Our techno-commercial proposal to CementCo for providing end to end services on (a) SAP consulting (b) IT infrastructure and

facilities planning and deployment (c) Maintenance services for SAP and IT infrastructure

Page No. 1 of 62

Table of Contents
EXECUTIVE SUMMARY ....................................................................................................................................... 4 OUR UNDERSTANDING OF CEMENTCOS REQUIREMENTS.................................................................... 5 OUR UNDERSTANDING OF CEMENT INDUSTRY SCENARIO AND CHALLENGES ............................. 6 OUR UNDERSTANDING OF KEY BUSINESS DRIVERS AND IT LEVERS ............................................... 14 OUR PROPOSED TEAM FOR CEMENTCO..................................................................................................... 16 SUMMARY OF RELEVANT PROJECTS DELIVERED BY OUR TEAM MEMBERS ............................... 17 OUR PARTNERSHIP WITH SAP........................................................................................................................ 19 OUR VALUE PROPOSITION FOR PROVIDING END TO END SAP AND IT INFRASTRUCTURE IMPLEMENTATION AND MAINTENANCE SERVICES FOR CEMENTCO ............................................. 20 OUR RECOMMENDATIONS ON RIGHT ERP FOR CEMENTCO............................................................... 22 OUR RECOMMENDATIONS ON RIGHT ERP FOR CEMENTCO............................................................... 23 CEMENT INDUSTRY SPECIFIC REQUIREMENTS SUPPORTED BY SAP............................................... 24 HOW SAP SUPPORTS INTEGRATED PROCESS FLOW IN A CEMENT PLANT ................................................................ 25 EXAMPLE 1: COST AND PROFITABILITY MANAGEMENT ......................................................................................... 26 EXAMPLE 2: PRODUCTION PLANNING FOR CEMENT INDUSTRY .............................................................................. 31 EXAMPLE 3: SALES AND DISTRIBUTION FOR CEMENT INDUSTRY ........................................................................... 32 EXAMPLE 4: PURCHASE OF RAW MATERIALS FOR CEMENT INDUSTRY ................................................................... 33 SUCCESSFUL SAP IMPLEMENTATIONS IN CEMENT INDUSTRY.......................................................... 34 ADVANTAGES OF A GREEN FIELD IMPLEMENTATION.......................................................................... 36 BEST PRACTICES SOLUTION MAP OF SAP FOR CEMENT INDUSTRY ............................................ 37 OUR PROPOSAL FOR PHASE WISE IMPLEMENTATION OF SAP AT CEMENTCO............................ 38 OUR PROPOSED SCOPE FOR FIRST PHASE AT CEMENTCO .................................................................. 39 OUR PROPOSED IMPLEMENTATION METHOD: ASAP FOCUS .............................................................. 41 EVOLUTION OF ASAP FOCUS METHOD .................................................................................................................. 41 ASAP FOCUS METHOD KEY STAGES AND DELIVERABLES ................................................................................... 46 HOW INNOVATIVE CONSULTANTS PLAN TO ADAPT ASAP FOCUS METHOD FOR CEMENTCO IMPLEMENTATION ... 47 OUR VALUE PROPOSITION TO CEMENTCO BY ADAPTING ASAP FOCUS METHOD .................................................. 47 OUR PROJECT GOVERNANCE MODEL......................................................................................................... 48 OUR PROPOSED RESPONSIBILITY MATRIX FOR PROJECT DELIVERABLES .................................. 50 OUR PROPOSED IT INFRASTRUCTURE MODEL AND FACILITIES SOLUTION FOR CEMENTCO52 Page No. 2 of 62

OUR DEPLOYMENT METHODOLOGY........................................................................................................... 53 OUR PROPOSED SCOPE FOR SAP MAINTENANCE SERVICES ............................................................... 55 OUR SAP MAINTENANCE SERVICES DELIVERY METHOD .................................................................... 56 EXCLUSIONS FROM MAINTENANCE SCOPE .............................................................................................. 57 COMMERCIAL PROPOSAL FOR SAP PROJECT (PHASE I)....................................................................... 59 COMMERCIAL PROPOSAL FOR ANNUAL MAINTENANCE SERVICES FOR SAP.............................. 60 PAYMENT TERMS................................................................................................................................................ 61 SAP LICENSES ....................................................................................................................................................... 61 SAP CONSULTING SERVICES .................................................................................................................................. 61 ANNUAL MAINTENANCE CONTRACT ..................................................................................................................... 61 BUDGETARY PROVISION FOR OTHER EXPENSES.................................................................................... 62

Page No. 3 of 62

Executive Summary

We understand that CementCo, a fast growing organization in the business of trading, cement manufacturing and captive power generation considering implementing SAP. We believe that, with our partnership with SAP for enterprise solutions and a strong SAP team having 15 to 30 years experience in SAP, we can add value to your strategic initiative of implementing SAP. Based on our overall assessment of ERPs on different parameters like ability to address key business drivers, industry vertical specialization, Indian statutory requirement, scalability, market position, add-on products, cost and user friendliness, we recommend SAP All-in-One Enterprise Solution for CementCo. SAP has an impressive credential in Indian and global cement industry for both large and SMB segments. Since this is a proposed green field implementation, CementCo has an additional advantage of standardizing their business processes and leveraging best business practices of SAP from day one. SAPs freely available business process mapping tool Solution Composer will be of great use in this process. This also makes the data migration process substantially less complex resulting in less business disruption during cut-over. We recommend a phase wise implementation of SAP enables your ERP to scale-up with time & growth of your business. The scope of the proposed first phase of implementation at CementCo includes project management including costing, financial accounting (general ledger, accounts receivables & payables, cash management, asset accounting and period end reporting), controlling (cost centre accounting, internal orders), management reporting, human recourse (payroll & timekeeping) and transportation management. Our SAP implementation method is built on ASAP Focus method using preconfigured SAP system for cement industry. The business blueprint is signed off before contract signing and project kick-off making the implementation safe, predictable and affordable for the client. CementCo will be buying xx user licenses of SAP All-in-One and additional license for payroll for a block of 500 employees. We estimate an implementation time frame of 12 elapsed weeks for the above scope. Our commercial quotation for SAP product license and consulting services for implementing the scope of work defined in first phase is Rs. xx lakhs. We are also happy to provide annual maintenance services for 3 years for the SAP system for the scope as defined in first phase at an annual price of Rs xx lakhs for first year, Rs. yy lakhs for second year and Rs. zz lakhs for third year. Apart from SAP implementation and maintenance services, we have capability and credential to design, deploy and maintain IT infrastructure for CementCo. We would be happy to submit a separate proposal on IT infrastructure design, deployment and maintenance after a detailed site study.

Page No. 4 of 62

Our understanding of CementCos requirements

We understand that CementCo is a fast growing organization in the business of trading, cement manufacturing and captive power generation. The trading business has a turn over of approx. Rs. xx crore per annum. CementCo, one of the most successful trading business houses in India, is setting up a xx MTPA cement plant in Meghalaya with a captive power generation plant. The investment for the cement plant is approx. Rs xx crore and that for power generation is approx. Rs. xx crore. With the above business drivers of rapid expansion through setting up of new plants, customer focus and profitability of the organization, CementCo is considering a world-class integrated ERP like SAP which will help them to achieve significant business benefits. We are happy to place our techno-commercial proposal for the SAP ERP implementation and annual maintenance services for the same. It also includes our capabilities in facilities management services and IT infrastructure. We will be happy to place our techno- commercial proposal for IT infrastructure and facilities management after we do a survey of your site.

Page No. 5 of 62

Our understanding of cement industry scenario and challenges

1. Indian cement industry is poised for an unprecedented steady growth of 10% YOY

2. Cement exports is poised for a steady 3.5% YOY growth

Page No. 6 of 62

3. In spite of consolidations, the growth is largely fuelled by small and medium sector cement plants. Plants with less than 2 MTPA contribute to almost 50% of the installed base of the country.

4. While WPI is likely to increase steadily, the industry as a whole is expected to be in a surplus situation putting pressures on price and profitability

Page No. 7 of 62

5. While West Bengal is the 8th largest cement consuming state, it is not one of the highest cement producing states.

Page No. 8 of 62

6. The Eastern region has the biggest deficit of cement (between production and domestic consumption)

7. Price of cement is highest in Eastern India

Page No. 9 of 62

8. The capacity utilization in Eastern India is the lowest

9. Though the net margin has increased, the operating margins have remained same

Page No. 10 of 62

10. Energy, raw materials and freight costs remain the key cost components

11. The gap between the industry best practice and Indian cement plants are increasing with respect to efficiency

Page No. 11 of 62

Cement requires around 80 separate and continuous operations. Cement prices in India are market driven and volatile. Retrospective changes are routine. Prices vary from district to district and customers are invoiced at the specified rate for consignees location. Even though cement companies try to create product differentiation, market share is highly dependent on price and hence cost control in production as well as logistics is very important. Prices include taxes and freight and hence realisation calculation is complex. Most payments are on-account types and not linked to invoices. Complex system of discount and incentives. Consignments of both road and rail sometimes need to be reallocated. Incentives and associated debit/credit generation is complex. Delivery tracking is critical. Accounting for damaged cement (bags) is necessary. Transporter billing on retrospective basis is necessary. Environment, health and safety is increasingly playing a key role in cement industry.

Page No. 12 of 62

The selection of right ERP for a cement plant is based on how the KPIs are getting addressed through the ERP solution.

Page No. 13 of 62

Our understanding of key business drivers and IT levers

The IT levers of a cement industry need to align to strategic imperatives and ERP implementation priorities.

Page No. 14 of 62

All these IT levers mentioned in the above diagram are critical in selection for the right ERP for your company. Right kind of IT levers helps you in deciding proper business levers, which in turn helps you in achieving your profitability objectives.

Page No. 15 of 62

Our proposed team for CementCo

One of our strongest value propositions is the credential of our leadership team in SAP consulting business who have extensive and proven track record in large and complex SAP implementation specifically in Mill products industry sector. Besides, they have also strong credentials in global SAP projects having managed various SAP assignments in India and abroad. We have a strong team of consultants with deep SAP, industry and business process knowledge supporting our SAP leadership team. Our team comes with deep industry and consulting background having served global consulting, IT and manufacturing companies in senior positions in the past. Most importantly, our leadership team not only provides overall direction to our growing SAP Practice but also is a team of hands-on SAP professionals who are actively involved in managing assignments for clients. In case you choose us for delivering SAP services, this team will be directly engaged in delivery of your very critical SAP initiative. This is to ensure that we can deliver highest quality of SAP services to you through this highly experienced team. Along with this senior leadership team, we have a strong team of consultants with deep SAP, industry and business process knowledge supporting our SAP leadership team.

Page No. 16 of 62

Summary of relevant projects delivered by our team members

Projects from mill products industry segment SAP Implementation at SteelCo
Brief on the Project: SteelCo SAP implementation was one of the largest and most complex SAP implementations in steel industry in India. The scope of the project involved the following business functions for SteelCo Order generation and fulfillment Financial Accounting Purchasing and Materials Management Production Planning Advanced Planning and Optimization for Long Products Product Costing at Product-Quality-Section Level Profitability Analysis Plant Maintenance Quality Management

The project involved around 2000 user licenses. The project was executed in 2 phases the first phase for order generation and fulfillment process and the second phase involved the other business processes around the manufacturing plant in Steel Nagar. The business benefits from the SAP implementation in SteelCo was published in press few months after go-live. Following is an excerpt on the benefits, as quoted by SteelCo executives. Roles of our team members in the project: Our team members were responsible for managing the project end-to-end and were senior members of the Core Team deployed by SteelCo for the implementation.

SAP Implementation at FirstSteel

Brief on the Project: FirstSteel was one of the first steel companies in India to implement SAP in its manufacturing facility at Birat Nagar. The implementation was done in 1997. The scope of the implementation included the following business processes Sales and Delivery process Financial Accounting Purchasing and Materials Management Production Planning Quality Management Plant Maintenance

The project involved around 500 user licenses. Page No. 17 of 62

Roles of our team members in the project: Our team members played key role as consultant in production planning and quality management areas.

SAP Implementation at Shakti Tubes

Brief on the Project: Shakti Tubes implemented SAP at Steel Nagar works in 2005-6. This involved around 400 users. Sales and Delivery process Financial Accounting Purchasing and Materials Management Production Planning Plant Maintenance

Roles of our team members in the project: Our team members were involved as team lead in plant maintenance module having end to end responsibility of business blueprinting, realization, training and post go-live hyper-care support.

SAP Implementation at Bhuvan Minerals

Brief on the Project: Bhuvan Minerals implemented SAP in its Jaipur works in 2008. This involved around 100 users. Sales and Delivery process Financial Accounting Purchasing and Materials Management Production Planning Plant Maintenance

The project involved around 500 user licenses. Roles of our team members in the project: Our team members were involved as independent consultant employed by Sarda for quality review of the business blueprint and system testing.

Projects from other industry segments

Apart from Mill products industry sector, our team members have played key roles in major SAP implementations in other sectors in prestigious clients both in India and abroad. Our team members have delivered these projects in various capacities like project management, team leaders, subject matter experts, global roll-out managers, offshore delivery managers, etc. A sample list of clients in non steel sectors serviced by our team members are given below.

Page No. 18 of 62

Our partnership with SAP

Page No. 19 of 62

Our value proposition for providing end to end SAP and IT infrastructure implementation and maintenance services for CementCo
We believe that we can add value to your SAP implementation as well as IT infrastructure consulting and facilities management because of the following reasons 1. Our partnership with SAP for enterprise solution All-in-One enable us to be a one stop shop for all your SAP services. 2. Deep experience in mill products industry of our team members provide the requisite industry expertise and best practices knowledge. 3. Deep experience of our team members in implementing complex SAP implementations in mill products industry helps us to provide high quality implementation services. 4. Global SAP experience of our team members helps us to bring global expertise in our implementations. 5. Our extensive service offerings meet most of clients requirements in SAP space. 6. Our capabilities in associated services like infrastructure management & facility management help us to provide integrated end to end services in a cost effective way. 7. Our innovative project delivery method built on ASAP Focus method together with our industry and business process expertise is geared towards a rapid high quality implementation. 8. Our workshop model of business blueprinting ensures optimal usage of scarce time of your business managers. 9. Our well defined project governance model and joint responsibility of deliverables provide an efficient mechanism of managing the project with clear and fast escalation path for issue resolution. 10. Our templates for project documentation provide standardization and fast documentation of project deliverables. 11. Innovative Consultants has deep experience in consulting and implementation of new IT infrastructure and data centers. 12. Our services, starting from load assessment & capacity planning, network design, security & threat migration, assessment of power system and load, fire alarm and control, HVAC/precision a/cs and UPS/gensets, have established us as a single point nodal agency for large projects. 13. Innovative Consultants facilities management services cater to every operational requirement of an IT services and data centre. Our services cover desk top management, network management, server management, mail/messaging systems and security & change management. These facility services are available on-site at customer location or remotely through our NOC based remote monitoring system. 14. Our expertise in networking technology and products from all major vendors including Cisco, Lucent, Nortel, HP and 3Com gives our clients the flexibility to choose the network environment of their choice.

Page No. 20 of 62

Section A: SAP consulting services

Page No. 21 of 62

Our recommendations on right ERP for CementCo

We have assessed ERP solutions for CementCo on the basis of the following criteria Ability to address key business drivers: Many ERPs (or nERPs) claim to support the basic business functions like accounting, costing, sales and distribution, materials management, etc. But the devil lies in the details! One has to deep dive into the features and assess whether they achieve to address the real business drivers of the industry. Industry vertical specialization: The ERP product must cater to the unique requirements of the cement industry Many ERPs (nERPs) have broad category of industry specialization e.g. process industry, manufacturing industry, mill products industry solution, etc. But cement industry needs deeper specialization supporting specifically building materials industry. Indian statutory requirements: The ERP product need to support Indian statutory requirements like excise, sales tax, various registers, etc Scalability: The ERP product should be able to support your expansion and diversification plans without having to throw away the ERP product and go for a new product in near future. Market position of the ERP product: This is important from the following perspectives Investment protection Proven capabilities in relevant industry segment Consistent product strategy State of the art technology and timely upgrade Availability of consulting services and support Add-on products: The ERP should provide add-on products like business process management tools, best practice scenarios, pre-configured clients, templates, documents and research paper for accelerated implementation. Cost: The ERP deployment and maintenance need to be cost effective. User Friendliness: The ERP product should be user friendly for easy training and adaptation

Page No. 22 of 62

Our recommendations on right ERP for CementCo

Category Fitment to address business drivers Subcategory Base functionalities in accounting, sales and distribution, materials management, production planning Key business drivers like multi-level product costing, profitability analysis, integrated plant maintenance, project systems and quality management, etc Manufacturing industry Process Industry Mill products industry Building materials industry (including cement) Production, sales and procurement processes addressing bulk, packaged and serviced cement business processes Indian statutory requirements related to excise, sales tax, etc. Whether scalable to address advanced requirements like CRM, SRM, Environment, Health and Safety, Internal Audit, Compliance, etc Current position in ERP market Proven capabilities in the industry segment Consistent product strategy State of art technology and timely upgrade Availability of consulting services and support Add-on products Best practices repository Pre-configured client Accelerators, templates and documents Business Information system Business Process Management tool Cost License cost Implementation cost through ASAP Focus method** Maintenance cost User Friendliness User friendliness SAP Enterprise Solution SAP Business One++ Other Known ERPs*

Industry specific solution

Indian statutory requirements Scalability

Market Positioning

* ERPs who position themselves comparable to SAP Enterprise solutions ++ Including other ERPs positioning themselves with SAPs Business One solution ** With our deep industry and SAP experienced team and SAPs ASAP Focus method, we provide an accelerated implementation path which helps to reduce the implementation costs significantly.

On overall assessment, we recommend SAP All-in-One Enterprise Solution for CementCo.

Page No. 23 of 62

Cement industry specific requirements supported by SAP

Solution Composer, a Business Process Management tool provided by SAP, has a special section on Building Materials with built-in best practices for building materials industry including cement. The best practices scenarios are available pre-configured.

Page No. 24 of 62

How SAP supports integrated process flow in a cement plant

SAP has the capability to support the integrated business process flow in a cement plant.

Page No. 25 of 62

Example 1: Cost and profitability management

Cost is one of the key business drivers of cement industry. This example, taken out of one of the pre-configured scenario documents in SAP, demonstrates how SAP assists in cost management.

The subsequent screenshots show how Estimating standard cost estimate including itemization Cost component-wise fixed and variable cost estimates Activity-wise cost estimate Actual costing including multi-level price estimates Profitability Analysis

Page No. 26 of 62

Material Cost Estimate with Quantity Structure

Cost Components showing Fixed & Variable Costs

Page No. 27 of 62

Costing full itemization

SAPs extensive feature on costing allows you to estimate the standard cost, capture the actual cost and measure variances at the lowest level.

Page No. 28 of 62

Page No. 29 of 62

SAP provides complete visibility at multi-levels on actual cost and profitability thereby assisting in controlling the cost of production and sale.

Page No. 30 of 62

Example 2: Production planning for cement industry

The preconfigured production planning scenarios for building materials industry specifically caters to both bulk and packaged production planning requirements of cement industry. Page No. 31 of 62

Example 3: Sales and distribution for cement industry

The preconfigured sales and distribution scenarios for building materials industry specifically caters to both bulk and packaged requirements of cement industry. It includes features like credit management, transportation management, rush orders, etc

Page No. 32 of 62

Example 4: Purchase of raw materials for cement industry

The preconfigured purchasing and inventory management scenarios for building materials industry specifically caters to bulk and packaged raw materials procurement of cement industry. It includes features like incoming quality control, invoice verification, etc Page No. 33 of 62

Successful SAP implementations in cement industry

SAP has an impressive credential in cement industry in India and globally

Page No. 34 of 62

Page No. 35 of 62

Advantages of a green field implementation

Greenfield stage of any company is the right time to implement SAP

You have the opportunity to standardize your business processes from day one. You have the opportunity to leverage best industry practices from day one. Organizational change management is easy. Data migration is absent this reduces the implementation time upto 20 30% compared to brown field projects. You can phase your implementations according to your project commencement timelines. This phase out the effort, complexity as well as the cost. There is no disruption in business during cut-over. You can manage your project phase through SAP. Examples of some companies who have reaped the benefit of a green field SAP implementation Haldia Petrochemicals Arvind Mills SteelCo CRM plant

Page No. 36 of 62

Best Practices Solution Map of SAP for Cement Industry

SAP solution map for Cement industry is a multilevel blueprint of processes to help you understand and implement these processes effectively. This tool helps you visualize, plan, and implement a coherent, integrated, and comprehensive information technology solution.

Page No. 37 of 62

Our proposal for phase wise implementation of SAP at CementCo

SAP fits your requirements to manage supply chain, back office, and customer relationships at macro assessment level, resulting in multiplicity of business benefits. This phase wise approach gives you enterprise-wide integrated process, from project execution, production to sales & distribution. This unique characteristic of SAP enables your ERP to scale-up with time and growing volume & size of your business.

Page No. 38 of 62

Our proposed scope for first phase at CementCo

Page No. 39 of 62

Based on the above business scope, we propose to implement the following SAP modules and sub-modules in first phase Project Management including Project Costing Financial Accounting General Ledger Accounts Payables Accounts Receivables Cash Management Asset Accounting Period end reporting Controlling Cost center accounting Internal Orders Procurement and Inventory Management Capital goods procurement Sundry purchases Management Reporting Human Recourse Management Payroll and Timekeeping Logistics Execution-Transportation Management We propose to implement the following geographical scope Head Office of CementCo at Project site at

Sales & Distribution Materials Mgmt.

SD

Financial Accounting

FI

MM

Product Planning

PP

R/3 R/3
HR

CO
Controlling

TR
Treasury

Quality Mgmt.

QM

Plant MainteMaintenance

Client/Server PS Client/Server PM ABAP/4 WF ABAP/4

Workflow Human Resources Industry Solutions

Project System

IS

SAPs honeycomb structure depicting the various modules

Page No. 40 of 62

Our Proposed Implementation Method: ASAP Focus

Evolution of ASAP Focus method

Four Toos myths about SAP

Page No. 41 of 62

SAP All-in-One breaking the myths

SAP All-in-One value proposition

Page No. 42 of 62

Traditional Deployment

Customerspecific requirements

+ SAP Best Practices + SAP Consulting Packaged Solution Roadmap & Accelerators

Rapid installation Fixed scope, Defined price, implementation Business expertise

ASAP Focus Safe, Predictable, Affordable

Generic Generic Business Processes (e.g. Accounting, logistics, sales, production) Processes specific to Industry Sectors (e.g. Manufacturing, Financial Services, Communication, etc) Processes specific to Industry Groups (e.g. Mill Products, Automobiles, Oil and Gas, Consumer Products, etc) Processes specific to Industry Vertical (e.g. Building Materials, Primary Metals, Forest and Paper, etc ) Processes specific to Industry Mini-vertical (e.g. Stone, clay, glass and concrete; Petroleum and coal products, etc ) Processes specific to Industry Micro-vertical (e.g. Cement, Concrete, Flat Glass, etc ) Processes specific to Your company Specific (e.g. CementCo Pvt. Ltd.. )

In some countries the micro-verticals are standardised e.g. US has around 1350 micro-verticals.

Business processes generic to specific (example cement industry processes)

Page No. 43 of 62

SAP standard

SAP standard product was available only at generic business process level. Consultants from implementation partners will configure and customise the rest during the implementation phase. The process was NOT SAFE: the configuration was done for the specific project and was not proven. PREDICTABLE: the testing method was not rigorous as it dependent on the consultants expertise from project to project. AFFORDABLE: the implementation timeframe and number of consultants as well as users required were high leading to high cost.

Configured/ customised by implementation partners on project to project basis

Traditional SAP implementations (adapted in the 1990s)

SAP standard

In 2000 SAP came up with industry solutions e.g. IS-Auto, IS-Oil, IS-Banking, etc. This reduced the degree of configuration/ customisation. However, still there was significant amount of configuration and/or customisation to be done by consultants during implementation. The process was still NOT SAFE PREDICTABLE AFFORDABLE

SAP Industry solutions

Configured/ customised by implementation partners on project to project basis

SAP implementations with ASAP method (adapted in the 2000s)

Page No. 44 of 62

 ASAP Focus method and pre-configured industry subtremendously verticals has reduced on-site configuration tremendously SAP standard SAP Partners like Innovative Consultants, with deep industry knowledge, develops pre-configured microverticals (if not provided by SAP) Only process specific to your company (beyond the micro-vertical your company belongs to) need to be configured on-site practices With extensive research from SAP and best practices of sub-verticals global companies belonging to the same sub-verticals and micro verticals built-in and India specific statutory requirements also built-in, such cases should be few and far between This process makes SAP implementation Pre-configured microverticals by SAP/ Partner On-site configuration/ customisation SAFE: The configuration is proven in other microindustries in the same sub-vertical and/or microvertical PREDICTABLE: The configuration is tested chances rigorously at SAPs lab in Walldorf and chances of failure is minimal AFFORDABLE: The cost of implementation as well as the timeframe is significantly lower as there is very little configuration to be done on-site for the project

SAP Industry solutions

SAP pre-configured sub-verticals

SAP implementations with ASAP Focus method (Introduced in 2007 globally and 2008 in India)

Page No. 45 of 62

ASAP Focus method key stages and deliverables

SAP ASAP Focus Methodology

Evaluation Roadmap Evaluation
Present solution/ implementation approach Validate customer fit Set expectations with customer Create Proposal Document Review and submit proposal

Implementation Roadmap Pre-Project Activities Project Preparation

Plan project Build project charter Set up Implementation standards and procedures Execute kick-off System setup (DEV&QA) Production hardware installation Quality check: Project preparation

Delta Requirements
Present prototype system Assess data complexity Identify Delta requirements Design Delta solution Get customer to sign off blueprint with Delta Finalize Statement of work

Realization
Validate organizational configuration Validate business processes Realize delta requirements Conduct organizational change management Planning for production support and cutover Run Integration & acceptance test Plan end user training Internal review

Final Preparation
Refine cutover plans Establish long term support plan Train end users Create & staff help desk System management Execute cutover Quality check: Final preparation Start of production

Go Live & Support

Monitor live environment Close open issues Start long term support plan Quality check: Go Live Project closing

Review data requirements and data cleansing plan Train project team Prepare Organizational Change management Set up project team environment Decide system landscape and Install hardware Order SAP BP

Start

Customer qualified

Contract signature

Project kick-off

GoLive

time

Key difference between ASAP and ASAP Focus method: Business Blueprint sign-off happens before contract signing

Page No. 46 of 62

How Innovative Consultants plan to adapt ASAP Focus method for CementCo implementation
1. Innovative consultants will import pre-configured system for cement industry provided by SAP best practices in SAP system installed at Innovative Consultants premises. 2. Innovative consultants will engage CementCos key users (core team members) in workshops and demonstrate the pre-configured processes and identify gaps. 3. Experienced consultants of Innovative Consultants will resolve the gaps through additional configuration and customization. 4. Innovative Consultants will engage CementCos key users for second workshop to validate and sign-off the prototyped processes. 5. Upon sign-off of the business blueprint, Innovative Consultants will request CementCo to award the contract and make the first payment. 6. The whole process is expected to take one elapsed month and is expected to engage 10 to 12 core users of CementCo. The expected time involvement of each core user is expected to be 4 to 5 working days.

Our value proposition to CementCo by adapting ASAP Focus method

We offer a SAFE implementation method

o The pre-configured business processes for cement industry provided by SAP is

tried and tested in multiple cement industries in mid-size segment and is expected to perform without any bugs and problems which are usually discovered post go-live. The experienced consultants from Innovative Consultants with deep experience in mill products industry configure the minor gaps and demonstrate to the users before the contract sign-off. The post go-live pains are significantly less and user adaption is higher.

o o

We offer a PREDICTABLE implementation method o o o Extensive use of pre-configured client from SAP tested thoroughly at SAP Labs reduces the surprise elements significantly. Demonstration of the prototype before the contract sign-off ensures acceptance of the configured processes by the users before embarking on the SAP project. This makes the project timeline predictable and go live issues minimal.

We offer an AFFORDABLE solution o o o o There is no financial investment or commitment of funds from CementCo during the business blueprint stage. The commitment of fund happens only after the acceptance of business blueprint. The reduction is project implementation time reduces the implementation cost significantly (can be upto 50% compared to a traditional implementation) The time commitment required from the core users during implementation is significantly less thereby indirectly saving precious cost and time of key managers of CementCo.

Page No. 47 of 62

Our Project Governance Model

Our project governance model is based on the following principles Joint project team between CementCo and Innovative Consultants Shared project deliverable responsibility between CementCo and Innovative Consultants Joint high level steering committee between CementCo and Innovative Consultants Well defined project status reporting based on pre-defined template Easy escalation path for fast decision making and resolution of issues

Project Sponsor
Sr. Execs from CementCo

Director or equivalent from Innovative Consultants Jt. Steering Committee

Project Lead Normal Communication Channels

Project Lead

Business Process Owners

Escalation Route Team Members

CementCo SAP Project Team

Innovative Consultants SAP Project Team

Roles and Responsibilities of the Project Team Steering Committee: The Steering committee is the highest decision making body of the project. Hence the steering committee needs to be represented by senior executives from CementCo and Innovative Consultants. Innovative Consultants will be represented in the Steering Committee by one of the Directors or equivalent. We recommend that CementCo appoints relevant senior executives like Directors/ VPs in the Steering Committee. We recommend that the overall Project Sponsor be from CementCo. The Steering Committee provides oversight to project, guidance on efficient management of the project, resolution of any issues escalated to the steering committee by the project team, approval to any major change of business process, approval to any major change of scope and approval of completion of key milestones of the project.

Page No. 48 of 62

Project Leader (CementCo and Innovative Consultants): Project Leaders from CementCo and Innovative Consultants have the overall responsibility of delivering the project end-to-end. Hence they should be persons with adequate seniority and having relevant knowledge and experience. The Project Lead from CementCo should also be a person with adequate influence within the organization to drive this massive organizational transformation exercise. From Innovative Consultants, the Project Leader would normally be a Principal Consultant or equivalent. Innovative Consultants always attempts to assign a Project Leader who has deep experience in SAP as well as in the industry relevant for the client. For CementCo, Project Leader will be assigned from one of the members whose pen profiles have been shared earlier. Business Process Owners (CementCo): Business Process Owners are recommended to be managers/ senior managers from various departments (sales, production, purchasing, materials, etc) from CementCo. The business process owners are responsible for communicating the business requirements, validating the to-be processes and owning and communicating the changed processes for CementCo. Knowing that the time of these senior managers is scarce; our workshop model ensures that their time is effectively used. Hence they will be required to participate in the targeted workshops during business blueprinting and they will need to provide overall guidance to the team members, but their full-time involvement during the full length of the project will not be required. They would, however, be responsible for the deliverables in their respective areas. Team Leaders (Innovative Consultants): Team Leaders from Innovative Consultants will have responsibility for designing and delivering SAP system one business area (sales, purchasing, production, etc) jointly with the corresponding business process owners of CementCo. Team leaders deployed by Innovative Consultants will have deep understanding of business process in their respective area, will be of relevant industry background and will have relevant SAP knowledge in the respective areas. Team leaders will work closely with the business process owners from CementCo. Some of the key members whose profiles have been shared and/or similar members will be assigned the Team Leader roles. Team Members (CementCo and Innovative Consultants): Team members of Innovative Consultants will be SAP consultants with adequate business process and industry knowledge. The ABAP and BASIS members of the team will have relevant IT experience in programming and system administration. They will be working under the guidance of their respective team leads. They will be responsible for assisting the team leads in business blueprinting, configuration and customization of system as per the blueprint, unit testing and integration testing, assisting CementCos team members in data migration and training; etc. The team members from CementCo are recommended to be junior executives/ engineers/ supervisors. They need to be full-time dedicated for the project duration. They will work under the guidance of their respective business process owners assisting them in providing inputs on business requirements, documenting the to-be process design, end user acceptance testing, end user training through train-the-trainer programs, assisting in post implementation hyper-care support.

Page No. 49 of 62

Our proposed responsibility matrix for project deliverables

We believe a joint responsibility and close teamwork between CementCo and Innovative Consultants members is a key to success of the project. Hence all project deliverables need to be jointly owned by CementCo and Innovative Consultants teams. However, to ensure that there is accountability in the whole process, we recommend that for each deliverable there is a primary owner (who can be either from CementCo or Innovative Consultants, depending on suitability and appropriateness) supported by secondary owner. Our recommended responsibility breakup for the key deliverables of the project is as follows:

Page No. 50 of 62

Section B: Our capability in IT infrastructure and facilities planning and deployment

Page No. 51 of 62

Our proposed IT infrastructure model and facilities solution for CementCo

Routers

VPN

Users Server Room

Users Head Office

Site Office

Our proposed IT infrastructure model for CementCo

For the proposed SAP implementation at CementCo, you will require three servers for development, quality/testing and production. Based on the number of user licenses, the servers would be connected with the PCs through routers. This LAN connection helps you in sharing the data and information within your office. The servers at your site office at Site Office and corporate office at ABC will be connected through VPN. A virtual private network (VPN) is a network to provide remote offices with secure access to their organizations network. For the smooth running of your day to day activity and security of data, we propose you to create a datacenter.

Page No. 52 of 62

Our deployment methodology

Based on our proposed IT infrastructure and facilities solution, we have segregated our activities in the following manner, Hardware Sizing- This activity includes the understanding the specifications of hardware required for your SAP implementation. This hardware includes servers, wires and cables for LAN & VPN, routers, switches etc. As the project office is yet to be constructed, so we are giving you the specifications for servers only. o Servers you may choose either Option a or b for production server a) Intel based Servers running Windows 2003 or higher Enterprise Edition (for Production Server) High availability clustered using 2 x Quad-core Intel Xeon processors, 8 GB RAM, 2 x 145 GB mirrored HDD for OS, clustering kit, Operating System, 3 x 300 GB external HDD for data in RAID 5 configuration price would be approximately 15 lakhs b) Intel based Servers running Windows 2003 or higher Standard Edition (2 servers proposed, 1 as Production server and 1 as hot standby) 2 x Quad-core Intel Xeon processors, 8 GB RAM, 2 x 145 GB mirrored HDD for OS, 3 x 300 GB internal HDD for data in RAID 5 configuration price would be approximately 5 lakhs each c) For Quality and Development / Sandpit servers- x Quad-core Intel Xeon processor, 8 GB RAM, 3 x 145 GB HDD in RAID 5 configuration price would be approximately 3 lakhs each Hardware Installation- After the purchase of all required hardware, we will install them at clients site. Network designing for SAP- The network designing for SAP, both for the site at Meghalaya and ABC can be determined after detailed survey of the proposed sites. Network Deployment for SAP- Soon after the network designing, the deployment of network will be done. VPN Connectivity- After the deployment of required network at your ABC office and site office at Meghalaya, both of your offices will be connected through VPN (Virtual Private Network). Facilities management services for your datacenter/server room- IT operations are a crucial aspect of most organizational operations. One of their main concerns is business continuity. So it is necessary to provide a reliable infrastructure for IT operation, in order to minimize any chance of disruption. Our services include, Civil & Architecture of the data centre Air-conditioning of the data centre UPS option creation Electrical wiring designing Fire detection & alarm system Fire suppression system Pest control, rodent control, water leak detection Building management system Networking

Our deployment methodology enables our customers to get the benefit through less disruption in their day to day work and timely delivery.

Page No. 53 of 62

Section C: Our maintenance services for SAP

Page No. 54 of 62

Our proposed scope for SAP maintenance services

Maintenance services of SAP involves a set of components

L1 Help Desk (logging calls, segregating SAP issues and routing, basic user administration) L2 Help Desk (solving how to questions, assisting in correcting data errors, analysing whether the issue is a product or config/ customisation problem) Fixing Config Issues L3 Support
Fixing Customi sation Issues Minor Enhance ments

Product Bug Fixing

(source code corrections, identification of patches)

System Maintenance (BASIS)

(performance tuning, user administration, patch application, etc)

We will be happy to provide all the three levels of support to CementCo. We have the support of SAPs global team for any product related issues.

Page No. 55 of 62

Our SAP maintenance services delivery method

Our maintenance services will include 1 month of hyper-care support at project site and user locations immediately after go-live. After 1 month of hyper-care support, we will continue to support the users of CementCo through an on-site/ off-site model. We will have one or two support personnel on-site to cater to the Level 1 support requirements of the users. This will be clubbed with the on-site support for infrastructure. The Level 2 and 3 support services will be provided from our offshore delivery center situated at The Level 2 and 3 support services will be provided by a team of SAP consultants located at our XYZ office. The services of the team of consultants are likely to be shared with other companies. We have the provision of having our consultants sign appropriate non disclosure agreement to ensure that your confidential data is protected. In case of Severity 1 and 2 calls, one team will be available in your location based on requirement. We propose to provide the SAP maintenance services on the basis of the following service level objectives.

Severity Level 1 2 3 4

Response Time 30 mins 4 hrs 1 working day 3 working days

8 hrs 1 working day 2 working day None

Resolution Time 48 hrs 3 working days 10 working days As per estimate and mutually agreed schedule

We propose to follow the following definition for the severity levels of the issues
Severity Level Definition 1 Disruption of entire business resulting from a total outage of the SAP system. Examples - Total outage of SAP production system 2 Disruption of key business functions which might have significant financial impact. Examples - despatch of goods has stopped, payroll processing at month-end has stopped, etc 3 Disruption of processes leading to minor inconvenience but business can be managed through workarounds or manual processes temporarily. Examples - (a) goods receipt in stores have stopped (2) invoice cannot be printed (3) purchase documents cannot be printed (4) production orders not getting recorded 4 No disruption in business but the fix is essential for improvement in business process. This will also include minor enhancements. Examples - (a) a new customised report (b) adding or modifying a G/L account changing the layout of purchase order

Page No. 56 of 62

Exclusions from maintenance scope

The following services will be excluded from the current maintenance scope of work. Innovative Consultants is however happy to engage with CementCo for these services through a separate contract, should CementCo feel any need of the same. Any change of system configuration due to any change of business rules of CementCo subsequent to business blueprint sign-off. Additional reports subsequent to those identified during the project implementation. Implementation of additional modules/ sub-modules apart from those enumerated in the current scope of work. Roll-out of SAP in additional plants, warehouses and sales offices apart from those identified in the current scope of work. Services related to upgrade of SAP from the current version which is mySAP ERP 2005 on ECC 6.0

Page No. 57 of 62

Section D: Commercial proposal

Page No. 58 of 62

Commercial proposal for SAP project (Phase I)

Our proposed price and fees for SAP product license, consulting fees for implementation is as below. This price assumes xx user licenses of SAP and licenses for using payroll functionality for a block of 500 employees. It also includes the last time connectivity hardware costs. These charges exclude the following 1. Travel and living costs of consultants traveling for project work outside ABC 2. Service taxes and VAT on the price, as applicable. The above costs will be charged on actual basis.

Page No. 59 of 62

Commercial proposal for annual maintenance services for SAP

We propose a consolidated AMC for SAP This price includes o Infrastructure cost of computers, network, related software required for support costs of the consultants stationed at Innovative Consultants premises in XYZ. o Telephone and other communication costs with the users of CementCo for consultants of Innovative Consultants located at Innovative Consultants office. o On-site hyper-care supports for 1 month post go live of SAP. This price excludes o Services taxes as applicable o Computers, network and sitting arrangement of support personnel of Innovative Consultants located at CementCos premises o Last mile connectivity between CementCos office at ABC to Innovative Consultants office at ABC This price assumes the following o Project start date of not later than 2 months after license buy o Project duration of approximately 3 months This price assumes the following o YOY productivity improvement of 10% o YOY system stabilization factor of 10% o YOY cost escalation of 10% The AMC is effective from the date of sale of SAP licenses.

Page No. 60 of 62

Payment terms
We propose the following payment terms for the various categories products and services. We will raise the relevant invoices within 15 days of the completion of the concerned milestone. We would request a payment against the invoice not later than 30 days from the raising of the invoice.

SAP licenses
1. 20% of the license sale value on order booking 2. 80% of the license sale price on delivery of software

SAP consulting services

1. 2. 3. 4. 5. 0% on business blueprint sign-off 30% advance on contract signing and project kick-off for mobilization of resources 40% on completion of realization phase 20% on go live 10% on completion of 1 month of hyper-care support

Annual Maintenance Contract

1. Rs xx lakhs is to be paid one-time every year at the beginning of each AMC year. 2. The remaining amount for the particular years AMC is to be paid in equal quarterly installments at the beginning of the quarter. 3. For the first year, the payment for Item No 2 will be due immediately after go live.

Page No. 61 of 62

Budgetary provision for other expenses

We recommend CementCo to provision for the following expenditure for deployment of SAP. This estimate is provided purely as assistance to CementCo to make the budgetary provisions. CementCo will be directly dealing with relevant vendors and/or service providers for obtaining these products and services and the actual price will depend on the terms and conditions between the vendor/service provider and CementCo. We recommend to budget for the following capex. This excludes cost of PCs, LAN and general software like MS Office, E-mail, which is assumed to be existing or being set up, irrespective of the project.

Cost Heads Database license (Oracle) SAP Server Equipment for last mile connectivity Total

Budget (Rs. Lakhs)

Travel expenses of consultants to the project site during realization, go live and hyper-care stage will be billed on actual. The estimated cost of the same is Rs xx lakhs. We recommend you to make a provision of Rs. xx Lakhs/annum for annual rental for 256 kbps connection (last mile connectivity) from our office at to your office at ...

Page No. 62 of 62