1. Business Support Services The Best of Both Worlds

2. About Baker Hughes Baker Hughes, a leader in oilfield services, provides drilling, formation evaluation and production technology used within oil and gas wells. Baker Hughes is comprised of seven operating divisions focused on technology development, customer service, field operations and financial performance.

3. Baker Hughes Business Support Services (BSS) provides strategic sourcing, information technology, accounting and payroll services to the divisions of Baker Hughes. BSS Purpose is… To add value to Baker Hughes by providing high quality, cost efficient business support services. Baker Hughes Business Support Services (BSS) provides strategic sourcing, information technology, accounting and payroll services to the divisions of Baker Hughes. BSS Purpose is… To add value to Baker Hughes by providing high quality, cost efficient business support services. About Shared Services

4. Leverage purchase volume Implement new technology efficiently Improve quality of business transactions Grow without incremental service expenses Process transactions to consistent business standards Leverage purchase volume Implement new technology efficiently Improve quality of business transactions Grow without incremental service expenses Process transactions to consistent business standards How to Accomplish Purpose

5. About Accounts Payable Global Operation with two Hub Service Centers – Houston and Aberdeen Internal Customer Base: Five divisions in eight countries Annual Accounts Payable Process Volume: 319,000 Purchase Orders Invoices 398,000 Non Purchase Order Invoices

6. Invoices Paid to Terms – Target 98% Why SAP AP WorkFlow?

7. Technology Landscape Single Instance, SAP 4.0B Optura’s AP Workflow Solution Documentum for Imaging

8. Activities - First Year March 2002 – June 2002 July 2002 – November 2002 December 2002 - February 2003 Evaluate Outsourcing vs. Technology Investment Performed Supplier Selection Process Obtained Executive Sponsorship and Approval for Project Selected Canadian Operation for Pilot Engaged Personnel from all five divisions to participate in Project Developed Key milestones for Divisional Signoff / Acceptance Created a "Who made that decision?" matrixCreated a "Who made that decision?" matrix Completed Design and Development Went live with all divisions and suppliers in Canada on schedule Captured Lessons Learned Went live with Corporate Legal Department Four MonthsFive MonthsThree Months

9. Who Made That Decision? Decision MatrixDepartmental Teams AP WorkFlow Team Expanded Project Team Procurement Council Division Controller CFO Council Status AFE and Project Charter IP/RIIIACmpl Coder and Signature Authority Structure IPRIAICmpl Invoice Sorting Process PR/AIIIICmpl Non-PO routing - Cost Center as key IPRIAICmpl Security for Non-PO process at division IPRIAICmpl Process Flows PR/APIIICmpl TeamConnect & SAP WorkFlow R/APIICmpl Workflow Administration Process IRPIIACmpl Harmonization of Signature Levels across divisions IPIIRACmpl Workflow Start Delay for Quantity Blocks PR/AIIIICmpl Scan date as baseline date IP/RIIAICmpl % Tolerance for Pay-as-is option IPIRAICmpl Vendor Communication Plan P/RIAIICmpl Training Material / Program IR/APII New Metrics for AP SLA PIRA Validate Business Benefits A Non-Trade invoice changes PR/AII P - Prepare / Propose R - Review / Recommend A - Approve I - Inform Cmpl

10. Lessons Learned / Contributors to Success Communication Transition Testing Cutover Review Training & Support

11. Lessons Learned / Contributors to Success Communication –Start communication process early – internal and external, all who will be touched by the process –Ensure local contacts are well informed to answer vendor questions and share information –Include Vendor Credit Department contacts in communications –Treat vendors differently depending on type - account for this in communications –Set-up helpline for Vendors and ensure it is manned

12. Lessons Learned / Contributors to Success Transition –Each area contributes to the Workplan – IT Infrastructure, Accounts Payable, SAP Support and Users –Ensure long lead time items are identified and plan go-live date to accommodate these –Choose optimal Go-Live timing to ensure success – avoid peak periods, holidays, year-end, etc. –Manage the transition closely - ensure old items are processed the ‘old’ way –Consider phased roll-out approach – by vendor type or other

13. Lessons Learned / Contributors to Success Testing –Test each users set-up at time of installation – SAP log-on, MAPI and Documentum –Allow time for testing of all system aspects –Ensure Cost & Profit Centers are set-up properly –Review hierarchy data for completeness before go live –Test Vendor helpline –Test mailing process

14. Lessons Learned / Contributors to Success Cutover Review –Hold Cutover Review Meetings with stakeholders from: Division Management IT Infrastructure Accounts Payable SAP Support –User groups must participate

15. Lessons Learned / Contributors to Success Training & Support –Needs to encompass what to do when things go wrong as well as ‘perfect world’ scenarios –Ensure documentation is available and distributed to all –Ensure Users are trained before they receive first item –Train users to get information out of the system

16. Visibility Report DocsDollar Value With AP Service for Query Resolution 11%6% With AP Vendor Master Maintenance 1%0% With AP to Posted 9%3% To be Coded 21%14% Awaiting Approval 58%77% Total100% Who’s Holding The Invoice?

17. Supplier Feedback Positive comments received… Our invoices are processed for payment a lot sooner. Payment of invoices used to take up to one or two months; now it's about two to three weeks. The new procedures are great. The difference is dramatic and wonderful. Whatever it is you are doing, it is working, and I love it.

18. Project Benefits Facilitates Shared Services Model: –Enables Process Standardization –Clarifies and documents hand-offs Improves Internal Controls Improves Financial Reporting Improves Efficiency Improves Supplier Relationships

19. Project Benefits For the purpose of the capital justification: Hard cost savings were considered from the Accounts Payable area only - Recurring annual savings over $600,000/year Savings and productivity from other areas were not estimated or considered

20. In Summary… SAP AP WorkFlow is the tool we needed to increase the performance in the Accounts Payable service area. A successful Implementation requires a disciplined project approach with strong leadership support.

21. Business Support Services The Best of Both Worlds Questions?