cap gemini profile

FOR INTERNAL USE ONLY

CAP GEMINI ERNST & YOUNG

COMPETITIVE VENDOR PROFILE

Prepared for

IBM CORPORATION

AMERICAS MARKET INTELLIGENCE

WHITE PLAINS, NY

Prepared by

Renaissance Group International, Inc.495 Wheeler RoadAshby, MA 01431

(978) 386-5858

January 30, 2002


Renaissance Group International, Inc. (RGI), 495 Wheeler Road, Ashby, MA 01431 978-386-5858



TABLE OF CONTENTS

Page

PREFACE 1

EXECUTIVE SUMMARY 2

BUSINESS STRATEGY 5

A. Group Ownership Model 5B. Company Operations 6C. Services Delivery 7

PRODUCT STRATEGY 8

A. Applications Management Outsourcing 8 B. B2B Supply Chain 10 C. Critical Technologies 13

D. Customer Relationship Management 17E. DareStep 19F. Extended Enterprise Applications (EEA) and 21

Enterprise Resource Planning (ERP) ServicesG. MCommerce 24H. Strategy and Transformation 25I. Support Services 25

MARKET STRATEGY 28

A. Customers and Company Size 28 B. Account Marketing Approach 30 C. Pricing 31

D. Advertising Strategy 31E. Competition 32

ORGANIZATION STRUCTURE 34

A. Top Level Management 34 B Field Presence and Headcount 35



TABLE OF CONTENTS (CONT.)

Page

ALLIANCES/JOINT VENTURES/PARTNERSHIPS 38

FINANCIALS 43

A. Market Segmentation 45B. International Results 46

CORPORATE STRENGTHS AND WEAKNESSES 49

INDUSTRY FOCUS 50

A. Financial Services 51B. Health 58C. High Growth 59D. High Tech 60E. Telecom, Media & Networks 63F. Life Sciences and Chemicals 65G. Consumer Products, Retail, and Distribution 67H. Manufacturing 67I. Utilities and Energy 68J. Transportation 69

CUSTOMER SUPPORT 72



CHARTS

Page

CAP GEMINI ERNST & YOUNG CAPITAL STRUCTURE 6

CAP GEMINI ERNST & YOUNG 1H/FY00 REVENUE BY GLOBAL MARKETS 28

CUSTOMER/INDUSTRY CHARACTERISTICS 29

SELECTED CAP GEMINI ERNST & YOUNG CLIENTS BY INDUSTRY 29

WORLD IT SERVICES AND CONSULTING COMPANIES 32

CAP GEMINI ERNST & YOUNG INTERNATIONAL PRESENCE 35

CAP GEMINI ERNST & YOUNG PRO FORMA REVENUE AND NET INCOME 44

CAP GEMINI ERNST & YOUNG REVENUE AND NET INCOME BEFORE 45ACQUISITION

CAP GEMINI ERNST & YOUNG 1HFY01 REVENUE BY GLOBAL MARKETS 45

CAP GEMINI ERNST & YOUNG REVENUE BY LINE OF SERVICE 46

CAP GEMINI ERNST & YOUNG PRO FORMA REVENUE BY GEOGRAPHIC AREA 47

CAP GEMINI ERNST & YOUNG PRO FORMA PROFIT AND LOSS 47

CAP GEMINI ERNST & YOUNG REGIONAL EMPLOYMENT 48

CAP GEMINI ERNST & YOUNG REVENUE PERCENTAGE BY INDUSTRY 50

CAP GEMINI ERNST & YOUNG SUPPORT CENTERS 72

CAP GEMINI ERNST & YOUNG: MARKETING STRATEGY REVIEW PAGE 1

Prepared by RGI and by IBM Americas Market Intelligence



Preface

IBM Americas Market Intelligence has been preparing marketing strategy reports with theassistance of independent consulting companies since 1987. All reports follow the samestandard outline; however, the level of depth and topics covered vary depending on the marketsserved by the profiled company. Market Intelligence, through an assigned point of contact, workswith the independent research company during the research phase of the report.

Market Intelligence intends the report to provide a general overview of the vendor’s marketingand selling strategies, with sufficient detail to cover company policy and modes of operation.Individuals requiring specific or related information are encouraged to contact Pat Schuett-Luccarelli on 8-224-4064 or [email protected].

The following report on Cap Gemini Ernst & Young has been prepared by IBM AmericasMarket Intelligence and by Renaissance Group International, Inc. (RGI) of 495 Wheeler Road,Ashby, Massachusetts (978) 386-5858.





Executive Summary

With Cap Gemini’s acquisition of Ernst & Young’s consulting business having been finalizedin May 2000, the combined entity, Cap Gemini Ernst & Young, represents one of the largestmanagement and IT consulting firms in the world. In fact, the latest ranking provided by theGroup’s estimations, based on its 2000 revenue, places it as the fifth largest IT Services andConsulting company, following IBM Global Services, EDS, Andersen Consulting, now known asAccenture, and CSC. Overall, Cap Gemini Ernst & Young offers management and IT consultingservices, systems integration, and technology development, design, and outsourcing capabilitieson a global scale. The company helps businesses to implement growth strategies and leveragetechnology in the new economy.

Before the Ernst & Young acquisition, Cap Gemini formerly had been referred to as CapGemini Group. This group was formed from the 1975 merger of three information technologyservices and consulting companies -- Sogeti, set up by Serge Kampf; CAP, formed in 1962; andGemini Computer Systems, formed in 1973. The group initially focused on developing its ITservices business in Europe and the U.S. and then established its management consultingbusiness under the name Gemini Consulting. In general, the company categorizes the periodsince 1990 as years of expansion, helped by various strategic acquisitions that include threemanagement consulting companies and several IT services companies. More specifically, CapGemini purchased two U.S.-based management consulting companies -- United Research andthe MAC Group -- as well as Gruber, Titze & Partner in Germany. As it relates to the company’sIT services, Cap Gemini purchased Hoskyns in the U.K., Programator in Scandanavia, andVolmac in Benelux. In the past few years, Cap Gemini merged the activities of the BossardGroup with those of Gemini Consulting, acquired Beechwood -- a U.S.-based companyspecializing in IT services for telecom operators -- and acquired a 50% share in Twinsoft Beneluxcompanies previously held by Compaq. Ernst & Young Consulting unit’s most recent acquisitionnearly doubles the company’s revenue and significantly increases its U.S. consulting presence.

• Gross margin gains

Cap Gemini faced strong margin pressure during 1992, 1993, and 1994, postingnegative net margins for each of the three years. Over the past few years, CapGemini has benefited steadily from cost containment efforts, raising its operatingmargins from 6.1% during 1HFY96 to 10.5% on FY00 on a pro forma basis. Whilethe operating margin shows sign of decreasing significantly for FY01, companymanagement and analysts alike appear confident that the Group again will realizemargins in the 10% neighborhood. In fact, CGE&Y posted a 6.1% operating marginfor 1HFY01,which compares to an operating margin of 10% for the same period oneyear ago. The Group says that this decrease was due in large part to difficultiesencountered in the telecommunications sector. Looking again to increase itsoperating margins, during mid-year 2001, the Group announced a restructuring planthat includes a goal of increasing operating margins in 2HFY01 to roughly 9%.Subsequently, CGE&Y provided further indication that the events of September 11pushed back the hope of a growth recovery by at least one to two quarters. In thisevent, RGI believes that the Group may not realize its initially anticipated increase inoperating margins until 2002.

• Product/services offering





Cap Gemini Ernst & Young provides a core range of revenue- generating consultingand IT services. Its management consulting and IT services offering includes fulllifecycle services, based on industry specific expertise in areas of applicationsmanagement, enterprise resource planning, electronic commerce customerrelationship management, and management consulting. Looking at the Ernst &Young component, the company rounds out the company’s presence in the U.S. andsignificantly contributes e-commerce and e-business consulting capabilities.

• Global geographic presence

The completed purchase of Ernst & Young Consulting in May 2000 significantlystrengthens Cap Gemini’s position in the U.S. and Germany. In addition, ascompanies require advice on developing an Internet business, the purchase of Ernst& Young’s consulting unit not only reinforces Cap Gemini’s management consultingbusiness, but it also profits from installing the required systems. In general, it haslong been considering a means of strengthening its presence in the U.S., the largestsoftware and consulting market in the world. In addition, Cap Gemini Ernst & Youngtouts its size as a core strength in its ability to serve global customers.

Despite these strengths, Cap Gemini exhibits some weaknesses and faces some risks, asfollows:

• Balance sheet intangible assets

Cap Gemini Ernst & Young’s latest balance sheet carries $1.8B of intangible assets,which the Group describes as market share arising from its various companypurchases. If this sum had been classified as goodwill at the time of eachacquisition, it would have been charged against profit. The Group considers theacquired companies’ market share resulting in multiyear contracts durable in timeand earnings potential.

• Pricing climate

The pricing climate for the U.S. consulting and systems integration markets appearstough due to ongoing economic weakness. Some analysts estimate that Cap GeminiErnst & Young has reduced its prices for these service by close to 15% as of mid-year 2001 in the U.S.. In fact, some believe that the pricing environment hasworsened in the U.S., as well as in Europe during the latter half of CY01. Given thestate of the IT labor market, analysts say that they see minimal chance of pricestability in this sector over the short term.

• Continued competition

The industry consolidation of Cap Gemini and Ernst & Young increases thecompetition among a defined few. The merger of Price Waterhouse and Coopersand Lybrand, as well as the split of Andersen Consulting, now known as Accenture,from Arthur Andersen certainly played a role in the Cap Gemini and Ernst & Youngacquisition decision.





While the purchase of Ernst & Young Consulting Services remains the largest transaction inthe industry, the combined operations faces a greater level of uncertainty than it did a year ago.During the past year to a year and a half, Cap Gemini not only completed the Ernst & Youngintegration, but also now faces a weakened economy. Once estimating a combined Group’srevenue increasing 14% over FY01, the Group has subsequently posted a nine-month 2001revenue increase of just 5% on a pro forma basis. In fact, the Group currently refuses to projectrevenue for the near term. Instead, it takes a cautionary stance, outlining several scenarios thatrange from a moderate growth continuation to a reduction in global volume of business activitydue to the persistence of a generally depressed climate. Although the near term appears achallenge for Cap Gemini Ernst & Young, analysts and Group management continue to tout thesuccessful operations integration and the synergies of the Ernst & Young acquisition. Takingsome corrective measures, Cap Gemini Ernst & Young appointed Group COO, Paul Hermelin, tothe additional role of CEO and announced a restructuring that includes a workforce reduction, aswell as multiple cost containment efforts. The organization reached approximately 60,000employees as of December 2000, with reported pro forma 2000 revenue approaching $8B. Itnow claims roughly 56,000 people worldwide.





Business Strategy

Cap Gemini Ernst & Young realized its fair share of change since purchasing Ernst &Young’s consulting arm in May FY00. Once billed as one of the most promising and largestacquisitions during 2000, the combined company’s year-over-year net income likely will fall bymore than one-half on relatively flat revenue. While the overall structure and solutions offering ofthe organization appear strong, analysts point to weak economic conditions and poor timing forCGE&Y’s shortcomings. In particular, the purchase of Ernst & Young Consulting Servicessignificantly built the Group’s North American presence at a time when the U.S. economy showedsigns of faltering. Looking to again boost revenue, Cap Gemini Ernst & Young appointed itsCOO, Paul Hermelin, to the added role of CEO, replacing Geoff Unwin in early January 2002. Italso announced cost containment efforts, including staff cutbacks, reductions in spending, andthe postponement of several initiatives. In general, CGE&Y realized a slowing of revenuethroughout the U.S. and many markets overseas in core industries. These range fromtelecommunications and financial services to the high-tech and manufacturing sectors.

Instead of increasing its combined revenue, some analysts estimate that the combined FY01revenue may fall short of its $7.6B posted the year before. This purchase strengthens CapGemini’s offering by adding e-business capabilities, while building on its market presence in theU.S. and Germany, as well as throughout the rest of Europe and the Asia/Pacific region.Finalized in May 2000, Cap Gemini acquired nearly all of the Ernst & Young consulting business,with headcount of roughly 18,000 and FY99 revenue of nearly $3.5B. The combination of the twocompanies yields mutual benefits. The SEC had pressured Ernst & Young to separate its auditfunctions from its consulting practice and Cap Gemini. With revenue increasing just 9% in FY99,analysts thought that the company could become a peripheral player if it had not increased itspresence in the U.S. Further defining the transaction, the purchase enables the combined Groupto:

• Become a major player in the U.S. (the U.S. represents more than one-third of itsrevenue) and strengthen its position in Germany;

• Realize an expanded industry coverage and, therefore, become the firm of choice formajor worldwide organizations;

• Significantly expand in consulting, a high added-value segment of critical importancethat provides clients with a range of services; and

• Implement on a larger scale all skills required to help its clients face the challenges ofthe “connected economy” -- strategy consulting, innovation, deployment of newtechnologies, knowledge management, human resources, and marketing.

A. Group Ownership Model

Three information technology services and consulting companies originally formed CapGemini Group in 1975 and, with the Ernst & Young Consulting acquisition in May 2000, is nowreferred to as Cap Gemini Ernst & Young. At this time, it changed its capital and managementstructure, reverting to a Board of Directors and an Executive Committee. Overall, the Cap GeminiErnst & Young still has three core shareholders: CGIP, a French-owned industrial group; Serge





Kampf, Founder and Executive Chairman; and Ernst & Young U.S. LLP. The remaining sharesare publicly traded with no shareholder owning more than 5% of the Group. The capital structuredoes change from time to time. For example, Daimler-Benz InterServices (DEBIS) divested itsshares from the Group during 1997. Similar to the structure of Electronic Data Systems andGeneral Motors, GM at one point held an ownership share in EDS. RGI notes that DEBIS held a24% share as recently as March 1997. As of December 2000, CGIP held 13%, Founder andExecutive Chairman, Serge Kampf held 5%, and Ernst & Young held 6%. The remaining stake of76% is public.

Cap Gemini Ernst & Young Capital Structure

Source: Cap Gemini Ernst & Young

B. Company Operations

Cap Gemini Ernst & Young operations consist of a combination of Global Units and Centersof Excellence, focusing on key markets and industries addressed by the Group. Morespecifically, it has five Global Sector Units: Consumer Products, Retail and Distribution; Energyand Utilities; Financial Services; High Technology and Automotive; and Life Sciences andChemicals. In addition, the company’s Telecom, Media, and Networks business unit in alliancewith Cisco Systems targets the telecom industry. The Group also has several Centers ofExcellence. These not only focus on solution areas, including ERP and mobile commerce, butalso several industries such as automotive.

The Group’s structure also includes various Service Centers that cover application areas,including Applications Management, Enterprise Management, Integrated Supply ChainManagement, and Customer Relationship Management. Other operational areas includetechnology labs. It launched its Netherlands-based Mobile Technology Lab, which is dedicated todeveloping mobile Internet technologies and, in an effort to help enterprises with continuedinnovation, CGE&Y established the Center for Enterprise Creation. The Center provides servicescovering all aspects of an enterprise launch, including strategic planning, technology architecture,operations definition, organization design, systems development, user experience design,temporary office space, and administrative support with a co-creation mindset.

CGIP (13% Share)

Serge Kampf(5% Share)

Public(76%)

CAP GEMINI S.A.

Operating Companies

Ernst & YoungUS LLP (6%)





C. Services Delivery

To deliver its services, Cap Gemini Ernst & Young consultants utilize PERFORM, the firm’sISO-9001 compliant quality system. PERFORM acts as a transnational set of standards, guides,templates, and best practices. The Group has been ISO 9001 certified since 1994 and coversCap Gemini areas such as study, design, implementation, and maintenance of informationsystems.

RGI notes that CGE&Y uses “On Time and Above Customer Expectation" (OTACE) tomeasure how its teams perform against client expectations and against the project timeline. Atthe beginning of each engagement, it meets with the client to determine the metrics that will beused to define success. For 2000, CGE&Y says that it had an OTACE measurement of 93% --meaning that it met or exceeded client expectations 93% of the time during the year.





Product Strategy

Cap Gemini Ernst & Young represents one of the largest management and IT consultingfirms on a worldwide basis. In fact, the Group claims to be the number one IT consulting servicesprovider in North America and to be ranked in the top five for professional services. The newcompany combines the resources of Gemini Consulting, Cap Gemini IT Services, and the recentacquisition from Ernst & Young LLP, Ernst & Young Consulting Services. Overall, the Groupoffers management and IT consulting services, systems integration, and technologydevelopment, design, and outsourcing capabilities on a global scale. It helps traditionalbusinesses and Internet-based companies to continue to explore growth strategies. RGI furtherdefines its solutions offering as follows.

• Management Consulting -- Cap Gemini Ernst & Young offers services that focus onbusiness strategy, operations, and people and information management. The firm’smanagement consultants help clients make decisions about where to allocateresources to deliver the maximum return on their investments. From improvementsin production and distribution, including e-business strategies, to better reporting andquality control, clients develop roadmaps that help them gain a competitiveadvantage over rivals and sustain that advantage over time.

• Systems Transformation -- The firm’s services in this area fall into two categories,including development of customized software or hardware for a specific client. Italso covers systems-integration projects, conducted in partnership with hardwaremanufacturers, software companies, and other partners. Cap Gemini Ernst & Youngdrafts specifications, designs the architecture, and handles the development andimplementation of the new system.

• Information Systems Management, Outsourcing -- Information Systems Management(ISM) oversees the day-to-day operation of the client’s business. The firm assumesresponsibility for all or part of customers’ information technology resources throughthe following service offerings: Applications Management (AM) and InfrastructureManagement (IM).

A. Applications Management Outsourcing

Cap Gemini Ernst & Young claims to be the leading European provider of ApplicationsManagement (AM) services. When delivering AM services, CGE&Y assumes contractedresponsibility for the continuous management and execution of activities related to the support,maintenance, enhancement, and evolution of applications. The company goes on to say that itsU.S. operations offers an extensive portfolio of outsourcing services that deliver the results thatcompanies look for in business focus, technology improvement, cost management, and access toresources. It developed an approach to outsourcing service delivery that combines best-in-classtools, industry leading processes and methodologies, and teams of specialists that help clientsfocus on the strategic imperatives that position them for competition.

These services have several key characteristics:





• A global network of Applications Management Service Centers (AMSCs) that delivereconomies of scale through industrialized processes and mutualized resources;

• A methodology that integrates the Carnegie Mellon Software Engineering Institute'sCapability Maturity Model (CMM) into its ISO-9001-compliant PERFORM processesand leverages global best practices;

• Measured delivery through customized, adaptive Service Level Agreements (SLAs)based on its clients' specific and evolving requirements and priorities; and

• Flexible delivery options that provide a solution to meet specific business needs.

A. 1. Applications Management Service Centers

CGE&Y deployed a global network of dedicated Applications Management Service Centers(AMSCs offering a standardized alternative approach to applications management. Withoperational and financial benefits, remote delivery increasingly has become the model of choicefor its customers. CGE&Y’s AMSCs deliver on improved efficiency and reduced cost by adheringto several key principals:

• Mutualization of resources -- Leveraging and sharing skilled expertise and resourcesacross multiple clients to increase flexibility, lower risk, reduce cost, and improveservice;

• Industrialization of processes -- Standardizing the methodologies and processes toimplement a factory approach engineered for high productivity and low cost; and

• Automation of tools -- Integrating and automating the tools to deliver improvedproductivity and enhanced reliability.

A. 2. Rigorous Proven Methodology

Cap Gemini Ernst & Young U.S. uses its propriety, ISO9001-compliant methodology,DELIVER, developed over more than 10 years, for the transition and delivery of its ApplicationsManagement services. The DELIVER AM module comprises the best practices, methods,techniques, and tools for the management of all phases of the lifecycle of applicationsmanagement. The Group also integrated the Carnegie Mellon Software Engineering Institute's(SEI) Capability Maturity Model (CMM) into its ISO9001-compliant disciplines to provide clientswith improvements in software development, service delivery, speed, productivity, and cost.

A. 3. Measured Delivery





Cap Gemini Ernst & Young U.S. LLC implements, delivers, measures, and reports on a fullcompliment of performance metrics designed to meet the service needs of its customers:

• Statement of Work (SOW): sets out the "what" of service delivery.

• Service Level Agreements (SLAs): its "living" SLAs define the "what, how much, andhow well" of the engagement and allow the service to evolve throughout the life of theengagement.

• Operating Level Agreements (OLAs): defines the "how much" and "how well" amongmultiple service providers to ensure seamless, undisrupted delivery and minimize"finger pointing."

• Service Quality Plan: defines the roles and responsibilities, process flows, andcommunication and reporting among clients, CGE&Y, and third-party vendors byoutlining how it will deliver expected client results and key deliverables.

• OTACE (On Time and Above Customer Expectations): defines how the Groupcontinually measures and improves customer satisfaction, based on criteriaindividually defined by its clients.

A. 4. Flexible Delivery Options

In addition to responsive, measured service, Cap Gemini Ernst & Young U.S. blends a mix ofservices and delivery options to craft a solution that will best fit its clients' needs.

• Manage a portfolio of applications or selected ones.

• Deliver services from a site or from its Applications Management Service Centers(AMSCs).

• Deliver a full-service solution, working in conjunction with the Group’s alliancepartners, or a custom solution that focuses on specific service components, includingAM, infrastructure management, business process management, and help desk.

• Offers a full service help desk capability in support of a client’s applications that canimprove levels of problem resolution and optimize operations.

• Supplies the necessary staffing resources or implements established procedures forthe transition of existing staff into CGE&Y.

• Offers a service-based pricing model with both fixed and variable components thatcan be controlled, based on the predefined levels of service.

B. B2B Supply Chain





With specialists based in the Americas, Europe, and Asia Pacific, Cap Gemini Ernst & YoungU.S. is a leader in B2B Supply Chain consulting. In addition, it provides solutions acrossCustomer Relationship Management, Information Technology, and Strategy Transformationdesigned to deliver value across the enterprise. The Group helps clients build adaptive supplychains by enabling them to get closer to customers, collaborate more effectively with suppliers,leverage digital marketplaces, and optimize the use of information. Overall, its suite of supplychain management services ranges from supply chain strategy and architecture development, tobusiness and technology integration, to full-service process and technology outsourcing. Inaddition, it has developed new offerings to address the market's customer-centric businesschallenges and to help companies build dynamic, adaptive supply chains. CGE&Y’s specificservice offerings include the following.

• Supply Chain Transformation – This offering determines a company's customertarget market, core competencies, manufacturing and purchasing opportunities,organizational structure, and connectivity options. Based on a technologyframework, the Supply Chain Transformation approach focuses on matching supplyand demand through fulfillment execution. Its Supply Chain Transformation servicesutilize the Networked Value Chain (NVC) solution as the core foundation to buildadaptive supply chains. The multi-tiered architecture gives companies the ability tocollaborate with business partners at increased velocity, while growing a broader,more loyal customer base. It also integrates multiple and disparate supply chains,delivering differentiated products and service bundles to customers.

• Demand and Supply Chain Optimization -- Cap Gemini Ernst & Young’s Demand andSupply Chain Optimization plays a role in translating business strategy intooperational execution. Essentially it becomes the company's operating plan andprovides much of the integration needed for making optimal decisions. CGE&Y'sDemand & Supply Chain Optimization services range from strategy development toorganizational design and change management to collaborative planning, forecastingand replenishment (CPFR). The Group goes on to say that its solutions can delivermajor improvements in operating expenses, working capital efficiency, and customerservice while greatly leveraging ERP investments. It also helps companies overcomefunctional barriers and uncertainty between trading partners, which can threatensupplier relationships and add unnecessary costs.

• Sourcing and E-Procurement -- CGE&Y’s Sourcing and E-Procurement servicesprovide an approach to transforming purchasing. This results in increased value fromexternally sourced goods and services and managed purchasing costs for theconnected economy. Transforming sourcing and e-procurement can reduce anorganization's direct cost of goods and services from 5% to 15%, while decreasingcycle time and time-to-market, and improving supplier relationships andproduct/process quality. In general, its Sourcing and E-Procurement solutionsleverage Internet technologies to develop and deploy strategies and solutions thatconnect clients to their suppliers. By consolidating buying volumes, negotiatingimproved pricing, managing suppliers, focusing on demand management, andenhancing catalog maintenance and control, business processes can be streamlined,company profits enhanced, and customer expectations exceeded. CGE&Y'sSourcing and E-Procurement solutions include strategic sourcing, design andsourcing, dynamic commerce, e-catalog and content management, and e-procurement.





• Logistics and E-Fulfillment -- The Cap Gemini Ernst & Young approach focuses onan end-to end, Logistics and E-Fulfillment solution that encompasses supply chainprocesses from the time the customer places the order to the time it is paid for anddelivered. To fulfill a customer requirement, CGE&Y provides end-to-end fulfillmentintegration through total supply chain visibility, connectivity to join all partners, andphysical delivery. CGE&Y's solution focuses on the customer and synchronizes thepartners and drivers across the entire supply chain. Its Logistics and E-Fulfillmentsolution includes assessment, future state model design, build, exchangemarketplace, and operate.

• Adaptive Manufacturing and Operations -- Adaptive manufacturing is a key step inthe evolution of lean and agile organizations. It provides a connection between themanufacturing and shop floor operations and the critical enterprise applications.CGE&Y provides clients with Adaptive Manufacturing and Operations solutions tohelp foster enterprise-wide communication, collaboration, responsiveness, and rapiddecision making/execution. As a result, organizations can realize cost savings andproductivity gains to maximize overall organizational yield. Each of thesecustomized solutions builds on the previous one to create a roadmap to an adaptiveoperation: lean manufacturing, enterprise connectivity, real-time performancemanagement, decision support system optimization, and distributed decision andcontrol.

• Private Marketplaces -- Private marketplaces transcend the traditional relationshipsbetween the company and its members. The company owning a private exchangeanchors it, and that anchor company needs to have the ability to attract the targetmembers to its network. Compared to other marketplace models, a private exchangegoes beyond procurement to achieve higher levels of collaborative commerce fasterand focus on value creation among members. Cap Gemini Ernst & Young helpscompanies build successful, private marketplaces by following a number of steps:

• Confirm and validate company strategy, direction, and basis for competitiveadvantage;

• Identify key communities-of-interest;

• Define appropriate private marketplace scenarios or each viable community ofinterest;

• Validate each private marketplace scenario by comparing it with potentialalternatives and absolutes; and

• Compare the private marketplace options to select the highest priorityopportunity.

• B2B Technology Solutions -- With a combination of industry knowledge and B2Bmarketplace experience, the Group helps companies make B2B exchange decisions.Its B2B Technology Solutions services help companies achieve bottom-line gainsthrough improved efficiency and increased revenue opportunities, while reducing therisks inherent in B2B marketplace participation. It also offers dedicated marketplaceconnection centers and proprietary process accelerators to increase a company'sspeed to connectivity. The following methodologies help businesses navigate the





technical, organizational, and process changes necessary to connect to B2Bmarketplaces:

• Strategy -- Examines the role of marketplaces in a specific industry, determinesthe service offerings to employ, and identifies the value creation.

• Readiness Assessment -- Analyzes a company's internal business processes,current technology infrastructure, and organization to define the gap betweencurrent capabilities and the requirements to join an exchange.

• Vision and Roadmap -- Features an Exchange Connection Workshop withexecutives to develop the vision of exchange participation and a detailed actionplan for connecting to B2B marketplaces.

• Design -- Constructs the technical and process design and operating model whileselecting the applications and implementing the supporting technical architectureto provide a powerful and effective exchange connection.

• Implementation -- Carries out the connection architecture at CGE&Y's B2BMarketplace Center of Excellence with a staff of technology professionals thatfollow a phased process, delivering increasingly robust levels of integratedfunctionality.

The Group employs the Networked Value Chain (NVC) as a solution framework for buildingmore adaptive supply chains. Tailored to each client’s requirements, this business integrationmodel is built on key supply chain and customer relationship management processes. The NVCmulti-tiered architecture enables companies to collaborate with business partners at increasedvelocity, while growing a broader, more loyal customer base. It also integrates multiple anddisparate supply chains to deliver differentiated products and service bundles to customers.From strategy through implementation, NVC contributes improved visibility of product andinventory, better management of demand variability, and increased profitable volume through thesupply chain.

In the 1980s, first-generation supply chains focused on functional excellence. In the early1990s, second-generation supply chains moved to a transaction-based approach. Currently,networked value chains require new ways of thinking that involve integrated decision makingbetween trading partners and even the collaboration of competitors to make joint decisions.Therefore, third-generation supply chain excellence delivers maximum supply chain yield so thatrevenue and profits increase and shareholder value increases. To support this point of view, B2Bexchanges connect an organization’s ecosystem of suppliers, partners, and service providers tooptimize the extended supply chain. To help companies accomplish this integration, CGE&Yadopts innovative capabilities, such as:

• Collaboration platforms;• Global visibility;• Dynamic pricing;• Integrated supply/demand management; and• Supplier e-hubs.

C. Critical Technologies





CGE&Y holds a vision of how to deploy, manage, and leverage Adaptive IT. Focusing on anecosystem of partners, suppliers, competitors, and customers, it helps clients align an ITorganization and efforts to be dynamically responsive. Adaptive IT acts as the foundation of theCGE&Y Critical Technologies solution area. CGE&Y can help an organization achieve adaptiveIT through a range of services, organized within three main service areas:

• Adaptive Development & Integration;• Network Infrastructure Solutions; and• Technology Consulting Services.

C. 1. Adaptive Development & Integration (AD&I)

CGE&Y houses its Advanced Development & Integration (AD&I) solutions within four serviceportfolios of technology offerings: Business Intelligence Solutions (BIS), Build and IntegrateSolutions, Technology Advisory Services, and Customer Relationship Management.

Business Intelligence Solutions

As one of the primary e-teams of the AD&I Business Unit, Business Intelligence Solutionsplays a role in advancing the charter of AD&I -- making CGE&Y the leading technology solutionsprovider in the market. BIS represents a diverse set of solutions and services and comprises awide range of competencies. From data modeling to strategy management, data warehousing toperformance management, and enterprise data integration to executive information systems, BISforms an integral component of its firm's ability to sell and deliver high-value solutions.

Build and Integrate Solutions

Its Build and Integrate Solutions deliver services that enable clients to customize and extendtheir systems in the evolving e-commerce environment. CGE&Y's Solutions in this area includeERP integration, eStorefront, eC Rapid Start, Java, Portals and Communities, RapidRequirements Workshop, eLegacy Web Enablement, Replatforming and Web Extension andBest Practices, IBM, and Microsoft.

Technology Advisory Services

After having consulted with the client on eStrategy, CGE&Y's Technology Advisory Servicescontinues through the development of architectural plans and the transformation of the ITorganization. The firm’s Technology Advisory Services group develops the technology strategyfor e-commerce and creates the supporting architecture.

Customer Relationship Management

The Customer Relationship Management team looks to assist clients in maximizing their rateof growth by developing strategies, allocating resources, and aligning operations in a manner thatcreates a customer portfolio. The CRM team assists clients with the research, analysis, andvisioning associated with the development of the optimal relationship strategy. This includes





building a customer portfolio, maximizing the range of value delivered, identifying the mostappropriate role to play within the market, and determining the balance of risk/reward associatedwith the customer relationship.

C 2. Network Infrastructure Solutions

The firm offers a range of services supporting the design, build, and implementation of anenterprise network. In addition, CGE&Y and Cisco Systems have a partnership to providetechnology infrastructure solutions that enable service providers and enterprises to connect totheir clients. Overall, CGE&Y's Network Infrastructure Solutions service line (NIS) bringsexpertise and knowledge in the design and deployment of infrastructures for service providersand enterprises. To accelerate a company's infrastructure transformation, NIS emphasizesservices around Cisco products and services.

For enterprises:

• Transition from bricks-and-mortar to e-business;

• Connectivity to all constituents - customers, suppliers, distributors, and employees;

• Business growth, merger and acquisition/consolidation;

• Reduction in operating infrastructure complexity;

• New products/ markets/businesses;

• Convergence of voice/data technologies;

• Changes in regulatory environment;

• Protection of information assets; and

• Secure, always-on (24x7), global operations.

For service providers:

• Changes in regulatory environment;

• The need to provide IP-based services, requiring move from circuit-switched topacket-switched infrastructure;

• Business growth, merger and acquisition/consolidation;

• Growth in broadband market;

• Lack of integrated OSS infrastructure to manage growth and new services; and

• NOC consolidation.





NIS provides a range of services for clients looking to leverage the connected economy.CGE&Y's NIS service offerings include the following.

• Infrastructure Gap Analysis -- Analyze how a client's infrastructure supports itsbusiness needs and define a roadmap for aligning the infrastructure with businessneeds and industry best practices.

• Design Infrastructure -- Develop an infrastructure blueprint based on business andfunctional requirements optimized for the client.

• Build Infrastructure -- Manage the overall deployment of an infrastructure (per designblueprints), including configuration/installation, testing, production migration/cutover,and project management.

• Design and Build Network Operation Centers (NOC) -- Provide network managementstrategies, platform architecture, software implementation, physical design, operatingprocedure development, and staffing models for the development of NOCs.

• ECOstructure Solutions -- Design high availability infrastructures based on theECOstructure blueprints.

• Security Services -- Analyze, design, and implement security solutions for networkand infrastructure at a level consistent with the client's overall security policy.

C. 3. Technology Consulting Services

Technology Consulting lies at the heart of CGE&Y’s technology offerings and represents akey enabler for many of the services employed in the global marketplace. CGE&Y looks to buildon its technology expertise, developing an increasingly rich ecosystem through a range oftechnology alliances. The company delivers the appropriate support to various customers acrossmultiple sectors.

The Group works with its customers to define an IT strategy and translates that into viableand sustainable solutions that meet business objectives. As a global leader in technicalarchitectures, its capabilities span creation, design, audit, and optimization, as well asdevelopment and implementation. Using architects, technology, product, and disciplinespecialists and technical design authorities, CGE&Y ensures that initial concepts andrequirements can be developed through its ASE (Advanced Solution Environment) and ISO-certified project management disciplines. Its technology consulting offering includes thefollowing.

• IT Strategy -- CGE&Y focuses on developing technology strategies that can beintegrated with its client's business strategy. The Group helps clients create a highperformance value by designing architectures, strategic plans, and governanceprocesses.

• Architecture Services – CGE&Y delivers secure, profitable, and innovativearchitectures through technology consultants by applying CGE&Y's ArchitectureFramework, supported by its ATAD (Adaptive Technology Architecture Definition)





service. CGE&Y provides architecture services across various dimensions of the ITlandscape, including applications, information, infrastructure, governance, andsecurity.

• IT Transformation -- CGE&Y provides a roadmap to support clients through the ITchange process, aligning the business and achieving stakeholder agreement. Itsexperience encompasses assessment of the appropriateness of existing IS/ITstrategy, initiative portfolio prioritization, transition planning, and assessment of anorganization's capability to implement a vision and support major change.

• IT Security -- CGE&Y's security service offering spans security health checks,security strategy and management, risk management, security technologies, andday-to-day operations. It reviews, designs, and builds connected and progressivemanagement services aimed at securing the overall enterprise. The Group also hasspecific responses to the needs of the e-commerce economy and provides robustsolutions for secure e-business environments.

• Adaptive Architecture (NRP) -- It creates for clients a user-centric platform with an e-commerce infrastructure. This enables users from different organizations to sharedata and processes. In summary, it enables a new business paradigm, replacing in-house functions with value chain processes across multiple users, organizations,suppliers, and devices. The Group creates platforms that underpin e-businessmodels.

D. Customer Relationship Management

CGE&Y provides strategies for the entire customer lifecycle by offering a variety of stand-alone and integrated solutions to capitalize on CRM opportunities. The approach’s foundation toCRM includes the customer experience, which is supported by a company's ability to know,target, sell, and service its customers. Its solutions lineup includes the following.

• CRM Integrated Offerings

• CRM Point Offerings

D. 1. CRM Integrated Offerings

CGE&Y’s CRM Integrated Offerings fall into several areas, including Strategy Alignment,Touchpoint Integration, Real-Time Marketing, Price Optimization, and CRM for Exchanges.

• Strategy Alignment -- Development of a CRM roadmap and business case to alignCRM initiatives to corporate objectives through Customer Experience Mapping,Business Process Modeling, and Technology Application Architecture. CGE&Y usesthe CRM Index as a step in assessing the potential role of CRM in supporting acompany’s business model.





• Touchpoint Integration -- CGE&Y says that the implementation of CRM involvesexecution on two dimensions: (1) full "web-centric" connectivity with constituents and(2) business intelligence applied real-time across the connected touchpoints. Thisincludes the fusion of e-business and CRM across the front- and back-office (sales,ordering, and service). It also covers the development of an "e" strategy forintegrating across multiple customer touchpoints, using a single IP network (voiceand data). In general, the Group offers five components of Touchpoint Integration:Internet sales and ordering, Internet service and contact center, contentmanagement, virtual (mobile) sales and service, and communication infrastructure.

• Real-Time Marketing -- Real-Time Marketing represents the business intelligencecomponent of full enterprise CRM. CGE&Y designed the Real-Time Marketingoffering to plug into the Touchpoint Integration component architectures, providingnear-real time, two-way offer exchanges to its clients' customer base.

• Price Optimization -- Considered a sister solution offering to the Real-TimeMarketing, Price Optimization provides CGE&Y clients with a variety of businessintelligence-based pricing strategies that can be executed in near-real-time. Thesepricing options include dynamic pricing (per market), target pricing (highest margin),and promotion pricing (correlates to increased sales).

• CRM for Exchanges -- This offers the addition of baseline CRM functionality forexchanges and their constituents. It covers six key components: common contractrepository; 360 degree view of buyers and sellers; customer support (billing andsettlement); recruiting of participants: contact management through telesales andfield sales; common marketing repository (combination of marketing, businessintelligence and content management); and internal and external reporting.

D. 2. CRM Point Offerings

• CRM Reengineering -- CRM Reengineering involves the transformation of a client'scurrent CRM landscape into a practices organization using various CRM people,process, and technology methods, tools, and enablers.

• Stand-alone Web Services -- Stand-alone Web Services integrate people, processes,and technology to create an optimal Web customer experience. This includesmarketing, sales, order management, and service, with respect to the Web.

• Sales Force Automation -- Sales Force Automation software includes productsdesigned to meet the routine needs of the sales representative. The product helpsthe sales professional organize and collect information about territories, customers,products, competitors, marketing campaigns, and pricing. The features include acustomer database, lead qualification, integrated word processor, report writer,address and phone card system, and a tickler file. Additional offerings include anopportunity management system, sales order or sales configuration tools, marketingencyclopedia, reporting and forecasting, and Internet access. CGE&Y alsoimplements technologies, including Siebel Systems, Nortel Networks, and Oracle 11iproducts.





• Contact Center Services -- This solution involves the evolution of traditional callcenters from a telephony-based cost center to a profit center. It provides thecapability to management customer relationships through multi-channel/touchpointcustomer interaction. CGE&Y assists clients in transforming or optimizing theirexisting call center by evaluating call center performance and developing future statecustomer service offerings across customer access channels. The Group alsodevelops “Greenfield” call centers for clients, from the ground up.

E. DareStep

Launched in March 2000, DareStep operates as an entrepreneurial venture, helpingcompanies design, build, and establish their online brand in the business-to-consumermarketplace. Located in New York’s Silicon Alley, DareStep helps companies launch their onlinebusiness or new offerings, including e-business strategy, technology, creative design, andinteractive marketing and branding services. DareStep operates on a global basis, with apresence in countries including Australia, Canada, Finland, France, Germany, Italy, TheNetherlands, New Zealand, Portugal, Spain, Sweden, U.K., as well as the U.S.

The company offering focuses on four areas: Strategy, Branding, Creative, and Technology.

• Strategy -- CGE&Y realizes that the Internet changes the boundaries of a businessand creates new relationships with customers and trading partners. This results in aneed for new business models, organization structures, technologies, and branding.As part of Cap Gemini Ernst & Young, DareStep brings together a team of expertsfrom the fields of e-commerce, technology, applications development, businessarchitecture, creative design, information architecture, and the telecommunicationsindustry and operation support systems. It says that it can work quickly to helpclients to develop a complete e-business strategy, from start to finish.

• Branding -- A brand is reflected in a customer's total online experience -- fromdesign, performance, usability, and product mix to the ability to deliver on customerexpectations. Whether a client has been leveraging an existing brand through theInternet, developing a new digital brand, or deciding between the two, DareStep’sbranding and marketing team looks to help clients develop a brand strategy.

• Creative -- Its creative team will design a site that conveys the spirit of a brand andsupports the customer’s e-commerce strategy. DareStep designers help clientscreate a visual presence on the Web that reaches out to target audiences and clearlycommunicates a message via a range of multimedia technologies. These includeanimation, audio, video, interactive 3-D, panoramic VR photography, and enhancedinteractivity.

• Technology -- DareStep can help customers leverage new technology in severalways. These include personalizing content for each customer, integrating systemsacross multiple entities that support a brand, integrating and communicatingthroughout a value chain, component-based custom-system development, Web-based package selection, implementation, and integration, as well as security andprivacy. It also includes accelerated architecture definition and design,outsourcing/operations, and Web hosting.





DareStep combines the capabilities of Strategy, Creative, Branding, and Technology todeliver value-based services for clients.

• E-Business Cost Effectiveness -- DareStep says that an effective e-businessperformance management tool provides cost effectiveness as well as cost efficiency.It reduces e-business operating costs by aligning operations and providingperformance indices and accountability between e-business and traditional businessunits.

• E-CRM Integration -- E-CRM integration ensures that consumers have a value-addedexperience when interacting with a company. Whether dialing into a call center orcommunicating via the Internet or a hand-held device, customers should have accessto the same information. This environment also should facilitate transactionsbetween companies and the customer.

• Idea to Launch -- This includes everything needed to build an online venture. Idea tolaunch is a package created for those clients seeking a broad array of integratedservices to launch an idea. It covers details from the initial concept to launch. Manyclients may wish to “pick and mix” these services, tailoring them to specific needs atany given time.

• Multi-Channel Interaction -- DareStep touts this as a way to implement and get themost out of multiple channels, such as mobile devices, PDAs, broadband, and thetelephone. New digital channels continue to proliferate, with an increasingly widerange of features and requirements. As a result, companies face the challenge ofproviding their users with a consistent user experience. CGE&Y says that thesecompanies need to rationalize their existing channels and develop new ones tocreating an effective multi-channel presence.

• Next-Generation -- DareStep offers an objective formula to enhance the value of anexisting online firm to improve its communication and create a strategy for growth.Most companies have developed and expanded on their first-generation Websitessuccessfully. However, it finds that they now need to revamp or relaunch by takingtheir sites to next-generation e-business and user experience.

• Website Effectiveness -- It touts this as a methodology for analyzing siteeffectiveness and prescribing solutions. For the optimization of a site's performance,Website Effectiveness diagnoses an organization’s current Website, either as a one-off project in itself or as the first step in a larger work project. DareStep helps toidentify and analyze site performance problems. It also suggests ways of optimizingthat performance.

• Integrated Technology Delivery -- DareStep takes complete advantage of itsaffiliation with other members of the Cap Gemini Ernst & Young group. Working withthe ASE and key software suppliers, DareStep remains committed to speeding uplead times and improving quality. DareStep has the resources to take its clients froman initial idea to a fully operational e-business solution. For a fast response,DareStep can tailor existing packages or analyze, identify, and design a fullycustomized solution for the client.





F. Extended Enterprise Applications (EEA) and Enterprise ResourcePlanning (ERP) Services

Cap Gemini Ernst & Young U.S. LLC began work in 1998 to demonstrate that ERP systemsprovide the foundation for the connected enterprise. It subsequently created EEA, ExtendedEnterprise Applications, to take a leading position in serving clients' needs in the new ExtendedEnterprise Market. Its global reach, breadth, and depth across multiple service lines provides itwith a significant advantage in this market. Overall, CGE&Y draws from personnel with expertisein change management, training, project management, technology, B2B supply chain, customerrelationship management, marketplace exchanges, human capital management, businessintelligence, and support services.

Falling into this service offering, Cap Gemini Ernst & Young delivers Extended EnterpriseApplications (EEA) and Enterprise Resource Planning (ERP) services geared for businessgrowth. RGI notes that the Package-Based Solutions division of Cap Gemini America plays arole in developing solutions for the ERP market. By combining the IT services of Cap Gemini withthe management consulting capabilities of Gemini Consulting, this unit provides packagedsolutions through alliances with companies such as SAP, Baan, and Oracle. For example, undera contract with Bridgestone/Firestone, Cap Gemini helped to enhance the companies’ businessprocesses using SAP modules, including Financial Accounting and Controlling (FI/CO), Sales andDistribution (SD), Materials Management (MM), Production Planning (PP), and planning engineMIMI from Chesapeake Software.

Cap Gemini implements its Enterprise Effectiveness in three stages: diagnostic assessment,design and development, and implementation and measurement. During the first two stages,Cap Gemini emphasizes the quick wins. It then completes the diagnostic assessment stage inthree to six weeks and provides the client with a comprehensive analysis of the enterpriseenvironment. The design stage, lasting from four to eight weeks, selects key operational areasfor improvement and formulates a course of action. The length of the execution andmeasurement stage varies, based on the scope of implementation, but the organization's ITenvironment is aligned with the key business objectives and drivers.

• Accelerated Delivery Centers -- Over the past several years, to meet client demandfor accelerated delivery of solutions, CGE&Y has specialized delivery centers toprovide the environment, tools, and technical specialists to accelerate decisionmaking and solution design, development, and deployment. It connected thesedelivery centers globally via a telecommunications network to form an infrastructureutilized across all of our service offerings. Its EEA/ERP service line uses the centersto handle phases of its projects, including initial planning and business casedevelopment through design, development, rollout, and running applications post-implementation.

• Change Management -- Change management services, those dealing with thehuman and organizational change associated with an EEA/ERP implementation, playa role in the success of a project. CGE&Y’s change management practice, whichsupports its EEA/ERP solutions in addition to other solution areas, continues toevolve its tools and techniques to address the continuously changing technologiesand complexities of ERP solutions. It offers three key components to its changemanagement practice: transformation management, learning solutions, andorganization alignment.





• Euro Conversion -- CGE&Y claims to be a recognized leader in the Euro conversionmarket. Since the creation of the Economic and Monetary Union (EMU) offering in1995, it has completed more than 800 projects and has built a range of services,enabling it to become a leader in the EMU market. The company expects EMU toincrease price transparency, to transform pan-European procurement and marketstrategies, to increase competition, and to centralize organizational structures.CGE&Y’s Euro transformation services include strategy, positioning, implementation,IT methodology and tools, and program management.

• Extended Enterprise Applications (EEA) -- In the customer-driven, connectedeconomy, CGE&Y sees a rise of Extended Enterprises, based on adaptive workingpractices and adaptive IT infrastructures. Success in the global economy of thefuture depends on the speed and effectiveness with which enterprises evolve tocapitalize on this new environment. The Cap Gemini Ernst & Young U.S. LLCExtended Enterprise Applications (EEA) model gives enterprises a practical methodfor beginning this transition process.

• Extended Enterprise Effectiveness (E3) -- To help companies create an EEAarchitecture, CGE&Y developed an approach called Extended EnterpriseEffectiveness (E3). E3 represents an evolution of its Enterprise Effectiveness (E2)service, originally designed to enable clients to connect strategy with processes,people, and technology. E2 also was developed to realize quick wins, developimprovement portfolios supported by a sound business case, measure and trackbenefits, and use business processes and ERP as a foundation for e-businessexcellence. E3 builds on E2 to include extended collaboration with customers andsuppliers, applications architecture, and technical architecture.

• Global and Regional ERP Implementation -- Having implemented complex softwaresolutions in 1,500 different situations, CGE&Y claims the breadth of experience toimplement an ERP system either on a regional basis or across the globe. It assists indetermining process, data, and solutions standards that can be implemented globallyto help achieve business objectives.

• Knowledge Management -- DELIVER/KLM (Knowledge, Learning, and Methods) actsas a knowledge integration system that links a repository of deliverables and workproducts to its project methodologies and standard work plans. DELIVER/KLM alsohas links to its repository of relevant training and business process knowledge.Using context sensitive linking, DELIVER/KLM presents the best examples ofknowledge and learning objects in the context of the methodology. The K!portalenables Internet access to its knowledge bases, regardless of technology platform.In addition, its knowledge centers provide thought leadership, service offerings,methods and tool development, and knowledge management that supports itsEEA/ERP service line.

• Methodology -- CGE&Y based its ERP methodologies on the vendor-developedmethods for implementation. It also embeds its methods and approaches into thevendor-provided framework to enrich the method. For example, it bases the CGE&YU.S. package implementation approaches on its demonstrated Package-EnabledReengineering (PER) method. This was developed to guide and manage projectsundertaking the reengineering of core processes within the framework of a packageimplementation. Modifications have been made to ERP that incorporate additionalprocesses and approaches that play an integral role to each package.





• Outsourcing and Hosting -- The Group delivers a range of services, ranging fromstrategy to outsourcing and hosting, that leverage the benefits of its clients' ERPimplementations. It also provides ongoing support for its clients’ businessrequirements. CGE&Y’s Operate offerings include Applications Management,Infrastructure Management, and Application Service Provider Services. The Grouphas found a growing demand for operate services as companies focus on corecompetencies and deploy their critical resources on strategic, high-impact areas. Atthe same time, these companies look for ways to reduce ERP implementationlifecycle costs and maximize the value (business benefits) that ERP can deliver.

• Package Evaluation, Selection, and Planning -- CGE&Y U.S. can help choose thesoftware package that best aligns the clients' e-business transformation with itsoverall corporate strategies. Its industry experience, record of teaming, andunderstanding of the clients' cultures and operational strategies accelerate the paceof package selection.

• Program Management -- CGE&Y’s Project/Program Management Approach utilizesexperienced project management personnel, established program managementmethodologies and standards, and tested tools and technologies to provideoversight, coordination, and control of all interrelated project or program activities.These program management features are leveraged to provide its clients with thenecessary management, infrastructure, and administrative support necessary tomake the initiative a success. Its approach facilitates effective project/programmanagement through the use of consistent and repeatable processes, programstandards, and leading practices relating to people, processes, and technology. ThisProject/Program Management Approach supports the EEA/ERP service line byproviding the frameworks, methods, techniques, and tools necessary to manage animplementation of large scope and complexity.

• Risk Management -- CGE&Y says that Assessment, the Quality Advisor, and OTACE(On Time and Above Client Expectations) provides the foundation for operationallysound service delivery that results in reduced risk, increased quality, and ultimately,client loyalty. This program, which applies to all of its EEA/ERP deliveryengagements, provides CGE&Y with ongoing views into the delivery of its work andis part of the way in which the Group does business. Risk Assessment acts as atechnique to identify, evaluate, and manage the most serious risks encounteredduring the pursuit and delivery of an engagement. At the beginning of eachengagement, the CGE&Y engagement director, using a checklist containing over 100risk factors, conducts a risk assessment. It then categorizes the risk factors by fiveprocesses: sales, service, people, knowledge, and client. It receives a risk rating ofhigh, medium, or low. Those risk factors that are rated “high” require a risk mitigationstrategy and are documented in the action plan. These action plan items are thenincorporated into the overall engagement work plan. The process ratings, togetherwith the overall ratings, define the risk profile for that statement of work. Ultimately, ituses the risk assessment to develop a preemptive risk management strategy.Eliminating them altogether or reducing them to an acceptable level manages themost serious risks.

• Upgrades -- Release upgrade strategies have been devised by software suppliers toprovide their customers with new functionality, fixes to known bugs, andimprovements to already existing functional and technical transaction frameworks.The rollout of a new release often brings shifts in a software supplier's support





strategy for releases in production with their customers. As older releases near theend of productive support by the software supplier, companies find it difficult to justifythe software release upgrade as a strategic initiative project. Without clearly statedbusiness objectives, it becomes impossible to identify how an upgrade projectintegrates into strategic initiatives. As a result, upgrade projects generally areconsidered to be an expense rather than an investment. The Upgrade for Successprogram was designed to enable clients to get the most out of new ERP softwarereleases. It helps them achieve the technical and business aspects of an upgrade ormigration.

G. MCommerce

Cap Gemini Ernst & Young’s MCommerce offering covers solutions geared for mobilecommerce over the Internet. As the use of mobile telephony grows worldwide, it says that 80% ofthe millions of devices in use will be WAP-enabled by 2002. With improvements in compression,greater available bandwidth, and the launch of more powerful and intelligent devices,MCommerce will provide e-mail on portable phones, disseminate information, and performcomplex transactions. Its MCommerce offering includes the following.

• Business Portals -- It provides design, build, and implementation services foradvanced business portals, with a focus on finance, travel, retail, and employeecentered systems;

• Business Applications -- CGE&Y creates, tests, and implements a range of mobileapplications, including supply chain, telemetry, fleet management, job dispatch, andall aspects of CRM;

• Residential Applications -- The company works with others to create and testapplications for home use. It currently tends to focus on mobile banking andbrokering, payment, shopping, and advertising;

• Mobile Marketplaces -- CGE&Y has been developing new services for mobilemarketplaces, working with a global partner that represents one of the largest mobileservice provider;

• Telco Solutions -- In the field of telecommunications technology and applications,CGE&Y builds a range of services for its global partners that include some of thelargest telecommunications providers; and

• Synergies with Other Service Offerings -- MCommerce not only acts as a stand-alonecapability, but also operates in the context of e-CRM, supply chain, and ERPofferings.

Addressing this market, CGE&Y claims a global network of wireless centers of excellence,equipped with technology from providers of wireless components. In general, its set of mobileservices includes mobile architecture definition, mobile infrastructure launch, mobile solution pilot,mobile solution launch, and mobile enterprise strategy and transformation. In addition, thecompany’s wireless professionals have experience with the leading technology in this arena, suchas WAP, Bluetooth, 802.11/802.11b, and Satellite.





H. Strategy and Transformation

CGE&Y’s Strategy and Transformation practice looks to help its clients remain or become thepreeminent value creators in their industries. The Group works with its clients to develop andimplement strategies for growth and competitive advantage. It can help companies sketch outscenarios and strategic options, visualize desirable outcomes three to five years from now, anddevelop new business models. Through the Center for Business Innovation, its Center forEnterprise Creation, and the Group’s continuing "Enterprise of the Future" research, the companyhas extended its perspective and is generating new insights into the future. Key service offeringsinclude the following:

• Alliances and Mergers -- Pre-deal assistance, including developing and testingrationale for deals, defining roadmaps, and creating success measures. Post-dealassistance, including developing and implementing actions to ensure value creationand capture.

• Enterprise of the Future -- Developing a vision of the enterprise in five years time,defining which portfolio of initiatives will be most effective in creating and capturingcustomer and shareholder value.

• Competitive Strategy -- Aligning enterprise/business unit visions with marketopportunities, designing and implementing strategies to optimize businessperformance and achieve advantage.

• Innovation and Growth -- Generating new ideas, defining growth platforms andbusiness models, and launching growth initiatives, including its GrowthWorksmethodology.

• New Business Creation -- Incubating and scaling new businesses.

• Collaborative Product/Service Development -- Designing collaborative new productand service development processes based on emerging technologies, to reducecosts and accelerate time-to-market.

• Next-Generation E-Business -- Rationalizing the portfolio of e-business strategiesand initiatives, ensuring that efforts remain consistent with overall business strategyand reflect a state-of-the-art view of technology.

• Business Redesign/Transformation -- Designing and launching strategictransformation programs to adapt the business to the new competitive environment,and implementing the client's competitive strategy.

I. Support Services





With a decade of experience helping companies redefine and optimize support functions,CGE&Y helps clients streamline operations and drive performance in finance, accounting, humanresources, knowledge management, and IT. Ranging from simple strategic planning to ERPoptimization, it practices a comprehensive approach to transform an internal infrastructure andenhance existing strong points within a client’s organization.

I. 1. Finance Transformation and Performance Management

CGE&Y assists CFOs in aspects of financial transformation. This includes developing thestrategy, creating the business case, designing the operating model, creating the performancemanagement framework, providing the technical skills and environment, and rapidly implementingthe solutions. The following solutions help CFOs position the finance organization as a driver fora company’s growth and profitability:

• Finance Transformation -- spans strategy development, process design andoptimization, ERP implementation, and Web-enabled solutions.

• E-Finance -- transforms the finance function through Internet-based technologies. Itsays that strategy, development, and implementation are expedited through the useof industry specific CFO and CIO solution sets.

• Performance and Cost Management -- analyzes costs and profitability. Developmentand implementation of processes and tools link strategy to operational execution.

• Shared Services -- designs and implements a shared services organization rangingfrom developing the vision through post-implementation support. It also optimizesshared services where an existing shared services organization exists.

• Specialty Areas -- focuses on areas of expertise, including revenue cycle, treasury,transfer pricing, and working capital management.

I. 2. Shared Services

It bases the CGE&Y Shared Services solution on global market leading experience,designing and implementing shared service operations to decrease operating costs and improvethe overall quality of services. It covers the full lifecycle of shared services, from developing thevision through post-implementation support. For clients with existing shared services operations,Cap Gemini Ernst & Young optimizes performance by suggesting changes to the underlyingoperating model, applying e-business technologies, or migrating from a regional to global SharedServices model.

I. 3. Workforce Excellence





Cap Gemini Ernst & Young’s Workforce Excellence services help clients build anorganizational architecture while developing workforce effectiveness. Services range fromimplementing best practices and leading technology in Human Resources core processes todramatically lower costs while increasing speed, accuracy, and self-service:

• High Performance HR -- spans strategy development, process design andoptimization, ERP implementation, and Web-enabled solutions.

• Transformation Management -- promotes leadership effectiveness, changemanagement, communication, and culture alignment.

• Organization Alignment -- includes structure and job alignment, competencymodeling, and talent investment optimization.

• Learning Solutions -- assists in developing corporate learning and e-learning orclassroom-based instruction.

I. 4. Knowledge Communities and Portals

Cap Gemini Ernst & Young claims to have demonstrated world-class knowledge assetmanagement capabilities. This experience resulted in its Knowledge Communities and Portalsofferings. CGE&Y shifts toward collaborative work methods, helping optimize corporateknowledge sharing to accelerate and improve customer service. Effective knowledgemanagement enhances the efficiency and effectiveness of individuals, teams, and theorganization as a whole and ultimately creates a significant competitive advantage.

The Knowledge Communities and Portals service offerings focus on helping organizationsunderstand business goals:

• Intranet Effectiveness -- begins by looking at how, when, and why people in anorganization access an Intranet. It examines functionality, scalability, and ease ofuse. It also provides a roadmap for leveraging and prioritizing a company’s Intranetinvestments. Beyond that, practices in content and community management areintegrated with an organization's specific need to establish an overall collaborationmodel.

• Knowledge Community Launch -- includes tools and a packaged approach that helpscompanies form, organize, launch, and monitor pathfinder groups. The projectemphasizes both speed and learning and helps an organization rapidly expandcollaborative decision making across multiple areas.

• Enterprise Community and Portal Design/Implementation -- helps re-create workmodels to maximize collaborative impact, using CGE&Y’s global experience.Through this work, it creates an Intranet strategy with a rollout plan and priorities thatare then reflected in all aspects of delivery -- from portal design, to communityparticipation, to performance management structures. In addition to access, CGE&Yestablishes the underlying processes and tools needed to sustain enterprise-wide,effective Intranet use and collaboration.





Market Strategy

The Group’s structure draws on the resources of Gemini Consulting, Cap Gemini IT Services,and recently-formed Cap Gemini Ernst & Young U.S. LLC (formerly Ernst & Young ConsultingServices) to provide strategies and IT frameworks for management consulting, systemstransformation, and outsourcing. Analysts believe that Cap Gemini Ernst & Young U.S. now hasthe resources of a global network with a significantly stronger U.S. presence, recognized alliancepartners, and greater industry knowledge. Many view the bottom line on the acquisition of Ernst& Young Consulting as providing Cap Gemini with a greater breadth of offerings and expandedgeographical coverage. Whereas Ernst & Young Consulting's expertise has been weightedtoward strategy development and project management in North America, Cap Gemini's focus hasbeen systems and technology integration in Europe and the Asia/Pacific region.

Industries in which CGE&Y claims a vertical presence include the financial services,telecommunications, consumer products and retail, manufacturing, life sciences, chemicals, andenergy and utilities markets.

Cap Gemini Ermst Young 1HFY00 Revenue by Global Markets (Revenue = $3,956M)

Source: Cap Gemini

A. Customers and Company Size

Cap Gemini Ernst & Young says that its client base touches nearly two-thirds of the GlobalFortune 500, with many of its clients based in the U.S. In fact, CGE&Y currently derivesapproximately 35% of its revenue from North American operations, which contrasts to less than15% before its Ernst & Young Consulting acquisition. Overall, revenue derived from the newlyformed Cap Gemini Ernst & Young U.S. brings broader industry experience to clients. Thisincludes in-depth, local expertise in financial services, telecommunications, retail, manufacturing,life sciences, and utilities.

Telecom & Media16%

Utilities8%

Other5%

Finance & Insurance

18%

Retail & Dist.15%

Manufacturing20%

Life Sci. & Healthcare

11%

Admin. & Pub. Service

7%





Customer/Industry Characteristics

Customer/Industry Customer/Industry Characteristics Cap Gemini Offering

Telecom & Media Deregulation and technologicaldevelopment

Group know-how in billing, Internetservices and customer loyalty

Insurance

Increased client segmentation,changes in regulations and tax laws

Introduction of management systemsadapted to insurance activities,which promote responsiveness andcost reduction.

Life Sciences

Emergence of technology requiringthe management of masses of data(study and genomes), corporatemergers.

Introduction of integrated logisticmanagement and clientmanagement systems.

Utilities Privatization and deregulation inEurope and the U.S.

Development of a clientmanagement procedure.

Source: Cap Gemini

The following chart provides a sampling of selected clients from each of these industries.

Selected Cap Gemini Ernst & Young Clients by Industry

Telecom, Media & Networks One-2-One (mobile phones company)California Public Utilities Comm.(third-party to Pacific Bell’s Sec. 271) Nextel Portal Information Network Belgacom France FirstMark CommunicationsFrance

Warner Music Arizona Corporation Comm. (third-party consultant to US West’s Sec.271) Warner Music International British Telecom Landtel N.V Polygram in France Telia Telecom

Vodaphone Cellnet Versatel (Netherlands) Albacom (Italy)GTE Data Services BT Paging Service Telia ProSoft FirstMark Communications France

Life Sciences Glaxo Wellcome Pateur Merieux Connaught(subsidiary of Rhone-Poulenc)

Janssen Pharmaceutical Ltd.(subsidiary of Johnson & Johnson)

Hoffman La RocheMonsanto CP Kelco

Health American Healthways Manhattan's North GeneralHospital

Mölnlycke Health Care Sarasota Memorial Health CareSystem

Continuum Health Partners Sarasota Memorial Health Care

Insurance Royal & Sun AllianceChubb & Sun

Trigon Blue Cross Blue Shield Maryland Casualty Company

Utilities (Energy, Water, and Environment) Yorkshire Utilities EDF-GDF Bruce Power (runs nuclear powerstations in Canada) Hydro One

Scottish Power Vivendi Group London Electricity Ontario Power Generation

Elf Atochem British Petroleum Toronto Hydro

Travel & Transport Aeroports de Paris Virgin Trains Trainline

TransaviaAutokontroll

Swedish Rail London Borough of Brent (parking





CAT Group Europecar

Malaysia Airlines Eurotunnel

management)

Consumer Products Retail & Distribution McDonalds Proctor & Gamble

GardenburgerDanzas

Nedlloyd Unitrans

Finance Nordbanken in Sweeden Credit Commercial de France

Credit LyonnaisABN Amro

General Motors Acceptance Nasdaq Europe

Administration & Public Services U.S. Chamber of Commerce State of Wyoming

Scottish Public Sector The United Way of America

Manufacturing (Process, Automotive and High Tech) Bridgestone/Firestone British Steel

BT Industries (truck manufacturing) Dresser-Rand Company Prosonic


B. Account Marketing Approach

In general, Cap Gemini Ernst & Young utilizes a mix of designated sales personnel andsenior consultants who have responsibility for new sales. While contacts were unable to provideinformation on the number of personnel dedicated solely to landing sales contracts, RGI believesthe firm weights the sales responsibility on senior consultants that may allocate as much as 20%of their time to winning new accounts. This appears to be the traditional services sales modelthat is typical of others in the consulting industry, such as KPMG and Deloitte & Touche.

Over the past year, the Group focused more heavily on building its Global Sector Unit salesalong five industry sectors. In addition, its Telecom Media and Networks units have responsibilityfor sale and delivery on a global and regional basis. The Group states that those fulfilling accountexecutives roles not only have responsibility for landing accounts, but also the entire follow-through process, including the sell and delivery side. The Group says that its sales can be lookedat from a global prospective. Its overall global sectors have responsibility for high-end marketingand knowledge-related activities that trickle down to the local level through its geographicpresence in eight regions. In this way, the Group can understand the global and local marketsand address each respectively.

According to conversations with Cap Gemini Ernst & Young contacts, the Group has mergedits operations on the account level, with some estimating a 50% overlap between the Cap Geminiand Ernst & Young client base. For example, all global accounts include members of both CapGemini as well as Ernst & Young. Overall, Cap Gemini Ernst & Young has global, multi-nationaland regional accounts. It goes on to structure account teams by industry, region, and serviceline. Towards the latter half of CY01, CGE&Y purportedly had just fewer than 100 global clientsgenerating an estimated 20% of its revenue. In fact, since the purchase of Ernst & YoungConsulting Services, the Group aligned its five Global Sectors so that each targeted 20 globalaccounts in an effort to quickly gain market share.

Looking to attract new clients, Cap Gemini Ernst & Young takes a somewhat differentapproach compared to other consulting firms. In general, the Group appears to be moving awayfrom the traditional transactional model where the consultancy is hired to do a project and moveson. CGE&Y hopes to build long-term relationships with major clients that will enable it to address





different client needs over an extended period. The Group says that it also looks to build itscross-over sales. For example, the Group looks to sell its AM services to accounts that havealready purchased its consulting services. In addition, it may look to market CRM solutions intoan AM contract. Cap Gemini Ernst & Young also views its alliances with solution partners assales channels. It not only has a relatively generic relationship with Microsoft and Oracle, butalso has alliances with the likes of Siebel and SAP. Under its relationship with SAP, for example,CGE&Y says that it can better target markets such as retail.

RGI notes that following the operational merge of Cap Gemini and Ernst & Young Consulting,the Group launched initiatives designed to attract potential employees. In particular, it allocatedstaff among six professions, corresponding to groups of business. The Group looks to encouragethe emergence of local and international professional communities to promote the developmentand sharing of methodologies specific to various businesses. CGE&Y goes on to say that thecreation of these professions offers a career framework for all employees. This allows the Groupto assign professional client engagements with a high level of competency in specific areas,whatever the country, industry, or service line. The six professions include the following:

• Strategy Consulting;• Enterprise Solution Consulting;• Technology Consulting;• Operations;• Business Development; and• Enable.

C. Pricing

Despite the changes due to the integration of the Ernst & Young Consulting unit, its pricingdoes not appear to have deviated from its time-and-materials or project-based fixed-fee models.RGI notes that this could change as the new company gets a feel for what it takes to operate anorganization that has doubled in size. However, CGE&Y’s management believes in theimportance of keeping pricing consistent, since clients are not likely to accept higher costs justbecause the name of their service provider has changed.

Even if prices stay the same, the firm expects increases in revenue for Cap Gemini Ernst &Young from the cross-selling of services. This means that former Ernst & Young Consultingclients may expect to be offered Cap Gemini call center hosting services. In a similar fashion,existing Cap Gemini clients will be offered Ernst & Young's project management and strategyservices.

D. Advertising Strategy

According to industry sources, Cap Gemini Ernst & Young is in the early stages of an agencyreview for its U.S. creative and media-related activities that sources value at roughly $20M peryear. In fact, its latest advertising campaign came during the latter half of CY00, after itsacquisition of Ernst & Young’s consulting business. The company said that the campaign was aneffort to capture visually Cap Gemini Ernst & Young’s essential brand equity of “entrepreneurial





creativity.” It demonstrates that Cap Gemini Ernst & Young has successfully distilled the brandessence of the newly merged company. The campaign is a celebration of having defined theglobal offer that distinguishes Cap Gemini Ernst & Young from its competitors. It also marks anew phase for Cap Gemini Ernst & Young as it continues its global expansion.

In reference to the $30M campaign developed by D’Arcy Masius Benton & Bowles, PatrickBoccard, Director of Corporate Communication for Cap Gemini Ernst & Young, stated thefollowing: “We are particularly proud to have achieved the complete cycle of brand definition,advertising agency search, and launch of the advertising campaign in just five months.”

Creative execution shows solutions that come from innovative thinking. The images includea footprint on the moon, a baby’s pacifier, and a light bulb. Incorporated into each image is CapGemini Ernst & Young’s icon, which has been part of Cap Gemini Ernst & Young’s corporateidentity since the company’s inception in 1967. Mr. Boccard went on to say, “Cap Gemini Ernst &Young is the only major consultancy with a logo as part of its graphic identity. We decided to usethe logo as a central creative element to symbolize our commitment to entrepreneurial creativityand business innovation.”

RGI also notes it was named as one of the premier brands in a recent book on BusinessSuperbrands in which Chairperson, Marcel Knobil, stated the following. "It is no accident that byfar the majority of these brands have been built upon a high quality product or service, lived up totheir promises, stood for something distinctive, generated considerable awareness, defined aclear personality, and consistently remained faithful to their brand principles."

Advertising will run in print media in 15 countries (Europe, North America, and Asia) betweenOctober and December, with strong visibility in transregional media, national dailies, weeklies,monthlies, and trade press, as well as in airports with billboards.

E. Competition

Cap Gemini Ernst & Young ranks itself against other global IT Services and Consulting firms,such as IBM Global Services, EDS, and Andersen Consulting, now known as Accenture. Othersinclude Computer Sciences Corporation, PricewaterhouseCoopers, and KPMG. It also competeswith the likes of Hewlett-Packard and Compaq. In addition to traditional management consultingservices, all of these competitors offer IT services such as outsourcing, Enterprise ResourceManagement, and Customer Resource Management services. RGI notes the following rangingprovided by the Group for 2000.

World IT Services and Consulting Companies (Fiscal year revenue; outsourcing excluded; $B)

Firm

WW FY00 Revenue

US FY00 Revenue

IBM Global Services $27.3 $11.5 EDS $19.2 $11.2 Andersen Consulting (Accenture) $10.5 $6.8 CSC $10.3 $5.2





Cap Gemini Ernst & Young $7.9 $2.7






Organization Structure

Since its Ernst & Young Consulting Services acquisition in 2000, Cap Gemini Ernst & Youngmade several key management changes, largely due to its lagging revenue. Initially touted asone of the largest transnational mergers of the year, CGE&Y’s profits likely will fall by more thanhalf over the calendar year on sales of roughly $8B. Making attempts to streamline its operationsto again realize revenue growth, the Group not only named its Chief Operating Officer, PaulHermelin, as its new Chief Executive Officer, replacing Geoff Unwin, but also implemented arestructuring plan. As late as December 2001, it disclosed a full year $180M restructuring chargeto cover a new round of layoffs and cost savings measures. To date, it has decreased its 60,000workforce by an estimated 9%. The restructuring also includes the postponement or staggeredimplementation of certain initiatives that no longer represent priorities, better management ofSG&A and travel expenses, as well as the closure of a few minor operations in Croatia andSlovakia.

In addition to the appointment of its new CEO, the Group made changes to its Americasoperations. In particular, CGE&Y named former VP and Leader of Health/Managed Care, PaulRuflin, as its Chief Operating Officer. He holds responsibility for all of the CGE&Y industryoperations in the Americas. In turn, the Group named Lewis Redd as its National Practice Leaderfor CGE&Y Health, a position overseeing all business development and service delivery amongU.S.-based clients. Other senior executives in the new CGE&Y Health practice include RussRudish who leads the Health Providers practice, Sean Kenny who leads the Managed Carepractice, and Ken Katif who leads the Life Sciences practice. In addition, David Zito oversees thesolutions teams involved in strategy, transformation, and information technology. Also duringNovember 2001, Cap Gemini Ernst & Young announced the appointment of John Parkinson asChief Technologist for the Americas. As an additional note, toward the beginning of CY01,CGE&Y named Florence Mairal as Communications Director, replacing Patrick Boccard.

A. Top Level Management

The Cap Gemini Ernst & Young organization does not lend itself to strict organizationalgroupings, due to its matrix nature. In general, the Group is led by a seven-membermanagement committee, which consists of three Managing Directors and four Group VicePresidents. In addition, looking at its U.S. management organization, Terry Ozan leads the regionas CEO and Paul Ruflin holds the position of Chief Operating Officer. The company also lists anumber of vice presidents, each leading an Americas’ industry sector such as energy and utilitiesor financial services.

A. 1. Group Management Committee

Managing Directors

• Paul Hermelin, Chief Executive Officer and Chief Operating Officer -- Regions• Terrence Ozan -- North America





• Pierre Hessler -- Capabilities

Group Vice Presidents

• Berend Brix -- Sectors• Hubert Giraud -- Risk Manager• Mark Hauser -- Offerings and Marketing• Frédéric Lemoine -- Chief Financial Officer

Board of Directors

• Serge Kampf --Chairman• Christian Blanc, Paul Hermelin, Pierre Hessler, Michel Jalabert, Ruud van Ommeren,

Terrence Ozan, Bruno Roger, Ernest-Antoine Sellière, Guy de Wouters , and ViceChairman, Geoff Unwin, -- Directors

• Phil Laskawy and Chris Van Breugel – Nonvoting members

North American Management

• Terry Ozan -- Group Managing Director for the Americas• Paul Ruflin -- Chief Operating Officer• John Parkinson -- Chief Technologist• Lanny Cohen -- VP, Strategy and Technology Service Lines• Stephen Deedy -- VP and Leader of Consumer Products, Retail and Distribution• Timothy Crichfield -- VP and Leader of Energy and Utilities• William Hartman -- VP and Leader of Manufacturing• Kenneth Katzif -- VP and Leader of Life Sciences and Chemicals• Michael Rice -- VP and Leader of the Financial Services Industries• Lewis Redd -- VP and Leader of Health/Managed Care• Ravi Ravikumar -- VP and Leader of High Technology• Leslie Blair -- VP and Leader of Critical Technologies• John Distefano -- VP and Leader of MobileCommerce

B. Field Presence and Headcount

As of mid-year 2001, Cap Gemini Ernst & Young had more than 60,000 employees inapproximately 30 countries. It is estimated that 11,450 were located in nearly 80 locations acrossthe U.S. Based on estimations made by the firm, the vast majority, or just over 85% of itsworkforce, are professional staff personnel. RGI categorizes these as consultants and engineers.Given the worldwide workforce figure of 60,000, RGI believes that Cap Gemini Ernst & Younghad approximately 51,000 consultants and engineers in service related offerings, includingmanagement consulting and IT services. With headquarters in Paris, France, Cap Gemini Ernst& Young operates in the following countries.

Cap Gemini Ernst & Young International Presence

Australia India Portugal Austria Ireland Romania





Belgium Italy Russian Federation Canada Japan Singapore China Korea Spain Denmark Latvia Sweden Finland Luxembourg Switzerland France Malaysia Taiwan Germany New Zealand The Netherlands Hong Kong Norway United Kingdom Hungary Poland


RGI notes that over the past few months, the Group announced a workforce reduction thatcompany officials claim has reduced its total number of employees by fewer than 10%, or 4,500from the beginning of CY01-January. This reduction would bring the number to approximately56,000 as of December 2001. Given this information, RGI estimates the number of consultantsand engineers at 47,600. Providing further guidance on its reduction, the Group stated duringone phase of its reduction that of the 2,700 jobs cut, the majority occurred in the U.S., U.K., andNordic countries. Cuts also were made across the Group’s telecommunications market unit. Atthis time, the Group transferred roughly 700 support staff members to client facing positions,following the rationalization of operating structures.

B. 1. Hiring and Compensation Practices

In the competitive landscape of management consulting, as well as IT consulting andservices, RGI believes that Cap Gemini must pay high salaries in order to compete for top leveltalent. However, due to the current weakness in the IT market and announced restructuringplans, the Group purportedly has considered ways of lowering wages for the top 10% earners.Cap Gemini Ernst & Young also made changes to its hiring practices over the past year. Morespecifically, to enable every member of CGE&Y to feel part of the group, it designated its"professions" as follows: Strategic Consulting, Business Consulting, Technology, Operate,Business Development, and the Enabling professions (e.g. Financial Management,Communications etc.). It says that belonging to a profession gives its employees the opportunityto network with the best talent from around the world, exchange the latest best practices, developnew skills and capabilities, and work together. In general, the CGE&Y Group created sixprofessions to develop its human capital. The purpose was to grow professional communities inwhich individual team members could feel at home and develop within a family of peers havingsimilar roles and interests.

• Strategic Consulting -- Work with business leaders to develop innovative strategiesand re-create enterprises.

• Business Consulting -- Ensure delivery of effective business processes andapplications solutions to business issues.

• Technology -- Develop and deliver complex technical solutions to real businessissues.





• Operate -- Provide world-class outsourcing services.

• Business Development -- Build account relationships and drive sales.

• Enabling Professions -- Provide support to the people and the business.

B. 2. Cap Gemini University

The university that Cap Gemini established in 1991 provides internal training to Groupemployees and represents one of the cornerstones of the Group’s internationalization strategy.By enabling employees from different countries to meet and get to know each other, theuniversity lays the foundation for cross-border exchanges. It promotes the creation ofcooperative networks that, in turn, help to leverage the Group’s capabilities in a number of areas.As stated by the Group during 1998, Cap Gemini University dispensed 20,000 man/days oftraining. The Discovery program gives new recruits an overview of the Cap Gemini Ernst &Young services, areas of competence, and the career opportunities offered by the organization.The International Business School program offers high-potential management staff theopportunity to develop key competencies. The Group also believes that innovation acts as a keygrowth driver and a source of competitive advantage in the competitive environment in which itoperates. In order to leverage the innovation process, the Group has developed InternalKnowledge Management tools to help stimulate creativity.

Cap Gemini Ernst & Young states that it offers employees an opportunity for a career -- notjust a job. A successful career not only benefits both the employee and the company, but suchsuccess also depends on working together with initiative and effort. In support of this belief, CapGemini formed its Career Program. It designed the Career Program to offer consultants aframework for setting and attaining career objectives, while offering the very best service to theGroup’s clients. The program offers consultants a variety of professional growth alternativeswithin a framework that parallels market trends and client demands. Example of programsinclude the following:

• Discovery Program -- Recent graduates who join Cap Gemini Ernst & Young can getan opportunity to attend a Discovery session at the university. Here, they learn moreabout the group's international dimension, experience at first hand working inmulticultural teams, and engage in role playing exercises that devise winningproposals for international clients.

• International Business School -- Developing its international leaders of the future is ofprime importance to Cap Gemini Ernst & Young. The CGE&Y International BusinessSchool is a 9-month program for high performing individuals. Using a mixture ofclassroom-based and project assignments, working with some of the leadingbusiness schools like INSEAD and the London Business School, Cap Gemini Ernst &Young created a program that both develops and stretches the participants.





Alliances/Joint Ventures/Partnerships

Over the past year or so, Cap Gemini Ernst & Young made a number of alliances and jointventures designed to strengthen its services portfolio and extend its product reach. For example,in November 2001, Nokia, CGE&Y U.S., and EYT (formerly Ernst & Young Technologies)announced a teaming arrangement to provide a mobile business solution for enterpriseapplications delivery. Together, they will help enable mobile workforces in North America tocomplete sales transactions, field service requests, fulfill customer orders, and manage inventoryfrom remote locations. This announcement combines Nokia’s focus on wireless devices,CGE&Y’s global systems integration experience, and EYT's competencies in applicationfulfillment and support, providing customers a “one-stop shopping” experience for their mobileenterprise integration.

• Microsoft -- In January 2001, CGE&Y introduced n-Portal, a knowledgemanagement solution based on Microsoft’s Solution for Intranets (MSI) that enablesknowledge sharing across corporate intranets. Using n-Portal, companies canprovide employees with rapid access to information through enhanced documentsearching and management capabilities; improve corporate communication andonline training capabilities through streaming video; and enable Web-based teamcollaboration on documents. CGE&Y’s accelerated development process deliversthe customized n-Portal solution that helps companies lower costs and increaseproductivity.

• Stef-TFE -- During November 2001, Stef-TFE and CGE&Y France sealed a long-term partnership agreement to develop and market IT solutions currently groupedunder the name Agrostar Applications. To this end, CGE&Y France will make acapital investment in Agrostar, the Stef-TFE unit specializing in IT systems, whichholds the marketing rights to the company's software products. By combining theexpertise of specialists in logistics and information systems, the aim is to strengthenthe range of services that both groups will be able to offer to their food-processingand distribution customers. Within this context, Stef-TFE has engaged CGE&YFrance to integrate its information systems within a single IT architecture and to runits existing and future systems as part of a ten-year outsourcing agreement.

• webMethods -- During November 2001, webMethods, a provider of integrationsoftware, and CGE&Y announced that the companies would collaborate to build,market, and sell a solution for the financial services industry. The solution willprovide businesses with the technology and consulting services necessary to achievestraight-through processing, addressing financial institutions’ need to move towardT+1 settlement for both domestic and cross-border securities trading. Together,CGE&Y and webMethods will provide a technology offering relevant forbroker/dealers, global custodians, and investment managers to achieve T+1settlement for domestic and cross-border securities trades. The companies willconnect the applications and systems necessary for settling securities trades.

• Siebel -- During October 2001, CGE&Y and Siebel announced a global alliance thatwould strengthen and expand their program of jointly implementing innovative e-business solutions and developing next-generation CRM services for the world’sleading companies. As a Global Strategic Partner to Siebel, CGE&Y will leverage itsglobal presence to deliver the full range of Siebel e-business applications, in additionto a variety of point solutions or as part of enterprise-wide integrated solutions to





transform a company’s CRM effectiveness. A number of specific initiatives will bedriven from the program:

• A global go-to-market initiative to offer best-of-class services for integration ofcustomer touchpoints, allowing clients in all industries to provide a singlecustomer experience across multiple channels.

• The development of Siebel Centers of Excellence in EMEA and APAC.

• A dedicated global network of application support centers supporting Siebel e-business applications, similar to the Applications Management Services Centers(AMSCs) supporting Siebel e-business applications established by Cap GeminiErnst & Young in Bristol, U.K. and Frederikstad, Norway.

• GE Cisco Industrial Networks -- During August 2001, CGE&Y U.S. and GE CiscoIndustrial Networks announce a North American alliance to deliver adaptivemanufacturing solutions to industrial companies worldwide. Bridging the system-widegap between manufacturing shop-floor operations and business Enterprise ResourcePlanning (ERP) systems, this solution enables real-time visibility and decision makingby allowing companies to be better connected, more responsive, and better managedacross their business enterprise. Comprehensive and sustained implementation ofadaptive manufacturing can have an impact on corporate measures, such asdecreasing build-to-order lead time, increasing product yields, and improvinginventory turns.

• SAP -- During August 2001, CGE&Y and SAP announced plans to work together ona global program to revolutionize the automotive supply chain. The new proposedalliance between the two global industry leaders will leverage each other’s strengthsand expertise in the automotive industry. The companies will address some of theindustry’s most pressing challenges related to just-in-time delivery and the make-to-order process. The two companies will develop a solution that merges Cap GeminiErnst & Young’s Adaptive Automotive Enterprise Model with SAP’s mySAPAutomotive solution. The Adaptive Automotive Enterprise Model (AAEM) provides avision of how an organization can sustain business success in this rapidly changingenvironment and assemble the building blocks necessary to take the organizationfrom where it is now to this future goal.

• EHPT -- In August 2001, CGE&Y and EHPT, a global supplier of software forcommunications management, announced an agreement on a business supportplatform, NextGen CRM, for next-generation service providers in thetelecommunications industry. NextGen CRM will be marketed and sold by the Nordicteam of Telecom Media Networks, an industry practice of the CGE&Y. It leveragesits global partnership agreement with EHPT to offer the EHPT portfolio of billing andcustomer care products as the basis of the new platform. CGE&Y then will integratebest-of-breed customer relationship management (CRM) products from othersuppliers according to specific customer needs.

• Convergys -- During August 2001, Convergys, a provider of integrated billing andcustomer care services, and Telecom Media Networks announced an alliance thatleverages Convergys' Geneva Active Revenue Management (ARM) software to focus





on the billing needs of operators. The alliance has secured a major account withleading broadband communication provider, FirstMark Comunicaciones España, tointegrate Convergys' Geneva software and other systems to support the company'soperations in Spain. Cap Gemini Ernst & Young, which led the system integration ofthe Geneva software in FirstMark Comunicaciones España, worked on all phases ofthe project - - from analysis to design, implementation, testing, and integration. Thiswork complemented Convergys' work on the scope analysis, installation of theGeneva software, and product analysis for the Voice Service. This project teamenabled FirstMark Comunicaciones España to have its billing system up and runningquickly and within budget, keeping it ahead of the competition.

• VerticalNet -- In July 2001, VerticalNet and CGE&Y U.S. formed a strategic allianceto help accelerate the adoption and integration of business-to-business technologyfor industrial marketplaces in the U.S. As a preferred systems integrator, CGE&Y willsupport VerticalNet’s implementation of software, tools, and technologies in the U.S.Additionally, under the terms of the agreement, VerticalNet will utilize CGE&Y’sAdvanced Development Center (ADC), leveraging its software developmentcapabilities to accelerate VerticalNet’s product lifecycle. VerticalNet will draw uponCGE&Y’s real-world expertise in planning, building, and managing e-businesssoftware and systems with a goal of seamless integration of its software. Thesesolutions address the needs of both private and public marketplaces, as well as theirmembers and participants, by providing a bridge between these markets and theirusers.

• SAPMarkets -- During April 2001, CGE&Y and SAPMarkets announced the signingof an agreement aimed at helping companies create comprehensive B2B exchangesolutions using the MarketSet solution. By signing the agreement with SAPMarkets,CGE&Y joined the SAPMarkets Global Partner Program as a Most Valuable Partner.As the first partner to be engaged at this elite level, CGE&Y will develop a dedicatedpractice focused on the delivery of MarketSet-based solutions. As part of theSAPMarkets Global Partner Program, CGY and SAPMarkets will engage in jointmarketing, business development, and solution delivery activities. In addition, twoSAPMarkets Centers of Excellence will be established in the U.S. and Europe tofocus on solution demonstrations, client awareness, and competency development.

• PeopleSoft -- In June 2001, CGE&Y announced the extension of its offerings withinthe PeopleSoft practice to provide business consulting and implementation servicesfor PeopleSoft 8 CRM. Lynn Anderson, leader of Cap Gemini Ernst & Young'sPeopleSoft practice, comments, “We are seeing a lot of interest from our clients inaddressing their customer-facing processes, as demonstrated by their willingness toengage in discussions regarding improving these processes using our CRM Indexdiagnostic tool. The PeopleSoft CRM modules will enable both existing and newPeopleSoft customers to realize benefits in this area.” RGI notes that CGE&Y’s CRMIndex provides an assessment of CRM capabilities in a format that allows easycomparisons with other businesses.

• TradeCard -- During May 2001, financial supply chain service provider, TradeCard,and CGE&Y announced an agreement to deliver and integrate TradeCard's patentedfinancial supply chain services. This will help companies improve working capital andbusiness process efficiencies within their financial supply chains. The financialsupply chain comprises the business processes and data flows that buyers andsellers use to manage and settle their trade transactions. According to a CGE&Y





benchmarking study of 150 large companies, the firm believes that automation of thefinancial supply chain with TradeCard's technology, along with targeted businessprocess realignments, could save companies 50 to 100 basis points of top-linerevenue. These savings result from improvements to working capital, riskmanagement, and business process costs, including the labor and fees related topurchasing, invoicing, accounts receivable, accounts payable, treasury, and cashmanagement.

• iPIN -- In March 2001, iPIN and CGE&Y announced a global alliance to provideInternet payment solutions to multiple industries, including telecommunications andfinancial service providers worldwide. iPIN and Telecom Media Networks will engagein joint sales, marketing, systems integration, and consultation to further deployiPIN’s payment technology and expand its penetration of telcos, financial institutions,merchants, and other partners. The iPIN and CGE&Y alliance will enable companiesto deploy payment solutions, such as wireless payments, eWallet solutions, andstored value applications. Having already identified specific large-scale projects towork on together, including a current initiative with France Telecom, thisannouncement further enhances the relationship between the two groups.

• Netonomy -- During March 2001, Netonomy, a provider of e-care and e-commercesolutions for wireless communications service providers, and CGE&Y’s TelecomMedia Networks signed a global partnership agreement. The partnership builds onthe informal working relationship already established by the two companies andenables Telecom Media Networks to integrate the MyNetonomy application into its e-care and e-commerce solutions for telecommunications service providers. Netonomywill work with Telecom Media Networks to establish best practice in delivering e-careand e-commerce solutions, particularly in the 3G environment. Only the self-servicemodel can fulfill true 3G service. As the number of customer interactions increase,the traditional customer service and support operations via the call center will beprohibitively expensive and slow.

• Blue Martini Software -- In February 2001, Blue Martini Software announced theaddition of CGE&Y to the Blue Martini Software Alliance Program at the highest,strategic level. Under the alliance, CGE&Y’s consumer goods, retail, and distributionpractice will be able to offer to companies around the world Blue Martini applicationsfor commerce, marketing, channels and service. Companies including Canadianhard goods retailer, Canadian Tire Corporation, have already selected Blue Martiniapplications together with CGE&Y’s strategy, development, and implementationservices.

• PeopleSoft -- During February 2001, PeopleSoft and CGE&Y teamed to introduce“HealtheValue,” a package of healthcare specific applications designed to lower costand increase the speed of e-business for healthcare organizations across thecountry. The PeopleSoft/Cap Gemini Ernst & Young agreement provides a packageof enhanced solutions designed to address specific challenges of healthcareorganizations that include human resources, benefits administration, payroll,purchasing/receiving, inventory control, general ledger, and accounts payable.PeopleSoft Consulting will join forces with CGE&Y to provide rapid implementation ofthese applications by leveraging Cap Gemini Ernst & Young’s “FastTrackMethodology.”





• Compaq -- In January 2001, Compaq and CGE&Y announced they signed a globalalliance agreement that draws on the strengths and capabilities of both companies toprovide best-in-class consulting and systems integration services worldwide. Theintent of this global agreement is to combine CGE&Y consulting services withCompaq’s IT Infrastructure and Global Services to provide integrated solutions toenterprise customers. This move extends Compaq Global Services’ capabilities andbroadens CGE&Y’s suite of technology-centered offerings. The alliance alsoprovides enterprise customers with a single source for integrated solutions acrossmultiple platforms. As part of the agreement, CGE&Y and Compaq will helpcustomers address business needs such as CRM, e-procurement, and technicalrequirements such as bandwidth, scalability, next-generation networks, and security.

• Xchange -- During January 2001, Xchange and CGE&Y U.S. announced an allianceto provide businesses with total CRM solutions. These solutions help businessesearn increased profits from their customer base so that communications are timely,relevant, personalized, consistent, and delivered through the interaction channelmost preferred by the individual customer. Xchange has been designated aPreferred Partner for Cap Gemini Ernst & Young’s CRM practice. Xchange’s productsuite will form the core of CGE&Y’s Real-Time Marketing eCRM solution offering.Under this agreement, Cap Gemini Ernst & Young will train up to 150 of itsconsultants to implement Xchange’s industry-leading CRM software by the end of2001, dedicate full-time salespeople to selling the solution, and co-market withXchange.

• PTC -- In January 2001, CGE&Y and PTC announced an agreement to offermanufacturers the ability to collaborate with key partners, suppliers, and customersthroughout phases of a product's lifecycle, including the design, prototype, andreview processes. The major industries targeted by this include aerospace anddefense, electronics, automotive, high technology, telecommunications, networkequipment, industrial equipment, and utilities. The fundamental business conceptbehind CPC (Collaborative Product Commerce) is that innovation and new productdevelopment is vital to profitable and sustainable growth for manufacturers.Significant advantage can be achieved by creating better products in less time, atlower cost, and with fewer defects than the competition. CPC acts as an architectureto help manufacturers meet buyers’ increasing demand for custom-tailored products.Through Internet-based collaboration, real-time communication occurs amongpartners, suppliers, and customers involved in a product lifecycle.





Financials

Since its acquisition of Ernst & Young Consulting Services during FY00, Cap Gemini Ernst &Young has realized lower than expected financial results. Having first anticipated an FY01revenue increase of 13% to $8.6B on a pro-forma basis, the Group now refuses to make aprediction on its FY01 operations. More specifically, prior to the close of its 1HFY01, Cap GeminiErnst & Young revised downward its forecast for the first half and full year. It cited a slowdown incustomer purchasing, as well as delays and cancellations of orders. At this time, it revised itsearnings outlook to $8B. Providing further guidance, the Group went on to say that the slowdownaffected several of its core industries, such as Financial Services in the U.S. and Beneluxregions, the High Tech sector, and Manufacturing in the U.S. It also stated that the Telco industrycontinued its downturn in all countries where it represents a notable part of the revenue for theGroup. CGE&Y goes on to say that the slowdown in activity during 2QFY01 led to a deteriorationof its utilization rates, which caused operating margins to fall around 6% for 1HFY01. Thiscompares to a FY00 pro forma operating margin of 10.5%. Attempting to take correctivemeasures, CGE&Y announced a cost cutting plan estimated at $76M, which includes thefollowing.

• A reduction in headcount of 2,700, mainly in the U.S., U.K., Nordic countries, andacross its Telco operations on a worldwide basis.

• The transfer of 700 support staff to client facing roles, as a consequence ofoperational structure simplifications.

• The delay or phasing of a number of market development initiatives that appear asnon-priority in the current environment.

• Significant reduction in general expenditure.

Shortly after its announced restructuring, the Group announced its 2Q results. Providinganother downward prospective on its business, it stated that in an economy that has alreadyexperience a heavy slowdown, the affects of the September 11 attacks cost the Group significantlosses in revenue and bookings. In turn, this has pushed back by at least one or two quarters thehope of recovery in growth and has resulted in another round of workforce reductions. During thesecond half of the year, and based on information gathered from its clients in the 30 countries,the Group now considers several hypotheses. These range from moderate growth continuation(a scenario which underpinned the objectives announced in June 2001, but which it nowconsiders optimistic) to a reduction in the global volume of business activity that the persistenceof a general depressed climate would generate.

While awaiting better visibility on which of these hypotheses will turn out to be correct andafter a 3Q below its previous objectives, the Board of Directors outlined the following steps:

• To indicate for the moment no new figure regarding the current fiscal year or the firstbudget drafts being studied for 2002; and

• To prepare or accelerate a certain number of measures of precaution (cost squeeze,pruning of the operational structures, relocating certain production activities,expansion of development centers). Implementation of these measures will enablethe Group to better weather the storm should a recession in Europe be confirmedand to rapidly take advantage of the recovery when it happens.





Overall, Cap Gemini Ernst and Young realized pro forma revenue and net income of $7.6B,and $489M for FY00, which compares to $6.8B and $389M for FY99. This represents anincrease of 12% and 26%, respectively. Going forward, the Group has provided relativelyminimal information for 2HFY01, only posting top-line pro forma nine-month revenue of $5.7B andnow making no estimates for the fiscal year results. RGI notes that this marks a 4% increaseover the comparative quarters in FY00.

Cap Gemini Ernst & Young Pro Forma Revenue and Net Income(FY-end December; $M)

$6,838

$389

$7,548

$489

$3,956

$99

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

FY99 FY00 1HFY01

RevenueNet Income

Note: Conversion 1 Euro = 0.8910 UDS.


RGI notes that during the completed fiscal year before the acquisition of Ernst & YoungConsulting Services, Cap Gemini’s FY99 revenue of $4.3B marks a 22% increase over the prioryear’s $3.5B. In addition, FY99’s net income of $237M grew 41% from the $168M posted inFY98. Cap Gemini Ernst & Young began including the Ernst & Young revenue during May 2000,and during FY00, the Group’s revenue grew 43% to $6.2B. The Group goes on to say that overFY00, the pace of business growth increased as the year progressed. Revenue in 2H rose15.3%, compared with a 5.5% increase in 1H, and the growth rate reached 22.4% in 4Q. It saysthat the escalating momentum was in keeping with the overall market trend, but it reflects theoperational benefits of the merger of the Group with Ernst & Young consulting business. It alsofound that revenue in the early part of the year had been impacted by a depressed demand in2HFY99. At this time, clients devoted their attention to protecting their systems from themillenium bug, and the markets still believed that the Web agencies might replace the traditionalIT services firms. Further into the year, clients gradually began launching large-scale projects,although decision making processes significantly were longer than in the past. Many of theseprojects included an initial strategic and management consulting phase. This resulted in pushingback to the second half of the year the ramp up of its IT services on the projects and,consequently, the generation of proportionately higher revenue. The Group also pointed out thatthe negotiations leading up to the acquisition of Ernst & Young consulting business, followed byits acquisition, adversely affected revenue for the year.





Cap Gemini Ernst & Young Revenue and Net Income Before Acquisition(FY-end December; $M)

$2,741

$103

$3,524

$168

$4,310

$237

$6,176

$384

$3,956

$99

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

FY97 FY98 FY99 FY00 1HFY01

RevenueNet Income

Note 1: The above chart shows CGE&Y Consulting revenue from end of May 2000 forward. Note 2: Conversion 1 Euro = 0.8910 UDS


A. Market Segmentation

Cap Gemini Ernst & Young targets five global sectors, including Consumer Products, Retail &Distribution; High Tech & Automotive; Healthcare & Public Sector; Finance; Life Sciences andChemicals; and Energy & Utilities. In addition, it markets to the telecommunications marketthrough its Telecom, Media & Networks business unit in which Cisco holds an approximate 5%share. Overall, the Telecom, Media & Networks and the Financial sectors hold the greatestpercentage of the Group’s revenue with 18% and 19%, respectively. The Consumer Products,Retail & Distribution, and Healthcare & Public Sectors each have a 14% share. In addition, itsHigh Tech & Automotive and Energy & Utilities markets tie for another 10% each. RGI notes thatCap Gemini Ernst & Young’s Life Sciences & Healthcare global market held a 7% share of itsrevenue for 1HFY01.

Cap Gemini Ernst & Young 1HFY01 Revenue by Global Markets (Revenue = $3,956M)

Energy & Utilities10%

Telecom & Media18%

Other8% High Tech &

Automotive10%

Consumer Products, Retail & Distribution

14%

Finance 19%

Life Sci. & Healthcare

7%

Healthcare & Public Sector

14%






A. 1. Service Line

The Group segments its revenue between its various services offered. For 1HFY01, itsBusiness Solution and Technology category held the highest percentage with 64%, followed byOperate with 20%, and Strategy & Transformation with 16%. Further segmenting the Group’sBusiness Solution & Technology revenue, RGI estimates that Technology accounts for 45% ofthe combined category. In turn, Business Solutions represents roughly 42%, and Technologyhold 22%.

Cap Gemini Ernst & Young Revenue by Line of Service(1HFY01, N = $3,956M)

Source: Merrill Lynch Capital Markets

B. International Results

Cap Gemini Ernst & Young operates in over eight regions. The Group goes on to say that ithas a relatively balanced geographic presence, with 35% of revenue generated in the Americasand just over 60% in Europe. The Group’s six European regions comprise approximately 20countries, and the expanding Asia-Pacific region extends from Korea to New Zealand. In all, CapGemini Ernst & Young has a presence in roughly 30 countries.

Operate20%

Strategy & Trans.

16%

Business Solution & Technolgy

64%





Cap Gemini Ernst & Young Pro Forma Revenue by Geographic Area(1HFY01, N = $3,956M)


Cap Gemini Ernst & Young reports its profit and loss by region. On a regional basis, theGroup achieved its greatest gross margins in the Benelux region or 14%, followed by NorthAmerica with 7.5%. In general, Europe had gross margins of roughly 4% to 5%. RGI notes thatAsia/Pacific realized negative gross margins of -8% during 1HFY01.

Cap Gemini Ernst & Young Pro Forma Profit and Loss(1HFY01-ending June; $3,956M)

1HFY01

OperatingIncome

OperatingMargin

North America $1,358 $102 7.5% U.K./Ireland $668 $25 3.7% Nordic $271 $7 2.6% Benelux $463 $65 14.0% Germany & Central Europe $258 $11 4.2% France $633 $28 4.4% South Europe $213 $10 4.6% Asia/Pacific $92 - $7 -7.8% Total $3,956 $240 6.1%

Note: Conversion 1 Euro = 0.8910 UDS


B. 1. Company Employees by Region

The following chart segments Cap Gemini Ernst & Young’s workforce by region. Thepurchase of Ernst & Young’s consulting practice strengthened its presence throughout NorthAmerica, as well as in Germany, increasing its percentage of workers to 19% and 6%,respectively. Before the acquisition, the Group had 9% of its total staff in North America and 3%in Germany. Over the past year, however, overall percentages have remained relatively steady,with the most notable change to its U.K. market. This percentage decreased from 17% in FY00to 14% in 1HFY01.

Asia Pacific2%

Nordic Countries

7%

UK17%

N. America34%France

16%

Benelux12%

South Europe

5%

Central Europe

7%





Cap Gemini Ernst & Young Regional Employment

FY99Cap Gemini

%

FY00CGE&Y

%

1HFY01CGE&Y

%

North America 3,626 9% 11,428 19% 11,458 19% U.K. & Ireland 8,217 21% 9,779 17% 8,712 14% Nordic countries 4,368 11% 4,877 8% 5,194 9% Benelux 7,635 19% 9,549 16% 9,808 16% Germany and Central Europe 1,146 3% 3,279 6% 3,411 6% France 11,315 29% 13,334 22% 13,908 23% Southern Europe 2,917 7% 5,291 9% 5,718 10% Asia/Pacific 402 1% 2,012 3% 2,045 3% Total 39,626 100% 59,549 100% 60,254 100%






Corporate Strengths and Weaknesses

For a summary of Cap Gemini’s strengths and weaknesses, please refer to the ExecutiveSummary section of this report.





Industry Focus

CGE&Y targets its largest industries through Global Sector Units, including ConsumerProducts, Retail and Distribution; Energy and Utilities; Financial Services; High Technology andAutomotive; and Life Sciences and Chemicals. In addition, during the latter half of CY00, CapGemini Ernst & Young and Cisco Systems announced the formalization of their strategic alliancewith the launch of a global business unit. The global business unit (GBU), called Cap GeminiErnst & Young Telecom, Media & Networks, operates under the Cap Gemini Ernst & Youngbrand. It provides strategic counsel and hands-on expertise to telecom, media, and networkingorganizations worldwide. The GBU delivers solutions that enable service providers andenterprise customers to offer more rapidly new services developed in conjunction with Cisco andCap Gemini Ernst & Young. These will include:

• Implementation of e-commerce and supply chain integration applications;• Integration/migration of voice and data networks;• Delivery of new wireless applications, including broadband wireless and wireless

data;• Delivery of broadband services;• Implementation of unified messaging applications;• Implementation of integrated call center applications; and• Implementation of IP-based management systems.

The strategic alliance also resulted in the creation of eight research, development, andinnovation labs throughout the world. The labs, based in California, Boston, Dallas, London,Paris, Munich, and Singapore, enable the GBU to maintain strict quality control standards onbehalf of its customers by testing system reliability before installation on client sites. Aside fromits efforts in the telecom sector, Cap Gemini Ernst & Young also signed an agreement withManugistics, the global provider of supply chain solutions for enterprises. The two companiesjointly will market e-business solutions for trading networks. Under this arrangement, the twocompanies plan to target the consumer packaged goods and motor vehicles and parts industrysegments.

In recent months, CGE&Y furthered its healthcare consultancy by bringing together theservices that its Health practice offers to hospitals, managed care companies, insurers, andpharmaceutical, biotechnology, and medical device companies. With this move, CGE&Ycombined its services geared for hospitals and managed care organizations with its life sciencesoffering. Additionally, the company’s emerging health technology initiatives will focus onidentifying new technology solutions to improve the connectivity, efficiency, and effectiveness ofhealthcare. With projected FY01 revenue of nearly $615M, and an annual growth rate of about25%, the new Health practice represents the largest single business sector within Cap GeminiErnst & Young U.S. LLC. It represents almost 10% of CGE&Y’s total global revenue.

Cap Gemini Ernst & Young Revenue Percentage by Industry(1HFY01)

Industry % Consumer Products, Retail & Distribution 14% Life Sciences & Chemicals 7% Energy & Utilities 10% Finance 19%





Telecom Media Networks 18% Other 8% Healthcare & Public Sector 14% High Tech & Automotive 10%


A. Financial Services

With a worldwide team of experienced professionals, Cap Gemini Ernst & Young hasestablished a leadership position in financial services, and now counts 35 of the world's largestfinancial institutions among its clients. The Global Financial Services sector representsapproximately 19% of the firm's revenue in FY00. To consolidate its leadership position in thesector, CGE&Y has embarked on a multi-dimensional development effort, unifying its capabilitiesand its go-to-market efforts across the traditional industry lines of banking, insurance, andsecurities. At the same time, it is elevating its focus on client relationship management andsector-specific offering development. Notable contracts during FY00 included an Internet portalfor three French banks: Credit Agricole, BNP Paribas, and Societe General. It also launched aB2B digital marketplace called “answork.”

CGE&Y service offerings include:

B2B Marketplaces and Supply Chain Suite of Services

• B2B Strategy assists individual companies or groups of companies in evaluatingstrategic alternatives and developing ideas to launch new online businesses.CGE&Y leads the ideation process by deploying the Accelerated ServiceEnvironment (ASE), which enables diverse business organizations to develop initialdesigns quickly in a neutral environment.

• Business Creation includes consortium engineering, governance, and financing of aB2B marketplace, evaluation and creation of business models, development of themanagement team, and identification of key partnerships and business alliances.

• Exchange Design covers industry-specific designs for marketplaces, such asprocurement, collaborative product development, supply chain collaboration, financialsettlement, content and community, order management, logistics, and other specialtyservices.

• Back-Office Design includes applications related to launching the business, such asrapid ERP implementation, customer relationship management systems, operations,marketing, and human resources.

• Build includes the design of architecture and technology, identification of keyintegration points, and the development of IT and network infrastructure, systemsintegration, as well as validation and testing.





• Run provides customers with the option of outsourcing the day-to-day managementof the new business, including applications and infrastructure, without divertingresources from core business operations.

• Customer and Supplier Enablement recognizes that building a community requiresthe readiness of all participants. This service assesses what must be done to align acompany's systems with those of its customers and suppliers.

• Inter-Exchange Integration establishes the necessary strategy, processes, andsystems that enable a company to participate in multiple exchanges.

A. 2. Center for Enterprise Creation

Despite the Internet's growth, CGE&Y says that most e-companies will fail. CGE&Yaddresses this issue with the Center for Enterprise Creation. The center brings together an e-company's founding innovation with the strategic, technical, human, operational, and financialsolution sets required to launch an e-company and build a foundation for scalable growth. Toutedas providing a comprehensive and fully integrated service, the Center for Enterprise Creationfocuses on the following areas:

• Supporting the co-creation of "spin-offs", extensions of existing products/services,and "spin-ins" (new business units);

• Establishing customized, repeatable, and consistent methods, processes, contracts,and funding vehicles for multiple/continuous new business creations; and

• Providing a network of best-of-breed providers called the Value Web (legal, branding,recruiting, hosting, and funding).

CGE&Y says that the center offers startups advantages over incubators and pure financialinvestors. It not only acts as a global e-strategy consultancy and provides accelerated Web andsystems developer, but also offers branding, legal, marketing, executive recruiting, andinfrastructure services. Relationships with equity and debt investors help founders secure thefunding to support the new venture's development, launch, and maturation. In exchange forthese services, the Center receives cash and equity.

A. 3. Connected Financial Services

The Connected Financial Services team consists of professionals with expertise in e-banking,e-brokerage, e-insurance, and B2B marketplaces and services. Linked to its Global ServiceLines and Financial Services Consulting, the team provides clients with an encompassing reachand vision, as well as a complete problem-solving capability. Connected Financial Services hasrefined and systemized the best practices of e-business. From this strategic base, it supports therapid development and deployment of successful business models as clients build, run, andmanage e-solutions. As clients design, build, run, and manage e-solutions, Connected Financial





Services helps to empower global organizations to provide profitable financial services -- B2B andB2C -- in the following broad categories:

• E-create -- Rapidly design and build new e-ventures.

• E-operate -- Operate and manage business processes and/or IT systems.

• E-strategy -- Help define a company's e-future.

• E-transform -- Adapt existing business and organize processes and systems to meetrequirements of the connected economy.

Several offerings follow.

• E-focus acts as an accelerated program that takes three weeks, working incollaboration with a company’s IT department to review the portfolio of e-projects andrecommend priorities.

• E-architecture scan represents an accelerated program that takes four to six weeks,working in collaboration with a company’s e-architects to find white spots in e-architecture and resolve them.

• Financial Services Innovation Center is centered in Madrid with additional locationsaround the world. At this location, Connected Financial Services works withtechnologies vendors and clients to design and build new business models.

• Connected Financial Services Workshop disseminates developments in finance,business cases, and best practices, relevant technologies, and strategic options.

• Connected Financial Services Accelerated Solutions Environment (ASE) representsan acknowledged framework to accelerate the development of creative businesssolutions.

• Funds Supermarket works as a framework to help financial organizations plan andexecute an online distribution platform for mutual funds and related financialproducts.

A. 4. Customer Relationship Management

Customer Relationship Management (CRM) maximizes the value of a company's customerportfolio through more effective and efficient marketing, sales, and customer service. CGE&Yhelps its clients to be more accessible and be easier to do business with in their efforts to know,target, sell to, and service their customers and prospects. Cap Gemini Ernst & Young offers end-to-end strategy and connectivity solutions that enhance its clients' customer relationships andfully integrate front- and back-office business operations. CGE&Y offers a variety of pointsolutions and integrated solutions to capitalize on a corporation’s CRM requirements.





• Strategy Alignment -- This includes the development of a CRM roadmap andbusiness case to align CRM initiatives to overall corporate objectives throughcustomer experience mapping, business process modeling, and technologyapplication architecture. The CRM Index, an ongoing barometer of CRM capabilitiesin the marketplace, plays a role in the strategy alignment assessment. CoveringCRM topics from strategy to implementation, it offers participants an array ofindustry-specific and best-in-class comparisons.

• Marketing Campaign Management – This includes the management of all marketingprograms, such as promotional campaigns, and loyalty and retention programs.These services also include real-time marketing solutions that integrate businessintelligence at the point of customer contact to deliver behavior-based offers.

• Real-Time Marketing -- Integrates business intelligence at the point of customercontact, using dynamic behavior-based offer creation and scripting linked to a real-time customer feedback loop. This offering was deisgned to link into the operationalframework (people, process, and technology) of Touchpoint Integration.

• Touchpoint Integration -- A pre-developed architecture and process for integratingacross multiple customer touchpoints and the communication infrastructurenecessary to support efficient customer interaction. This solution incorporatesconsulting, system integration, software, and hardware.

• Customer Intelligence/Data Mining -- Customer Intelligence deals with aspects ofcapturing, analyzing, and optimizing the knowledge related to customers. CustomerIntelligence techniques are based mainly on data warehousing, data mining, andpredictive modeling.

• CRM Process Reengineering and Efficiency – This services utilizes depth andbreadth of knowledge across all CRM business processes (marketing, sales, ordermanagement, and service) to transform a client's current CRM landscape to aleading practices organization, using various CRM tools and enablers.

• Stand-Alone Web Services -- These services utilize marketing, sales, ordermanagement, and service skills to manage content on the Web. Customers candevelop and build Web storefront capabilities.

• Call/Contact Center Solutions -- These solutions help customers evolving traditionalcall centers from a cost to a profit center. They include strategy, business process,and technology services. The solutions provide the capability to manage customerrelationships through multi-channel/touchpoint customer interaction, while increasingcustomer retention, acquisition, and value. Specific activities include contact centerreviews/audits, upgrading existing call centers, consolidations, and new builds.

• Sales Force Automation/Effectiveness -- Enables selling capabilities, includingidentification of cross-selling and up-selling opportunities, improved communication ofcustomer information across the organization, and the increased effectiveness ofsales organizations and efficiency of sales efforts across channels.

• Price Optimization -- Integrates pricing into the Touchpoint integration operationalframework. It matches the right customer to the right product, with the right price in





the Touchpoint channel of choice. It includes dynamic pricing, complex pricingagreements, and contracts, as well as promotional pricing.

• CRM for Exchanges -- Provides the addition of baseline CRM functionality forexchanges and their constituents. It includes contract management repository,contact management system (hook-up and sign-on), customer support (billing andsettlement), in bound/outbound email, common marketing repository (combination ofmarketing, business intelligence, and content management), and internal andexternal reporting.

A. 5. Euro

CGE&Y's Euro service offering supports the changes to the business and IT that arenecessary for the single currency. The Group’s 800+ assignments, over 300 in financial servicessince 1996, supported by a state-of-the-art methodology, have enabled it to assist at every stageof a project. CGE&Y says that the combined business and technical experience has made it theleader in Euro services. The Group also offers consultancy on the wider aspects of EMU. Issuesfor 2001/2002 include health check, notes, and coins, a resolution of the complex logistics, aswell as strategic consulting and resourcing.

A. 6. Insurance Services

Cap Gemini Ernst & Young says that it focuses on the big issues facing the insuranceindustry, with a team of consultants and industry experts assessing the major challenges facingits clients. Currently, it is helping insurance clients to face such challenges as managing newdistribution channels, globalization, speed-to-market, customer service, and cost reduction. Asleading business and IT consultants to the insurance industry, it believes that it is well placed tohelp clients build responsiveness into their systems, using Web-based technology and productdevelopment capability.

A. 7. Outsourcing

The Financial Services sector offers an extensive portfolio of outsourcing services thatdeliver results companies are seeking in terms of business focus, technology improvement, costmanagement, and access to resources. The Group has developed an approach to outsourcingservice delivery and has refined over 30 years of applications services that combines best-in-class tools, industry-leading processes, and methodologies. The Group says that it hasinternational teams of specialists to help clients focus on the strategic imperatives that sharpentheir competitive edge. It goes on to say that its services are distinguished by several keycharacteristics:

• A global network of Applications Management Service Centers that delivereconomies of scale through industrialized processes and mutualized resources;





• A rigorous methodology that integrates the Carnegie Mellon Software EngineeringInstitute Maturity Model (CMM) into its proprietary ISO-9001-compliant PERFORMprocesses and leverages global best practices;

• Measured delivery through customized, adaptive Service Level Agreements (SLAs),based on its clients' specific and evolving requirements and priorities; and

• Flexible delivery options that provide the "right" solution to meet specific businessneed.

A. 8. Secure e.Payments

Cap Gemini Ernst and Young claims to have a strong track record in developing secure e-commerce solutions. Building on this experience, it partnered with Arcot Systems to offer a fullrange of services for banks and merchants, implementing the new secure e.payment processes.These services include:

• Security, authentication, and enrollment strategy;• Solution design and integration; and• Hosted solutions for banks and merchants.

A. 9. Straight Through Processing

CGE&Y says that global Straight Through Processing (STP) will revolutionize the financialservices industry over the next five years. Financial firms must begin now to develop a long-termvision to guide them through profound changes in the way they operate. Cap Gemini Ernst &Young's STP services respond to each of the key challenges in volume growth, cost containment,and risk reduction facing the securities and payments industries. The STP services address bothinternal and external opportunities for companies to improve STP. The Group goes on to say thatits STP services help to lower transaction costs, shorten processing cycle times, and reduce riskexposure by applying the appropriate combination of:

• E-Strategy;• Strategic Blueprints;• Business Case Development;• IT and Operational Infrastructure Assessment;• Solution Selection;• Renovation Strategy;• Renovation and Platform Transition;• Application Build;• Infrastructure and Integration Planning;• System Integration and Development;• Systems Enhancement and Maintenance; and• FM and AM Legacy Systems Application Management.





Its STP solutions also benefit from several technology providers whose technologyrepresents part of its area of expertise. These providers include: Axion4, Dovetail, FinancialSystems Architects, Heliograph, Mercator, Omgeo, Securities Industry News, SeeBeyond, STPMagazine, Sungard, S.W.I.F.T., and Trace Financial.

A. 10. Trading and Risk Management

Cap Gemini Ernst & Young's Trading and Risk Management Group focuses on the evaluationand implementation of capital markets and risk management infrastructures. The Group helpsmany financial institutions and corporate clients to:

• Manage risk;• Measure performance;• Optimize the allocation of capital; and• Identify and control exposures.

Specific topics within Trading and Risk Management include:

• Managing Uncertainty in Capital Markets;• Treasury and Risk Advisory;• E-Commerce in Treasury;• Enterprise-Wide Risk Management;• Investment Operations Review;• Commodity Trading;• Asset and Fund Management;• Technology Package Selection;• Technology Implementation; and• Operational Risk Management.

CGE&Y delivers its Risk Management Global Services thought the Risk Management Group(RMG), part of an international network of practitioners with key centers in New York, London,Amsterdam, Paris, Singapore, Tokyo, Sweden, and Toronto. Its professionals continually monitorthe latest academic and applied innovations in the risk management industry and are called on topresent the latest developments and leading practices at industry conferences. The RMGfocuses on the quantification and evaluation of risk arising from business strategy (strategic risk),capital markets transactions (market risk), lending activities (credit risk), and overall operations(operational risk).

A. 11. Wealth Management

CGE&Y says that wealth management represents the most profitable and fastest growingsegment of the financial services industry. It includes asset managers and private bankinginstitutions in the banking, capital markets, and insurance sectors. The Group goes on to say thatwealth management is facing exciting challenges, such as globalization, consolidation, newcompetitors, and differentiation. Cap Gemini Ernst & Young acts as an acknowledged leader in





this market, with a global network of 200 dedicated wealth management professionals residing inall the major global money centers. Services falling under this category include the following:

• Customer Relationship Management;• Fund Supermarkets and Wealth Portals;• Hedge Funds;• Straight Through Processing and Trade Date +1;• Strategy; and• System Selection and Implementation.

B. Health

Over the past five years, Cap Gemini Ernst & Young Health has served over 1,000 differenthealth organizations. This includes some of the largest hospital and health systems in thecountry, major managed care companies, physician groups, and health technology companies.The Group claims a client roster that includes 13 of the top 15 global pharmaceutical companies,nine of the top 20 medical device companies, and five of the top biotech companies. In recentmonths, it appointed Lewis Redd as National Practice Leader for CGE&Y Health. He isresponsible for all business development and service delivery among U.S.-based clients. Mr.Redd noted that the firm has considered for some time the increasing interdependency of itshealth clients in diverse segments of the industry. “New pressures are being placed on the healthindustry -- there is an expectation to deliver public health preparedness assistance and therapiesacross the entire spectrum of the health industry, while improving patient care at an economicallyefficient level. This new environment positions CGE&Y Health as the only company whoseservices extend from the earliest stages of research and development through the ultimatedelivery and management of patient care.”

CGE&Y's integrated health market practice positions the Group to provide comprehensiveservices and solutions for providers and health systems, managed care organizations, andemerging healthcare technology companies. It claims a goal of helping clients to increase marketshare, improve operational efficiencies, and enhance customer service. In addition, itsknowledge in areas such as HIPAA and e-health/Information Technology helping organizationsaddresses current changes in the industry. In doing so, it provides the following health-relatedsolutions.

• Provider and Health Systems Solutions -- Company Transformation, CustomerRelationship Management, Information Technology, Operations, Supply ChainManagement, Support Services, HIPAA Solutions;

• Managed Care Services -- Startup, Planning, and Development; Delivery SystemDevelopment and Management; Medical Management; General Management andAdministration; Core Administrative Processing; Information Technology; Sales andMarketing; and HIPAA Solutions; and

• Emerging Health Care Technology Companies -- Strategy, Technology Development,System Integration and Deployment, Infrastructure Development, Post MergerIntegration, HIPAA, and Supply Chain.

RGI notes that during November 2001, PeopleSoft announced that Sarasota Memorial HealthCare System selected HealtheValue, an enterprise solution combining software and services,





from PeopleSoft and Cap Gemini Ernst & Young. Designed for the health care industry,HealtheValue includes Internet applications for materials management, financial management,and human resources (HR) management, as well as consulting, training, and implementationservices. The HealtheValue solution will enable Sarasota Memorial to eliminate manuallyintensive administrative HR tasks, shorten monthly close activities in accounting, and reduce thecosts of the procure-to-pay process.

C. High Growth

Cap Gemini Ernst & Young U.S. LLC's (CGE&Y) approach to helping high growth companieshas been created expressly to help these organizations sustain their business models and to usegrowth as an effective competitive strategy. Its services include:

• Critical Technologies -- The Group’s High Growth Critical Technologies service lineclaims a dedication to designing, developing, integrating, and implementing mission-critical information technology solutions for the connected economy. High growthcompanies benefit from a skilled pool of CGE&Y consultants, pre-configuredcomponents and learning tools, methodologies and in-house developmentcapabilities, and infrastructure.

• Customer Relationship Management (CRM) -- Customer Relationship Management(CRM) powers growth through improved customer acquisition and retention, as wellas the expansion of a company's customer relationships. CGE&Y's High GrowthCRM practice helps clients drive growth through sales force effectiveness, contactcenter optimization, marketing maximization, customer analytics, and customer-facing e-business. CGE&Y's CRM point-of-view is the result of its combined years ofresearch and fieldwork, making the Group one of the top CRM system integrators.

• Engineering, Construction, and Real Estate -- The Engineering, Construction, andReal Estate (ECRE) practice provides professional consulting services to theconstruction, engineering, real estate development, property management, and assetmanagement industries. The ECRE practice specializes in technology issuesaffecting these industries. It focuses on providing technology strategy, technology-enabled process improvement, software selection, systems implementation, andintegration for high growth companies. The ECRE practice maintains an activepresence in North America and works with leading industry technology providers todefine the technology future for real estate.

• Extended Enterprise Applications/Enterprise Resource Planning (EEA/ERP) --CGE&Y's rapid implementation approaches for EEA/ERP enable high growthcompanies to establish the foundation systems required to connect with customers,suppliers, employees, shareholders, and other stakeholders. CGE&Y’s ERP/EEAsolutions go beyond implementation and integration, with outsourcing services,upgrade, training, and migration support services. Its experience includes Oracle,PeopleSoft, SAP, and JD Edwards.

• Strategy and Transformation -- CGE&Y's High Growth Strategy and Transformationservice line helps companies develop business and technology strategies andtransformation programs to gain and sustain a competitive advantage in a connected





economy. Its approach to strategy and transformation focuses on the creation ofgrowth strategies and transformation initiatives to reduce business costs. Proprietaryaccelerators used to help its customers achieve rapid results include the Group’sAccelerated Solution Environment (ASE) DesignShops and the Center for BusinessKnowledge (CBK).

• Supply Chain -- CGE&Y's High Growth Supply Chain service line helps companiesoptimize the management of their materials, information, cash, and work flows fromthe company's suppliers to the end customer, in order to gain and sustain competitiveadvantage. Its approach to effective supply chain management allows companies tobecome more responsive to new business issues by increasing speed, flexibility, andrevenue growth, and dramatically reduce operating costs. CGE&Y providescomprehensive supply chain management advice and support through a broad rangeof industry experience, business and functional solutions, technology, andimplementation expertise.

D. High Tech

As it relates to the High Tech sector, CGE&Y offers various solution areas, each focused ona key business issue, expediting CGE&Y’s delivery of value to technology companies. Itdesigned these solutions to create continuous and sustainable business improvements. RGInotes that the Group supports each solution area with a dedicated team of technology specialists.

D. 1. Customer Relationship Management

CGE&Y says that as the channels connecting companies and their customers multiply,technology firms confront new challenges and opportunities in identifying, acquiring, andsustaining profitable customer relationships. Its Customer Relationship Management practice isdevoted to maximizing the value of a customer portfolio by carrying out the following:

• Determining which customers a client should target for acquisition, development, andretention;

• Generating, managing, and deploying customer knowledge to increase revenue andreduce churn; and

• Making effective use of customer-connecting technologies.

Overall, its CRM services cover five key areas:

• Customer relationship strategy;

• Management of customer access, both direct and indirect, to product information andcompany processes;

• Customer care and billing systems, from order management to cash collections;





• Call center strategies, with a focus on their efficient and profitable use; and

• Knowledge management strategies and systems that mine customer information togrow revenue and maintain a profitable customer portfolio.

D. 2. New Product Development

CGE&Y looks to develop new products, tailoring them to customer needs on a mass basis.In turn, it develops product strategy and assists with product and service development, launch,and support. CGE&Y designed its solutions to reduce time-to-market with a range of services.These include:

• Advanced Development -- R&D processes that deliver new technologies, processes,and data;

• Product Planning -- Idea generation and product portfolio management;

• Program Execution -- Design of products and services and preparation for productionand launch; and

• Post-Launch Support -- Maintaining use of the product, including developingenhancements to extend its useful life.

D. 3. Support/Shared Services

CGE&Y guides companies through the process of defining and executing strategies toachieve cost and performance goals. This is done through shared services, which include theconsolidation of functions to leverage economies of scale while improving service quality. Itsservices solutions range from a cost/benefit analysis of outsourcing non-core functions to theimpact of service rates on customer responsiveness.

D. 4. Merger Integration

CGE&Y helps companies increase their rate of success in this highly specialized area byproviding services that include program management of the merger activity. It also covers thedevelopment of the merged firm's new business model and execution of the myriad of process,organization, and system changes.

D. 5. Supply Chain and Operations Management





CGE&Y helps companies achieve differentiation through a supply chain that providescustomized products, bundled with a wider range of value-added services, delivered faster. Itassists with tools, systems, and techniques that create flexibility across the entire supply chain,and it closely integrates processes with suppliers, alliances, and customers. The Group alsoaddresses the effective and efficient management of materials, goods, and services; information;cash; and work processes and alliances from the point of first supply to the end user and back.

Along these lines, CGE&Y offers services in operations strategy, demand/supply planning,sourcing, and supplier management, manufacturing and operations, transportation anddistribution, and customer and order management. Each solution addresses the informationsystems necessary for the effective end-to-end management of supply chain functions.

D. 6. Combining People, Knowledge, Process, and Technology

CGE&Y says that turning strategy into action requires motivated, trained employees, adeptprocess changes, and robust technologies. It supports each of its solution areas with a range ofcompetencies dealing with people, knowledge, process, and technology issues. Thesecompetencies are brought to bear on an as-needed basis to achieve the desired changes.

D. 7. People AdvantEDGE

CGE&Y looks to provide the solutions to organizational and people issues necessary forimplementing enterprise-wide, technology process transformation within complex environments.Its People AdvantEDGE solutions include developing end user competency, transforming humanresource processes, managing change, and redesigning and aligning organizations.

D. 8. Knowledge Solutions and Knowledge-Based Businesses

CGE&Y provides companies with approaches that are designed to improve a company’sability to create and apply knowledge across an organization. Its solution services providesupport for knowledge development, acquisition, sharing, and application.

The company also helps implement and operate knowledge-enabling technologies. Itdevelops and deploys Internet and intranet applications, as well as communications andcollaboration tools and data management technologies. To support a customer’s requirement,CGE&Y consultants can tap its knowledge library.

D. 9. Process Transformation





CGE&Y says that process transformation solutions can reduce product cycle time by asmuch as 50% and seamlessly fuse all of the elements needed for process change. Theseinclude marketing coordination, methods development, people development, learning, andtraining development. It also encompasses assistance in selling, staffing, and decision making.Overall, CGE&Y’s process transformation solutions guide companies through change efforts forlong-term capital growth, delivery of short-term improvements, and/or highly focused incrementalimprovements, offering a fast return on investment.

D. 10. Systems Development and Integration

CGE&Y designed its SD&I solutions to align a customer’s business systems with a strategyusing the best available technologies. To achieve these goals, CGE&Y guides companiesthrough the implementation of enterprise-wide ERP solutions, including Oracle, PeopleSoft, andSAP. Throughout the process, it works closely with vendors to develop, implement, and integrateinnovative system solutions. CGE&Y’s solutions range from providing package implementationfor supply chain and customer-facing applications to addressing the integration challenges of apost-merger or acquisition environment.

D. 11. Technology Advisory Services

CGE&Y helps companies develop the technology architecture and infrastructure thatsupports their business systems and optimizes their technology investments. Its focuses ondeveloping solutions in technology architecture, infrastructure, advanced applications, andmanagement of the technology infrastructure.

The scope of its technical support services includes IS architecture (application, data andtechnology architecture, and cost estimations); IS planning (information systems, technologyimplementation plans, and IT alignment with business strategy); technical engineering and design(networks, platforms, databases, and data center configurations); and IS operations andmanagement (IS organizational design, systems, and network management).

E. Telecom, Media & Networks

As part of Cap Gemini Ernst & Young and organized as a Global Business Unit, the TMNGroup provides strategic consultancy and hands-on technological expertise to organizationsoperating in the converging areas of technology. In 2000, an estimated 70% of the world’s toptelecom businesses relied on the services provided by the TMN group, representing 18% of theFY00 Cap Gemini Ernst & Young pro forma revenue. The Group employs roughly 5,600management and IT consultants who operate from roughly 25 locations throughout the U.S., Asia,and Europe. The TMN Group also draws heavily on the expertise of its extensive alliancenetwork that includes partnerships with over 40 technology vendors, including Cisco Systems,Portal Software, Nokia, Clarify, and Oracle. The TMN Group operates 11 research, development,and innovation labs throughout the world: Atherton CA, Boston, MA, Dallas, TX, London (3),





Munich, Paris (2), and Singapore. The company also has a European-based Mobile TechnologyLab, which enables the TMN Group to maintain strict quality control standards by testing systemreliability before installation, for example.

• Strategy and Business Consulting -- TMN provides high-end strategy and businessconsulting and business creation for telecom, media, and enterprise organizations.From improvements in production and distribution, including e-business strategies, tobetter reporting and quality control, it develops solutions that give its clients acompetitive advantage over rivals, which can be sustained over time

• Network Infrastructure Solutions -- CGE&Y designs and implements networkoperations centers (NOCs) and develops tailored, end-to-end configurationmanagement and fault isolation solutions that let clients proactively monitor andcontrol their networks. The Group’s services include network analysis, architecture,and deployment, as well as end user training. Its network integration services alsocover network engineering expertise to support Cisco-based New World Networksolutions.

• Operations Support Services -- Cap Gemini Ernst & Young combines businessacumen with unparalleled expertise in automating and integrating complex telecomprocesses, offering high quality, seamless Operations Systems Support (OSS)solutions. It works with the full spectrum of OSS functions, including network designand inventory, service provisioning and activation, as well as service assurance andworkforce management. TMN offers a full suite of services, including packageselection, project/program management, package implementation/integration,business process design, data conversion/migration, custom development, end usertraining, and interconnect gateway integration for all types of carriers.

• Customer Relationship Management -- TMN helps clients through offerings thatinclude CRM strategy, customer intelligence and target marketing, sales forceautomation and effectiveness, and integrated call centers. It helps develop thevision, operating principles, metrics, a model, and a prototype of customerexperience.

• Digital Content Management -- With the emergence of digital TV, electronicpublishing, interactive advertising and services, and the Internet, fundamentalstructural change is occurring across the communications industry. A few existingexamples are multi-channel publishing, narrowcasting, and interactive advertisingand services. TMN helps clients steer a course through investment choices byidentifying rapidly evolving technology, new entrants, and changing market demand,and then implementing the processes and technology required to make them work.

• Billing and Customer Administration – CGE&Y implements next-generation billingsystems for wireline, IP, wireless, or convergent services. With a dedicated serviceline and close partnerships with package vendors, it builds and supports a full rangeof CCB solutions. It also provides support with selecting packages, definingrequirements, program management, data converting, interfaces through enterprisearchitecture middleware or point-to-point solutions, testing methods and procedures,training, architecture configuration, and development. It also designs the businessprocesses, the people policies, and the technology architecture. Then, the Groupintegrates the IT solutions using the most appropriate software package for eachcustomer environment. Specific billing and administration services include: billing





transformation, newcomer customer care and billing, Internet billing, and lhs-basedcustomer care and billing.

• E-Services -- Cap Gemini Ernst & Young has assembled the people, procedures, andproducts that can provide the full spectrum of services required to succeed in anevolving marketplace. It can devise innovative ways to incorporate the Internet andelectronic commerce into an operational model, including planning, project selection,business case development, and organizational alignment.

• Network Infrastructure Solutions -- CGE&Y designs and implements networkoperations centers (NOCs) and develops end-to-end configuration management andfault isolation solutions that let clients proactively monitor and control their networks.Its services include network analysis, architecture, and deployment, as well as enduser training. TMN’s network integration services also cover network engineeringexpertise to support Cisco-based New World Network solutions.

RGI also notes that towards the beginning of CY01, CGE&Y and Vodafone chose Terenci asthe name for their Mobile B2B solutions joint venture. Terenci will integrate mobile services withInternet and IT solutions to address the growing needs of European businesses to make mobiletechnology an integral part of their operational processes. Terenci, which combines themanagement consultancy, information technology, and integration skills of CGE&Y and themobile technology and services expertise of Vodafone, initially will focus on those segments ofthe market where mobile access and timely information are crucial. These include areas offreight and logistics, automotive, and construction.

F. Life Sciences and Chemicals

With nearly 500 professionals dedicated to partnering with global Life Sciences clients andhaving consulted with more than 90 of the top companies in the sector, the Life Sciences andChemicals Group represents a leading consultancy in this industry. Customers include virtuallyall of the world's largest pharmaceutical firms and many of the leading medical device andbiotechnology companies. Even a short list of Cap Gemini Ernst & Young's references in thissector -- one marked by constant consolidation and growth -- provides some idea of this group'sglobal reach. It touts customers such as Akzo Nobel Hoffman La Roche, AstraZeneca, Johnson& Johnson, Aventis Millennium Chemicals, BASF Novartis, Baxter Healthcare Oxford AsymmetryInternational, Bayer Pharmacia (including Monsanto), Boston Scientific Schering-Plough, Eli LillySmith & Nephew, and GlaxoSmithKline Syngenta. The practice has locations in 25 cities fromAtlantic to Zurich, Barcelona to Tokyo, and Johannesburg to Paris.

Overall, its Life Sciences and Chemicals sector helps to transform every segment of theindustry, including pharmaceuticals, biotechnology, chemicals, medical devices, and animalhealth. The Group provides an end-to-end portfolio of integrated business and technologysolutions that can help companies generate growth and shareholder value. Service offerings fallinto the following areas: strategy and transformation, critical technologies, customer relationshipmanagement, supply chain, support services, and ERP.

The Group’s e-solutions also apply to the Life Sciences industry, as noted below.





• E-strategy acts as the portal to the e-solutions it offers to the life sciences industry. Itfocuses on charting a course for CGE&Y clients to become a .company and thenassists in the management and execution of the entire transformation agenda.Starting with an e-diagnostic and facilitated by a customized e-strategy workshop, theGroup will create a clear and prioritized set of objectives for a .companytransformation.

• E-knowledge management uses Web-enabled functionality to improve thecompetitive intelligence, market research, lessons, and insight management in R&Dand sales/marketing.

• Customer relationship management provides Web-enabled connectivity to thecustomer, end user of information, and business partners. It allows life sciencescompanies to have an enterprise-wide view of customers and to understand thepotential of those customers to the company.

• E-procurement has two key benefits. It improves the efficiency and lowers the cost ofsupplying key areas of the company with needed materials such as R&D labs. It alsoopens new channels for supplying the health market, including 300 buyers at keyintegrated delivery networks.

• E-clinical trial management uses Web-enabled connectivity to improve the recruitingof patients and physicians, management of clinical research activities, and captureand reporting of study results and conclusions.

• E-enabled M&A/post-merger integration utilizes e-based technology to facilitate valuecreation and extraction in the rapid design and implementation of mergers, alliances,and .company spin-offs.

CGE&Y helps chemical companies balance their strategic direction with operational andinformation technology requirements to produce significant results across the chemical valuechain. The Group’s professionals help clients create and manage global supply chains,consolidate service centers, envision global sourcing strategies, and implement new businessprocesses and systems. Overall, its experience with chemical companies has allowed CGE&Y toaccomplish the following:

• Achieve growth targets by developing and implementing a new growth strategy;

• Help define new market space and products based on existing competencies;

• Facilitate the implementation of ERP software, such as SAP and Oracle, bycombining its change management capabilities and information technology expertise;

• Restructure business processes and designed team-based organizations, whichhave enabled transformation from regional to global operations;

• Improve efficiencies in components of supply chain operations and effectivelyintegrated multiple functions when the business case justified the investment; and

• Redesign capital portfolio and project processes to improve decision making andaccelerate project completion while lowering costs.





G. Consumer Products, Retail, and Distribution

The Global Consumer Products, Retail, and Distribution (CPRD) practice conducts researchinto market trends, as well as provides enterprise-wide solutions to help organizations create astronger, competitive edge. The practice’s approach includes a comprehensive suite ofcapabilities ranging from customer relationship management to ERP Innovation. This Group has9,000 full-time practitioners helping consumer products, retail, and distribution clients in morethan 30 countries. It also claims to have worked with nearly one-half of the world's 100 largestretailers. CPRD has developed customized answers to the specific questions asked bycompanies.

The Group also claims to have developed approaches for many CPRD global companies.For example, it developed the Consumer Relevancy strategic framework after CGE&Y completedstudies of more than 10,000 customers. The research found a new customer emphasis onvalues over product and service value. It also found a sizable gap between consumers’expectations and the companies in the sector trying to meet them. When it applied the ConsumerRelevancy framework to the problems of global companies, they improved their connections withcustomers and competitive positioning.

CPRD also teamed with SAP and a global consumer products manufacturer to create abeverage industry-specific pre-configured SAP solution. It also formed a joint venture, Ciberion,focused on designing CRM solutions to solve the CRM problems faced by CPRD companies.RGI also notes that recent projects include work with Kimberly-Clark, Danone, Ahold, Carrefour,Deutsche Post, and Geodis. Overall its approach includes a suite of capabilities that include thefollowing.

• Application Management and Integration;• ASPs;• B2B Exchanges;• Consumer Relevancy;• Customer Relationship Management;• E-Fulfillment and Logistics;• GrowthWorks;• PMI Shared Services;• mySAP Consumer Products Beverage Solution;• mySAP Retail;• Shared Services; and• Retail Operations.

H. Manufacturing

CGE&Y says that no other sector of the U.S. economy has felt the reality of globalcompetition more than manufacturing. Labor, raw materials, and capital are more fluid than atany time in history. As trade and political barriers come down, new markets have opened in LatinAmerica, Eastern Europe, and Asia, resulting in new competitors. To compete in their respective





marketplaces, U.S. manufacturers have been retooling for global leadership. Manufacturers havebeen searching for ways to shorten time-to-market and to manufacture higher quality products atlower costs.

The Cap Gemini Ernst & Young U.S. (CGE&Y) Manufacturing Group helps U.S.manufacturers find solutions. It provides a wide range of professional services to leading globalmanufacturing clients. In addition, it has alliances with leading information technology firms andplays a leading role in industry/trade organizations, government "think tanks," and universities todevelop leading competitive advantage concepts important to U.S. manufacturers.

Based on the Connected Manufacturing Enterprise (CME) strategy, CGE&Y goes on to saythat the manufacturing industry has entered a new era, one in which companies rely on the use ofnetworks as opposed to traditional manufacturing processes. It created the ConnectedManufacturing Enterprise (CME) to address these changes in manufacturing. CME addressesthe following:

• Shifts in production technology;• Shifts in the position of manufacturing within the economy;• Changes in the role and management of labor; and• Changes in the customers' perception of value.

In addition, CME also will develop likely scenarios for the industry over the next three to fiveyears, as well as the strategies needed to adapt to the connected economy. To predict thechanges to come, CME plans to use the Delphi Process. Developed to forecast the future ofpost-WWII Eastern Europe, it has since been adapted and applied to many industries to forecastfuture changes and issues.

RGI also notes that the CGE&Y Process Manufacturing group offers various IT services tosolve the specific needs of chemical and life sciences companies in the process manufacturingsector. It helps clients change their business paradigm to take advantage of their EnterpriseResource Planning (ERP) systems and supply chain systems -- an area in which processmanufacturers have traditionally lagged behind other industries. With enterprise effectiveness, itassists companies in maximizing value from ERP in the post go-live environment.

During August 2001, Cap Gemini Ernst & Young and GE Cisco Industrial Networks announcean unique North American alliance to deliver adaptive manufacturing solutions to industrialcompanies worldwide. Bridging the system-wide gap between manufacturing shop-flooroperations and business Enterprise Resource Planning (ERP) systems, this solution enablesreal-time visibility and decision making by allowing companies to be better connected, moreresponsive, and better managed across their business enterprise. CGE&Y goes on to say thatthe solution helps to decrease build-to-order lead time, increase product yields, and improveinventory turns.

I. Utilities and Energy

CGE&Y claims more than 5,000 consultants engaged in energy and utilities projects acrossEurope, North America, and Asia/Pacific, generating 10% of the consolidated FY00 Grouprevenue. The Group’s Energy and Utilities practice serves the business consulting and





information technology needs of many of the world's largest players of this industry, covering twoareas: oil and gas, and utilities.

The Group has developed industry-specific service lines such as trading and riskmanagement and advanced e-business solutions. For example, the Energy and Utilities GlobalSector unit has been working with Equiva Services, the Shell-Texaco Saudi Aramco joint venture,to help establish a position across a breadth of e-business services. CGE&Y also helped with thelaunch of Enporion, a U.S. marketplace linking nine electronic and gas utilities to over 50suppliers for online procurement and dynamic commerce. In Australia, the Group has beenworking with NEMMCO, the authority charged with setting up the open energy technology market.In Canada, it signed an outsourcing agreement with Ontario Power Generation.

It also provides several solutions for the utility services market, which RGI discusses asfollows:

• For Independent Systems Operators and Regional Transmission Organizations --CGE&Y offers services ranging from economic analysis of market mechanics tosystems development and integration. Its software solutions cover settlements,billing, customer enrollment, and use aggregation and profiling. CGE&Y alsoestablished a delivery center for specific ISO and RTO software solutions.

• For Generation Operations Improvement -- CGE&Y's professionals offer a broadrange of services supporting the acquisition, operation, and disposition of fossil,nuclear, and hydro-generation assets. Its Nuclear Solutions Group acts as theleading transformation advisor to nuclear operators in North America. In addition, itse-generation team helps generation operators harness the power of the connectedeconomy to lower costs and increase performance.

• For Energy Trading Systems and Risk Management -- CGE&Y developed methodsfor project and risk management, process acceleration, and knowledge transfer. Itoffers application and data models, technical infrastructure configurations, projectmethodologies, and accelerated solutions capabilities. Through the Magellan EnergyTrading Center of Excellence, it offers energy trading and risk managementaccelerators that are designed to help customers develop trading processes andsystems quickly and cost effectively.

RGI also notes that during October 2001, Hydro One selected CGE&Y Canada to enter intocontract negotiations to transfer existing Hydro One e-services capabilities to Cap Gemini Ernst &Young. This was part of Hydro One’s efforts to increase its competitiveness. CGE&Y and HydroOne have been negotiating a ten-year contract to manage and operate technology-enabledservices to Hydro One, which owns and operates one of the ten largest transmission anddistribution networks in North America. The Group will provide a range of information technologyand business process services to the Hydro One family of companies, including IT, customercare, supply chain, and certain transactional human resources and finance processes. HydroOne, through its subsidiaries, is principally engaged in electricity transmission, distribution,telecommunications, and energy services businesses.

J. Transportation





Cap Gemini Ernst & Young U.S. (CGE&Y) looks to assist the transportation industry as itmoves into a more connected and global marketplace. Those choosing CGE&Y’s solutionsinclude major airlines, rail carriers, shippers, hotels, travel companies, airplane manufacturers,and automotive manufacturers. It helps these companies develop strategies, form alliances,adopt new technologies, improve operations, and connect with customers.

J. 1. Maintenance Repair Overhaul (MRO)

CGE&Y's airline MRO solutions act as the key to organizational and systems transformationfor clients facing aging information technology architectures, growing capital costs for aircraftmaintenance, and increasing consolidation. Its solutions address the full maintenance lifecycle,allowing companies to improve decision making abilities, reduce inventory, market moreeffectively, and improve inventory control. They support the aviation/aerospace/airlineenvironment and leverage the extensive integration capabilities of ERP software to enable wall-to-wall management of the MRO function. In addition, it has established MRO Centers ofExcellence in Dallas, TX, and Auckland, New Zealand. CGE&Y plans additional centers forEurope and Asia.

J. 2. Value Exchange

CGE&Y’s Value Exchange gives companies the ability to manage the value invested in,versus the value received from, each customer relationship. Using this process, companiesevaluate the cost of investing in a customer (e.g., service levels, product attributes, pricing,distribution channels, etc.), relative to the value received in return from that customer's profit-impacting behaviors (e.g., purchasing products, referring new customers, etc.). Value Exchangealso can be used for optimizing and managing the value of relationships with employees andsuppliers, using the same process of focusing investments to produce targeted, profit-impactingbehaviors.

J. 3. Shared Services

The Shared Services solution offers transportation companies the opportunity to reduce thetime, effort, and resources applied to internal support services (e.g., finance, accounting, humanresources, procurement, etc.). By converting these functions into discrete business unitsdedicated to serving the company -- in some cases, serving the outside marketplace andgenerating revenue -- companies can spend more time focusing on their core competencies.Through Shared Services, CGE&Y helps guide companies through the process of defining andexecuting strategies for achieving cost and performance goals.

J. 4. Outsourcing and Joint Ventures





CGE&Y has established a global alignment of industry teams dedicated to delivering custom-crafted outsourcing solutions. It helps to identify and act on key outsourcing opportunities thatincrease operating efficiency and shareholder value. The company has streamlined its servicesinto three primary areas:

• Business Process Outsourcing (BPO) -- back-office and administrative processes;• Technology management -- complete responsibility for a client's IT environment; and• Applications management -- maintenance, development, enhancement.

It can deliver these services both through traditional outsourcing contracts and through whatCGE&Y calls the market differentiator --The Transco Model. Transco (short for "TransformationCompany") represents a deal construct that helps accelerate the transformation of a customer’sbusiness. The Transco model creates a relationship between CGE&Y, the company, and a newjointly owned enterprise that aligns incentives and provides adaptability for a changing businessenvironment.

J. 5. Strategic Sourcing

CGE&Y applies Strategic Sourcing to help companies implement innovative programs thatcan lead to reductions in material and service costs, while enhancing service levels to customers.Using a four-phase process, it analyzes a company's sourcing processes, policies, and supplybase to help capture immediate cost savings and cash flow improvements. Areas of focusinclude contract re-negotiation, transportation cost reduction, and group leveraging.

J. 6. Enterprise Resource Planning

Enterprise Resource Planning (ERP) unifies a company's information systems into anintegrated software package. It integrates business processes, decision disciplines, performancemeasurements, and people with the technical platform that the ERP system provides. Working intandem with an ERP vendor, such as SAP, Oracle, BAAN, or PeopleSoft, CGE&Y helps to delivera total solution to maximize value and leverage a company's overall investment in a softwarepackage. CGE&Y says it has become the systems integrator of choice for companies worldwide.

J. 7. Supply Chain and Operations Management

CGE&Y’s supply chain solutions address the management of materials, products, andservices; information; cash; and work processes and alliances from the point of first supply to theend user. It assists customers with tools, systems, and techniques that create flexibility acrossthe supply chain. In addition, it closely integrates a client’s processes with those of suppliers,alliances, and customers. Those using the solution can realize increased sales, reduced costs,decreased working and fixed capital, reduced taxes, and simplified business processes.





Customer Support

Cap Gemini Ernst & Young does not provide the same form of customer support as does acomputer vendor such as Dell or Gateway. As a provider of management consulting andInformation Technology services, the Group bundles customer support services into its overallservices offering.

In general, the firm has multiple Global Sector units designed to help CGE&Y provide anintegrated solution for its customers. These were established to provide customers with solutionsthat integrate CGE&Y’s management consulting and IT services. In addition, CGE&Y offersvarious Enterprise Resource Planning Packaged Based Solutions (PBS) designed to helpbusinesses grow. The following chart indicates the Group’s various centers that can beconsidered part of the support process. RGI also notes it also offers Centers of Excellencelocations that cover areas of focus such as mobile communications and several industries,including automotive. Similar to its other service centers, these locations give customers theability to test applications and solutions of interest.

Cap Gemini Ernst & Young Support Centers

IndustryGlobal Sectors

IndustryGlobal Sectors (Con’t)

Packaged-BasedSolutions/Practices

Other Service Centers

Telecom & Media(Separate unit in alliancewith Cisco)

High TechnologyAutomotive

Baan ApplicationsManagement ServiceCenters (AMSC)

Life Sciences &Chemicals

Consumer ProductsRetail & Distribution

Oracle Applications Enterprise ManagementService Centers

Financial Services SAP Integrated Supply ChainManagement (ISCM)Service Centers

Energy & Utilities PeopleSoft Customer RelationshipManagement (CRM)Service Centers

Source: Cap Gemini and RGI Research

Cap Gemini Ernst & Young also looks to add value through thought leadership centers,where the Group provides ongoing research, collaborative knowledge, and progressivemethodologies to bring fresh approaches to business challenges. Its centers of excellenceinclude the following:

• Accelerated Solutions Environment -- The Accelerated Solutions Environment (ASE)acts as an approach for creating and transforming enterprises. It designs anddevelops the technology solutions that both drive and support these majortransformation efforts. CGE&Y designed the ASE to support a collaborative, focusedprocess. It engineered the environment for developing and testing new businessstrategies and the complex technology solutions that support them.





• Benchmarking Services Group -- The Benchmarking Services Group (BSG) globallydelivers high quality performance assessments to Cap Gemini Ernst & Young clientteams through a cost-effective approach. By utilizing benchmarking methods andtools, the BSG identifies value-added opportunities with clients. The BSG looks toidentify and quantify opportunities with clients. It also explores aggregate trends andrelationships that can be utilized to the firm's advantage on client pursuits andengagements.

• Center for Business Innovation -- The Cap Gemini Ernst & Young Center forBusiness Innovation (CBI) anticipates and shapes the evolution of business. TheCBI creates new service offerings and businesses, providing value for clients. TheCBI achieves this through its research and collaboration with a diverse network ofleading thinkers and by communicating its knowledge to broad audiences.

• Center for Enterprise Creation -- The Center for Enterprise Creation provides thepeople, the process, and the place to build new economy businesses quickly. Itsnetwork of centers leverages CGE&Y's consulting capabilities and the newlyestablished Value Web -- a large network of service providers that includes legal,recruiting, branding, hosting, and financing. The Center for Enterprise Creation actsas the catalyst for corporations to re-purpose, leverage, and monetize assets such asbrand, people, and customers. It allows them to reclaim their position as innovatorsin the marketplace.

• Global Delivery Center Dallas -- The Cap Gemini Ernst & Young Global DeliveryCenter (GDC) helps companies transform the way they do business by building thetools, methods, techniques, and training needed to support the "innovatedenterprise." Professionals in Cap Gemini Ernst & Young's GDC practice drive andsupport its competencies in all management consulting services.

RGI also notes that the company has other centers focused on a particular alliance thattargets a market or industry sector. For example, as recently as January 2002, CGE&Yannounced the opening of an IVT center for Cisco Systems located in Paris, France. It coversInternet Protocol (IP) Telephony and Content Networking technologies, a crossroad featuringboth functional and architecture aspects. TMN hosts the IVT center to serve its partners andcustomers. The IVT center promotes competencies in the testing processes for IP telephony, callcenter, and rich media streaming environments. It also has a global network of wireless centersof excellence, and CGE&Y has equipped these centers with technology from providers ofwireless components. Through this facility, it address many of the key challenges unique to themobile computing model. These include areas of multiple device type compatibility, wirelesschannel integration, mobile payment and trading systems integration, and security andauthentication.

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