1 IEEE BMS / BES Status Update IEEE IT Department 25-Sep-2004 FinComm meeting

2 Business Management System (BMS) Project Intent of the project is to “leverage the infrastructure” per the recommendation from the BDO Seidman report Final recommendation will be based on the trade offs between efficiencies using an integrated solution vs. the unique requirements of each business supported A key design principle is to ensure that we support all integration points with other systems within our architecture The BMS solution will help define key components of our Enterprise Architecture

3 Business Entity System (BES) Project Status Phase 1 implementation – On schedule - Oct 2004 –included purchase of Oracle modules (Customer On-line, Contracts & Data Librarian) and necessary system hardware & support software –Subset of IEL customers (275) will be processed using new software beginning in September –Full back end integration with Oracle Financial Modules and limited front end integration with Maximizer CRM software Phase st quarter 2005 –Add Non US IEL customers –Expand the functionality to include additional electronic only package - ASPP & POP customers

4 BES Project Investment Phase 1 and / 2004 – Invested ~$350K on capital for Oracle modules and $165K on consulting cost –On target for cost and on schedule for project delivery dates!

5 Business Entity System Status Phase 3 & 4 Phase 3 continues software integration with purchase of additional Oracle modules (Advance Pricing, Bill of Materials & Sales Reporting) – 3 rd Quarter 2005 –Functional integration to be expanded to include new electronic offerings (eg. Enterprise) and print subscription ordering & fulfillment –Will provide enhanced service integration, sales reporting, service and operational efficiencies Possible Phase 4 to include customer facing self-service applications and integration into content delivery platform (Xplore) – Capture requirements – 3 rd Quarter 2005

6 BES Financials Phase 3 and 4 ($ Thousands) Total Capital557 Expense Includes Phase III implementation and Phase IV requirements gathering for 2005 Revised upward from $135K to $161 as a result of Oracle software maintenance cost estimates

7 BES Sales/Customer/Other Service Efficiency and Avoidance Savings ($ Thousands) YearCS/MS Committed CS/MS Cumulative Other Dept TB Verfied Other Dept Cumm All Depts Cumm Total Savings over 4 years is 2.7 MM Committed in 2005 budget cycle

8 BES Net Present Value (NPV) Summary Investment$1.07m Savings$3.65m NPV$1.89m Software, Consulting, Infrastructure Headcount Reduction/Hiring Avoidance Using 5.5% Interest Rate

9 Business Management System Project Driving force is the need to replace the current Oracle ICSS system that supports membership processing (1995) The desire is to implement a fully integrated business system that supports all customer facing business applications – membership, non-member subscription, conferences, etc. Methodology being used to develop business requirements is “use cases” – provides a base to evaluate purchased applications or develop in house

10 Business need for the BMS system The current system is obsolete and antiquated The business needs have outpaced the system changes to a point it needs a fresh start It will cost more to maintain and enhance the old system than implementing a new system Not doing anything is no longer an option Inability to support new business drivers and technology drivers may hurt us grow revenue and stay competitive

11 BMS Status Update Since ITSC 11-Aug-2004 meeting FINCOM, at their August meeting, set-up a placeholder of 1MM in the 2005 budget towards IT initiatives (BES/BMS and Security) in anticipation that the ITSC would make the recommendation to support these projects at the November Board Series Distributed RFPs to 10 Vendors –Aptify, Avectra, Accenture, TMA, ACGI, Oracle, JL Systems, Systems Evolution, Global Turnkey, Data Systems Solution –Anticipate ~6 vendors will respond Distributed IEEE BMS Business Requirements to Mary Ward-Callan and Cecelia Jankowski for further distribution to volunteers –Art Winston, Cleon Anderson, ITSC Committee –TAB – Gene Hoffnagle, John Vig, Sent to TAB alias – 14 responses thus far –RAB – Marc Apter, Maurice Papo, Regional Directors –Standards – Jim Carlo, Don Heirman, Paul Nikolich BMS requirements being reviewed with ITSC members and soliciting feedback

12 Vendor Status update Held initial phone discussions with several vendors Received preliminary software licenses and integration costs from vendors –Varying costs received from vendors based on preliminary responses received Through our RFP evaluation process, we will continue to refine the costs since we will be: –Confirming software solutions (buy vs. build) –Confirming interface impacts driven by software solutions –The above variables/unknowns could potentially impact the project costs we review/recommend in November by +50 – 100%

13 BMS Preliminary Capital estimates ($ Thousands) Vendor Total Aug ITSC Model 2,9301,120 4,620 Vendor 11, ,980 Vendor 23, ,910 Vendor 33, ,280

14 BMS Preliminary Expense estimated ($ Thousands) Vendor Total Aug ITSC Model ,074 3,454 Vendor ,0712,662 Vendor ,5851,4304,543 Vendor 36841,0711,4301,2164,401

15 Highlights of our Vendor Selection Process Establish Vendor Selection criteria16-Sep-2004 Evaluate Initial Vendor Responses, First Cut30-Sep-2004 Complete Initial Vendor Presentations Second Cut8-Nov-2004 Review Vendors Prelim. Proofs of Concept (POC)Jan-2005 Refine costs and incremental staff requirementsContinuous Align scope based on features and capabilities supported by vendor solutionsJan-2005 Define integration points between BMS and applications outside BMS ScopeJan/Feb-2005 Conduct detailed POC with Selected vendor finalists.Feb-2005 Define phased deliverablesFeb-2005

16 BMS Project Next Steps Update to FinCom – Ben Johnson25-Sep-04 Receive Vendor response to RFP29-Sep-04 Receive Volunteer feedback on requirements 16-Oct-04 Finalize requirements and Define Scope for BMS Phase IOct 2004 Complete Preliminary Vendor PresentationsNov 2004 Confirm Preliminary Vendor Cost projections Nov 2004 Obtain Preliminary Board Approval on BudgetNov-2004 Confirm Scope and budget information based on POCFeb-2005

17 Electronic Services Security Project Conduct an assessment of the IEEE’s electronic infrastructure and services in order to identify opportunities to improve security capabilities Implement measures to remediate exposure Enhance the ongoing operations of our electronic security infrastructure

IT Expense Budget Base$20.50m Additional Headcount$.351m BMS/BES/Security$ 1.0m Total$21.851m 2005 budget cycle 1 Analyst, 1 Security Analyst, 1 Internet Infrastructure Specialist BMS $.655m*, BES $.165m, Security $.180m * - Please note that until solution/vendor selection is complete, the BMS costs could be %