Baseline ROI Awards Submission Analysis

1
Baseline ROI Awards Submission Analysis

• Prepared for Lyondell Chemical Company

2
Agenda

• Compliance and Background
• Executive Summary
• Costs and Cost Drivers
• Benefits and Benefit Drivers
• Consensure Tornado Analysis
• Consensure Cost Recovery Analysis
• Consensure Cost Benefit Analysis
• Consensure Balanced Scorecard Benefit Map

3
Compliance and Background

• Compliance
• Nomination complies to Baseline entry
  requirements
• Yes
• Background
• Nominated company
• Lyondell Chemical Company
• Nominator name
• Mike Reilly, Senior Account Executive Fama PR
• Category prize
• Data Management Operations
• Target user community
• Information Technology and Manufacturing /
  Operations
• Project team
• Douglas Koenig, Mark Oates, Ed Price, Sanjay
  Chadha, Tony Savana, Mike May
• Primary suppliers
• Software NSI Software
• Hardware Hewlett-Packard Company
• Professional Services NSI Software

4
Executive Summary

• Business Challenge
• Meeting regulatory requirements from the EPA and
  OSHA, and managing records used in ongoing
  operations can create a sea of information that
  is very costly to maintain. Lyondell Chemical
  Company operates in many locations around the
  globe, and its U.S. file and print servers alone
  house over 13 terabytes of data.
• In the last decade, Lyondell's stored data
  increased by 364, going from an average of 230
  MB to 1050 MB per user. With 7,500 employees,
  the impact was far-reaching and translated into
  the need for more servers and more storage space,
  extended backup times, and outage recovery times
  up to 36 hours.
• After evaluating its steadily growing storage
  expense, Lyondell looked for ways to streamline
  the process and reduce costs. To accomplish
  this, the company's first goal was to eliminate
  local tape backup at its 26 U.S. locations in
  order to consolidate the rising costs of media
  (tapes), hardware and services. At the time,
  each Lyondell facility around the globe was
  independently backing up to tape and then
  transporting the media offsite.
• Nature of Project
• By installing Double-Take from NSI software,
  Lyondell was able to consolidate its rising
  storage expenses while at the same time improving
  its disaster recovery preparedness. Since
  Double-Take is a software solution that can be
  easily phased in and tested before a full-blown
  deployment takes place, Lyondell began testing
  the solution 2001, and eased its way into running
  Double-Take company-wide within the next few
  years. After testing, deployment began in 2002
  when Double-Take was installed at 8 US sites by
  2003, 22 sites were operating and in 2004, the
  company started to see true ROI with the solution
  fully rolled out.

5
Executive Summary

• Describe how IT aligns technical objectives with
  business objectives
• Lyondell strives to be a low cost provider. To
  align with the company's overall objectives, its
  IT staff provides employees with technology that
  meets their needs, and does so at the best
  possible price. The IT staff is constantly
  identifying and researching new technologies that
  will either help employees do their job better,
  or consolidate overall costs.
• How did this IT project help reduce business
  expenses?
• By restructuring and consolidating how its data
  was stored and backed up, Lyondell saved money on
  hardware costs, media, tape transportation and
  storage, tech support and regular server
  maintenance.
• The project produced business value by changing
  the data backup interval from once a day to
  continuous mode, eliminating the need for rework
  on the business side due to server failure.
• From a business SLA position the project produced
  benefits around having the most current data
  available rapidly in the event of a server
  failure, not just last nights data after a 36
  hours wait. In addition, the user would have to
  recreate data lost after the nightly backup
  during 0-24 work hours as well as, either delay
  business for 36 hours while the system was being
  restored or spend effort in appending the post
  failure data to the restored data once it was
  available. Either case, it is a significant
  benefit to the business from a strategic
  perspective.

6
Executive Summary

• How did this IT project help increase revenues?
• N/A

7
Costs and Cost Drivers
3-Year Cost of Ownership Snap-shot
8
Benefits and Benefit Drivers
131,004
1,220,404
937,400
One-Time benefit
Annual Benefit
9
Consensure Tornado Analysis
3-Year Economic Value Add
Breakeven
691,837
400,000 1. Reduce Server Maintenance
133,404 2. Reduce Media Costs
126,000 3. Removal of backup server from remote
sites
120,000 4. Reduced central support costs
120,000 5. Eliminated tape support personal at
remote locations
88,000 6. Reduce Hardware Costs
70,000 7. Reduced tape transportation and
storage costs.
11,000 8. Annual cost for software at remote
locations

Lyondell Chemical 3-Year Quantifiable Benefits

• Reduced server maintenance
• Reduced media costs
• Removal of backup server from remote sites
• Reduced central support costs
• Eliminated tape support personal at remote
  locations
• Reduced hardware costs
• Reduced tape transportation and storage costs.
• Annual cost for software at remote locations

10
Consensure Cost Recovery Analysis
100 80 60 40 20 0 -20 -40 -60 -8
0 -100
1
Cost Recovery
0 0.50 1.0 1.5 2.0 2.5 3.0 Millions
2
3
4
5
6
7
8

Lyondell Chemical 3-Year Quantifiable Benefits

• Reduced server maintenance
• Reduced hardware costs
• Reduced media costs
• Removal of backup server from remote sites
• Reduced central support costs
• Eliminated tape support personal at remote
  locations
• Reduced tape transportation and storage costs.
• Annual cost for software at remote locations

11
Consensure Cost Benefit Analysis
Pay Back (Months) 31.8
12
Consensure Cost Benefit Analysis
13
Consensure Cost Benefit Analysis
14
Consensure Cost Benefit Analysis
15
Consensure Balanced Scorecard Benefit Map
3-Year Economic Value Add
Customer Perspective
A
Financial Perspective
Reduced server maintenance Reduced media costs
Removal of backup server from remote
sites Reduced central support costs Eliminated
tape support personal at remote
locations Reduced hardware costs Reduced tape
transportation and storage costs. Annual cost
for software at remote locations
B

C
D
E
D
E
H
F
B
G
C
F
A
Internal Perspective
G
Strategic Perspective
H
Learning Perspective
Payback / Breakeven
16
Baseline ROI Awards Submission Analysis

• Prepared for Lyondell Chemical Company