This "case study" is the latest in a series of articles aimed at helping public companies understand how other organizations are using technology to comply with new regulations and standards. These are not advertisements or marketing vehicles for the companies mentioned; Compliance Week's editorial staff speaks with the public company that has deployed the technology, and the article is written without the input—and in many cases the knowledge—of the vendor.
GeoEye can discern the difference between a car and a sports utility vehicle from Earth orbit, but earlier this decade it couldn’t tell precisely how its own accounts payable department functioned. In early 2005, Hugh Klipp joined the company to change that.
Klipp became director of business process management for GeoEye, the world’s largest remote-sensing firm, whose current trio of satellites constantly updates an image database spanning 160 million square miles—more than 80 percent of Earth’s surface. Klipp quickly saw that GeoEye’s internal vision was considerably less comprehensive than its view of the home planet.
The company was humming along, serving up satellite and aerial imagery to national security clients, mapping experts, local governments and even Microsoft and Yahoo! for their online maps. But the processes behind the business were largely undocumented.
“It was a blank board, but with plenty of mental videotape,” Klipp says. “That day-to-day piece was in our organization, but nobody had taken the time to write it down.
Sarbanes-Oxley forced the company’s hand; as an accelerated filer, Klipp immediately knew the company needed a grip on its internal processes if it had any hope of passing SOX muster with its auditor.
One option, Klipp knew, was charting out hundreds of transactions and business processes using Visio or Microsoft Word. But such an approach would do nothing to leverage consulting costs associated with a thorough enterprise-mapping effort, not to mention they would be far more expensive to maintain in the long haul.
“Stay Out Of The Visio World”
GeoEye sought software capable of flexibly modeling its business processes and storing the results in a central repository. Doing so would automatically propagate changes to processes, names, requirements, and relationships throughout GeoEye’s enterprise model, saving hours of rework required to update dozens of hard-coded desktop-software documents.
Klipp considered six modeling software packages. Separately, he interviewed three consulting firms to do the mapping work. He chose MorganFranklin as consultant. For enterprise modeling software, Klipp went with MEGA International’s MEGA Modeling Suite.
Most of the software Klipp considered had a supply-chain management focus, he says. MEGA offered the most flexible approach, allowing GeoEye to design their own control icons; link personnel and equipment resource; and “to stay out of the Visio world,” as Klipp describes it.
That was important, Klipp says, because GeoEye’s decision to invest in enterprise management software hinged on more than compliance. The company really wanted some solution that could handle multiple tasks, such as smoothing the path for GeoEye’s acquisition of rival Space Imaging in January 2006 or supporting the company’s ISO 9001-2000 certification efforts, Klipp says.
“If we were going to be paying all this money, we ought to be doing it for something more than handling Sarbanes-Oxley once a year,” Klipp says.
The project began in April 2005. For about four months, four MorganFranklin consultants conducted dozens of interviews, created processes narratives and flows, and entered results into MEGA. The interviews focused on financial and accounting staff, Klipp says, as they are most focused on financial controls. Klipp managed the process. The team identified 260 objectives to which controls were attached. Klipp says the objectives were often simple, such as ensuring that accounts payable follows the purchase-order signature policy.
“If we were going to be paying all this money, we ought to be doing it for something more than handling Sarbanes-Oxley once a year,”
— Hugh Klipp
Director of Business Process Management
GeoEye
Ultimately, that exercise led to a MEGA enterprise model with 177 procedures and 1,876 operations documented within them. In addition, the team mapped in 519 risks and 341 constraints, which includes such things as segregation of duties, Klipp says. The mapping effort included the full range of GeoEye’s people, processes, and equipment.
“We were able to take our IT infrastructure and map servers and switches to applications business users see,” Klipp said.
All such relationships landed in the MEGA repository, which lets managers consider GeoEye’s processes from various perspectives. For example, Klipp says, “I can start in a risk and follow through all the diagrams to see who’s mitigating it and what risks we’re offsetting.”
That up-front effort was done in August 2005. During the first audit with the system, GeoEye simply asked its independent auditors what they wanted and then let the models generate an answer. “That's the real power of this whole approach using these tools,” Klipp says. “I can switch auditors and bring in a new group that asks about new risks and show how we manage those.”
The MEGA system also proved to be a boon in integrating former competitor Space Imaging, which meant reassessing and updating processes, adding equipment, and changing titles throughout the enterprise model. Most fundamentally, Klipp said, GeoEye was able to efficiently compare its documents and procedures with those of Space Imaging and to use Space Imaging’s best ideas to the benefit of the combined company.
“Because it was all in a repository, we made the changes there and just republished the flows and modules,” Klipp says. “If you think in terms of a Visio and Word approach, it took us a few hours to make the changes as opposed to a cast-of-thousands effort.”
In general, Klipp says, the time required to keep GeoEye’s enterprise model up-to-date can be counted in hours, rather than weeks, per year.
In March 2007, GeoEye acquired 60-employee M.J. Harden, which specializes in aerial imagery for utilities, engineering companies, developers and government. With M.J. Harden operating as a subsidiary, the integration will be a shadow of Space Imaging’s digestion, Klipp says. He is, however, reviewing M.J. Harden’s procedures to bring the company under GeoEye’s ISO 9001 registrar.
ISO certification is the price of entry into many of GeoEye’s markets, Klipp says. Although Sarbanes triggered the enterprise-modeling effort, MEGA’s bottom-line impact has been greatest with ISO. Without the MEGA models, GeoEye would need two or three additional employees at a cost of $300,000 to $400,000 to achieve ISO certification.
The MEGA system’s total cost was about $90,000, most of it in up-front consulting fees, Klipp says. For a handful of concurrent users, the cost of the software itself is “trivial … probably no more expensive than getting Visio licenses,” he says.
“We were surprised at how far beyond our expectations it has delivered and we’re only starting to scratch the surface,” Klipp says. “An enterprise-model approach just served a whole bunch of purposes.”
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