Halliburton Tax Department Process Improvement Efforts June 29, 2011.

Halliburton Tax Department

Process Improvement Efforts

June 29, 2011

2FOR INTERNAL USE ONLY

Team Report-outs

TaxSystems

DataMgt.

Tax Acctg. ...

OpportunityCategory

LikelySolution

List OfOpportunities

• Initial view of opportunities• Opportunities not quantified• Will require input from Team leads

• Highly Subjective


LikelySolution Audit Compliance DMG FTC OneSOurce Planning Tax Acctg Grand Total %OneSOurce 12 6 10 12 40 35%Process 6 2 3 8 5 24 21%Talisman 1 9 1 1 12 10%Tool 3 4 4 11 10%Source Data - FA 5 1 4 10 9%Role 1 1 2 4 3%Training 1 3 4 3%CorpTax 2 2 2%Sharepoint 2 2 2%Communication 1 1 2 2%Documetation 2 2 2%Access 1 1 1%SAP 1 1 1%Grand Total 13 27 18 5 11 13 28 115 100%

Opportunity CategoryAudit Compliance DMG FTC OneSOurce Planning Tax Acctg Grand Total %Auto 1 11 8 1 3 9 33 29%Info 2 3 7 3 2 6 23 20%PI 4 6 1 1 1 6 2 21 18%Data 2 5 1 2 2 2 5 19 17%P&T 4 1 1 1 3 5 15 13%F&A 2 1 1 4 3%Grand Total 13 27 18 5 11 13 28 115 100%

A Quick Look At The Opportunities …

Of the approximately 115 opportunities identified in the team presentations, the vast majority (80+%) fall into 4 categories: Automation, Information, Process Improvement and Data.

… of those opportunities, the solutions tend to cluster around a few areas.


Looking at the intersection between the type of opportunity (e.g. automation) and the expected solution (e.g. OneSource) we see pockets of commonality:

… while this information is not conclusive, it provides a “heat-map” view of where we think opportunities exist, and where we may want to focus our efforts. Equally important – where we may NOT want to focus our efforts.

A Quick Look At The Opportunities …

Opportunity CategoryAccessCommuni

cationDocumet

ation Process RoleSource

Data - FA Tool Training OneSOurce Talisman Sharepnt SAP CorpTax Grand Total

Auto 1 3 24 4 1 33

Info 1 5 3 7 6 1 23

PI 12 1 2 3 1 1 1 21

Data 1 1 1 2 5 3 5 1 19

P&T 1 5 3 4 1 1 15

F&A 4 4

Grand Total 1 2 2 24 4 10 11 4 40 12 2 1 2 115


Process Improvement Program vs Effort

Strategic initiative Multi-year effort Focused on culture change &

results Extensive training:

– Black Belts

– Green Belts

– Master Black Belts

Short-term, tactical effort Focused on specific opportunities Upgrade organization’s skills Minimal training:

– Project Sponsors

– Project Leads

ProgramProgram EffortEffort

As Tax embarks on its Process Improvement Efforts over the next several months it can learn form Process Improvement Programs and consider Best Practices.


Goals / Expectations – Typical PI Program

Culture Change•Fact-based decisions•Customer-focused organization•Effective, consistent approach to problem solving

Results:•Productivity (typically 20-30% improvement)•Cost savings•Quality improvement (fewer defects, risk mitigation)

Effective Team working:•Identifying the right team members•Effectively engaging team members to solve the problem

Upgrade Organizational Capabilities & Solve Specific ProblemsUpgrade Organizational Capabilities & Solve Specific ProblemsUpgrade Organizational Capabilities & Solve Specific ProblemsUpgrade Organizational Capabilities & Solve Specific Problems


Process Improvement Roles

Project Sponsor(Champion)

Project Leader(Belt)

Team MembersIndividuals with specific skills/knowledge required to successfully complete the project.

Leads day-to-day project activities.Responsible for the success of the projectEstablishes a team and manages the team’s activities.

Identifies and qualifies the project opportunity.Assigns the project to a project lead.Monitors progress, breaks down barriers.


Yellow-Belt Training

Session 1: Process thinking Lean Principals Project Chartering (Identification,

Scoping, Chartering)

Session 2: SIPOC

– Cause & Effect Matrix (C&E) 8 Wastes

– Rolled-Throughput Yield (RTY)

- Should Consider For Tax- Should Consider For Tax - Should Consider For Tax- Should Consider For Tax

Session 3: Value Stream Mapping (VSM)

- Failure Mode Effect Analysis (FMEA)

- Project Management

Session 4: Process Controls

- Transition to Process Owner

- Leveragability

- Update living documents (FMEA, SOPs, Control Docs, etc.)

- Project Closeout


The Goal: Breakthrough

Time

De

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tep

s ProcessBreakthrough

Current State

Future State

Improvement Period


APPENDIX


Process Improvement Training

Role Training PurposeTypical

Application

Awareness 4 Hours Basic Understanding Everyone

White Belt 1 Day Support Projects as Team Member Varies

Yellow Belt 2 Days Leads Small Projects Varies

Green Belt 10 Days Leads Medium Sized Projects – supports BB Projects

10% - All Salaried Employees

Black Belt 20 Days Large and/or complex ProjectsMentors GBs & YBs 1%-3% of Staff

Master Black Belt 30 Days Very large/Complex projectsTrains GBs, BBs, etc. Very few


June 14th Meeting

Good energy & involvement Lot of activity Some bright spots

Poor execution Little progress Inconsistent approach Lots of platitudes … few actual

commitments


Examples of Categories of Opportunities Auto Examples:

– Automate Transfer of Data Between Compliance Software and Excel– Manual Tax Adjustment (data)– Manual Tax Adjustment (process) Automation– Forms Automation

Info Examples:– Begin to mitigate Fin 48 issues arising from lack of documentation– Incorporate use of provision reporting checklists to ensure appropriate inter- and intra-period classification of balances

PI Examples:– Partner with internal audit to ensure planning strategies are implemented, executed, and maintained in accordance with the

plan– Develop Process to Release 3rd Party WHT from A/R

Data Examples:– Develop database of historic intercompany issues and their resolution – reduce duplication of effort– Topside Entries– Integration of Hyperion Planning data directly into provision processes on a real-time basis

P&T Examples:– Implement a rotation/training process to develop expertise– Completion and rollout of iLearn courses followed by continuous update – Assignment of support responsibility to Tracy Howell to assist F&A field personnel and RTM’s

F&A Examples:– Create Separate “Capital Accounts” for Partnership Rptg. – Flexible data feeds & adjustment automation enable working with F&A to improve upstream data feeds – Alignment of tax with the finance organization (data not aligned)


Tax Process Improvement – Initial Steps

Rough analysis of presentations Initial discussion on the approach

– Identify & fix problems

– Improve staff skills? Next Steps

– Dir. Reports ID top 3-4 opportunities

– Rough quantification & ID lead

Report-out from dir. Reports – top opportunities

JA discuss what good project definition looks like

– Problem Statement– Quantification– Entitlement– Metrics– Customers– Defect definition

Next Steps– Dir. Rpts. Refine & bring back to

next staff meeting

June 29th Staff Meeting July 13th Staff Meeting

Get on the same page:•See the data from June 14th meeting•Think about the objective

Know thy limitations:•Learn a little about what a good project definition looks like - &


Examples of Opportunities from June 14th


What Good Project Definition Looks Like

During 200_ HAL processed ___ Inter/Intra period balances. For Tax to properly process that may balances requires allocation of __ man-hours of effort.

Problem Statement:Problem Statement:

Identify & implement a solution that will reduce the amount of effort required by Tax from __ man-hours of effort to approximately__ man-hours of effort – without compromising the quality of the results produced by Tax. This goal should be achieved by mm/dd/yy.

Project Objective:Project Objective:

Hours of effort to process an Inter/Intra period balance.

Primary Metric:Primary Metric:

1) Any Inter/Intra period balance that requires more than ___ hours to properly categorize,

2) Any inter/intra period balance that was categorized incorrectly.

Defect Definition:Defect Definition:

1) Get clear on the problem• Do we have errors (defects) in how we

categorize Inter/Intra period balances, OR• Are we trying to save time & get more

efficient?

2) What is the Objective of the project”• How will the Project leader know when

they are done? Successful?• Are expectations reasonable

(entitlement)?

3) How do you measure this process?

4) What is considered a defect for this process?

Example: “Incorporate use of provision reporting checklists to ensure appropriate inter- and intra-period classification of balances “


Approach

Look at opportunities from June14th

PI Objective:– Act on opportunities– Staff skills?

DRs discuss top opportunities

Who will lead? Cross functional? Overlaps? Assign top few to staff

July 27th

DRs report out on refined projects– Problem– Objective– Metrics– VOC Discuss SIPOC / C&E

Agenda: Agenda: Agenda:

Purpose: Purpose: Purpose: All get on the same page: See data from June 14th Think about objective:

– Fix problems– Staff skills?

ID top opportunities Know thy limitations:

– Projects not well defined– Why staff needs help

Staff Meeting Staff Meeting Staff Meeting

Finalize opportunities Agree on training / next

steps

June 29th

July 13th

DR

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Halliburton Tax Department Process Improvement Efforts June 29, 2011.

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