1. IT Asset Reassignment / Moves David Levine Information Technology IKON Network Center

2. 2 Background – Current Process & Facts n Over 7900 major assets were due back to Compaq Financial between October 2002 and July 2003, of the 7900 assets over 3000 were never located or returned. n Until late 2002 a company wide physical inventory of IT assets had never been conducted. n Current National Help Desk (NHD) IT Asset Relocation web form, introduced in 2002 is being utilized less than 27% of the time. n Current NHD Move Employee web form does not track IKON Bar Code asset ids, Employee IDs (EID) or asset serial numbers. n The NHD desk currently tracks 12,000+ add, move or change tickets and 3,700+ hardware repair tickets annually. n Beginning January 2004 a significant amount of Dell equipment will be due to Dell Financial Services.

3. 3 Project Definition n Problem Statement: The process of tracking IKON's personal computing assets, which includes laptops, desktops and servers, does not allow us to accurately locate these assets when they need to be returned to the lessor. During the last three rounds of lease returns IKON was unable to locate 3,000 assets representing a write-off amount of $1.2mm. Without improving processes in this area IKON will perpetually write-off residual lease amounts for assets that IKON may actually be in possession of but can not locate. Over a 48 month period we estimate this expense, which has a direct impact on OI, will reach $3.5mm. This estimate is based on prior history and a review of future lease renewals.

4. 4 Project Definition, Cont’d n Project Definition : Implement controls that allow IKON to capture or validate location information as assets are touched by IT. Assets are physically touched by a member of IT as people are moved between offices or as assets are reassigned due to employee turn over. In addition to IT physical touching the assets this process can be augmented by performing data collection at the Help Desk. As users call into the Help Desk for assistance we have an opportunity to validate asset information with minimal effort. It is expected that the new controls will be in place within four months of starting this project.

5. 5 Project Definition, Cont’d n Project Benefits: This project will not fully eliminate the write-off amounts but is expected to address 70% of them. This represents $2.45mm over the next 48 months. The $2.45mm can be easily measured and will be visible as an improvement to OI. 15% of the write-off amounts can be corrected through serialization issues with the lessors. (This will be a separate project, not part of this charter.) The remaining 15% is reserved for loss due to theft, etc.

6. 6 Project Definition, Cont’d n Financial Benefits: Net Project Benefits: Year 1 = $575,000 and Year 2 = $650,000 n Project Metric “Y”: Big Y = Asset Tracking 2 nd Level Y = Asset Control 3 rd Level Y = Asset Moves & Reassignment n Defect Definition: Each leased IT asset that is not found and returned to the lessor leads to a write-off expense. The success of this project can be quantified by measuring the reduction in the raw number of units not returned. Leveragability: n Possible reduction in the number of physical IT inventories. (Soft dollar benefit only through staff prioritization)

7. 7 Additional Financial Information n Total Value of equipment on lease with Dell and IBM through 1- 01-06 = $28,805,294.88 n Monthly lease payments to Dell & IBM = $861,683.90 n Total Laptops & Desktops Due = 15,386 n Total Servers Due = 341 n 90% (14,163 items) of the equipment is due between 5-1-04 and 12-31-05 (20 Month Period) n Average items due per month (14163/20) = 708 n Average monthly lease cost per item = $61 n Average monthly exposure for equipment returned outside of 5 days within the 20 month period (708x61) = $43,188 or $518,256.00 a year

8. 8 Project Team n Champion – Tracey Rothenberger n Process Owner – Mac McGraw n Black Belt – David Levine n Financial Analyst – Carol Uhlig n Team Members: Process Personnel – Rick Faber Process Personnel – Chris Fauth Process Personnel – Danny Goode Process Personnel (GHD) – Bob Burchell Master Black Belt – Dan Douglas

9. 9 Other Contributing Factors n Other factors contributing to low lease returns n Stolen Equipment n Equipment damaged beyond repair

10. 10 Other Contributing Factors Cont’d n Serial numbers not matching lease schedules n Technical issues with the bar code system n Inconsistent use of the bar code system n Other General Lease Return Issues resulting in higher processing costs n IKON owned equipment was shipped to the lease-end processing company n Equipment on leases with other lessors was shipped to the lease-end processing company n Equipment was miss-shipped to the lease end processing company

11. 11 CTx Identification n Customers: n IKON Finance n IKON Users n Y = n IT Asset disposition within 5 days of lease end n CTQ= n All leased items returned or accounted for n Accurate lease schedules n No "miss-ships" n No serial number issues n Accurate Bar Code n All data "cleaned" to DOD Level 3 Standards n Replacement asset at the end user prior to removal of the “off lease” asset n Final disposition recorded in Asset Tracking Database n CTD= n Timely Employee Notification n Timely Equipment Replacement n Accurate Lease Schedules n Accurate Shipping and Receiving Reports n CTC= n Equipment returned On-time n No damaged equipment n No "miss-ships“ n No special operations/ rework to account for assets (ie. Census of all assets that have been conducted in the past

12. 12 CT Flow Down

13. 13 Performance Standards n Y= IT Asset disposition within 0 - 5 days of lease end n Tolerance Range is 0-5 days after lease end date and 30 days prior to lease end date. n Any asset returned after 5 days triggers additional rental charges to be billed to IKON n Any asset returned more than 30 days prior to lease termination results in an overlap of lease payments. n The internal tolerance and acceptable customer range in this case is equal. n The total number of assets returned as a percentage will also be measured.

14. 14 End State Disposition Process Time n Disposition Process should take no longer then 31 Days n 1 Day to locate equipment n 17 Days to order and replace equipment n 2 Request to Approve n 10 Days from Order to Receive n 5 Days from Receive to Install n 6 Days to ship equipment to 3 rd Party lease-end processor n 2 Days required for 3 rd Party lease-end process n 5 Days to ship equipment to Dell via non-dedicated freight Calculation is based on fixed data

15. 15 Current Process Capability for Returning Equipment On-time USL = 0 Days LSL = -5 Days Z Bench = -1.94 Mean = 37.7 Days DPMO = 973,741 Based on the Compaq Lease Return Data

16. 16 High Level Process Map

17. 17 Process Map Order to Deploy

18. 18 Request to Install Process Capability USL = 17 Days LSL = 0 Days Z Bench = -1.38 Mean = 45.4 Days DPMO = 915,705

19. 19 Delivery to Install Process Capability USL = 5 Days LSL = 0 Days Z Bench = -1.62 Mean = 20.9 Days DPMO = 936,886

20. 20 High Level Touch Point Map

21. 21 Touch Point Inputs & Outputs

22. 22 Process Map for Inventories

23. 23 Process Map for Disposition

24. 24 Lease End Processing Map

25. 25 Data Collection Plan Data DescriptionCollection TypeTypeCollection Plan Status Days + or - the lease end date that equipment is received by the lessor On-GoingContinuous – Time in DaysSetup standard reports with DellComplete Return StatusOn-GoingDiscrete- ClassificationSetup standard internal reportsNot Started Returned Bought-out - Missing Bought-out – Stolen Bought-out – Damaged Bought-out - Retained Cycle time from request to orderOne -Time HistoricalContinuous - Time in DaysSystematic Random (every 40 th ticket from the last 6 Months) Complete Cycle time from order to deliveryOne -Time HistoricalContinuous - Time in DaysSystematic Random (every 40 th ticket from the last 6 Months) Complete Cycle time from delivery to installationOne -Time HistoricalContinuous - Time in DaysSystematic Random (every 40 th ticket from the last 6 Months) Complete Cycle time while at 3 rd Party Lease End Processor One -Time HistoricalContinuous - Time in DaysSystematic Random (every 40 th ticket from the last 6 Months) Complete

26. 26 Data Collection Plan Continued Data DescriptionCollection TypeTypeCollection Plan Status Number or Desktops, Laptops and Servers on lease with Dell and their Lease End Dates. One -Time HistoricalDiscrete – Count and MonthAll Dell Lease Schedules up to 1/1/2006Complete Number or Desktops, Laptops and Servers on lease with IBM and their Lease End Dates. One -Time HistoricalDiscrete – Count and MonthAll IBM Lease Schedules up to 6/30/05Complete Number of Moves, Add ChangesOne -Time HistoricalDiscrete – CountGHD Report for the last the past quarter with annual estimates Complete Final Disposition Report for Compaq Lease Schedules One -Time HistoricalDiscrete – Returned\Not ReturnedRequest Report from CFS-HPFSWIP Final Disposition Report for Compaq Lease Schedules One -Time HistoricalContinuous – Days early or lateRequest Report from CFS-HPFSComplete Cycle time from 3rd Party Lease End Processor to Lessor One -Time HistoricalContinuous - Time in DaysRequest data from DendriteComplete Cycle time from IKON to 3rd Party Lease End Processor One -Time HistoricalContinuous - Time in DaysRequest from Regional IT managersComplete

27. 27 Project DMAIC Checklist/Status August 19,2003