1. Copyright © 2003 Americas’ SAP Users’ Group SAP EC-CS / BCS vs. Hyperion Marty Krist Manager, Corporate Systems Team W. R. Grace & Co.

2. SAP vs. Hyperion  The following pages were taken directly from our analysis of alternatives for a new financial consolidation application, and are included in their entirety so you might have a full insight into the evaluation and selection process.

3. Vision - Executive Summary ~ management is faced with strategic opportunities and tactical needs that would be best met by improving and extending our current use of SAP’s financial consolidation and data warehousing modules. We propose replacing the IRIS (SAP FI-LC 3.0c) consolidation system to satisfy tactical needs and to lay a foundation for a second project to address strategic opportunities.

4. Vision - Executive Summary Our use of enterprise-level software creates an opportunity to use existing internal information, combined with external information, what-if scenarios, and other non- financial data, to better understand and manage our business in real time. SAP’s product strategy for delivering such advanced functionality is shown on the following slide. We believe in the approach, regardless of the software provider(s) we choose to work with.

5. The SEM Integrated Approach Stakeholders Strategic Enterprise Management (optimizing stakeholder value) Business Planning & Simulation (SEM-BPS) Corporate Performance Monitor (SEM-CPM) Stakeholder Relationship Management (SEM-SRM) Business Consolidation (SEM-BCS) Business Information Collection (SEM-BIC) ManufacturingDistributionSales Supplier Customer Supply Chain Optimization Planning and Execution Extended Financials (Financial execution system) Investment Mgmt. Joint Venture Acc. ABCTreasury Traditional Financials

6. Vision - Executive Summary The tactical project, SOAR, would replace IRIS, giving us consolidation and basic reporting functionality. This would include what we have today, and add drill-back to transactions, an effective link to desktop software, improved performance and increased flexibility. SOAR is also a cornerstone for future systems. SOAR could be live for the January closing in February, provided we begin during September. SOAR is estimated to cost less than $500k.

7. Vision - Executive Summary STRAWMAN SCENARIO We propose that Grace’s interests are best served if we continue to stay with SAP for the basic consolidation and reporting requirements. This protects our investments, gives us the flexibility to choose SAP or non-SAP solutions for advanced reporting and data warehousing, and permits us to keep a very lean and effective infrastructure. Most importantly, we move from a system that only reports history to one that better supports operations.

8. Project SOAR Page 8:Evolution of financial report systems Page 12:IRIS’ shortcomings Page 13:Evaluation of alternatives Page 23:Preliminary recommendation Page 24:Next steps

9. Evolution of Financial Reporting Computron and Oracle systems were used for all internal and external reporting requirements, but had to be manually reconciled and analyzed.

10. Evolution of Financial Reporting The IRIS SAP-based system was designed to provide a single source for all top level internal and external reporting requirements. The IRIS system successfully replaced a group of partially- and non- integrated systems for legal reporting, management reporting, quarterly reporting, budgeting, and flexible forecasting in November 1996. Its design includes 2 SAP modules: FI-LC Legal Consolidation and EC-EIS Executive Information System.

11. Evolution of Financial Reporting Original IRIS design included SAP’s data warehouse to get access to advanced reporting tools, but we have not even begun to really extend it beyond periodic financial reporting

12. Evolution of Financial Reporting We will strive for solutions that are considered ‘best in class’

13. IRIS’ Shortcomings  No link to Excel  Inflexible reporting  No presentation quality reporting  No direct link to transaction detail  Too slow  Outdated  No help for the operating manager The original design was deliberately limited to accommodate the number and variety of legacy systems within Grace

14. Available Alternatives An SAP study determined that multi-nationals using SAP to run the business end up choosing either SAP or Hyperion for financial consolidation.

15. Implementation cost matrix (amounts shown are total costs, not incremental) Our existing license allows for a no-cost upgrade to EC-CS

16. Will the Problems be Solved? Only SAP software can readily support reaching across systems in real time Pro’s and con’s of each solution are summarized on the following pages

17. Option1: Incremental change (SAP 3.0c)  Pro: Minimizes short term costs  Pro: Supports our efforts to reduce reporting cycle time through continued use of a well-understood tool ************************************************  Con: Unable to keep pace with a changing business and the needs of executive management  Con: No effective link to Excel and the desktop  Con: No drill-through to detail transactions  Con: Current model of refreshing a data warehouse every closing loses valuable time  Con: Release is unsupported by SAP, so we have no help for problems that might arise, and no ongoing improvements Incremental change leaves all our problems unresolved

18. Option 2: Upgrade SAP to EC-CS  Pro: Positions us to implement advanced solutions from SAP, Hyperion or another provider with little redundant efforts  Pro: Provides drill-back to detail transactions  Pro: Provides drill-down reporting without a data warehouse  Pro: Increases user productivity through close Excel integration  Pro: Moves us from an unsupported release to one that is supported and being enhanced *********************************************  Con: No advanced reporting and analysis tools  Con: All eggs kept in an SAP basket Meets our current needs, maintains strategic direction, increases flexibility

19. Option 3: Hyperion Enterprise  Pro: Reduces reliance on SAP  Pro: Positions us to implement advanced Hyperion solutions  Pro: Provides drill-down reporting without a data warehouse  Pro: Increases user productivity through close Excel integration  Pro: Potential to leverage staff experience with other tools **********************************************  Con: Global retraining effort  Con: Higher licensing fees and increased cost of ownership  Con: Resources required for Interface development and maintenance  Con: Limits our options for advanced reporting and analysis Increased effort and cost while losing the ability to link across systems

20. Project SOAR - Potential Benefits The potential benefits in terms of new and improved functionality are defined on the following slides.  Full integration with Excel  Drill-through to transaction detail  Drill-down reporting w/o separate module

21. Benefits of New Functionality Full integration with Excel. Presentation quality reports can be developed directly in Excel. Authorized end users can develop their own specialized reports without waiting for support from Financial Systems. Leverages end user experience with desktop tools Implicit access to presentation quality output capabilities

22. Benefits of New Functionality Drill-back to transaction detail. Analysts spend a significant portion of their time researching the details supporting balances in the consolidation system. Drill-through would permit end- users to seamlessly move from balances in the consolidation to transactions in the ledger. Creates high value analytical time out of low value ‘data digging’

23. Benefits of New Functionality Drill-down reporting w/o separate module. Each time we run a closing 2 hours is spent refreshing the data warehouse databases. A single module solution recovers that time forever, and converts it to high-value analysis from low-value data-digging. 40% savings in processing time for every closing run

24. Preliminary Recommendation Option 2 should be taken. SOAR would be SAP’s EC-CS: Consolidation System. EC-CS provides improved functionality for financial consolidation, basic reporting and financial analysis. It is also flexible enough support SAP and non-SAP solutions for advanced reporting and analysis. EC- CS’ advantages over Hyperion are the ability to drill-back to the ledger and not requiring any additional licensing fees. Please note that we could create “datasheds” in CS until a data warehouse decision is taken for ~.

25. Next Steps Present strawman to the:  Financial Services Leadership Team  SAP teams  Business, regional and other managers Form a project team: This team would be very focused for SOAR, with current key users and others to direct the project, while a broader group could be formed if we decided to pursue a data warehouse. Prepare an implementation calendar: We believe that starting SOAR by the end of August would support going live for the January closing in February.