Nick Bomba Contract Management Director SBC Customer Team Lucent Technologies Inc.

2. System Tools & Processes Facilitating Contract Management Nick Bomba Contract Management Director SBC Customer Team Lucent Technologies Inc. September 2, 2004 NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

3. Lucent Quote To Cash (QTC) Initiative • What is Quote to Cash? - Quote to Cash (QTC) is a globally deployed end-to-end process & associated tool sets by which Lucent receives a customer's request for a quote or proposal for a solution and ends with the cash payments for delivery of that solution. • Benefits - Reduces operating costs through streamlined business processes & tool sets. Replaced local financial platforms for one global financial platform, resulting in faster reporting, increased reliability of information and smaller and flexible organization. NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

4. System Tools • B&P/Contracts Tool • Pricing Database • Pricing Engine • Enterprise Resource Planning (ERP) Platform NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

5. Agreement Name & Description, Effective & Expiration Date, Item Codes and Price. • Can add to existing Agreement or create new. • Pricing Pools Need to be UPDATED in Pricing Engine. B&P/ CONTRACTS TOOL For Hybrid Quotes (uncontracted items are present), nothing automatically transferred. Enter Quote #, etc. directly in Price Database When a Quote is entered in B&P/Contracts TOOL Quotes: Quote Number, Quote Created Date, Customer Request Number, Quote Due Date, Customer Name, ERP sold to Number, Type of Service (engineering, installation, etc) Quotes When a quote is priced and committed in Surround: Records Total Dollar amount of quote, Date quote was priced in Pricing Engine, Expiration date of quote. • When a Purchase Order is entered into SAP: • Lucent Order Number • Customer PO Number • PO Received Date • PO Amount • Project Number • When priced and committed in Pricing Engine: • Quote Header info • Pricing (Orderable Items, Comcodes, etc.) System Interaction Pricing DB Pricing Engine ERP Platform NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

6. B&P/Contracts Tools Summary NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

7. B&P/Contracts Tool Functions NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

8. B&P/Contracts Tool(Features) Lucent’s global B&P Tool for entering, tracking, archiving quotes. End-to-end quote and proposal management. Used by sales force, project mgrs, contract managers for: • Quote generation • Electronic document storing & management • Win/Loss Statistics • Track B&P expenses to opportunity level The Contracts module of B&P/Contracts Tool is used primarily by Contract Managers as Lucent’s central repository for customer contract and agreement information. Information is captured in summary form, as well as, attachments of actual contracts. NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

9. B&P/Contracts Tool (In Search Of) • Search Capabilities Perform either a Field or Full Text Search Fields: - Customer name - Contract Mgr. - Contract No. - Product Unit - Region Editing capabilities Isolate the desired contract to make desired changes (e.g. correct entry previous entry errors; add/delete attachments) Exporting Data • Under can Export this information to their PC. • Report Generation NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

10. B&P/Contracts ToolContract Manager Responsibilities For each new contract the CM populates the module by answering 30 questions: Fields: Contract No., Eff. Date, term, payment terms, title/ROL Special Provisions: -Most Preferred Customer (MPC) -Liquidated Damages -Non-standard acceptance terms • Separate questionnaire for MPC. - Frequency of reporting - Prospective or retroactive remedy Upon completion of questionaire(s) attach contract files and related attachments. • Each CM can access a list of their contracts or search for any archived contract. NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

11. Contract Manager: NBOMBA (N. J. (Nick) J. Bomba) POST Entry Additional Team Members:  Contract Documents:  Related Documents:  29 Proposal Number:  Enter the proposal number associated with the contract. 30 Comments:  Additional Comments / Notes Attachments NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

12. Pricing Database Tool Business Functionality • Used by Sales Personnel for the following: • Access Repository of Global List Prices • Determine Market based pricing • Perform “What If” Pricing Scenarios • Create Volume Discount Schedules for Bid Opportunity - Bundled Discounts - Multi-Tiered Pricing - Configuration Level Pricing - Below Floor Pricing Flag • Ad-hoc Reporting (user defined criteria) & Analysis NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

13. Pricing Engine • Contains: - Algorithms - Pricing Pools - Pricing logic and rules • Interfaces with customer ordering systems - Facilitates EDI NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

14. Sarbanes-Oxley Compliance • In order to comply with Sarbanes-Oxley, Lucent Contract Management is a designated control point for Contract Loading into Pricing Engine. This control is required in all contracts, amendments, Special offers, etc. • CM provides notification and confirmation to the Contract Loading Teams (CLT) that: - Business case done & approved by Finance org. - Contract signed or offer accepted in writing - No “side-deals” are sanctioned CM verifies appropriate pricing and terms and approves loading of contract/pricing into Pricing Engine • After loading, Pricing Engine verifies that prices in customer PO match actual prices in the contract - This maintains business case integrity - Contract compliance; deters gaming NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

15. NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

16. Lucent.com (Made to Order) • www.lucent.com portal • 7X24 access for Online ordering • Order status capabilities • Ability to track all orders (paper, fax, email, web) - Completion dates - Drill down to view component level detail - Check shipping data • Invoices link - Quantities ordered & shipped - Itemization (material, installation, engr., transportation charges) - Payment terms; due date; amounts due - Tax info. NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

17. Lucent.com (Support) • Array of Customer Support Available -Searchable knowledge database of products -Comprehensive product index Product Descriptions Feature Sets - Product Training - Buying instructions -Repair & Exchange Services - Technical Support via email - Helpdesk link - Online trouble reporting, tracking, status NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process

18. EDI • Value Added Network (VANs) Utilized • Transaction Sets -Purchase Orders -Functional Acknowledgment (Handshake) -Change Orders -Mechanized Order Acknowledgement (MOA) -Invoices -Advanced Ship Notices • Lucent moved EDI functionality from legacy systems to an SAP platform - Enabled a consistent, standard format for all invoices. - Thousands of invoices are generated each month - 16% of orders placed using EDI - 1% of orders via lucent.com portal Going Forward: Increase use of web ordering and EDI to reduce touch time and manual intervention. NCMA 4th Annual Commercial Contract Management Conference Tools, Jewels, and Rules: Leveraging the Contract Management Process