Alain Sénéchal, CA Manager, SAP Optimization Business Integration - Corporate Accounting

1. SAP implementation at Canadian National Railway Americas SAP User Group – Quebec Chapter Tuesday March 25th 2003 Alain Sénéchal, CA Manager, SAP Optimization Business Integration - Corporate Accounting Tel: (514) 399-6405 Pager: (514) 440-3612 Email: alain.senechal@cn.ca

2. Who is CN? • One of North America’s largest Class 1 railroads • An innovative, industry-leading transportation company • North America’s only tri-coastal NAFTA railroad • Unmatched access to all three NAFTA nations • A former Canadian government Crown Corporation - privatized in 1995 and now listed on the NYSE and Toronto Stock Exchange

3. CN’s Geographical Operations

4. CN Quick Facts 2002 • $6 billion revenues • $12 billion of assets • 22,868 employees • 17,986 route miles of track • 1,500 locomotives • 61,800 railcars • 3 million pieces of signal equipment

5. SAP Implementations – A 3 Phase approach April 22, 2002 October 1999 January 2001 PHASE 1 PHASE 2 PHASE 3 Network Assets S&C Configuration Mgmt CN/GT Inventory Requisitioning Bar Coding Purchasing Engineering IC Rollout Intranet Requisitioning IC Field Inventory Procurement Cards Expense (OCS) Travel Booking (Pilot Sept 14) Field Inventory/Rail Shop Inventory Management Supply Management IC Rollout Projects System Asset Accounting Recoverable Billing General Ledger Financial Reporting Accounts Payable BPS/BW Finance Business Warehouse (Sept 9, 2001) Budget Planning (Sept 24, 2001) Workforce Planning/Qualifications Employee Self-Service Employee Health & Safety Net Payroll Canadian & US Benefits CN Management Employee Information Compensation & Succession Time & Gross Payroll US Rollout All Unionized Employees Time Reporting Human Resources Mobile Assets (Loco/Car) Work Equipment Main Shops (Transcona) Mechanical

6. Scope of each phase • Phase I: go-live Oct 1999 • FI: G/L, A/P, Financial Reporting (using SPL for Regulatory Reporting) • MM: purchasing & inventory mgmt (Canada only) • HR: management admin & payroll • Phase II: go-live January 2001 • FI: capital, project mgmt, recoverables (Non Freight Billing) • MM: purchasing & inventory mgmt (US), eProcurement (ARIBA) • HR: union admin and payroll, time keeping

7. Scope of each phase (Cont’d) • Phase III: go-live April 29, 2002 • Plant Maintenance: • Rail cars and locomotives • Rail network assets • Facility maintenance (one location) • Employee qualifications • Gross-to-net payroll • Travel expenses • EH&S (Risk Management)

8. SAP Quick Facts • 27,000 SAP/ESS users • 9,000 SAP users • HP/Unix on Oracle

9. Business Warehouse (BW) • Used for SAP financial data used in budgeting, forecasting, Projects and recoverable expense accounting • Budgeting at CN is currently done using a tool called Business Planning & Simulation (BPS) within SEM (Strategic Enterprise Management) • Currently Upgrading SAP BW to version 3.0B and SEM to version 3.1B. • Next cubes to be deployed are A/P for Spend Management and HR for labor relations

10. WHAT’S AHEAD? • Integrating Fuel Consumptions • Implementing Service PO module • Expand scope of Natural Language Understanding (NLU) applications to facilitate SAP front-end input • Implement and expand SAP workflow links with Lotus Notes, email, fax, documents, forms and SAP transactions with a document management solution • SAP no longer supports the CIV invoice validation module and the migration to LIV is required in order to maintain a stable platform for invoice processing