Page 30 - Global Risk Advisory – Connected Thinking

Global Risk Advisory PCoE | Connected thinking Charting the course of your optimized assurance journey Implementing transformation, risk and assurance functions improving the efficiency of how you deliver combined frameworks – is lining you up to build an even stronger, future-proof Siemens that can continue to compete with the best in the industry. Charting the course of your optimized assurance journey 8 January 2018 | Annex 1 | Proposal to Siemens to further optimize your assurance landscape 01 Charting the course of your optimized assurance journey | Contents 2018 Deloitte GmbH Wirtschaftsprüfungs-gesellschaft Contents Introduction and executive summary Meeting your objectives How we will deliver: Our plan on a page Deep dive: De-layering your assurance function Deep dive: Providing assurance over majority owned businesses Our delivery timeline Leveraging our experience The right team Proposed fee and investment Appendix A: CVs Appendix B: Your medium and long term analytics plan Appendix C: Deloitte Greenhouse acceleration labs Appendix D: The future of combined assurance Appendix E: Sample leadership transition lab agenda Appendix F: Client responsibilities and project assumptions 03 05 13 14 16 18 19 26 28 29 38 41 49 54 56 Charting the course of your optimized assurance journey | Introduction and executive summary Introduction and executive summary This is an exciting time for Siemens. Your growth, focus and flexibility is impressive. And your new strategy – your “flotilla of independent ships” – is lining you up to build an even stronger, future-proof Siemens that can continue to compete with the best in the industry. At the same time, your plans represent the most significant transformation your risk and assurance function has ever contemplated. You need to adapt and support this new construct while continuing to protect your global brand. At this important time in Siemens’ history, your values and strategies are allowing you to respond by evolving your strong foundation, innovating and driving change to revolutionize the future of assurance at Siemens. D e l o i t t e h a s b e e n p r e p a r i n g t o s u p p o r t y o u i n charting the course of this journey for a long time. As you can see in our proposal, we are excited and ready. Trust, commitment, quality, insight We have had the privilege of working with your team over the last decade. We have taken time to get to know you and understand what is important. During this time we have delivered a number of successful risk projects together, including Charting the course of your optimized assurance journey | Meeting your objectives Meeting your objectives We appreciate the time you have taken to share your thoughts on your objectives and what is important to you. You have been open, engaging and willing to share valuable information with us. We listened, and have designed our approach with your needs in mind. Objective #1 Combine your IA and R/IC/ functions, including ERM and improve the efficiency of how you deliver combined assurance across the organization Key areas of focus to achieve this objective: • Designing a fit-for-purpose R/IC/ approach • De-layering your assurance function • Automating assurance • Reducing areas of overlap and unnecessary activity • Managing the function more strategically • Establishing cost-effective reliance by your external auditor 2018 Deloitte GmbH Wirtschaftsprüfungs-gesellschaft Meeting two key objectives You have identified two key objectives you want to achieve as a result of this initiative. Your objectives are to: Charting your course 1. combine your CFA* (IA) and RI/IC/ functions, including Enterprise Risk Management (ERM) and improve the efficiency of how you deliver combined assurance across the organization 2. design the process for providing assurance over majority owned businesses given the growth in this area as a result of the Siemens AG strategy. This section summarizes our thoughts on the key areas we will work with you to focus on as part of this project to help you achieve these objectives. d 20 control (R/IC/) system and a number of cyber security assignments. Your feedback is consistent: • you trust our team and commitment, and value our ability to consistently deliver the highest quality results • you trust our advice and value that we continue to challenge and bring you new insights and ideas. We have worked closely with you to help you s c h o ma p b e i n y e o d u r a s t h s u i n r k a i n n c g e a f r u o n u c n t i d o n y o . Y u o r u n e c w a n e x p e c t this same commitment as we continue your assurance journey together. eHxaprenretsisieng insights from world-class Deloitte has the largest Risk Advisory practice in the world. We also deliver more integrated assurance projects than any other firm by a wide margin – and integrating your assurance capabilities is of course at the heart of what you need to do to optimize your assurance. t3 e v e lo p i 1 n g 8 y D o e u lo r tt in e t G e m g b r H a W t e d rt r sc is h k a a ts n pr d ü i fu n n t gs e r - n ge i i f l e a s ll s c ha f Objective #2 Design the process for providing assurance over majority owned business given the growth in this area as a result of the Siemens AG strategy Key areas of focus to achieve this objective: • Setting a clear governance framework • Defining R/IC/ and assurance requirements for your future “flotilla” • Resourcing the “supply” of assurance * Throughout this document we refer to CFA as your legacy internal audit function, bweilflobreacrkeayticnogmypoounr ennetwocfocmombibniendedasasusruarnacnecefunanctdioisn.rGefoeirnrgedfotrowasrdIAinwtherenreal audit 5 forward looking. Charting the course of your optimized assurance journey | Introduction and executive summary This market share translates into extensive practical experience. In my role as your engagement partner and as Deloitte’s Global Risk Advisory Chief Operating Officer, I am here to bring the full power of our global firm to support your combined assurance journey. Right away you can see this commitment brought to life in the team members we have mobilized to support you. Our team includes engagement partners from two countries and delivery team members from across Europe. We are supported by a world-class panel of 11 subject matters experts (SMEs) from across North America, Europe and Asia Pacific that specialize in internal audit (IA) transformation, combined assurance, analytics, digital opportunities and assurance related to initial public offering (IPO) and joint venture (JV) structures. They represent the best from across our Deloitte network. Their insights, built on what they learn working with other relevant global players have helped shape our thinking on this project. Working with our SME panel on this project will help us ignite the art of the possible with insights to help you unearth and explore new possibilities. Our SME panel will connect you directly to these relevant global players. This includes clients like Amazon, Google, BP, Shell, BHP, Rolls Royce and Thyssenkrupp. This is a unique opportunity for you to engage directly, learn and share challenges and opportunities with others that are on journeys like yours. This is similar to the RICS roundtable we have been facilitating for you since 2011. This means more insights on a global scale. It is not just the expertise of our firm as a whole that provides value for you. It is actually the direct experience of our 2018 Deloitte GmbH Wirtschaftsprüfungs-gesellschaft individual team members. Our team members have been involved in similar projects for the most relevant global players. This includes all of the clients mentioned above. We worked with each of these clients – and many more – to combine and de-layer their assurance functions to create fit-for- purpose structures and drive efficiency and savings, redefine what assurance means to the organization, implement new governance structures and build roadmaps for their future. We can benchmark you against others who are on the same journey and share insights and valuable, real-time lessons learned with you as we go. You can continue to expect the best insight and expertise from Deloitte. Investing in your journey to bring the art of the possible to life A key focus of this project is to design your new combined assurance function and approach to give you a solid foundation for the future. We know that Siemens prides itself on being at the cutting-edge in both whatyoudoandhowyoudoit–andyour assurance function is no different. We are passionate about challenging our clients to think differently and we are already helping a number of them to innovate their own assurance journeys. Giving you a clear, actionable roadmap on how to get there is an important step in our approach. As part of our continued commitment to your journey, we would like to invest in a series of intensive labs. The first set is what we call a Deloitte Greenhouse. This is a three-day session where your team joins ours – including members of our SME panel – in one of our global Greenhouse headquarters to accelerate breakthroughs in how you leverage analytics and digital opportunities and then develop and prototype actions to bring your roadmap to life. The second is a series of full day individual leadership labs for each of the leads of your new combined assurance function to help them integrate into the new function. Your team will be equipped to meet the expectations of your stakeholders and help Siemens protect its most important asset – the brand. These labs, along with our substantial fee investment show our continued commitment to your cause. De-risking your journey A new organization structure and new processes means a lot of change – effectively managing this change is a critical success factor for the project. Working with an experienced team like ours that you know and trust will help de-risk this project and make implementation easier. We will work closely with you to shape the approach and messaging you need to build consensus, bring the rest of the business on board and drive change to make this evolution a success – while enabling you to still deliver high quality assurance. Thinking long term This project will help you set the critical foundation of your future combined assurance function. But, this is only the first step on a longer journey to build and maintain your leadership in this space. There will be times along this journey when you want to be able to look to the team you choose to help you design and implement certain initiatives and help your management make decisions around assurance. We are committed to being the team and partner that can play this role. A true passion to see you succeed Great teams do extraordinary things. You see this at Siemens and you will continue to see it with us. Every day, we will work diligently to continue to deliver an exceptional experience. We are truly excited to play our part in helping you navigate the future. We look forward to meeting with your team on Wednesday to discuss our proposal in detail. As always, please do not hesitate to reach out to me if you have any questions. Yours sincerely, David Noon Engagement partner Risk Advisory 4 2 Charting the course of your optimized assurance journey | How we will deliver How we will deliver Objectives Activities Deliverables Timing* *Details on page 18 CSirematenas’vfiustiounreacnodmpbuirnpeodsaesstuartaenmcent for function and document the boundaries for design. Casoslluarbaonrcaetiavpelpyrdoeascihgnanthdefufuntcutiroencaonmdblianyedthe foundation for implementation. Focuses on meeting your objective #1 Integrate 3 LOD frameworks: pDreosvigidninagfiats-fsourr-apnucrpeosverapmparjoarcithy towned business. Focuses on meeting your objective #2 SaundppimorptlSeimemenetninsginfuidtuernetiafysisnugr,asneclecting technologies to drive further digitization and efficiency – and bring the art of the pFoscsuibselestonlifme.eeting your fit-for-future journey a) Agree on vision and purpose for combined aPsrosujercatnDceirefucntocrtion (integrated model) with a) b) Dreolactuiomnetnot wthoerkbsoturenadmarsie2stfor4d(ie.es.iglinminitations for consideration) b) c) B gleonbcahl mplarykertos, owbithaian finosciugshotsnfrthoomserewleitvhant sbiugsniinfiecsasnetsJV relationships and majority owned c) Conductndcurrent state assessment of 3 LOD (3rd line ( S –PyCusFrteApmo, 2s/eR//PlIiCon/se,it1–isoEtnlRi/nMPerao–nRced/IsCIsn/etase/nrPndeaEolRpCMloen/)Pturesorilnfogr5mPasnce) Complete assurance mapping (via analytics) to identify duplicative efforts and de-layer Douetseormuricninegmtoixm(gaujeosrtitayuodwitnoersd, breusoinuerscseesh, aring, rCealpiatnucre)reporting demands and design future state reporting (interactive, video, podcast) nd a) b) c) d) • • • Identify priority majority owned businesses to fcohcaunsgaet)tbeansteiodno(bnursisinkeasnsdesmimatpuaricttyed by the Dm e e f a i n n e s t f h o e r S l i i me mi t s e o n f s “ i c n o t n e t r r mo l s ” o a n f d s p w e h c i a f y t i t n h g i s r i s k , iantderpnraolceosnsterso.l and assurance arrangements Design a framework (including approach) for pbruosvinideisnsgesa.sTsuhreafnrcaemoevweorr“kmwaijlol rinitcyluodwen:ed” • Governance structure • Basyslauwrasn(cheow“deSimemanedn”sadnedfihnoews itshe majority owned businesses “supply” • aAssurance)coverage, types and timing • Arespsurtatniocenatol,poipcser(ea.tgio. nICaFl,Rc,ormiskp–liance) Pnroempianraetefodrbaupsilnoetsosf the approach on a Dtoomcuamjoernittyeodwfrnaemdebwuosirnkedsessaigssnuarnadncaepproach Manadjoarpitpyrowacnhedwbituhsdineessirseadsosutrcaonmceps idloetfipnleadn. The plan includes a lessons learned approach Months 3-7 a) b) c) d) • • • Hold a three-day Deloitte Greenhouse lab wGrheernehyousretehaemadjqouinasrtuesrsintonaeccoefleoruarteglobal b hroewakwtehrwoiullgheslpinyou leverage analytics and dpirgoitoaltyopeprooratudnmitaiepsacntdiotnhsetnodevellopand then bring your roadmap to life. Topics will inc•ludFeu:ture IA: • Agile auditing • Dynamic resourcing structures • Cognitive computing • Fu•turGeuaesstuaruandciteo:rs • IAndtvearancteivdedraetpaoarntianlgytics • Artificial intelligence (AI) • Robotics Process Automation (RPA) • CRoismk smeonnsinGgRC platforms Build your roadmap Hlaoblsdfaorseraicehs of tfhuell dleaydisnodfivyidouarlnleawdership combined assurance function to help them integrate into the new function. Aronandamnaplytoicsbemcaotmureitaynasinsseisgshmtse-dnrtivaennd oFirvgeayneizaartironadmap of methodologies and selected technologies that you can implement. TMhoisntinhcslu3d-5es an action plan of quick wins d) AasgsruerearnecpeofrutincgtisotnruwcittuhrePrfojrecot mDibreincetodr d) e) lDinees)ign reliance protocols (external audit, IA, 2 • Df u o n c c u t i mo n e n t e d v i s i o n f o r n e w a s s u r a n c e • Benchmarking paper of insights • Months 1 f) C(daepmtuarnedd/seusipgpnlyplreinvceirpsl,epsrfionrciipnlteagrxaist,erdepapoprtrionagc, h rcoloersd/rineastpion)siabnilditiperse, prealriaenacses,ucroavnecreavgies,ion 2020+ Integrate functions: a) Acogureneterroplearotsf c(EoRmMb,inIAe,dRa/IsCs/u, rInatnecrenfaul nCcotniotnro, lroles of System) b) Dexeptermts,inbeodstyrulecatusere, in(c-e/cnotr-/aoliuzet-ds/oduercendt)ralized, Lay the foundations: a) Dcoemvebloinpedroasdsmurapn*cetofunnecwtionptimized approach and b) Develop a change management plan *•wRinosa”dCtmourarrepeanwlitzilesl tpbaretienoeraiftsiitszsersaigschmttiveaintwieta/sya.snsdurhaignhcleigmhta“tqruixick • Dasessuigranndcoecfurmamenetwaonrdk de-layering matrix for • IA strategy • IpMmlaopnlethmse2n-6tation roadmap/change management 2018 Deloitte GmbH Wirtschaftsprüfungs-gesellschaft 13 30 02