1. ERP Implementation Life Cycle A CASE STUDY FORM HM / AVTEC l Pre evaluation screening l Package evaluation l Project planning phase / milestones l Team / team leader finalization l Vendor / implementation partner finalization l Requirements / gap analysis

2. l Re Engineering l System Configuration / System Integration l Implementation Team Training l Data Migration / Verification l System testing l Trails / user walkthro’ l End User Training l GO LIVE l Post implementation metrics ERP Implementation Life Cycle A CASE STUDY FORM HM / AVTEC

3. ENTERPRISE RESOURCE PLANNING –FOR HMPPD A PERSPECTIVE ANALYSIS A PERSPECTIVE ANALYSIS HMPPD / MIS / 03-01-05 SA

4. AGENDA  Executive Summary  HM-PPD - Present I T Status, Issues and risks.  Present Business Need / HM PPD Challenges  Alternatives evaluation and related SWOT analysis  Comparison in ERP and related SWOT analysis.  Oracle / Peoplesoft  S A P  Action plan / CFT for Implementation  Phased Implementation Methodology / suggested benefits  Proposed Recommendation  Proposed New System Arch. HMPPD / MIS / 03-01-05 SA

5. Executive Summary  Also the present Market Conditions demand a GLOBAL MARKET REACH, supported by a SECURE, RELIABLE & STABLE IT ARCHITECTURE, with very high availability. As such these are now a “ De-facto” organizational needs.  In the present context of global competition, it is imperative that Organization adapt current technology trends in Information Management for an improved Business AGILITY and competitive edge in Business.  Current Business Needs in I T :  Current Issues in I T in HM-PPD :  Obsolete I T Systems Hardware / Network / RDBMS  Support for Database ( INGRES) withdrawn from Party M/s Mastek  Manpower Crisis due to very high attrition.. reduced from 8nos to just 3 ( 70 % )  Support for Database Alpha SERVER being withdrawn by H P from Sep ’05  Overall a serious risk in ongoing maintenance of both Hardware& Database  A clear ‘end-of-the-road’ crisis situation and needs immediate change / action HMPPD / MIS / 03-01-05 SA

6. Executive Summary  Evaluation & Comparisons were made between S A P and Peoplesoft E R P  In the process of evaluation parties M/S ‘S A P’ and PEOPLESOFT had made presentations on Product features, ease of Configuration, Support Commitment implementation Cycle Time etc.  Emphasis was also laid on our Specific needs as TCO, Skills availability, adaptability Market leadership etc. A detailed RATING POINTS is enclosed  PPD had also initiated in house ERP development with Vendor M/s LINC SW & designed Prototype, which is now put on hold in view of ERP Evaluation. Overall in terms of Rating comparison ‘ S A P ’ appear to have a clear EDGE as Compared to Peoplesoft ( Subject to negotiation of TCO ). Rating comparison & SWOT analysis are indicated separately,with tips on effective implementation.  Briefing on evaluation of alternative ERP : HMPPD / MIS / 03-01-05 SA

7.  With the increasing Criticism on ERP Vendors on HIGH TCO, prices are expected to be lesser than before and would be around one Crore for 60 Users License and also for Implementation. To this the cost of Network, communication and Hardware is to be added which is expected to be identical and Overall Cost Outlay is estimated to be around TWO Crores. DETAILED PERSPECTIVE ANALYSIS IS ENCLOSED Executive Summary HMPPD / MIS / 03-01-05 SA

8. General  General  High Manpower Attrition over 70 %  Ingres crashed when a Export Sales was being Invoiced.  Declining enhancements./ low uptime due to Obsolescence. Present Status & issues in Manpower / Database / Server  RDBMS ( Ingres)  Product Related : Ingres is also not upgraded or updated for the past several months & \ GUI, web / XML features is not supported..  Service Related : There is no direct support from Mastek, Needs high AMC Cost SERVER ( Dec Alpha 800)  SERVER ( Dec Alpha 800)  Dec Alpha, though a reliable architecture, is not OWNED by any one due to regular take over and NOW OBSOLETE  No clear road map for future growth.. Clearly “ end-of-the-road” situation.  Potential risks of down time, as Support is withdrawn from Sep’05. POTENTIAL BUSINESS RISK … MANPOWER / HARDWARE / SOFTWARE HMPPD / MIS / 03-01-05 SA

9.  The following are the focus areas as per HM PPD’s IT Strategy  Development & Implementation of State of Art Web & XML enabled RDBMS in a current Business Server offering flexibility, Security & high reliability / availability.  Full Migration to GUI & OPEN STANDARDS of FRONT END ( IBM lBasic / Web sphere)  To fulfill this objective it is STRATEGICALLY IMPORTANT to have a stable, reliable & secure Database / Server Arch.with high availability, supporting web interface, XML / GUI / WEB technology, OLAP, Business Intelligence etc. The present database of INGRES does not support this.  POPULAR ERP AS ‘SAP ’ or ‘ PEOPLESOFT ‘ FULLY SUPPORT THIS BUSINESS NEED & I T STRATEGY HM PPD – IT Strategy and Focus Areas HMPPD / MIS / 03-01-05 SA

10. Business Challenges clearly demand high AGILITY and response to contain cost, improve cycle time, better retention of customers etc through a better and Improved Business functionality with ERP. Present Business Need As indicated in this chart a VAST MAJORITY HAD RESPONDED THAT ERP is already in Use ( in SMB / MFG / AUTO Sector )( SAP/ BAAN / Peoplesoft) HMPPD / MIS / 03-01-05 SA

11. To meet Business Challenges VAST majority of Organizations in & around HOSUR / BANGALORE have a better & Improved Business functionality with ERP Applications Software. Present Business Need Percentage of Companies in Discrete MFG Percentage of Companies in Discrete MFG Sector who have Implemnted ERP package HMPPD / MIS / 03-01-05 SA

12. Aberdeen report for SMB / AUTO sector summarizes following as key Concerns Present Business Need Pressure to REDUCE Operating Cots Need to improve Productivity / Cycle Times Concern for Topline growth / Customer growth / retention Commoditization of Products and Services Product Innovation / enhanced R & D Improved Retention / Hiring of Key talents Response as to what BEST STRATEGY is adapted to meet these needs posed to Leading FORTUNE Companies, the responses are as under… 21 % responded that SIX SIGMA / LEAN MFG as key success Strategy 49 % responded that ERP / CRM / SCM / SRM as key success Strategy 30 % responded on other strategies HMPPD / MIS / 03-01-05 SA

13.  The following are perceived as PPD issues / challenges in terms of I T solution ** High / Imbalanced Inventory / High operating Cost ** Productivity / Cycle time/ Lead time Improvement ** Cash to cash Cycle time high – High receivables HM-PPD CHALLENGES ** Dynamic / immediate response to planning / changes in planning ** Dynamic response /compliance to STATUTORY / TAX related changes etc.  THESE CHALLENGES ARE BEST MET BY ERP PACKAGE  The following is also a MAJOR CHALLENGE in ERP Implementation in HM-PPD ** With the BPR enabled Streamlined and proven Business Process, with a clear Process MOPs, value added, quality certified processes /, etc., ADAPTABILITY of this process and CONFIGURATION of the Business Process in ERP System would be a complex task. ** We may need to Compromise some proven Functionality to fall in line with the ERP package. However the matter MUST BE RESOLVED by related Implementation Consultant HMPPD / MIS / 03-01-05 SA

14. Alternatives & SWOT analysis Functionality / SWOTIn-House ERP Packaged (SAP / Peoplesoft) Remarks High Integration Web/ Net Enable Workflow enabled World Class Bench Mark / Business Process WeakStrongPackaged ERP is better T C O( total cost of ownership) StrongWeakIn House ERP less by 75 %, in terms of TCO BI Capability ( Business Intelligence) WeakStrongOpportunity in SAP AttritionWeak Common Threat OTHER THAN A HIGH TCO … PACKAGED ERP IS SUPERIOR FOR BUSINESS HMPPD / MIS / 03-01-05 SA

15.  Many benchmark comparisons and white papers rate S A P as superior product. Though they are Criticized for high T C O. Overall they enjoy a high Market Share of nearly 50 % in the Engineering Industries / AUTO Sector as shown above. RATING COMPARISON IN TERMS OF SWOT ANALYSIS IS ENCLOSED FOR SAP / Peoplesoft ERP : Comparison between S A P / Peoplesoft Source : CIO magazine SA HMPPD / MIS / 03-01-05

16. ERP : S A P / Peoplesoft – Comparison HMPPD/ HMCCP / HMPUP Team rating (KR- K Ramesh, ML- MurariLal, SA- S Appan,VRB-V Rajeshbabu,SKJ- S K Joseph, AKM-AK Mathur ) BS = Birlasoft, BC = Bristle Cone HMPPD / MIS / 03-01-05

17. ERP : S A P / Peoplesoft – Comparison SWOT ANALYSIS HMPPD / MIS / 03-01-05

18. ERP : S A P / Peoplesoft – Comparison SWOT ANALYSIS HMPPD / MIS / 03-01-05

19.  S A P (VS) PEOPLESOFT ** S A P has offered to transfer ‘FREE OF COST’ unutilized / excess licenses available at ‘ HM-CCP’, to other divisions. This would be beneficial in terms of TCO.,and saves COST. ** Recent take over of “PEOPLESOFT” by ORACLE, would mean that the Commitment for Product Support and enhancement would suffer as ORACLE may pursue their own range of “ORACLE ERP ‘. This would be a definite RISK in the long term period, for customers of ‘PEOPLESOFT’ and fading of this product range by ORACLE may be a distinct possibility. We also have positive feedback in terms of Product Support Commitment by S A P from HM-CCP and regular Product enhancements by S A P. Overall the above SWOT analysis makes S A P a preferred choice. ERP : S A P / Peoplesoft – Comparison / SWOT HMPPD / MIS / 03-01-05

20. PRIMARILY ERP IMPLEMENTAION STARTS WITH THE FOLLOWING BASIC NEEDS a. TOP Management / Executive Sponsor / Commitment b. CFT Formation – Various Function for FULL TIME c. ERP BENEFITS / GOAL Targeting / Brain Storming d. Partner selection – CFT to involve to target ERP goals e. PHASED IMPLEMENTATION PROJECT PLANNING ( Indicated in the enclosed pages ) ERP : ACTION PLAN – CFT FOR IMPLEMENTATION HMPPD / MIS / 03-01-05

21.  Number of other white papers have clearly stated and users also have confirmed that ERP System is a Company Wide, top driven Change Management Commitment.  Over 66 % of ERP efforts are SOFT SKILLS as TEAM Commitment, TOP EXECUTIVE support, CFT formation & FULL TIME Involvement in implementation,users commitment etc.  In summary various aspects of successful implementation based on survey is shown below ERP : ACTION PLAN – CFT FOR IMPLEMENTATION Source : META Group HMPPD / MIS / 03-01-05

22. ERP : ACTION PLAN – CFT FOR IMPLEMENTATION TRANSACTION / BUSINESS PROCESS CONTROLS / REPORTING Strategic Value It is important to follow the above step FISRT and TARGET ERP GOALS for all the 3 Spheres of Management Hierarchy…. for next 3 to 4 years CFT TO PLAN STREAMLINING PROCESS PRODUCTIVITY IMPROVEMENT / THRO’PUT TIME REDUCTION ETC & TARGET MANPOWER RATIONALISATION IN SUPPORT AREAS CFT / HODS TO PLAN CONTROLS / TARGET REDUCED INVENTORY / REDUCED OPERATING COSTS etc. TOP MANAGEMENT TEAM TO PLAN STRATEGIC VALUE PROPOSITION WITH ERP. Time = 3- 4 Yrs Time = 1-2 Yrs Time = 6M-1Yr HMPPD / MIS / 03-01-05

23. PHASED IMPLEMENTATION METHODOLOGY / BENEFITS  Phased implementation methodology is the most successful approach to ensure effective and Timely ERP Implementation  As indicated in the CHART below a vast majority have implemented FINANCE and the MATERIALS first, though a few have attempted a BIGBANG approach HMPPD / MIS / 03-01-05

24. PHASED IMPLEMENTATION METHODOLOGY / BENEFITS  Phased implementation methodology is briefly presented below I Phase- Sponsor / Plan Project Scoping/funding Staffing / CFT Formation Benefits Targeting Change mgmnt approach II Ph: Business Process Mapping Business Process Model/design. Process / Data analysis Process Modeling for ERP Data Analysis III Ph: SW Configuration Process Configuration SW / Process Interfacing Sizing / Data Cleansing/ Reporting HMPPD / MIS / 03-01-05

25. PHASED IMPLEMENTATION METHODOLOGY / BENEFITS  Phased implementation methodology is briefly presented below IV Phase- Data Migration Data Conversion / Testing Interfacing / user testing Integration Testing End user training Pre Production run V Phase – GO LIVE HELP DESK. INTERFACE SUPPORT Process Improvements Monitor Data Analysis / Benefits Monitor HMPPD / MIS / 03-01-05

26. Conclusion / Recommendations  ERP / I T are presently ESSENTIAL INFRASTRUCTURE for a competitive Business Agility and dynamic response to Customers  It is imperative that we soon adapt a suitable ERP as a part of our overall Business Infrastructure, to stay competitive  In HM-PPD, where we already have a streamlined business process and a in-house ‘near ERP package’ in legacy System, CONFIGURATION of our process for ERP System may pose complex issues. However this is to be fully examined so that we do not compromise proven functionality Over all the trends strongly suggest that ERP package is becoming quite essential. Propose System Arch. is enclosed HMPPD / MIS / 03-01-05

27. Thin Client Rich Client BACKENDDB2-RDBMS PROPOSED NEW Architecture ERP PACKAGE / MIDWARE ERP FRONT END IN WEB BROWSER HMPPD / MIS / 03-01-05