Steps to Success: Pwc and the Sochi 2014 Organizing Committee

www.pwc.ru/en/sochi2014

Steps to success PwC and the Sochi 2014 Organizing Committee

January 2014

PwC Russia has been providing professional services to the Organizing Committee of the XXII Winter Olympic Games and XI Winter Paralympic Games of 2014 in Sochi since late 2008. We are proud that our team has won the right to be the Official Professional Services Provider and a Partner to the Sochi 2014 Organizing Committee.

In over five years of working together, PwC and the Sochi 2014 Organizing Committee have jointly carried out over 200 projects related to the planning, preparation and staging of the Games, with our firm devoting more than 200,000 consulting hours to these projects.

The goal of our joint efforts is to ensure the efficiency of the Organizing Committee’s preparations for the Games in the following areas: integrated planning of the Games, human resources, risk management, financial planning and budgeting, and taxation.

Many of the projects that we have implemented with the Organizing Committee have proven to be innovative for these types of events. One of our key decisions was to introduce the concept of a project- based organisation as the basis for the Organizing Committee’s activities at every stage. In addition, we have applied a new integrated, client-oriented approach to preparations for the Games, which focuses on each group of people and organisation directly or indirectly involved in the Games.

By applying the so-called “Sochi model”, which was created to coordinate and manage multiple stand-alone projects and activities, we have helped ensure that the Sochi 2014 Organizing Committee’s activities are integrated into a single complex of interrelated programmes and projects. While separately pursuing diverse goals, collectively these projects are aimed at implementing the overall strategy of the Games.

This model may be used for organising major sporting events in Russia and other countries in the future.

PwC and the Sochi 2014 Organizing Committee 01 Strategic planning of the An innovative methodology for project- 01: Games preparation based organisation developed by PwC underlies the tactical plan, which The PwC working team helped the helps to separate Games preparation Planning the Organizing Committee to develop work into projects, processes and a plan for the Games’ preparations. actions using standard criteria. The preparation The plan, as instructed by the Russian general schedule developed was Government, was based on information used for monitoring and controlling for the games provided by over 20 external the Games preparation process. organisations. We are proud that we were able to coordinate the efforts Performance management of every party involved and ensure system development their effective teamwork, as well as to organise the process of collecting, PwC specialists, in cooperation with treating and discussing the information. Sochi 2014 Organizing Committee, created a simple and transparent PwC specialists were in charge of Performance Management System. any amendments made in various The project covered concept versions of the document, making development, detailed design, tables for reaching a consensus on implementation and testing separate issues and preparation of of the system, as well as its meeting reports, and they also took operational support. part in developing resolutions after approval of the plan to follow up on its This system was used to assess implementation. The final document the projects implemented by the was successfully approved by the Organizing Committee at the end State Committee for the Preparation of each year using three key and Staging of XXII Olympic performance indicators: timing, Winter Games and XI Paralympic quality and budget. The workload Winter Games 2014 in Sochi. per Organizing Committee employee was reduced thanks to Tactical planning of Sochi the implementation of this project. 2014 Organizing Committee The PwC working team also helped activities in 2011-2014 the Organizing Committee to develop a relevant regulatory framework that PwC team was also invited to take ensures the full integration of the part in preparation of a document of Performance Management System primary importance: the tactical plan with the existing project of Sochi 2014 Organizing Committee organisation system. activities. The tactical plan is a document that contains a list of events in over 50 functional areas from 2011 until 2014, and a description of the control points, timelines, stakeholders and reasons for holding each even. This came to over 2,600 items in total.

02 PwC | Steps to success Programme for maximum During the next operational planning 02: spectator attendance stage, the client was provided with the appropriate tools for bringing The programme for filling up spectator this concept to life. Specific elements Taking care of stands as much as possible, which of the programme included detailed was developed by PwC specialists and forecasts of the number of spectators the spectator Sochi 2014 Organizing Committee, per event, an analysis of demand on is aimed the extensive planning of hotel services and hotel bedspace for experience the spectator experience, which is spectator accommodation, a checklist of the largest client group that will be services, a concept for creating a festive immediately present at the venues atmosphere, and information on other during Olympic and Paralympic events. operational planning documents. PwC specialists helped the client create In addition, thanks to PwC working a programme for filling up spectator team’s efforts, the needs of spectators stands in an optimum manner by as a client group were analysed in developing a road map of actions documents on service planning to improve service quality and the developed by the Sochi 2014 Organizing spectator experience at every stage. Committee’s functional areas. PwC A strategic document formulating the specialists also helped the client to approach to planning the “spectator comply with IOC requirements and to experience” during the Olympic Games create an effective programme that was developed at a later stage. achieved its key strategic objectives.

PwC and the Sochi 2014 Organizing Committee 03 Functional operational Development of Service 03: planning with consideration of Level Agreements service levels for client groups The Organizing Committee instructed Ensuring a In 2009, PwC specialists together with PwC to develop and carry out an the experts from Sochi 2014 Organizing innovative service planning approach comprehensive Committee, started developing the for the Olympic Games that primarily Functional Operational Plan (FOP), considers client interests (this category approach to which contains detailed descriptions includes all groups of people and of the various types of work, such as organisations directly or indirectly planning guest seating, transportation, staging involved in the Games). Client of sporting competitions, Olympic interests must be described in each venues management, medical care, Service Level Agreement (SLA). etc. We developed a detailed FOP and integrated it with other projects, such Our specialists developed detailed as operational planning of Olympic parameters for all services and, venue operations, risk management, together with the Organizing transition period planning and Committee, they also created and ensuring the operational availability. implemented a client service planning methodology and prepared a document As a result, effectiveness of on SLAs, which included a structured communications between functional description of services provided to blocks improved while their direct specific clients during the 2014 responsibilities and means of Winter Olympics. When preparing communication were clearly set the document, we considered the out thanks to this project. The FOP staging of the 2012 Summer also sets a foundation for planning Olympics in London and made resources in terms of budgeting, sure that it was compliant with staffing, planning materiel supplies the new statutory requirements. procurement and technology use.

Robert Gruman, Leader of PwC’s Russia Advisory practice: “It is a big honour to work on Sochi 2014 project for me personally and the whole PwC team. In our work with the Organizing Committee, we were able not only to provide strategic consulting, but also to implement practical solutions in management, sustainable development and planning. We have done our best to ensure that Russia stages the greatest Olympic and Paralympic Games of all time. We also want the country to showcase its achievements and enormous potential to the world.”

04 PwC | Steps to success Operational planning of In our work, we assessed the 04: non-competition venues stakeholders, analysed the client needs, organised operational and The key point of success in staging commission inspections while also Boosting the Games is the operational planning factoring in any recommendations for both sporting, and non-sporting and preparing detailed plans for efficiency of venues. PwC staff helped the Sochi operating the venues during the 2014 Organizing Committee develop Games. As a result, PwC specialists Olympic venue a methodology and organise the provided the Organizing Committee preparation of operational plans with a full picture of how the for operating venues not used in operations non-competition venues will be sporting competitions, including operated in winter of 2014. Sochi International Airport, the main distribution centre, transportation hub, three Olympic villages, hotels for the Olympic and Paralympic national sports teams, etc.

Operational readiness Our working team helped determine 05: programme the scope and schedule for the entire operational readiness programme, PwC specialists were actively contributed to the training course Organising involved in planning, preparing for the programme instructors, as and implementing the operational well as prepared and held a series the games’ readiness programme for the Games. of real-time simulation modelling This programme is a set of training events for the Organizing Committee, readiness events to test operations, thereby partially in respect to the operation ensuring Games readiness. This of the Olympic venues inspections included educational seminars, on the job training, simulation modelling and training exercises.

PwC and the Sochi 2014 Organizing Committee 05 Planning test events in for staging the test events, monitoring 06: Sochi and preparations programme implementation, for their staging developing tactical preparation plans, advisory support, budgeting, Taking part in The test events programme was reporting and integration of realised from February 2011 until accumulated experience into December 2013 in Sochi. It provided preparation of the Games’ preparation. The for modelling over 70 real-time test implementation of this project events for all Olympic and Paralympic test events enabled the Sochi 2014 Organizing sports across 10 Olympic venues. Committee to successfully plan the test events and stage them PwC specialists also took part in with maximum effect. the development of the strategy

Development of a games the Organizing Committee, we 07: management system developed a management framework for the Games, including a roadmap Together with the Sochi 2014 for the transition period, an Assisting Organizing Committee, PwC organisational structure of the specialists developed a framework Main Operations Centre, an effective for Games management and a operational plan for operating the system for coordinating the venues, documents regulating the in games activities of all management bodies, work of the management bodies, including the Organizing Committee, etc. Thanks to this project, the IOC/IPC, the City of Sochi, the management Organizing Committee was provided transport and security systems. with a full picture of how the Games management system will function We made a comprehensive analysis of during the staging of the Winter the various technical data and, based Olympics and Paralympics. on this, and together with

06 PwC | Steps to success HR planning for Games time PwC was deeply engaged in 08: HR planning for the Games. We It is well known that human resources developed individual HR plans are a keystone in any endeavour. For for each venue and made up Deploying the the Games in Sochi this is especially schedules for the Games and test true. Properly organised and well events. Thanks to the project, the workforce aligned staff performance is a major staff size was optimised by 20%. success factor for the Olympic and As a result, the costs were reduced, Paralympic Games. Personnel expenses and the Games preparation account for 30% of the Games budget efficiency was enhanced. and include recruitment, payroll, meals, training, transport and other expenses.

Employment strategy for The strategy is aimed at socialisation 09: people with disabilities of the disabled and focuses on education, training, Around 3,000 people with disabilities and social assistance. Helping to find were unemployed before the Games. PwC, together with the Sochi 2014 The project helped the Sochi 2014 employment Organizing Committee, developed Organizing Committee to structure an employment strategy for people an employment strategy for people with disabilities to engage them during for people with disabilities in compliance the preparation and staging of the with equal opportunity principles. with disabilities Olympic and Paralympic Games.

PwC and the Sochi 2014 Organizing Committee 07 Professional development the programme that consisted of four 10: programme for venue managers modules and was based on case study. Together with the Sochi 2014 With this programme, we improved Training Organizing Committee, we’ve come the provision of management decisions up with a professional development related to sporting events preparation programme for venue managers called managers of and staging. During the project, PwC Path to Success. The programme is and venue managers shared their aimed at developing competences sports venue knowledge and experience, while the in large-scale national sporting Sochi 2014 Organizing Committee’s project management. Top experts lead managers learnt new in leadership and professional leadership skills. development assisted in delivering

Risk management advisory The project team updated the risk management policy, reviewed risk 11: There are certain risks associated matrices and functional area operating with the Games. Therefore, effective plans, developed incident matrices, and Risk awareness risk management was a critical drew up contingency plans. In total, objective for the Sochi 2014 we developed 28 internal contingency Organizing Committee. PwC plans for the Games period, as well Russia was engaged to develop as 11 plans for test events and nine a risk management framework. multi-agency contingency plans.

Sustainability reporting implementing a sustainable 12: development management system Large-scale events like the Olympic and designed a relevant training and Paralympic Games inevitably programme for the Organizing Enhancing impacts the environment. The Committee’s employees. The Environment and Sustainability training programme included commitment Report prepared by PwC in accordance introductory courses for the with Global Reporting Initiative Organizing Committee’s nine to sustainable (GRI) principles explains how the functional areas, key partners, Organizing Committee has approached contractors and volunteers of the environmental management issues. development Olympic Games. The programme also offered recommendations on We also assisted the Organizing sustainable development principles. Committee in developing and

08 PwC | Steps to success Games budgeting The project was primarily aimed at identification of issues and risks related 13: PwC Russia has been engaged in to performance of the financial plan, designing and implementing a new compliance with IOC requirements, Financial budget management procedure for the and reconciliation of management Sochi 2014 Organizing Committee. reporting and financial statements. advice We have developed an operational concept and control procedures for the The PwC team conducted an internal Operating Contingency Fund. The effort audit in key areas: the Organizing helped to improve transparency in the Committee’s charter documents, budgeting process and facilitated prompt an overall review of the Organizing amendments to the draft Games budget Committee’s performance, the in compliance with IOC requirements. financial plan for the Games, procurement procedures, tax Furthermore, the PwC project team liabilities, etc. The project helped the developed procedures to regulate Sochi 2014 Organizing Committee the Operating Contingency Fund and Audit Commission to get better for 2013–2014. As a result, the Sochi insight into key issues and risks. 2014 Organizing Committee received an effective funds management Systematisation of the tool with respect to allocation of host country’s liabilities responsibility and authority. PwC helped identify, analyse and Sochi 2014 Organizing systematise the Sochi 2014 Organizing Committee internal audit Committee’s financial liabilities. These liabilities were also prioritised and The Sochi 2014 Audit (Revision) integrated into the Tactical plan so Commission engaged PwC to conduct that they would become part of the an internal audit of the Sochi 2014 overall Games preparation and Organizing Committee. During delivery process. As a deliverable our audit, we reviewed primary of the project, the Organizing and supporting documentation, Committee got a full picture of accounting records, as well as the specific financial liabilities and Organizing Committee’s financial their respective owners. and business performance reports.

Customs project Committee identify the key barriers and challenges imposed by law. We 14: The Olympic Games in Sochi revealed also designed a project to simplify the need to streamline export and import and export procedures. PwC’s Streamlining import operations. In order to contribution was recognised at the achieve this objective, the Sochi 2014 Sustainability Award Ceremony held in import Organizing Committee engaged March 2013 as part of the XXII Olympic the PwC tax and legal team. Winter Games and XI Paralympic Winter and export Games Preparation Programme. At We’ve performed relevant analytical this ceremony, PwC was presented studies and helped the Organizing operations with the Economic Prosperity Award.

PwC and the Sochi 2014 Organizing Committee 09 www.pwc.ru

Better together

In this document PwC refers to OOO PricewaterhouseCoopers Advisory. or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate legal entity. PwC Russia (www.pwc.ru) provides industry-focused assurance, tax, legal and advisory services. Over 2,600 professionals working in PwC offices in Moscow, St Petersburg, Ekaterinburg, Kazan, Novosibirsk, Rostov-on-Don, Krasnodar, Voronezh, Yuzhno- Sakhalinsk and Vladikavkaz share their thinking, experience and solutions to develop fresh perspectives and practical advice for our clients. The global network of PwC firms brings together more than 195,000 people in 157 countries. “PwC” is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. “PwC Russia” refers to PwCIL member-firms operating in Russia.