On The

1. On The EDGE OF WHAT’S POSSIBLE December 10, 1999

2. Table of Contents • Introduction to E-Business • Today’s State of E-Business • Assessment of Proposed B2B Extranet Site • Vision for B2B Extranet Site • PricewaterhouseCoopers and E-Business

3. Introduction to E-Business E-Business Defined Four Box E-Business Model End-to-end E-Business Transformation

4. E-Business Defined • E-Business encompasses electronic commerce – the external channels beyond the boundaries of an organization – and integrates every aspect of the firm’s strategy and operations, including bi-directional information sharing with suppliers and customers. E-Business is improving businessperformance through connectivity: • New technologies in the value chain • Connecting value chains across businesses • E-Commerce : • Marketing • Selling • Buying of productsand services on the internet In order to : • Create stronger “Customer” & “Supplier” • relationships • Improve service/reduce costs • Open new channels • Transform competitive landscapes

5. Convergence Industries Integrated e-Business Portals Transparent Integration Industry Transformation Industry Consortiums Cybersourcing Industry Reengineering Virtual Organizations Value Chain Integration Disintermediation Reintermediation Value Chain Integration Business Process Outsourcing Channel Enhancement Secure Transaction Processing Online Catalogs Publishing Web Sites Four Box E-Business Development Model For each step in the model we can hypothesize specific industry initiatives in the evolution of E-Business such as the following: • Collaborative Planning • Collaborative Product Development • HR Management • Configure to Order • Consumer Direct • Scan Based Trading • Relationship Management • Knowledge Management • e-Procurement • Content Management

6. Develop products Perform marketing Procurement Manage logistics • Supplier network • Customer network Production Perform sales Customer service Value Chain Integration • Value chain integration connects an enterprise with its wider network of suppliers and customers

7. End-to-end E-Business Transformation • A mistake many companies make is to approach E-Business solely from a technology or a strategic perspective…PwC approaches it end-to-end and enterprise-wide. • Financial objectives • Key performance indicators • Individual vs. group targets • Mission Statement • Strategic Objectives • Customer / Consumer emphasis • Key Appeals Business Strategy Critical Success Factors • Management style • Current norms • Differences from current business Mdse Planning / Allocation ProductDevelopm’t Business Planning Marketing/Content Sourcing &Buying Distribution/ Logistics Customer Care • Value chain analysis • Core competencies • Shared service and/or outsourcing opportunities Processes Organization Culture Technology • Technology Infrastructure • E-Commerce engine (e.g. website, order processing, fulfillment, content mgmt.) • Inventory management systems • Order processing / fulfillment • Customer information / management • Decision support • Systems Integration • Technical architecture NOTE: PwC manages E-Business projects end-to-end…Strategic Change through Process Improvements through Technology Solutions. • Organizational Requirements • Global E-Business Coordination Team • Level of support required for specific initiatives • Skills required • Organizational control

8. Technology Implications Industry Vision E-Business Transformation Life Cycle Project Initiation/Strategy Formulation Solution Definition Business models/ scenarios/solution definitions/transition approaches piloted and/or implemented Business models/ scenarios/solution definitions/transition approaches re-developed Transition Closure Progamme and Project Management

9. InitialIntegratedProject Plan DetailedIntegratedProject Plan ContractNegotiation& Agreement SalesApproachDevelopment Proposal& ContractDevelopment E-Business Transformation - Project Initiation, Strategy Formulation Project Initiation Strategy Formulation BusinessEnvironmentAnalysis PotentialChangeOpportunities People& CultureAnalysis E-BusinessMaturityAssessment StrategyDevelopment StrategicDiagnostic DetailedValueProposition EnterpriseOverview Initial ValueProposition OrganizationAnalysis ScopeDefinition TargetEnvironmentEnvisioning ProcessAnalysis Qualification Commitment DataAnalysis High-levelTransitionStrategy SystemAnalysis LeadQualification OpportunityAssessment InfrastructureAnalysis Programme and Project Management Stage Start-up Phases Ongoing PPMPhases StakeholderEngagement ProjectControlEstablishment IntegratedProjectPlanning Team &InfrastructureMobilization ProjectManagementProcess Control IntegratedProjectPlan Management

10. People & CultureTransition (includingTraining) Organization Transition ApplicationDevelopment Phases IT InfrastructureDevelopment Phases Facility/EquipmentInfrastructure Development Documentation Development Acceptance Testing E-Business Transformation - Solution Definition, Transition, Closure Solution Definition Transition Closure People & CultureDefinition ContinuousImprovement OrganizationDefinition KnowledgeHarvesting TransitionPlanning ProcessDefinition SystemDefinition Completion DataDefinition InfrastructureDefinition Programme and Project Management Stage Start-up Phases Ongoing PPMPhases StakeholderEngagement ProjectControlEstablishment IntegratedProjectPlanning Team &InfrastructureMobilization ProjectManagementProcess Control IntegratedProjectPlan Management

11. Today’s State of E-Business E-Business Trends & Headlines CEO’s E-Business Focus Leading to Competitive Advantage

12. E-Business Trends & Headlines • Recent E-Business trends are driving world-class companies to reshape their business models. According to Forrester Research, annual B-2-B e-business is projected to surpass $1.3 trillion by 2003. Manufacturers seeking ways to reach the consumer, will sell directly to them. Logistics and distribution will be integrated with ordering and production. According to “The Industry Standard”, a car parts supplier, Magna, had six T1 lines to its customers, each of which cost more than $1,000 a month. This cost led to the creation of a virtual private network “ANX” Automotive Network Exchange for the auto industry and its suppliers built on web-enabled technologies. This led to a monthly cost for Magna of $20! Ford purchased a minority share of internet car shopping site CarPoint, to promote a "build-to-order" system in which the manufacturing process is directly influenced by online customer preferences and grants shoppers a direct connection to the manufacturer's inventory In a survey of 400 global CEO’s, 4 out of 5, or 80%, felt that Electronic Business would significantly, if not completely, reshape competition in their industries. Source: Electronic Commerce Toyota recently announced it would be building a custom order Camry within 5 days at its plant in Ontario, Canada. Mergers and acquisitions are fueling the need for flexible integrated systems that connect trading partners and industries, especially in the energy utility sector.

13. CEOs are focusing on these E-Business issues • What can E-Business do for me? • E-Business Impacts • Building customer loyalty • Achieving market leadership • Streamlining business processes • Creating new products/services • Managing “risk and compliance” • Reaching new markets 80.0 70.0 60.0 50.0 40.0 Percent Responding 30.0 20.0 10.0 0.0 Diminish Risk Enhance our Reputation Segment Markets Finely Match Competitive Moves Enhance Brand Recognition Offer Differentiated Products Increase Customer Loyalty Reduce Infrastructure Costs Increase Information's Impact Achieve/maintain Leadership Reach New Markets Quickly Lower Customer Service Costs Assure Regulatory Compliance Low Med High Source: PwC Conference Board Research, 1998

14. Leading edge firms are web-enabling the supply chain to gain competitive advantage Extend reach Dell computers sell 17% overseas with no increase in sales costs Improve efficiency A sub-process level change at a UK retailer will yield a $750,000 cost saving according to a PwC study Reduce staff costs AMD believes it will save up to $125M by eliminating staff in procurement processes Integrate processes ABI/Inform say Chrysler, Ford & GM could save $1B per annum by using E-Business to integrate the supply chain Reduce cycle time USA industry SCM benchmarks show cycle-time reduction: 70% -90% and error rate reduction of 90% through E-Business Suppliers Enterprise Customers Product Realization Process Strategic Materials Voice of Customer Delivered Orders Order Fulfillment Process Direct Materials Returns and Repairs Order Capture Process Selling/Buying Support Processes Customer Care Reduce processing costs TradeEx reduced re-ordering cost from $55-$75 per transaction to $10 p/t. The bottom line benefit was $9M saved per year. Indirect Materials Settlements Revenue enhancement PwC client, StorageTek target benefit of $18M from sales force automation Supplier Relationship Processes Customer Relationship Processes Customer satisfaction Genstar launched on-line booking service - with significant client usage resulting in day one profits covering total investment

15. Assessment of Proposed B2B Extranet Site “Enhance the transaction processing between Tosco and jobbers/dealers”

16. Assessment of Proposed B2B Extranet Site • Strengths • Proposed integration with back-office systems • Focused approach to meet delivery deadlines • Phased approach to site development • Cost reduction focused • Opportunities • Additional services to improve dealer/jobber sales • Additional services to improve dealer/jobber productivity • Build 1-to-1 relationships with customers • Develop site maintenance strategy • Develop E-Business strategy

17. Jacques Nasser, CEO of Ford Motor Company, defined the Customer Company in a recent interview with PricewaterhouseCoopers • “What is a customer company? It’s an enterprise that is continuously gathering unfiltered customer insights worldwide to: • Connect with current and potential customers and anticipate their present and future needs • Translate customer needs into a competitive advantage, using fast cycle time and generation of breakthrough products and services • Focus on building sustained relationships • Effectively manage a portfolio of brands • Continuously grow shareholder value”

18. Tosco needs a strategy which ties internal efforts together with external trends and forces within the marketplace to provide customer centric services. • How can Tosco develop and pursue an E-Business strategy to take advantage of the opportunities and threats in the market? • How do we use technology to get closer to our customers? • How will we get direct feedback from our customers into the system? • What investments in tools/technologies/platforms should be made in order to - tie the existing initiatives together?- provide effective solutions that can be leveraged to our suppliers and customers? • Who will we partner or ally or compete with? • Which of our customers can we foster a more collaborative relationship? Market Trends Requirements • Internet focus moving from B2C to B2B • Functional disaggregation leading to outsourcing • Information availability threatens customer loyalty • Drive to reduce costs throughout the value chain • Globalization pressures • Speed to Market Customer Requirements • Ability to take on more responsibility within value chain • Seamless/proactive integration with customer schedules • Shorter cycle times Competitor Responses • Lower costs, faster to market • Integrated chains of value

19. PricewaterhouseCoopers’ Vision for Tosco’s B2B Extranet Site “Tosco will be a valued business partner and advisor to your business customer by leveraging web-enabled technologies”

20. What Questions Do Your Business Customers Face Each Day? Classifications • Purchasing • Operations • Operations • Training, Mktg/Sales • Purchasing • Operations • News • News • Mktg/Sales • News • How can I reduce my spending on fuel products? • How can I reduce my administrative overhead? • What is the proper maintenance schedule for station equipment and property? How do I remember what needs to be done and when - at each station? • What are the new products and promotions that can improve profitability? • Can I reduce my spending on non-fuel products (e.g., convenience items, office supplies, maintenance items)? • What is the best way to schedule staff for the stores/stations? Someone’s sick, who do we call for a replacement? • What new government regulations will affect my business? • How are my investments doing? • What are other jobbers/dealers doing? • What else is going on in my community/neighborhood?

21. Phased Deployment Approach for Tosco’s B2B Extranet

22. PricewaterhouseCoopers and E-Business BroadVision Capabilities E-Business Client List E-Business Alliances

23. Staff Counts E-Business focused: 7,500 BroadVision trained: 300 BroadVision training goal by June, 2000: 600 BroadVision experienced today: 100 Joint Clients/Opportunities BellSouth BP Amoco Carrier Chevron First Energy GTE Wireless Highmark Insurance KPN PwC-BroadVision Initiatives Industry templates Common methodology Training programs Lloyd’s Bank MyWay.com Pratt and Whitney Sanborn’s US Postal Service BroadVision Capabilities

24. Selected E-Businsess Client Engagements • Castrol • Develop E-Business strategy and deployment plan. • Reuters • Develop Web Enabler - a Web-based Customer Self-Service tool - enabling real-time electronic business between Reuters, their partners, and their customers. • Sega of America • Analysis of technology and infrastructure leading to assistance with the implementation of a direct-to-consumer E-Commerce solution • Ford Motor Company • Develop a Web-enabled Human Resources system • BellSouth • Web development, programming, and back end system integration. • Department of Defense, U.S. Government • Develop E-Commerce Site to Manage Vendor Solicitations • Compaq • Design, develop and implement a global Internet based direct-to-consumer product sales capability, a channel partner network providing distribution channel with real-time access to product information and order status, and customized business sites.

25. Selected E-Business Client Engagements • Tetrapak • Develop Web-enabled production environment to provide customer self-service and a flexible Internet architecture for future development. • Concert Communications Services • Develop Web-based purchasing & receiving systems • Government National Mortgage Association (Ginnie Mae) • Analysis, Design, Development, Implementation and Support of Systems • NECX • Develop E-Business strategy and implement Internet commerce site • American Express • Develop and implement an online brokerage service • Citibank • Develop E-Business Gateway for Corporate Trade Payments • High-Tech Manufacturer • Develop E-Business strategy and implement Internet commerce site • Major Personal Computer Manufacturer • Develop vision for Knowledge Management

26. PricewaterhouseCoopers is the largest professional services firm in the world and has a global E-Business practice with extensive E-Business experience - from strategy through implementation. Dedicated E-Business strategy and delivery capability worldwide Specific, credible experience in delivering the wide range of E-Business solutions under considerations Extensive global company experience on the team Proven E-Business consultant to multiple high-technology industry global clients 3rd largest E-Business consultant (IDC) and leading CRM consultant (Gartner)

27. PricewaterhouseCoopers’ E-Business Alliances Engaged Mature BroadVision CheckFree Intershop Oracle InfoBank CommerceOne OpenMarket Ariba Vignette SAP Extricity netDynamics Siebel iPlanet Emerging Infrastructure BlueGill Cisco Brightware Microsoft Silverstream HP Saphire IBM SUN VerifyEC NetWest Compaq Clear Commerce EMC