NOTES
EXHIBIT 99.523
Overview of PSC Strategy
Business Development Workshop
13 May 1998
PSC confidential and proprietary
[PEROT SYSTEMS LOGO]
NOTES
How our strategy distinguishes us
"PSC is focused on a simple idea that is distinctive
in the competitive context."
Competitor Mission in a nutshell Focus
- ---------- --------------------- ------
Andersen Consulting Transform enterprises. Change
CSC Build systems. Reliability
EDS Build infrastructure. Co-sourcing
IBM ISSC Build infrastructure. Industry solutions
Perot System Prepare for the future. Emergent Economy
[PEROT SYSTEMS LOGO]
NOTES
WAYS TO EVALUATE OUR STRATEGY
"How do we know if our strategy is on the right track?"
Basis for Why? - Does it leverage our competencies?
the strategy - Does it build on our history & reputation?
- Does it exploit competitive dynamics?
- Does it reflect trends in market conditions?
Depiction of What! - Is it clear and powerful enough to guide us?
the strategy - Is it compelling to our prospective partners?
- Is it distinctive enough to command attention?
Consequences So... - Does it give us organizational focus?
of the strategy - Can it generate valuable points of view?
- Does it drive specific products & services?
[PEROT SYSTEMS LOGO]
NOTES
Why?
A NEW DIGITAL ERA HAS ARRIVED: UBIQUITY
"PSC understands and responds to key long-wave changes."
GLASS ROOMS-> DESKTOPS-> UBIQUITY
1947-82 1982-95 1995-
Key benefit Automation Decentralization Relationships
Power center Producers Retailers Consumers
Control points Vendors Integrators Multiple
Hardware Mainframes Clients/Servers Pervasive
Software Back office Networks Transparent
The steady quantitative progress of the past 40 years - more MIPS, more MBs,
more transistors, etc. - has fostered a qualitative change. BIOLOGICAL MODELS
OF THE ECONOMY ARE REPLACING MECHANICAL ONES. MOMENTUM AND INNOVATION WILL BE
MORE IMPORTANT THAN CONTROL.
[PEROT SYSTEMS LOGO]
NOTES
Why?
CONSEQUENCES OF UBIQUITOUS TECHNOLOGY
"PSC has a clear vision of what's coming."
IN THE CASE OF COMPUTERS AND NETWORKS, MORE IS DIFFERENT.
At 1 million nodes, it's a university research network, with many discussion
groups; at 100 million nodes, it's a global platform for commerce and
communication.
DIGITAL TECHNOLOGY: NOT JUST FOR PROPELLER-HEADS ANYMORE.
Chips and software are present in products ranging from ears to toasters to
toys. In the US alone, 45% of adults have net access; by 2000, 36 million US
households and 380,000 businesses will be online; women account for 60% of US
online shopping. Asia and Europe are already ramping up for similarly rapid
growth.
INVESTING MORE TO GET MORE.
Yesterday's IT investments, made primarily to cut costs and streamline
processes, are now a foundation upon which companies can build new revenues. On
this base, relatively targeted investments can reap relatively colossal
rewards.
NOBODY'S DRIVING THE BUS.
Thirty years of aggressive IT investment has produced a thicket of platforms,
standards and other interdependencies that go well beyond what managers - or
even conventional outsourcers and integrators - can control. IT services firms
must respond with creativity and continual reinvention.
[PEROT SYSTEMS LOGO]
NOTES
Why?
THE EMERGENT ECONOMY: SHIFTS AT FOUR LEVELS "PSC has worked to 'net out'
complex technological and economic changes."
.....for 1 INDIVIDUALS ARE GAINING POWER
individuals Increasing choices, convenience, and personal
responsibility are breeding higher expectations.
.....within 2 ENTERPRISES ARE BECOMING MORE AGILE
companies They aim increasingly for value creation
and effectiveness rather than pur efficiency.
.....across 3 INDUSTRIES ARE DECLINING IN IMPORTANCE
companies 'Disintermediation' drives shift in focus from
competitors to customers and complementors.
.....to basic 4 INFRASTRUCTURE IS AN ACTIVE CHOICE
structures Formerly the domain of the SEC, ICC,
and Ma Bell, infrastructure has become a
very powerful and flexible strategic tool.
</Table>
[VARIOUS LOGOS]
[PEROT SYSTEMS LOGO]
NOTES
What!
PEROT SYSTEMS CORPORATION MISSION
"PSC goes beyond the nuts and bolts of IT to drive strategic innovation."
Perot Systems Corporation prepares enterprises to seize the opportunities of the
Emergent Economy. To do this, we help our clients and partners get closer to
their customers, partner in building new forms of business, and apply technology
strategically.
[PEROT SYSTEMS LOGO]
NOTES What!
HOW PSC ADDS VALUE AT ALL LEVELS
"PSC is building the skills and focus to help enterprises thrive in the
Emergent Economy."
<Table>
..... for 1 CREATE USER-CENTERED SYSTEMS AND STRATEGIES
individuals Foster community-based digital marketplaces;
self service IT; and compelling experiences.
..... within 2 PREPARE ENTERPRISES TO BE AGILE
companies Bundle digital infrastructure, process redesign,
& culture change enterprises need to adapt.
..... across 3 FULL ENTERPRISES TOGETHER IN INNOVATIVE WAYS
companies Foster 'webs' of complementary enterprises &
new process for alignment across companies.
..... to basic 4 DEVELOP INFRASTRUCTURE STRATEGIES
structures Help clients make buy/build/partner decisions;
launch ventures to build digital infrastructure.
</Table>
[PEROT SYSTEMS LOGO]
NOTES So...
HOW OUR STRATEGY CAUSES US TO ACT
"PSC's approach is novel, bold, and creative."
We build new kinds of capabilities
powerful intranets like TRAIN, comprehensive CRM offerings, rapid
reengineering, user-centered strategies
We blaze new paths to market
Value webs; cross-industry, cross-competency systems like e-treasury,
e-home, and health care network
We foster reward-sharing relationships
e.g. Swiss Bank, Galileo, others
[PEROT SYSTEMS LOGO]
NOTES
So . . .
COMPONENTS OF OUR STRATEGY
"PSC uses multiple kinds of competencies in an integrated way."
[GRAPHIC]
[PEROT SYSTEMS LOGO]
NOTES So...
HOW WE INNOVATE OUT FROM OUR CORE
"From a solid base, PSC is venturing intelligently into the white spaces."
[GRAPHIC]
[PEROT SYSTEMS LOGO]
NOTES
So . . .
DEVELOPING CLIENT RELATIONSHIPS: MIGRATION PATH
"PSC is augmenting outsourcing by creating more sophisticated services."
[CHART]
[PEROT SYSTEMS LOGO]
NOTES
So...
CRUCIAL BEHAVIORAL SHIFTS
"PSC's strategy will be real only when we begin to
behave in fundamentally new ways."
TARGET INDIVIDUAL CUSTOMERS
Our vertical industry groups must decide specifically who to target and
what value we would add.
MAKE COMPETENCIES EASILY ACCESSIBLE
Our verticals must have instantaneous, effective ability to access
and apply our technical and process competencies.
CLOSE DEALS QUICKLY
PSC must be willing to move boldly and imaginatively in constructing
partnerships, which means we have to take risks.
EXECUTE ON WHAT WE SELL
PSC must improve the quality, thoroughness, and reliability of our
service delivery.
[PEROT SYSTEMS LOGO]
NOTES
CRUCIAL STRATEGY TASKS
"These are some immediate items we need to focus on."
1. Develop metrics and set objectives
2. Develop PSC process model
3. Identify and polish high level processes, e.g., sales and marketing
4. Develop multiple points of view across the enterprise
5. Create visibility around our distinctiveness
6. Refine mergers and acquisition plan
[PEROT SYSTEMS LOGO]
NOTES Details
BUILDING CAPABILITIES AND ADDING COMPETENCIES
Recommendations from the New Competencies task force
PSC must continue to grow and add technical capabilities (skills, methods, and
processes we will routinely need) as well as technical COMPETENCIES
(differentiating skills and methods that we can aggressively market).
<Table>
<Caption>
IN PLACE TODAY NEED TO DEVELOP
These help PSC and ADAPTIVE SYSTEMS MANAGEMENT > Mobility
our partners achieve E-COMMERCE > Knowledge Management
STRATEGIC GROWTH... CUSTOMER RELATIONSHIP MGMT. > New Channel Marketing
These help PSC and DATA MINING/DATA WAREHOUSES > Security
our partners increase Business Process Automation > Collaborative Work
RETURN ON INVESTMENT Internet/Intranet
These help PSC build OBJECT-ORIENTED TOOLS & METHODS > Software Engineering
OPERATIONAL EFFICIENCIES NETWORKING > Project/Program Management
& COST SAVINGS Legacy Integration > Repeatable Architectures
& Processes
</Table>
[PEROT SYSTEMS LOGO]
NOTES
Details
STABILIZING TECHNICAL OPERATIONS
Recommendations from the Operational task force
PSC must be an industry leader in effectively executing any projects or
programs it sells. To achieve this we will:
- - Migrate current technical capabilities from a model that appears to be
commodity to a value-added service
- - Create systems that are more open, ubiquitous, and robust
- - Create management tools that make our capabilities easier to understand,
access, and apply
- - Create voluntary conventions that will better leverage our routinely
applied technical capabilities
- - Address specific improvements in security, network backbone, networking,
message and directory services
- - Examine systems for cost reallocation
[PEROT SYSTEMS LOGO]
NOTES
Details
ACQUIRING NEW COMPETENCIES AND CAPABILITIES
Recommendations from the M&A task force
PSC must more systematically drive acquisition plans out of units, in a manner
that leverages our concept of the Emergent Economy.
1. BUSINESS UNIT STRATEGY MUST DRIVE M & A
- Better screening process
- M & A team alignment to business unit
- M & A can support achievement to sales objectives
2. CORPORATE RESOURCES MUST BE RATIONED
- Annual budget set by corporate
- Competition for resources
- General allocations to business units
3. THERE MUST BE CLEAR ACCOUNTABILITY WHEN RESOURCES ARE OMITTED TO M & A
PURSUITS
- Business units sponsor from initial contact thru close
- Define and assign budgets for pursuit & close
4. WE MUST IMPROVE OUR ABILITY TO EFFECTIVELY INTEGRATE ACQUIRED COMPANIES
- Transition planning (sooner, more comprehensive)
- Cross functional teams, lead by business unit
5. KEY CLIENTS, PARTNERSHIPS AND ALLIANCES WILL INFLUENCE AND INFORM BUSINESS
UNIT STRATEGY
- Identify Key Accounts/Prospectus
- Cooperative strategy development
[PEROT SYSTEMS LOGO]
NOTES Details
DELIVERING OUR COMPETENCIES
Recommendations from the Competency Life Cycle task force
PSC must combine our technical capabilities and project offices into new units
called Applied Technology Centers (ATC's). This will permit us to propagate our
skills more broadly while continually subjecting them to the discipline of
markets.
- Integrate competencies and POs into ATCs.
- Define strategy relative to competency, service line, and utility,
which form ATC.
- Each competency should have business plans relative to their
lifestyle stage.
- Use pilots to form ATCs for each stage of the lifecycle.
- Clearly define PSC sales channel strategy, the role of an integrator,
function of ATC (level of centralization vs. decentralization).
[PEROT SYSTEMS LOGO]
NOTES
[GRAPHIC]
[PEROT SYSTEMS LOGO]
May 07, 1998
[PEROT SYSTEMS LOGO]1
NOTES
OUR STRATEGY
- --------------------------------------------------------------------------------
Our strategy is to segment and conquer...
[CHART]
[PEROT SYSTEMS LOGO]2
NOTES
WHAT ARE WE TRYING TO DO?
- --------------------------------------------------------------------------------
Focus on high potential segments in the United States
Market Segments
[Chart]
Source: IDC August, 1996: Note: Annual spending of $3 billion is on professional
services only, and does not include spending on IT hardware and software.
[PEROT SYSTEMS LOGO]3
NOTES
WHAT ARE WE TRYING TO DO? (continued)
- --------------------------------------------------------------------------------
Provide bundled solutions focused on our clients' critical success factors ...
Market Segments
[Chart]
[PEROT SYSTEMS LOGO]4
NOTES
WHAT IS NEW IN OUR APPROACH?
- -------------------------------------------------------------------------------
Why do we think it will succeed...we help our clients achieve
renewable competitive:
- Industry focus
- Fully integrated continuum of
services: Analyze, design,
build, implement and operate
- Advanced business, clinical,
and technical skills
- Emphasis on time compression
and speed of results
[CHART] - Pure services bundled with
"best of breed" collaborators to
create solutions focused on our
clients' critical success factors
- Enterprise or timeshare
services
- Pricing models aligned with
our clients objectives
- Transaction
- Unit
- Risk
[PEROT SYSTEMS LOGO]5
NOTES
WHAT IS NEW IN OUR APPROACH? (continued)
- -------------------------------------------------------------------------------
Why do we think it will succeed...our work for these clients is typical of our
continuum of services approach.
Client Engagement Result
- ----------------------------------------------------------------------------------------
Tenet Healthcare - Technology Partnership - Operate the largest frame relay
Corporation - Bundled Solutions network in the industry
- Managed care - Over 100 disparate hospitals
- Physician management integrated within one year
- E Commerce - Reduced 15 costs by $20 million per
year
- Achieved economies of scale
- Reduced variable 15 costs
- Allowed Tenet to rapidly acquire
and integrate new hospitals
Charter Behavioral - IT Strategy and - Web Access of Clinical Records and
Health Systems implementation Administrative Information
- Development of - Increased annual savings in excess of
National Frame Relay $3.5 million
- Introduction of call - Increased call handling to 400,000 call
center technology and annually
applications
[PEROT SYSTEMS LOGO]6
NOTES
WHAT IS NEW IN OUR APPROACH? (continued)
- --------------------------------------------------------------------------------
Why do we think it will succeed...our work for these clients is typical of our
continuum of services approach.
<Table>
<Caption>
Client Engagement Result
- -------------------------------------------------------------------------------------------------------------
Atlantic Health o Accelerating the design o Within 18 months:
System and execution of -Merger of one large hospital to
Atlantic's IHN strategy the network; pending mergers or
-Expand horizontal sponsorships with eight
and vertical additional hospital partners
networks -Completion of strategic
-Develop an MSO relationships with vertical
-Design and network partners
implement a -Full implementation of an MSO,
physician network including completion of 1,000
member physician network
- -------------------------------------------------------------------------------------------------------------
Aurora Health Plan o Implementation of o Allowed Aurora entry to managed
AMISYS(TM) Managed care market
Care System o Implemented managed care
(outsourcing functionality without large
arrangement) implementation capital outlay
</Table>
[PEROT SYSTEMS LOGO] 7
NOTES
WHAT IS NEW IN OUR APPROACH?
- --------------------------------------------------------------------------------
Why do we think it will succeed....our work for these clients is typical of our
continuum of services approach.
<Table>
<Caption>
CLIENT ENGAGEMENT RESULT
- --------------------------------------------------------------------------------
Health First o Design and o Electronic transactions for
Health Plans implementation of eligibility records, referral
E-Commerce solution information, and client results
through the internet
o Lowered administrative costs
- --------------------------------------------------------------------------------
North Shore o Formulated and o Executed sever major hospital
Health System executed in strategic acquisitions (3000 beds)
plan to position the o Grew revenue to $1.8 billion
hospital as a regional o Developed eight PHO's a Super
integrated health network PHO and a system-wide MSO
o Established managed care
relationships covering 300,000
lives
</Table>
[PEROT SYSTEMS LOGO] 8
NOTES
ASSUMING SUCCESS...
- -------------------------------------------------------------------------------
What Difference Does it Make to Our Clients? How do they get paid?
At Risk Revenue
[GRAPHIC]
New revenue through membership market share
Lower cost and better quality
Lower cost and better customer service
Every 1% reduction in medical delivery has a significant impact on operating
margin
[PEROT SYSTEMS LOGO] 9
NOTES
HOW LONG WILL IT TAKE, HOW MUCH WILL IT COST?
- --------------------------------------------------------------------------------
REVENUE
[CHART]
<Table>
<Caption>
1996 1997 1998 1999 2000
---- ---- ---- ---- ----
Growth rate 54% 31% 37% 25% 25%
Operating Margin 15% 18% 20% 25% 30%
Backlog 200M 270M 300M 400M 500M
Anchors US 1 1 2 3 4
Anchors Int 0 0 1 1 2
WWShare OS 6% 8% 9% 10% 11%
WWShare Solutions 5% 1% 1.5% 2% 2.5%
</Table>
[PEROT SYSTEMS LOGO] 10
NOTES
Global Financial Services
Strategy Overview
May 07, 1998
[PEROT SYSTEMS LOGO] 1
NOTES
STRATEGIC CONTEXT
- --------------------------------------------------------------------------------
<Table>
...Dick Boyle "In the past, I relied on technology to reduce cost and increase productivity.
Retired Vice-Chairman Now i rely on technology to hold customers and to get new customers."
Chase Manhattan Bank
...Marcel Ospel "Technological development, whether we like it or not, has to be a core competence
CEO of our organization. This business will become more and more computerized. There are
Swiss Bank Corporation all sorts of scenarios you can develop for the electronic disintermediation of
businesses whether in investment banking, private banking or whatever. We have to
stay on top of such skills."
.....Wall Street Journal "Technology in banking today refers to everything from internal operating systems to
Thursday providing customers with Internet banking and phone banking and building sophisticated
November 27, 1997 databases of customer information that can be used to sell products more efficiently.
What banks seek is the ability to provide personalized service at every point of contact."
</Table>
[PEROT SYSTEMS LOGO] 2
NOTES
STRATEGIC CONTEXT TRANSLATED...
- --------------------------------------------------------------------------------
* The primary emphasis among financial institutions is no longer on cost
reduction
* The primary emphasis is now on:
- retaining customers and gaining new ones
- leveraging IT expenses
- generating revenue
[PEROT SYSTEMS LOGO] 3
NOTES
Context (continued) -- Limitations of Current Industry Practices/Products
- ----------------------------------------------------------------------------
CONDITION
- -- Customer access to all their information and transactions -
anyway, anywhere, anytime
- -- Individual customer defined products and services
- -- No brand loyalty
- -- Pace of technology advancement
- -- Technology created markets and channels
- -- Shortening of product/service Life Cycles
- -- Customers choice of global service providers
- -- Consolidation within Financial Services and across other industry
groups
- -- Entry of new, nimble, non-traditional players
- -- Stranded Assets
-- Sunk cost of architecture and hardware
-- Information stovepipes and old applications
-- Dated people skills
-- psychical plans
- -- Lack of meaningful measures of success
- -- Which customers should the client seek and retain
- -- Which products and services should the client be selling
to its customers
- -- The struggle to determine the way forward
-- How much to invest and where?
-- Where to get the management bandwidth and skilled people?
-- What are the costs and risks of changing versus not changing?
-- How to get projects completed successfully?
[PEROT SYSTEMS LOGO] 4
NOTES
SERVICES STRATEGY
- -------------------------------------------------------------------
- -- MISSION: To be the world leader in technologies that enable our
clients to attract and retain customers by...
-- managing customer and marketing information;
-- getting products and services to market rapidly; and
-- containing costs.
- -- OBJECTIVES
-- Sign and retain long-term profitable relationships
-- Select our clients based upon a mutual fit of cultures and
long-term goals
-- Build a market reputation for delivering solutions oriented to
our clients' customers
-- Build and retain an integrated team of outstanding people with
both technology and business skills
-- Continue to evolve our business approach and offerings as the
market changes
- -- KEY STRATEGIC ELEMENTS
-- Our industry view of what capabilities our clients need to attract
and retain customers
-- Our view of ourselves and the capabilities we need to help our
clients attract and retain customers
[PEROT SYSTEMS LOGO] 5
NOTES
Services Strategy (continued)
- --------------------------------------------------------------------------------
- GFS Strengths
- Client relationship management
o Industry knowledge [VARIOUS LOGOS]
o Market orientation
- Creative business construction
- Big enough to play, yet very agile
- Rapid time to market, on schedule, on budget delivery
- Legacy systems development and operations
- Client/server distributed network systems development and
operations
- Technical Expertise
o Legacy-network integration
o Internal/Intranet/E-commerce [GRAPHIC]
o Imaging and work flow
o Data mining/Data warehousing.
[PEROT SYSTEMS LOGO] 6
NOTES
Services Strategy (continued)
- --------------------------------------------------------------------------------
- Business Approach
- Customer issues focus
- Integrated solutions
- Complete or concept, not price or product
- Leverages existing success
- Processes in place and core teams exist
- Technology Approach
- Build solutions that integrate technology and business strategy
- Base solutions on reusable work products
- Build utilities that take advantage of new opportunities for
scale
- Focus on client customer acquisition and retention
- Make increased client revenue integral to our business model
- Use advanced technologies to reduce time to market
- Provide proven rapid cost containment from consolidation
[PEROT SYSTEMS LOGO] 7
NOTES
Services Strategy (continued)
- --------------------------------------------------------------------------------
<Table>
- - Mission: To be the world leader in technologies that enable our clients to
attract and retain customers by...
getting products
managing customer and services to
and marketing market rapidly;
information and containing costs
- - Offerings: Domain Specific...
1 - Large-Scale Applications Development X X
2 - Infrastructure Management and Operations
- Mainframe X X
- Distributed
3 - Project Management X X X
4 - Process Enhancement X X X
5 - Security Improvement X X
6 - Architecture X X X
</Table>
[PEROT SYSTEMS LOGO]
CRM - Driven by increasingly sophisticated and demanding customer expectations,
financial institutions are becoming one-step, fully integrated providers while
relying with increasing frequency on service utilities to provide non customer-
facing transactions support. Able to...
automate and integrate business processes
develop data warehousing and data mining capabilities by building and
maintaining:
Customer Information Files (CIFs), as depositories of static customer
data
Marketing Customer Information Files (MCIFs) to promote proactive
marketing activities
Customer Information Systems (CIS), which integrates all data for
modeling purposes
leverage technical resources and non-proprietary applications by creating
revenue generating service utilities
Rapid Development - The compression of product life cycles, and the realization
that competitive advantage is realized not so much through advanced technologies
but through the ability to manage advanced technologies, is driving the demand
for rapid development capabilities. Able to...
implement business drive technology decisions by identifying business
drivers and using these to make application and technology decisions
develop enterprise computing architectures
provide scalable development processes for:
building applications that continue to be effective as system partners
increase
segmenting application or system development to enable several teams
to work on discrete project issues, resulting in a cohesive effort as
projects scale up
trace requirements to object oriented building blocks through
analysis, design, coding, integration and testing
Consolidation - Globalization, vertical and horizontal consolidation, legacy to
network migrations and increasingly sophisticated customer expectations are
forcing enterprise solutions that fully integrate not only technologies but
business processes and people. Able to...
develop fully integrated strategic business, technology and people
solutions
replace intra-business functional stovepipes with more efficiently
integrated, customer oriented processes
relocate and integrate technology and resources to better achieve
global capacity
address and resolve cultural resistance in change
Networked Environments - Client/server, distributed and open systems are gaining
in sophistication, computing power and general popularity, currently as an
extension of, but eventually as a legitimate alternative to, legacy systems.
Able to...
develop effective strategies for implementing network computing solutions
reduce IT expenses, while delivering more complex and flexible
infrastructures and applications
deal with the network bandwidth explosion
address rapidly growing network and systems management issues
provide meaningful differentiation to enterprise capabilities while
standardizing IT services, products and packages
select best-of-breed packaged applications
Legacy Systems - are still critical and will remain critical through the near
future. Able to...
maintain their current legacy systems
integrate these systems with those obtained through acquisition and merger
integrate these systems with new technologies (client/server, distributed
systems)
address Y2K and Euro conversion issues on all critical applications
plan effective strategies to install more advanced and more flexible
technologies
migrate, in the longer run, away from the legacy environment
Internet/Intranet/e-Commerce - The currently small but rapidly expanding and
evolving digital marketplace requires multi-enterprise, platform independent
digital connectivity and an expanded (i.e., an end-to-end) definition of the
transaction. Able to...
understand the key business ramifications of the Internet and make
effective use of enterprise intranets
build multi-enterprise digital commerce capabilities in a staged
fashion based on user response to evolving marketplaces
achieve momentum by building partnerships that will become the
foundation of a broadening set of services as marketplaces evolve
foster "Long Running Transaction" activities, including:
the gathering of information about products
the search for products which meet a set of criteria
negotiating terms with a vendor
product acceptance post-purchase
reconciling the invoice, packing slip, and purchase order
supplier evaluation
[PEROT SYSTEMS LOGO] 8
NOTES
MARKET-FACING STRUCTURE
- --------------------------------------------------------------------------------
POTENTIAL VALUE OF THE RELATIONSHIP
[GRAPHIC]
[PEROT SYSTEMS LOGO] 9
NOTES
Background Information
- -------------------------------------------------------------------------------
Resource Gaps in
Prospective Client Organizations
The Opportunity
[PEROT SYSTEMS LOGO] 10
NOTES
Resource Requirements
- -------------------------------------------------------------------------------
1998...
[CHART]
[PEROT SYSTEMS LOGO] 11
NOTES
Resource Requirements (continued)
- -------------------------------------------------------------------------------
1998...
[CHART]
[PEROT SYSTEMS LOGO] 12
NOTES
Resource Requirements (continued)
- -------------------------------------------------------------------------------
1998...
[CHART]
[PEROT SYSTEMS LOGO] 13
NOTES
Resource Requirements (continued)
- -------------------------------------------------------------------------------
1998...
[CHART]
[PEROT SYSTEMS LOGO] 14
NOTES
Resource Requirements (continued)
- -------------------------------------------------------------------------------
1998...
[CHART]
[PEROT SYSTEMS LOGO] 15
NOTES
[PEROT SYSTEMS LOGO]
- --------------------------------------------------------------------------------
Travel Industry Group
Strategy Overview
May, 1998
[PEROT SYSTEMS LOGO] 1
NOTES
Travel Industry Overview
- --------------------------------------------------------------------------------
The travel industry business model is changing......
[CHART]
[PEROT SYSTEMS LOGO] 2
NOTES
OUR STRATEGIC FOCUS...
- --------------------------------------------------------------------------------
....has narrowed from many industry segments to two
[GRAPHIC]
Travel Industry Group Strategy [PEROT SYSTEMS LOGO] 3
May, 1998
NOTES
OUR TEAM IS FOCUSED ON THE RIGHT OPPORTUNITIES.....
- --------------------------------------------------------------------------------
TRAVEL INDUSTRY GROUP
BUSINESS DEVELOPMENT TEAM
Bill Doody
CAR RENTAL HOSPITALITY
Bill Doody Barry Kotar
David Joslin St. John Murphy
SUPPORT CONSULTING
Lillian Hartung Robert Verasdonck
Jim Kathman Dick Nauman
(industry consultant)
Travel Industry Group Strategy [PEROT SYSTEMS LOGO] 4
May, 1998
NOTES
BALANCING STRATEGIC SELLING AND OPPORTUNISM
- --------------------------------------------------------------------------------
* WE WILL REMAIN OPPORTUNISTIC/MARKET FOCUSED
- it has driven the business so far
- interesting opportunities will always present themselves
* TO DRIVE AN 'ACTIVE SALES ENGINE' WE ALSO MUST BE STRATEGIC
- create capabilities to match market opportunity
- target sell
- sustainable growth for '98 and beyond
Travel Industry Group Strategy [PEROT SYSTEMS LOGO] 5
May, 1998
NOTES
THE CAR RENTAL INDUSTRY
Travel Industry Group Strategy [PEROT SYSTEMS LOGO] 6
May, 1998
NOTES
Our Strategy in Car Rental....
- -------------------------------------------------------------------------------
is centered around Greenway
Other car rental companies?
Europcar ??? National Australia
Done - 1992 ???
Greenway
National Done - 1997 (our proprietary ??? CarTemps
car rental system)
Alamo -- selling
??? ???
National Europe Information Utility
Travel Industry Group Strategy
May, 1998
[PEROT SYSTEMS LOGO] 7
NOTES
Our current focus in the car rental industry
- -------------------------------------------------------------------------------
The Republic business strategy..."cradle to grave" auto's
Financing
Car Rental
Car
Manufacturers AutoNation
Dealership Service
Travel Industry Group Strategy
May, 1998
[PEROT SYSTEMS LOGO] 8
NOTES
Our current focus in the car rental industry...
- -------------------------------------------------------------------------------
.....is on Republic Industries' Auto Rental Group (ARG)
Key Business Issues
o Multiple Brands
National o Alamo Strategic Direction
(Business) o 98 profitability improvement
==================================
Alamo are being addressed by
(Leisure) the Consulting Group
o signed $3m contract - Jan 98
National Europe
(Europe)
CarTemps
(Replacement)
Key Technology Issues
o implementing odyssey
o shared services
=============================
.....are being addressed by Sales & Operation Teams
Travel Industry Group Strategy
May, 1998
[PEROT SYSTEMS LOGO] 9
NOTES
New business opportunity in car rental.....
- ------------------------------------------------------------
......a car rental industry utility
(CHART)
Travel Industry Group Strategy
May, 1998 [PEROT SYSTEMS LOGO] 10
NOTES
The Hospitality Industry
Travel Industry Group Strategy
May, 1998
[PEROT SYSTEMS LOGO] 11
NOTES
Key issues in the hospitality industry
- --------------------------------------------------------------------------------
- -Industry is consolidating (new people, new money)
-Starwood/Westin/Sheraton Hilton/Hilton Int
-HFS (Days, HoJo, Ramada) Marriott/Renaissance
-Promus/Doubletree
Pegasus/HCC/Thisco
- -Hotel system integration-an industry problem
-CRS/PMS providers are small, unstable and fragmented
- -Hotels need the CRS systems to evolve.......
-into customer focused systems to build customer loyalty
-into integrated sales and marketing systems
Travel Industry Group Strategy
May, 1998
[PEROT SYSTEMS LOGO] 12
Our Strategy in the hospitality industry
- -------------------------------------------------------------------------------
- -Influence "new breed of hotel owners"
-leverage Perot Systems' technical expertise
-leverage Perot Sytems' hotel industry expertise
-manage consolidation/integration challenges
- -Address hotel integration needs
-leverage Perot Systems' system integration capabilities
- -Build a 'breakthrough' hotel system
-Work with a partner
-Develop integrated Property Management System (PMS)/Central
Reservation System (CRS)
Travel Industry Group Strategy
Map, 1994
[PEROT SYSTEMS LOGO] 13
NOTES
OUR CURRENT FOCUS IN THE HOSPITALITY INDUSTRY
- --------------------------------------------------------------------------------
[logo] STARWOOD LODGING
116 hotels - multiple brands
Purchased - 1997 Closed - Feb '98
[LOGO] $500K Study - Jan '98 [LOGO]
110 hotels 450 hotels
'97 rev = $5 million
'98 rev = $8 million
OUR RECOMMENDATION
- Select one system (Sheraton)
- Consolidate in one data center
- Reduce cost
- Develop "future" system to drive revenue growth
- Select Perot Systems as a partner
Travel Industry Group Services
May 1998 [PEROT SYSTEMS LOGO] 14
NOTES
NEW BUSINESS OPPORTUNITY IN HOSPITALITY
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.....help the industry move from... to...
Discrete expensive systems and Distributed systems
interfaces decreasing functionality transparently connected
Customer [CHART] [CHART] Customer Customer
Travel agent Data Mining
Travel agent
Internet [CHART] Internet Network
Switch
CRO [CHART] [CHART] CRO
Hotel Complex
Res. Office [CHART] [CHART] Res. Center [CHART]
Travel industry group strategy
May 1998 [PEROT SYSTEMS LOGO] 15
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Travel Industry Group Performance ('96-'98) . . .
A comparison of Actual vs. Plan
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[GRAPH]
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Financial - Comparison to Industry Peer Group
Incubating industry groups only . . .
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[CHART] [CHART]
Travel Industry Group Strategy
May, 1998 [PEROT SYSTEMS LOGO] 17
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Financials - Comparison to all Industries
Exclusive of GFS . . .
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[CHART] [CHART]
Travel Industry Group Strategy
May, 1998
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Travel Industry Group Service Design
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Sales Funnel
May 1998
[GRAPH]
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Travel Industry Group Strategy
May, 1998
NOTES
Our current and potential clients in car rental . . .
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are pushing Perot Systems toward industry dominance
Rank Company Mkt Share(*) Ownership IT Provider
---- ------- ------------ --------- -----------
1 Hertz 24% IPO Internal
2 Avis 22% Cendant Wizcom
3 Alamo 13% Republic Perot
4 National 13% Republic Perot
5 Budget 10% Private Wizcom
6 Enterprise 6% Private Internal
7 Dollar 4% Dollar Thrifty Group Perot
8 Thrifty 2% Dollar Thrifty Group Perot
(*) 1997 Airport Market Share (airport rentals account for 92% of total rentals)
Source: Auto Rental News' 1998 Fact Book
Travel Industry Group Strategy
May, 1998
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Our current and potential customers in hospitality . . .
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would form a diverse portfolio of hotel companies
[GRAPH]
Travel Industry Group Strategy
May, 1998
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[ENERGY LOGO]
Energy Strategy
Executive Summary
(April 27th Version)
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What are we trying to accomplish and, over what time frame?
The Challenge.....
[GRAPH]
<Caption>
1995 1996 1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ---- ---- ----
Annual Revenue ($M): 54 53 96 98 118 141 169 203
Base Revenue ($M): 38 43 40 50 60 101 116 146
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Backlog ($M): 332 291 280 260 420 390 550 460
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Rev Growth Rate (%): 25 17 55 0 20 20 20 20
Base Growth Rate (%): 25 13 (16) 25 20 68 15 26
Operating Margin (%): 23 24 24 25 22 23 24 25
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What are we trying to accomplish and over what time frame?
IT and Services Portfolio...
[CHART]
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How Is This Different From What We Are Doing Today?
PSC's Current Energy Practice....
- Formulated 1992
- Accounts 5 (EME, SCE, C&SW, ISO, PX)
- People 750
- Growth CAGR 27%
- 1997 Highlights
- Growth 55%
- Revenue >10% PSC
- Account of Reference
- Significance
- First Outsource in U.K.
- At the "pit face" of U.K. deregulation
- Built USA's fist retail ISO in California
- Heavily involved in forefront of Calif deregulation -
leading US market
- Highly visible industry subject matter experts.
4
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How Is This Different From What We Doing Today?
Developing our Sales Services Pipelines
[CHART]
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What Is Our Vision of the World?
The Energy Market Place...
[CHART]
- Capital Intensive
- Financially Solid
- Global Change
- From Monopolistic to
Open Markets
- Consolidation
- New Entrants Emerging
- Processes Unbundling
Annual IT Spend (Rate)
- Chemicals 3.5 (7%)
- Oil 4.5 (8%)
- Mining 1.5 (2%)
- Utility 6.0 (20%)
* "Compliance", or market restructuring efforts, can be expected to
significantly increase the Utilities' IT spending patterns
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What Is Our Vision of the World?
A Propensity for Change which will yield opportunities....
The future shape of things to come:
Utilities will be forced to spend significant IT moneys to meet statutory
market restructuring "compliance" requirements, e.g. "Rule of Thumb". $100 for
@ customer. These expenditures are over and beyond normal annual IT spends.
[GRAPH]
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Our New Approach & Why We Feel It Will Succeed.
Our Focus.....
* Exploit our knowledge of the deregulatory markets in U.K. and California to
design & roll-out (4) integrated service offerings focused on developing
significant replicable transaction-based services & annuity enterprises
* Design and develop multi-industry strategic service offerings e.g.
integrated Supply Chain Management, Settlements & Cleaning, etc., building
upon PSC's strategic competencies
* Create incubators for developing PSC's competencies in strategic delivery
capabilities e.g. Software factory and off-shore application development
production
* Find and close a long-term anchor contract creating backlog to balance our
service portfolio and providing a commercial platform from which we can build
and develop our teams
* Leverage our present relationships winning more of the business and
technology services from our existing clients
* Build information systems & infrastructures enabling our clients to adapt
rapidly to market changes increasing their competitiveness and securing high
return on IT investments
* Select and develop 5 leaders to be delivered as Corporate leadership
resources
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OUR NEW APPROACH & WHY WE FEEL IT WILL SUCCEED.
A MARKET ENTRY STRATEGY......
[CHANNELS TO MARKET CHART]
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What Effect Will This Have On Our Client?
The Value Proposition or What's In It For Me?
<Table>
<Caption>
CEO PSC
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1. SERVICE -REDUCED "TIME TO MARKET" -CREATION OF DIGITAL COMMERCE
INFRASTRUCTURE: -LARGE SCALE COST VP, TRANSACTION ENGINE
REPRODUCTION -LONG TERM SERVICE CONTRACTS
& BACKLOG
-CASHFLOW IMPROVEMENTS -FOUNDATIONS FOR INFOR
CLEARINGHOUSE & OTHER
VALUE-BASED ENTERPRISES
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2. MARKET -STATUTORY LEGAL -CREATION OF BLUEPRINT FOR
RESTRUCTURINGS COMPLIANCE REPEATABLE PROCESSES HIGH
REVENUE OPPORTUNITIES
-LEVERAGING ASSETS -POSITIONING FOR FUTURE TECH O/S
-BUILDING "GROWTH"
ACQUISITION ENGINES
ENERGY TRADING -SIGNIFICANT -HIGH MARGIN & PERFORMANCE
& RISK MANAGEMENT COMPETITIVE ADVANTAGE IN
"HIGH STAKES" GAME
-RISK MITIGATION -BASIS OF ALLIANCE WITH MARKET
MAKERS
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3. PROD & SVC -NEW REVENUE SOURCES -CREATE & OPERATE ANNUITY SERVICES
INNOVATION -NEW MARKET ENTERPRISES -NEW SERVICE ENTERPRISES-ORGANIC
GROWTH ENGINES
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[LOGO] What Are The Risks and Our Plan for Dealing With Them?
Our Issues and Our Responses...
ISSUES RESPONSES
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- - Create Predictable Future - Develop (J) Synergic service offerings founded on market change &
Revenue & Growth multi-industry applications
- Compliance Engine: ServCo
- Integrate Supply Chain Management
- Settlements & Cleaning
- Retail Systems & Infrastructure
- Jointly develop "Enterprises" with our clients creating leveraged
Intellectual Property and serving as future organic growth engines, e.g.
EnerACT, OnSight
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- - Develop Processes to Produce - Create an EME "breakdown" for developing PSC's delivery responsibilities
Predictable Delivery Results e.g. Software facility & offshore application development
Leveraged Across PSC - Leverage the replacable & operable processes formed around the
strategic service offerings
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- - "Source" the Resources & Talent - Develop a leadership pipeline for the industry group & the
Required to Build and Lead the Business Corporation
- Develop "solution" provider alliances
- Create recruitment strategies & contingency development plans
licensed around our strategic services offerings
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- - Address our Financial Exposure in - Sign new "long-term" European business eg., Rome, Eastern Group
Having one client Comprising such - Sign on another business in USA with long-term revenue (5-10 years)
a Large % of our Business - Establish a balanced portfolio of businesses across geographic and IT
continuums
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[LOGO] How Long Will It Take & What Will It Cost?
Summary...
WHAT ARE THE CHANNELS RESKILL &
INVESTMENTS? TO MARKET REALIGN
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- - Create Strategic Service Offerings:
1. Compliance Engine - Develop ServCo with - Incorporate ECOS & Web NT
Sempre SAP or Oracle
2. Integrated Supply Chain - Develop with Shell - Establish a Supply Chain Competency
Management
3. Settlement & Clearing - Target Call Industry Mkt - Leverage Benton's payments &
cleaning expertise
4. Retail Systems & Infrastructure - LG&E(RAS): NGC, Sheet - ECOS structures & services
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- - Develop "Enterprises" & supporting
service infrastructures for:
1. EnerACT with EnerSHOP - Joint Venture - Real-time SCADA talents
2. "Onsight" with EnerShop - Consortium/Perot Group - Doblin, web-technology, ECOS
3. "Home" Retail Services Advisor - Consortium Shell, NGC, - Doblin, web-technology, ECOS
LG&E MCN, etc.
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- - Develop an "Anchor" Account in - LG&E, Sempra, NGC - Technology infrastructure & delivery
the US
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- - Investigate Development of - LG&E LD, NGC - Trading Infrastructure
Trading Back Office Service
Offering
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