Participations PARIS Implementation & Residuals

Problem Statement – Participations ● Very manual, time-consuming and inefficient processes are employed for Data Sourcing, Payout Calculations, Paper copying and filing.
● The OPUS system is not enabled to model participant contracts, calculate payouts and to directly generate participant statements. A mix of manual procedures and excel manipulations are employed to prepare Talent Statements.
● The volume and type of products and the complexity of talent deals are ever increasing which results in keeping up with the statement generation schedule very difficult. Additional headcounts are required to keep up with the ever growing volume of work. To deal with the work load, for the deals which are forecasted to not pay do not have statements created (i.e. statements are “bugged”)
● Upstream data sources lacking governance and consistency in usage providing data in a form that lacks the appropriate level of granularity and attributes. Lack of complete understanding of the information flowing into and filtered out of the data feeds into the department.
● Unable to focus on value-add activities (e.g. breakout projections, proactive buyout assessments, ‘What-if’ analysis, impact assessment & feedback to Business Affairs across title, market & media types). 4 Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

Problem Statement – Residuals ● Very manual, inefficient, and error-prone processes employed for data sourcing, payout calculations, guild reporting, paper copying/filing.
● Majority of the data sourcing and systems feeding is done manually by the clerks which is error-prone. Data reconciliation processes are not rigorous and error prone due to human involvement.
● The volume and type of Products, the complexity of guild rules along with expansion of the reuse markets and the manual departmental procedures results in keeping up with the workload very difficult. This in turn results in un-recoupable overpayments, late fees and penalties on the department.
● The increasing workload and the lack of a system results in the work being handled by the staff through overtime and by outsourcing to third party providers. This has also resulted in temporary staff being used permanently.
● Unable to focus on value-add activities (e.g. projections, analysis for negotiations and ultimates).
● Recurring errors in payouts and the accompanying claims might strain relations with the Talents. 5 Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

Participations Difficult to manage the volume with time-consuming manual calculations
Statement generation is manual and very cumbersome; OPUS does not produce “headsheets” or statements, only the data to support them
18-month limit on detailed monthly data in OPUS; difficult to calculate historical point-in-time data
Spends a significant amount of time responding to queries from other groups; lack any type of estimation/modeling tools for calculating “what-if” scenarios
No system support for payout calculations for the digital markets, and complex talent deals Audit Spends a significant amount of time researching data discrepancies, statement adjustments, etc.
System “tricks”, dummy numbers, and manual adjustments (“one-sided entries”) pose risks during audits
Lack of formal checks and balances IT Residuals system is inflexible and has several system limitations (e.g. field sizes are limited to $99,999) as it was implemented in the 1960’s
IT support for the Residuals mainframe system is very limited due to aging technology. The team has recently lost one-half of the IT support team –resources who had been supporting the department for several years. Additional turnover events (like retirement) will pose serious risks to IT operations and the obsolete technology makes it harder to find suitable replacements. Residuals Difficult to manage the volume with time-consuming manual calculations
Changes to the guild agreements cannot be accommodated; system is not equipped to support current guild agreements
Unable to capture pension or pension ceilings so often overpaying or underpaying
Cannot adjust tax rates as the change will be applied retroactively and recalculate all previous statements/payments
Payments are manually tracked on a spreadsheet
Retrieve data from 12 different feeds/sources; input data manually from hard copy reports
Electronic reporting to the guilds and talents requires improvement
Data reconciliation of financial and trigger information is not being done due to lack of system capabilities Current Challenges and Issues by Area 6 Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

7 Since we last convened … An Assessment phase was funded with the primary objective of assessing the functional fit-gap of NBCU PARIS against SPE requirements and assessing the feasibility of Residuals BPO. Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

Assessment Phase Summary Timeline: August 2011 to August 2012 Phase Cost: $949,325








Activities summary:
Delivered selection of Software Platform and Operations Model using PARIS for Participations
Delivered Business Case Assessment and subsequent Due Diligence for BPO with Entertainment Partners
Gathered High Level Requirements through Focus interviews and Workshops with key stakeholders
Finalized Overall Project Scope
Developed High-level Project Budget, Schedule and Timeline, Resource Plan (including backfill requirements)
Developed Data Conversion & Migration Strategy and Plan
Developed Data Sourcing & Interface Strategy and Plan
Developed Greenlighting Material for full project funding Data & Interface Assessment Residuals Outsourcing Assessment NBCU PARIS Impact Assessment BPO Due Diligence BPO Business Case PARIS Impact Assessment Report 8 Comparative Review Executive
Debrief Participations PARIS Implementation & Residuals BPO – Greenlight deck The project has already seen paybacks in terms of recoupments for Participations and Residuals in the Inception phase.<br>

PARIS for Participations - Impact Assessment Participations module of NBCU-PARIS has a good level of functional fit relative to SPE’s requirements.

● The Business Process automations delivered by PARIS far exceeds the current automation levels at SPE.
● PARIS capabilities and feature-set for Participations & Audit scored at over 86% and 81% respectively by SPE stakeholders.
● PARIS provides a strong coverage for most of the requirements.
● The Participations, Data Staging and Audit modules are quite robust, flexible and more mature than the Residuals module.
● PARIS architected on the latest Microsoft technologies including the .NET framework. NBCU facilitated 4 sessions with SPE:
PARIS overview and orientation
Admin features (Data staging and Administration) demo
Residuals demo
Participations demo

The NBCU demonstrations of PARIS were based on scripted demo scenarios :
These scenarios were based on SPE’s high-level functional requirements.
The scenarios represented a selection of high- and medium priority processing requirements.
Demos were attended by SPE stakeholders across Participations, Residuals, Input Consolidation, Audit, Finance and IT groups. 9 Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

PARIS for Participations - Project Phases Impact assessment
Requirements
Functional fit
Estimates
Hands-on evaluation
Early design
Support model decision
Refined estimates
Conversion planning
Approach and priorities
Resources and backfill
Controls and Acceptance
Planning for Parallel Ops. Impact Assessment
Hands-on Evaluation
Conversion planning Installation and Configuration
Development and Integration
System & Parallel Testing
Training and Change management Participations Conversion
Parallel Operations
IT Support Installation and Configuration
Data loads (migration)
Lookups/mappings
Templates and hierarchies
Development and Integration
Interfaces
Reports
Testing
Functional tests
Parallel tests
Training and Change management
Org and process design Participations conversion
Parallel operations
Data refreshes
Porting converted titles
IT support
Hypercare
Systems maintenance
User support 10 2 Months 12 Months Ongoing Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

PARIS for Participations - Project Timeline Key Estimation Drivers and Project Considerations

● The PARIS Configuration within the Implementation phase is the key design activity to prepare the system for Participations usage.

● The detail- and research-oriented nature of Conversion makes it the most intensive phase in time and effort. Issues unearthed demand strong decision making skills and Standard Exception Handling procedures need to be instituted.

● Resource planning and Department alignment is critical to the success of the project. Determining backfill, ratio of SPE-to-contractor resources and regular training will help mitigate the risk of PARIS knowledge being confined to contractors.

● There exists a steep learning curve to PARIS, and the departmental functions will become more analytical and less data entry / processing type. Go Live Implementation model decision Decommission legacy systems Planning Conversion Conversion Complete 11 Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

PARIS for Participations - Project Costs & Benefits Summary 12 Note:
Twelve year summary includes the costs of Inception phase
CBA has been calculated over a timeline starting FY12 Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

13 PARIS for Participations - Project Benefits Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

Entertainment Partners selected as the leading vendor from a Business Process Outsourcing RFQ concluded in 2012.


A detailed due diligence assessment of the EP proposal was conducted. The assessment included review of - Organization & Transition approach, Conversion approach, IT Systems, Timeline and Level of Effort. The goal of the due diligence was to craft the future state organization for SPE and EP, create the BPO Business Case and confirm the Pricing.

● EP proposes to completely take over certain functions, including product and cast setup, residuals calculations and payment processing.
● SPE would retain ownership over interpreting agreements, determining triggers, supporting audits, forecasting and reporting,
● Improved Data Staging is the key to realizing the benefits. The option being considered is the use of EP’s proposed new feeder system (go-live expected in July 2013).
● There is a potential to offshore 2 FTEs in the retained organization. Draft for discussion 14 EP for Residuals Outsourcing - Assessment<br>

Finalize Contracts, SLAs, and KPIs
Define Processes & Controls
Perform Data Reconciliation
Build Data Enrichment Platform
Build Interfaces for triggers & payments
Design Organization and Change Management
Conduct recruitment for Backfill and retained Organization
Build the SPE system sunset roadmap Implement Organization, Processes & Infrastructure Import historic data and recreate balances between SPE & EP Business-as-usual interaction between SPE and EP Title/cast setups for 1,442 features and 52,714(1) episodes
Revenue and air date history import
Reconciliation of historic SPE payments with EP system results Document collection for new setups
Review/approval of setups, triggers and payments
Audit & forecast support
New acquisitions processing
Residual payment processing
Infrastructure maintenance Draft for discussion 15 EP for Residuals Outsourcing - Project Phases Project (24 Months) Note:
1. Size of the library as of August 2012<br>

Process Transition Data Staging / Enrichment Contract Negotiations Planning and Administration EP Client
On-Boarding Data Conversion Training Project Closure Finalize KPI/SLA
Review and finalize MSA
Finalize new Air Date vendor Finalize transition plan
Confirm transition team
Obtain resources Confirm Data Enrichment requirements
Configure Data Enrichment requirements
Develop Data Enrichment rules
Test enrichment rules
Deploy enrichment rules to production IT Design & Development Build interface for revenue /run data
GL interface from EP
Reports development
Reconciliation reports Vendor introductions
Account setups
Finalize EP client profile
User access rights (hosted environment, VPO) Integration Testing Revenue triggers
Run triggers
GL feed to SAP Cutover Plan Hosted environment
VPO
Conduct future state process training
EP work shadow and knowledge transfer Develop and approve cutover approach (business and IT)
Decommission transition backfill Project completion planning
Implement retained organization
Archive historic data
Decommission conversion backfill
Decommission RP00 Confirm final process design
Future process documentation & desktop procedures Communication Features Review and finalize communication requirements
Draft communication to internal organization
Draft communication to external organizations (talent, guilds, etc.) Organizational Transition Roles & responsibilities
Identify skillsets for retained organization
Identify key process owners
Coordination with HR (compensation, termination, recruitment)
Interview potential hires
Identify resource transition plan and timeline Data Reconciliation EP for Residuals Outsourcing - Project Timeline<br>

17 EP for Residuals Outsourcing - Project Costs & Benefits Summary Note:
Twelve year summary includes the costs of Inception phase
CBA has been calculated over a timeline starting FY12 Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

18 EP for Residuals Outsourcing – Project Benefits Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

Draft for discussion 19 Headcount request One Director role to Television IT team to replace Mark Quinto

One Director/Manager role to Corporate IT team to backfill Rajeev Nair<br>

20 Questions ? Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

21 State of other Studios Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

PARIS Impact Assessment Approach The PARIS Impact Assessment was identified as an initial planning tool as part of the SPE Participations and Residuals Program Alignment Session in July 2011

As part of the assessment, high-level requirements were gathered for Participations and Residuals processing and these requirements were prioritized to create:
► Scripted scenarios for a PARIS demo
► A technical questionnaire covering system configuration and maintenance inputs

Three PARIS demo sessions spanning 8 hours were held to:
► Assess key capabilities and functional fit
► Gather high-level implementation inputs

Additional inputs on implementation and conversion were collected from other studios’ experiences with PARIS and other solutions

These inputs were distilled to:
Create a work plan and estimates with the implementation approach and timeline
Document risks and considerations around deploying and transitioning operations to PARIS Draft for discussion 22<br>

PARIS manages the range and complexity of scenarios and calculations employed by Participations & Residuals Flexibility Usability Controls Fit 23 Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>

24 Residuals departmental work metrics Participations PARIS Implementation & Residuals BPO – Greenlight deck Features with Quarterly Reporting Net New TV Episodes requiring setup Titles with New Media Payments (Quarterly Payments)<br>

25 Participations departmental work metrics Participations PARIS Implementation & Residuals BPO – Greenlight deck<br>