify and report issues impacting NPS data.

The intended audience for this document are CEO, CFO, SVP, VP and Director of Operations, Senior Management Team.

The contents of this document are intended to be part of a series of documents to increase awareness about AT&T account structure, AT&T financials, and revised processes to drive strategic change.

Executive Summary

Our Delivery Model is about partnering, not ad-hoc reaction to requests

Partnering Philosophy

External vendors/contractors will be engaged under agreements that are enforced by meeting CBSS KPI’s (e.g. On-time, Installation hours (Actual vs. AT&T baseline, NPS CAGR analysis)

All negative incidents will be aggregated and communicated to AT&T on weekly calls and via a written monthly report AT&T leadership

We will recruit and retain talent knowledgeable of AT&T products. Resources not maintaining a 96A% CBSS Quality score will be place on performance plan

We will retain control of AT&T business relationship, assess associate quality contribution, drive account level profitability, and internal communication of NPS data

We will maintain contract relationships with technicians that can flex up to meet unanticipated AT&T demand

The Delivery Model will be managed according to the following Guiding Principles

We will maintain focus on the customer and ensure that our actions enhance overall customer value

We are confident that we will develop a credible and achievable AT&T Delivery Model to help drive revenue growth and EBITDA

We will partner with AT&T and leverage internal CBSS resources in order to drive a high degree of trust, ownership, accountability, and compliance

We have set our priorities for 2013-2014 to focus on service quality, AT&T needs, and operational excellence

• We will improve our Service Quality to provide reliability and stability to our AT&T and their customers

• We will continue to align our delivery model with AT&T partner requirements• We will ensure our Delivery Model moves us towards best-in-class

We will deliver a Delivery Model which is aligned with the CBSS Quality standards• Increased service quality by market• Flexible resourcing model to take on new launches and handle increased demand• Transparency

We will implement a Hybrid approach to driving change, accountability and an increase in our NPS numbers. The changes will include cost containment, creation of a KPI dashboard, hiring QA Manager, reduction in force, regional management structure, increased utilization of associates.

We had much to do in order to delivery on our AT&T business strategy{Focus Areas FY2013+}

Growth & InnovationGrowth & Innovation

Proactive Monitoring

Proactive Monitoring

Re-organize AT&T team

Re-organize AT&T team

AT&TRoadmaps

AT&TRoadmaps Digital StrategyDigital Strategy

GovernanceGovernance Drive TransperancyDrive Transperancy Capability andCapacity Model

Capability andCapacity Model

Predictive Analytics Environment

Predictive Analytics Environment

CBSS ContinousEducation

CBSS ContinousEducation

Metrics and KPI’sMetrics and KPI’s QA StrategyQA Strategy Move to Regional ModelMove to Regional Model CBSS AppCBSS App CollaborativeEnvironment

CollaborativeEnvironment

Service QualityService Quality

We must monitor 100% of our AT&T data daily

We must monitor 100% of our AT&T data daily

Our AT&T team must deliver a clear roadmap and a set ofServices that differentiate us from our competitors.

Our AT&T team must deliver a clear roadmap and a set ofServices that differentiate us from our competitors.

Right size team so weCan delivery on our strategy

Right size team so weCan delivery on our strategy

Establish productRoadmap where we will playIn (FY13 to FY18)

Establish productRoadmap where we will playIn (FY13 to FY18)

Share experience andKnowlege with other Techs

Share experience andKnowlege with other Techs

Insure we use the AT&TDigital Life offering

Insure we use the AT&TDigital Life offering

A consistent framework forManaging Change, accountability and growth

A consistent framework forManaging Change, accountability and growth

Insure CBSS understandsthe cost of each Investment (current and future)

Insure CBSS understandsthe cost of each Investment (current and future)

Capacity planning andResource model

Capacity planning andResource model

Establish demand and supplyModelling environment forFlexing labor based on NPS

Establish demand and supplyModelling environment forFlexing labor based on NPS

Move past product knowlegeand train techs based onSenarios they may encounter

Move past product knowlegeand train techs based onSenarios they may encounter

Establish a common set ofMetrics that reflect the healthOf the AT&T account

Establish a common set ofMetrics that reflect the healthOf the AT&T account

Eliminate obsolete thinkingStrive for continous Improvement to improve NPS

Eliminate obsolete thinkingStrive for continous Improvement to improve NPS

Increase utilization by creatingRegions

Increase utilization by creatingRegions

OnDemand information about Product and Services available

OnDemand information about Product and Services available

Establish “Big Data”Environment where we sharefindings with AT&T

Establish “Big Data”Environment where we sharefindings with AT&T

The organization can not reach its FY13/14 goals if the AT&T account is not the “point of the spear”

The organization can not reach its FY13/14 goals if the AT&T account is not the “point of the spear”

Create KnowledgePortal

Create KnowledgePortal

CBSS Residential

Strategy

Description Capabilities Delivered

Unassailable Data (Q3 FY13 – Q4 FY14)

CBSS Intelligence Engine

“aka Channel Manager”

An integrated system to manage all aspects of data processing, validation and uploading of data to a single repository leveraged by all resources

Single Data Repository that contains cleansed customer, pricing and geographical data which is 100% accurate before processing

An input handler to process all batch/real-time data feeds Real-time updating of in field issues and closure review

Superior Connectivity (Q4 FY13 – Q1 FY14)

CBSSConnect

Providing consistency across products and services. Insure our technicians have a CBSS app in order to request, review or gain additional knowledge surrounding an account or client istall

Promotes rapid and predictable access to CBSS products and services Improves customer experience by simplifying customer interaction and method of

connecting with CBSS platforms to support the Digital Life offeringInfrastructure to support common communication across CBSSCommon set of KPI’s

Integration (Data Feed)

Insures common & consistency in looking at NPS data and daily AT&T survey data.

Increased awareness on problem areas Focus on driving customer value and retention Mapping of NPS to CBSS Quality metrics

Customer Acquisition, Growth and Retention (FY14)

Residential Model Our strategy for residential. Partner programs, capabilities, and our own branded product lines (???)

Replaces 100% of residential revenue is based on 1 An integrated growth model where resources are shared at strategic levels within

CBSS Ability to support new revenue models and complex residential offerings coming out

in the marketplace

Our strategy drives value in three core areas

Revenue Growth

Voice of the Customer

The Delivery Model is mission-critical to achieving Carter Brother’s long-term strategy

Strategic PrioritiesDelivery Model

Imperatives• Deliver a consistent, positive

customer experience

• Provide high quality/superior knowledge of AT&T products

• Governance and controls that drive transparency and increased service quality

• People and processes to run the local market activity at very high levels of efficiency

• We are commercially viable option for complex situations

• Scalable infrastructure

• Standardized interfaces across markets

• Reduction in installation times with a 99A% quality score

• We are cost effective to AT&T

Knowledge

FY13+ Focus

Our primary focus will be on reducing cost, while delivering a flexible, innovative, and sustainable delivery model

Business Top line Growth Enablement

Agility Enhancement3

Business Risk Mitigation2

Cost Reduction

Business Flexibility Enablement1

FY13+ Objectives

Drive focus and awareness around AT&T Delivery Model

– Increase focus on strategic sourcing of Digital Life Talent

• Lay foundation to shift us towards being the most knowledgeable partner of AT&T product and away from pure cost reduction

• Leverage partners with licenses to contain costs

• Introduce a regional support model to drive focus and reduce the tendency to create hierarchy

– Develop dashboard to facilitate up-to-date understanding of AT&T Delivery Model among key stakeholders

– Drive accountability through milestone-based controls and regular progress evaluation

1: The time it takes to enable a new business capability (e.g., IP based wireless Cameras)2: Reducing risk (improved process documentation and standardization), project risk (fewer installation errors), and human capital risk (ensuring we have talent)3: Increase in the speed and flexibility deployment model to drive high NPS once we go to piece rate model

Identification of NPS initiatives is key driving waste out

Feedback and Coaching (Focus & Feasibility)

NPS Idea Generation

NPS Proposal Template

NPS Tracking Document

NPS Recommendations (including backup hypotheses)

Update NPS template

Operating Owners (multiple)

CBSS AT&T Operations Team SVP/Leadership Team

Track Changes and Risks Quarterly OperationUpdates

Follow up with At-Risk Operating Owners

Assess Likelihood of Realizing Targets

Address At-Risk Items

InitiativeAlignment

Milestone-Based Decisions (e.g. Messaging, HR Legal, etc.)

Kick Off Backup Hypotheses as Needed

CBSS/AT&T Senior Management

Guidance – Savings & Assistance with starting projects

Director Operations

Stop Funding for Hypotheses Unable to Achieve Targets

Detailed Project Plan

Feasibility Verification Verification

Project Approval Notification

Monthly OPS Reports

Quarterly OPS Reports

NPS Commitment

Repeated Throughout the Year

Senior Management Quarterly Updates

123

4 5

6 7 8

9 10 11

12

13 14

15

19

16

17

18

2021

22

23

24

Planning & Project Development

Project Execution

Review

The Director of Operations will take ownership over the AT&T Delivery Model, and will regularly communicate progress updates

across organization (AT&T, CCBS)

Ops Team

CCBS OPS Leadership

AT&T

OPS Delivery Teams

Audience Event & Frequency Tracking of NPS data, AT&T launches and savings Weekly Account Briefings Investigations and recommendations for AT&T Updates on daily number changes (2 points worst than prior

day)

How to leverage field teams (i.e. Crew Rostering) Introduce CBSS AT&T center of competencies to teams

(e.g. continuous product education) Insights and reviews to AT&T

Discussions/Information on Digital Life program, Changes and strategy

Feedback on partners performance

Communicate feedback from field Daily assessment of delivery capability maturity and

compliance with our guidelines and requirementsTechnicians

All contact with the AT&T Delivery team should flow through the appropriate point of contact

Contact Role Can help with…

Art CBSS Director OPS

Delivery AT&T Delivery Model Strategy and

Vision

Rob AT&T Business Analysis,&

NPS Operating Owner

General inquiries about AT&T Technology Projects & Program

Process questions Ramping up resources

Caleab Quality and Program

oversight of select AT&T markets

Daily and Monthly CBSS Quality Dashboard

Project level updates CBSS Costs (Allocation and by

Market)

AT&T pending Models for 2014

As the AT&T account matures, we are being asked to look into and participate in test delivery models under the Digital Life product line.

Comparison of Contract Types

Resource-based Deliverable-based

Billing based on the number of

resources engaged and the number of

hours worked

Billing based on the successful

completion of deliverables (e.g.

Installation of base service)

Time & Material Fixed Price (aka Piece Rate)

CBSS can maximize revenue by:

- providing excellent quality service

- expanding scope of work beyond

SLAs where possible

CBSS can maximize margin by:

- Efficiently completing work as

specified in SLAsCBSS can maximize revenue by:

- meeting SLAs in order to secure

renewal and additional work

Applications with variable workflowDevelopment projects

Applications with predictable, stable

workflowMaintenance projects

Description

Contract Structure

CBSSImplications

Best Suited for

AT&T has mandated a 46% reduction in force effective September 1st 2013

Market Aug Sep Oct Nov Dec

Chicago 23 14 14 14 14

Dallas 20 12 12 12 12

Los Angeles 26 17 17 17 17

San Francisco 16 6 6 6 6

Denver 10 5 5 5 5

Philadelphia 19 9 9 9 9

Baltimore 5 4 4 4 4

Phoenix 15 6 6 6 6

Sacramento 7 3 3 3 3

Washington 14 9 9 9 9

Cleveland 6 3 3 3 3

Detroit 8 0 0 0 0

Indianapolis 5 3 3 3 3

San Jose 5 4 4 4 4

Total Headcount 179 95 95 95 95

The planned reduction in force will have an immediate impact on AT&T sales review. Taking our average review targets from $1.4M~ to sub

$950K levels

To address the reduction in Revenue we will change the structure and accountability of the AT&T account team

For CBSS

For AT&T

Lets understand the benefits and risks…..

Benefits Risks

Lower total operating costs for AT&T account

Increased utilization of marketing managers, and dedicated trainers get moved into field providing potential a lift NPS (i.e. knowledge)

Daily accountability for Quality

Increased need to monitor and manage field performance to ensure service levels are met

Increased transparency in how we are handling client concerns and driving volume and greater predictability

Opportunity for increased margin through flexibility in resource management

Less concern about attrition, back-fill, etc.

Reduction in 1to1 marketing manager contact per market

We will transition from dedicated trainers to flex trainers, we will move to a regional Operating Manager model versus a market manager per market model.

We have ran an analysis of converting technicians in the field from 1099 to W2. Our findings show a decrease in Margin percentage from 31% to 23%. Recommendation is to move the conversion into Q1

2013 and immediately put in place regional manager model.

Situation Revenue COGS Gross Margin

Techs without benefits $2.997M $2.06M 31%

Techs with benefits $2.997M $2.3M 23%

As we drilled down into our cost drivers we have been able to directly attribute increased conversion costs to:

• Insurance benefits

• Other accrued benefits (paid time off, sick leave, continuous training, etc…)

Transition from Dedicated Trainers to Flex Trainers increases in field knowledge. We will also create a database containing the experience of each technician by AT&T product line

(e.g. Base Installs, Water Sensors, etc..). The database will be leverage by other technicians if they have questions on an install

Trainers- Current trainers that perform new training classes

• Will Long• Ansel Butler• Mickey Salters

Flex Trainers-Current technicians who are qualified as train the trainers

• Johnathan McCamey• Brandon Proctor• Quinton Brown• Jesse Rauldes• Additional Classes are offered for Train the

Trainers

Our current licensing model presents challenges and obsessive costs. We are proposing changes that will requiring a CBSS employee to hold a licenses if

operating at a field level manager position

To address our reduction in NPS, our AT&T team will focus on quality of service and knowledge of product. To insure compliance CBSS has brought

on two additional senior leaders to the account

DouglasSmith

SVP OPS

CalebWilliams

Manager QA

Results-driven, decisive, seasoned Executive with extensive Global Business Development and Strategy experience. Track record delivering transformational solutions, thrives in challenging, fast-paced settings delivering complex business solutions, developing high performing teams and providing insight into digital marketplace, social business, cloud computing and B2B/B2C trends and directions. Experience working with business partners to formulate growth strategies, solve complex concepts, and manage multiple initiatives through an accelerated deployment and delivery methodology. Strong problem-solving and solutions building skills in:

Latest digital marketplace concepts (e.g. Social Media/Business, Cloud Computing, SaaS, PaaS, and Marketplace Based Solutions). Multi-Country Service Delivery Models (e.g. Offshoring, BPO, Global Delivery Management) Business Project Delivery and Standards SOX, PCI, and European Data Protection Directive Business Unit Product roadmap creation Multidisciplinary staff management, Relationship and Vendor Management Organization Strategy Vendor negotiations, and Reengineering

Resourceful and visionary leader with the ability to quickly detect and analyze problems to provide innovative solutions. 12 years of experience in security technology, program/project management, data, troubleshooting, networking, and high level design. A strong personal leader with the experience and dedication to succeed. He began his career in the United States Air Force in Security and Operations where he rose through the ranks to become a Security Manager where he still holds that title today in the US Air Force Reserve. After 7 yeas of Active Duty, Caleb entered corporate America and began to gain valuable skills that shaped him into the professional he is today. He has worked, contracted and consulted for companies such as Trane, Netversant, RF Technologies, Chenega Federal Systems and Lakel Networks. Some of the positions Caleb has held range from field technician, Field Engineer, Field Manager, Regional Manager, Senior Project Manager, Senior Engineer, Security Operations Manager and Program Manager. Because Of Caleb’s experience and wealth of knowledge on management, policies, procedures, engineering and customer service

New structure results in savings of $213,920

Positions Reduced:Trainers (3)Mangers (2)Transition to Billable (2)

Anticipate another $110,000 in reductions which we will reallocate to other operational areas of the business. We will require utilization to stay above 76% for technicians and market managers. Field Operations will slowly take on Commercial and Residential activities.

We leverage relationship leaders/technicians to understand and drive AT&T account growth. The relationship leaders have a defined number of resources needed to support daily installs, but can draw upon flex labor to meet unanticipated demand.

Relationship LeaderWest CoastOperations

The broader structure (FY14) allows us to be accountable to the AT&T business

Manager of AT&T Operations

Customer Success OfficeMonitors, Supports and oversees continued health of AT&T account

Relationship LeaderSouthernOperations

Business Intelligence/QAOversees reporting, data management forIncreasing NPS

Relationship LeaderEast Coast/NorthOperations

Relationship LeaderMidwestOperations

Flex Resource PoolResources needed to support unanticipated growth or maintenance and support obligations (i.e. call backs)

Global Delivery (OPEN)

Manages technicians and Subs across CBSS insuring a high degree of experience is in place