EXHIBIT 10.3
PWC CONSULTING
- --------------------------------------------------------------------------------
A business of PRICEWATERHOUSECOOPERS [LOGO]
[PRICEWATERHOUSECOOPERS LETTERHEAD]
July 15, 2002
Mr. Ken Cichocki
Chief Financial Officer
Home Interiors & Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007
Dear Mr. Cichocki:
We are very pleased that Home Interiors & Gifts, Inc. ("Client" or "HIG") has
agreed to engage PricewaterhouseCoopers LLP ("PwC") to provide consulting
services for the implementation of HIG's ERP system, using as a foundation the
J. D. Edwards Financial, Distribution and Demand Planning software. This
engagement letter, once signed by both parties, will constitute the agreement
("Agreement") between Client and PwC for this project.
Background
Client previously entered into an agreement with Arthur Andersen LLP
("Andersen") for services related to the project. Andersen has informed Client
of its inability to continue the project and has received from Client a notice
of termination. Client confirms that a copy of the agreement between Andersen
and Client, together with any change orders and amendments, is attached hereto
as Exhibit 1 (the "Andersen/Client Agreement").
The project originally involved assisting HIG in the development, testing and
roll-out of the ERP system, using as a foundation, the J.D. Edwards (JDE) system
solution (Build - Phase III or "Phase III"). The Andersen/Client Agreement
established the scope of services, deliverables, compensation, terms and
conditions, and other business terms for Andersen's participation in the
project.
HIG and PwC have agreed that PwC will provide consulting services for Phase III,
as described in this Agreement. In recognition of HIG's need for a quick
transition of services to PwC, the parties have agreed to use the
Andersen/Client Agreement as the template for their Agreement. The parties
understand and agree that such use of the Andersen/Client Agreement will not
result in PwC's being treated as the successor, assignee or transferee of
Andersen or the Andersen/Client Agreement.
Scope of PwC Services
Client is engaging PwC to perform services and provide deliverables not
previously completed under the Andersen/Client Agreement, as indicated in the
below charts and otherwise described in this Agreement (collectively, the "PwC
Services").
PwC Consulting(TM) refers to the management consulting services businesses of
the member firms of the worldwide PricewaterhouseCoopers organisation.
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
The functional and technical processes and modules within the scope of this
project are consistent with the scope identified in the Andersen/Client
Agreement, including all stated processes and modules.
The joint PwC/Client team will produce the deliverables as shown below. PwC's
Services do not include deliverables or activities within the stages that are
shown as complete in the following charts, which deliverables and activities are
deemed part of the Prior Work. However, as described elsewhere in this
Agreement, PwC has agreed to perform certain corrective services, if needed, as
part of its scope of work.
Report Development:
Specifications, Development, Unit Testing, String Testing, Integrated Testing
and Implementation of Reports - PwC will work with Client to produce those
deliverables listed below. (Associated tasks under the Andersen/Client Agreement
not listed but required to complete the deliverables below will be considered
part of the scope.):
<Table>
<Caption>
% Complete by Stage
- ---------------------------------------------------------------------------------------------------------------------
Integrated
Object Number Description Specs Develop Unit Test String Test Test Implement
- ------------- ----------- ----- ------- --------- ----------- ---------- ---------
12 Weekly & YTD Sales by Country of
Origin 100 100 100 100 0 0
39 Category Performance Report (YTD) 100 100 100 100 0 0
41 Category Sales Trends 100 100 100 100 0 0
43 Key Item Hot 100 100 100 100 0 0
44 Key Item Not 100 100 100 100 0 0
69 Executive WMS Analysis Wholesale
Merchandise Shipped 100 100 100 100 0 0
75 Executive Sales Analysis 100 100 100 100 0 0
286 Purchase Order Report 100 100 100 100 0 0
287 Merchandise Status 100 100 100 100 0 0
3 Weekly Sales by Category Summary 100 100 100 0 0 0
11 Order Information IOE 100 100 100 0 0 0
16 Shipments % by Whls Value Range 100 100 100 0 0 0
30 Brochure Sales Statistics 100 100 100 0 0 0
32 Product Price Point Analysis 100 100 100 0 0 0
45 Discontinued Tracker 100 100 100 0 0 0
46 Category Discontinued Report 100 100 100 0 0 0
58 Displayer Scorecard 100 100 100 0 0 0
71 Executive Displayer Analysis 100 100 100 0 0 0
73 Executive Sales Analysis 100 100 100 0 0 0
120 Actuals for Forecast Model 100 100 100 0 0 0
</Table>
2
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
<Table>
123 Listing of Displayers by Branch,
Unit & District 100 100 100 0 0 0
124 Consolidated BVA - BS, P&L & Cash
Flow 100 100 100 0 0 0
136 Count of Active Displayers by
Unit Code 100 100 100 0 0 0
145 AP Cash Requirements summarized
by Vendor Class 100 100 100 0 0 0
148 Aging Analysis for A/P Trade 100 100 100 0 0 0
150 Check Register 100 100 100 0 0 0
156 Check Register (Including Voids)
sorted by Vendor Class 100 100 100 0 0 0
162 AR Collections by Age of Invoice
Paid 100 100 100 0 0 0
163 Newton Extract 100 100 100 0 0 0
168 Weekly AR aging Analysis 100 100 100 0 0 0
195 G/L Summary Trial Balance 100 100 100 0 0 0
213 Consolidating Statement of
Operations 100 100 100 0 0 0
214 Consolidating Balance Sheet
Statement 100 100 100 0 0 0
225 Released to Sales Report 100 100 100 0 0 0
229 Open Batch Report 100 100 100 0 0 0
231 Hold Orders Report 100 100 100 0 0 0
238 Daily Bank Deposit Reports 100 100 100 0 0 0
254 Taxes Ordered by State and
Subtotalled by State 100 100 100 0 0 0
276 Item Back Order Report 100 100 100 0 0 0
277 Sales by Item Family 100 100 100 0 0 0
278 Daily Order Report 100 100 100 0 0 0
279 Top 20 Items Report 100 100 100 0 0 0
283 Invoice Corrections Control 100 100 100 0 0 0
284 Custom Invoice 100 100 100 0 0 0
289 30%/50%.70% Discounted Items by
Status/Category 100 100 100 0 0 0
291 Inventory Usage 100 100 100 0 0 0
294 Fulfilment 100 100 100 0 0 0
313 All carriers $10 report 100 100 100 0 0 0
320 YTD Defective Summary (By Vendor) 100 100 100 0 0 0
340 Top 3 Branch Leaders Extract 100 100 100 0 0 0
392 Credit Report for Affidavits 100 100 100 0 0 0
400 Weekly Category Performance -
Foreign Currency 100 100 100 0 0 0
401 Displayer Productivity - Foreign
Currency 100 100 100 0 0 0
</Table>
3
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
<Table>
129 Mexico Sales & COGS by Product
Source (Vendor) 50 0 0 0 0 0
139 General Ledger Transaction Detail 50 0 0 0 0 0
142 Paid Invoice History by Vendor 50 0 0 0 0 0
146 Cash Disbursements 50 0 0 0 0 0
149 Aging analysis for Unvouchered
Receipts 50 0 0 0 0 0
153 Forecast of Cash Disbursements
from Open Inventory Pos 50 0 0 0 0 0
154 Forecast of Cash Disbursements
from AP Unvouchered B94 50 0 0 0 0 0
157 Credit Card Deposit Detail by day 50 0 0 0 0 0
193 Itm_ext_nels - Inventory Report
by Item and Category Code 50 0 0 0 0 0
201 Report of Cleared Checks from
Bank Reconciliation 50 0 0 0 0 0
230 Booklet Order Error report 50 0 0 0 0 0
233 Cancelled Orders Report 50 0 0 0 0 0
250 Inquire A/R Activities by Account
No. 50 0 0 0 0 0
257 ASR Labels 50 0 0 0 0 0
259 Branch Distribution Mailing Labels 50 0 0 0 0 0
265 Colorbar - Customer Base List for
File Label Export - Full 50 0 0 0 0 0
267 Displayer Promotion Addresses 50 0 0 0 0 0
275 Morning Quick Daily Sales Report
US and Canada 50 0 0 0 0 0
293 YTD PO's by Vendor & Category 50 0 0 0 0 0
295 Vendor Inventory Status 50 0 0 0 0 0
297 PO Maintenance (PAVA) 50 0 0 0 0 0
301 PO Tracking (PAVA)(Needs major
improvement) 50 0 0 0 0 0
302 In transit (PAVA)/Shipping Status
(PAVA) 50 0 0 0 0 0
305 Sales By Vendor 50 0 0 0 0 0
316 Directs and Distributors for
Transportation Dept. 50 0 0 0 0 0
321 YTD Defective (by Item by Vendor) 50 0 0 0 0 0
322 YTD Damage Defective Analysis 50 0 0 0 0 0
323 Monthly Defective Summary (by
Vendor) 50 0 0 0 0 0
324 Monthly Defective Items by Vendor 50 0 0 0 0 0
327 Category Performance Report by
Item Report 50 0 0 0 0 0
335 Promotion Data Query (LITA). DIS 50 0 0 0 0 0
</Table>
4
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
<Table>
384 A/R Statements 50 0 0 0 0 0
389 Vendor Quantity Report 50 0 0 0 0 0
390 Weekly Orders by Zone 2 50 0 0 0 0 0
391 Group WMS 50 0 0 0 0 0
27 Daily Sales Forecast Moved Outside of Scope of JDE Report Team
60 Director Key Driver Moved Outside of Scope of JDE Report Team
98 Historical Comparison - Branch Moved Outside of Scope of JDE Report Team
99 WMS and Displayer for Branch # Moved Outside of Scope of JDE Report Team
100 Historical Comparison (Director
Bonus) - Branch Moved Outside of Scope of JDE Report Team
200 ABRA Payroll G/L Distribution Moved Outside of Scope of JDE Report Team
221 CRM - Support Services And Web
Support Department Report Moved Outside of Scope of JDE Report Team
222 CRM - Support Services And Web
Support Group Leaders Moved Outside of Scope of JDE Report Team
40 Category Performance Report Cancelled
70 Executive WMS Analysis Cancelled
72 Executive Displayer Analysis Cancelled
74 Executive Sales Analysis Cancelled
115 Sales, COGS & Gross Profit by
State of Destination Cancelled
116 Weekly Sales by Categories Summary Cancelled
133 Wholesale vs. Hostess Qty shipped Cancelled
134 Canada Sales, COGS & Gross Profit
by item and category Cancelled
135 Weekly & YTD sales by Country by
Origin Cancelled
191 General Ledger detail Cancelled
223 Weekly New Account Volume Report Cancelled
224 New Account Approvals Cancelled
292 Inventory Usage - Christmas Items
Report Cancelled
314 Some carriers $10 report Cancelled
315 Monthly All Carriers $10 report Cancelled
334 Nuggets Earned (NFH) Cancelled
</Table>
Enhancements, Interfaces and Automated Conversions Development:
Specifications, Development, Unit Testing, String Testing, Integrated Testing
and Implementation of Enhancements, Interfaces and Automated Conversions - PwC
will work with Client to produce those deliverables listed below. (Associated
tasks under the Andersen/Client Agreement not listed but required to complete
the deliverables below will be considered part of the scope.):
5
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
<Table>
<Caption>
% Complete by Stage
- ----------------------------------------------------------------------------------------------------------------------
Integrated
Object Number Description Specs Develop Unit Test String Test Test Implement
- ------------- ----------- ----- ------- --------- ----------- ---------- ---------
CN-DAI-JDE-X-1-001 Vendor master 100 100 100 100 0 0
CN-DAI-JDE-X-1-003 Bank Information 100 100 100 100 0 0
CN-DAI-JDE-X-1-002 Customer master 100 75 0 0 0 0
CN-EXE-JDE-X-1-001 Inventory Balance on Hand 100 0 0 0 0 0
EN-JDE-CS-X-002 NCA : Address verification
(Address Mailer, SSN du 100 100 100 100 0 0
EN-JDE-CS-X-001 Default value for customer
master (including credi 100 100 100 100 0 0
EN-JDE-WMS-X-009 WMS Enhancement 100 100 100 75 0 0
EN-JDE-CS-X-006 Qualified groups for promotions 100 100 100 75 0 0
EN-JDE-CS-X-005 Sample sales for displayers /
directors 50 0 0 0 0 0
EN-JDE-CS-X-003 Counter of number of orders
(free goods and freigh 25 25 0 0 0 0
EN-JDE-CS-X-008 Auto-close inactive accounts 25 0 0 0 0 0
IN-JDE-IOE-X-X-008 Displayer Purge Upload 100 100 100 75 0 0
IN-JDE-QUA-X-X-001 Customer address QUAD 100 100 100 75 0 0
IN-JDE-IOE-X-N-001 Displayer Upload 100 100 100 75 0 0
IN-JDE-INT-X-X-001 Customer address INT 100 100 100 75 0 0
EN-JDE-CS-X-007 Vertex interface, retail price,
state adjustment, 100 100 100 75 0 0
EN-JDE-VTX-X-002 Tax Only Credit 100 100 100 75 0 0
IN-VTX-JDE-X-X-001 Tax amount and tax base amount 100 100 100 75 0 0
IN-IOE-JDE-X-N-001 Order Extract 50 0 0 0 0 0
</Table>
6
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
<Table>
IN-JDE-VTX-X-X-001 Tax calculation 100 100 100 75 0 0
IN-SCN-JDE-X-D-001 Scanner to JDE dataflow (Bubble
Order) 50 0 0 0 0 0
EN-JDE-CS-X-010 Auto Credit / Debit 0 0 0 0 0 0
EN-JDE-MLR-X-002 Address Server requirements
gathering 100 0 0 100 0 0
IN-JDE-EXE-X-D-001_ Customer 100 100 100 100 0 0
IN-JDE-IOE-X-N-003_ Account Detail Upload 100 100 100 25 0 0
IN-JDE-IOE-X-H-006 Item Status Upload 100 100 100 100 0 0
IN-JDE-IOE-X-H-007 Order Status Upload 100 100 100 100 0 0
IN-JDE-INV-X-X-001 Invoice Mailing 100 100 100 50 0 0
EN-JDE-CS-X-004 Invoice (comments, reason for
non shipment, group 100 100 100 25 0 0
IN-JDE-IOE-X-N-002 Invoice Upload 100 100 100 50 0 0
IN-JDE-EXE-X-D-005 Sales Order
Header/Detail/Trailer 75 75 25 0 0 0
IN-EXE-JDE-X-D-005 Shipping Header/Detail 50 0 0 0 0 0
IN-IOE-JDE-X-N-002 Payment Extract 100 100 100 100 0 0
IN-FRG-JDE-X-X-001 Automatic Invoice Upload 100 100 100 100 0 0
IN-CMS-JDE-X-N-003 Sales accounting - Redemption
of certificate 100 100 100 100 0 0
IN-HR-JDE-X-X-001 HR interface to JDE (Abra) 100 100 100 100 0 0
IN-BUD-JDE-X-X-001 PC budget Upload 100 100 100 25 0 0
IN-4S-JDE-X-X-001 4th Shift (Enterprise system
for sub's) 100 100 100 100 0 0
IN-FA-JDE-X-X-001 FAS (fix assets) manual update
to GL 100 100 100 100 0 0
IN-FOX-JDE-X-X-001 Fox Pro (system for Mexico) 100 100 100 100 0 0
IN-COM-JDE-X-X-002 Commissions Check upload 100 100 100 100 0 0
IN-JDE-BK1-X-X-002 ACH Payment 100 100 100 75 0 0
IN-JDE-IOE-X-N-011 Statement (account activity) 0 0 0 0 0 0
IN-JDE-FOR-X-X-001 AP checks sent to Forms Server
for Formatting 100 25 0 0 0 0
IN-JDE-BK1-X-X-001 Positive Pay interface with
Bank1. 100 0 0 0 0 0
</Table>
7
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
<Table>
IN-BK1-JDE-X-X-001 Bank Reconciliation tape 100 0 0 0 0 0
EN-JDE-FN-X-006 View PO Unit Price for received
inventory 0 0 0 0 0 0
IN-JDE-IOE-X-N-010 AR aging 100 100 100 100 0 0
EN-JDE-FN-X-002 Map a method of payment code to
a specific g/l off 100 100 100 100 0 0
EN-JDE-FN-X-005 Remove NSF hold when AR balance
is Zero 100 100 100 100 0 0
EN-JDE-FN-X-001 Enter quantity for noncash
payments and auto calcu 100 100 100 100 0 0
IN-JDE-IVR-X-W-001 JDE-IVR Data Extract 100 100 100 25 0 0
EN-JDE-FN-X-003 Auto update credit limit based
on WMS for past 12 100 100 100 100 0 0
EN-JDE-FN-X-004 Exempt certain displayers from
credit limit auto u 100 100 100 100 0 0
IN-JDE-IH-X-W-004_ AR_TRANSACTIONS_HIST 75 75 50 0 0 0
IN-JDE-IH-X-W-003_ AR_MASTER_HIST 100 50 50 0 0 0
IN-JDE-IH-X-W-016 SALES_ORDER_MESSAGES_HIST 50 0 0 0 0 0
IN-JDE-COM-X-X-001 New Address Book accounts
outbound to commissions 100 100 100 100 0 0
IN-JDE-COM-X-X-002 Address Book maintenance into
JDE, passing change 100 100 100 100 0 0
IN-COM-JDE-X-X-001 Compensation Hierarchy Changes 100 100 100 100 0 0
IN-JDE-COM-X-X-003 Sales Outbound from JDE passing
Sale data F4201, a 100 100 100 0 0 0
IN-COM-JDE-X-X-004 Commissions WMS information 0 0 0 0 0 0
Job Scheduling Job Scheduling and Interface
Integration 50 50 50 50 0 0
IN-JDE-EXE-X-D-004 PO Header/Detail 100 100 100 100 0 0
IN-EXE-JDE-X-D-001 Activity, PO receipts 100 100 100 100 0 0
IN-EXE-JDE-X-D-002 Activity, Mark outs 100 100 100 100 0 0
IN-EXE-JDE-X-D-003 Activity, Inventory Adjustments 100 75 25 0 0 0
IN-EXE-JDE-X-D-004 Inventory Balance on Hand 100 0 0 0 0 0
EN-JDE-SC-X-001 Transportation routes 50 0 0 0 0 0
</Table>
8
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
<Table>
IN-JDE-IOE-X-N-005 Item Assembly (itc) Upload
(KIT) 100 100 100 100 0 0
IN-JDE-IH-X-W-017 CARRIER_CONTACT 100 100 100 0 0 0
IN-JDE-IOE-X-N-004 Item (itm,iad,itc for USA and
CAN) Upload (nightly 100 100 100 100 0 0
IN-JDE-EXE-X-D-002 Item Header/Detail 100 100 100 100 0 0
IN-JDE-DP-X-D-001 Items, locations, sales history
(3 files) 100 100 100 75 0 0
IN-JDE-IH-X-W-001 CUSTOMER_MASTER_HIST 100 100 100 0 0 0
IN-DP-JDE-X-D-001 Forecast info returned 100 25 0 0 0 0
IN-JDE-IH-X-W-002 COMMISSION_DATA_HIST 50 0 0 0 0 0
IN-JDE-EXE-X-D-003 Vendor 100 100 100 100 0 0
IN-EXE-JDE-X-D-006 Item dimension 100 100 100 100 0 0
IN-JDE-IH-X-W-015 PURCHASE_ORDER_RECEIPT 100 100 100 0 0 0
CN-DWH-DP-X-1-001 Sales history (DP), APAg
Interface set up 100 100 100 100 0 0
DP-JDE-X-D-001 Stored Procedure: forecast from
DP 100 100 100 0 0 0
IN-JDE-IH-X-W-013 SALES_ORDER_DETAIL_HIST 100 0 0 0 0 0
IN-JDE-CAN-X-D-001 Canada Export file (shipment) 100 100 100 0 0 0
IN-JDE-PR-X-D-001 PR Sales order header 100 0 0 0 0 0
IN-JDE-PR-X-D-002 PR Invoice detail 100 0 0 0 0 0
IN-JDE-IH-X-W-005 ITEM_HISTORY_HIST 100 100 100 0 0 0
IN-JDE-IH-X-W-009 PURCHASE_ORDER_HEADER 100 100 100 0 0 0
IN-JDE-IH-X-W-008 ITEM_ATTRIBUTE_HIST 100 100 100 0 0 0
IN-JDE-IH-X-W-006 ITEM_MASTER_HIST 100 100 100 0 0 0
IN-JDE-IH-X-W-007 ITEM_QUANTITY_HIST 100 100 100 0 0 0
IN-JDE-IH-X-W-012 SALES_ORDER_HEADER_HIST 100 0 0 0 0 0
IN-JDE-IH-X-W-010 PURCHASE_ORDER_DETAIL_HIST 100 100 100 0 0 0
</Table>
9
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
Manual Conversions:
Specifications, Development, Unit Testing, String Testing, Integrated Testing
and Implementation of Manual Conversions - PwC will provide guidance to Client
to produce those deliverables listed below. (Associated tasks under the
Andersen/Client Agreement not listed but required to complete the deliverables
below will be considered part of the scope.):
<Table>
<Caption>
% Complete by Stage
- --------------------------------------------------------------------------------------------------------
Integrated
Object Number Description Specs Develop Unit Test String Test Test Implement
- ------------- ----------- ----- ------- --------- ----------- ---------- ---------
Manual Item Master 100 100 100 0 0 0
Manual Chart of Accounts 100 100 100 0 0 0
Manual GL Balances 100 100 100 0 0 0
Manual Purchase Orders 100 50 0 0 0 0
Manual Transportation
Routes 100 100 50 0 0 0
</Table>
Other Deliverables
PwC, working with the HIG personnel, will produce the following remaining
deliverables:
Organizational Change Management
o Web Based Training Course Maps
o Web Based Training Courses and materials, including process maps
o Prerequisite Training Delivery Confirmed
o Training Schedule
o Go-Live Promotion and Communications Plan
o Ownership Transition Plan
o System Go-Live and Project Success Communication
Reports & Form Team
o Report and Form Cut-Over Checklist
o Report Development Request Approach (Post Go Live)
Development & Functional Teams (Supply Chain, Customer & Sales, and Finance)
o Archived Interface Program Code
o Control Reports
o Interface Impact Assessment on Custom Modifications
10
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
o Reconciliation Reports
o Archived Data Conversion Program Code
o Data Conversion Checklist
o Operational batch schedule
o Operational batch schedule documentation
o Security design and approach
o Archived Enhancement Program Code
Functional Teams (Supply Chain, Customer & Sales, and Finance) & Integration
Teams
o Integrated Test Approach
o Integrated Test Scripts
o Integrated Test Data
o Stress Test Approach
o Stress Test Scripts
o Stress Test Data
o Stress Test Instructions
o Stress Test Evaluation Form
o Stress Test Results
o Integrated Test Kick-Off Presentation
o Integrated Test Results
o Issues Resolution
o Updated Process Flow Charts
o Knowledge Transfer Plan - at Integrated Test and Post Go-live
o User Readiness Mock Session ('Day in the Life')
o Roll-Out and End-User Support Team Plan
o Overall Cut-Over Checklist
o Contingency Plan
o Completed Go-Live Sign-Off
o Going-Forward Recommendations
o Post Go-live 'C' Priority Development Plan
Demand Planning
o System Configuration
o Integrated Testing
o User and Technical Training
o User / Procedure Manuals
o System Integration with JDE
o Sales History Data Conversion
o Demand Planning Process Implementation
Sales and Operations Planning
o Process Flows
o Policy and procedure documentation
o Monthly planning calendar
11
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
o Role definition
o Key Reports (approach and specification)
o Roll out plan
Project Management Assistance
o Build Phase QA Checklist
o Client Satisfaction Survey
o Overall Project Review
o Project Team Evaluations
o Lessons Learned
o Final QA Review Checklist
o Test Phase QA Checklist
o Post Roll Out Review Report
o Issue Database
Activities and Services
PWC, WORKING WITH THE CLIENT, WILL COMPLETE THE REMAINING KEY ACTIVITIES AND
SERVICES:
JDE Implementation
o WBT Course & Related User Procedure & Training Development Materials
o Training Preparation - Logistics
o Remaining Reports Development - See Above
o Remaining Forms Development - See Above
o Remaining Interface Development - See Above
o Data Conversion Preparation (Data Cleansing, Final Mapping)
o Remaining Data Conversion Development - See Above
o Remaining Enhancement Specifications Development - See Above
o Remaining Enhancement Development including Unit Testing - See Above
o Developer Support During Integrated and System Test
o Remaining Functional Team Support of Development Team - See Above
o Integrated Test Preparation - Scripts Development
o Integrated Test - Cycle 1
o Integrated Test - Cycle 2
o Stress Test Preparation and Execute #1 (Sales Order Processing)
o Data Conversion Test #1 (A,B)
o Data Conversion Test #2 (A,B,C)
o Stress Test Preparation and Execute #2 (Integrated Processing)
o Deploy Preparation
o Training Delivery
o User Readiness Session
o Quality Assurance Review - Check Points
o Close Build Phase
12
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
o Overall Project Management (Client makes management decisions)
Sales and Operations Planning
o Develop S&OP process design
o Gather input and define functional requirements
o Define key metrics and reports to support the S&OP Process
o Define the organizational roles and responsibilities
o Facilitate process design workshops
Demand Planning
o Prepare and Convert Data (2 years of Sales History)
o Assist in design of Interface to and from JDE
o Perform 2 Integrated Test Cycles
o Prepare and facilitate Training
o Define and Develop Reports
o Validate Final Technical Environment
o Deploy Demand Planning
Organizational Change Management
o Plan and facilitate remaining communications
o Conduct remaining organization communication meetings
o Continue to celebrate milestone accomplishments
o Facilitate User involvement strategy from Design Phase
o Facilitate Leadership involvement strategy from Design
o Facilitate findings/actions items identified in Change readiness/risk
assessment from Design Phase
o WBT Courses and related Materials
o Training development and facilitation
Assist with providing guidance for the following client-led sub-teams:
o Commissions
o 9-8 Customer Number Conversion
o Data Warehouse
o CNC/Infrastructure
Services and deliverables under the Andersen/Client Agreement which are not
expressly identified as PwC Services shall be referred to collectively as the
Prior Work.
Team Structure
The team organizational structure will remain the same as identified in the
Andersen/Client Agreement.
13
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
PwC Services
The PwC Services will be performed by PwC's management consulting line of
service. Except as otherwise provided in this Agreement, all terms and
conditions set forth in the Andersen/Client Agreement will apply to and are
hereby incorporated by reference into this Agreement, as if all references
therein were to PwC instead of Andersen, and all references to the
Andersen/Client Agreement were to this Agreement. However, the scope of PwC
Services, PwC staffing and fee arrangements are as set forth in this Agreement.
It is an assumption under this Agreement that all deliverables, working papers
and work products will be available to PwC on a timely basis for the performance
of the PwC Services. Should this assumption become invalid, the parties will
amend this Agreement through a change order, taking into account any impact on
schedule, fees and resources.
In calculating and approving the fee estimate in this Agreement, the parties
have assumed that the Prior Work meets appropriate standards for the efficient
performance of the PwC Services and complies with the standards set forth in the
Andersen/Client Agreement, and will not require amendment, update, correction or
change to meet such standards. In the event the Prior Work meets the warranty
standards set forth in Section 6 of the incorporated Business Consulting
Standard Business Terms (the "Performance Standards"), and Client nevertheless
requests a change to the Prior Work, the parties will amend this Agreement
through a change order, taking into account any impact on schedule, fees and
resources. However, in the event Client believes that the Prior Work performed
in Phase III did not meet the Performance Standards, Client will provide all
reasonable information and documents requested by PwC to evidence such belief.
If the Prior Work performed in Phase III did not meet the Performance Standard,
then PwC shall be obligated to work in a diligent and competent manner with the
Client team (in accordance with their respective responsibilities for the
original work being corrected) toward making any required amendment, update,
correction or change. Such corrective work shall be considered PwC Services for
which no fees shall be charged to Client.
Notwithstanding the foregoing paragraph, all amendments, updates, corrections or
changes to Phase I and Phase II work will be considered additional work and will
be handled through the change order process. Client acknowledges that PwC's
agreement to perform corrective services does not imply and will not be deemed
to make PwC responsible for deficiencies or defects in Andersen's work or
otherwise make PwC a successor or assignee of Andersen or the Andersen/Client
Agreement. However, PwC agrees that it will be responsible for performing
corrective services in a diligent and competent manner, as described above.
The PwC Services, including post-live services, will be consistent with audit
independence rules. Without limitation, PwC will not perform any management
functions or supervise the operation of the Client's systems.
PwC Staffing
We anticipate that the following PwC resources will be assigned to this project.
PwC may, from time to time, make re-assignments and substitutions of personnel
in accordance with the Business Consulting Standard Business Terms set forth in
the Andersen/Client Agreement:
14
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
o Robert Newsbaum - Engagement Director
o Steve McLaurin - Quality Assurance
o Shawn Permann - Project Manager - Part Time*
o John Hallin - Customer and Sales Team Lead - Full Time*
o Bob Whalen - Financials Team Lead - Full Time*
o Bryan Fornadel - Supply Chain Team Lead - Full Time*
o David Siu - Development Team Lead - Full Time*
o Ryan Ferguson - Customer and Sales Team Consultant - Full Time*
o Jeff Pennington - Supply Chain Team Consultant - Full Time
o Britt-Louise Andermo - Financials Team Consultant - Full Time*
o Muriel Perie - Technical Facilitator - Full Time*
o Ocie Anderson - Supply Chain Team Consultant - Full Time*
o Doug Roesch - Reports and Forms Team Support - Full Time
o Staci Rankin - Web Tech Writer - Full Time
o Stacie Mewhirter - Web Tech Writer - Full Time
o The following resources will be contracted directly to HIG from Experio:
Regina Brodum - Supply Chain Team Consultant - Full Time & Carol Pearson
- Organizational Change Team Consultant- Full Time
Fees and Expenses
We estimate the Build Phase, including post go-live support will be completed on
February 3, 2003 with an actual 'Go-Live' date estimate of December 29, 2002.
PwC's fees for the scope of Services described in this Statement of Work will be
based upon actual time and materials at a substantially discounted rate. Our fee
estimate is $1,768,358, plus out of pocket expenses. An hour and rate schedule
supporting this fee estimate is shown below.
<Table>
<Caption>
PWC RESOURCES
- -------------
HOURS RATES FEES ROLE RESOURCE
- ----- ----- ---- ---- --------
64 $288.00 $ 18,432 Quality Assurance S. McLaurin
116 $288.00 $ 33,408 Engagement Director B. Newsbaum
674 $256.00 $ 172,544 Project Manager S. Permann
1171 $224.00 $ 262,304 Functional Lead - Customer & Sales & Integration Lead J. Hallin
1160 $224.00 $ 259,840 Functional Lead - Supply Chain Team B. Fornadel
1186 $224.00 $ 265,664 Functional Lead - Financial B. Whalen
1016 $147.20 $ 149,555 Technical Lead - Development Team D. Siu
104 $160.00 $ 16,640 Technical Facilitator M. Perie
1146 $160.00 $ 183,360 Application Consultant - Customer & Sales Team R. Ferguson
260 $118.40 $ 30,784 Application Consultant - Customer & Sales Team TBD
1020 $147.20 $ 150,144 Application Consultant - Financial B. Andermo
529 $147.20 $ 77,869 Application Consultant - Supply Chain Team O. Anderson
400 $ 80.00 $ 32,000 Staff Consultant - Financial/Web Tech Writer S. Mewhirter
320 $118.40 $ 37,888 Staff Consultant - Supply Chain J. Pennington
400 $ 80.00 $ 32,000 Staff Consultant - Customer/Web Tech Writer S. Rankin
312 $147.20 $ 45,926 Report Developer D. Roesch
9878 Total Hours
$179.02 $1,768,358 PwC Average Rate & Total Fees
</Table>
15
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
Third-party resources will be required for the CNC implementation and
configuration and the development effort. It is our understanding that HIG will
contract directly with all 3rd party vendors and these vendors will bill HIG
directly for those services. All third party resources (other than any PwC's
subcontractors) will be considered part of the Client resource team. The scope
of work for these third party resources is consistent with the scope identified
for these roles in the Andersen/Client Agreement, and the project assumes their
diligent and competent performance.
This fee estimate is based on Client fulfilling the Client Responsibilities and
Assumptions described in the Andersen/Client Agreement, which responsibilities
and assumptions are incorporated herein, as described above.
PwC will bill Client $290,000 after the beginning of the project (August 1,
2002) then in accordance with the following billing schedule:
September 1, 2002 $290,000+ actual expenses incurred in July
October 1, 2002 $290,000+ actual expenses incurred in August
November 1, 2002 $290,000+ actual expenses incurred in September
December 1, 2002 $290,000+ actual expenses incurred in October
January 1, 2002 $290,000+ actual expenses incurred in November
February 15, 2003 Remaining fees + actual expenses incurred in
December and January
As an incentive to its team, PwC agrees to pay a "Client Stay Bonus" to those
key PwC employees (identified in the Staffing section by *) who remain for their
designated term.
PwC will set the following standards for the bonus. The bonuses will be paid to
qualified employees in the amount of 2.5% of base salary for each month of
service on this engagement. The bonus calculation will be based on the current
salary of the staff member at the time the bonus is paid. Nothing in this
Agreement will imply that Client has any control or responsibility for PwC's
bonus program. Without limitation, PwC has determined that if the staff resigns
from the firm or is terminated or removes themselves from the project prior to
the completion of their term, they will be disqualified from the Client Stay
Bonus program.
We will reconcile the actual fee amounts incurred for the project at the end of
the project and any adjustments will be reflected in a final billing or credit.
PwC will be reimbursed by Client for reasonable out-of-pocket expenses
(including transportation, hotels, per diems, etc.) incurred as a result of
PwC's performance of Services. PwC agrees to use reasonable efforts to limit
travel and lodging expenses by using coach air fare, booking in advance when
available, staying at hotels identified by Client offering corporate rates, and
sharing mid-size rental cars where practical. Invoices are due upon
presentation. Should any invoice remain unpaid for more than 28 days, interest
shall be paid at a rate of 1.5% per month. Any taxes arising out of this
arrangement other than those on PwC's net income shall be Client's
responsibility.
16
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
Certain Key Conditions
As a condition for entering into this Agreement, PwC is relying upon the
following agreements by Client:
Client understands and agrees that neither PwC nor any of its affiliates,
partners, principals or employees is a successor, assignee or transferee of
Andersen or any of Andersen's assets or liabilities, including without
limitation the Andersen/Client Agreement. Client waives, releases and discharges
PwC from any claim that PwC, as a result of PwC's entering into this Agreement,
its performance of the PwC Services, or its hiring or engagement of former
Andersen partners, principals and employees (whether or not in connection with
the PwC Services), is liable or otherwise responsible for any obligation or
action or failure to act by Andersen,
Without limiting the foregoing, if Client has paid Andersen for any work that
has not been completed as of the start of PwC's participation in the project,
Client will look solely to Andersen for the refund of payments or other
resolution of any payment disputes.
PwC is responsible for the performance solely of the PwC Services, as described
in this Agreement. PwC's Services exclude the Prior Work, except that PwC has
agreed to perform certain corrective services as described above. Client hereby
waives, releases and discharges PwC from all Actions which Client ever had, now
has, shall or may have, against PwC related to any deficiencies or defects in
the Prior Work or any other commitment, obligation, action or failure to take
action by Andersen. For purposes of this paragraph, "PwC" includes PwC, and its
present, future and former partners, principals, agents, employees, attorneys,
representatives, affiliated entities, parents and subsidiaries, officers,
predecessors, successors and assigns. For purposes of this paragraph, "Actions"
means all suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, damages, judgments, execution, claims and demands whatsoever, in law
or equity, whether based in tort, contract or other theory of recovery, known or
unknown, absolute or contingent, direct or indirect.
Client management has designated an executive responsible for the project to
review, approve and evaluate the adequacy of project choices regarding the
products to be selected and evaluated, and the design and implementation of the
ERP system, including, but not limited to, the controls and system procedures to
be implemented, the scope and timetable of system implementation, and the
testing, training, and conversion plans. Such executive will be responsible for
reviewing and accepting all deliverables. Additionally, Client, through such
executive, will be primarily responsible for confirming that the internal
controls and financial reporting systems within the ERP system are adequate for
Client's needs.
17
PWC CONSULTING
A business of PRICEWATERHOUSECOOPERS [LOGO]
Other
PwC may without consent assign or transfer this Agreement to a successor or
assignee to that portion of its entire consulting business to which this
Agreement relates.
Without limitation of the other provisions of this Agreement, references to the
"fees Andersen receives hereunder" in Section 7(a) of the Business Consulting
Standard Business Terms in the Andersen/Client agreement will be deemed to refer
to "fees PwC receives under this Agreement."
Because adverse income tax consequences may result from assignment of PwC
personnel at project sites for an extended period, such personnel may be
required by PwC to break from providing service to Client; and if Client elects
in its discretion that it does not want to release personnel from performing
services, after written notification by PwC of such adverse income tax
consequences Client agrees to pay to PwC the amount of compensation provided by
PwC to its personnel to cover the tax consequences thereof.
Please indicate your agreement with this letter by signing where indicated
below, and returning to my attention the additional copy of this letter that I
have included.
We are grateful that you have chosen PwC and look forward to working with you on
this project.
Sincerely yours,
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
By: /s/ Steve McLaurin
Name: Steve McLaurin
Agreed and accepted as of the date of this letter:
Home Interiors & Gifts, Inc.
By: /s/ Kenneth J. Cichocki
Name: Kenneth J. Cichocki
Title: Sr. VP of Finance, Chief Financial Officer
18
[ARTHUR ANDERSEN LETTERHEAD]
BUSINESS CONSULTING
STATEMENT OF WORK
December 20, 2001
Mr. Ken Cichocki
Chief Financial Officer
Home Interiors and Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007
Dear Mr. Cichocki:
This Statement of Work, including any appendices, schedules, and/or attachments,
documents the understanding between Arthur Andersen LLP ("Andersen") and Home
Interiors and Gifts, Inc. ("HIG") with respect to certain services to be
performed by Andersen related to the implementation of HIG's ERP system, using
as a foundation the J.D. Edwards Financial, Distribution and Demand Planning
software ("Services"). Andersen shall provide the Services pursuant to the
provisions of this Statement of Work and Business Consulting's Standard Business
Terms which, together, describe our understanding with respect to the Services
("Agreement").
Project Scope and Objectives
We understand that the objective for this project is for Andersen to assist HIG
in planning the implementation of HIG's ERP system, using as a foundation, the
J.D. Edwards (JDE) system solution. Andersen will provide consulting and project
management services for the ERP implementation planning project.
The scope of this project is to plan the implementation for the following JDE
modules:
o General Ledger and Financial Reporting
o Budgeting
o Multi-Currency Processing
o Address Book
o Accounts Receivable
o Accounts Payable
o Project Accounting
o Job Cost
o Treasury/Cash Management
o Fixed Assets
o Purchasing
o Inventory Management
o Sales Order Management
o Advanced Pricing
o Demand Planning
o Standard Workflow Processes for the above modules
Geographically the scope includes:
o HIG Headquarters in Carrollton, Texas
o HIG Distribution Center in Carrollton, Texas
Andersen Services and Responsibilities
The project services and responsibilities will include the following:
Andersen will work with the HIG personnel to assist in the following activities
by leveraging our experience, tool sets and methodology from similar projects:
o Develop an operational enterprise master implementation plan and detailed
project plan for the planning, design, implementation and roll out phases.
o Identify and confirm the implementation scope, objectives and assumptions.
o Develop project calendar and critical success factors.
o Develop proposed project organization charts for the project teams and
confirm resource availability and time commitments.
o Identify and estimate the number of implementation interfaces, conversions
and modifications and the respective level of complexity.
o Identify the number of processes and sub-processes per module and the
respective level of complexity.
o Identify the number of custom and/or standard reports and forms and the
respective level of complexity to be included in the implementation scope.
o Confirm and assess other business initiatives, which could impact the
status of the JDE project.
o Assist HIG personnel in understanding and using our standard implementation
methodology.
o Refine implementation cost estimates specific to utilizing Andersen and
J.D. Edwards Services as the business partners on the JDE implementation.
o Identify all related activities reasonably necessary to the successful ERP
implementation.
2
Deliverables
Andersen, working with the HIG personnel, will produce the following
deliverables:
o Project team organization chart
o Project scope, objectives and assumptions
o Project critical success factors
o Project team training plan
o Detailed implementation approach, timeline and calendar
o High-level enterprise master implementation plan
o Detailed work plans and resource estimate
o High-level interface, conversion and modification matrices
o Refined implementation cost estimate
o Processes and sub-processes matrices
o Finalized list of modules to be implemented
Client Responsibilities and Project Assumptions
The following individuals will be responsible for providing information and
documentation relative to the process, functionality and technology within the
scope of their identified sub-team. They will provide assistance in identifying
key personnel within their areas for additional data gathering as well as
provide oversight and confirmation of final deliverables.
o Erik Johnsson - Project Management
o Chris Lesher - Customer and Sales Team Lead
o Mary Knight Tyler - Financial Team Lead
o Dan Zipes - Supply Chain Team Lead
o Alan Boyer - Information Technology - Development and Infrastructure
1. Client Responsibilities
In connection with Andersen's provision of the Services, Client will
perform the tasks, furnish the personnel, provide the resources, or
undertake the responsibilities specified below ("Client Responsibilities").
Client will designate a competent employee or employees within its senior
management who will make all management decisions with respect to this
engagement. To the extent that the Services or Andersen's deliverables
include the design or implementation of hardware or software systems,
Client's management shall be responsible for making all management
decisions, including but not limited to, decisions concerning systems to be
evaluated and selected; the design of such systems; controls and system
procedures to be implemented; scope and timetable of system implementation;
3
and testing, training, and conversion plans. To the extent that Andersen's
deliverables include surveys, analyses, reports, evaluations,
recommendations or other management consulting services, Client's
management shall be responsible for all implementation decisions and for
any future action with respect to the matters addressed in the
deliverables. In conjunction with Client acceptance, Client's management
will evaluate the adequacy and results of the design and implementation of
Andersen's deliverables.
Except as expressly agreed herein, Client shall be solely responsible for:
o determining the existence of, and complying with, any and all of the
following that are applicable to electronic transactions, commerce,
processes, or activities conducted over the Internet or any electronic
network (collectively, "Transactions"): import/export controls;
requirements to obtain and maintain licenses or other permissions;
requirements to assess, pay, or withhold taxes, customs duties, or
other charges; and other laws or regulations in all applicable
jurisdictions;
o the security of its network and any related systems, including the
security, privacy and confidentiality of any Client or third party
data, intellectual property, or other information;
o establishing and determining the validity and enforceability of
contract execution, performance and fulfillment processes, contracts,
and any other documentation necessary for or used in conducting
Transactions;
o any content contributed by Client or a third party in connection with
this engagement; and
o any use by Client of the Deliverables (including, but not limited to:
Client's posting to its website, or transmission over the Internet, of
text, images, software, music, video, or other information; Client's
sale or offering for sale of any goods and services via its website or
otherwise over the Internet; and any linking, framing, or distribution
of unsolicited electronic mail in connection with Client's website)
which is illegal, unlawful, or harassing, which infringes another's
intellectual property rights, or which otherwise constitutes network
abuse ("Misuse").
Client acknowledges that Client and/or its affiliates (i) are the controller(s)
of any Client, affiliate, or third party data or databases accessed and/or
processed by Andersen in the course of performing the Services, including, but
not limited to, data relating to individuals (the "Data"), and (ii) will be
solely responsible to third parties for such Data, including, but not limited
to, the individuals to whom the Data relate and Client and affiliate personnel.
Client represents and warrants to Andersen that all Data processing and
transfers between Client and its affiliates on the one hand and Andersen on the
other hand have been and will be conducted in full compliance with any laws or
regulations applicable to the protection of data.
Notwithstanding the scope of Andersen's services or deliverables hereunder,
Client acknowledges that it remains Client's responsibility to devise and
maintain a system of internal accounting controls [in compliance with Section
13(b)(2) of the U.S. Securities Exchange Act of 1934, which Section provides
that such controls be] sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary (a) to permit
preparation of financial statements in conformity with generally accepted
4
accounting principles or any other criteria applicable to such statements, and
(b) to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. [In addition, Client represents and warrants to Andersen that
Client's management: (1) has acknowledged such responsibility in writing to its
audit committee or, if no such committee exists, then to its board of directors
or, if Client has neither an audit committee nor a board of directors, then to
the audit committee or board of directors, as applicable, of any entity that
controls Client or, alternatively, (2) will, upon execution, provide a copy of
this Statement of Work to the foregoing committee or board, as applicable.]
Client will determine the adequacy of its internal accounting controls and
financial reporting systems without relying on Andersen's services or
deliverables as the primary basis for making such determination. Finally, Client
acknowledges to Andersen that it is Client's responsibility to make such
disclosures with respect to this engagement that are required by applicable laws
and regulations.
Project Assumptions
The project assumptions include the following:
o Andersen is not responsible in any way for the selection of the new ERP
system J.D. Edwards.
o The implementation planning project will start on December 10, 2001.
o The implementation planning project will assume an operational
enterprise-wide financial, distribution and demand planning system by
August 1st, 2002.
o Andersen and HIG will perform as project managers. HIG will provide a
full-time project manager.
o HIG will provide the project teams secure dedicated office space with
telephone and analog line access, located in close proximity to key HIG
personnel.
Andersen's delivery of the Services and the fees charged are dependent on (i)
the Client's timely and effective completion of the Client Responsibilities,
(ii) the accuracy of the Assumptions, and (iii) timely decisions and approvals
by Client's management. Client shall be responsible for any delays, additional
costs, or other liabilities caused by or associated with any deficiencies in the
Client Responsibilities and Assumptions.
Project Approach
The overall approach for completing the work specified or described in this
arrangement based on the Solution Scoping Phase of Proactive Xe Solutions
Methodology to meet the project objectives for the scope listed previously. This
framework is Andersen's proprietary JD Edwards specific business integration
methodology, and has been adapted to meet the objectives of this engagement.
5
[SCOPING AND PLANNING TIMELINE CHART]
Staffing
The following Andersen resources shall be assigned to the implementation
planning project. Additional Andersen resources may be involved as necessary.
o Stephen Engel - Project Partner
o Shawn Permann - Project Manager
o Steve Bellas - Sales and Customer and Project co-lead
o John Hallin - Sales and Customer co-lead
o Bob Whalen - Financial Lead
o David Siu - Technical Lead
o Bryan Fornadel - Supply Chain Lead
o Regina Kinslow - Supply Chain Support
o Mark Kocis - Change Management Lead
6
Fees & Expenses
We estimate the project will be completed on December 28, 2001 with a Phase 2
targeted start date of January 2, 2002.
Andersen's fees for the scope of Services described in this Statement of Work
will be based upon actual time and materials at a substantially discounted rate
with a not-to-exceed limit of $110,000, plus out of pocket expenses. Our fees
are based on an average rate of $178 per hour.
Further to these fees, J.D. Edwards Resources for the CNC implementation and
configuration will be required. This will be identified and addressed in a
change order.
This fee is based on Client fulfilling the Client Responsibilities and
Assumptions described in this Statement of Work. Andersen will bill Client
$50,000 at the beginning of the project (December 10th) and Andersen will bill
the client at the end of the project (January 2, 2002) for any remaining fees
plus all incurred expenses.
Andersen will be reimbursed by Client for reasonable out-of pocket expenses
(including transportation, hotels, meals, etc.) incurred as a result of
Andersen's performance of Services. Andersen agrees to use reasonable efforts to
limit travel and lodging expenses by using coach air fare, booking in advance
when available, staying at hotels identified by Client offering corporate rates,
and sharing mid-size rental cars where practical. Invoices are due upon
presentation. Should any invoice remain unpaid for more than 21 days, interest
shall be paid at a rate of 1.5% per month. Any taxes arising out of this
arrangement other than those on Andersen's net income shall be Client's
responsibility.
Change Order Process
During the project described in this Statement of Work, Client may request, in
writing in a form substantially similar to Andersen's standard form of change
request, additions, deletions, or modifications to the scope or nature of the
Services described in this Statement of Work (all referred to hereinafter as
"Changes"). Andersen shall have no obligation to, and shall not, commence work
in connection with any Change until the fee and/or schedule impact of the Change
is agreed upon in a written change order signed by both Andersen and Client.
Upon a request for a Change, Andersen shall submit a proposal to Client on
Andersen's standard change order form (or in a form substantially similar to
Andersen's standard change order form attached hereto) describing the Changes,
including, as applicable, the impact of such Changes on schedule and fees and
expenses. Within 5 days of receipt of the proposed change order, Client shall
either indicate its acceptance of the proposed Changes by signing the change
order or advise Andersen not to perform the Changes, in which event Andersen
shall proceed with the original Services. The foregoing notwithstanding, if
Andersen, at the written request of Client, performs work that is not covered by
this Statement of Work or that exceeds the scope of Services described in this
Statement of Work, such work shall be deemed Services provided pursuant to this
Statement of Work, for
7
which Client shall compensate Andersen at the same rates as those described
under Fees & Expenses above or, in the case of a fixed fee engagement, at the
rates used in calculating such fixed fee.
8
We appreciate the opportunity to be of service to you and look forward to
working with you on this challenging project. You can be assured that it will
receive our close attention. Please indicate your agreement to these
arrangements by signing and returning to Andersen the enclosed copy of this
Agreement.
Very truly yours,
ARTHUR ANDERSEN LLP
By: /s/ STEPHEN ENGEL
-----------------------------------
Stephen Engel
Attachments: Business Consulting Standard Business Terms
Business Consulting Statement of Work Standard Change Order Form
Acknowledged and Accepted:
Home Interiors and Gifts, Inc.
By: /s / KENNETH CICHOCKI
---------------------------
Title Senior Vice President
---------------------------
Date 12/20/01
---------------------------
9
BUSINESS CONSULTING
STANDARD BUSINESS TERMS
These Business Consulting Standard Business Terms ("Terms") shall govern the
Services provided by Arthur Andersen LLP ("Andersen") as set forth in the
Statement of Work executed by Client and Andersen to which these Terms are
attached. These Terms, together with the Statement of Work, constitute the
entire understanding and agreement between Client and Andersen with respect to
the Services described in the Statement of Work ("Agreement"), supersede all
prior oral and written communications, and may be amended, modified or changed
(including changes in scope or nature of the Services or fees as described
under Change Order Process in the Statement of Work) only in writing when signed
by both parties. If there is a conflict between these Terms and the terms of any
Statement of Work, these Terms shall govern.
SECTION 1. FEES, EXPENSES
Client shall pay Andersen the professional fees and the related expenses in
accordance with the Statement of Work.
SECTION 2. CLIENT RESPONSIBILITIES
As a prerequisite to Andersen's delivery of Services, Client shall (i) fulfill
the Client Responsibilities and ensure that all Assumptions are accurate; (ii)
provide Andersen with reliable, accurate and complete information, as required;
(iii) make timely decisions and obtain required management approvals; and (iv)
furnish Andersen personnel with a suitable office environment and adequate
resources and supplies, as needed. In addition, Andersen shall be entitled to
rely on all Client decisions and approvals made independently of this Agreement
and/or prior to its execution by the parties. Nothing in this Agreement shall
require Andersen to evaluate, advise on, modify, confirm, or reject such
decisions and approvals, except as expressly agreed to in the Statement of Work.
SECTION 3. CONFIDENTIALITY
With respect to this Agreement and any information supplied in connection with
this Agreement and designated by the disclosing party as confidential, the
recipient agrees to: (i) protect the confidential information in a reasonable
and appropriate manner or in accordance with applicable professional standards;
(ii) use confidential information only to perform its obligations under this
Agreement; and (iii) reproduce confidential information only as required to
perform its obligations under this Agreement. This section shall not apply to
information which is (i) publicly known, (ii) already known to the recipient;
(iii) disclosed to a third party without restriction; (iv) independently
developed; or (v) disclosed pursuant to legal requirement or order. Subject to
the foregoing, Andersen may disclose Client's confidential information to its
subcontractors and affiliates, provided that such parties agree to abide by the
terms of this Section 3.
SECTION 4. DELIVERABLES
Client may, solely for its internal business purposes, use, copy, distribute
internally, and modify the deliverable items specifically described in the
Statement of Work (the "Deliverables"). Except as set forth in this Section 4,
Client shall not, without Andersen's prior written consent, which shall not be
unreasonably withheld, disclose to a third party (other than subcontractors,
affiliates and agents of Client related to this project) or publicly quote the
Deliverables. Andersen shall retain all right, title and interest in and to: (i)
the Deliverables, including but not limited to all patent, copyright, trademark
and other intellectual property rights therein; and (ii) all methodologies,
processes, techniques, ideas, concepts, trade secrets and know-how embodied in
the Deliverables or that Andersen may develop or supply in connection with this
Agreement (the "Andersen Knowledge"). Subject to the confidentiality
restrictions contained in Section 3, Andersen may use the Deliverables and the
Andersen Knowledge for any purpose. Client may allow third parties to access the
Deliverables for any purpose relating to the ordinary business operations of
Client; provided that nothing in this sentence shall allow Client to sublicense
the Deliverables to any such third party.
SECTION 5. ACCEPTANCE
Client shall accept Deliverables which (i) conform to the requirements of the
Statement of Work or (ii) where applicable, successfully complete an acceptance
test plan to which Client has agreed. Client will promptly give Andersen
notification of any non-conformance of the Deliverables with such requirements
("Non-conformance"), and Andersen shall have a reasonable period of time, based
on the severity and complexity of the Non-conformance, to correct the
Non-conformance, but in no event shall the period of time be longer than that
which would be required for the Andersen staffing identified in the Statement of
Work to correct the Non-conformance working full-time. If Client uses the
Deliverable before acceptance, fails to promptly notify Andersen of any
Non-conformance, or unreasonably delays the beginning of acceptance testing,
then the Deliverable shall be considered accepted by the Client.
SECTION 6. WARRANTY
(a) Andersen warrants that the Services shall be performed with reasonable care
in a diligent and competent manner. Andersen's sole obligation shall be to
correct any non-conformance with this warranty, provided that Client gives
Andersen written notice within thirty (30) days after the Services are performed
or successful completion of the acceptance test plan, if applicable.
(b) Andersen does not warrant and is not responsible for any third party
products or services. Client's sole and exclusive rights and remedies with
respect to any third party products or services are against the third party
vendor and not against Andersen.
(c) THIS SECTION 6 IS ANDERSEN'S ONLY WARRANTY CONCERNING THE SERVICES AND ANY
DELIVERABLE,
1
AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS,
EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE.
SECTION 7. RISK ALLOCATION
(a) Excluding claims for indemnification under Section 7(c), Andersen's total
liability relating to this Agreement shall in no event exceed the fees Andersen
receives hereunder for the portion of the work giving rise to liability, or
include any special, consequential, incidental or exemplary damages or loss (nor
any lost profits, savings or business opportunity Excluding claims for
indemnification under Section 7(b), Client's total liability relating to this
Agreement shall in no event exceed the fees due to Andersen hereunder.
(b) As Andersen is performing the Services solely for the benefit of Client,
Client will indemnify Andersen, its affiliates and their partners, principals
and personnel against all costs, fees, expenses, damages and liabilities
(including defense costs) associated with any third party claim, relating to or
arising as a result of the Services, Client's use of the Deliverables, or this
Agreement, but excluding claims relating or arising as a result of the solely
negligent or willful acts or omissions of Andersen's personnel or agents in
performing the Services.
(c) Andersen will indemnify Client against any damage or expense relating to
bodily injury or death of any person or damage to real and/or tangible personal
property incurred while Andersen is performing the Services and to the extent
caused by the negligent or willful acts or omissions of Andersen's personnel or
agents in performing the Services.
(d) The provisions of this Section 7 are intended to apply in all circumstances,
regardless of the grounds or nature of any claim asserted (including contract,
statute, any form of negligence, whether of Client, Andersen, or others, tort,
strict liability or otherwise) and whether or not the party seeking
indemnification was advised of the possibility of the damage or loss asserted,
to the extent not contrary to applicable law.
(e) Any action against Andersen must be brought within twenty-four (24) months
after the cause of action arises.
SECTION 8. PERSONNEL
(a) While Andersen shall attempt to comply with Client's request for specific
individuals, Andersen shall be responsible for assigning and re-assigning its
personnel, as appropriate, to perform the Services; however, unless Client
agrees otherwise, Andersen shall assign the individuals identified in the
Statement of Work to perform the Services, unless such individuals are no longer
employed by or are unable to perform services for Andersen.
(b) During the term of this Agreement and for a period of twelve (12) months
following the expiration or termination thereof, neither party will actively
solicit the employment of the personnel of the other party involved directly
with providing Services hereunder.
SECTION 9. TERMINATION
(a) This Agreement may be terminated at any time by either party upon fifteen
(15) days written notice to the other.
(b) Client shall pay Andersen for all Services rendered and expenses incurred as
of the date of termination.
(c) Except for matters related to confidentiality or intellectual property
rights, the parties shall first attempt to resolve any dispute or alleged breach
internally by escalating it through management and, prior to pursuing
litigation, use a mutually acceptable alternative dispute resolution process.
SECTION 10. GENERAL
(a) Neither party shall use the other party's name, trademarks, service marks,
logos, trade names and/or branding without such party's prior written consent
(b) Neither party shall be liable for any delays or failures in performance due
to circumstances beyond its reasonable control.
(c) This Agreement may not be assigned or otherwise transferred by Andersen
without the prior express written consent of the Client, which shall not be
unreasonably withheld. Andersen may assign this Agreement to an affiliate of its
international organization or use subcontractors to provide Services.
(d) Any notices given pursuant to this Agreement shall be in writing, delivered
to the address set forth in the Statement of Work, and shall be considered given
when received.
(e) No term of this Agreement shall be deemed waived, and no breach of this
Agreement excused, unless the waiver or consent is in writing signed by the
party granting such waiver or consent.
(f) If any term or provision of this Agreement is determined to be illegal or
unenforceable, such term or provision shall be deemed stricken, and all
other terms and provisions shall remain in frill force and effect.
(g) This Agreement does not make either party an agent or legal representative
of the other party, and does not create a partnership or joint venture. Both
parties are independent contractors and principals for their own accounts.
(h) Sections 3 through 10 of these Terms shall survive the expiration or
termination of this Agreement.
(i) The laws of the State of Texas shall govern this Agreement
(j) Client acknowledges that: (i) Andersen and Client may correspond or convey
documentation via Internet e-mail unless Client expressly requests otherwise,
(ii) neither party has control over the performance, reliability, availability,
or security of Internet e-mail, and (iii) Andersen shall not be liable for any
loss, damage, expense, harm or inconvenience resulting from the loss, delay,
interception, corruption, or alteration of any Internet e-mail due to any reason
beyond Andersen's reasonable control.
2
BUSINESS CONSULTING
STATEMENT OF WORK
CHANGE ORDER NUMBER ____
[date]
[Client contact name]
[complete legal name of Client entity]
[Client address]
Dear [Client contact name]:
This Change Order, including any appendices, schedules, and/or attachments,
documents changes to the Statement of Work between Arthur Andersen LLP
("Andersen") and [Client's complete legal name] ("Client") dated ______________,
200_, including any prior Change Order(s) or amendments thereto (the "Statement
of Work"). This Change Order constitutes the entire understanding and agreement
between Client and Andersen with respect to such changes, supersedes all prior
oral and written communications with respect to such changes (including, but not
limited to, written change requests), and may be amended, modified or changed
only in writing when signed by both parties. The section(s) of the Statement of
Work set forth below is/are hereby amended, effective as of the date first
written above, by adding at the conclusion of the respective section(s) the
following text:
Project Scope and Objectives
Andersen Services and Responsibilities
Deliverables
Acceptance
Client Responsibilities
Project Assumptions
1
Project Approach
Staffing
Fees & Expenses
Except as expressly modified herein, all other terms and conditions of the
Statement of Work and the Business Consulting Standard Business Terms remain
unchanged. Please indicate your agreement to these arrangements by signing and
returning to Andersen the enclosed copy of this Change Order.
Very truly yours,
ARTHUR ANDERSEN LLP
By:
-----------------------------
Stephen Engel
Acknowledged and Accepted:
Home Interiors and Gifts, Inc.
By:
-----------------------------
Title:
-----------------------------
Date:
-----------------------------
2
[ARTHUR ANDERSEN LLP LETTERHEAD]
BUSINESS CONSULTING
STATEMENT OF WORK
January 10, 2002
Mr. Ken Cichocki
Chief Financial Officer
Home Interiors and Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007
Dear Mr. Cichocki:
This Statement of Work, including any appendices, schedules, and/or attachments,
documents the understanding between Arthur Andersen LLP ("Andersen") and Home
Interiors and Gifts, Inc. ("HIG") with respect to certain services to be
performed by Andersen related to the implementation of HIG's ERP system, using
as a foundation the J. D. Edwards Financial, Distribution and Demand Planning
software. ("Services"). Andersen shall provide the Services pursuant to the
provisions of this Statement of Work and Business Consulting's Standard Business
Terms which, together, describe our understanding with respect to the Services
("Agreement").
Project Scope and Objectives
In addition to the ERP implementation planning project (Phase I), We understand
that the objective for the next phase (Design-Phase II) is for Andersen to
assist HIG in the Design and configuration of the ERP system, using as a
foundation, the J.D. Edwards (JDE) system solution. Andersen will provide
consulting and project management services for the ERP system Design project.
The scope of this project is to configure and prepare the following JDE modules
for the implementation phase (Phase III):
o General Ledger
o Financial Planning and Budgeting
o Financial Reporting
o Multi-Currency
o Address Book
o Accounts Receivable
o Accounts Payable
o Supplier Management
o Procurement
o Inventory Management
o Demand Planning
o Requirements Planning - MRP
o Sales Order Management
o Advanced Pricing
o Standard Workflow Processes for the above modules
The JDE Modules (or module components) that are not included in the scope for
the Design effort include:
o Electronic Burst & Bind
o Cash Basis Accounting
o Time Accounting
o Fixed Assets
o Multi-Site Consolidation
o Basic Equipment Management
o Requirements Planning
o Enterprise Facility Planning
o Advanced Forecasting
o Quality Management
o Advanced Stock Valuation
o Bulk Stock Management
o Advanced Warehouse Management
o Work Orders/Service Billing/Work Order Management
o Transportation Management
o Job Costing
o Change Management
o Contract Billing/Contract Management/Subcontract Management
o Property Management
o Call Management
o Payroll Processing/Time Accounting
o Human Resources Management/Human Resources Benefits
o Bulk Stock Management
o ECS Sales Order Management
o Load & Delivery Management
o Manufacturing Suite except for MRP
2
The processes that are considered in-scope include:
CUSTOMER & SALES
o New Account Setup
- Enter and Validate New Displayer Accounts
- Manage Displayer Accounts
o Determine Item Pricing
- Utilize and maintain item price lists
o Develop and Setup Pricing and Promotion Programs
- Displayer group discounts
- Item group discounts
- Develop and maintain ordinal order promotions (1st order, 2nd order)
- Free goods
- Develop and maintain contest promotions
- Develop and maintain "nuggets" or certificate promotions
- Freight pricing
- Bonus buys
- Kit pricing
o Enter and Process Merchandise Orders
- Enter merchandise order
- Validate system processing capability and speed (overnight process)
- Process merchandise orders
- Consolidate orders
- Validate order criteria (min $, credit, account status)
- Apply super bubble
- Process "ship-with" orders
- Process direct ship order
- Process Canadian display order
- Process Mexico order
- Determine tax on order
- Process invoices for merchandise orders
o Enter and Process Service Orders
o Order Hold Processing
3
o Enter and Process Credit Invoices
o Enter and Process Service Orders
o Order Hold Processing
o Enter and Process Manual Orders
o Enter and Process Credit Invoices
o Create Customs Documents
o Payment Processing
- Cash Payments
- Non Cash Payments
- Process NSF Payments
o Periodic Processing
- Close Accounts
- Freight Route Changes
- Credit Limit Review
- Print Statements
o Extract Data for Other Systems (i.e. Commissions)
o Marketing Mailings
SUPPLY CHAIN
o Demand Planning
o Develop New Products
- Initiate New Products
- Product Review Committee Meeting
o Forecast Detail Information
- Product Stratification
- Develop Sales Forecasting Process
4
o Procurement
o Procure Items
- MRP Planning Parameters
- Run MRP to create Purchase Orders
- Procure items according to forecast needs, and MRP messages
o Procure MRO/Stores Supplies
- Process requisitions
- Generate/Maintain Purchase Orders according to set Min/Max levels
- Select and Set up Vendors
o Reporting and Inquiry
- Regulatory Reporting
o Interface
- Support interface from ERP to WMS (EXE)
o Inventory Management
o Master Data
- Maintain Item Master Information
- Maintain Vendor Information
o Item Maintenance
- Maintain Item Availability
FINANCE
o Budgeting & Forecasting
- Develop and Consolidate Budget
- Develop and Consolidate Forecast
- Treasury Management
o General Ledger
- Develop Organizational Entity Structure/Departmental Structure
- Develop Chart of Accounts/Reporting Hierarchies
- Process Manual Journals
- Process Interfaced T/B Journals
- Process Intercompany Transactions
- Process Allocations
5
- Process Multi-Currency - Translation/Revaluation
- Fiscal Period Processing
- System Close
o Reporting and Consolidation
- Consolidate and Publish Financial Reports
- Regulatory Reporting
o Sales Accounting, Credit, and Collections
- Credits and Adjustments
- Collections Management
- Customer Correspondence
- Cash Receipt/Application/Lockbox
- Tax Processing
- Multi-currency Processing
- Fiscal Period Processing/Reporting
o Accounts Payable
- Maintain Vendor Information
- Manual Invoice Processing
- Payment Processing
- Displayer Payments (1099's & Commissions)
- Tax Processing
- Multi-currency Processing
- Fiscal Period Processing/Reporting
The scope includes the design of the following reports:
o 9 High complexity custom reports
o 9 Medium complexity custom reports
o 9 Low complexity custom reports
The scope includes the design and preliminary specifications for the following
modifications:
o Financial - AR
- Automatically placing orders on hold based on credit and collection
status
- NSF Check auto update
- Credit and collections updates for help loans and payment plans
- Automatically increase or decrease credit line
6
o Financial - AP
- Non-cash 1099 information
o Financial - Tax
- Sales Tax Calculation (retail vs. wholesale)
o Customer and Sales
- Pricing rules not covered in advanced pricing
- Order pre-process sort routine
- New customer account defaults and validations
The scope includes the design and definition of approach for each of the
following conversions (with estimated records):
o Master Data Conversion -- Customer and Sales
- Customer Master -- 180,000 Records
o Master Data Conversion -- Supply Chain
- Vendor Master -- 500 Records
- Supplier/Item Information -- 2000 Records
- Open Purchase Order Header -- 100 Records
- Open Purchase Orders Detail -- 100 Records
- Transportation Carriers -- 100 Records
- Open Receipts -- 500 Records
- Item Master/Item Branch -- 2000
- Warehouse Locations -- 1
- Units of Measure (standard, conversions) -- 20 Records
- Item Cross-Reference -- 500 Records
- Finished Goods Inventory -- 2000 Records
- Stores Inventory -- 500 Records
- Item Cost -- 2000 Records
o Master Data Conversion -- Finance and Accounting - GL
- Chart of Accounts -- 10,000 Records
- Companies -- 15 Records
- Business Units -- 50 Records
- Accounting Periods -- 17 Records
o Master Data Conversion -- Finance and Accounting - AR
- Sales/Use Tax Tables/VAT -- 10,000 Records
- Customer Payment Terms -- 50 Records
7
- Dunning Letter Information -- N/A
- Bank Payment tables -- 15 Records
o Master Data Conversion -- Finance and Accounting -- AP
- AP Payment Terms -- 50 Records
- UDC's (Tax Explanation Codes, Special Handling Codes, 1099 Processing
Codes, Bank Type Codes) -- 30 Records
- Tax Setup (Sales/Use/VAT) -- 10 Records
- ACH Bank Information -- 80,000 Records
o Historical Data Conversion -- Finance and Accounting -- GL
- Conversion of GL history (Current & PY balances) -- 1000 Records
- Conversion of Budget history (Current & PY balances) -- 1000 Records
- Conversion of Forecast history (Current & PY balance) -- 1000 Records
o Historical Data Conversion -- Finance and Accounting -- AR
- Customer History -- TBD
- Open AR -- up to 80,000 Records
- Sales Tax History -- TBD
- Payment Details -- TBD
o Historical Data Conversion -- Finance and Accounting -- AP
- AP Invoice History -- TBD
- AP Open Invoices -- 200 Records
- AP Payment History -- TBD
o Historical Data -- Supply Chain
- Item History -- Up to 3 years
- Sales History -- Up to 3 years
- Forecasts -- Up to 3 Years
The scope includes the design and preliminary specifications for the following
interfaces (including the estimated complexity):
o Finance and Accounting
- Positive Pay interface with Bank One -- High Complexity
- Sales tax interface with 3rd party (Vertex or Tax Ware) -- High
Complexity
- HR interface to JDE (Abra) -- Medium Complexity
- 4th Shift (Enterprise system for sub's) -- Low Complexity
- Fox Pro (system for Mexico) -- Low Complexity
- ACH Payment Interface -- Medium Complexity
8
o Customer and Sales
- IOE - Internet Order Entry -- High Complexity
- Order Scanning -- Medium Complexity
- Invoice Mailing -- High Complexity
- DIR - Interactive Voice Response -- High Complexity
- Address Standardization -- Low Complexity
- Data Warehouse -- Medium Complexity
- Commissions custom application -- High Complexity
- Data Warehouse with HomcoSoft -- High Complexity
o Supply Chain
- EXE (WMS) -- High Complexity
- District and Branch Directors Contract application -- High Complexity
- Inventory Database and Application for Mexico trailer shipping and
invoices -- High Complexity
- Product Development Brochure/Photo Application -- High Complexity
The scope does not include the design and/or configuration of any third party
tax programs such as:
o Tax Ware or
o Vertex
Geographically the scope includes:
o HIG Headquarters in Carrollton, Texas
o HIG Distribution Center in Carrollton, Texas
Andersen Services and Responsibilities
The project services and responsibilities will include the following:
Andersen will work with the HIG personnel to assist in the following activities
by leveraging our experience, tool sets and methodology from similar projects:
PHASE II -- DESIGN -- This phase is focused on designing the application
configuration based on the business requirements, the to-be processes and the
testing of those designs. It is also focused on the requirements specific to
conversions, interfaces and modifications. Key activities for this phase of work
are:
o Hardware/Software Configuration - Design System Requirements
o Technical/CNC Design Workshop - Design Security, Menus and CNC
9
o Process Design Workshops - Design Revised (To-Be) Key Business Procedures
o Application Design Workshops -- Application Design and Set-up
o Report and Form Workshops - Functional and Reporting Analysis
o Interface Design Workshops - Specify Interface Requirements and Priorities
o Data Conversion Design Workshops - Specify Conversion Requirements and
Priorities
o Enhancements Design Workshops - Specify Modification Requirements and
Priorities
o Prototype (Modular & Integrated CRP) - Application Design and Set-up
o Finalize Design Specification
o Procedures/Training Design Workshop
o Organizational Change Management
o Quality Design Reviews
o Overall Project Management
o Development of Implementation Plan and Resource Estimates
PROJECT PLANNING AND MANAGEMENT -- The purpose of this component is to provide
leadership, guidance and structure to the project team. Additionally, the
project managers will work to remove obstacles and barriers to progress and
insure stability in the implementation process. The project managers will also
be responsible for developing a strong team environment where open communication
is encouraged. Key activities for this component are:
o Daily Project Management
o Internal Project Communications
o Conduct Status Meetings and Prepare Status Reports
o Conduct Steering Committee Meetings
o Manage Project Team Roles & Responsibilities
o Coordination of Deliverables
o Project Team Training/Orientation
o Scope and Change Management
o Manage Project Calendar and schedules
ORGANIZATIONAL CHANGE MANAGEMENT -- This component is focused on the people
aspect of the implementation: Internal and external project communications,
training design and approach, and defining and measuring critical success
factors. Key activities for this component are:
o Plan and execute communications
o Manage project change
o Conduct organization communication meetings
o Celebrate milestone accomplishments
o User audience segmentation and data gathering
o User involvement strategy
o Leadership involvement strategy
10
o Change readiness/risk assessment
o Application user procedures
o Technical user procedures
o Training strategy and approach
o ERP/Implementation KPI's
EXECUTIVE REPORTING -- This sub-team is focused on the identification of the
reporting requirements for the executive management team and the creation of the
approach and specifications to meet those requirements. This team will review
the current reporting approaches, data sources, toolsets used, and resource
requirements and then, based on the proposed system changes, develop the
approach for the fixture to meet these same requirements. Andersen's role will
be limited to providing support and guidance to the HIG team lead by providing
templates, recommending approaches and tasks, as well as providing subject
matter expert support on JDE data tables, the application development toolset
and the JDE Enterprise Report Writing tool. Key activities for this sub-team
are:
o Review High-Level Report and Form Requirements
o Finalize As-Is Report and Form Matrix (if needed)
o Develop Report and Form Approach
o Determine Report and Form Development Tool
o Finalize To-Be Report and Form Matrix
o Create Non-Standard Report and Form Design Documents
COMMISSIONS SYSTEM -- This sub-team is focused on the identification of the
requirements for the development of a custom system that would support the
management (generation, tracking, reporting, etc.) of the commission payments
made to the independent Displayers. This team will review the business
requirements; develop the businesses specifications and the technical
specification during the design phase and begin development. Andersen's role
will be limited to the management over-sight relative to the integration and
dependency on the J. D. Edwards system design effort and (jointly with HIG) the
design and specification for the integration with the JDE platform. Key
activities for this team are:
o Develop Business Requirements
o Determine Development Toolset
o Identify Business and Technical Resources
o Develop Technical Specifications
o Begin Development
Deliverables
Andersen, working with the HIG personnel, will produce the following
deliverables:
11
o Project Team Roles and Responsibilities
o Project Work plan
o Project Contact List
o Project Calendar
o Sign-Off Matrix
o Project Issue Database
o Project Documentation Standards
o Time and Expense Tracking Spreadsheet
o Project Team Goals and Expectations
o Project Kick-off Presentation
o Quality Assurance Approach
o Risk Assessment and Mitigation Plan
o Technical Environment Approach
o Technical Environment Scrub Checklist
o Connectivity Approach
o Overall Security Approach
o Security Matrix
o User Menu Design
o Object Control Approach and Standards
o Job Queue Requirements
o Automatic Jobs
o Backup and Recovery Approach
o As-Is Process Flows (if needed)
o Overview of Best Practices
o Design Workflows for Processes, Activities, and Tasks
o Detailed Application Requirements & Approach Matrix
o Application Design Documents
o As-Is Report and Form Matrix (if needed)
o Report and Form Approach
o To-Be Report and Form Matrix
o Non-Standard Report and Form Design Documents
o Interface Approach
o Preliminary Interface Design Specifications
o Data Conversion Approach
o Preliminary Data Conversion Design Specifications
o Reconciliation Report List
o Data Conversion Mapping Tables
o Enhancement Approach
o Preliminary Enhancement Design Specifications
o CRP Approach
12
o CRP Scripts
o CRP Configuration
o CRP Test Data
o CRP Results
o User Procedures and Training Approach
o User Procedures Template and Guidelines
o List of users with supporting data
o User involvement strategy; Resource summaries
o Leadership involvement strategy
o Change readiness/risk assessment
o Application user procedures formats/templates
o Technical user procedures formats/templates
o Training strategy/approach; Training design formats/templates
o ERP Business Benefits document
o Design Phase QA Checklist
o J.D. Edwards Design Review
o Detailed Implementation Work plan and resource estimates
Staffing
The following individuals shall be assigned to the engagement from Arthur
Andersen:
o Stephen Engel -- Engagement Partner
o Sharon Stufflebeme -- Quality Assurance Partner
o Bob Newsbaum -- Quality Assurance Partner
o Shawn Permann -- Project Manager
o John Hahn -- Customer and Sales Team Lead
o Steve Bellas -- Customer and Sales Team Lead (interim)
o Bob Whalen -- Financials Team Lead
o Bryan Fornadel -- Supply Chain Team Lead
o Mark Kocis -- Organizational Change Team Lead
o David Siu - Development Team Lead
o TBD -- Executive Reporting Team Support
o Kristy Kimberling -- Customer and Sales Team Consultant
o Britt-Louise Andermo -- Financials Team Consultant
o Regina Brodun -- Supply Chain Team Consultant
o Carol Pearson Organizational Change Team Consultant
o TBD (Third Party Subcontractors ) -- Developers (JDE Toolset)
o Cheryl Ostor (Third Party Subcontractor) -- Supply Chain Team
Application Consultant
o TBD (Third Party Subcontractor ) -- Supply Chain Team Technical
Consultant
13
TEAM ORGANIZATIONAL STRUCTURE
[TEAM ORGANIZATIONAL STRUCTURE CHART]
Andersen Roles
PROJECT PARTNER
The project partner ensures overall project success and client satisfaction. The
partner maintains the executive level relationships and keeps all communication
lines open between key client sponsors and Andersen. This individual is
ultimately accountable for the project and has a high-level decision making
capability. Responsibilities include:
o Supports timely resolution of major business issues
o Ensures resources are available for success of the project
o Ensures the project is adequately staffed
14
o Respond to on-going status reports to remove/resolve road blocks for
the project
QUALITY ASSURANCE
The quality assurance representatives are responsible for ensuring quality work
products. Responsibilities include:
o Provides expertise and overall direction to the implementation team
o Monitors and supports the overall engagement relationship and resolves
issues and conflicts
o Implement and manage ExCEED Process
o Implement and manage Quality Assurance Process
PROJECT MANAGER -- SHARED ROLE
The project manager is responsible for planning and assigning project work,
participating in group discussions, and ensuring all deliverables are produced
on time and with the desired quality. The project manager is ultimately
responsible for all project responsibilities assigned to other project team
members and for coordinating resolution of issues. Responsibilities include:
o Determines project objectives, schedules, and resource budgets
o Monitors results, performance, and resource expenditures against
targets
o Controls all project changes
o Compiles project progress and status reports
o Maintains customer contact and momentum
o Determines specific project tasks and how they will be accomplished
o Ensures that assigned tasks are performed in accordance with the
established standards and are completed on time and within budget
o Resolves outstanding issues and action items
o Reviews all system modifications with the executive sponsors
FUNCTIONAL TEAM LEAD
The functional team lead is responsible for leading the functional team members
Through the design to support HIG's process vision and business requirements.
Responsibilities include:
o Ensures consistency and a high level of quality
o Ensures deliveries are completed on time with appropriate functional
approval and quality
o Guides the functional team in effectively translating functional
requirements into configuration options and solutions
o Identifies and assists in resolving issues and conflicts
o Leads functional team in change initiatives
o Responsible for transferring application configuration and
implementation methodology knowledge to the Systems Analysts/Business
System Analysts
o Supervises the application consultant
15
o Validates customizations to the standard JDE business processes,
explains the impact of the customizations on other processes and
transactions, executes the detail design and configuration of the JDE
system
o Assists in validation of the design of reports, forms, interfaces,
modifications and conversions
o Assists in developing CRP scripts and expected results
o Executes CRP testing. This includes making changes in configuration
based on results and resolving errors
o Validates the procedures and system tasks documented by the end user
training and development team
DEVELOPMENT TEAM LEAD
The development team lead is responsible for leading the development team
members though the design to support HIG's process vision and business
requirements. Responsibilities include:
o Gains a clear understanding of business requirements and processes
o Attends project/JDE tools training with client developers
o Develops draft material in preparation of work sessions
o Oversees the development the interface, modification and conversion
design during the design phase of the project
o Documents requirements, process changes and unresolved issues during
client work sessions in conjunction with business area analysts
o Actively works with business area analysts to ensure customization of
JDE software is minimal
o Guides the development team though the design of technical approaches
and specifications for the interfaces, conversions and modifications
o Oversees the Designs and modifies JDE software based on user
requirement specifications
o Oversees the design, development and testing of custom reports
o Assist with the design, development and testing of standard reports
DEVELOPERS (3RD PARTY)
The development team is responsible for working with the HIG developers to
understand the business requirements and begin developing the approach and
specifications for the development of the interfaces, conversions, and
modifications. Andersen will directly manage these 3rd party resources.
Responsibilities include:
o Gains a clear understanding of business requirements and processes
o Jointly develops the interface, modification and conversion design
during the design phase of the project
o Documents requirements, process changes and unresolved issues during
client work sessions in conjunction with business area analysts
o Actively works with business area analysts to ensure customization of
JDE software is minimal
16
o Develops the design of technical approaches and specifications for the
interfaces, conversions and modifications
o Jointly with HIG developers, designs and modifies JDE software based
on user requirement specifications
APPLICATION CONSULTANTS
The application consultant plays a combined functional and technical role with
heavy emphasis on knowledge transfer and translating functional requirements
into specific features and tailoring options. Each functional team's Application
Consultant works with the other functional team members to design and configure
the JDE system to support the HIG's "To-Be" process vision and business
requirements. Responsibilities include:
o Responsible for transferring application configuration knowledge to
the Systems Analysts/Business Analyst
o Assists the Functional Leads and functional team in effectively
translating functional requirements into configuration options and
solutions
o Validates customizations to the standard JDE business processes,
explains the impact of the customizations on other processes and
transactions, executes the detail design and configuration of the JDE
system
-- Assists in validation of the design of reports, forms,
interfaces, modifications and conversions
-- Assists in developing CRP scripts and expected results
-- Executes BPS testing. This includes making changes in
configuration based on results and resolving errors
-- Validates the procedures and system tasks documented by the end
user training and development team
ORGANIZATIONAL CHANGE MANAGEMENT LEAD -- SHARED ROLE
The change lead is responsible for communicating and managing the change efforts
associated with the implementation. Responsibilities include:
o Works closely with the functional and technical teams to understand
organizational requirements and design approach on user procedures and
training manuals
o Documents and communicates organizational change requirements and
decisions to the appropriate managers so they can effect the changes
in their departments
o Communicates project progress and important enterprise change
decisions to the entire company
o Develops the training strategy and determines best practice for
delivery of training
o Determines proper medium for training (e.g., classroom, self-paced
tutorial, train-the-trainer approach, Intranet, etc.)
o Determines the target training participants and the training needs
depending on the work responsibility of that user
17
TECHNICAL SUPPORT FOR DEMAND PLANNING INSTALLATION (3rd party)
This resource will be responsible for supporting the HIG technical team with the
set-up and installation of the Demand Planning software. Key activities include:
o Define technical environment requirements
o Develop installation plan
o Oversight of the installation process
o Documentation related to the install procedures and maintenance
Client Responsibilities and Project Assumptions
1. Client Responsibilities
In connection with Andersen's provision of the Services, Client will
perform the tasks, furnish the personnel, provide the resources, or
undertake the responsibilities specified below ("Client Responsibilities").
STEERING COMMITTEE
The steering committee is the owner of the project and are responsible for
providing the necessary funding and resources as well as the management
commitment to the project. Responsibilities include:
o Resolves major implementation policy decisions and makes the
final decision on all other proposed opportunities and
recommendations
o Provides overall project direction and management support
o Supports the vision of the project
KEY ADVISORS
The key advisors are executive level advisors assisting with business
knowledge and resources. Responsibilities include:
o Assist with issue resolution
o Provide input to major business policy decisions
o Supports the vision of the project
EXECUTIVE SPONSORS - PMO
The project directors are key executives responsible for the major business
areas included in the project scope. These individuals are ultimately
accountable for the project and have high-level decision-making capability.
Responsibilities include:
18
o Supports timely resolution of major business issues
o Ensures resources are available for success of the project
o Ensures the project is adequately funded
o Respond to on-going status reports to remove/resolve road blocks for
the project
o Ensures that internal policies are updated to reflect business process
changes and communicates that change to the organization
o Approves all system modifications
The following individuals will be responsible for providing this executive level
support specific to their areas, which includes providing oversight and
confirmation of final deliverables:
o Mary Knight Tyler -- Project Management & Financial Team
o Chris Lesher -- Customer and Sales Team
o Dan Zipes -- Supply Chain Team
o Alan Boyer -- Information Technology -- Development and Infrastructure
PROJECT MANAGER -- SHARED ROLE
The project manager is responsible for planning and assigning project work,
participating in group discussions, and ensuring all deliverables are produced
on time and with the desired quality. The project manager is ultimately
responsible for all project responsibilities assigned to other project team
members and for coordinating resolution of issues. Responsibilities include:
o Determines project objectives, schedules, and resource budgets
o Monitors results, performance, and resource expenditures against
targets
o Controls all project changes
o Compiles project progress and status reports
o Maintains customer contact and momentum
o Determines specific project tasks and how they will be accomplished
o Ensures that assigned tasks are performed in accordance with the
established standards and are completed on time and within budget
o Resolves outstanding issues and action items
o Reviews all system modifications with the executive sponsors
BUSINESS AREA ANALYSTS COMBINED WITH THE SYSTEMS ANALYST ROLE
Business Area Analysts are responsible for representing the overall organization
and their specific business unit's needs by participating in requirements
workshop discussions. They are key participants in the design phase, approving
design prototypes and usability testing. They reach consensus regarding changes
in business requirements. Responsibilities include:
o Performs as liaison between the business department and the
implementation team
o Attends project team training and orientation
19
o Contributes subject-area business knowledge
o Assists in the security definition of end-users
o Communicates results of meetings and workshops to the organization
o Attends meetings and participates in all aspects of the project
o Develops draft material in preparation of work sessions
o Gains a clear understanding of business requirements as defined during
the discovery activity
o Assists in the development of the functional design during the design
phase
o Supports timely resolution of outstanding business issues as assigned,
and documents resolutions
o Identifies and communicates opportunities for business area practice
changes
o Prepares and delivers a plan for communication to all areas impacted
by the new system
o Develops written procedures for the new system
o Enters reference data into the new system during construction activity
of the project
o Responsible for input and/or coordination of manual data input
o Documents requirements, process changes and unresolved issues during
client work sessions
o Designs and modifies JDE software based on user requirement
specifications
o Performs design of custom reports
o Performs design of standard reports
TECHNICAL TEAM
The technical team is responsible for developing technical knowledge and skills
specific to the software package. Responsibilities include:
o Provides application security and HW/OS support
o Oversees database administration
o Designs disaster recovery plan
DATABASE ADMINISTRATION
The data base administration team is responsible for creating and maintaining
the database. Responsibilities include:
o Responsible for the creation of new tables, views and elements in the
JDE system
o Responsible for data base tuning
o Responsible for the creation of views for end-user reporting
o Coordinates with the Data Administration group to complete user
request procedures for adding new data elements, views, and tables to
the JDE software
DATA ADMINISTRATION
The data administration team is responsible for providing the initial data
context for the project. Responsibilities include:
o Ensures that corporate data standards are adhered to and that they fit
into the corporate logical data model
20
o Reviews draft data materials during the requirements/design definition
phase, and reviews design feasibility prototypes
o Assists the conversion team with data mapping between the JDE system
to/from other systems
o Coordinates creation of database views with the DBAs
o Ensures that all data required by the process data flows are reflected
in the model
o Documents potential changes as a result of requirement/process
discussions
o Coordinates with the DBA group to complete user request procedures for
adding new data elements, views, and tables to the JDE software
NETWORK ADMINISTRATION/TELECOMMUNICATIONS
The network group is responsible for the overall network communication support
needs of the project. Responsibilities include:
o Responsible for hardware infrastructure supporting workstation
connectivity
o Ensures that adequate system support will be provided during all
stages of the project
o Develops volume test plans in conjunction with the QA group
o Monitors access and documents performance issues as it relates to
network operations
OPERATIONS GROUP
The operations group is responsible for coordinating the scheduling of all batch
processing. Responsibilities include:
o Schedules are coordinated with end-users and/or appropriate project
staff and properly set-up
o Responsible for ensuring schedules do not cause conflicts with other
areas
CHANGE MANAGEMENT TEAM (SOFTWARE VERSIONS)
The change management group is responsible for controlling software within the
environment. Responsibilities include:
o Providing guidance and input for change management plans
o Implementing change management plans
QUALITY ASSURANCE/TESTING
The quality assurance group is responsible for reviewing project deliverables
and coordinating user acceptance testing. Responsibilities include:
o Develops the user acceptance test plan
o Reviews project deliverables with the project manager
o Assists in selecting test participants
o Coordinates the development of the user acceptance test plan
o Schedules and/or coordinates testing facilities and equipment
21
o Coordinates and monitors testing schedule
SECURITY
The security team is responsible for over-all security definition and practice.
They ensure that corporate security standards are adhered to and they fit into
the existing corporate security strategy. Responsibilities include:
o Initial set-up, transfer, and maintenance of security/user profiles
o Ensures the application does not impact other application security
(e.g., network, mainframe security, etc.)
o Gains a clear understanding of security requirements to define
security strategy
o Responsible for ensuring that long-term strategies are understood
o Controls over-all access to the application
o Serves as liaison to the auditors for security issues
o Responsible for establishing security requirements that will not
compromise assets (e.g., ensuring that application programmers cannot
inadvertently erase production data, etc.)
SUPPORT CENTER
The support center is responsible for answering, responding, and assigning (as
needed) end-user desktop software/usage questions and problems. Responsibilities
include:
o Questions are answered or assigned to the proper personnel
o Proper personnel are notified of problems
o Attends training designed for support center staff to answer calls
and/or determine proper notification (e.g., application group,
database group, etc.)
SYSTEMS GROUP
The systems group is responsible for providing system support on all platforms.
Responsibilities include:
o Coordinates allocation of server and client disk space in preparation
of installation, upgrade, and maintenance of software
o Ensures that adequate disk space is available
o Ensures that system standards are adhered to and that they fit into
the existing and planned system standards
o Reviews draft data materials during the requirements/design definition
phase, and reviews design feasibility prototypes
SUBJECT MAILER EXPERTS -- SHARED ROLE
Subject matter experts (SME) play a key role in defining and clarifying business
requirements. The SME is responsible for participating in meetings, as required
by the business area analysts, to ensure the project team has a clear
understanding of requirements. Responsibilities include:
22
o Contributes subject-area business knowledge
o Develops draft material in preparation of work sessions
o Assists in the development of the functional design during the design
phase
o Supports timely resolution of outstanding business issues as assigned
and documents resolutions
o Participates in confirming BPS results
ORGANIZATIONAL CHANGE MANAGEMENT LEAD -- SHARED ROLE
The change lead is responsible for communicating and managing the change efforts
associated with the design effort. Responsibilities include:
o Works closely with the functional and technical teams to understand
organizational requirements and design approach on user procedures and
training manuals
o Documents and communicates organizational change requirements and
decisions to the appropriate managers so they can effect the changes
in their departments
o Communicates project progress and important enterprise change
decisions to the entire company
o Develops the training strategy and determines best practice for
delivery of training
o Determines proper medium for training (e.g.. classroom, self-paced
tutorial, train-the-trainer approach, Intranet, etc.)
o Determines the target training participants and the training needs
depending on the work responsibility of that user
COMMISSION SYSTEM LEAD, ANALYST, DEVELOPERS, ET ALL
The responsibility of designing and developing the Commission System is solely
the responsibility of HIG. Andersen's role will be limited to the management
over-sight relative to the integration and dependency on the J. D. Edwards
system design effort. HIG will otherwise be responsible for all deliverables and
work products, resource assignments, tasks identification and completion,
documentation and all other related items to the design and development of the
Commission System.
Project Assumptions
THE PROJECT ASSUMPTIONS INCLUDE THE FOLLOWING:
o Andersen is not responsible in any way for the selection of the new
ERP system J.D. Edwards.
o The Design phase will start on January 7, 2002 and will run
approximately 12 weeks.
o The Design project will assume an operational enterprise-wide
financial, distribution and demand planning system by August 1st 2002.
o Andersen and HIG will perform as project managers. HIG will provide a
full-time project manager. Andersen's delivery of the Services and the
fees charged are dependent on (i) the Client's timely and effective
completion of the Client Responsibilities, (ii) the accuracy of the
Assumptions, and (iii) timely
23
decisions and approvals by Client's management. Client shall be responsible for
any delays, additional costs, or other liabilities caused by or associated with
any deficiencies in the Client Responsibilities and Assumptions.
PROJECT ASSUMPTIONS SPECIFIC TO THE SCOPE ARE:
o Interface modification plan and design will occur concurrently with the JDE
application design and setup
o The amount and complexity of reports will be further defined during the
design phase. The standard JDE report writer will be utilized for all
reports, except the 27 custom reports identified in the reporting scope.
OVERALL PROJECT ASSUMPTIONS:
o Any scope changes upon commencement of the project will be documented
through a change order process and agreed to by both Andersen and HIG.
o This project is a significant endeavor for HIG. The participation and
leadership of key management executives in this project is critical to its
success.
o HIG will adopt the new processes driven by the JDE software and will not
engage in any major reengineering efforts.
o We assume the HIG Steering Committee personnel will be available to make
key decisions on a timely basis.
o It is assumed that all key deliverables are signed off on a timely basis.
Delays in confirmation of key sign-off deliverables may impact the project
timeline.
o Andersen and HIG will participate jointly in the project and will share
responsibility to complete project tasks. We assume HIG will make
available, on a timely basis, appropriate personnel to complete the
required tasks.
o HIG will manage other third-party vendor activities except those designated
as sub contractors of Andersen. Negotiations and billings of all other
third-party vendors will be the responsibility of HIG. Contract
negotiations for all vendors can impact the overall project timing and
deadlines.
PROJECT PLANNING AND MANAGEMENT ASSUMPTIONS:
o We assume a work area for the project team will be in place including
copier, analog lines, laser printer, telephones, and other necessary
supplies. E-mail and shared directory (ies) will be available to the
project team members to facilitate communication and information gathering
and sharing.
o We are assuming eight-hour work days, five days a week, for all local
project team members. We are assuming a ten-hour work days, four days a
week, for all traveling project team members. This may vary depending on
the segment of the project.
o HIG's is expected to play a significant role in the Change Management
implementation; coordinating employee related decisions, as well as
ultimately supporting overall training design and approach.
24
o HIG will also provide business and technology resources as outlined in the
Project Organization section of this proposal.
o If additional staff level resources are needed to perform administrative
and documentation tasks, the HIG and Andersen project management team will
agree on the required time and costs.
TECHNICAL ENVIRONMENT
o We assume all new JDE users will be provided with connectivity, technical
infrastructure, and the appropriate personal computers and software to
access their required modules by HIG and/or a third party vendor.
o We assume that HIG will have an in-house database administrator and an
in-house Unix or NT administrator.
o We assume HIG is responsible for the JDE technical environment and that HIG
technical personnel will have or be trained in the necessary technical
skills.
o We assume (18) system interfaces to JDE; if there are additional required
interfaces, they will be identified during the design segment of the
project. Andersen will assist with the design and management of the
required interfaces, but programming efforts will be performed by HIG.
o The testing of interfaced transactions through other systems will be the
responsibility of HIG. The project team will ensure the proper transactions
are generated and formatted to the other systems.
o Upgrade to new versions of the JDE software or required hardware or systems
software is the responsibility of HIG.
o A HIG resource will be dedicated to the design and implementation of JDE
security. Andersen will provide direction and review of the security
tasks.
o Required custom programmed reports (C, C++, SQL, and/or third party tools)
will be determined during the design phase. Andersen will assist with the
design and management of the custom reports, but programming efforts will
be performed by HIG and/or JDE qualified third party programmers.
CONVERSION:
o Andersen and HIG will jointly manage data conversion tasks. We will assist
with the conversion approach and high-level design of conversion programs.
o Andersen will assist with the design and management of the conversion
programs.
o Mapping tables between legacy systems and JDE will be required for all
interfaces. HIG will be responsible for producing and maintaining all
mapping tables.
o Data will be converted manually where the cost of automation exceeds that
of manual. HIG employees or temporary employees will do manual conversion.
Client will designate a competent employee or employees within its senior
management who will make all management decisions with respect to this
engagement. To the extent that the Services or Andersen's deliverables include
the design or implementation of hardware or software systems, Client's
management shall be responsible for making all management decisions, including
but not limited to, decisions
25
concerning systems to be evaluated and selected; the design of such systems;
controls and system procedures to be implemented; scope and timetable of system
implementation; and testing, training, and conversion plans. To the extent that
Andersen's deliverables include surveys, analyses, reports, evaluations,
recommendations or other management consulting services, Client's management
shall be responsible for all implementation decisions and for any future action
with respect to the matters addressed in the deliverables. In conjunction with
Client acceptance, Client's management will evaluate the adequacy and results of
the design and implementation of Andersen's deliverables.
Except as expressly agreed herein, Client shall be solely responsible for:
o determining the existence of, and complying with, any and all of the
following that are applicable to electronic transactions, commerce,
processes, or activities conducted over the Internet or any electronic
network (collectively, "Transactions"): import/export controls;
requirements to obtain and maintain licenses or other permissions;
requirements to assess, pay, or withhold taxes, customs duties, or
other charges; and other laws or regulations in all applicable
jurisdictions;
o the security of its network and any related systems, including the
security, privacy and confidentiality of any Client or third party
data, intellectual property, or other information;
o establishing and determining the validity and enforceability of
contract execution, performance and fulfillment processes, contracts,
and any other documentation necessary for or used in conducting
Transactions;
o any content contributed by Client or a third party in connection with
this engagement; and
o any use by Client of the Deliverables (including, but not limited to:
Client's posting to its website, or transmission over the Internet, of
text, images, software, music, video, or other information; Client's
sale or offering for sale of any goods and services via its website or
otherwise over the Internet; and any linking, framing, or distribution
of unsolicited electronic mail in connection with Client's website)
which is illegal, unlawful, or harassing, which infringes another's
intellectual property rights, or which otherwise constitutes network
abuse ("Misuse").
Client acknowledges that Client and/or its affiliates (i) are the controller(s)
of any Client, affiliate, or third party data or databases accessed and/or
processed by Andersen in the course of performing the Services, including, but
not limited to, data relating to individuals (the "Data"), and (ii) will be
solely responsible to third parties for such Data, including, but not limited
to, the individuals to whom the Data relate and Client and affiliate personnel.
Client represents and warrants to Andersen that all Data processing and
transfers between Client and its affiliates on the one hand and Andersen on the
other hand have been and will be conducted in full compliance with any laws or
regulations applicable to the protection of data.
Notwithstanding the scope of Andersen's services or deliverables hereunder,
Client acknowledges that it remains Client's responsibility to devise and
maintain a system of internal accounting controls [in compliance with Section
13(b)(2) of the U.S. Securities Exchange Act of 1934, which Section provides
that such controls be] sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as
26
necessary (a) to permit preparation of financial statements in conformity with
generally accepted accounting principles or any other criteria applicable to
such statements, and (b) to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. [In addition, Client represents and warrants to
Andersen that Client's management: (1) has acknowledged such responsibility in
writing to its audit committee or, if no such committee exists, then to its
board of directors or, if Client has neither an audit committee nor a board of
directors, then to the audit committee or board of directors, as applicable, of
any entity that controls Client or, alternatively, (2) will, upon execution,
provide a copy of this Statement of Work to the foregoing committee or board, as
applicable.] Client will determine the adequacy of its internal accounting
controls and financial reporting systems without relying on Andersen's services
or deliverables as the primary basis for making such determination. Finally,
Client acknowledges to Andersen that it is Client's responsibility to make such
disclosures with respect to this engagement that are required by applicable laws
and regulations.
Project Approach and Timeline
The overall approach for completing the work specified or described in this
arrangement based on the Design Phase of Proactive Xe Solutions Methodology to
meet the project objectives for the scope listed previously. This framework is
Andersen's proprietary JD Edwards specific business integration methodology, and
has been adapted to meet the objectives of this engagement. A detailed work plan
has been provided to reflect the level of effort and specific dates for all
relative tasks. This chart depicts a summary view of that work plan.
[HIG JDE IMPLEMENTATION CHART]
27
Fees & Expenses
We estimate the Design Phase will be completed on March 29, 2002 with an
Implementation Phase start date of April 1, 2002.
Andersen's fees for the scope of Services described in this Statement of Work
will be based upon actual time and materials at a substantially discounted rate.
Our fee estimate is $850,688, plus out of pocket expenses. Our fees are based on
an average rate of $189 per hour.
In addition to these fees, we estimate that third party resources required for
the development effort and the Demand Planning design, integration, and
installation effort for the Design phase will be $259,000, plus out of pocket
expenses. We will subcontract and manage these individuals directly and their
fees will be included in our billing statements to you.
Further to these fees, J.D. Edwards Resources for the CNC implementation and
configuration will be required. It is our understanding the HIG will contract
directly with J. D. Edwards and J. D. Edwards will bill HIG directly for those
services.
This fee is based on Client fulfilling the Client Responsibilities and
Assumptions described in this Statement of Work. Andersen will bill Client
$369,896 at the beginning of the project (January 15, 2002) then in accordance
with the following billing schedule:
February 15, 2002 $369,896 + actual expenses incurred in January
March 15, 2002 $369,896 + actual expense incurred in February
April 15, 2002 actual expenses incurred in March
We will reconcile the actual fee amounts incurred for each month (versus that
months' pre-billing) and any adjustments be reflected in the next months bill.
Andersen will be reimbursed by Client for reasonable out-of-pocket expenses
(including transportation, hotels, meals, etc.) incurred as a result of
Andersen's performance of Services. Andersen agrees to use reasonable efforts to
limit travel and lodging expenses by using coach air fare, booking in advance
when available, staying at hotels identified by Client offering corporate rates,
and sharing mid-size rental cars where practical. Invoices are due upon
presentation. Should any invoice remain unpaid for more than 28 days, interest
shall be paid at a rate of 1.5% per month. Any taxes arising out of this
arrangement other than those on Andersen's net income shall be Client's
responsibility.
Change Order Process
During the project described in this Statement of Work, Client may request, in
writing in a form substantially similar to Andersen's standard form of change
request, additions, deletions, or modifications to the scope or nature of the
Services described in this Statement of Work (all referred to hereinafter as
28
"Changes"). Andersen shall have no obligation to, and shall not, commence work
in connection with any Change until the fee and/or schedule impact of the Change
is agreed upon in a written change order signed by both Andersen and Client.
Upon a request for a Change, Andersen shall submit a proposal to Client on
Andersen's standard change order form (or in a form substantially similar to
Andersen's standard change order form attached hereto) describing the Changes,
including, as applicable, the impact of such Changes on schedule and fees and
expenses. Within 5 days of receipt of the proposed change order, Client shall
either indicate its acceptance of the proposed Changes by signing the change
order or advise Andersen not to perform the Changes, in which event Andersen
shall proceed with the original Services. The foregoing notwithstanding, if
Andersen, at the written request of Client, performs work that is not covered by
this Statement of Work or that exceeds the scope of Services described in this
Statement of Work, such work shall be deemed Services provided pursuant to this
Statement of Work, for which Client shall compensate Andersen at the same rates
as those described under Fees & Expenses above or, in the case of a fixed fee
engagement, at the rates used in calculating such fixed fee.
We appreciate the opportunity to be of service to you and look forward to
working with you on this challenging project. You can be assured that it will
receive our close attention. Please indicate your agreement to these
arrangements by signing and returning to Andersen the enclosed copy of this
Agreement.
Very truly yours,
ARTHUR ANDERSEN LLP
By: /s/ STEPHEN ENGEL
----------------------------------
Stephen Engel
Attachments: Business Consulting Standard Business Terms
Business Consulting Statement of Work Standard Change Order Form
Acknowledged and Accepted:
Home Interiors and Gifts, Inc.
By: /s/ [ILLEGIBLE]
----------------------------------
Title: Sr. Vice President
----------------------------------
Date: 1/23/02
----------------------------------
29
BUSINESS CONSULTING
STANDARD BUSINESS TERMS
These Business Consulting Standard Business Terms ("Terms") shall govern the
Services provided by Arthur Andersen LLP ("Andersen") as set forth in the
Statement of Work executed by Client and Andersen to which these Terms are
attached. These Terms, together with the Statement of Work, constitute the
entire understanding and agreement between Client and Andersen with respect to
the Services described in the Statement of Work ("Agreement"), supersede all
prior oral and written communications, and may be amended, modified or changed
(including changes in scope or nature of the Services or fees as described under
Change Order Process in the Statement of Work) only in writing when signed by
both parties. If there is a conflict between these Terms and the terms of any
Statement of Work, these Terms shall govern.
SECTION 1. FEES, EXPENSES
Client shall pay Andersen the professional fees and the related expenses in
accordance with the Statement of Work.
SECTION 2. CLIENT RESPONSIBILITIES
As a prerequisite to Andersen's delivery of Services, Client shall (i) fulfill
the Client Responsibilities and ensure that all Assumptions are accurate; (ii)
provide Andersen with reliable, accurate and complete information, as required;
(iii) make timely decisions and obtain required management approvals; and (iv)
furnish Andersen personnel with a suitable office environment and adequate
resources and supplies, as needed. In addition, Andersen shall be entitled to
rely on all Client decisions and approvals made independently of this Agreement
and/or prior to its execution by the parties. Nothing in this Agreement shall
require Andersen to evaluate, advise on, modify, confirm, or reject such
decisions and approvals, except as expressly agreed to in the Statement of Work.
SECTION 3. CONFIDENTIALITY
With respect to this Agreement and any information supplied in connection with
this Agreement and designated by the disclosing party as confidential, the
recipient agrees to: (i) protect the confidential information in a reasonable
and appropriate manner or in accordance with applicable professional standards;
(ii) use confidential information only to perform its obligations under this
Agreement; and (iii) reproduce confidential information only as required to
perform its obligations under this Agreement. This section shall not apply to
information which is (i) publicly known, (ii) already known to the recipient;
(iii) disclosed to a third party without restriction; (iv) independently
developed; or (v) disclosed pursuant to legal requirement or order. Subject to
the foregoing, Andersen may disclose Client's confidential information to its
subcontractors and affiliates, provided that such parties agree to abide by the
terms of this Section 3.
SECTION 4. DELIVERABLES
Client may, solely for its internal business purposes, use, copy, distribute
internally, and modify the deliverable items specifically described in the
Statement of Work (the "Deliverables"). Except as set forth in this Section 4,
Client shall not, without Andersen's prior written consent, which shall not be
unreasonably withheld, disclose to a third party (other than subcontractors,
affiliates and agents of Client related to this project) or publicly quote the
Deliverables. Andersen shall retain all right, title and interest in and to: (i)
the Deliverables, including but not limited to all patent, copyright, trademark
and other intellectual property rights therein; and (ii) all methodologies,
processes, techniques, ideas, concepts, trade secrets and know-how embodied in
the Deliverables or that Andersen may develop or supply in connection with this
Agreement (the "Andersen Knowledge"). Subject to the confidentiality
restrictions contained in Section 3, Andersen may use the Deliverables and the
Andersen Knowledge for any purpose. Client may allow third parties to access the
Deliverables for any purpose relating to the ordinary business operations of
Client; provided that nothing in this sentence shall allow Client to sublicense
the Deliverables to any such third party.
SECTION 5. ACCEPTANCE
Client shall accept Deliverables which (i) conform to the requirements of the
Statement of Work or (ii) where applicable, successfully complete an acceptance
test plan to which Client has agreed. Client will promptly give Andersen
notification of any non-conformance of the Deliverables with such requirements
("Non-conformance"), and Andersen shall have a reasonable period of time, based
on the severity and complexity of the Non-conformance, to correct the
Non-conformance, but in no event shall the period of time be longer than that
which would be required for the Andersen staffing identified in the Statement of
Work to correct the Non-conformance working full-time. If Client uses the
Deliverable before acceptance, fails to promptly notify Andersen of any
Non-conformance, or unreasonably delays the beginning of acceptance testing,
then the Deliverable shall be considered accepted by the Client.
SECTION 6. WARRANTY
(a) Andersen warrants that the Services shall be performed with reasonable care
in a diligent and competent manner. Andersen's sole obligation shall be to
correct any non-conformance with this warranty, provided that Client gives
Andersen written notice within thirty (30) days after the Services are performed
or successful completion of the acceptance test plan, if applicable.
(b) Andersen does not warrant and is not responsible for any third party
products or services. Client's sole and exclusive rights and remedies with
respect to any third party products or services are against the third party
vendor and not against Andersen.
(c) THIS SECTION 6 IS ANDERSEN'S ONLY WARRANTY CONCERNING THE SERVICES AND ANY
DELIVERABLE,
1
AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS,
EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE.
SECTION 7. RISK ALLOCATION
(a) Excluding claims for indemnification under Section 7(c), Andersen's total
liability relating to this Agreement shall in no event exceed the fees Andersen
receives hereunder for the portion of the work giving rise to liability, or
include any special, consequential, incidental or exemplary damages or loss (nor
any lost profits, savings or business opportunity. Excluding claims for
indemnification under Section 7(b), Client's total liability relating to this
Agreement shall in no event exceed the fees due to Andersen hereunder.
(b) As Andersen is performing the Services solely for the benefit of Client,
Client will indemnify Andersen, its affiliates and their partners, principals
and personnel against all costs, fees, expenses, damages and liabilities
(including defense costs) associated with any third party claim, relating to or
arising as a result of the Services, Client's use of the Deliverables, or this
Agreement, but excluding claims relating or arising as a result of the solely
negligent or willful acts or omissions of Andersen's personnel or agents in
performing the Services.
(c) Andersen will indemnify Client against any damage or expense relating to
bodily injury or death of any person or damage to real and/or tangible personal
property incurred while Andersen is performing the Services and to the extent
caused by the negligent or willful acts or omissions of Andersen's personnel or
agents in performing the Services.
(d) The provisions of this Section 7 are intended to apply in all circumstances,
regardless of the grounds or nature of any claim asserted (including contract,
statute, any form of negligence, whether of Client, Andersen, or others, tort,
strict liability or otherwise) and whether or not the party seeking
indemnification was advised of the possibility of the damage or loss asserted,
to the extent not contrary to applicable law.
(e) Any action against Andersen must be brought within twenty-four (24) months
after the cause of action arises.
SECTION 8. PERSONNEL
(a) While Andersen shall attempt to comply with Client's request for specific
individuals, Andersen shall be responsible for assigning and re-assigning its
personnel, as appropriate, to perform the Services; however, unless Client
agrees otherwise, Andersen shall assign the individuals identified in the
Statement of Work to perform the Services, unless such individuals are no longer
employed by or are unable to perform services for Andersen.
(b) During the term of this Agreement, and for a period of twelve (12) months
following the expiration or termination thereof, neither party will actively
solicit the employment of the personnel of the other party involved directly
with providing Services hereunder.
SECTION 9. TERMINATION
(a) This Agreement may be terminated at any time by either party upon fifteen
(15) days written notice to the other.
(b) Client shall pay Andersen for all Services rendered and expenses incurred as
of the date of termination.
(c) Except for matters related to confidentiality or intellectual property
rights, the parties shall first attempt to resolve any dispute or alleged
breach internally by escalating it through management and, prior to pursuing
litigation, use a mutually acceptable alternative dispute resolution process.
SECTION 10. GENERAL
(a) Neither party shall use the other party's name, trademarks, service
marks, logos, trade names and/or branding without such party's prior written
consent.
(b) Neither party shall be liable for any delays or failures in performance due
to circumstances beyond its reasonable control.
(c) This Agreement may not be assigned or otherwise transferred by Andersen
without the prior express written consent of the Client, which shall not be
unreasonably withheld. Andersen may assign this Agreement to an affiliate of its
international organization or use subcontractors to provide Services.
(d) Any notices given pursuant to this Agreement shall be in writing, delivered
to the address set forth in the Statement of Work, and shall be considered given
when received.
(e) No term of this Agreement shall be deemed waived, and no breach of this
Agreement excused, unless the waiver or consent is in writing signed by the
party granting such waiver or consent.
(f) If any term or provision of this Agreement is determined to be illegal or
unenforceable, such term or provision shall be deemed stricken, and all other
terms and provisions shall remain in full force and effect.
(g) This Agreement does not make either party an agent or legal representative
of the other party, and does not create a partnership or joint venture. Both
parties are independent contractors and principals for their own accounts.
(h) Sections 3 through 10 of these Terms shall survive the expiration or
termination of this Agreement.
(i) The laws of the State of Texas shall govern this Agreement.
(j) Client acknowledges that: (i) Andersen and Client may correspond or convey
documentation via Internet e-mail unless Client expressly requests otherwise,
(ii) neither party has control over the performance, reliability, availability,
or security of Internet e-mail, and (iii) Andersen shall not be liable for any
loss, damage, expense, harm or inconvenience resulting from the loss, delay,
interception, corruption, or alteration of any Internet e-mail due to any reason
beyond Andersen's reasonable control.
2
BUSINESS CONSULTING
STATEMENT OF WORK
CHANGE ORDER NUMBER
------
[date]
[Client contact name]
[complete legal name of Client entity]
[Client address]
Dear [Client contact name]:
This Change Order, including any appendices, schedules, and/or attachments,
documents changes to the Statement of Work between Arthur Andersen LLP
("Andersen") and [Client's complete legal name] ("Client") dated
_________________, 200__, including any prior Change Order(s) or amendments
thereto (the "Statement of Work"). This Change Order constitutes the entire
understanding and agreement between Client and Andersen with respect to such
changes, supersedes all prior oral and written communications with respect to
such changes (including, but not limited to, written change requests), and may
be amended, modified or changed only in writing when signed by both parties. The
section(s) of the Statement of Work set forth below is/are hereby amended,
effective as of the date first written above, by adding at the conclusion of the
respective section(s) the following text:
Project Scope and Objectives
Andersen Services and Responsibilities
Deliverables
Acceptance
Client Responsibilities
Project Assumptions
1
BUSINESS CONSULTING
STATEMENT OF WORK
CHANGE ORDER NUMBER 1
January 24, 2002
Mr. Ken Cichocki
Chief Financial Officer
Home Interiors and Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007
Dear Ken:
This Change Order, including any appendices, schedules, and/or attachments,
documents changes to the Statement of Work between Arthur Andersen LLP
("Andersen") and Home Interiors and Gifts, Inc. ("HIG") ("Client") dated January
10, 2002 including any prior Change Order(s) or amendments thereto (the
"Statement of Work"). This Change Order constitutes the entire understanding and
agreement between Client and Andersen with respect to such changes, supersedes
all prior oral and written communications with respect to such changes
(including, but not limited to, written change requests), and may be amended,
modified or changed only in writing when signed by both parties. The section(s)
of the Statement of Work set forth below is/are hereby amended, effective as of
the date first written above, by adding at the conclusion of the respective
section(s) the following text:
Project Scope and Objectives
HIG has asked Andersen to assist in facilitating and documenting the business
requirements for the internal development effort on the 'Commissions-Sales
Compensation system. Andersen will work with key individuals to identify
workshop participants, dates and deliverables.
Andersen Services and Responsibilities
The project services and responsibilities will include the following:
Andersen will work with the HIG personnel to assist in the following activities
by leveraging our experience, tool sets and methodology from similar projects:
DESIGN WORKSHOPS -- These sessions will be focused on developing the process
design for the commissions and compensation management. This will include
defining and documenting the As-Is process, defining and documenting the To-Be
processes, completing a process and value analysis (PAVA) and defining the roles
that are responsible, accountable, consulted, or informed within the process
design (RACI).
Additionally, report requirements will be identified, user lists for the
application defined and a schematic diagram of the application interfaces will
also be documented.
The scope will not include the facilitation or the identifications of the
requirements specific to technical specifications (hardware, software,
connectivity, code, etc.), data conversions, interfaces, project/resource
planning, testing, training or risk management.
Key activities for this of work includes:
- Identification of key work shop participants
- Scheduling of the Design Workshops
- Facilitation of the Design Workshops
- Documentation of the outcome (Business Requirements) from the Design
Workshops
- Final compilation and review of documented Business Requirements
- Identification of reporting requirements
- Compilation of the application user list
- Evaluation of the application design and interfaces
- Review development methodology and timeline
Deliverables
- As-is process flow diagrams
- To-be process flow diagrams
- Detail Business Requirements
- Report Matrix
- Application user list
- Commissions system application interface schematic
Client Responsibilities
No Changes from the original Statement of Work
Project Assumptions
No Changes from the original Statement of Work
Project Approach and Timeline
The overall approach for completing the work specified or described in this
arrangement based on the Design Phase of Proactive Xe Solutions Methodology to
meet the project objectives for the scope listed previously. This framework is
Andersen's proprietary business integration methodology, and has been adapted to
meet the objectives of this engagement. The anticipated time frame is 2 1/2
weeks or 9 ten-hour days. We anticipate that it will require 7 days to complete
the facilitation and documentation sessions and 2 days to compile final results
and review findings with management and the IT development staff.
Staffing
o Steve Bellas will complete the tasks identified above with management
oversight from the existing Project Management team currently in place
on the ERP project
Fees & Expenses
Andersen's fees for the scope of Services described in this Change Order will be
based upon actual time and materials at a substantially discounted rate. Our fee
estimate is $20,160, plus out of pocket expenses. Our fees are based on an
average rate of $224 per hour.
This fee is based on Client fulfilling the Client Responsibilities and
Assumptions described in this Change Order. Andersen will bill Client $20,160 at
the beginning of the project, January 28, 2002 and then February 28, 2002 for
any expenses incurred.
We will reconcile the actual fee amounts incurred for the project period (versus
the pre-billing) and any adjustments be reflected in the final expense billing.
Andersen will be reimbursed by Client for reasonable out-of-pocket expenses
(including transportation, hotels, meals, etc.) incurred as a result of
Andersen's performance of Services. Andersen agrees to use reasonable efforts to
limit travel and lodging expenses by using coach air fare, booking in advance
when available, staying at hotels identified by Client offering corporate rates,
and sharing mid-size rental cars where practical. Invoices are due upon
presentation. Should any invoice remain unpaid for more than 28 days, interest
shall be paid at a rate of 1.5% per month. Any taxes arising out of this
arrangement other than those on Andersen's net income shall be Client's
responsibility.
Except as expressly modified herein, all other terms and conditions of the
Statement of Work and the Business Consulting Standard Business Terms remain
unchanged. Please indicate your agreement to these arrangements by signing and
returning to Andersen the enclosed copy of this Change Order.
Very truly yours,
ARTHUR ANDERSEN LLP
By: /s/ STEPHEN ENGEL
---------------------------
Stephen Engel
Acknowledged and Accepted:
Home Interiors and Gifts, Inc.
By: /s/ [ILLEGIBLE]
---------------------------
Title: Sr. V. President and CFO
------------------------
Date: February 15, 2002
-------------------------
[ANDERSEN LOGO]
BUSINESS CONSULTING
STATEMENT OF WORK
CHANGE ORDER NUMBER 2
February 14, 2002
Mr. Ken Cichocki
Chief Financial Officer
Home Interiors and Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007
Dear Ken:
This Change Order, including any appendices, schedules, and/or attachments,
documents changes to the Statement of Work between Arthur Andersen LLP
("Andersen") and Home Interiors and Gifts, Inc. ("HIG") dated January 10, 2002,
including any prior Change Order(s) or amendments thereto (the "Statement of
Work"). This Change Order constitutes the entire understanding and agreement
between HIG and Andersen with respect to such changes, supersedes all prior oral
and written communications with respect to such changes (including, but not
limited to, written change requests), and may be amended, modified or changed
only in writing when signed by both parties. In the event of a dispute between
the provisions of this Change Order and the Standard Business Terms, the
provisions of the Standard Business terms prevail. The section(s) of the
Statement of Work set forth below is/are hereby amended, effective as of the
date first written above, by adding at the conclusion of the respective
section(s) the following text:
Project Scope and Objectives
The scope of this project has been expanded to include the implementation and
configuration of Vertex Quantum(TM) for Sales and Use Tax (Vertex) to enhance
sales and use tax compliance for HIG's sell side process. During Phase 1, we
will customize a project workplan to meet HIG's tax compliance needs for order
entry, billing and accounts receivable. The project workplan will be broken down
into separate and distinct phases to address the changing systems environment,
prevent any delays to the existing JDE system implementation plan, and assist
with the integration of Vertex to address HIG's sales and use tax compliance
requirements.
Andersen Services and Responsibilities
In coordination with HIG's Tax Executive Lead, Andersen will provide overall
project management and guidance in this Vertex system implementation solution,
and we will actively participate in the detailed execution of the project plan.
Andersen will work jointly and cooperatively with HIG management and staff
throughout this initiative. The project's success will depend upon HIG's
participation in key project decisions including validation of assumptions that
impact the agreed-upon sales and use tax compliance solution.
Acceptance
Andersen will request HIG to complete a Vertex Tax Decision Maker(TM) (TDM)
sign-off prior to delivery of the configured Vertex system near the completion
of the Implementation phase. Delays in the acceptance process may increase the
Vertex project timeline. In addition, we will complete a Design Sign-off Matrix
indicating completion of documentation deliverables during interval stages of
the project. Each deliverable will require approvals from HIG's Tax Functional
Resource, Tax Executive Lead and/or the Project Manager in order to proceed with
the project workplan.
HIG Responsibilities
HIG's responsibilities of this project have been expanded to include a part-time
tax functional resource to determine HIG's sales and use tax compliance policy
and assist with the configuration and testing of the Vertex solution. We have
estimated approximately 525 combined hours for a HIG Tax Resources (Functional
Resource and Tax Executive Lead) as part of the overall tax implementation team.
In addition, any design and implementation of tax modifications will be a shared
responsibility between the Andersen, HIG Tax, HIG Information Technology (IT)
personnel and JDE consultants. Requirements for tax modifications and testing
will be provided by the tax team comprised of HIG and Andersen resources, and
HIG IT and JDE consultants will provide all development work. The specific
responsibilities for the HIG Tax and Information Technology (IT) Resources are
as follows:
HIG Tax Resources
o The Tax Functional and Tax Executive Lead is responsible for assisting the
tax core team members through the design, implementation and rollout phases
to support HIG's sales and use tax functional requirements.
Responsibilities of the Tax Resource includes the following:
- Provide documentation of sales and use tax decision matrices for
products sold by HIG and assume responsibility for these tax
determinations
- Actively participate, when applicable, with the Vertex implementation
team in key decisions that impact the overall JDE project
implementation
- Assist the Vertex implementation team in effectively translating sales
and use tax functional requirements into configuration options and
solutions
- Demonstrate and encourage a willingness to adapt and simplify
procedures, policies, and business rules to facilitate working within
the bounds of the Vertex sales and use tax system
- Act as a liaison between the HIG Tax Department and the Vertex
implementation team to ensure transaction tax requirements for billing
are included in the overall system design
- Review and understands Vertex sales and use tax compliance reports
- Assist in developing system test scripts to simulate billing
transactions, tax determinations and verify actual with expected
results
- Assist in execution of integration testing
- Participate in Vertex system end-user training
- Assume responsibility for Vertex's Tax Decision Maker(TM)(TDM)
maintenance during system roll out support
- Sign off on the Vertex TDM taxability decision content prior to
delivery of the configured Vertex system, as well as each deliverable
during the project
HIG Information Technology (IT) Resources
o Andersen will coordinate with a IT resource to execute the following tasks:
- Installation of Vertex Sales and Use Tax Quantum software to the JDE
server (estimated 8 hours of HIG's DBA time)
/ Create empty databases
/ Create directory structure for rate and Geocoder files as well as
Utility Kits
/ Assign user clearances to the register database
/ Extract the rate and Geocoder files
/ Populate and update databases
/ Installing and extract Utility Kits
- Provide support in resolving potential troubleshooting during the
testing phase, "tuning" the Vertex databases and interface to the IDE
Sales Order and Address Book. (estimated 8 to 16 hours of HIG's DBA
time)
Project Assumptions
The project assumptions will be amended for the following:
Business Procedures and Training
- We assume that HIG's Tax department will perform the sales and use tax
compliance process after go-live.
- We assume HIG will provide access to individuals responsible for
implementation and maintenance of the JDE system and applications to
facilitate the Vertex integration project.
- We understand Conference Room Pilot (CRP) will be underway to validate
design and configuration of business procedures within the JDE system
configuration. Sales and use tax policies specific to HIG will need to
be configured within the Vertex tax software. It may be necessary for
HIG to modify certain business procedures or JDE system configuration
to accommodate data requirements of the Vertex tax software.
- Sales and use tax requirements are based on current information
obtained from HIG as of January 29, 2002. Therefore, any future
changes to the tax requirement that may be have a significant or
material impact to the workplan or timeline may require additional
Andersen hours to complete the project. If any significant changes are
discovered, we will communicate the issue immediately to HIG's Tax
Functional Resource and Tax Executive Lead.
- The JDE Address Book will need to be validated in order to assign
Vertex GeoCodes to each customer address.
- The following are special tax requirements within JDE specific to HIG
for which Andersen and the HIG Tax Department will provide the process
design:
/ Posting of tax liability from Sales Order to a state-specific sub
ledger account in the general ledger. Currently, SAR 3526702 will
need to be resolved in order to utilize this feature in JDE.
/ The Internet Order Entry (IOE) module will process sales tax
quotes based on an average rate for be each state. The average
tax rates will maintained by HIG.
/ Based on HIG's agreements with taxing jurisdictions, sales
transaction for Hostess, Bonus Buys and Wholesale will require
specific requirements for either tax base or tax types (sales or
use tax). The
modification will need to occur within the Pre-Processing module
prior to the Sales Order interface with Vertex.
/ The daily batch process will be designed to complete Vertex tax
processing within a three hour time frame.
Project Approach
In addition to the completion of the ERP implementation-planning project (Phase
1), we understand that the project approach will be amended for the following as
it relates to the Vertex integration with JDE workflow modules for the remaining
Phases:
Phase 2 -- Design -- This phase is specifically designed to initiate the
project and begin identifying the business requirements for the
configuration of the Vertex software. Key activities related to integration
of a sales and use tax compliance solution for this phase of work are:
1) Vertex Implementation Project Team roles and responsibilities
definition
2) High-level review of current processes and requirements
3) High-level review of system functionality and capabilities
4) Project planning
5) Change planning
6) Vertex Quantum(TM) installation
Key deliverables and responsibilities assigned for this phase of work, as
they relate to the integration of Vertex Quantum(TM) for Sales and Use Tax,
are:
1) Review process maps detailing current design of IDE procurement
functionality -- Andersen
2) Documentation of sales and use tax reporting requirements -- HIG
and Andersen
3) Documentation of systems hardware and software
capabilities/requirements -- Andersen
4) High-level sales and use tax requirements -- HIG and Andersen
- Functional
- Interfaces between JDE Sales Order, Address Book and Vertex
5) Detailed workplan and project timeline for Vertex integration --
Andersen
As part of Phase 2, we will also focus on designing the Vertex system
configuration based on the business requirements, the "to-be" processes and
the testing of those designs. It is also focused on the requirements
specific to any necessary data conversions, Vertex interface specifications
and/or modifications to pass critical data elements necessary to sales and
use taxability determinations from IDE Sales Order and Address Book. Key
activities related to integration of a sales and use tax compliance solution
for this phase of work are:
1) Document data mapping requirements between IDE and Vertex
software
2) Design and document JDE/Vertex system design
3) Design revised "to-be" key business procedures with use tax
requirements, if necessary
4) Document tax interface requirements between Vertex and IDE Sales
Order / Address Book
5) Conference Room Pilot (CRP) Testing (Modular & Integrated) with
emphasis on sales and use tax compliance
6) Finalize Vertex configuration and design specifications
Key deliverables and responsibilities assigned for this phase of work, as they
relate to the integration of Vertex Quantum(TM) for Sales and Use Tax, are
listed below:
1) Process maps with sales and use tax compliance process overlay --
Andersen
2) HIG sales and use tax decision hierarchy and matrices for items
procured -- HIG
3) Data mapping documentation for interface between Vertex and JDE
Sales Order/Address Book -- HIG and Andersen
4) HIG sales and use tax requirements and Vertex standard report
definition -- HIG and Andersen
5) Final CRP test scenarios; CRP test feedback and results -- HIG
and Andersen
6) Final design and configuration documentation for Vertex
integration -- Andersen
PHASE 3 -- IMPLEMENTATION -- the purpose of this phases is to develop, implement
and finalize interfaces between Vertex and JDE Sales Order/Address Book,
modifications, code reports and forms, and set-up security. Additionally, in
this phase the team develops the conversion process including any coding,
conducts all system and acceptance testing and develops and conducts all
end-user training. Finally, the team prepares for and conducts the actual cut
over to the new system. After "go-live" a portion of the Vertex integration team
remains intact to provide post conversion support, as necessary, generally 2 to
3 days. Key activities related to integration of a sales and use tax compliance
solution for this phase of work are listed below:
1) Finalize set-up and configuration for Vertex Quantum(TM) TDM
2) Finalize Vertex tax system report creation procedures
3) Finalize interfaces between Vertex and JDE Sales Order/Address
Book, and data flow documentation
4) Finalize end-user training documentation and conduct training for
Tax Department
5) Modular and integrated system & acceptance tests
6) Prepare for Vertex system "go-live"
7) Post conversion support, if necessary
Key deliverables and responsibilities assigned for this phase of work, as they
relate to the integration of Vertex Quantum(TM) for Sales and Use Tax, are as
follows:
1) TDM configuration sign-off -- HIG
2) Vertex TDM file configured for sales and use tax policy
requirements related to the sell side process by HIG -- Andersen
and HIG
3) Documentation of configuration for Vertex software -- Andersen
4) Documentation of final Vertex system interfaces and process
design -- Andersen
5) Final user training and support plan -- HIG and Andersen
6) Documentation of end-to-end testing of billing transactions and
data capture to transaction tax reports and GL tax liability
accounts -- HIG and Andersen
7) Final Vertex training materials -- Andersen
8) System test data and acceptance test results -- HIG and Andersen
9) Operational Vertex and JDE System -- HIG and Andersen
10) Documentation of post "go-live" troubleshooting -- Andersen
11) End User Support -- HIG
Out of Scope
1) Integrating Vertex to any host system other than the JDE Sales
Order and Address Book
2) Implementation and support of tax processes in the Internet Order
Entry (IOE) module
3) Implementation and support of tax processes in the Pre-Processing
module
4) Taxability research or tax planning
5) Assigning categorization codes to the item master
6) Address clean-up for utilization of Vertex GeoCodes in the
Address Book
7) Additional consulting services that are not specifically defined
in this proposal
8) Analysis, design, implementation and support of tax processes
that are not defined within the scope of this project
9) Services of attorneys
10) Ongoing support of any new solution implemented as a result of
this project
11) Optimization of transaction tax functionality for additional
systems or feeder systems not defined within the scope of this
project (e.g., Financial, Billing, or Procurement systems)
12) Additional necessary application, tools or system upgrade costs
as recommended by software vendors
13) Additional system hardware costs to support and maintain Vertex
or other third-party software applications
14) Implementation of a data repository or data warehouse, other than
the Vertex register database, to contain transaction data used in
tax compliance or in audit defense
15) Due diligence of any documentation to provide tax advice, review
of contract and/or agreements for internal use of arrangements
with external parties
Staffing
The tax team members consist of the following:
o HIG Tax Executive Lead -- Leonard Robertson
o HIG Tax Functional Resource -- Linda Lujan
o HIG IT Resource -- TBD
o Engagement Director -- Wilma Murphree
o Andersen Project Manager -- Leo Fox
o Andersen Process & Technology Consultant -- Sean Griffin
o Andersen Subject Matter Advisor -- Coleman Nunn
o Andersen staff -- TBD
Fees & Expenses
Our fee for the scope of Services described in this Work Order for the design,
configuration, testing and training for the Vertex Quantum(TM) for Sales and Use
Tax Application is based on an estimate of 575 hours required to do this work.
The estimated fee for this work is $103,500, plus out-of-pocket expenses.
Andersen will bill the fees and expenses as incurred on a monthly basis. The
fees and expenses will be added to the overall billing schedule stated in the
original Statement of Work.
Except as expressly modified herein, all other terms and conditions of the
Statement of Work and the Business Consulting Standard Business Terms remain
unchanged. Please indicate your agreement to these arrangements by signing and
returning to Andersen the enclosed copy of this Change Order.
Very truly yours,
ARTHUR ANDERSEN LLP
By: /s/ STEPHEN ENGEL
----------------------------------
Stephen Engel
Acknowledged and Accepted:
Home Interiors and Gifts, Inc.
By: /s/ KENNETH CICHOCKI
----------------------------------
Title: Sr. Vice President
-------------------------------
Date: 3/07/02
--------------------------------
[ARTHUR ANDERSEN LLP LETTERHEAD]
BUSINESS CONSULTING
STATEMENT OF WORK
April 15, 2002
Mr. Ken Cichocki
Chief Financial Officer
Home Interiors and Gifts, Inc.
1649 Frankford Road West
Carrollton, Texas 75007
Dear Mr. Cichocki:
This Statement of Work, including any appendices, schedules, and/or attachments,
documents the understanding between Arthur Andersen LLP ("Andersen") and Home
Interiors and Gifts, Inc. ("HIG") with respect to certain services to be
performed by Andersen related to the implementation of HIG's ERP system, using
as a foundation the J. D. Edwards Financial, Distribution and Demand Planning
software. ("Services"). Andersen shall provide the Services pursuant to the
provisions of this Statement of Work and Business Consulting's Standard Business
Terms which, together, describe our understanding with respect to the Services
("Agreement").
Project Scope and Objectives
In addition to the ERP implementation-planning project (Phase I) and the JDE
Design Phase (Phase II), We understand that the objective for the next phase
(Build-Phase III) is for Andersen to assist HIG in the development, testing and
roll-out of the ERP system, using as a foundation, the J.D. Edwards (JDE) system
solution. Andersen will provide consulting and project management services for
the ERP system 'Build Phase' project.
The scope of this project is to configure and test the following JDE modules for
the production (live) environment:
o General Ledger
o Financial Planning and Budgeting
o Financial Reporting
o Multi-Currency
o Address Book
o Accounts Receivable
o Accounts Payable
o Supplier Management
o Procurement
o Inventory Management
o Demand Planning
o Requirements Planning -- MPS
o Forecasting
o Product Data Management -- Bill of Materials
o Sales Order Management
o Advanced Pricing
o Standard Workflow Processes for the above modules
The JDE Modules (or module components) that are not included in the scope for
the Build effort include:
o Electronic Burst & Bind
o Cash Basis Accounting
o Time Accounting
o Fixed Assets
o Multi-Site Consolidation
o Basic Equipment Management
o Requirements Planning -- MRP, DRP
o Enterprise Facility Planning
o Advanced Forecasting
o Quality Management
o Advanced Stock Valuation
o Bulk Stock Management
o Advanced Warehouse Management
o Work Orders/Service Billing/Work Order Management
o Transportation Management
o Job Costing
o Change Management
o Contract Billing/Contract Management/Subcontract Management
o Property Management
o Call Management
o Payroll Processing/Time Accounting
o Human Resources Management/human Resources Benefits
o Bulk Stock Management
o ECS Sales Order Management
o Load & Delivery Management
o Manufacturing Suite
2
The processes that are considered in-scope include:
CUSTOMER & SALES
o New Account Setup
- Enter and Validate New Displayer Accounts
- Manage Displayer Accounts
o Determine Item Pricing
- Utilize and maintain complex item price lists
o Develop and Setup Pricing and Promotion Programs
- Displayer group discounts
- Item group discounts
- Develop and maintain ordinal order promotions (1st order, 2nd order)
- Free goods
- Develop and maintain contest promotions
- Develop and maintain "nuggets" or certificate promotions
- Freight pricing
- Bonus buys
- Kit pricing
- Complex Advanced Pricing
- Sample Sales
o Enter and Process Merchandise Orders
- Enter merchandise order
- Validate system processing capability and speed (overnight process)
- Process merchandise orders
- Processing with 'Ship-with' program
- Validate order criteria (min $, credit, account status)
- Apply super bubble
- Process direct ship order 'Home 2 Home'
- Process Canadian display order
- Process Mexico order
- Determine tax on order
- Process invoices for merchandise orders
- Apply promotional discounts
- Consider web based order process during design of associated
enhancements
3
o Enter and Process Service Orders
o Order Hold Processing
o Enter and Process Credit Invoices
o Enter and Process Manual Orders
o Create Customs Documents -- via interface to systems
o Periodic Processing
- Close Accounts
- Freight Route Changes
- Credit Limit Review
- Print Statements
o Extract Data for Other Systems (i.e. Commissions, Integration Hub)
SUPPLY CHAIN
o Demand Planning
- Product Stratification
- Develop Sales Forecasting Process
o Develop New Products
- Initiate Set-up of New Products
o Procure Items
- MPS Planning Parameters
- Run MPS to create Purchase Orders
- Procure items according to forecast needs, and MPS messages
- Manual Purchase Order Entry
o Supplier Management
o Procure MRO/Stores Supplies
- Process requisitions
- Generate/Maintain Purchase Orders according to set Min/Max levels
- Select and Set up Vendors
4
o Reporting and Inquiry
o Inventory Management
- Inventory Adjustments
- Vendor Returns
o Master Data
- Maintain Item Master Information
- Maintain Vendor Information
o Item Maintenance
- Maintain Item Availability
- Maintain Base Wholesale Prices in Both VSD & CAD
- Maintain Retail Price
o Transportation -- support routing assignments
o Sales and Operations Planning
Finance
o Budgeting & Forecasting
- Develop and Consolidate Budget
- Develop and Consolidate Forecast
- Support for Treasury Management
o General Ledger
- Develop Organizational Entity Structure/Departmental Structure
- Develop Chart of Accounts/Reporting Hierarchies
- Process Manual Journals
- Process Interfaced T/B Journals
- Process Intercompany Transactions
- Process Allocations
- Process Multi-Currency - Translation/Revaluation (US, Canada, &
Mexico)
- Fiscal Period Processing
- Period End Close
o Reporting and Consolidation
- Consolidate and Publish Financial Reports
- System Design to support Regulatory Reporting - SEC, GAAP & IRS
5
o Sales Accounting, Credit, and Collections
- Credit policies and practices -- Help Loans and NSF processing
- Collections Management -- Standard Workflow & Dunning Letters
- Cash Receipt/Application/Lockbox
- Tax Processing
- Multi-currency Processing (US, Canada, & Mexico)
- Fiscal Period Processing/Reporting
o Payment Processing
- Cash Payments
- Non Cash Payments
- Process NSF Payments
o Accounts Payable
- Maintain Vendor Information
- Invoice Processing (Manual, 3-way Match, 2-way Match)
- Payment Processing (Checks, Wires, ACH)
- Displayer Payments (1099's & Commissions)
- Tax Processing -- Vertex
- Multi-currency Processing (US, & Canada)
- Fiscal Period Processing/Reporting
The following summary highlights the 105 key reports by categories that are
included in the scope for design and development:
o Custom, Standard, and Enhanced Standard J. D. Edwards Reports -- 98
o Requires Custom non-J. D. Edwards Solution -- 7
The scope includes the detail specifications, development and implementation of
the following modifications:
o Financial
- EN-JDE-FN-X-001 -- Enter quantity for non-cash payments and auto
calculate value of payment
- EN-JDE-FN-X-003 -- Auto update credit limit based on WMS for past 12
periods
- EN-JDE-FN-X-005 -- Remove Credit Hold
o Customer and Sales
- EN-JDE-CS-X-001 -- Default value for customer master (including credit
limit)
- EN-JDE-CS-X-002 -- NCA: Address verification (Address Mailer, SSN
duplicate verification, transportation routes)
6
- EN-JDE-CS-X-003 -- Counter of number of orders (free goods and
freight)
- EN-JDE-CS-X-004 -- Invoice (comments, reason for non shipment, group
sales by category, Canada)
- EN-JDE-CS-X-005 -- Sample sales for displayers / directors
- EN-JDE-CS-X-006 -- Qualified groups for promotions
- EN-JDE-CS-X-007 -- Vertex interface, retail price, state adjustment,
freight tax for Canada
- EN-JDE-CS-X-008 -- Auto-close inactive accounts
- EN-JDE-CS-X-009 -- WMS Enhancement
- EN-JDE-CS-X-010 -- Auto Credit & Debit
o Supply Chain
- EN-JDE-SC-X-001 -- Transportation routes
The scope includes the final design, development, testing and implementation of
each of the following AUTOMATED conversions:
o Master Data Conversion -- Finance
- CN-DAI-JDE-X-1-001 -- Customer Master
- CN-DAI-JDE-X-1-002 -- Vendor Master
- CN-DAI-JDE-X-1-003 -- Bank Information
o Historical Data Conversion -- Finance
- CN-DAI-JDE-X-1-004 -- AR Open Invoices
- CN-DAI-JDE-X-1-005 -- AR Log
o Master Data Conversion -- Supply Chain
- CN-EXE-JDE-X-1-001 -- Inventory Balance on-hand
o Historical Data Conversion -- Supply Chain
- CN-DWH-DP-X-1-001 -- Sales History (DP)
o WMS Data Conversion -- Supply Chain
- CN-DWH-JDE-X-1-001 -- WMS Conversion
The scope includes the final design and implementation of each of the following
MANUAL conversions:
o Master Data Conversion -- Finance
- Chart of Accounts -- Excel to JDE
o Historical Data Conversion -- Finance
- G/L Balances -- Actual 2001 and 2002; Budget 2003
7
- AR/AP Multi-currency conversion -- Payments and receipts to/from
Canadian Displayers from USD to CAN -- DAI to JDE (subject to
Going-Live with Canada in September)
o Master Data Conversion -- Supply Chain
- Inventory Items -- DAI to JDE
- Transportation Routes -- DAI to JDE
o Historical Data Conversion -- Supply Chain
- Open Purchase Orders -- DAI to JDE
o Master Data Conversion -- Customer and Sales
- Pricing and Promotions -- Excel to JDE
- Preferences for Item Restrictions -- DAI to JDE
o Historical Data Conversion -- Customer and Sales
- Open Sales Orders -- DAT to JDE
- Help Loans -- DAI to JDE
The scope includes the detail specifications, development, testing and
implementation of the following AUTOMATED interfaces:
o Finance
1) IN-IOE-JDE-X-N-002 - Payment Extract
2) IN-JDE-FOR-X-X-001 - AP Checks to Forms Server
3) IN-JDE-BK1-X-X-001 - Positive Pay
4) IN-JDE-BK1-X-X-002 - ACH Payment
5) IN-BK1-JDE-X-X-001 - Bank Reconciliation Tape
6) IN-CMS-JDE-X-X-002 - Commissions Check
7) IN-FRG-JDE-X-X-001 - Freight Invoices Upload
8) IN-JDE-IOE-X-N-010 - AR Aging
9) IN-JDE-IVR-X-W-001 - JDE-IVR Extract
10) IN-IOE-JDE-X-N-003 - Redemption of Certificate
11) IN-JDE-IOE-X-N-011 - Statement
o Supply Chain
12) IN-JDE-EXE-X-D-004 - PO Header Detail
13) IN-EXE-JDE-X-D-001 - PO Receipts
14) IN-EXE-JDE-X-D-002 - Mark-outs
15) IN-EXE-JDE-X-D-003 - Inventory Adjustments
8
16) IN-EXE-JDE-X-D-004 - Balance on Hand
17) IN-JDE-DP-X-D-001 - Items, locations Sales History
18) IN-DP-JDE-X-D-001 - Forecast info returned
19) IN-JDE-EXE-X-D-003 - Vendor
20) IN-JDE-EXE-X-D-002 - Item Header/Detail
21) IN-JDE-PR-X-D-001 - Sales Order Header (Shipping Documentation)
22) IN-JDE-PR-X-D-002 - Invoice Detail (Shipping Documentation)
23) IN-JDE-CAN-X-D-001 - Export Ship File
24) IN-EXE-JDE-X-D-006 - Item Dimension
o Customer and Sales
25) IN-IOE-JDE-X-N-001 - Order Extract
26) IN-SCN-JDE-X-D-001 - Scanner
27) IN-JDE-EXE-X-D-005 - Sales Order Header
28) IN-EXE-JDE-X-D-005 - Shipping Header Detail
29) IN-JDE-INV-X-X-001 - Invoice Mailing
30) IN-JDE-IOE-X-N-001 - Displayer Upload
31) IN-JDE-IOE-X-N-002 - Invoice Upload
32) IN-JDE-IOE-X-N-004 - Item Upload
33) IN-JDE-IOE-X-H-007 - Order Status Upload
34) IN-JDE-IOE-X-N-003 - Account Detail Upload
35) IN-JDE-IOE-X-H-006 - Item Status Upload
36) IN-JDE-EXE-X-D-001 - Customer
37) IN-JDE-IOE-X-X-008 - Displayer Purge
38) IN-JDE-IOE-X-N-005 - Item Assembly
39) IN-JDE-VTX-X-X-001 - Tax Calculation
40) IN-VTX-JDE-X-X-001 - Tax Amount and Base
41) IN-JDE-INT-X-X-001 - Customer Address
42) IN-JDE-QUA-X-X-001 - Customer Address
o Commissions
43) IN-JDE-COM-X-X-001 - New Address Book accounts
44) IN-COM-JDE-X-X-001 - Compensation Hierarchy Changes
45) IN-JDE-COM-X-X-002 - Address Book Changes
46) IN-JDE-COM-X-X-003 - Sales outbound
47) IN-COM-JDE-X-X-002 - Commissions WMS information
9
o Integration Hub
48) IN-JDE-IH-X-W-001 - Customer Master - DW
49) IN-JDE-IH-X-W-002 - Commission Data - DW
50) IN-JDE-IH-X-W-003 - AR Master - DW
51) IN-JDE-IH-X-W-004 - AR Transactions - DW
52) IN-JDE-IH-X-W-005 - Item History - DW
53) IN-JDE-IH-X-W-006 - Item Master - DW
54) IN-JDE-IH-X-W-007 - Item Quantity - DW
55) IN-JDE-IH-X-W-008 - Item Attribute - DW
56) IN-JDE-IH-X-D-009 - Purchase Order Header - DW
57) IN-JDE-IH-X-D-010 - Purchase Order Detail - DW
58) IN-JDE-IH-X-W-011 - Vendor Master - DW
59) IN-JDE-IH-X-W-012 - Sales Order Header - DW
60) IN-JDE-IH-X-W-013 - Sales Order Detail - DW
61) IN-JDE-IH-X-D-014 - Purchase Order Message - DW
62) IN-JDE-IH-X-W-015 - Purchase Order Receipt - DW
63) IN-JDE-IH-X-W-016 - Sales Order Message - DW
64) IN-JDE-IH-X-W-017 - Carrier Contact - DW
65) IN-JDE-IH-X-D-018 - Fulfillment - DW
66) IN-JDE-IH-X-D-019 - Bill of Lading - DW
The scope includes the detail specifications, development, testing and
implementation of the following MANUAL interfaces:
67) IN-HR-JDE-X-X-001 - HR - Manual
68) IN-FA-JDE-X-X-001 - FAS - Manual
69) IN-BUD-JDE-X-X-001 - PC Budget Upload - Manual
70) IN-45-JDE-X-X-001 - 4th Shift - Manual
71) IN-FOX-JDE-X-X-001 - Fox Pro - Manual
The scope of this contract does not include the design and/or configuration of
any third party tax programs; the implementation of Vertex is covered in Change
Order #2 dated January 30, 2002, as part of the Phase II Design 'Statement of
Work' dated January 10, 2002.
Geographically the scope includes:
o HIG Headquarters in Carrollton, Texas
o HIG Distribution Center in Carrollton, Texas
10
Andersen Services and Responsibilities
The project services and responsibilities will include the following:
Andersen will work with the HIG and other 3rd party contractor personnel to
assist in the following activities by leveraging our experience, tool sets and
methodology from similar projects:
PHASE III -- BUILD -- This phase is focused on building the system based on the
design defined in the previous Design phase (Phase II). The Build Phase includes
development of the reports, enhancements, and interfaces identified above in the
scope of work. This phase also includes the development of the conversion
efforts, the final system configuration, and integrated testing. The change
management team will be focusing on training and on-going communication.
Finally, the entire team will participate in the go-live planning, execution and
post go-live support. Key activities for this phase of work are:
o WBT Course & Related User Procedure & Training Development Materials
o Training Preparation - Logistics
o Reports Development
o Forms Development
o Interface Development
o Data Conversion Preparation (Data Cleansing, Final Mapping)
o Data Conversion Development
o Enhancement Specifications Development
o Enhancement Development including Unit Testing
o Developer Support During System Test
o Functional Team Support of Development Team including Unit Testing
o Integrated Test Preparation - Scripts Development
o Integrated Test - Cycle 1
o Integrated Test - Cycle 2
o Stress Test Preparation and Execute #1 (Sales Order Processing)
o Data Conversion Test #1 (A,B)
o Data Conversion Test #2 (A,B,C)
o Stress Test Preparation and Execute #2 (Integrated Processing)
o Deploy Preparation
o Training Delivery
o User Readiness Session
o Quality Assurance Review - Andersen Check Points
o Close Build Phase
o Overall Project Management
11
PROJECT PLANNING AND MANAGEMENT -- The purpose of this component is to provide
leadership, guidance and structure to the project team. Additionally, the
project managers will work to remove obstacles and barriers to progress and
insure stability in the implementation process. The project managers will also
be responsible for developing a strong team environment where open communication
is encouraged. Key activities for this component are:
o Project Management
o Internal Project Communications
o Conduct Status Meetings and Prepare Status Reports
o Conduct Steering Committee Meetings
o Manage Project Team Roles & Responsibilities
o Coordination of Deliverables
o Project Team Training/Orientation
o Scope and Change Management
o Manage Project Calendar and schedules
ORGANIZATIONAL CHANGE MANAGEMENT -- This component is focused on the people
aspect of the implementation: Internal and external project communications,
training development and execution, and go-live readiness analysis. Key
activities for this component are:
o Plan and execute communications
o Manage project change
o Conduct organization communication meetings
o Celebrate milestone accomplishments
o Execute User involvement strategy from Design Phase
o Execute Leadership involvement strategy from Design Phase
o Execute findings/actions items identified in Change readiness/risk
assessment from Design Phase
o WBT Courses and related Materials
o Training development and execution
REPORTS AND FORMS -- This sub-team is focused on the development of the reports
and forms required for go-live. This team will utilize the reports approach and
reports matrix developed during the Design phase. Andersen's role will be
limited to providing support, and guidance to the HIG team lead and training to
and key HIG report writing staff. Andersen will also assist in the development
of the first 100 reports. Key activities for this sub-team are:
o Finalize To-Be Report and Form Matrix
o Develop Report Design Documents
o Develop Reports and Forms
o Develop Report and Form Cut-over Checklist
o Conduct On-Site Training for Key Report writing personnel
12
o Develop post go-live report development policies and procedures
DEMAND PLANNING -- This process is focused on the definition of the Demand
Planning process and the configuration of the software application. The elements
to be implemented include: multiple forecast models, simulation capability, and
manual override capability of both forecasts and demand history and promotion
management capability. Key activities for this team are:
o Prepare and Convert Data (2 years of Sales History)
o Prepare Test Scripts
o Assist in design of Interface to and from JDE
o Perform 2 Integrated Test Cycles
o Prepare and Execute Training
o Define and Develop Reports
o Validate Final Technical Environment
o Deploy Demand Planning
SALES AND OPERATIONS PLANNING -- This process is focused on the creation of a
formal, integrated communication process for managing change related to product
demand and supply. This process reconciles tactical operating plans (financial,
category, consensus, assortment, unit) with the overall strategic business
objectives. Key activities for this team are:
o Develop S&OP process design
o Gather input and define functional requirements
o Define key metrics and reports to support the process
o Define the organizational roles and responsibilities
o Facilitate process design workshops
COMMISSIONS SYSTEM -- This sub-team is focused on the development of the system
that would support the management (generation, tracking, reporting, etc.) of the
commission payments made to the independent Displayers. Andersen's role will be
limited to the management over-sight relative to the integration and dependency
on the J. D. Edwards system development effort and (jointly with HIG & 3rd party
developers) the development and testing of the interfaces between the JDE
platform and the Commission system; (see interface list for specific interface
requirements). Key activities for this team are:
o Development of the Detail Use Cases
o Detail Adjustment GUI
o Develop GUI Functionality to Support Use Cases
o Data Conversion from DAI
o System Test
o Acceptance Test
13
o Training Plan Development
o Transition and Training
DATA WAREHOUSE TEAM -- This sub-team is focused on the efforts required for
maintaining the current 'data warehouse' as an operational integration hub for
the various legacy systems that depend on it for data flow. This is a client
lead effort where Andersen's role will be limited to the management over-sight
relative to the integration and dependency on the J. D. Edwards system
development effort and (jointly with HIG & 3rd party developers) the development
and testing of the interfaces between the JDE platform and the data warehouse
system (integration hub); (see interface list for specific interface
requirements). Key activities for this team are:
o Develop interface approach
o Design and implement data migration approach for second JDE instance
o Define detail mapping requirements
o Create second reporting instance of JDE
o Confirm JDE aliases and common glossary of terms
o Support development effort of interfaces
o Develop test plan and approach
o Facilitate testing sessions and user acceptance/sign-off
o Reporting Instance Design & Execution
o Go-live
9-8 DEVELOPMENT TEAM -- This sub-team is focused on the efforts required to
convert the existing customer number in the various remaining legacy system from
9 digits to 8 digits. This conversion is necessary for the remaining legacy
systems to successfully integrate with the JDE platform. This is a client lead
effort where Andersen's role will be limited to management over-sight only. Key
activities for this team are:
o Develop Database Conversion Script
o Development Documentation
o Completion of Conversion Effort
o Develop Test Plan and Approach
o Conduct Integrated Test
o Complete Go-live/Conversion
14
CNC/INFRASTRUCTURE TEAM -- This sub-team will be responsible for creating and
maintaining the J. D. Edwards technical environments for development, testing
and production use. This is a client lead effort where Andersen's role will be
limited to the management over-sight and the required interaction to make this
team successful. The CNC/Infrastructure team is tasked with supporting the
project team needs both pre and post go-live. Key activities for this team are:
o Development and Maintenance of the Training Environment
o Development and Maintenance of the Development Environment
o Development and Maintenance of the Production/User Environment
o Development and Maintenance of the Second Database Instance (Reporting
Instance)
o Set-up and Maintenance of CNC and Functional Security
o Set-up and Testing of Load balancing and Fail-over
o Application database tuning
o Application Change Management
o Impact Analysis on ESU, ASU & Service Pack Updates
o Application of ESUs
o Integration of the Address Server
o Configuration of AutoPilot
o Integration and configuration of Disaster Recovery Procedures
Deliverables
Andersen, working with the HIG personnel, will produce the following
deliverables:
Organizational Change Management
o Web Based Training Course Maps
o Web Based Training Courses and materials, including process maps
o Prerequisite Training Delivery Confirmed
o Training Schedule
o Series of Impact/Change Readiness Meetings
o Go-Live Promotion and Communications Plan
o Ownership Transition Plan
o Feedback Workshop
o End-User Training
o System Go-Live and Project Success Communication
Reports & Form Team
o Report and Form Development Matrix
o Report and Form Design Documentation
15
o Report and Form Printouts
o Report and Form Cut-Over Checklist
o Report Training Course Outlines
o Report Development Request Approach (Post Go Live)
Development & Functional Teams
o Interface Programs
o Interface Test Scripts
o Interface Test Data
o Archived Interface Program Code
o Control Reports
o Interface Impact Assessment on Custom Modifications
o Data Conversion Programs
o Reconciliation Reports
o Data Conversion Test Scripts
o Data Cleansing Activities
o Data Conversion Test Data
o Archived Data Conversion Program Code
o Data Conversion Checklist
o Enhancement Programs
o Enhancement Test Scripts
o Enhancement Test Data
o Enhancement development documentation
o Operational batch schedule
o Operational batch schedule documentation
o Security design and approach
o Archived Enhancement Program Code
Functional & Integration Teams
o Integrated Test Approach
o Integrated Test Scripts
o Integrated Test Data
o Stress Test Approach
o Stress Test Scripts
o Stress Test Data
o Stress Test Instructions
o Stress Test Evaluation Form
o Stress Test Results
o Integrated Test Kick-Off Presentation
o Integrated Test Results
o Issues Resolution
16
o Updated Process Flow Charts
o Knowledge Transfer Plan -- at Integrated Test and Post Go-live
o User Readiness Mock Session ('Day in the Life')
o Roll-Out and End-User Support Team Plan
o Overall Cut-Over Checklist
o Contingency Plan
o Completed Go-Live Sign-Off
o Going-Forward Recommendations
o Post Go-live 'C' Priority Development Plan
Demand Planning
o System Configuration
o Integrated Testing
o User and Technical Training
o User / Procedure Manuals
o System Integration with JDE
o Sales History Data Conversion
o Demand Planning Process Implementation
Sales and Operations Planning
o Process Flows
o Policy and procedure documentation
o Monthly planning calendar
o Role definition
o Key Reports (approach and specification)
o Roll out plan
Project Management
o Build Phase QA Checklist
o Client Satisfaction Survey
o Overall Project Review
o Project Team Evaluations
o Lessons Learned
o Final QA Review Checklist
o AA Test Phase QA Checklist
o Post Roll Out Review Report
o Issue Database
17
Staffing
The following individuals shall be assigned to the engagement from Andersen:
o Stephen Engel -- Engagement Partner
o Sharon Stufflebeme -- Quality Assurance Partner
o Robert Newsbaum -- Andersen JD Edwards Liaison
o Shawn Permann -- Project Manager -- Client stay bonus participant
o John Hallin -- Customer and Sales Team Lead -- Client stay bonus
participant
o Bob Whalen -- Financials Team Lead -- Client stay bonus participant
o Bryan Fornadel -- Supply Chain Team Lead -- Client stay bonus
participant
o David Siu -- Development Team Lead -- Client stay bonus participant
o TBD -- Customer and Sales Team Consultant -- Client stay bonus
participant
o Canaan Reich -- Customer and Sales Team Consultant
o Jeff Pennington -- Supply Chain Team Consultant
o Britt-Louise Andermo -- Financials Team Consultant -- Client stay
bonus participant
o Regina Brodun -- Supply Chain Team Consultant -- Client stay bonus
participant
o Muriel Perie -- Technical Facilitator -- Client stay bonus participant
o Carol Pearson -- Organizational Change Team Consultant -- Client stay
bonus participant
o Ocie Anderson -- Supply Chain Team Consultant -- Client stay bonus
participant
o Liviu Parvu -- (Third party Subcontractor) -- Supply Chain Team
Technical Consultant
o Doug Roesch -- Reports and Forms Team Support
o Staci Rankin -- Web Tech Writer
o Stacie Mehwriter -- Web Tech Writer
o Ken Huntly -- Developer -- Focus on Conversions
Andersen reserves the right to re-assign resources on this project as necessary.
18
TEAM ORGANIZATIONAL STRUCTURE
[TEAM ORGANIZATIONAL STRUCTURE CHART]
19
Andersen Roles
PROJECT PARTNER
The project partner ensures overall project success and client satisfaction. The
partner maintains the executive level relationships and keeps all communication
lines open between key client sponsors and Andersen. This individual is
ultimately accountable for the project and has a high-level decision making
capability. Responsibilities include:
o Supports timely resolution of major business issues
o Ensures resources are available for success of the project
o Ensures the project is adequately staffed
o Respond to on-going status reports to remove/resolve road blocks for
the project
QUALITY ASSURANCE
The quality assurance representatives are responsible for ensuring quality work
products. Responsibilities include:
o Provides expertise and overall direction to the implementation team
o Monitors and supports the overall engagement relationship and resolves
issues and conflicts
o Implement and manage ExCEED Process
o Implement and manage Quality Assurance Process
PROJECT MANAGER -- SHARED ROLE
The project manager is responsible for planning and assigning project work,
participating in group discussions, and ensuring all deliverables are produced
on time and with the desired quality. The project manager is ultimately
accountable for all project responsibilities assigned to other project team
members and for coordinating resolution of issues. Responsibilities include:
o Determines project objectives, schedules, and resource budgets
o Monitors results, performance, and resource expenditures against
targets
o Controls all project changes
o Compiles project progress and status reports
o Maintains customer contact and momentum
o Determines specific project tasks and how they will be accomplished
o Ensures that assigned tasks are performed in accordance with the
established standards and are completed on time and within budget
o Resolves outstanding issues and action items
o Reviews all system modifications with the executive sponsors
20
FUNCTIONAL TEAM LEAD
The functional team lead is responsible for leading the functional team members
through the Build Phase to support HIG's process vision and business
requirements. Responsibilities include:
o Ensures consistency and a high level of quality
o Ensures deliverables are completed on time with appropriate functional
approval and quality
o Guides the functional team in effectively translating functional
requirements into an operating and usable solution
o Identifies and assists in resolving issues and conflicts
o Responsible for transferring application configuration and
implementation methodology knowledge to the Systems Analysts/Business
System Analysts
o Supervises the application consultant
o Executes the detail design and configuration of the JDE system
o Assists in the design and development effort of reports, forms,
interfaces, modifications and conversions
o Assists in developing Stress and Integrated Test scripts and
Integrated Test data
o Executes integrated and Stress testing. This includes making changes
in configuration based on results and resolving errors
o Validates the procedures and system tasks documented by the end user
training and development team
o Assist in the development and execution of the go-live cut-over plan
o Provides post go-live support as necessary
DEVELOPMENT TEAM LEAD & TECHNICAL FACILITATOR -- SHARED
The development team lead is responsible for leading the development team
members through the Build Phase by completing the development effort.
Responsibilities include:
o Maintains and communicates a clear understanding of business
requirements and processes
o Develops draft material in preparation of work sessions
o Oversees the development of the interfaces, modifications and
conversion efforts
o Plans and schedules development work effort and prioritizes work for
the development staff
o Documents requirements, process changes and unresolved issues during
client work sessions in conjunction with business area analysts
o Actively works with business area analysts to ensure interfaces and
modifications are consistent with the business requirements and
overall system design
o Guides the development team through the design of technical approaches
and specifications for the interfaces, conversions and modifications
21
DEVELOPERS (3RD PARTY)
The development team is responsible for working with the Functional Teams and
HIG developers to understand the business requirements and begin developing the
detail specifications for modifications, interfaces and conversions. Ultimately
the development team is responsible for the development of the modifications,
interfaces and conversions. Andersen will directly manage these 3rd party
resources. Responsibilities include:
o Gains a clear understanding of business requirements and processes
o Jointly develops the interfaces, modifications and conversions with
the support of the functional teams.
o Documents requirements, process changes and unresolved issues during
client work sessions in conjunction with business area analysts
o Documents their design and development effort
o Actively works with business area analysts to ensure interfaces and
modifications are consistent with the business requirements and
overall system design
o Develops the detail design of technical approaches and specifications
for the interfaces, conversions and modifications
o Jointly with HIG developers, designs and modifies JDE software based
on user requirement specifications
o Unit/String Test Plans
APPLICATION CONSULTANTS
The application consultant plays a combined functional and technical role with
heavy emphasis on knowledge transfer and translating functional requirements
into specific features and tailoring options. Each functional team's Application
Consultant works with the other functional team members to design and configure
the JDE system to support the approved design and configuration from the Design
Phase of work. Responsibilities include:
o Responsible for transferring application configuration knowledge to
the Systems Analysts/Business Analyst
o Assists the Functional Leads and functional team in effectively
translating functional requirements into configuration options and
solutions
o Executes the detail design and configuration of the JDE system
o Assists in the design and development effort of reports, forms,
interfaces, modifications and conversions
o Assists in developing Stress and Integrated Test scripts and
Integrated Test data
o Executes integrated and Stress testing. This includes making changes
in configuration based on results and resolving errors
22
o Validates the procedures and system tasks documented by the end user
training and development team
o Assist in the development and execution of the go-live cut-over plan
o Provides post go-live support as necessary
ORGANIZATIONAL CHANGE MANAGEMENT LEAD -- SHARED ROLE
The change lead is responsible for communicating and managing the change efforts
associated with the implementation. Responsibilities include:
o Works closely with the functional and technical teams to understand
organizational requirements and design approach on user procedures and
training manuals
o Documents and communicates organizational change requirements and
decisions to the appropriate managers so they can effect the changes
in their departments
o Communicates project progress and important enterprise change
decisions to the entire company
o Executes the training strategy defined in the Design Phase
o Oversees completion of training and communication deliverables
o Responsible for the training logistics and trainee scheduling
o Supports User Readiness Planning
TECHNICAL SUPPORT FOR DEMAND PLANNING INSTALLATION (3RD PARTY)
This resource will be responsible for supporting the HIG technical team with the
tuning of the database of the Demand Planning software. Key activities include:
o Provide database tuning and application optimization
WEB TECH WRITERS
These resources will be responsible for developing the Web-Based
Content/Materials used to deliver the training to the end-users. These writers
will work with the Functional Teams and the SME's to develop materials that are
based on the roles, processes and systems specific to HIG. Key activities
include:
o Review and translate process flow documentation into Key Training
activities
o Interview key users and SME's to understand HIG specific terminology
and processes
o Work with Functional team to understand system and process flow
integration/interaction
o Develop Web-based training content based on findings and research
23
Client Responsibilities and Project Assumptions
1. Client Responsibilities
In connection with Andersen's provision of the Services, Client will
perform the tasks, furnish the personnel, provide the resources, or
undertake the responsibilities specified below ("Client Responsibilities").
STEERING COMMITTEE
The steering committee is the owner of the project and are responsible for
providing the necessary funding and resources as well as the management
commitment to the project. Responsibilities include:
o Resolves major implementation policy decisions and makes the
final decision on all other proposed opportunities and
recommendations
o Provides overall project direction and management support
o Supports the vision of the project
KEY ADVISORS
The key advisors are executive level advisors assisting with business
knowledge and resources. Responsibilities include:
o Assist with issue resolution
o Provide input to major business policy decisions
o Supports the vision of the project
EXECUTIVE SPONSORS - PMO
The project directors are key executives responsible for the major business
areas included in the project scope. These individuals are ultimately
accountable for the project and have high-level decision-making capability.
Responsibilities include:
o Supports timely resolution of major business issues
o Ensures resources are available for success of the project
o Ensures the project is adequately funded
o Respond to on-going status reports to remove/resolve road blocks
for the project
o Ensures that internal policies are updated to reflect business
process changes and communicates that change to the organization
o Approves all system modifications
The following individuals will be responsible for providing this executive
level support specific to their areas which includes providing oversight
and confirmation of final deliverables:
24
o Mary-Knight Tyler -- Project Management, Finance, Commissions, Vertex,
Integration, and 9-8 Conversion
o Chris Lesher -- Customer and Sales Team
o Dan Zipes -- Supply Chain Team
o Alan Boyer -- Information Technology -- Data Warehouse, Development
and CNC/Infrastructure
o Jeannie Price -- Organizational Change Management, and Canadian
Conversion
o Kim Bohling -- Reporting and Forms
PROJECT MANAGER -- SHARED ROLE
The project manager is responsible for planning and assigning project work,
participating in group discussions, and ensuring all deliverables are produced
on time and with the desired quality. The project manager is ultimately
responsible for all project responsibilities assigned to other project team
members and for coordinating resolution of issues. Responsibilities include:
o Determines project objectives, schedules, and resource budgets
o Monitors results, performance, and resource expenditures against
targets
o Controls all project changes
o Compiles project progress and status reports
o Maintains customer contact and momentum
o Determines specific project tasks and how they will be accomplished
o Ensures that assigned tasks are performed in accordance with the
established standards and are completed on time and within budget
o Resolves outstanding issues and action items
o Reviews all system modifications with the executive sponsors
BUSINESS AREA ANALYSTS COMBINED WITH THE SYSTEMS ANALYST ROLE
Business Area Analysts are responsible for representing the overall organization
and their specific business unit's needs by participating in requirements
workshop discussions. They are key participants in the design phase, approving
design prototypes and usability testing. They reach consensus regarding changes
in business requirements. Responsibilities include:
o Performs as liaison between the business department and the
implementation team
o Attends project team training and orientation
o Contributes subject-area business knowledge
o Assists in the security definition of end-users
o Communicates results of meetings and workshops to the organization
o Attends meetings and participates in all aspects of the project
o Develops draft material in preparation of work sessions
o Gains a clear understanding of business requirements as defined during
the discovery activity
o Assists in the development of the functional design during the design
phase
o Supports timely resolution of outstanding business issues as assigned,
and documents resolutions
25
o Identifies and communicates opportunities for business area practice
changes
o Prepares and delivers a plan for communication to all areas impacted
by the new system
o Develops written procedures for the new system
o Enters reference data into the new system during construction activity
of the project
o Responsible for input and/or coordination of manual data input
o Documents requirements, process changes and unresolved issues during
client work sessions
o Designs and modifies JDE software based on user requirement
specifications
o Performs design of custom reports
o Performs design of standard reports
TECHNICAL TEAM
The technical team is responsible for developing technical knowledge and skills
specific to the software package. Responsibilities include:
o Provides application security and HW/OS support
o Oversees database administration
o Designs disaster recovery plan
o HTML, Citrix, Fat Clients
DATABASE ADMINISTRATION
The data base administration team is responsible for creating and maintaining
the database. Responsibilities include:
o Responsible for the creation of new tables, views and elements in the
JDE system
o Responsible for data base tuning
o Responsible for the creation of views for end-user reporting
o Coordinates with the Data Administration group to complete user
request procedures for adding new data elements, views, and tables to
the JDE software
o Technical Environments
DATA ADMINISTRATION
The data administration team is responsible for providing the initial data
context for the project. Responsibilities include:
o Ensures that corporate data standards are adhered to and that they fit
into the corporate logical data model
o Reviews draft data materials during the requirements/design definition
phase, and reviews design feasibility prototypes
o Assists the conversion team with data mapping between the JDE system
to/from other systems
o Coordinates creation of database views with the DBAs
o Ensures that all data required by the process data flows are reflected
in the model
o Documents potential changes as a result of requirement/process
discussions
26
o Coordinates with the DBA group to complete user request procedures for
adding new data elements, views, and tables to the JDE software
NETWORK ADMINISTRATION/TELECOMMUNICATIONS
The network group is responsible for the overall network communication support
needs of the project. Responsibilities include:
o Responsible for hardware infrastructure supporting workstation
connectivity
o Ensures that adequate system support will be provided during all
stages of the project
o Develops volume test plans in conjunction with the QA group
o Monitors access and documents performance issues as it relates to
network operations
OPERATIONS GROUP
The operations group is responsible for coordinating the scheduling of all batch
processing. Responsibilities include:
o Schedules are coordinated with end-users and/or appropriate project
staff and properly set-up
o Responsible for ensuring schedules do not cause conflicts with other
areas
CHANGE MANAGEMENT TEAM (SOFTWARE VERSIONS)
The change management group is responsible for controlling software within the
environment. Responsibilities include:
o Providing guidance and input for change management plans
o Implementing change management plans
o Owns Production Environment
QUALITY ASSURANCE/TESTING
The quality assurance group is responsible for reviewing project deliverables
and coordinating user acceptance testing. Responsibilities include:
o Develops the user acceptance test plan
o Reviews project deliverables with the project manager
o Assists in selecting test participants
o Coordinates the development of the user acceptance test plan
o Schedules and/or coordinates testing facilities and equipment
o Coordinates and monitors testing schedule
27
SECURITY
The security team is responsible for over-all security definition and practice.
They ensure that corporate security standards are adhered to and they fit into
the existing corporate security strategy. Responsibilities include:
o Initial set-up, transfer, and maintenance of security/user profiles
o Ensures the application does not impact other application security
(e.g., network, mainframe security, etc.)
o Gains a clear understanding of security requirements to define
security strategy
o Responsible for ensuring that long-term strategies are understood
o Controls over-all access to the application
o Serves as liaison to the auditors for security issues
o Responsible for establishing security requirements that will not
compromise assets (e.g., ensuring that application programmers cannot
inadvertently erase production data, etc.)
SUPPORT CENTER
The support center is responsible for answering, responding, and assigning (as
needed) end-user desktop software/usage questions and problems. Responsibilities
include:
o Questions are answered or assigned to the proper personnel
o Proper personnel are notified of problems
o Attends training designed for support center staff to answer calls
and/or determine proper notification (e.g., application group,
database group, etc.)
SYSTEMS GROUP
The systems group is responsible for providing system support on all platforms.
Responsibilities include:
o Coordinates allocation of server and client disk space in preparation
of installation, upgrade, and maintenance of software
o Ensures that adequate disk space is available
o Ensures that system standards are adhered to and that they fit into
the existing and planned system standards
o Reviews draft data materials during the requirements/design definition
phase, and reviews design feasibility prototypes
28
SUBJECT MATTER EXPERTS -- SHARED ROLE
Subject matter experts (SME) play a key role in defining and clarifying business
requirements. The SME is responsible for participating in meetings, as required
by the business area analysts, to ensure the project team has a clear
understanding of requirements. Responsibilities include:
o Contributes subject-area business knowledge
o Develops draft material in preparation of work sessions
o Assists in the development of the functional design during the design
phase
o Supports timely resolution of outstanding business issues as assigned
and documents resolutions
o Participates in confirming Integration Test results
ORGANIZATIONAL CHANGE MANAGEMENT LEAD -- SHARED ROLE
The change lead is responsible for communicating and managing the change efforts
associated with the design effort. Responsibilities include:
o Works closely with the functional and technical teams to understand
organizational requirements and design approach on user procedures and
training manuals
o Documents and communicates organizational change requirements and
decisions to the appropriate managers so they can effect the changes
in their departments
o Communicates project progress and important enterprise change
decisions to the entire company
o Develops the training strategy and determines best practice for
delivery of training
o Determines proper medium for training (e.g., classroom, self-paced
tutorial, train-the-trainer approach, Intranet, etc.)
o Determines the target training participants and the training needs
depending on the work responsibility of that user
o User Readiness Support
COMMISSION SYSTEM LEAD, ANALYST, DEVELOPERS, ET ALL
The responsibility of designing and developing the Commission System is solely
the responsibility of HIG. Andersen's role will be limited to the management
over-sight relative to the integration and dependency on the J. D. Edwards
system design effort. HIG will otherwise be responsible for all deliverables and
work products, resource assignments, tasks identification and completion,
documentation and all other related items to the design and development of the
Commission System.
Project Assumptions
THE PROJECT ASSUMPTIONS INCLUDE THE FOLLOWING:
o Andersen is not responsible in any way for the selection of the new
ERP system J.D. Edwards.
o The Build phase will start on April 15, 2002 and will run
approximately 42 weeks.
29
o The Build phase project will assume an operational enterprise-wide
financial, distribution and demand planning system by December 29th, 2002.
o Andersen and HIG will perform as project managers. HIG will provide a
full-time project manager.
Andersen's delivery of the Services and the fees charged are dependent on (i)
the Client's timely and effective completion of the Client Responsibilities,
(ii) the accuracy of the Assumptions, and (iii) timely decisions and approvals
by Client's management. Client shall be responsible for any delays, additional
costs, or other liabilities caused by or associated with any deficiencies in the
Client Responsibilities and Assumptions.
PROJECT ASSUMPTIONS SPECIFIC TO THE SCOPE ARE:
o Interface modification plan and design will occur concurrently with the JDE
application design and setup
o Any newly identified RICE component (Reports, Interfaces, Conversions &
Enhancements) will require a Change Order
OVERALL PROJECT ASSUMPTIONS:
o Any scope changes upon commencement of the project will be documented
through a change order process and agreed to by both Andersen and HIG.
o This project is a significant endeavor for HIG. The participation and
leadership of key management executives in this project is critical to its
success.
o HIG will adopt the new processes driven by the JDE software and will not
engage in any major reengineering efforts.
o We assume the HIG Steering Committee personnel will be available to make
key decisions on a timely basis.
o It is assumed that all key deliverables are signed off on a timely basis.
Delays in confirmation of key sign-off deliverables may impact the project
timeline.
o Andersen and HIG will participate jointly in the project and will share
responsibility to complete project tasks. We assume HIG will make
available, on a timely basis, appropriate personnel to complete the
required tasks.
o HIG will manage other third-party vendor activities except those designated
as sub contractors of Andersen. Negotiations and billings of all other
third-party vendors will be the responsibility of HIG. Contract
negotiations for all vendors can impact the overall project timing and
deadlines.
PROJECT PLANNING AND MANAGEMENT ASSUMPTIONS:
o We assume a work area for the project team will be in place including
copier, analog lines, laser printer, telephones, and other necessary
supplies. E-mail and shared directory(ies) will be available to the project
team members to facilitate communication and information gathering and
sharing.
30
o We are assuming eight-hour work days, five days a week, for all local
project team members. We are assuming a ten-hour work days, four days a
week, for all traveling project team members. This may vary depending on
the segment of the project.
o HIG's is expected to play a significant role in the Change Management
implementation; coordinating employee related decisions, as well as
ultimately supporting overall training design and approach.
o HIG will also provide business and technology resources as outlined in the
Project Organization section of this proposal.
o If additional staff-level resources are needed to perform administrative
and documentation tasks, the HIG and Andersen project management team will
agree on the required time and costs.
TECHNICAL ENVIRONMENT:
o We assume all new JDE users will be provided with connectivity, technical
infrastructure, and the appropriate personal computers and software to
access their required modules by HIG and/or a third party vendor.
o We assume that HIG will have an in-house database administrator and an
in-house Unix or NT administrator.
o We assume HIG is responsible for the JDE technical environment and that HIG
technical personnel will have or be trained in the necessary technical
skills.
o The testing of interfaced transactions through other systems will be the
responsibility of HIG. The project team will ensure the proper transactions
are generated and formatted to the other systems.
o Upgrade to new versions of the JDE software or required hardware or systems
software is the responsibility of HIG.
o We assume that the JDE technical environment will meet HIG requirements for
transaction processing speed and volumes
o We assume that the JDE technical resources assigned to the project will
have the necessary technical skill sets and/or will have access to the
appropriate resources for issue resolution
o An HIG resource will be dedicated to the design and implementation of JDE
security. Andersen will provide direction and review of the security tasks.
CONVERSION:
o Andersen and HIG will jointly manage data conversion tasks. We will assist
with the conversion approach and high-level design of conversion programs.
o Andersen will assist with the design and management of the conversion
programs.
o Mapping tables between legacy systems and JDE will be required for all
interfaces. HIG will be responsible for producing and maintaining all
mapping tables.
Client will designate a competent employee or employees within its senior
management who will make all management decisions with respect to this
engagement. To the extent that the Services or Andersen's deliverables include
the design or implementation of hardware or software systems, Client's
management
31
shall be responsible for making all management decisions, including but not
limited to, decisions concerning systems to be evaluated and selected; the
design of such systems; controls and system procedures to be implemented; scope
and timetable of system implementation; and testing, training, and conversion
plans. To the extent that Andersen's deliverables include surveys, analyses,
reports, evaluations, recommendations or other management consulting services,
Client's management shall be responsible for all implementation decisions and
for any future action with respect to the matters addressed in the deliverables.
In conjunction with Client acceptance, Client's management will evaluate the
adequacy and results of the design and implementation of Andersen's
deliverables.
Except as expressly agreed herein, Client shall be solely responsible for:
o determining the existence of, and complying with, any and all of the
following that are applicable to electronic transactions, commerce,
processes, or activities conducted over the Internet or any electronic
network (collectively, "Transactions"): import/export controls;
requirements to obtain and maintain licenses or other permissions;
requirements to assess, pay, or withhold taxes, customs duties, or
other charges; and other laws or regulations in all applicable
jurisdictions;
o the security of its network and any related systems, including the
security, privacy and confidentiality of any Client or third party
data, intellectual property, or other information;
o establishing and determining the validity and enforceability of
contract execution, performance and fulfillment processes, contracts,
and any other documentation necessary for or used in conducting
Transactions;
o any content contributed by Client or a third party in connection with
this engagement; and
o any use by Client of the Deliverables (including, but not limited to:
Client's posting to its website, or transmission over the Internet, of
text, images, software, music, video, or other information; Client's
sale or offering for sale of any goods and services via its website or
otherwise over the Internet; and any linking, framing, or distribution
of unsolicited electronic mail in connection with Client's website)
which is illegal, unlawful, or harassing, which infringes another's
intellectual property rights, or which otherwise constitutes network
abuse ("Misuse").
Client acknowledges that Client and/or its affiliates (i) are the controller(s)
of any Client, affiliate, or third party data or databases accessed and/or
processed by Andersen in the course of performing the Services, including, but
not limited to, data relating to individuals (the "Data"), and (ii) will be
solely responsible to third parties for such Data, including, but not limited
to, the individuals to whom the Data relate and Client and affiliate personnel.
Client represents and warrants to Andersen that all Data processing and
transfers between Client and its affiliates on the one hand and Andersen on the
other hand have been and will be conducted in full compliance with any laws or
regulations applicable to the protection of data.
Notwithstanding the scope of Andersen's services or deliverables hereunder,
Client acknowledges that it remains Client's responsibility to devise and
maintain a system of internal accounting controls [in compliance with Section
13(b)(2) of the U.S. Securities Exchange Act of 1934, which Section provides
that such controls be] sufficient to provide reasonable assurances that: (i)
transactions are executed in
32
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary (a) to permit preparation of financial
statements in conformity with generally accepted accounting principles or any
other criteria applicable to such statements, and (b) to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. [In
addition, Client represents and warrants to Andersen that Client's management:
(1) has acknowledged such responsibility in writing to its audit committee or,
if no such committee exists, then to its board of directors or, if Client has
neither an audit committee nor a board of directors, then to the audit committee
or board of directors, as applicable, of any entity that controls Client or,
alternatively, (2) will, upon execution, provide a copy of this Statement of
Work to the foregoing committee or board, as applicable.] Client will determine
the adequacy of its internal accounting controls and financial reporting systems
without relying on Andersen's services or deliverables as the primary basis for
making such determination. Finally, Client acknowledges to Andersen that it is
Client's responsibility to make such disclosures with respect to this engagement
that are required by applicable laws and regulations.
Project Approach and Timeline
The overall approach for completing the work specified or described in this
arrangement is based on the Build Phase of Proactive Xe Solutions Methodology to
meet the project objectives for the scope listed previously. This framework is
Andersen's proprietary JD Edwards specific business integration methodology, and
has been adapted to meet the objectives of this engagement. A work plan has been
provided to reflect the level of effort and specific dates for all key/relative
tasks. Please refer to Appendix A for a detail view of the work plan.
Fees & Expenses
We estimate the Build Phase, including post go-live support will be completed on
February 3, 2003 with an actual 'Go-Live' date estimate of December 29, 2002.
Andersen's fees for the scope of Services described in this Statement of Work
will be based upon actual time and materials at a substantially discounted rate.
Our fee estimate is $3,231,168, plus out of pocket expenses. Our fees are based
on an average rate of $176 per hour. Please refer to Appendix B for detail
supporting this estimate.
Further to these fees, 3rd party resources will be required for the CNC
implementation/configuration and the development effort. It is our understanding
the HIG will contract directly with all 3rd party vendors and these vendors will
bill HIG directly for those services.
33
This fee is based on Client fulfilling the Client Responsibilities and
Assumptions described in this Statement of Work. Andersen will bill Client
$350,000 at the beginning of the project (April 15, 2002) then in accordance
with the following billing schedule:
<Table>
June 1, 2002 $350,000+ actual expenses incurred in April
July 1, 2002 $350,000+ actual expense incurred in May
August 1, 2002 $350,000+ actual expenses incurred in June
September 1, 2002 $325,000+ actual expenses incurred in July
October 1, 2002 $325,000+ actual expenses incurred in August
November 1, 2002 $325,000+ actual expenses incurred in September
December 1, 2002 $325,000+ actual expenses incurred in October
January 1, 2002 $300000+ actual expenses incurred in November
February 1,2003 actual expenses incurred in December
February 15, 2003 $ remaining fees minus "Client Stay Bonus" plus remaining expenses from project
</Table>
As agreed upon by both parties, a "Client Stay Bonus" will be paid to those key
Andersen employees (identified in the Staffing section) who remain for the
entire project, upon completion of this engagement. Home Interiors and Gifts
will complete this payout directly to the named employees. The funds required to
support this will be subtracted from the final payment due to Andersen in
February. We will reconcile the actual fee amounts incurred for the project at
the end of the project and any adjustments will be reflected in a final billing
or credit.
Andersen will be reimbursed by Client for reasonable out-of-pocket expenses
(including transportation, hotels, meals, etc.) incurred as a result of
Andersen's performance of Services. Andersen agrees to use reasonable efforts to
limit travel and lodging expenses by using coach air fare, booking in advance
when available, staying at hotels identified by Client offering corporate rates,
and sharing mid-size rental cars where practical. Invoices are due upon
presentation. Should any invoice remain unpaid for more than 28 days, interest
shall be paid at a rate of 1.5% per month. Any taxes arising out of this
arrangement other than those on Andersen's net income shall be Client's
responsibility.
Change Order Process
During the project described in this Statement of Work, Client may request, in
writing in a form substantially similar to Andersen's standard form of change
request, additions, deletions, or modifications to the scope or nature of the
Services described in this Statement of Work (all referred to hereinafter as
"Changes"). Andersen shall have no obligation to, and shall not, commence work
in connection with any Change until the fee and/or schedule impact of the Change
is agreed upon in a written change order signed by both Andersen and Client.
Upon a request for a Change, Andersen shall submit a proposal to Client on
Andersen's standard change order form (or in a form substantially similar to
Andersen's standard change order form attached hereto) describing the Changes,
including, as applicable, the impact of such Changes on schedule and fees and
expenses. Within 5 days of receipt of the proposed change order, Client shall
either indicate its acceptance of the proposed Changes by signing the change
order or
34
advise Andersen not to perform the Changes, in which event Andersen shall
proceed with the original Services. The foregoing notwithstanding, if Andersen,
at the written request of Client, performs work that is not covered by this
Statement of Work or that exceeds the scope of Services described in this
Statement of Work, such work shall be deemed Services provided pursuant to this
Statement of Work, for which Client shall compensate Andersen at the same rates
as those described under Fees & Expenses above or, in the case of a fixed fee
engagement, at the rates used in calculating such fixed fee.
We appreciate the opportunity to be of service to you and look forward to
working with you on this challenging project. You can be assured that it will
receive our close attention. Please indicate your agreement to these
arrangements by signing and returning to Andersen the enclosed copy of this
Agreement.
Very truly yours,
ARTHUR ANDERSEN LLP
By: /s/ STEPHEN ENGEL
----------------------------------
Stephen Engel
Attachments: Business Consulting Standard Business Terms
Business Consulting Statement of Work Standard Change Order Form
Acknowledged and Accepted:
Home Interiors and Gifts, Inc.
By: /s/ KENNETH CICHOCKI
----------------------------------
Title: Senior Vice President
----------------------------------
Date: 5/8/02
----------------------------------
35
BUSINESS CONSULTING
STANDARD BUSINESS TERMS
These Business Consulting Standard Business Terms ("Terms") shall govern the
Services provided by Arthur Andersen LLP ("Andersen") as set forth in the
Statement of Work executed by Client and Andersen to which these Terms are
attached. These Terms, together with the Statement of Work, constitute the
entire understanding and agreement between Client and Andersen with respect to
the Services described in the Statement of Work ("Agreement"), supersede all
prior oral and written communications, and may be amended, modified or changed
(including changes in scope or nature of the Services or fees as described under
Change Order Process in the Statement of Work) only in writing when signed by
both parties. If there is a conflict between these Terms and the terms of any
Statement of Work, these Terms shall govern.
SECTION 1. FEES, EXPENSES
Client shall pay Andersen the professional fees and the related expenses in
accordance with the Statement of Work.
SECTION 2. CLIENT RESPONSIBILITIES
As a prerequisite to Andersen's delivery of Services, Client shall (i) fulfill
the Client Responsibilities and ensure that all Assumptions are accurate; (ii)
provide Andersen with reliable, accurate and complete information, as required;
(iii) make timely decisions and obtain required management approvals; and (iv)
furnish Andersen personnel with a suitable office environment and adequate
resources and supplies, as needed. In addition, Andersen shall be entitled to
rely on all Client decisions and approvals made independently of this Agreement
and/or prior to its execution by the parties. Nothing in this Agreement shall
require Andersen to evaluate, advise on, modify, confirm, or reject such
decisions and approvals, except as expressly agreed to in the Statement of Work.
SECTION 3. CONFIDENTIALITY
With respect to this Agreement and any information supplied in connection with
this Agreement and designated by the disclosing party as confidential, the
recipient agrees to: (i) protect the confidential information in a reasonable
and appropriate manner or in accordance with applicable professional standards;
(ii) use confidential information only to perform its obligations under this
Agreement; and (iii) reproduce confidential information only as required to
perform its obligations under this Agreement. This section shall not apply to
information which is (i) publicly known, (ii) already known to the recipient;
(iii) disclosed to a third party without restriction; (iv) independently
developed; or (v) disclosed pursuant to legal requirement or order. Subject to
the foregoing, Andersen may disclose Client's confidential information to its
subcontractors and affiliates, provided that such parties agree to abide by the
terms of this Section 3.
SECTION 4. DELIVERABLES
Client may, solely for its internal business purposes, use, copy, distribute
internally, and modify the deliverable items specifically described in the
Statement of Work (the "Deliverables"). Except as set forth in this Section 4,
Client shall not, without Andersen's prior written consent, which shall not be
unreasonably withheld, disclose to a third party (other than subcontractors,
affiliates and agents of Client related to this project) or publicly quote the
Deliverables. Andersen shall retain all right, title and interest in and to: (i)
the Deliverables, including but not limited to all patent, copyright, trademark
and other intellectual property rights therein; and (ii) all methodologies,
processes, techniques, ideas, concepts, trade secrets and know-how embodied in
the Deliverables or that Andersen may develop or supply in connection with this
Agreement (the "Andersen Knowledge"). Subject to the confidentiality
restrictions contained in Section 3, Andersen may use the Deliverables and the
Andersen Knowledge for any purpose. Client may allow third parties to access the
Deliverables for any purpose relating to the ordinary business operations of
Client; provided that nothing in this sentence shall allow Client to sublicense
the Deliverables to any such third party.
SECTION 5. ACCEPTANCE
Client shall accept Deliverables which (i) conform to the requirements of the
Statement of Work or (ii) where applicable, successfully complete an acceptance
test plan to which Client has agreed. Client will promptly give Andersen
notification of any non-conformance of the Deliverables with such requirements
("Non-conformance"), and Andersen shall have a reasonable period of time, based
on the severity and complexity of the Non-conformance, to correct the
Non-conformance, but in no event shall the period of time be longer than that
which would be required for the Andersen staffing identified in the Statement of
Work to correct the Non-conformance working full-time. If Client uses the
Deliverable before acceptance, fails to promptly notify Andersen of any
Non-conformance, or unreasonably delays the beginning of acceptance testing,
then the Deliverable shall be considered accepted by the Client.
SECTION 6. WARRANTY
(a) Andersen warrants that the Services shall be performed with reasonable care
in a diligent and competent manner. Andersen's sole obligation shall be to
correct any non-conformance with this warranty, provided that Client gives
Andersen written notice within thirty (30) days after the Services are performed
or successful completion of the acceptance test plan, if applicable.
(b) Andersen does not warrant and is not responsible for any third party
products or services. Client's sole and exclusive rights and remedies with
respect to any third party products or services are against the third party
vendor and not against Andersen.
1
(c) THIS SECTION 6 IS ANDERSEN'S ONLY WARRANTY CONCERNING THE SERVICES AND ANY
DELIVERABLE, AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND
REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, NON-INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, OR
OTHERWISE.
SECTION 7. RISK ALLOCATION
(a) Excluding claims for indemnification under Section 7(c), Andersen's total
liability relating to this Agreement shall in no event exceed the fees Andersen
receives hereunder for the portion of the work giving rise to liability, or
include any special, consequential, incidental or exemplary damages or loss (nor
any lost profits, savings or business opportunity Excluding claims for
indemnification under Section 7(b), Client's total liability relating to this
Agreement shall in no event exceed the fees due to Andersen hereunder.
(b) As Andersen is performing the Services solely for the benefit of Client,
Client will indemnify Andersen, its affiliates and their partners, principals
and personnel against all costs, fees, expenses, damages and liabilities
(including defense costs) associated with any third party claim, relating to or
arising as a result of the Services, Client's use of the Deliverables, or this
Agreement, but excluding claims relating or arising as a result of the solely
negligent or willful acts or omissions of Andersen's personnel or agents in
performing the Services.
(c) Andersen will indemnify Client against any damage or expense relating to
bodily injury or death of any person or damage to real and/or tangible personal
property incurred while Andersen is performing the Services and to the extent
caused by the negligent or willful acts or omissions of Andersen's personnel or
agents in performing the Services.
(d) The provisions of this Section 7 are intended to apply in all circumstances,
regardless of the grounds or nature of any claim asserted (including contract,
statute, any form of negligence, whether of Client, Andersen, or others, tort,
strict liability or otherwise) and whether or not the party seeking
indemnification was advised of the possibility of the damage or loss asserted,
to the extent not contrary to applicable law.
(e) Any action against Andersen must be brought within twenty-four (24) months
after the cause of action arises.
SECTION 8. PERSONNEL
(a) While Andersen shall attempt to comply with Client's request for specific
individuals, Andersen shall be responsible for assigning and re-assigning its
personnel, as appropriate, to perform the Services
(b) During the term of this Agreement, and for a period of six(6) months
following the expiration or termination thereof, neither party will actively
solicit the employment of the personnel of the other party involved directly
with providing Services hereunder, Notwithstanding the foregoing, the
restriction on soliciting the employment of the other party's personnel shall
not apply (i) to those that have been laid off; or (ii) in the event that
Andersen successor entity shall suffer liquidity problems that renders it unable
to continue the employment of these key Andersen employees listed in the
Statement of Work.
SECTION 9. TERMINATION
(a) This Agreement may be terminated at any time by either party upon fifteen
(15) days written notice to the other.
(b) Client shall pay Andersen for all Services rendered and expenses incurred as
of the date of termination.
(c) Except for matters related to confidentiality or intellectual property
rights, the parties shall first attempt to resolve any dispute or alleged breach
internally by escalating it through management and, prior to pursuing
litigation, use a mutually acceptable alternative dispute resolution process.
SECTION 10. GENERAL
(a) Neither party shall use the other party's name, trademarks, service marks,
logos, trade names and/or branding without such party's prior written consent.
(b) Neither party shall be liable for any delays or failures in performance due
to circumstances beyond its reasonable control.
(c) This Agreement may not be assigned or otherwise transferred by Andersen
without the prior express written consent of the Client, which shall not be
unreasonably withheld. Andersen may assign this Agreement to an affiliate of its
international organization or use subcontractors to provide Services.
(d) Any notices given pursuant to this Agreement shall be in writing, delivered
to the address set forth in the Statement of Work, and shall be considered given
when received.
(e) No term of this Agreement shall be deemed waived, and no breach of this
Agreement excused, unless the waiver or consent is in writing signed by the
party granting such waiver or consent.
(f) If any term or provision of this Agreement is determined to be illegal or
unenforceable, such term or provision shall be deemed stricken, and all other
terms and provisions shall remain in full force and effect.
(g) This Agreement does not make either party an agent or legal representative
of the other party, and does not create a partnership or joint venture. Both
parties are independent contractors and principals for their own accounts.
(h) Sections 3 through 10 of these Terms shall survive the expiration or
termination of this Agreement.
(i) The laws of the State of Texas shall govern this Agreement.
(j) Client acknowledges that: (i) Andersen and Client may correspond or convey
documentation via Internet e-mail unless Client expressly requests otherwise,
(ii) neither party has control over the performance, reliability, availability,
or security of Internet e-mail, and (iii) Andersen shall not be liable for any
loss, damage, expense, harm or inconvenience resulting from the loss, delay,
interception, corruption, or alteration of any Internet e-mail due to any reason
beyond Andersen's reasonable control.
2
BUSINESS CONSULTING
STATEMENT OF WORK
CHANGE ORDER NUMBER ____
[date]
[Client contact name]
[complete legal name of Client entity]
[Client address]
Dear [Client contact name]:
This Change Order, including any appendices, schedules, and/or attachments,
documents changes to the Statement of Work between Arthur Andersen LLP
("Andersen") and [Client's complete legal name] ("Client") dated
________________,200_, including any prior Change Order(s) or amendments thereto
(the "Statement of Work"). This Change Order constitutes the entire
understanding and agreement between Client and Andersen with respect to such
changes, supersedes all prior oral and written communications with respect to
such changes (including, but not limited to, written change requests), and may
be amended, modified or changed only in writing when signed by both parties. The
section(s) of the Statement of Work set forth below is/are hereby amended,
effective as of the date first written above, by adding at the conclusion of the
respective section(s) the following text:
Project Scope and Objectives
Andersen Services and Responsibilities
Deliverables
Acceptance
Client Responsibilities
Project Assumptions
1
Project Approach
Staffing
Fees & Expenses
Except as expressly modified herein, all other terms and conditions of the
Statement of Work and the Business Consulting Standard Business Terms remain
unchanged. Please indicate your agreement to these arrangements by signing and
returning to Andersen the enclosed copy of this Change Order.
Very truly yours,
ARTHUR ANDERSEN LLP
By:
-----------------------------
Stephen Engel
Acknowledged and Accepted:
Home Interiors and Gifts, Inc.
By:
-----------------------------
Title:
-----------------------------
Date:
-----------------------------
2
Restrict Future Items (Items Not Released to Sale)
- --------------------------------------------------
Requirement: Future Items are not for sale to displayers, however they may
be sold to Directors as Preview Pack components. Future items
can also be sold to internal departments (such as Product
Development) as samples.
Solution: (1) Future items are set up in Item master with Availability
flag SRP1 set to 'FI', item line type set to 'S'. The SRP1
and Line type value travels from item master to order
detail. The future item inventory is managed in such a way
that it has zero on hand in the 'Warehouse' location as
long as the item availability status stays 'FI'. When a
displayer orders a future item from the 'Warehouse', the
line will be back ordered. This is JDE Vanilla.
(2) The EXE extract program needs to do the following for
future item lines: (a) do not extract a line to EXE if the
order type DTCO is 'SO' and SRP1 is 'FI' and line type is
'S'. (b) bump the line status from 535 to 556 if DTCO is
'SO' and SRP1 is 'FI' and line type is 'S' (so that the
line B/O qty can be cleared to Canceled qty bucket later
by the Batch program).
(3) A future item can be purchased by a restricted customer
group as 'Preview Pack' kit component. Preview Pack items
are set up to have SRP1 equals 'FI' and LnType equals 'PP'
in the item master. Only directors can buy 'PP' items.
Such restriction is Vanilla set up in the customer master.
(4) If an internal HIG customer/department needs to buy a
Future Item (SRP1 'FI', LnType 'S') for marketing or
research purpose, a manual internal order (with order type
DTCO equals to 'SI') can be entered through P4210 to buy
the item from the 'Hold' location rather than the
'Warehouse' location. This line will then be extracted to
EXE and fulfilled as usual.
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX A
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
3 Build -- Architecture & Functional Teams [CHART]
3.1 User Procedure & Training Development
3.2.1 Training Preparation -- Logistics
3.2.2 Install Web Based Training Tool -- CNC
3.3.1 Reports Development
3.3.2 Forms Development
3.4.1 Interface Development -- "The 60"
3.4.2 Interface Development -- Data Warehouse -- Operational
Links
3.5 Data Conversion Preparation (Data Cleansing, Final
Mapping)
3.6 Data Conversion Development
3.7 Enhancement Specification Development
3.8 Enhancement Development
3.8.8 Developer Support During System Test
3.8.9 Functional Team Support of Development Team
3.9.1 Technical/CNC Configuration -- System Test
3.9.2 Technical/CNC Configuration -- Training Environment
3.9.4 Technical/CNC Configuration -- Production/User Environment
3.9.5 Technical/CNC Configuration -- Reporting Instance
3.9.6 Security CNC & Functional
3.9.7 Technical/CNC Configuration -- Automatic Job
Processing/UBE Scheduler
3.9.8 Technical/CNC Configuration -- Tuning
3.9.9 Technical/CNC -- Autopilot Configuration
3.9.10 Technical/CNC Configuration -- Change Management
3.9.11 Technical/CNC -- Data Archive & Purge
3.9.12 Technical/CNC -- Environment Scrub Checklist
3.9.13 Technical/CNC -- Disaster Recovery (Vertos integration)
3.9.15 Technical/CNC -- Load Balancing and Fallover
3.9.16 Technical/CNC -- Address Server
3.10 Integrated Test Preparation -- Scripts Development
3.11 Integrated Test -- Cycle 1
3.12 Integrated Test -- Cycle 2
3.13 Stress Test Preparation and Execute #1 (Sales Order
Processing)
3.14 Data Conversion Test #1 (A,B)
3.15 Data Conversion Test #2 (A,B,C)
3.16 Final Technical/CNC Configuration
3.17 Stress Test Preparation and Execute #2 (Integrated
Processing)
3.18 Deploy Preparation
3.19 Training Delivery
3.20 User Readiness Session
3.21 Quality Assurance Review -- Andersen Check Points
3.22 Go-live Check Points
3.23 Close Build Phase
3.24 Knowledge Team in Training
3.25 Knowledge Transfer Team Identified and On Ground
4 Build -- Demand Planning
4.1 CRP II -- Finalize Design
4.2 User Procedure Development
4.3 Data Conversion Preparation
4.4 Data Conversion (2yrs -- Pre go-live / go-live)
4.5 Integrated Test Preparation -- Scripts Development
4.6 Interface Design/Development
4.7 Integrated Test -- Cycle 1
4.8 Integrated Test -- Cycle 2
4.9 Training Preparation
4.10 Report Development
4.11 Training
4.12 Final Technical/CNC Configuration
4.13 Deploy Preparation
4.14 Deploy
4.15 Sales Order Processing -- Demand Planning Process/Org
Design
5 ERP Deployment
5.1 Deploy
5.2 Data Conversion (Post go-live -- if any)
5.3 Post Deploy Review
5.4 Go-live Communication/Transition
5.5 Final Quality Assurance Review
5.6 Support First Financial Close
5.7 Close Deploy Phase
6 9-8 Conversion
6.1 Database Conversion Script
6.2 IOE
6.3 Bubble Book & Scanner
6.4 HomeCoSoft
6.5 WWW -- Websphere
6.6 WWW -- Vingnette
6.7 Interactive Voice Response
6.8 Non-Cash Certificates
6.9 Gift Certificates
6.10 Data Warehouse Reports
6.11 Data Warehouse
6.12 Intranet
6.13 DAI
6.14 Seminar Applications
6.15 Contact Books
6.22 Create Test Plans
6.23 Integrated Test
6.24 Go-Live
7 Commission
7.1 Detail Use Cases
7.2 Detail Adjustment GUI
7.3 Develop GUI Functionality to Support Use Cases
7.4 Develop Business Rules Functionality to Support Use Cases
7.5 Data Conversion from DAI
7.6 System Test
7.7 Acceptance Test
7.8 Training Plan
7.9 Transition
8 Canada Conversion
8.1 Requirements Gathering
8.2 Setup Payment with Payment Tech
8.3 Build (minor HTML changes and Payment Processing)
8.4 Data Conversion to C$
8.5 System Test
8.6 Deployment
9 Change Management
10 Project Management
11 Technical Architecture Management
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
4/15 4/22 4/29 5/6 5/13 5/20
---------------------------------------------
20 21 22 23 24 25
---------------------------------------------
ANDERSEN TOTAL
- ------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 20 21 22 23 24 25
- ------------------------------------------------------------------------------------------------------------------------------
88 $450 $ 39,600 QA Partner S. Stufflebeme 8
172 $450 $ 77,400 Project Partner S. Engel 8 4 4 4 4 4
994 $400 $ 397,600 Project Manager S. Permann 32 24 24 24 24 24
1640 $350 $ 574,000 Functional Lead -- Customer & J. Hallin 40 40 40 40 40 40
Sales & Integration Lead
1640 $350 $ 574,000 Functional Lead -- Supply Chain B. Fornadel 40 40 40 40 40 40
Team
1680 $350 $ 588,000 Functional Lead -- Financial B. Whalen 40 40 40 40 40 40
1520 $230 $ 349,600 Technical Lead -- Development Team D. Siu 40 40 40 40 40 40
480 $250 $ 120,000 Technical Facilitator M. Perie 40 40 40 40 40 40
1440 $250 $ 360,000 Application Consultant -- Customer K. Kimberling 40 40 40 40
& Sales Team
380 $185 $ 70,300 Application Consultant -- Customer C. Reich 40 40 40
& Sales Team
1640 $250 $ 410,000 Application Consultant -- Supply R. Brodhun 40 40 40 40 40 40
Chain Team
1520 $230 $ 349,600 Application B. Andermo 40 40 40 40 40 40
Consultant -- Financial
1040 $230 $ 239,200 Application Consultant -- Supply O. Anderson 40 40 40 40 40 40
Chain Team
400 $125 $ 50,000 Staff Consultant -- Financial/Web S. Mewhirter
Tech Writer
320 $185 $ 59,200 Staff Consultant -- Supply Chain J. Pennington
400 $125 $ 50,000 Staff Consultant -- Customer/Web S. Rankin
Tech Writer
1208 $250 $ 302,000 Change Consultant C. Pearson 40 40 24 24 24 24
80 $ 0 $ 0 Staff Consultant -- Supply Chain J. Pennington 40 40
80 $ 0 $ 0 Staff Consultant -- Customer/Web S. Rankin 40 40
Tech Writer
80 $ 0 $ 0 Staff Consultant -- Financial/Web S. Mewhirter 40 40
Tech Writer
720 $300 $ 216,000 Developer 1 -- Conversions K. Huntly 40 40 40
600 $230 $ 138,000 Report Developer D. Roesch 40 40 40 40 40
112 $455 $ 50,960 Vertex Team Lead L. Fox 2 2 4 2 2 4
66 $285 $ 18,810 Vertex Consultant S. Griffin 4 4
78 $185 $ 14,430 Vertex Consultant J. Gee 2 2 2 2
- -------------------------------------------------------------
18378 Total Hours
- -------------------------------------------------------------
$275 $5,048,700 Andersen Average Rate & Gross Fees
36% Andersen Discount
$176 $3,231,168 Andersen Average Rate & Total Fees
<Caption>
5/27 6/3 6/10 6/17 6/24 7/1 7/8 7/15
-------------------------------------------------------------
26 27 28 29 30 31 32 33
-------------------------------------------------------------
ANDERSEN
- ----------------------------------------------------------------------------------------------------------
HOURS ROLE 26 27 28 29 30 31 32 33
- ----------------------------------------------------------------------------------------------------------
88 QA Partner 8 8
172 Project Partner 4 4 4 4 4 4 4 4
994 Project Manager 24 24 24 24 24 24 24 24
1640 Functional Lead -- Customer & 40 40 40 40 40 40 40 40
Sales & Integration Lead
1640 Functional Lead -- Supply Chain 40 40 40 40 40 40 40 40
Team
1680 Functional Lead -- Financial 40 40 40 40 40 40 40 40
1520 Technical Lead -- Development Team 40 40 40 40 40 40 40 40
480 Technical Facilitator 40 40 40 40 40 40
1440 Application Consultant -- Customer 40 40 40 40 40 40 40 40
& Sales Team
380 Application Consultant -- Customer
& Sales Team
1640 Application Consultant -- Supply 40 40 40 40 40 40 40 40
Chain Team
1520 Application 40 40 40 40 40 40 40 40
Consultant -- Financial
1040 Application Consultant -- Supply 40 40 40 40 40 40 40 40
Chain Team
400 Staff Consultant -- Financial/Web
Tech Writer
320 Staff Consultant -- Supply Chain
400 Staff Consultant -- Customer/Web
Tech Writer
1208 Change Consultant 24 24 24 24 24 24 24 24
80 Staff Consultant -- Supply Chain
80 Staff Consultant -- Customer/Web
Tech Writer
80 Staff Consultant -- Financial/Web
Tech Writer
720 Developer 1 -- Conversions 40 40 40 40 40 40 40 40
600 Report Developer 40 40 40 40 40 40 40 40
112 Vertex Team Lead 2 2 4 2 2 4 2 2
66 Vertex Consultant 4 4
78 Vertex Consultant 2 2 2 2 2 2
- -------------------------------------------
18378 Total Hours
- -------------------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
7/22 7/29 8/5 8/12 8/19 8/26 9/2
-----------------------------------------------------
34 35 36 37 38 39 40
-----------------------------------------------------
ANDERSEN TOTAL
- -------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 34 35 36 37 38 39 40
- -------------------------------------------------------------------------------------------------------------------------------
88 $450 $ 39,600 QA Partner S. Stufflebeme 8 8
172 $450 $ 77,400 Project Partner S. Engel 4 4 4 4 4 4 4
994 $400 $ 397,600 Project Manager S. Permann 24 24 24 24 24 24 24
1640 $350 $ 574,000 Functional Lead -- Customer J. Hallin 40 40 40 40 40 40 40
& Sales & Integration Lead
1640 $350 $ 574,000 Functional Lead -- Supply B. Fornadel 40 40 40 40 40 40 40
Chain Team
1680 $350 $ 588,000 Functional B. Whalen 40 40 40 40 40 40 40
Lead -- Financial
1520 $230 $ 349,600 Technical Lead -- D. Siu 40 40 40 40 40 40 40
Development Team
480 $250 $ 120,000 Technical Facilitator M. Perie
1440 $250 $ 360,000 Application Consultant -- K. Kimberling 40 40 40 40 40 40 40
Customer & Sales Team
380 $185 $ 70,300 Application Consultant -- C. Reich 40 40 40
Customer & Sales Team
1640 $250 $ 410,000 Application Consultant -- R. Brodhun 40 40 40 40 40 40 40
Supply Chain Team
1520 $230 $ 349,600 Application Consultant -- B. Andermo 40 40 40 40 40 40 40
Financial
1040 $230 $ 239,200 Application Consultant -- O. Anderson 40 40 40 40
Supply Chain Team
400 $125 $ 50,000 Staff S. Mewhirter
Consultant -- Financial/
Web Tech Writer
320 $185 $ 59,200 Staff Consultant -- Supply J. Pennington
Chain
400 $125 $ 50,000 Staff S. Rankin
Consultant -- Customer/ Web
Tech Writer
1208 $250 $ 302,000 Change Consultant C. Pearson 24 24 24 24 24 24 24
80 $ 0 $ 0 Staff Consultant -- Supply J. Pennington
Chain
80 $ 0 $ 0 Staff S. Rankin
Consultant -- Customer/ Web
Tech Writer
80 $ 0 $ 0 Staff S. Mewhirter
Consultant -- Financial/
Web Tech Writer
720 $300 $ 216,000 Developer 1 -- Conversions K. Huntly 40 40 40 40 40
600 $230 $ 138,000 Report Developer D. Roesch 40 40
112 $455 $ 50,960 Vertex Team Lead L. Fox 2 2 4 2 2 2 4
66 $285 $ 18,810 Vertex Consultant S. Griffin 4 2
78 $185 $ 14,430 Vertex Consultant J. Gee 2 2 2 2 2 2 4
- -----------------------------------------------------
18378 Total Hours
- -----------------------------------------------------
<Caption>
9/9 9/16 9/23 9/30 10/7 10/14 10/21 10/28
------------------------------------------------------------
41 42 43 44 45 46 47 48
------------------------------------------------------------
ANDERSEN
- --------------------------------------------------------------------------------------------------
HOURS ROLE 41 42 43 44 45 46 47 48
- --------------------------------------------------------------------------------------------------
88 QA Partner 8 8
172 Project Partner 4 4 4 4 4 4 4 4
994 Project Manager 24 24 24 24 24 24 24 24
1640 Functional Lead -- Customer 40 40 40 40 40 40 40 40
& Sales & Integration Lead
1640 Functional Lead -- Supply 40 40 40 40 40 40 40 40
Chain Team
1680 Functional 40 40 40 40 40 40 40 40
Lead -- Financial
1520 Technical Lead -- 40 40 40 40 40 40 40 40
Development Team
480 Technical Facilitator
1440 Application Consultant -- 40 40 40 40 40 40 40 40
Customer & Sales Team
380 Application Consultant -- 40 40 40 20
Customer & Sales Team
1640 Application Consultant -- 40 40 40 40 40 40 40 40
Supply Chain Team
1520 Application Consultant -- 40 40 40 40 40 40 40 40
Financial
1040 Application Consultant --
Supply Chain Team
400 Staff 40 40 40 40 40 40
Consultant -- Financial/
Web Tech Writer
320 Staff Consultant -- Supply 40 40 40 40 40 40
Chain
400 Staff 40 40 40 40 40 40
Consultant -- Customer/ Web
Tech Writer
1208 Change Consultant 24 24 40 40 40 40 40 40
80 Staff Consultant -- Supply
Chain
80 Staff
Consultant -- Customer/ Web
Tech Writer
80 Staff
Consultant -- Financial/
Web Tech Writer
720 Developer 1 -- Conversions 40
600 Report Developer
112 Vertex Team Lead 4 4 4 4 4 4 4 2
66 Vertex Consultant 2 2 2 2 2 2 2 2
78 Vertex Consultant 4 4 4 4 4 4 4 2
- -----------------------------------
18378 Total Hours
- -----------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
11/4 11/11 11/18 11/25 12/2 12/9
---------------------------------------------
49 50 51 52 53 54
---------------------------------------------
ERP GO-LIVE
ANDERSEN TOTAL
- ------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 49 50 51 52 53 54
- ------------------------------------------------------------------------------------------------------------------------------
88 $450 $ 39,600 QA Partner S. Stufflebeme 8 8
172 $450 $ 77,400 Project Partner S. Engel 4 4 4 4 4 4
994 $400 $ 397,600 Project Manager S. Permann 24 24 24 24 24 24
1640 $350 $ 574,000 Functional Lead -- Customer & J. Hallin 40 40 40 40 40 40
Sales & Integration Lead
1640 $350 $ 574,000 Functional Lead -- Supply Chain B. Fornadel 40 40 40 40 40 40
Team
1680 $350 $ 588,000 Functional Lead -- Financial B. Whalen 40 40 40 40 40 40
1520 $230 $ 349,600 Technical Lead -- Development Team D. Siu 40 40 40 40 40 40
480 $250 $ 120,000 Technical Facilitator M. Perie
1440 $250 $ 360,000 Application Consultant -- Customer K. Kimberling 40 40 40 40 40 40
& Sales Team
380 $185 $ 70,300 Application Consultant -- Customer C. Reich
& Sales Team
1640 $250 $ 410,000 Application Consultant -- Supply R. Brodhun 40 40 40 40 40 40
Chain Team
1520 $230 $ 349,600 Application B. Andermo 40 40 40 40 40 40
Consultant -- Financial
1040 $230 $ 239,200 Application Consultant -- Supply O. Anderson
Chain Team
400 $125 $ 50,000 Staff Consultant -- Financial/Web S. Mewhirter 40 40 40 40
Tech Writer
320 $185 $ 59,200 Staff Consultant -- Supply Chain J. Pennington 40 40
400 $125 $ 50,000 Staff Consultant -- Customer/Web S. Rankin 40 40 40 40
Tech Writer
1208 $250 $ 302,000 Change Consultant C. Pearson 40 40 40 40 40 40
80 $ 0 $ 0 Staff Consultant -- Supply Chain J. Pennington
80 $ 0 $ 0 Staff Consultant -- Customer/Web S. Rankin
Tech Writer
80 $ 0 $ 0 Staff Consultant -- Financial/Web S. Mewhirter
Tech Writer
720 $300 $ 216,000 Developer 1 -- Conversions K. Huntly
600 $230 $ 138,000 Report Developer D. Roesch
112 $455 $ 50,960 Vertex Team Lead L. Fox 2 2 2 2
66 $285 $ 18,810 Vertex Consultant S. Griffin 2 2 2 2
78 $185 $ 14,430 Vertex Consultant J. Gee 2 2 2 2
- -------------------------------------------------------------
18378 Total Hours
- -------------------------------------------------------------
<Caption>
12/16 12/23 12/30 1/6 1/13 1/20 1/27 2/3
------------------------------------------------------------
55 56 57 58 59 60 61 62
------------------------------------------------------------
ERP GO-LIVE
ANDERSEN
- ------------------------------------------------------------------------------------------------------------
HOURS ROLE 55 56 57 58 59 60 61 62
- ------------------------------------------------------------------------------------------------------------
88 QA Partner 8 8
172 Project Partner 4 4 4 4 4 4 4 4
994 Project Manager 24 24 24 24 20 20 10
1640 Functional Lead -- Customer & 40 40 40 40 40 40
Sales & Integration Lead
1640 Functional Lead -- Supply Chain 40 40 40 40 40 40
Team
1680 Functional Lead -- Financial 40 40 40 40 40 40 40
1520 Technical Lead -- Development Team 40 40 40
480 Technical Facilitator
1440 Application Consultant -- Customer 40 40 40
& Sales Team
380 Application Consultant -- Customer
& Sales Team
1640 Application Consultant -- Supply 40 40 40 40 40 40
Chain Team
1520 Application 40 40 40
Consultant -- Financial
1040 Application Consultant -- Supply 40 40 40 40 40 40 80
Chain Team
400 Staff Consultant -- Financial/Web
Tech Writer
320 Staff Consultant -- Supply Chain
400 Staff Consultant -- Customer/Web
Tech Writer
1208 Change Consultant 40 40 40 24
80 Staff Consultant -- Supply Chain
80 Staff Consultant -- Customer/Web
Tech Writer
80 Staff Consultant -- Financial/Web
Tech Writer
720 Developer 1 -- Conversions 40
600 Report Developer
112 Vertex Team Lead 2 2 16
66 Vertex Consultant 2 2 16
78 Vertex Consultant 2 2
- --------------------------------------------
18378 Total Hours
- --------------------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
4/15 4/22 4/29 5/6 5/13 5/20
---------------------------------------------
20 21 22 23 24 25
---------------------------------------------
JDE/THIRD PARTY DIRECT
- ------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 20 21 22 23 24 25
- ------------------------------------------------------------------------------------------------------------------------------
1680 $140 $ 235,200 Developer 2 -- Interfaces C. Vashi 40 40 40 40 40 40
1680 $140 $ 235,200 Developer 3 -- Interfaces R. Tuscano 40 40 40 40 40 40
1680 $140 $ 235,200 Developer 4 -- Interfaces D. Emanuel 40 40 40 40 40 40
750 $120 $ 90,000 Developer 5 -- Interfaces S. Venkat 40 40 40 40 40 40
550 $130 $ 71,500 Developer 6 -- Interfaces T. Parkin 40 40 40 40 40 40
540 $130 $ 70,200 Developer 7 -- Interfaces P. Divecha 40 40 40 40 40 40
860 $130 $ 111,800 Developer 8 -- Enhancements A. Shetty 40 40 40 40 40 40
620 $130 $ 80,600 Developer 9 -- Enhancements S. Bhambhani 40 40 40 40 40 40
56 $225 $ 12,600 Demand Planning Tech Support Liviu Parvu 16
1560 $ 26 $ 40,560 Project Librarian S. Quellette 40 40 40 40 40 40
1120 $110 $ 123,200 Data Warehouse Consultant S. Coan 40 40 40 40 40 40
1720 $ 90 $ 154,800 Financials Consultant B. Garrett 40 40 40 40 40 40
503 $250 $ 125,750 JDE CNC Manager A. Jacot 15 16 16 8 8 16
934 $200 $ 186,800 JDE CNC Consultant J. Jang 34 34 31 0 24 24
40 $275 $ 11,000 JDE Global Advanced Technology TBO
- -------------------------------------------------------------
14293 Total Hours
- -------------------------------------------------------------
$1,784,410
<Caption>
5/27 6/3 6/10 6/17 6/24 7/1 7/8 7/15
------------------------------------------------------------
26 27 28 29 30 31 32 33
------------------------------------------------------------
JDE/T
- ----------------------------------------------------------------------------------------------------------
HOURS ROLE 26 27 28 29 30 31 32 33
- ----------------------------------------------------------------------------------------------------------
1680 Developer 2 -- Interfaces 40 40 40 40 40 40 40 40
1680 Developer 3 -- Interfaces 40 40 40 40 40 40 40 40
1680 Developer 4 -- Interfaces 40 40 40 40 40 40 40 40
750 Developer 5 -- Interfaces 40 40 40 40 40 40 40 40
550 Developer 6 -- Interfaces 40 40 40 40 40 40 40 40
540 Developer 7 -- Interfaces 40 40 40 40 40 40 40 40
860 Developer 8 -- Enhancements 40 40 40 40 40 40 40 40
620 Developer 9 -- Enhancements 40 40 40 40 40 40 40 40
56 Demand Planning Tech Support 40
1560 Project Librarian 40 40 40 40 40 40 40 40
1120 Data Warehouse Consultant 40 40 40 40 40 40 40 40
1720 Financials Consultant 40 40 40 40 40 40 40 40
503 JDE CNC Manager 8 8 0 16 16 0 16 0
934 JDE CNC Consultant 24 24 0 24 24 0 24 24
40 JDE Global Advanced Technology 40
- -----------------------------------------
14293 Total Hours
- -----------------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
7/22 7/29 8/5 8/12 8/19 8/26 9/2
-----------------------------------------------------
34 35 36 37 38 39 40
-----------------------------------------------------
JDE/THIRD PARTY DIRECT
- -------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 34 35 36 37 38 39 40
- -------------------------------------------------------------------------------------------------------------------------------
1680 $140 $ 235,200 Developer 2 -- Interfaces C. Vashi 40 40 40 40 40 40 40
1680 $140 $ 235,200 Developer 3 -- Interfaces R. Tuscano 40 40 40 40 40 40 40
1680 $140 $ 235,200 Developer 4 -- Interfaces D. Emanuel 40 40 40 40 40 40 40
750 $120 $ 90,000 Developer 5 -- Interfaces S. Venkat 40 40 40 40 30
550 $130 $ 71,500 Developer 6 -- Interfaces T. Parkin
540 $130 $ 70,200 Developer 7 -- Interfaces P. Divecha
860 $130 $ 111,800 Developer 8 -- Enhancements A. Shetty 40 40 40 40 40 40 40
620 $130 $ 80,600 Developer 9 -- Enhancements S. Bhambhani 40 20
56 $225 $ 12,600 Demand Planning Tech Liviu Parvu
Support
1560 $ 26 $ 40,560 Project Librarian S. Quellette 40 40 40 40 40 40 40
1120 $110 $ 123,200 Data Warehouse Consultant S. Coan 40 40 40 40 40 40 40
1720 $ 90 $ 154,800 Financials Consultant B. Garrett 40 40 40 40 40 40 40
503 $250 $ 125,750 JDE CNC Manager A. Jacot 16 16 16 0 16 16 16
934 $200 $ 186,800 JDE CNC Consultant J. Jang 0 24 0 24 24 24 24
40 $275 $ 11,000 JDE Global Advanced TBO
Technology
- -------------------------------------------------------
14293 Total Hours
- -------------------------------------------------------
<Caption>
9/9 9/16 9/23 9/30 10/7 10/14 10/21 10/28
-------------------------------------------------------------
41 42 43 44 45 46 47 48
-------------------------------------------------------------
JDE/T
- ---------------------------------------------------------------------------------------------------
HOURS ROLE 41 42 43 44 45 46 47 48
- ---------------------------------------------------------------------------------------------------
1680 Developer 2 -- Interfaces 40 40 40 40 40 40 40 40
1680 Developer 3 -- Interfaces 40 40 40 40 40 40 40 40
1680 Developer 4 -- Interfaces 40 40 40 40 40 40 40 40
750 Developer 5 -- Interfaces
550 Developer 6 -- Interfaces
540 Developer 7 -- Interfaces
860 Developer 8 -- Enhancements 20
620 Developer 9 -- Enhancements
56 Demand Planning Tech
Support
1560 Project Librarian 40 40 40 40 40 40 40 40
1120 Data Warehouse Consultant 40 40 40 40 40 40 40
1720 Financials Consultant 40 40 40 40 40 40 40 40
503 JDE CNC Manager 8 16 16 16 16 16 16 16
934 JDE CNC Consultant 24 30 24 30 24 30 24 24
40 JDE Global Advanced
Technology
- ----------------------------------
14293 Total Hours
- ----------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
11/4 11/11 11/18 11/25 12/2 12/9
---------------------------------------------
49 50 51 52 53 54
---------------------------------------------
JDE/THIRD PARTY DIRECT
- ------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 49 50 51 52 53 54
- ------------------------------------------------------------------------------------------------------------------------------
1680 $140 $ 235,200 Developer 2 -- Interfaces C. Vashi 40 40 40 40 40 40
1680 $140 $ 235,200 Developer 3 -- Interfaces R. Tuscano 40 40 40 40 40 40
1680 $140 $ 235,200 Developer 4 -- Interfaces D. Emanuel 40 40 40 40 40 40
750 $120 $ 90,000 Developer 5 -- Interfaces S. Venkat
550 $130 $ 71,500 Developer 6 -- Interfaces T. Parkin
540 $130 $ 70,200 Developer 7 -- Interfaces P. Divecha
860 $130 $ 111,800 Developer 8 -- Enhancements A. Shetty
620 $130 $ 80,600 Developer 9 -- Enhancements S. Bhambhani
56 $225 $ 12,600 Demand Planning Tech Support Liviu Parvu
1560 $ 26 $ 40,560 Project Librarian S. Quellette 40 40 40 40 40 40
1120 $110 $ 123,200 Data Warehouse Consultant S. Coan
1720 $ 90 $ 154,800 Financials Consultant B. Garrett 40 40 40 40 40 40
503 $250 $ 125,750 JDE CNC Manager A. Jacot 16 16 16 16 16 16
934 $200 $ 186,800 JDE CNC Consultant J. Jang 30 24 30 30 24 24
40 $275 $ 11,000 JDE Global Advanced Technology TBO
- ----------------------------------------------------------
14293 Total Hours
- ----------------------------------------------------------
<Caption>
12/16 12/23 12/30 1/6 1/13 1/20 1/27 2/3
-------------------------------------------------------------
55 56 57 58 59 60 61 62
-------------------------------------------------------------
JDE/T
- -----------------------------------------------------------------------------------------------------------
HOURS ROLE 55 56 57 58 59 60 61 62
- -----------------------------------------------------------------------------------------------------------
1680 Developer 2 -- Interfaces 40 40 40 40 40 40 40
1680 Developer 3 -- Interfaces 40 40 40 40 40 40 40
1680 Developer 4 -- Interfaces 40 40 40 40 40 40 40
750 Developer 5 -- Interfaces
550 Developer 6 -- Interfaces
540 Developer 7 -- Interfaces
860 Developer 8 -- Enhancements
620 Developer 9 -- Enhancements
56 Demand Planning Tech Support
1560 Project Librarian 40 40 40 40
1120 Data Warehouse Consultant
1720 Financials Consultant 40 40 40 40 40 40 40 40
503 JDE CNC Manager 16 16 16
934 JDE CNC Consultant 24 24 40 40 24
40 JDE Global Advanced Technology
- ---------------------------------------
14293 Total Hours
- ---------------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
4/15 4/22 4/29 5/6 5/13 5/20 5/27
-----------------------------------------------------
20 21 22 23 24 25 26
-----------------------------------------------------
9-8 CONVERSION
- -------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 20 21 22 23 24 25 26
- -------------------------------------------------------------------------------------------------------------------------------
190 $ 50 $ 9,500 Conversion Developer 1 G. Cochran 30 25 25 25 25
65 $ 55 $ 3,575 Conversion Developer 2 -- S. Bennett 25 50
Interfaces
$ 8,000 Outside Development -- IVR TBD
- ------------------------------------------------------
255 Total Hours
- ------------------------------------------------------
$ 21,075
<Caption>
6/3 6/10 6/17 6/24 7/1 7/8 7/15
----------------------------------------------------
27 28 29 30 31 32 33
----------------------------------------------------
9-8 CONVERSION
- -----------------------------------------------------------------------------------------
HOURS ROLE 27 28 29 30 31 32 33
- -----------------------------------------------------------------------------------------
190 Conversion Developer 1 10 10 10 30
65 Conversion Developer 2 -- 4 4 4 8
Interfaces
Outside Development -- IVR
- ---------------------------------
255 Total Hours
- ---------------------------------
</Table>
<Table>
<Caption>
4/15 4/22 4/29 5/6 5/13 5/20 5/27
-----------------------------------------------------
20 21 22 23 24 25 26
-----------------------------------------------------
COMMISSION
- -------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 20 21 22 23 24 25 26
- -------------------------------------------------------------------------------------------------------------------------------
510 $ 55 $ 28,050 Commissions Consultant -- S. Bennett 30 30 30 30 30 30 30
Developer 1
680 $110 $ 74,800 Commissions Consultant -- S. Hayward 40 40 40 40 40 40 40
Application Architect
680 $ 80 $ 54,500 Commissions Consultant -- A. Potemkin 40 40 40 40 40 40 40
Developer 2
680 $ 80 $ 54,400 Commissions Consultant -- C. Tennant 40 40 40 40 40 40 40
Project Manager
- ------------------------------------------------------
2550 Total Hours
- ------------------------------------------------------
$ 211,650
- ------------------------------------------------------
35476 $5,248,303 Grand Total
- ------------------------------------------------------
<Caption>
6/3 6/10 6/17 6/24 7/1 7/8 7/15
---------------------------------------------------
27 28 29 30 31 32 33
---------------------------------------------------
COMMISSION
- --------------------------------------------------------------------------------------------------
HOURS ROLE 27 28 29 30 31 32 33
- --------------------------------------------------------------------------------------------------
510 Commissions Consultant -- 30 30 30 30 30 30 30
Developer 1
680 Commissions Consultant -- 40 40 40 40 40 40 40
Application Architect
680 Commissions Consultant -- 40 40 40 40 40 40 40
Developer 2
680 Commissions Consultant -- 40 40 40 40 40 40 40
Project Manager
- ----------------------------------------
2550 Total Hours
- ----------------------------------------
35476 Grand Total
- ----------------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
7/22 7/29 8/5 8/12 8/19 8/26 9/2
-----------------------------------------------------
34 35 36 37 38 39 40
-----------------------------------------------------
9-8 CONVERSION
- -------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 34 35 36 37 38 39 40
- -------------------------------------------------------------------------------------------------------------------------------
190 $ 50 $ 9,500 Conversion Developer 1 G. Cochran
65 $ 55 $ 3,575 Conversion Developer 2 -- S. Bennett
Interfaces
$ 8,000 Outside Development -- IVR TBD
- -------------------------------------------------------
255 Total Hours
- -------------------------------------------------------
$ 21,075
<Caption>
9/9 9/16 9/23 9/30 10/7 10/14 10/21 10/28
------------------------------------------------------------
41 42 43 44 45 46 47 48
------------------------------------------------------------
9-8 CONVERSION
- ---------------------------------------------------------------------------------------------------
HOURS ROLE 41 42 43 44 45 46 47 48
- ---------------------------------------------------------------------------------------------------
190 Conversion Developer 1
65 Conversion Developer 2 --
Interfaces
Outside Development -- IVR
- ------------------------------------
255 Total Hours
- ------------------------------------
</Table>
<Table>
<Caption>
7/22 7/29 8/5 8/12 8/19 8/26 9/2
-----------------------------------------------------
34 35 36 37 38 39 40
-----------------------------------------------------
COMMISSION
- -------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 34 35 36 37 38 39 40
- -------------------------------------------------------------------------------------------------------------------------------
510 $ 55 $ 28,050 Commissions Consultant -- S. Bennett 30 30 30
Developer 1
680 $110 $ 74,800 Commissions Consultant -- S. Hayward 40 40 40
Application Architect
680 $ 80 $ 54,500 Commissions Consultant -- A. Potemkin 40 40 40
Developer 2
680 $ 80 $ 54,400 Commissions Consultant -- C. Tennant 40 40 40
Project Manager
- -------------------------------------------------------
2550 Total Hours
- -------------------------------------------------------
$ 211,650
- -------------------------------------------------------
35476 $5,248,303 Grand Total
- -------------------------------------------------------
<Caption>
9/9 9/16 9/23 9/30 10/7 10/14 10/21 10/28
------------------------------------------------------------
41 42 43 44 45 46 47 48
------------------------------------------------------------
COMMISSION
- --------------------------------------------------------------------------------------------------------
HOURS ROLE 41 42 43 44 45 46 47 48
- --------------------------------------------------------------------------------------------------------
510 Commissions Consultant --
Developer 1
680 Commissions Consultant --
Application Architect
680 Commissions Consultant --
Developer 2
680 Commissions Consultant --
Project Manager
- ----------------------------------------
2550 Total Hours
- ----------------------------------------
35476 Grand Total
- ----------------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
11/4 11/11 11/18 11/25 12/2 12/9
---------------------------------------------
49 50 51 52 53 54
---------------------------------------------
9-8 CONVERSION
- ------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 49 50 51 52 53 54
- ------------------------------------------------------------------------------------------------------------------------------
190 $ 50 $ 9,500 Conversion Developer 1 G. Cochran
65 $ 55 $ 3,575 Conversion Developer 2 -- S. Bennett
Interfaces
$ 8,000 Outside Development -- IVR TBD
- --------------------------------------------------------
255 Total Hours
- --------------------------------------------------------
$ 21,075
<Caption>
12/16 12/23 12/30 1/6 1/13 1/20 1/27 2/3
------------------------------------------------------------
55 56 57 58 59 60 61 62
------------------------------------------------------------
9-8 CONVERSION
- ---------------------------------------------------------------------------------------------------------
HOURS ROLE 55 56 57 58 59 60 61 62
- ---------------------------------------------------------------------------------------------------------
190 Conversion Developer 1
65 Conversion Developer 2 --
Interfaces
Outside Development -- IVR
- ------------------------------------
255 Total Hours
- ------------------------------------
</Table>
<Table>
<Caption>
11/4 11/11 11/18 11/25 12/2 12/9
---------------------------------------------
49 50 51 52 53 54
---------------------------------------------
COMMISSION
- ------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 49 50 51 52 53 54
- ------------------------------------------------------------------------------------------------------------------------------
510 $ 55 $ 28,050 Commissions Consultant -- S. Bennett
Developer 1
680 $110 $ 74,800 Commissions Consultant -- S. Hayward
Application Architect
680 $ 80 $ 54,500 Commissions Consultant -- A. Potemkin
Developer 2
680 $ 80 $ 54,400 Commissions Consultant -- C. Tennant
Project Manager
- -------------------------------------------------------
2550 Total Hours
- -------------------------------------------------------
$ 211,650
- -------------------------------------------------------
35476 $5,248,303 Grand Total
- -------------------------------------------------------
<Caption>
12/16 12/23 12/30 1/6 1/13 1/20 1/27 2/3
-------------------------------------------------------------
55 56 57 58 59 60 61 62
-------------------------------------------------------------
COMMISSION
- ------------------------------------------------------------------------------------------------------------------
HOURS ROLE 55 56 57 58 59 60 61 62
- ------------------------------------------------------------------------------------------------------------------
510 Commissions Consultant --
Developer 1
680 Commissions Consultant --
Application Architect
680 Commissions Consultant --
Developer 2
680 Commissions Consultant --
Project Manager
- ----------------------------------------
2550 Total Hours
- ----------------------------------------
35476 Grand Total
- ----------------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
4/15 4/22 4/29 5/6 5/13 5/20 5/27
-----------------------------------------------------
20 21 22 23 24 25 26
-----------------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
- -------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 20 21 22 23 24 25 26
- -------------------------------------------------------------------------------------------------------------------------------
- -280 $118 $ (33,040) Script Writer TBD
Support -- CS -- Caanan
- -400 $159 $ (63,600) HIG Knowledge Tansfer -- TBD
CS -- Kristy
- -400 $147 $ (58,800) HIG Knowledge Tansfer -- TBD
FN -- Britt
- ------------------------------------------------------
- -1080 Total Hours
- ------------------------------------------------------
$ (155,440) (Less of Andersen Time)
- ------------------------------------------------------
34396 $5,092,863 Grand Total w/Backfill
- ------------------------------------------------------
32692 $4,811,237 Grand Total
w/Backfill -- Pre Go-live
Only
- ------------------------------------------------------
1704 $ 281,626 Grand Total
w/Backfill -- Post Go-live
Only
- ------------------------------------------------------
<Caption>
6/3 6/10 6/17 6/24 7/1 7/8 7/15
-----------------------------------------------------
27 28 29 30 31 32 33
-----------------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
- ------------------------------------------------------------------------------------------
HOURS ROLE 27 28 29 30 31 32 33
- ------------------------------------------------------------------------------------------
- -280 Script Writer
Support -- CS -- Caanan
- -400 HIG Knowledge Tansfer --
CS -- Kristy
- -400 HIG Knowledge Tansfer --
FN -- Britt
- ----------------------------------
- -1080 Total Hours
- ----------------------------------
(Less of Andersen Time)
- ----------------------------------
34396 Grand Total w/Backfill
- ----------------------------------
32692 Grand Total
w/Backfill -- Pre Go-live
Only
- ----------------------------------
1704 Grand Total
w/Backfill -- Post Go-live
Only
- ----------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
7/22 7/29 8/5 8/12 8/19 8/26 9/2
-----------------------------------------------------
34 35 36 37 38 39 40
-----------------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
- -------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 34 35 36 37 38 39 40
- -------------------------------------------------------------------------------------------------------------------------------
- -280 $118 $ (33,040) Script Writer TBD -40 -40 -40
Support -- CS -- Caanan
- -400 $159 $ (63,600) HIG Knowledge Tansfer -- TBD Start
CS -- Kristy Participation
Here
- -400 $147 $ (58,800) HIG Knowledge Tansfer -- Start
FN -- Britt Participation
Here
- ------------------------------------------------------
- -1080 Total Hours
- ------------------------------------------------------
$ (155,440) (Less of Andersen Time)
- ------------------------------------------------------
34396 $5,092,863 Grand Total w/Backfill
- ------------------------------------------------------
32692 $4,811,237 Grand Total
w/Backfill -- Pre Go-live
Only
- ------------------------------------------------------
1704 $ 281,626 Grand Total
w/Backfill -- Post Go-live
Only
- ------------------------------------------------------
<Caption>
9/9 9/16 9/23 9/30 10/7 10/14 10/21 10/28
-------------------------------------------------------------
41 42 43 44 45 46 47 48
-------------------------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
- -------------------------------------------------------------------------------------------------
HOURS ROLE 41 42 43 44 45 46 47 48
- -------------------------------------------------------------------------------------------------
- -280 Script Writer -40 -40 -40 -40
Support -- CS -- Caanan
- -400 HIG Knowledge Tansfer -- -40
CS -- Kristy
- -400 HIG Knowledge Tansfer -- -40
FN -- Britt
- ----------------------------------
- -1080 Total Hours
- ----------------------------------
(Less of Andersen Time)
- ----------------------------------
34396 Grand Total w/Backfill
- ----------------------------------
32692 Grand Total
w/Backfill -- Pre Go-live
Only
- ----------------------------------
1704 Grand Total
w/Backfill -- Post Go-live
Only
- ----------------------------------
</Table>
HIG JDE IMPLEMENTATION ESTIMATE -- APPENDIX B
WORKPLAN SECTION -- WEEK BEGINNING
<Table>
<Caption>
11/4 11/11 11/18 11/25 12/2 12/9
---------------------------------------------
49 50 51 52 53 54
---------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
- ------------------------------------------------------------------------------------------------------------------------------
HOURS RATES FEES ROLE RESOURCE 49 50 51 52 53 54
- ------------------------------------------------------------------------------------------------------------------------------
- -280 $118 $ (33,040) Script Writer TBD
Support -- CS -- Caanan
- -400 $159 $ (63,600) HIG Knowledge Tansfer -- TBD -40 -40 -40 -40 -40 -40
CS -- Kristy
- -400 $147 $ (58,800) HIG Knowledge Tansfer -- TBD -40 -40 -40 -40 -40 -40
FN -- Britt
- -----------------------------------------------------------
- -1080 Total Hours
- -----------------------------------------------------------
$ (155,440) (Less of Andersen Time)
- -----------------------------------------------------------
34396 $5,092,863 Grand Total w/Backfill
- -----------------------------------------------------------
32692 $4,811,237 Grand Total
w/Backfill -- Pre Go-live
Only
- -----------------------------------------------------------
1704 $ 281,626 Grand Total
w/Backfill -- Post Go-live
Only
- -----------------------------------------------------------
<Caption>
12/16 12/23 12/30 1/6 1/13 1/20 1/27 2/3
------------------------------------------------------------
55 56 57 58 59 60 61 62
------------------------------------------------------------
HIG PERSONNEL BACKFILL
OPPORTUNITIES
- --------------------------------------------------------------------------------------------------------
HOURS ROLE 55 56 57 58 59 60 61 62
- --------------------------------------------------------------------------------------------------------
- -280 Script Writer
Support -- CS -- Caanan
- -400 HIG Knowledge Tansfer -- -40 -40 -40
CS -- Kristy
- -400 HIG Knowledge Tansfer -- -40 -40 -40
FN -- Britt
- --------------------------------------
- -1080 Total Hours
- --------------------------------------
(Less of Andersen Time)
- --------------------------------------
34396 Grand Total w/Backfill
- --------------------------------------
32692 Grand Total
w/Backfill -- Pre Go-live
Only
- --------------------------------------
1704 Grand Total
w/Backfill -- Post Go-live
Only
- --------------------------------------
</Table>