IT EXPENSES BUSINESS GROWTH BUDGET CONTROL OR INVESTMENT PAYBACK ANALYSIS Stephen M. Ragow, CFO CAR SOUND EXHAUST SYSTEM, INC October 2007

AGENDA  INTRODUCTION  BUDGET APPROACH  INVESTMENT APPROACH  EXAMPLES  MEASUREMENT

INTRODUCTION The On-Going Battle For $$$  BUSINESS GROWTH Increased Space Added People Increased Expenditures Added Revenues Added Profits  CHANGE Reliance on Technology How does a company keep Technology (IT) expenses in Line with the growth?

BUDGET APPROACH  % Of Revenues Use prior year figures plus some uplift  Projects = Problem New Efforts Replacements - Upgrades  Staff Adds = Problem  Impact Growth Support Efficiency

INVESTMENT APPROACH  Every decision is a business decision – not an IT decision.  Every decision must have payback (ROI)  Every decision must involve management and department personnel.

EXAMPLES  Review – Business Processes Improvement Change  Select – Implement ERP System Support Business Processes Rework Existing System  Networks - Wireless  Select – Implement Other Software EDI Fax To Order WMS Document Management  Automate Other Areas Production Floor Laboratory IT-User Support Back-Up Cell Phone Integration Staffing

MEASUREMENTS  Focus on Operational Areas  Accept Where You Are – Set Goal For Where You Want To Be.  Collect Data – Current Year Prior Year(s) Graphic - Numerical

MEASUREMENTS  Operational Measures # of orders New business (backlog) Billings  By Product Line Credits Cancelled Order Lines  By Product Line Production  Labor Cost  Units Inventory Warranty - $ Values  Issues By Product Line  Issues By Customer  Issues By Reason Code Order Profiles Order Fill Rates Order On Time Delivery