iSpec presentation Welcome to the iSpec presentation. iSpec is a fully integrated strategic procurement tool that manages the entire process from requirement through eSourcing, project and contract management to final delivery and acceptance.

Company background

Remy InfoSource Our solutions The InfoSource Group owns 3 technologies iSpec (Tender, Bid and Contract Management) iTech (Artificial Intelligence Diagnostics) ICAM (Equipment Logistics System)

Remy InfoSource Siemens (MagLev) HPH (no2 in ports) Some of our customers Siemens (MagLev) HPH (no2 in ports) DP World (no3 in ports) SABMiller (no2 in beer) Bermuda Government Remy has extensive experience in delivering high-tech business and technical solutions to multi-national corporations. You might be aware of the world’s first magnetic levitation train that was built by Siemens and Thyssen Krupp in Shanghai China. Remy supplied the technology and methodologies used in the diagnostic system that monitors over 120,000 components in real-time.

The issues First of all let’s take a look at the issues

Large CAPEX projects Complexity. Multiple stakeholders. Interfaces. The dilemma Complexity. Decisions made, technical problems solved, financing requirements assessed, supplier capacities evaluated, legal issues addressed. Not even the smallest detail can be overlooked. Multiple stakeholders. Aligning the many functional stakeholders typically involved in large capex projects is a major task. Finance, procurement, legal and engineering all consider different issues. Interfaces. The combination of functional and international stakeholders and different segments and procurement packages requires well-managed interfaces. Good communication/collaboration is essential.

Typical CAPEX project management Many systems involved - duplication of data/effort e-Sourcing system Outlook/exchange server Microsoft office Many organisations have a diverse range of applications and tools which combine to deliver the procurement process and project management to final delivery and commissioning, however this complexity often leads to lack of integration.   Tracking, auditing and synching information across multiple systems is time consuming and expensive in terms of people and potential project delays no matter how efficient the organisation is. Document management system Project management system Contract management system Quality assurance/inspections Workflow system

The result Where how why when? Project information is scattered on computers and in documents throughout multiple organisations and in multiple systems Missing/outdated documents No Accountability Difficult to audit No control/authorisation No transparency High risk Many disputes The main reason we experience all the above-mentioned problems is the fact that this information is typically scattered on computers and in documents and tools throughout the organisation and often even in other organisations.

Filling the gaps iSpec Sourcing RFx Evaluation Negotiation Trials & Supplier Accreditation Tech Spec Management External info gathering Contract draft and review iSpec Strategic Sourcing Contract implemented Here is a graphic presentation of how iSpec complements typical ERP systems Internal business requirement Reporting Planning systems Requisition Payment Typical ERP /eTendering system Transactional Processing MRP Purchase order Item based procurement - SKUs Invoice processing Approval Goods receiving Inventory Management Quality Management

Pressure (time and resources) The main reason we experience all the above-mentioned problems is the fact that this information is typically scattered on computers and in documents and tools throughout the organisation and often even in other organisations. Reality Reality Reality Insufficient resources Time constraints Skills shortages Sequential document access (long lead time) Bad collaboration Geographically dispersed data and stakeholders Incomplete bids Manual processes Data mining Comparative reports Evaluation Massive paper/email trail Time constraints Many design reviews Many change requests Many disputes No proper audit trail Cost overruns Much time spent resolving issues Delays

Typical intangible risks Risk management Intangible risk has a 100% probability of occurring but is ignored by the organisation due to a lack of identification ability. It directly reduces the productivity of knowledge workers, decreases cost effectiveness, profitability, service, quality, reputation, brand value, and earnings quality. Typical intangible risks Knowledge risk (poor access to information/skills) Relationship risk (poor collaboration) Process-engagement risk (poor procedural compliance and no transparency) Intangible risk management identifies a new type of a risk that has a 100% probability of occurring but is ignored by the organisation due to a lack of identification ability. For example, when deficient knowledge is applied to a situation, a knowledge risk materialises. Relationship risk appears when ineffective collaboration occurs. Process-engagement risk may be an issue when ineffective operational procedures are applied. These risks directly reduce the productivity of knowledge workers, decrease cost effectiveness, profitability, service, quality, reputation, brand value, and earnings quality. Intangible risk management allows risk management to create immediate value from the identification and reduction of risks that reduce productivity. Principles of risk management [edit] The International Organization for Standardization (ISO) identifies the following principles of risk management:[4] Risk management should: create value – resources expended to mitigate risk should be less than the consequence of inaction, or (as in value engineering), the gain should exceed the pain be an integral part of organizational processes be part of decision making process explicitly address uncertainty and assumptions be systematic and structured be based on the best available information be tailorable take human factors into account be transparent and inclusive be dynamic, iterative and responsive to change be capable of continual improvement and enhancement be continually or periodically re-assessed

Total Cost of Ownership(TCO) SKU based procurement Inadequate evaluation methods Cost implications beyond the sourcing phase not considered/handled No consideration of costs external to contract No life-cycle approach Use of iSpec has been proven to result in not only reduction in cost of acquisition but total cost of ownership in that it enables one to consider other factors such as external costs (outside of the contract), MRO spares requirements, etc.

The Solution Let’s now take a look at how iSpec solves the problems we have just discussed.

Manages integrated process The solution Web based solution Requires only a browser Fewer support issues Global access Role-based access Full security Manages integrated process Master library Tender creation/publication Vendor response Evaluation and negotiation Contract management Quality Assurance This is an overview of the solution

iSpec - A-in-1/OTS - fully integrated Initial request through sourcing, contract management and QA Tools Doc Mgt QA Workflow/Approvals Proj Mgt e-Source Contract mgt Messaging Docs Reminders iSpec ✔ QA/inspections ERP Outlook Office Proj Mgt. iSpec is an all-in-one, off-the-shelf package that handles the entire process in a fully integrated manner.

Centralised control, global access Vendors Bid submissions Clarifications Change requests Delivery tracking Technical/Engineering Specifications QA Project management Technical evaluations Only 1 copy of each document Only 1 copy - the right one Global role-based access Concurrent editing Version control (audit trail) Complete contextual audit trail All email collaborations All negotiations All vendor responses All clarifications Contract amendments Approvals By whom, when, from where Ideally, the optimum solution would involve a system that maintains centralized control but yet allows global access to all the project information. Thus no matter how far your project team is scattered geographically, all members should be able to access and work on all documents AT THE SAME TIME FROM ANYWHERE! Wouldn’t that be great. Everyone working on the same document at the same time from different locations and no data loss. Is this even possible? Procurement/legal Agreement Terms and conditions Health and safety Financials Vendor KPI Approvals Commercial evaluations Management Approvals Overview Programme mgt KPI

Wizards on every screen This is an overview of the solution The solution Help file Training videos Wizards on every screen

The Solution Let’s look at a typical tender work flow. Ideally we would like to have a set of master documents or templates for the various types of projects that we do on a regular basis. Let’s see how we set that up.

Master documents Control Authority Audit trail Outdated documents Current method Issues project managers currently have in managing master documents Control Authority Audit trail Outdated documents Missing documents

Create a template Add template Create master set Let’s see how iSpec handles this. First of all let’s create a template for the construction of an A-type warehouse. To do this we select New Template and then create a standard list of documents that form part of the template. Just like we used to do it manually. Add template Add documents that form part of master set

Adjust document settings Create a template Adjust document settings Now we create the outline or headings on the left - just like Word in outline mode - and then add the detail or clauses under that heading on the right. As we add these clauses or text, the system automatically adds them to our standard library. This allows us to re-use a clause in many other documents later on without having to re-type it. We can also configure each clause to be editable during tender preparation or not. You will see that only 3 of the headings in this document have pencils next to them. That means that only those 3 headings contain clauses that are editable during tender preparation and only by team members with the appropriate permissions. The beauty of this is that the project team does not need to waste time reading the other clauses as they are all pre-approved and are not subject to change - therefor requiring no effort during preparation or approval. Add new content Add content from library Only certain items are editable

Requirement/response settings Create a template Requirement/response settings What are requirements? Delivery dates How will responses be scored What response is expected? Prices Product data Responses to questions For each heading or for an entire document we can setup what the internal user has to do during preparation and what responses we require from the vendor.

Audit trail - version tracking The library also keeps a record of each version or change to each clause. So in the history tab, we can browse through previous versions of the clause and view, compare or roll back to a previous version - if we have the appropriate permissions of course. All changes recorded: By whom When Compare Roll back

Creation of Master Library Dedicate resources The library also keeps a record of each version or change to each clause. So in the history tab, we can browse through previous versions of the clause and view, compare or roll back to a previous version - if we have the appropriate permissions of course. Remy service Develop specification for library Configuration of library Creation of master documents Vendor response settings

The Solution Once we have created our templates, we can use them to create a tender a just create one from scratch. The project team - which can include legal, procurement, external consultants, engineering, etc. can all assigned to the tender and work on it simultaneously.

Issues for tender preparation Current method Correct documents Procedural compliance Lead times Geographically distributed project team Audit trail Typical issues project managers experience in tender preparation

User login Login takes user to My Workspace When the user logs in, he/she is immediately taken to the My Workspace page listing all items that requires his/her attention. Login takes user to My Workspace Lists all outstanding tasks Gets daily email with similar summary

Create a new tender Set basic options Add a tender Publication dates Once we have completed all the documents in our template and approved them for use, we can now use this template to go and publish our first tender. We can enter information and select various options for this project. The publication dates for example as well as the currency, whether it is a closed or public tender, etc. Set basic options Publication dates Type - RFx Currency Business Unit

Prepare tender Dates Status Reports Open and completed tasks Overview Once the project is created, we get the overview screen. This contains various panels that can be used to view or manage various aspects of the tender. The task manager has two sections - listing both the open tasks that require our attention as well as the completed tasks below. Dates Status Reports Open and completed tasks

Tender preparation phase Prepare tender Tender preparation phase Documents copied from master template Documents requiring attention have alert icons Select project team and roles Select vendors to invite In the Tender Documents panel, we see the documents that were all copied from the original master template. Each document with a yellow alert icon next to it indicates that it requires our attention. So depending on who is logged in - for example a lawyer or an engineer or procurement specialist - they will see different documents and alerts calling for their attention. Lower down panels contain internal users that are assigned to this project as well as a list of invited or registered vendors that intend to bid on this project.

Prepare tender Only items with pencils require editing Document preparation Only items with pencils require editing Other headings are pre- approved and cannot be changed Less work - less checking As the team now starts to prepare the documents for publication, we can see our original document with only 3 headings requiring our attention. What a pleasure. We only need to read and edit those 3 items and we are done with this document.

Prepare tender Orange pencils turn green as items are completed Preparation Orange pencils turn green as items are completed Select options as set up in template - no editing required Import BOQ from Excel All items with green pencils have been completed and require no further attention. All items with orange pencils DO require our attention.

Upload attachments/addenda We can also upload attachments such as drawings, spreadsheets and any other files we wish. Upload multiple documents at a time Attach drawings, pictures, documents, spreadsheets, etc.

Team works simultaneously Concurrent document access Now here is where the real power of iSpec comes in. The minute we edit a clause, we can see if anyone else has made any changes and we can view and compare those changes, roll back or combine them. This means that even if 2 people - one in New York and one in Hong Kong are both working on the same clause at the same time, we won’t lose any of their changes, both edits will be recorded, and the final approver can decide which to use or combine them. No other system has this capability. Multiple users can access document simultaneously from different geographic locations All changes are recorded

Vendor management Register Assign to Groups Vendors Panels Trades iSpec also does vendor management and we can create panels and trade lists. This way we can invite a whole group of vendors e.g. top five electrical contractors with one click rather than having to invite each one individually. Register Assign to Groups Panels Trades

Creation of Tenders Remy service Dedicate resources The library also keeps a record of each version or change to each clause. So in the history tab, we can browse through previous versions of the clause and view, compare or roll back to a previous version - if we have the appropriate permissions of course. Remy service Create and prepare tender Customer review and approval Remy help desk support

The Solution Now we need to obtain the required approvals depending on the type of tender and perhaps the value.

Approval issues Ensure correct approvals Current method Getting approvals in a timely manner can be a problem. We also need to ensure that nobody changes anything after the approvals have been done. Ensure correct approvals Lead times (availability of approvers) Avoid unauthorised changes after approval

Obtain approval Approvals can only start once all pencils are green It is impossible to publish an incomplete document Once approval starts all documents are frozen Once we have completed all our documents for publication - in other words when all the pencils are green, only then will iSpec allow us to start certain of the approvals. This means it is impossible to publish a tender that is incomplete. Once we click the start approval button, all the appropriate approvers are automatically sent email reminders to login and approve the documents. At this point no changes can be made. Once all approvals have been completed, the system will wait for the publication date and then send out automated invitations to the selected vendors (if any) and open the tender to them or all vendors if it is a public tender.

The Solution Our vendors can now login and start preparing their bids online.

Vendor response issues Current method Incomplete submissions Different formats Difficult data mining Unnecessary marketing material Administration of clarifications and communications There are many issues relating to vendor responses that can be a nightmare to manage.

Vendor login Login takes vendor to My Workspace When the vendors log in they are immediately taken to their My Workspace page to see a list of outstanding tasks. Login takes vendor to My Workspace Lists all outstanding tasks Gets daily email with similar summary Wizard for guidance

Vendor online submission Prepare bid and submit Vendor online submission The first thing the vendor sees is the same basic information regarding the status of the tender. The vendor also has a submission panel where he or she may Submit a bid, submit no bid or generate a printable document. During the publication period before the tender closes, a vendor may submit, edit or withdraw a bid as many times as he likes. Again the list of documents have their alerts for the attention of the vendor. Vendor sees same basic overview Control panel for submitting/withdrawing bid Documents with alerts

Prepare bid and submit Vendor response Red items require attention When the vendor enters a document for the first time, he sees only red headings. This indicates all the items that require his attention. As he submits the information required at each heading, that heading changes to black and thereby keeps track of how much he has completed. Red items require attention Vendor response for each item is specified and simple Delivery dates Prices Compliance Documentation

Clarifications - Audit trail All correspondence is recorded in iSpec automatically linked to the heading it relates to Creates comprehensive audit trail Once you select the heading, you can view the message, mark it as actioned and if necessary, send your own mail message.

Modifications/addenda Addenda/clarifications The internal team can also update vendors with new or missing information Messages/addenda can be sent to one or all vendors Part of audit trail

Prepare bid and submit Response validation Vendor cannot submit bid unless all items have been completed Should a vendor accidentally click the Submit your bid button, the system will check all documents and warn him/her that there are still outstanding or incomplete items. This means that a vendor can NEVER submit an incomplete bid.

The Solution Once the bids have closed, the Tender Committee approves the opening of the bids.

Open bids Approval status Track and expedite approvals Once the Tender closes, the assigned tender committee members automatically receive an email requesting they approve the opening of the bids. If the bids are not opened on time, we can go to the approval screen and see who is holding up the process and send them a reminder.

The Solution Now the team can start evaluation and negotiations

Evaluation issues Incomplete submissions Different formats Current method Incomplete submissions Different formats Difficult data mining Pricing comparison Non-compliant items Different evaluation scenarios Technical Commercial Various issues affect how well we can evaluate the submitted bids.

Compare pricing One click pricing comparison No data mining required Bid evaluation One click pricing comparison No data mining required Once the bids are open, the first order of business is typically to compare the prices. This is done with the click of a single button. As all data is submitted directly into a database and not in spreadsheets or documents, the system can provide the pricing comparison report immediately. Detailed information is available by clicking on a specific item.

Compliance Next we might want to view the number of non-compliant items from each vendor. Then we could call up the non-compliance detail report. Here we can compare all non-compliant items from each vendor. We can then score each vendor on these items and this will then update the evaluation score bar chart seen here. Finally we can track negotiation progress.

Non-compliance details Next we might want to view the number of non-compliant items from each vendor. Then we could call up the non-compliance detail report. Here we can compare all non-compliant items from each vendor. We can then score each vendor on these items and this will then update the evaluation score bar chart seen here.

Evaluate and negotiate Score and negotiate As we continue evaluation and negotiations, we can view each item individually and see who made the offer from the vendor’s side. We may look at his supplemental information and find that the specification is close enough and therefor we might be happy to accept his offer as compliant. On the other hand although we find it superior, we might decide to accept it as non-compliant. A third option exists. We might find it totally unacceptable and then we may click on the negotiate button and make a counter offer that he must comply with the specification We can go back and forth like this until we agree and then we can accept the final offer. The entire history of the negotiations are also kept as part of the audit trail - in exactly the same way we keep the correspondence. The benefits of iSpec in this regard are that one no longer needs to sit around a table with tons of printed documents with yellow highlights and post-it notes. You either do this over the phone or if you want still around a table - each with his notebook open and logged in. Once you agree on an item, one party enters the offer and the other accepts it. Both the offer and acceptance are date, time and user stamped. It is therefor no longer necessary to keep minutes of meetings or create addenda as everything is recorded in iSpec. Evaluate and negotiate Enter technical & commercial scores Accept or negotiate

Evaluate As we continue scoring the vendors’ responses, iSpec continually updates the evaluation reports.

Negotiation progress Finally we can track negotiation progress.

Sign the contract Prepare final version online Final contract Prepare final version online Electronic version should be legally binding Option to print and sign The final contract documents can be generated for printing and signature. At this point you may elect to include other information into the document as well. For example the vendor submissions, the negotiation history, correspondence and other information.

The Solution Now we get to the Contract Management phase where we need to track delivery, manage revisions, do Quality Assurance and calculate liquidated damages if any.

Contract management issues Current method What about contract management? Project management Variation orders Tracking delivery Vendor performance Forget crucial milestones and follow up How do we ensure that the vendor delivers according to contract?

Project planning Generate project plan containing Resource planning Generate project plan containing Deliverables Milestones Use as basis for project planning MS Project or Primavera The list of deliverable items can be used to generate a Microsoft project plan outline with completion dates or interface to other systems such as Primavera. This can serve as an outline for the customer or vendor to create a detailed plan withe resources etc.

Delivery tracking Automated reminders Vendor reports delivery Tracking delivery of items or achieving of milestones is an important part of the contract management function. Vendor delivery Automated reminders Vendor reports delivery Uploads certificates Manuals Delivery notes Customer verifies

Vendor delivery performance Delivery schedule Vendor delivery performance During the delivery phase, iSpec typically allows you to view a delivery report where the green area represents items delivered on time, the red area items delivered late and the blue area represents items still to be delivered. The table shows all deliverable items with first of all the delivery dates requested in the original tender documents, secondly the dates agreed during negotiation and finally the actual delivery dates. Track and compare: Original request Agreed per contract Actual delivery dates Calculate penalties

Contract management Vendor raises issue Send email from iSpec If revisions need to be negotiated to the contract, there is a facility to do this as well and these changes and acceptances form part of the audit trail under negotiations. Typically the vendor would send a request or raise an issue via the messaging system. Vendor raises issue Send email from iSpec Customer gets mail

Contract management Customer sees issue Mark item as read The customer sees the issue and responds Customer sees issue Mark item as read Change contract text

Contract management Revision is made Content change is highlighted Email sent to vendor to accept The changes are highlighted and the vendor notified

Vendor accepts revision Contract management Vendor accepts revision Vendor can view revision details and accept The vendor can now register acceptance of the discussed change or discuss it further.

Contract management Manage other revisions Other revisions Pricing All revisions/change/variation orders are handled in this way. Manage other revisions Pricing Delivery date Units

MRO spares data Enter spares data Validate Capture MRO data If your tender includes the supply of spare parts for maintenance of the system, these can also be specified and their data captured and validated in iSpec for later use in your storeroom and maintenance management systems. Enter spares data Validate Interface to ELS (Equipment logistic systems)

Quality assurance Monitoring of status of the works QA Monitoring of status of the works Checklists of outstanding/faulty items Acceptance tests/inspections Performance testing Certifications Consolidating this information into reports Let’s look at the quality assurance aspect of project delivery. We need to track faulty items and perform ad-hoc inspections. For certain projects we might need to do performance testing of systems or health and safety certifications. All this information needs to be tracked and managed.

Inspection items Create inspection items We can actually setup and manage a list of inspection items Ad-hoc inspections Create inspection items Attach inspection records to specific items or as general issues

Inspection items Take pictures of issues and faults Track correction Ad-hoc inspections During inspection/testing/commissioning, we can take pictures, attach test results, etc. as part of the inspection record. We can also track issues that need to be addressed and attach them to punch lists/milestones. Take pictures of issues and faults Track correction Attach to milestones

Work packages as sub-tenders Main & sub-tenders Work packages as sub-tenders Large project contains separate work packages Civil works Utilities Security Process control Plant Work packages can be published/awarded separately Roll up overview for evaluation Automatically generate separate contracts Manage them When we have large projects with many work packages that may be farmed out to different vendors, we would like to publish the entire project as a whole to get a picture of the entire project and be able to roll up costs of all the work packages.

iSpec Improvement Do it right Reap benefits Standardised approach The main reason we experience all the above-mentioned problems is the fact that this information is typically scattered on computers and in documents and tools throughout the organisation and often even in other organisations. Improvement Do it right Reap benefits Standardised approach Enforced procedural compliance Easy collaboration amongst stakeholders Proper audit trail Concurrent document access Improved productivity Online clarifications are part of audit trail No incomplete bids Automated evaluation Negotiation audit trail Automated contract generation Better contracts Improved productivity Fewer design reviews Fewer change requests Fewer disputes Full audit trail Cost savings Better QA Improved productivity Transparency Reduced tender management costs

Key Performance Indicators

Bottlenecks/lead times Project timeline Bottlenecks/lead times Key performance indicators assist in identifying bottlenecks in the process. Here we see a chart showing lapsed time for each phase of a tender. Clicking on a bar shows both the time take and the persons involved. If someone has not completed his approvals for example a reminder can be sent automatically. Identify bottlenecks Analyse lead times Send reminders Compare to bench-marks

Measure vendor performance Tracking vendor performance is also important. Measure vendor performance Project review On-time delivery Quality Reliability Vendor summary Flag vendors and projects

Vendor contracts Various reports regarding vendor participation, spend, etc are available.

Vendor participation Various reports regarding vendor participation, spend, etc are available.

Analysis Other analysis tools are available and custom reports can also be incorporated into the system to improve management decision making.

INTERNAL USERS/CONSULTANTS SUPPLIERS INTERNAL USERS/CONSULTANTS BIDS No downloading and uploading of documents All submissions done online and encrypted securely into the database Attachments allowed No information visible to the company until after bids have been opened electronically Negotiate/correspond online One-click conflict resolution Track delivery online Reminders for deliverable items TENDERS/CONTRACTS Tender is a copy of the latest approved version of a template or newly created Customise only editable items Negotiate/correspond with suppliers online Full audit trail kept with date and time stamps Approvals at various stages up to contract signature Built-in pricing comparator, conformance reports and evaluation system (scoring) Built-in KPI reports Custom reports using Crystal reporter TEMPLATE LIBRARY Templates have assigned owners and approvers Colleagues can correspond regarding changes, etc. Messages stored with clause as part of the audit trail Copy and paste a template to create a similar one and just make the changes Multiple language versions possible Only fully approved templates can be used to create tenders/contracts MASTER LIBRARY Clauses or complete documents Each with an owner/approver Changes automatically update any template in which item is used Comprehensive audit trail Rollback, compare, approve Correspondence regarding changes are stored as part of the audit trail Batch approvals Multiple language versions Item can be fixed, fully editable or only have editable fields - giving complete control over change permissions Here is a final overview of the entire system consisting of the master library with all its features. These items are used to create templates that are automatically updated when a clause is updated. Only fully approved templates can be used to create tenders or contracts. Bids are entered online and as a result comparisons, evaluations and scoring becomes a simple matter. Inspections can be performed during project delivery and underlying it all is the workflow, communications and audit trail. Supplier 1 Master library item Supplier 2 Tender Template Master library item Tender Supplier 3 Master library item Tender Master library item Tender Template INSPECTIONS Online/offline inspections Can link to items in documents Quick reports & Punch lists Ad-hoc and standard inspections Master library item Tender Workflow, Communications and Audit trail Inspector

Concurrent licensing Estimate the maximum number of users that would be logged in at any time during the day. This is the number of concurrent licenses you will require. 3 concurrent users in this example Licensing is based on the maximum number of users that may be logged in at any one time. You may give unlimited users access to the system at no additional cost. Concurrent user licenses start at around Euro 7,000/ user and decrease as the number of licenses increases. Users logged into iSpec at any time Users with iSpec login and password Unlimited users with iSpec login

Benefits

Savings and benefits 3%-20% project cost savings Financial savings 3%-20% project cost savings 60% tender management cost savings Reduced audit costs Vendor cost savings

Savings and benefits 70% efficiency improvement Other benefits 70% efficiency improvement Lead time reduction from 2 weeks to 1 day Improved vendor relations Better sharing of global expertise Improved control and transparency Improved management reporting capability improved procedural compliance Improved risk management

User observations - $ Savings “Standardisation of contracts and specifications (using iSpec) has lead to lower prices in general (3% on large projects). Business units not using iSpec are paying higher prices. (1 general case > 20%).” Why - Clear unambiguous tenders. Transparency. Better leverage during negotiations. “Because of the transparency vendors can no longer get away with charging different business units different prices for the same equipment.” (or different prices for the same item on different projects) User interviews have resulted in the following comments regarding savings resulting from the use of iSpec. As shown in an earlier slide an average saving of 3% of total project cost has resulted.

User observations - effort “Transparency, traceability and keeping the communication/negotiations together are a huge benefit for both parties… The only reason that we can manage so many projects so effectively is because the negotiations and communications are recorded against each item/clause for anybody to read and see what has been discussed/negotiated. That is also valid for the Vendor because they pass the documents from Tender team to Engineering/Project management team. We do the same for 3rd party…..” Paul Jordaan, DPWorld. One of the most praised features and benefits of iSpec is the fact that all communications and negotiations are recorded against each item. This not only benefits the customer, but also the vendor as when the document is passed from the Tender team to the Project team, they also benefit from this quick access to this information.

Evaluation & Negotiation Before Bid Documents @ @ @ Tender Documents @ @ @ @ Bid Documents Remember the old way of doing things? @ @ @ @ @ @ Evaluation & Negotiation @ Bid Documents Bid Bid @ Bid @ @ @ @ @ @ @ @ @ @ @ @ Contract Delivery @ @ @ @ @ @

After Suppliers Project team Supplier 1 Supplier 2 Supplier 3 iSpec Now clicking on an item in the original tender document immediately displays all correspondence, responses, negotiations, final contract text and any attachments for each vendor. No other system offers an audit trail this comprehensive. Correspondence ______ ________ _________ Bid response Negotiations Final contract Attachments Correspondence ______ ________ _________ Bid response Negotiations Final contract Attachments Correspondence ______ ________ _________ Bid response Negotiations Final contract Attachments iSpec 1_______ 1.1___ 2_______ __________ 3_______ 3.1 Aircon 3.2_____ 4___________ ____________

iSpec users These are some of the companies that use iSpec.

Why iSpec? Timing and cost Flexibility Learn and grow Deliver value Business requirement Timing and cost Flexibility Learn and grow Deliver value Project Management Document Management and Version control Risk management

Why iSpec? SAP Toolset Other solutions iSpec Tool selection Integrated tool lacking in functionality and ease of use. Adjusted timelines Other solutions Various solutions reviewed Internal proposal in progress iSpec

Why iSpec? Out of the box ready Reasons for iSpec Out of the box ready Almost 100% fit to our business requirement Rapid implementation Standalone flexibility until back-end ready Intuitive interface Training and help included Industry experience - not theoretical model

Case study - Bermuda Requirements: Bermuda Government Transparency Control Audit-ability Standardisation Skills optimisation

Case study - Bermuda Customisations Installation Training Implementation Customisations Installation Training Total time - 3 months

Case study - SABMiller Second largest brewer in the world About Second largest brewer in the world Operates in 67 countries CAPEX expenditure US$900 million per annum

Case study - SABMiller SAP user About SAP user Required efficient Tender Management system Trial of iSpec as best-of- breed solution Contract/spec contains over 6,000 data items to manage for a new brewery

Case study - SABMiller Internal issues External issues (vendors) Speed - LAN issue - issued key users with 3G cards as interim solution Resistance to change (learning curve) External issues (vendors) Data entry slow - new spreadsheet-like quick entry Validation - no incomplete submissions allowed. Vendor education.

Case study - SABMiller Productivity improvement of 300% Benefits Productivity improvement of 300% Contract price reduction +- 3% Transparency and audit trail Single point auditing

Case study - SABMiller Global roll-out plan Roll out customisations roll-out team training system custom manuals global roll-out in progress

Case study - SABMiller ERP vs iSpec iSpec was 100% fit for our business requirement iSpec is out of the box ready to use whereas ERP CRM integration is very difficult. You have to get e-sourcing to talk to the back end and this is very expensive and time consuming Rapid implementation of iSpec allowed us to change our process and behaviour without worrying about the tool Running iSpec standalone allows us more flexibility - we are not restricted by the back-end as with ERP

Case study - SABMiller Why iSpec? iSpec's user interface is intuitive and easy to use iSpec comes with training materials which ERP doesn't - we would have to develop that iSpec comes with industry experience which makes implementation easier. iSpec instantly addressed our business problems Remy's commitment to solving our problems and making things work made a difference

Case study - DP World World’s 3rd largest port operator Over 50 ports globally CAPEX around US$ 3 billion in current projects

Case study - DP World Wanted to centralise CAPEX procurement Requirements Wanted to centralise CAPEX procurement Needed an automated system Global access 24/7 All documents up-to-the- minute accurate

Case study - DP World Internal resistance Internet issues Issues DPW bought P&O and they resented DPW central procurement Once they saw benefits they came on board very quickly Internet issues China - ISP blocked attachments over 5MB - fixed Internal LAN bandwidth issues

Case study - DP World Customised system Benefits and savings Customised system 1 project manager now handles up to 30 projects (previously only 4) Single point auditing Standardisation Project cost reduction of 3%

User observations - value “iSpec has highlighted weaknesses that existed in our processes as well as our people. Using iSpec now helps us augment tendering and contract management skills in many of our business units.” “Project managers are now adding value to the process rather than doing clerical work much of the time” “Management reports are available at the click of a button and data contained in them is current - not days or weeks old.” “With improved visibility and a bit more time spent on negotiations we have saved in virtually ZERO amendments to contracts after awarding.” User comments on other value added benefits include the augmentation of contract management skills throughout the organization. Up to date management reports and other benefits.

Summary Costs - iSpec avg. savings of 3%-20% on total project cost Productivity - iSpec results in 300%+ improvement = $ Accountability - iSpec’s comprehensive audit trail Conflict resolution - iSpec One-Click resolution Control - Approved templates and edit/approval control Transparency - iSpec audit trail and easy user access Here is a final summary of the most important savings and benefits of using iSpec. Which one do you see as the best added value to your business processes?

Thank you

Technology and security For anyone who has questions about Technology and security issues - use the following slides.

Technical information Technology Microsoft .NET application Requires only a browser (IE 8 +, Safari, Firefox, Chrome) Secure access Database - MS SQL Server 2008+ Microsoft server 2008+ The system is developed using Microsoft .NET technology. Users only require a browser to access it securely.

iSpec uses the familiar 3 tier architecture.

Fin-Link Financial links to: DTS or SSIS IAS compliant Typical interfaces Interfacing Financial links to: ORACLE SAP JDE PeopleSoft Sun Thalia Sage Scala Empriz DTS or SSIS IAS compliant $25,000 each + consulting Sourcing RFx Evaluation Negotiation Trials & Supplier Accreditation External info gathering Contract draft and review Tech Spec Management We have standard interfaces to financial (ERP) systems. Strategic Sourcing Contract implemented Internal business requirement Reporting Planning systems Requisition Payment Transactional Processing MRP Purchase order Invoice processing Approval Goods receiving Inventory Management Quality Management

Typical Security This is the typical configuration we recommend and implement ourselves. Of course most larger companies who do their own hosting will have their own corporate policies and IT departments that will follow their own standards.

eBidding option We also have an ebidding module for reverse auctions, as well as an auction module.

These links only work in Keynote Remy IssuesSolution TemplatesTender Response Clarifications Approvals Bid opening Evaluation Delivery Project planning Contract mgt KPI Benefits Why iSpec? SAB DPW Bermuda Technology Implementation SizingGAP analysis 1st Data gathering Training 1st template 1st tender Feedback Adjust Roll out plan Roll out Internet LAN Vendors Internal resistance Over-customisation Integration ERP These links only work in Keynote

Implementation

Sizing Questionnaire Tenders per annum Time zones Duration of publication Project duration Vendors per tender Project team size

Sizing Hardware Reverse proxy Application server Database server

Sizing Software Server 2008 SQLServer 2008 Browsers IE 9+, Safari, Firefox, Chrome

Implementation Startup meeting Resources Training Project Plan 3 sites - production, UAT (test), training

Typical project plan

GAP analysis Master documents Tender process Delivery process Contract Management No customisation yet

Data gathering Business hierarchy Templates Roles Approvals Configuration

Data gathering Typical RFQ structure RFQ Sections Plant A Plant B Plant C Plant D Memorandum of Agreement Same conditions O H & S Commercial Terms and Conditions ($) $$$$$$$ General Conditions Special Conditions Employer’s Requirement (FIDIC) ####### Eskom Standards and Specifications Drawings Executive Summary Milestone Schedule

Training Training plan 1st training 1st template

Training Administrator Template editors Project team Vendor introduction

Training Custom Quick Guides Custom training videos Implement

First tender Prepare - smaller tender Publish Evaluate/negotiate Award Manage contract Feedback

Analyse first tender Issues identified during each phase (internal messaging) Adjustment/customisation Apply new methods and customisations

Roll out plan Finalise Data gathering input plan Finalise Support plan Finalise Hosting plan Finalise Training plan Roll out plan to divisions and business units

Roll out plan Centre of Excellence: Role allocation & Definition of competency requirements Master template management Roles definition Interface with Remy-IS and GIS Help Desk functionality Knowledge sharing and capability building

Roll out plan Departments/regions: Role allocation & competency requirements Template management Roles allocation at project level Help Desk requirements

Possible issues

Attachments the main issue Internet Attachments the main issue iSpec Attachments ISP limits file size for uploading Request ISP to increase file size limit

LAN Issues Slow performance 90% of the time the problem is LAN bottleneck not internet Separate LAN segment with high QOS

Vendor issues Validation - must submit all requested data Draw back Vendors Validation - must submit all requested data Lazy - will do work if they get contract Want an opportunity to negotiate after bid opening Draw back You can’t evaluate properly without sufficient data Fix Condition of doing business Long term benefit Decide which data is important for evaluation purposes

Internal resistance Resistance Resistance to change Training New system - takes time Have to change habits Requires discipline initially Soon realise benefits of improved productivity and transparency

Over-customisation To customise or not Enthusiastic users want everything up front Won’t work if we don’t have XX Customisation/re-working is expensive and causes delays and errors Try before you customise - see what you REALLY need

Integrate/interface with ERP Interfacing Do all divisions/business units have the same back-end? Is your back-end mature and fully rolled out? How will customisations affect integration? Get immediate benefit, customise when sure, then integrate (quicker return, lower cost, less frustration)