1

Business PlanFinancial Year 2013/14

1. Shared Services Budget Agenda

2

1. Shared Services Total

2. People Services, Marketing Services & Analytics, Financial Services & Facilities (PAFF)

Business Plan

3. ICT Business Plan

Contents

Shared ServicesTotal

3

Historical Scorecard KPIs

4

Financial Sustainability

FY12 (Actual

FY13(Budget)

FY13(Forecast)

Status (Red /

Amber / Green )

Comment

ICTDirect Expenses

$16.3m $18.6m $19.1m Variance to be Explained in ICT Presentation

PAFFDirect Expenses

$6.8m $7.6m $7.6m Variation in FY13 Budget to FY13 forecast• FY13 Forecast is expected to be close to budget

Movement between FY12 Actual and FY13 budget• CPI $0.3M• Savings against FY12 budget by PAFF $0.5m

Total Shared Services

$23.1m $26.2m $26.7m

26.7

0.1

0.5

26.2

25.0

26.0

27.0

FY13 (Budget) PAFF Movement ICT Movement FY13 (Forecast)

$Mill

ions

FY13 (b) to FY13 (f)

5

Key Messages

Explanations in respective PAFF & ICT Business Plans

Historical Review: Trends

15.2 16.319.1

6.36.8

7.6

0.0

5.0

10.0

15.0

20.0

25.0

30.0

FY11 (A) FY12 (A) FY13 (F)

Mill

ions

Expenses: Shared Services

PAFF

ICT

Shared Services Budget P&L

6

Financial Sustainability

FY12 (Actual

FY13(Forecast)

FY14(Target)

FY 15 (Target)

FY16(Target)

FY17 (Target)

FY18 (Target)

Costs - SS (Ms)

People Commitment FY12 (Actual

FY13(Forecast)

FY14 (Target)

FY 15 (Target)

FY16 (Target)

FY17 (Target

)

FY18 (Target)

Health and Safety

Maintain Work safe Gold accreditation

GOLD GOLD GOLD GOLD GOLD GOLD GOLD

Employee Engagement

Employee Engagement Score

71 BEZ BEZ BEZ BEZ BEZ BEZ

Employee Turnover 13.8 21 19 17 16 15 15

Sick Leave 2.5 3.0 2.8 2.6 2.5 2.5 2.5

Membership Excellence

FY12 (Actual

FY13 (Forecast)

FY14 (Target) FY 15 (Target)

FY16 (Target)

FY17 (Target)

FY18 (Target)

Customer Satisfaction 3.8 3.9 4.0 4.0 4.0 4.0 4.0

Scorecard Key Performance Indicators

7

P&L

FY13 FY14 FY15 FY16 FY17 FY18

$'000 $'000 $'000 $'000 $'000 $'000

PROFIT & LOSS

Product Revenue 0 0 0 0 0 0 Internal Revenue 29,664 35,975 36,952 38,207 39,343 40,653 Other Revenue 62 0 0 0 0 0

Revenue 29,727 35,975 36,952 38,207 39,343 40,653

Direct Expenses (24,106) (29,322) (29,719) (30,940) (31,795) (32,732) Indirect Expenses (3,037) (3,420) (3,424) (3,524) (3,613) (3,757)

Operating Expenses (27,143) (32,741) (33,143) (34,465) (35,408) (36,490)

Operating Investment 0 0 0 0 0 0

Operating Profit 2,583 3,234 3,809 3,742 3,936 4,163

Depreciation & Amortisation (Expense) (2,441) (3,234) (3,809) (3,742) (3,936) (4,163)

Non Operating Investments (Revenue) 0 0 0 0 0 0

Profit Before Acquisition Amort & Tax 143 0 0 0 0 0

Acquisition Amortisation 0 0 0 0 0 0

Profit / (Loss) Before Tax 143 0 0 0 0 0

Taxation 0 0 0 0 0 0

Profit / (Loss) After Tax 143 0 0 0 0 0

Shared Services DivisionProfit & Loss Summary, Rolling (5 Year View)

Server: PROD_PL App: RAC1 Database: PLReport Location: /A) RAC Group/1) P&L Reports

Report Name: 101f P&L Summary - 5 YearRun by user: Yum0p at: 9:34 AM on 18 Mar 13

Page 1 of 1

Note: Breakdown in PAFF and ICT Business Plan

SS Var. Review – FY13 to FY17 total (v previous plan)

9

ICT

Note: Details in PAFF and ICT Business Plan

140.9

1.0

1.7

2.8

137.4

135.0

136.0

137.0

138.0

139.0

140.0

141.0

142.0

FY13

B - 5

yrs

ICT

Mov

emen

t

ICT

- Ora

cle

Busi

ness

Lead

(Off

set)

PAFF

Mov

emen

t

FY14

B - 5

yrs

$Mill

ions

PAFFBusiness PlanFinancial Year 2013/14

10

Section Slide Number

1. Requirements and Context 13

2. FY13 Historical Performance 19

3. FY14 Business Plan 26

4. Risk Assessment 36

5. Sensitivity Analysis / Stress Testing 38

Appendix 1 – copies of P&L, Balance Sheet and Cash flow (from Hyperion or similar)

40

11

Contents

This output document template has been provided to you by Corporate to use during Divisional Business Planning process. Hyperion is required to be updated by Shared Services by 28/2/13, Distribution by 1/3/13 and other businesses (which includes Corporate and Member Services) by 14/3/13. This template is to be submitted no later than 22 March 2013.

1.0 Business Planning and BudgetingRequirements and Context

© XXXWA 2010

PAFF2.0 FY 13 Historical Performance

13

2. Historical Review: FY13 vs. Budget

14

PAFF Highlights• Health & Safety 5 year strategy developed• Recruitment savings (direct XXX advertising) across SS/Corp $300K (YTD) • Radiator produced in house by Design Team• Handover of corporate segmentation to analytics team• Increase in the use of Member Panel for research• January 2013 customer satisfaction rating of MSA 4.2 and Payroll 4.1 (v target of 4). Total

PAFF is 3.9.

PAFF Key Challenges & Risks• Variations in understanding of group alignment vs. business autonomy. This misalignment

makes delivering a Shared Service extremely challenging.• Stakeholder Turnover• Lack of Insurance data for analysis – and still no clear direction as to the future warehouse

solution• Resourcing – especially in Design Services (small teams)

Summary

2. Historical Review: FY13 Initiatives Update (PAFF)

15

Initiatives

FY13 Initiative Status (Red / Amber /

Green /Complete)

Comment s

Support the business in major initiatives in Project Springboard, OXXXle R12 Upgrade and Auto Services Expansion

• Support provided in the scoping of OXXXle R12 upgrade. This project has been delayed to FY14/FY15

• Support provided in Project Springboard. Project is now focussed solely on Motoring

• Auto Services expansion now delayed to late FY14

Building internal capability to enable more effective response to business demand

• LMS capability is being developed and will be transferred to People Services by June 2013

Completion of the Shared Services Leadership Program

• Selected leaders will complete the program by June 2013

2. Historical Scorecard KPIs

16

Financial Sustainability

FY12 (Actual

FY13(Budget)

FY13(Forecast)

Status (Red /

Amber / Green )

Comment

PAFFDirect Expenses

$6.8m $7.6m $7.6m Variation in FY13 Budget to FY13 forecast• FY13 Forecast is expected to be close to budget

Movement between FY12 Actual and FY13 budget• CPI $0.3M• Savings against FY12 budget by PAFF $0.5m

6.87.6 7.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

FY12 (A) FY13(B) FY13(F)

Mill

ions

Total PAFF Costs

17

Key Messages

Movement between FY12 Actual and FY13 Budget

PAFF• CPI $0.3M• Savings against FY12 budget

$0.5m

2. Historical Review: Trends

6.36.8

7.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

FY11 (A) FY12 (A) FY13 (F)

Mill

ions

Expenses: PAFF

Financial Sustainability

FY11(Actual)

FY 12 (Actual)

FY13(Forecast)

Costs - PAFF(Ms) 6.5 6.8 7.6

People Commitment FY11(Actual)

FY 12 (Actual)

FY13(Forecast)

Health and Safety

Maintain Work safe Gold accreditation

GOLD GOLD GOLD

Employee Engagement

Employee Engagement Score

60 71 BEZ

Employee Turnover 20.5 13.8 21

Sick Leave 2.1 2.5 3.0

Membership Excellence

FY11(Actual)

FY 12 (Actual)

FY13(Forecast)

Customer Satisfaction 3.8 3.8 3.9

2. Scorecard PAFF Key Performance Indicators

18

PAFF3.0 FY14 Business Plan

19

OUR PURPOSE:The XXX exists to protect and enhance the lifestyle of its shareholders

20

OUR VISION:By 2020, Western Australians rate the XXX as their most-valued organisation.

RONA& NPS*

Integral to achieving our Vision

Shared ServicesStrategic Issues

PAFFInitiatives

Group Strategic Issues

Financial Sustainability

2013 Strategic Plan

PAFF Aligning the group strategic direction

HoldingsPurpose: To provide financial

return and brand enhancement

People Commitment

Relationship Excellence

Key Result Areas

Competition and Substitution of Services

Performance of XXX

Division

Growth & Sustainability ofFinancial Engine

Disruptive Technology and

Enabling Technology

AttXXXting, Retaining and

Enabling the talent

Complex Systems and inefficient processes

Capacity & Capability constraints

Customer relationship

Shared Services Culture

The Service Delivery Model is not fit for

purpose

IncreaseCapabilities

Integrate withthe businesses

Share insightand knowledge

Focus onSystems

ContinuousImprovement

Building StrongRelationships

PAFF Growth Path

21

Time Horizon

Time

Value

2012/2013>> >>2015 >>2020

Where we are now?

Where we want to be?

Horizon 1‘NORMING’• Businesses understand the

services that are provided.• Services are delivered to a good

standard.• Teams understand the needs of

their customers, and have developed good relationships with stakeholders

• Internal processes have improved, but there are still areas than can addressed.

Horizon 2CONTINUOUS IMPROVEMENT• All repeatable processes are performed

to their optimal efficiency• Service catalogue is constantly

evolving as businesses are becoming more reliant on PAFF.

• Value add is transparent, and measureable

• Teams are truly integrated into the XXX Businesses, and are pro-actively seeking ways to add more value.

• Skills with PAFF teams are constantly being developed, with XXX Businesses recognising PAFF as true experts in their areas.

Horizon 3‘PERFORMING’• XXX Businesses trust PAFF to

provide expert services efficiently• PAFF teams working as self-

managed teams, constantly looking for new ways to add value.

• Businesses recognise the value of consolidating activities within PAFF

3. PAFF FY14 Business Plan Overview

Divisional OAS Statement

Shared Services exists for the benefit of the XXX businesses. Our overall aim is to provide efficient transactional services, plus services, specialist advice and insights that will add value.

We will measure the efficiency of our repeatable processes, and areas of added value, but our overall success will be determined by how well Shared Services can contribute to the businesses achieving their strategic objectives

Highlights of the 5 year Strategic Plan• Process enhancement – developing the ‘how’ and not just the ‘what’• Capability improvement – technology and skill set alignment to business requirements• Improving the relationship with the businesses, through successful and transparent delivery of

requirements• Leadership development • Career Development and skills enhancement• Understanding engagement, and developing initiatives to address issues.

3. PAFF FY14 Business Plan Overview

Key Priorities / Initiatives

Across Shared Services • Facilitate cross group process improvement for Shared Services provided functions

Marketing Services and Analytics• Implement new Market Research survey tool to create reporting efficiencies• Develop new processes of insight development and report writing by having UNITS in the EDW.• Add photography to the Design Services catalogue after training in FY13• Make the business case for an additional Designer, and employ

Financial Services • OXXXle R12 Implementation

Review current OXXXle E-Business system, and redesign, optimise and improve module configuration

Streamline workflow processes in OXXXle, including manual Shared Services processes• Service and Capability Improvement

People Services • People administration process reengineering• Research, investigate and develop a recommendation for an automated on boarding system

3. Divisional FY14 Business Plan Overview

Key Challenges & Risks

• Delivering internal Shared Services initiatives, while still delivering BAU with sub optimal systems and processes while keeping costs at an acceptable level

• Loss of key staff

• Turnover of business stakeholders

25

Key Assumptions

• PAFF includes $1m (5 years) transfer of the OXXXle Business Lead transferred from ICT to Financial Services (offset in ICT)

3. Divisional Forecast Performance – PBT, Net Assets, RONA

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

FY13 FY14 FY15 FY16 FY17

Mill

ions

Expenses: PAFF

Expenses : PY Expenses : CY

3. PAFF - FY13B FY14 to FY14B FY14 Bridge

26

Commentary• OXXXle Business Lead transferred into Financial Services (savings offset in ICT)

8.5

0.2 0.1 0.1 0.10.1 0.1

0.2

7.7

6.0

6.5

7.0

7.5

8.0

8.5

9.0

FY13

B - F

Y14

FS- O

racl

e Bu

sine

ss L

ead

(Off

set i

n IC

T)

FS -

Fina

ncia

l & C

omm

ICT

Supp

ort r

ole

PS -

RAC

Gro

up H

SIn

itiati

ve

PS -

LMS

Reso

urce

PS -

Auto

mat

e Pe

ople

Form

s

PS/F

S - R

enta

l

Oth

er

FY14

B - F

Y14

Budg

et

$Mill

ions

3. Summary of FY14 Budget Initiatives

27

Initiative Revenue ($’000)

Expenses ($’000)

PBT ($’000)

KPI / Volume

Capex($’000)

Cash flow($’000)

XXX Group HS Initiative 120

Financial Sustainability

FY12 (Actual

FY13(Forecast)

FY14(Target)

FY 15 (Target)

FY16(Target)

FY17 (Target)

FY18 (Target)

Costs - PAFF(Ms) 6.8 7.6 8.5 8.4 8.7 8.9 9.1

People Commitment FY12 (Actual

FY13(Forecast)

FY14 (Target)

FY 15 (Target)

FY16 (Target)

FY17 (Target

)

FY18 (Target)

Health and Safety

Maintain Work safe Gold accreditation

GOLD GOLD GOLD GOLD GOLD GOLD GOLD

Employee Engagement

Employee Engagement Score

71 BEZ BEZ BEZ BEZ BEZ BEZ

Employee Turnover 13.8 21 19 17 16 15 15

Sick Leave 2.5 3.0 2.8 2.6 2.5 2.5 2.5

Membership Excellence

FY12 (Actual

FY13 (Forecast)

FY14 (Target) FY 15 (Target)

FY16 (Target)

FY17 (Target)

FY18 (Target)

Customer Satisfaction 3.8 3.9 4.0 4.0 4.0 4.0 4.0

3. Scorecard Key Performance Indicators

28

3. PAFF Headcount & FTE

29

Description FY13 (Budget)

FY13 (Forecast)

FY14 (Forecast)

FY 15 (Forecast)

FY16 (Forecast)

FY17 (Forecast)

FY18 (Forecast)

Headcount 61

FTE – Actual Alesco 55.8 58.5

Current Vacancies – FTE

2.2

Costed FTE – Total Planned

53.6 56.3 55.4 51.7 51.7 49.7 48.7

PAFFFY14 Business Plan 4.0 Risk Assessment

30

4. Risk Assessment

31

Risk Description

Residual Risk Rating

(H/M/L)

Risk Mitigation Strategy / Actions

Loss of key staff and special skills M Key HR strategies in place for succession management, career development, workforce planning , training and building of leadership capability.

Managing demand and supply in the short to medium term

M Continue to communicate and engage business through Focus Groups and Stakeholder meetings.Initiate strategies that meets business demand and needs.

Delivering BAU activities in an effective and timely manner

M

Ability to measure and benchmark success M Continue to perform periodic surveys on Customer Satisfaction. Identify new measures that improve the transparency of PAFF activities with business and its cost effectiveness.

PAFFFY14 Business Plan 5.0 Sensitivity Analysis / Stress Testing

32

5. Sensitivity Analysis / Stress Testing

33

StressTested – impact on PBT

FY14 (Target)

FY 15 (Target)

FY16 (Target)

FY17 (Target)

FY18 (Target)

PBT impact PBT impact PBT impact PBT impact PBT impact

5% increase in wage costs(PAFF)

$0.3m $0.3m $0.3m $0.3m $0.3m

PAFFFY14 Business Plan Appendix 1 – P&L

34

Appendix 1: P&L

FY13 FY14 FY15 FY16 FY17 FY18

$'000 $'000 $'000 $'000 $'000 $'000

PROFIT & LOSS

Product Revenue 0 0 0 0 0 0 Internal Revenue 8,853 9,939 9,851 10,167 10,337 10,605 Other Revenue 62 0 0 0 0 0

Revenue 8,916 9,939 9,851 10,167 10,337 10,605

Direct Expenses (7,538) (8,492) (8,399) (8,670) (8,817) (9,049) Indirect Expenses (1,223) (1,403) (1,406) (1,451) (1,488) (1,539)

Operating Expenses (8,761) (9,893) (9,806) (10,122) (10,305) (10,590)

Operating Investment 0 0 0 0 0 0

Operating Profit 154 45 46 45 34 15

Depreciation & Amortisation (Expense) (33) (45) (46) (45) (34) (15)

Non Operating Investments (Revenue) 0 0 0 0 0 0

Profit Before Acquisition Amort & Tax 122 0 0 0 0 0

Acquisition Amortisation 0 0 0 0 0 0

Profit / (Loss) Before Tax 122 0 0 0 0 0

Taxation 0 0 0 0 0 0

Profit / (Loss) After Tax 122 0 0 0 0 0

PAFFProfit & Loss Summary, Rolling (5 Year View)

Server: PROD_PL App: RAC1 Database: PLReport Location: /A) RAC Group/1) P&L Reports

Report Name: 101f P&L Summary - 5 YearRun by user: Yum0p at: 9:36 AM on 18 Mar 13

Page 1 of 1

Note: Total costs includes internal charges from other Shared Services (including PAFF and ICT)

Appendix 2 – PAFF Variance – FY13 to FY17 total (v previous plan)

36

Notes:• FS – Financial Services• PS – People Services

42.2

1.0 0.1 0.2 0.10.4 0.2 0.1 0.1

0.40.3

39.4

38.0

39.0

40.0

41.0

42.0

43.0

FY13

B - 5

yrs

FS- O

racl

e Bu

sine

ss L

ead

(Off

set i

n IC

T)

FS -

Fina

ncia

l & C

omm

ICT

Supp

ort r

ole

FS -

Team

Reor

gani

satio

n

FS -

Staff

Ince

ntive

s

PS -

RAC

Gro

up H

SIn

itiati

ve

PS -

Annu

al A

lesc

oU

pgra

des

PS -

LMS

Reso

urce

PS -

Auto

mat

e Pe

ople

Form

s

PS/F

S - R

enta

l

Oth

er

FY14

B - 5

yrs

$Mill

ions

Appendix 3 – PAFF Issues, Strategies and Initiatives

37

Strategic Issue Shared Services Strategies PAFF Initiatives

1.Complex systems and inefficient processes

1.2 Optimise Shared Services processes to eliminate

inefficiencies reducing the cost per transactional service

1.2.1 Breakthrough1.2.2 Process re-engineering

2.Capacity and capability constraints

2.2 Continue to develop capability across all of Shared Services

2.2.1 Continuous improvement2.2.1 Increase Capabilities

3.Service Delivery Model is not fit for purpose

3.1 Revisit all elements of the Service Delivery Model to ensure that it is appropriate to the needs of our Business customers (Transparency, understanding)

3.1.1 Oversight Model Review3.1.2 Service catalogue review3.1.3 Cost allocation review

4.Customer Relationship

4.1 Proactively support businesses in delivering on their business objectives

4.1.1 Potential synergies with Insurance4.1.2 Actively support Divisions in achieving their objectives4.1.3 Develop BPI measure link to businesses4.1.4 Improve the engagement mechanism between Shared Services & the Businesses

5.Shared Services Culture

5.1 Develop a culture of confidence, performance and collaboration

5.1.1 Training, coaching and mentoring in people management disciplines5.1.2 SS Leadership development 5.1.3 Understand and improve Shared Services Employee Engagement

38

Appendix 4 - Procurement benefits tXXXking, 8 months as at Feb 2012 Benefits Tracking

Initiative Motoring, Auto

Svcs & DT ($,000)

Insurance & Security ($,000)

Holdings & Club

($,000)

TF & D

($,000)

Total Group

($,000)

*Est. Annual Savings ($,000)

Comments

Print 15 19 12 5 51 77 Scott Print contract renegotiated

Stationery 1 5 1 2 9 12

Reduced basket of stationery ordering and renegotiated deal

Bank Fees 15 15 12 4 46 69 Negotiated contract with Westpac

Horizons Magazine Printing 654 654 981

PMP print contracted to print Horizons as Globe previously did. Savings since switch.

Horizons Distribution (CA) 181 181 181 Cost avoidance for magazine distribution

Document Storage 0.5 6 7 5 18.5 28 Negotiated contract with Recall 1 Qtr

Waste Management 5 5 8 Negotiated contract with Cleanaway

External Recruitment 41 40 90 25 196 294 Negotiated panel agreements

Staff Uniform 22 22 22

Rejected additional cost of paying for discontinued stock.

Canon Printer/Copiers 32 80 112 168

Negotiated unit price reduction per print for newly installed Cannon photocopy/ print/ fax

Total YTD 77.5 117 1,059 41 1,294.5 1,840

Forecasted savings are dependent on volume spend ** Telecoms data not available to calculate savings.

Initiatives generated by businesses and supported by Procurement.

Initiatives negotiated and delivered by Procurement.

Feedback questionnaire – Improving Continuously

One of xxx core values is “Improving Continuously.” To this end please answer the following questions:

1. What worked well with the business planning process?

2. What could be improved?

3. Any other comments about the business planning process?

Thank you for your assistance.