preparation tomorrow meeting 9 fernley fyi process assessing impact priorities mentioned forwarded mike jordan lon ect 04 10 2000 14 23 mike jordan 26 09 2000 19 18 fernley dyson lon ect ect mark pickering lon ect ect richard sage lon ect ect cc steve whitaker lon ect ect sandip joshi lon ect ect subject preparation tomorrow meeting 9 fernley fyi note send john richard joe michael explaining going justify program beyond current agreement principal go back 1 2 reasonably quickly joe richard big buyers 1 least introduction enron expanding rapidly continuing grow current business acquiring new business lines highlighted number problems least lack transparency underlying cost structure within enron need focus root causes costs rather symptoms objectives current costbase need establish business units end end direct support costs see spreadsheet example worksheet e 2 e direct support headcount model costbase move forward need develop cost model provide qualitative description cost drivers within organisation answers key activities functions within business unit functions across business units main cost activity drivers carrying activities functions headcount cost attributable activity function establish quantitative cost measure need able report current operational leverage efficiency ratios efficiency ratio percentage rework activity function implies estimate far stp process operational leverage ratio headcount increase activity increase use costbase model predict quantifiable benefits using headcount cost data ratios need understand many quick hits accrue business process changes current environment impact efficiency ratio need understand functionality developments change required headcount cost impact operational leverage ratio investment cost specific costs associated changing operating platform development costs people hardware business analysts time line management time user time including time uat consulting costs opportunity cost prepare cost benefit analysis use 3 4 identify qualitative benefits reduction operating risk process exception based front controls reduction number operational errors trading errors charged middle office client costs funding errors mo support base focused value adding tasks effective management better management information quicker identification exceptions leader quicker resolution people benefits increased job satisfaction processes investigative improved control standards standard processes stretch across businesses eliminates costs difficulty maintaining various systems e g spreadsheets easier cross train staff provide cover utilise information calculate actual target unit cost per transaction vanilla complex monitor key success factor progam spreadsheet shows looking complete worksheet costs model input need product one spreadsheet per product example sally updated next steps confirm scope e 2 e direct support costs enron europe limited cost model middle office products gas power credit structured commodities scope although could expanded egm metals ees ebs eim steps responsibilities land 2 e 2 e direct support costs finops establish agree scope mike jordan steve whitaker define departmental activities initial draft steve whitaker sandip joshi confirm departmental activities department heads james new ian sloman gail hill etc determine key drivers activity product departmental heads add weightings driver departmental heads collate information sandip joshi consolidate spreadsheets send back comments sandip joshi plan steps 3 steve mike