Delivering Value Through Enterprise Resource Planning/ SAP Business Suite Application

1. Delivering Value Through Enterprise Resource Planning/SAP Business Suite Application Sharp Electronics Corporation Amelia Mezrahi Director of IT

2. About Sharp Sharp Corporation is a Japan based international consumer electronics company with subsidiaries world-wide. Sharp Electronics Corporation (SEC) is a US based company that purchases product from Sharp Corporation, Japan, and has manufacturing and distribution facilities in US, Mexico, and Canada. SEC produces products across multiple business units primarily focused on selling consumer electronics, mobile and IT solutions, Professional business systems, microelectronics, and solar systems. Products are sold through retail, dealer and business/OEM channels. Sharp uses primarily the SAP suite of applications across all organizations and locations since 1997 when the first implementation was completed.

3. SAP Tidbits • SAP is currently: • The largest software company in the world • 3rd largest software company in the world • 5th largest software company in the world • What does SAP stand for? • Number of SAP customers : • 525,100 • 3400 • 21,600

4. Airport Banner • Berkshire Grocery selects SAP to integrate Financial, Human Resources, and /manufacturing… January 2004 • Study shows Korean-based consumer products company, CJ Corp achieved double-digit returns with CRM/SAP …December 2003 • Volkswagen drives productivity & profitability with SAP Product Lifecycle Management, Financials, Logistics, Production and CRM. …December 2003 • CRM for streamlining spare parts fulfillment and collaboration across dealership network • PLM for electronic bills of material in order to reduce cost across engineering and production operations • Link production, financial and logistics to increase transparency and efficiency across motor assembly operations… • SAP chosen by Novartis for its global IT strategy ….June 2003 • Replacing legacy systems across 50 countries, creating new efficiencies for research and development, managing HR, supplier relationships, production and supply chain processes.

5. End-to-End Enterprise Integration • Execute and integrate business activities across the enterprise that enable the firm to deliver the right product to the right place at the right time at the right cost Customer Relationship Management Marketing, Field Service, Sales Financial Management Human Resource Management

6. Solution Maps Analytics Strategic Enterprise Management Financial Analysis Operations Analysis Workforce Analysis Financials Financial Accounting Mgmt Accounting Financial Supply Chain Mgmt Corporate Governance HR Employee Life Cycle Mgmt Transaction Mgmt Self-Service Workforce Deployment Operations Procurement Inventory & Warehouse Mgmt Manufacturing Transportation Sales Order Mgmt Customer Service Corporate Services Travel Mgmt Environment, Health, Safety Incentive & Commission Mgmt Real Estate Mgmt Marketing Marketing Planning Campaign Mgmt Trade Promotion Mgmt Lead Mgmt Perosnalization Sales Sales Planning Territory Mgmt Account & Contact Mgmt Opportunity Tracking Contract Mgmt Incentive, Commission Services Sales Planning Forecasting Customer Service & Support Resource Planning Service Operation Mgmt Professional Services Life Cycle Data Mgmt Document Mgmt Product Structure Recipe Mgmt Integration Change & Config Mgmt Life Cycle Collaboration Idea Mgmt Design Colab. Collab. Project Mgmt Quality Collab Analytics Content Mgmt Quality Quality Engineering Quality Assurance Quality Improvement ERP Solution Map Customer Relationship Management Solution Map Product Life Cycle Management Solution Map

7. Features and Benefits Functions Benefits Analytics • Delivers analyses and evaluations for planning and controlling activities to improve performance • Supports decision making with simulations to improve responsiveness to change • Helps management recognize and capitalize on opportunities to create value in daily business and thereby increase the value of an organization • Helps to monitor all financial transactions in real time for more accurate/timely information • Offers extensive corporate governance support, including Sarbanes-Oxley compliance and Transparent financial reporting, reducing risk of noncompliance • Simplifies processing of incoming & outgoing payments, ensuring improved cash flow • Combines planning, reporting, and analysis of competitive measures in one process to provide a more informed business analysis • Provides tools for measuring & optimizing the performance of important tasks to increase productivity • Provides an extensive range of services and processes for effective human resources management, including employee transaction management, employee life-cycle management, recruiting, training, employee relationship management, employee self-service, and HCM analytics, resulting in improved staff productivity and retention • Strengthens the logistical capability in procurement, production, storage, transportation, sales and distribution,and maintenance to create a more efficient, streamlined business • Forms the basis for cross-organization enhancement of business processes and collaboration with vendors,customers, and other partners, improving the utilization of assets • Supports centralized and decentralized organizational services in areas such travel management, treasury, incentive and commission management, and environment, health, and safety, minimizing costs and optimizing sales performance Financials HR Operations Corporate Services

8. What to Target ? Two different ways to determine what to target: A Diagnostic Approach- When unsure of what business process to target, we can employ a diagnostic approach to financial and operational metrics.

9. What to Target ? Two different ways to determine what to target: A Prescriptive Approach- Through this approach, we target business processes, quantify improvement through operational metrics that impact financials

10. IT Business Value Align IT Projects with Shareholder Value and Strategic Objectives.

11. Application Value Framework Cost Vs. Value V A L U E C O S T Cost Perspective • IT Costs /Budget - Hardware, Software, Networking, Staff, Services • User Costs - Fully loaded costs of active users • Downtime Costs - Value lost due to downtime & disaster exposure • Opportunity Costs - Application maintenance opportunity costs Value Perspective /Business Contribution • Improved productivity • Incremental revenue generation • Lower business costs • Reduced risks

12. Project Portfolio Snapshot

13. Application Portfolio Value Costs Transactional Informational/Analytics Strategic IT Efficiency Business Contribution Informational Strategic -Improved Productivity -Lower cost -Better information flow/visibility -Global supply chain - Hardware -Software -Staff -Maintenance ERP SMA Implementation Transactional 2.0 5% -Hardware - Staff Collab. Planning, Forecasting Supply Chain Metrics Profitability Analysis -Standard Measures - Reduced efforts - root cause analysis & corrective actions -Software -Staff Transactional- Process and automate basic transactions in order to boost productivity & reduce costs Informational/Analytics -Provide information and analytics for managing the company. Strategic - External-facing systems resulting in sales growth, competitive advantage, and stronger market position. -Software -Staff -Improve Profitability Analysis capability - More profitable sales -Software -Staff - Hardware Warehouse Management Transportation Planning Web Order Entry/ Internet Sales Order Pointing -Improve shipment processing;Reduce Costs -Improve shipment processing;Reduce Costs -Software -Staff -Better order cycle time - Revenue growth - Reduce costs -Hardware -Staff/Dev -Improve on time & complete - improve out of region shipments -Staff Market Intelligence -Stronger Market positioning - ability to set better prices -Staff

14. Value Transition Maintenance Dev. Maint. Development Key Projects Across all Areas of the Organization 1. Web Order Entry/Internet Sales – SALES 2. Mexico Warehouse Management System - LOGISITCS 3. Latin America Group SAP Implementation- ALL ENTERPRISE 4. Capital & Expense Request/Internal Order Tracking System- FINANCE 5. Service Center Refurbishment Automation – CUSTOMER SERVICE 6. Semiconductor Division SAP Implementation- ALL ENTERPRISE 7. New semiconductor Start-up Green-Field Business 8. Traffic Claims System 9. Collaborative Planning, Forecasting & Replenishment w/Retail customers 10. New Deployment Toolkit to reduce out of region shipments/freight cost 11. Circuit City Direct Ship and ASN for laptop Business Unit 12. Supply Chain Metrics in Data Warehouse -for inventory, receipt and forecast accuracy, customer service reporting & metrics • Web Based Document Imaging – CUSTOMER SVC/SUPPLY CHAIN • Free Trade Zone and Customs System • Customer Relationship Management Opportunity Tracking System – MKTG/SALES

15. Master Data Management Finance Finance Sales and Distribution G/L Accounting Material Management Accounts Payable Asset Manage-ment Material Management Valuation and Closing DRM Controlling Clearing APO Taxes Process Solution Map BW Order to Cash Sales Order Processing Deliveries and Shipping Billing Process Rebates Process A/R DRM – Price Protection DRM – Ship & Debit Procure To Pay Planning Procurement Production Inventory Management A/P APO Integrated Demand Planning Integrated Supply Planning Semiconductor Division Implementation

16. A/P • A/R and Credit • General Ledger • Fin Reporting • Asset Mgmt Financials (FI) Module Scope Core Processes to SAP Modules Map Master Data Management • Sales / Returns • Credits / Debits • Billing / Invoicing • Rebates • Contracts / Quotations • Deliveries / Credit Control • Distributor Price Protection • Ship and Debit • Claims management • Purchasing • Inventory Mgmt • Valuation • Invoice • Verification • Cost Center • Accounting • Internal Order • Accounting • Profit Center • Accounting • Demand Planning • Supply Planning Core Processes Sales & Distribution (SD) Distributor/Reseller Management (DRM) Materials Management (MM) Controlling (CO) APO SAP Modules Security and Control Business Warehouse Reporting

17. Program Management Business PracticeAids Methods Final Preparation Project Preparation Business Blueprint Organization Go Live and Support Evaluation Realization Sustain Application Preferred Practices Architecture Operations Project Lifecycle Project Lifecycle

18. Key Milestone Alignment Process Technical Change Management Program Team Structure and Milestones approved/Project Start Decision on hardware finalized and approved Business Blueprint Validation Completed Change Management Leader identified High-level architecture design finalized and approved Target business designs finalized and approved Change Management and Training Strategy defined and approved SAP Landscape design finalized and approved Baseline configuration completed Project Team Training Delivered (Realization) time Promote to Production Strategy finalized and approved Final configuration completed Training Environment prepared and approved SAP 4.6 Sandbox with APO approved and prepared Security and Controls configuration completed Organization definitions completed and approved Development Environment prepared and approved – R/3, BW, APO Integration test completed Role definitions completed and approved Test/Training Environment prepared and approved – R/3, BW, APO Go/No Go review/decision Organization trained and ready for go-live Production Hardware installed and tested Go-Live Support Organization Trained and Established R/3, BW, APO Production System Delivered to Functional Teams Knowledge Transfer to Support Organization Completed

19. Keys to SuccessCritical Success Factors • Organizational commitment • “Best” project resources committed full time to project activities • Multi disciplined project team • Business and Management model defined • Measures of success defined • Quick escalation procedures to support prompt decisions on critical business issues • Project team empowered to make decisions on behalf of operating organizations • Minimal turnover of project team members • Active steering committee in place • Change management process in place and supported • Active Project Control and Management

20. Key Project Considerations • Budget/Costs • Business Value and ROI • Scope • Project Stages/Phases • Timeline • Project Team • Location and Logistics • Tools and Monitoring • Stakeholder Communications & PR

21. Current Sharp SAP Environment • ALL Sharp subsidiaries world-wide are integrated via SAP an ERP software system. This allows all departments within the company to use a common database effectively and efficiently for: • Supply and demand of product and parts for manufacturing • Demand and Supply Planning • Product Marketing • Inventory Control • Finance, Credit and Accounting • Order Processing • Warehouse Management and Logistics • “E-Sales” • Shipping and Delivery (Traffic) • Internal Purchasing • Model Master and Account/Customer Management • Reporting • EDI

22. Enterprise Customers Sourcing Portal Financial Portal HR/Training Portal Metrics Portal MFG Portal S & OP Portal. Logistics Portal Sales & Mktg Portal Supp. Disti Supp. Brokers Supp. Portal Integration SEM Internal Internal Business Warehouse Internal Internal Internal SAP R/3 APO/ SCM CRM HR/ TRNG Other Internal Extranet and Intranet Sharp Future State • The Extended Enterprise Enterprise Integration within the four walls and extended partners

23. Thank You!