Deal Ratio (RFR 2.

0)
Launch Readiness Session

Aug - Sep 2021

© 2021 Cognizant
Basic Guidelines

✓ This training primarily focuses on understanding the process and activities related to Deal Ratio
(RFR2.0) the users must perform in Deal Ratio (RFR 2.0) module.

 Any account specific queries or project specific queries will not be addressed now but through
Hyper-care sessions at a later date.
Focus

• Participants to have a good understanding of current PCB and the allied activities.

Pre-Requisites

• Please post your queries in the Chat window. Queries will be addressed periodically throughout the
session.

Queries
2 © 2021 Cognizant
 Key Features:
Deal Ratio (RFR
2.0) Introduction
New Module in ESA which requires PMs/
EDPs to submit Gross Revenue ratio by
practice while creating Project Baseline
on PCB. It is applicable on:
Fixed Bid Projects
Deals baselined in PCB since Jan’ 2021
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Deal Ratio (RFR 2.0) ratios are computed based on Deal Revenue Ratio
for Single Project Deal, and Project C&B Ratio for Multi Project Deal
Integrated with Project Cost Baseline, a centralized baseline platform
for effort, cost, and revenue.
Deal Ratio (RFR 2.0) allocates project level recognized revenue to
Practices in Insight Compass instead of using ratios derived through
efforts and last 3 months T&M average.
Uses Deal Ratio to allocate revenue to fixed bid projects if deal ratio
information is available in PCB. If Deal Ratios are unavailable,
allocation to fixed bid projects to continue with existing logic.
Allows EDP/EPL/EDL/PMs to edit default ratio and submit for approval.
Ratios can be edited during the project for eligible (pre-defined)
reasons.
 Key Benefits Key Changes

Revamp Current model for strategic offerings

Current model employs resource-based approach to

allocate Practice revenue across bill types which served Revenue Cost
well for staff augmentation. Practice Level No change from
based on existing process.
a) Bid Pricing
models
Incentivizes Service Lines b) C&B ratio (Effort
baselining).
As Industry graduates to more solution-based delivery,
measuring Revenue contribution of Practices based on
resources has become obsolete & disincentivizes Approvals Edits to
Service lines from selling transformational engagements
EDP/EPL/EDL for
Revenue Ratios
all projects. Initiated by
PM/EDP/EPL/EDL.
Shifts focus to Customer Value Proposition For TCV > $ 5 MN,
Defining deal ratios upfront for allocating revenue to FPA Approval is
required.
practices will encourage Lines of Services to rethink
customer value proposition, productivity & efficiency

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RFR 1.0 versus Deal Ratio (RFR 2.0)
Particulars
Scope
Approach
Billing Type – Fixed Bid
Contract – BFD (37% of
Revenue)
Billing Type - Time &
Material Contract –BTM
(51% of Revenue)
Billing Type – Transaction
Based Billing – BTB (12% of
Revenue)
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RFR 1.0
Applicable to all Contract Billability types (BTM, BFD,
BTB)
• Resource based approach for all billing contracts
• Revenue Split to LoS/ Practices based on Rate
Card Model (Actuals for BTM, 3 months rolling
average for others)
Revenue Allocation to associates in Projects based
on rolling 3 months average and T&M Bill rate
computed at Practice, Grade and Country Level.
Associate wise revenue based on Hours *
Contracted Rate as per Billing
Revenue Allocation to associates in Projects based
on rolling 3 months average and T&M Bill rate
computed at Practice, Grade and Country Level.
Deal Ratio based Revenue Allocation
(RFR 2.0)
Applicable to all new Fixed Bill contracts/ Renewals
effective Jan-2021 and which are updated with deal
revenue ratios in PCB
• Revenue allocation based on final approved Deal Bid
ratios
• EDP/EPL/EDL to approve revenue ratio split to
Practices based on value and client centricity
• Service Leaders will bring more focus on customer
value propositions than simply lending resources to
engagements.
Revenue Allocation to practices basis Final Deal
Revenue Ratio % at bid submission
No Change
No Change
RFR 1.0 versus Deal Ratio (RFR 2.0) (Cont’d)
Particulars RFR 1.0 Deal Ratio based Revenue Allocation
(RFR 2.0)
Pros Works well for BTM, single practice BFD contracts, • Margin Differentiator for Practices
and engagements where Bid = Did • Delivery Estimation Rigor
• Optimization Capability over the deal term
• Incentivize Shoring, Pyramid and Productivity
• Rewards Practices for increase in efficiency
• Better revenue forecasting capability

Cons No means to incentivize Practices for Optimization of • Change in Actual mix of Practice-wise Associates,
Delivery via Pyramid, Shoring and Productivity OR
• Adding new practices into Delivery Mix may need re-
adjusting Deal Ratios for revenue recognition.

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Key Terminologies
Deal Ratio (RFR 2.0) Calculations

Deal Revenue Ratio

These ratios are calculated based on the practice wise Revenue proportion as
defined in Opportunity Baseline.
Deal Revenue Ratio are computed for all the Projects which have just one BFD
project mapped to the Deal.

Project C&B Ratio

These ratios are calculated based on the practice wise C&B cost proportion as
per project effort baseline.
Standard Cost Ratio are computed for all the Projects.

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How is Deal Revenue Calculated?

= Monthly Revenue for

each practice / Total
Monthly Revenue

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How is Project C&B Ratio Calculated?

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High-Level Process Flow
 PCB & Deal Ratio Integration - High Level Process (New Deal & Project)
MONTH 1
START N * RFR ratio freeze date is typically 3 / 4 days
after ESA month freeze.
* 1 working day prior to freeze date,
Deal
PCB Baseline Approval
reminders to be sent PM/EDP on pending
RFR ratios.
(Deal & Project creation
Baseline N
module ) Y
Project EXANT ESA
Y
Baseline Submission TO Approval Budget
creation EXTN Baseline

ESA
PM notified to submit RFR

Option to select
these ratios N
Project Baseline
C&B Ratio
Deal Y
Approved Edit Deal Ratio
Ratio Approval Deal Ratios (prospective
DEAL (RFR 2.0) (RFR 2.0) months only)
RATIO Deal Revenue
(RFR 2.0) Ratio TCV > $5M
N
Approval
MODULE TCV
> $5M
Y

Final Deal
END
Ratios
Deal Ratio freeze date*
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System Calculated Manual Entry Project Manager EDP/EPL/EDL FP&A Revenue
 PCB & Deal Ratio Integration - High Level Process (Amendments)
MONTH 2 ONWARDS
START 1 If an Expansion / Renewal deal id
N was created for the amendment.

1 2 If there is no Expansion / Renewal

PCB Exp./Ren deal id for amendment.
( Deal & Deal Baseline Approval
Project Creation 3 Migrated baseline from ESA before
N expansion / renewal
Baseline Y
module ) * 1 working days prior to freeze date,
Project Baseline Y ESA
2 Amendment Submission Approval Budget reminders to be sent PM/EDP on
pending RFR ratios.
Creation Baseline

ESA
PM notified to submit RFR

Project N
Baseline C&B
Ratio Amended Edit Deal Ratio
Y Approved
3 Approved Deal Ratio Approval (prospective
DEAL Deal Ratios (RFR 2.0)
Ratios
months only)
RATIO (RFR 2.0)
(RFR 2.0) Deal Revenue TCV > $5M N
Approval
MODULE Ratio TCV
> $5M
Option to select Y
these ratios
Final Deal
END
Ratios
Deal Ratio freeze date*
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System Calculated Manual Entry Project Manager EDP/EPL/EDL FP&A Revenue
Steps to Create Deal
Ratios (RFR 2.0)
Creating Deal Ratios (RFR 2.0) for New Project
Process Flow

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Creating Deal Ratios (RFR 2.0)

Navigation

ESA Home Page→ NavBar → Classic Home → Main Menu→ RFR 2.0

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Creating Deal Ratios (RFR 2.0) View as
EDP/EDL/EPL/PM- Access
STEP 1: RFR 2.0 Dashboard is driven from RHMS

For New Project

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Creating Deal Ratios (RFR 2.0)
STEP 2: User can select either Deal Revenue Ratio or Project C&B Ratio

For Deals with Multiple

Projects

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Creating Deal Ratios (RFR 2.0)
STEP 3:

Navigation within the

same page

Transaction History
Log

Project Metadata
Section. This section
cannot be edited.

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Creating Deal Ratios (RFR 2.0)
STEP 4:

User can select either Project C&B ratio, or Deal

Revenue ratio. This can also be changed while
editing Deal Ratios

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Creating Deal Ratios (RFR 2.0)
STEP 5:

These values correspond to revenue distributed in Project
Baseline section in accordance to the Revenue recognition
method assigned by Revenue team. Total TCV is mentioned
during contract creation, once contract is processed by the
Revenue team, revenue gets distributed in Project Baseline.
Manual Entry for HW/SW Rebill Revenue. To be filled if
there is a component if Hardware/ Software rebill in the
project.

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Creating Deal Ratios (RFR 2.0)
STEP 6: Gross Revenue ratio will get populated based on the methodology selected in Section 01-
Project C&B Ratio, or Deal Revenue Ratio.

Practices can be added Ratios can be assigned manually too

(Apart from practices
mentioned in opportunity
baseline setup page)

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Creating Deal Ratios (RFR 2.0)
STEP 6: Gross Revenue ratio will get populated based on the methodology selected in Section 1- Project
C&B Ratio, or Deal Revenue Ratio.

Compare with Deal

Revenue Ratio or
Project C&B Ratio;
The table below
gives comparison:

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Creating Deal Ratios (RFR 2.0)
STEP 7: Ratios can be assigned manually too.

Use Quick Fill functionality if ratios remain

consistent

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Creating Deal Ratios (RFR 2.0)
STEP 8: Approval Workflow

You can switch between Deal Revenue Ratio

and Project C&B Ratio before submitting.
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Transaction Logs

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Steps to Approve Deal
Ratio (RFR 2.0)
How Does an EDP/EPL/EDL approve Deal Ratio (RFR 2.0)?
Process Flow

If no changes to be made
to RFR Ratios

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How Does an EDP/EPL/EDL approve Deal Ratio (RFR 2.0)?

Navigation

ESA Home Page→ NavBar → Classic Home → Main Menu →RFR 2.0

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How Does an EDP/EPL/EDL approve Deal Ratio (RFR 2.0)?

Select role as EDP/EDL/EPL;

Access is driven from RHMS

Approve or Decline

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Steps to Edit Deal Ratio
(RFR 2.0)
How can an EDP/EPL/EDL/PM Edit Deal Ratio (RFR 2.0)?
STEP 1: Edits can be initiated by PM or EDP/EPL/EDL

To initiate an edit, Go to RFR

Dashboard, and click on View

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How can an EDP/EPL/EDL/PM Edit Deal Ratio (RFR 2.0)?
STEP 2:

Click on edit, and

Select Reason from
drop-down

Follow Step 4 – 8 from Scenario-1 on ‘How to create Deal Ratios (RFR 2.0)’

33 © 2021 Cognizant
Reason Codes and when to use them?

Reason Description
Add Practice Allows user to add new practice and resubmit updated Deal Ratios (RFR 2.0). Approved ratios for
closed financial period will be non-editable.

Error During Submission Allows user to - Edit Deal Ratios (RFR 2.0) for all months, Add new practices and Resubmit updated
Deal Ratios (RFR 2.0) in the first month before Deal Ratio (RFR 2.0) Freeze.

Project Split Allows user to add new practice and resubmit updated Deal Ratios (RFR 2.0) for newly split BFD
Project. Approved ratios for closed financial period will be non-editable.

Re-calendarize Allows user to edit Deal Ratios (RFR 2.0) for scope shift across calendar. User cannot add new practice
and approved ratios for closed financial period will be non-editable.

Re-organization Allows users to edit Deal Ratios (RFR 2.0) with the addition of new practice in case of Consolidation or
split of Practices at Horizontal Practice level. Approved ratios for closed financial period will be non-
editable.

True Up Allows user to edit Deal Ratios (RFR 2.0) in case of True-up in historical months resulting in less
revenue share to Practices currently assigned to the project. User cannot add new practice and
approved ratios for closed financial period will be non-editable.

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Deal Ratio (RFR 2.0)
FP&A Approval
How can FP&A approve Deal Ratio (RFR 2.0)?

Add approvers from Service Lines, if required.

FP&A may add approver and then skip approval if
approval should go to another FP&A team

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How can FP&A approve Deal Ratio (RFR 2.0)?

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How can FP&A skip approval?

FP&A can first Add

Approver, and then skip

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Scenario 4: How can FP&A add approvers?

Multiple
Approvers
can be added

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Deal Ratio (RFR 2.0)
workflow during Contract
Amendment
Deal Ratio (RFR 2.0) Submission and workflow during
contract amendment
Process Flow

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Deal Ratio (RFR 2.0) Submission and workflow during
contract amendment
While submitting amendment baseline, system will direct user to RFR Dashboard

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Deal Ratio (RFR 2.0) Submission and workflow during
contract amendment
When system redirects users to create RFR ratios on Amendment baseline, it tags respective amendment ID
to the project.

RFR ratios will be in Draft

State to make changes

Follow Step 1 – 8 from Scenario-1 on ‘How to create Deal

Ratios (RFR 2.0)’

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Deal Ratio (RFR 2.0)
Workflow for Split projects
Deal Ratio (RFR 2.0) related workflows for Split projects

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Deal Ratio (RFR 2.0) related workflows for Split projects

For a split project created against opportunity ID, project Deal ratios (RFR 2.0) are created
against project identifier. When the project is created and approved by Project admin,
Project ID will replace Project identifier in project dashboard, keeping all other details intact

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Deal Ratio (RFR 2.0) related workflows for Split projects

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Change Management
 RFR 1.0 cut-over; Deal

OCM Plan for Deal Ratio (RFR 2.0) – 17th Sep 2021 (Go-Live date) Ratio (RFR 2.0)
mainstream from Jan’22
Pre Go-Live Deal Ratio (RFR 2.0) Go-Live Post Go-Live
Oct-Dec’21;
Till 13th Aug W1:16-21 Aug W2:23-28 Aug W3:30Aug-3 Sep W4:06-10 Sep W5:13-17 Sep W1:20-24 Sep
Jan’22>>

Planning and Preparation Implementation Hyper Care

Launch Communication to Post Training
End users Comms – 1C Alerts
EDP/EPL/EDL
End user
Training Invites
Reinforcement
Go-Live Communication
Leadership
Communication
mail by FP&A BU/SL OE Invite
& Training
Detailed Trainings for BU/SL - EDPs/EDLs/EPLs
Global Ops + FP&A

Detailed Trainings for BU/SL – PMs Hypercare

Global Ops + FP&A Sessions
Post Training Comms to
COO Debrief
comms - FPA Support teams by
Training Collaterals IT team
Preparation – Playbooks, FP&A Hypercare
Micro-videos, Training Training Schedule planning
deck Post Training
Post Training Comms - PMs
Training Collaterals
Finalization and sign off
comms – Fully functional GSD Support –
BU/SL OE Refer to next slide for support
by FP&A and Global
Ops – Playbooks, Micro- Planned mechanism through GSD
videos, Training deck, Activities
FAQ
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Target Audience (End users):
Note: Corporate FP&A to initiate leadership communications
FP&A POCs (BU/SL) along with OE to drive BU wise detailed trainings EDPs,EDLs,EPLs,PMs Inprogress Planned Completed Delayed
Role Mapping & Support
Role-Mapping in Deal Ratio (RFR 2.0) :
Update Deal Edit Deal
Revenue Ratio (RFR
Approve Create Approve Approve
Create Deal Ratio or 2.0), if
Deal Project Project Deal Ratio
Baseline Project required
Baseline Baseline Baseline (RFR 2.0)
Baseline (before ESA
C&B Ratio freeze)

EDP/ EDL/
EPL

PM

SBU Head/
Delivery
Leaders
FP&A (if deal
TCV > USD 5
Million

Revenue

SBU Head/ Delivery Leaders/ Country Managers approval on Deal Ratio (RFR 2.0) required only if Deal Ratio (RFR 2.0) is edited
51 © 2021 Cognizant
 Deal Ratio (RFR 2.0) – Query Resolution Mechanism
End-User has a TAT
query on Deal Ratio L1 Helpdesk : 3 days (max)
(RFR 2.0) L2 Technical Analysis : 2 days + 1 day for Timeline
Create a GSD L1 Escalation : 2 working days
Problem Ticket / L2 Escalation : Resolution time determined
Yes based on the query.
Is the query Able to
functional or Yes solve
L-1 Team User No
related to Deal
reachable ticket in Transfer tickets to L2
Ratio (RFR approaches in 3
2.0) platform/
3 End User informed
User attempts?
IT? Workda
ys
Analyze Ticket
(2 days)
Other query No

End-User approaches
FP&A via email
No Solution
Yes Yes No
readily Create Problem
Provide availabl Ticket
FP&A provides Solution e?
resolution
Publish Timeline
Functional and and Update End
Platform Issues User

End Close
Escalate to RFR IT
Team and RFR Core
Team (SMEs)
52 © 2021 Cognizant
Key Points to Note:

• Ensure Deal Ratios (RFR 2.0) are approved in the system before month end

• If a project undergoes multiple amendments in a month, users can aggregate and submit
the Deal Ratios (RFR 2.0) once a month

• Deal Ratio (RFR 2.0) workflow is independent of Revenue Process workflow

• Upon editing Deal Ratios, approval is at times routed to key stakeholders – EDP/ SBU
Head/ Delivery Leaders/ Country Managers. Approval workflows follow roles defined in
RHMS.

53 © 2021 Cognizant
POCs

• For Revenue Distribution Related Queries, contact FP&A

• For functional or platform related queries, contact

DealRatioSupport@cognizant.com

• Raise GSD for IT or platform related issues.

54 © 2021 Cognizant
Thank You