Trade Finance — Target Operating Model design

Business strategy:

• Define mid & long term Business development plan for Trade Finance activity

Organization, IT & operations assessment:

• Identify & prioritize challenges and opportunities based on as-is analysis

Target definition:

• Define Target Operating Model addressing business ambitions and IT and operations stakes

Projects portfolio definition:

• Define business, IT and Operations projects portfolio to reach target

Roadmap, business cases & budget definition:

• Detail project business case and roadmap and build transformation budget

Program governance definition:

• Prepare Program implementation phase and build case for validation by the executive instance

Business strategy:

3 years Plan with differentiated approach:

• Per products:documentary products remains the core business activity, Growth opportunity in Europe for guarantees, supply chain financing identified as the largest growth perspective
• Per Regions:heterogeneous development perspectives in Asia, Europe, Middle East or Americas

Organization, IT & operations assessment:

• Heterogeneous landscape, with different level of maturity per product category in term of IT and operational set up, depending on past investments efforts
• Aging systems,heavy to maintain and to adapt, with increasing operational risks

Target definition:

TOM definition per product category, from an organization, process and IT point of view:

• Optimize and further industrializeDocumentary Products Global set up
• Design regional TOMsand secure operational set up for Guarantees
• IndustrializeSupply Chain set up

Projects portfolio definition:

Prioritized projects covering all Product categories, with business, organization, IT and processes transformation initiatives, including:

• Renew of the FO to BO IT platformfor traditional trade to better address business needs and operations constraints
• Industrializationof the existing operational set up
• Deployment of a regional set upfor new products

Roadmap, business cases & budget definition:

• Elaboration of Business casesfor each projects (estimated workload, investment and expected ROI)
• Planning for each projects, taking into account interdependencies
• Definition of 4 year implementation roadmap and budget

Program governance definition:

• Governance framework & principles validated by stakeholders
• Budget and Roadmapvalidated by executive instance

Business strategy:

• Clear understanding of the business expectationsper product and regions required
• Stability in the vision needed, to comply with IT & Operations time to market and longer investment cycle
• A strong coordination between Business and Operationsis necessary to drive the investments according to Business priorities and manage the expectations related to Operations constraints

Organization, IT & operations assessment:

• Current state description & assessment results must be sharedwith business and operations stakeholders to reach consensus
• Shared assessment of the current state proved a critical reference pointfor the next steps of the program
• Unsurprisingly, business with low level of past investments are the one requiring more catch-up

Target definition:

• It is a good practice to set Guiding principlesto establish the foundation of the target (eg. Promote common solutions for the Filiere, prefer digital approach)
• The scoping of the Target is critical:it is essential to resist including everything in the transformation program (eg. Local, tactical solutions, with no common or lasting impact)

Projects portfolio definition:

• Strong and clear governance of the Filièreis required to prioritize the projects
• Involvement of expert and Senior Management is key to first assess the macro investment for each projects
• Guiding Principles should remain the first filterto prioritize projects

Roadmap, business cases & budget definition:

• Build as much as possible a roadmap with intermediary steps (“plateau”)that are stable and sustainable
• Do not under-estimate the bottleneck effecton experts teams who could be solicited on several streams in parallel
• Anticipate in the build-up of the Business cases the investment and revenue allocation model

Program governance definition:

• Refine and clarify as much as possible the story-tellingexplaining the reasons and the expected benefits of the transformation program
• Clarify and simplify as much as possible the Program governancewith a limited number of attendees, clear objectives for each instance, the right level of representatives , and an efficient escalation process
• Prepare staffingfor implementation