1. Inconsistent Administration of Sales Commissions Status Report August 28, 2003 Norcross, GA

2. 2 Project Definition n Problem Statement: Inconsistent administration of sales commissions is affecting sales rep morale and wasting IKON dollars in the administration of the sales commission "errors". Sales commission administration is currently handled at the four customer care centers (Phoenix, Atlanta, Houston & Glastonbury), but is being centralized to the MSSC. The Phoenix CCC will be the first to be centralized November 1. The Phoenix CCC has reported that over 40% of the Phoenix sales commissions were incorrect in the month of May. This equated to approximately $90,000 in net savings to IKON in the form of commission payments that were not calculated correctly. n Project Definition: This project is to reduce the need to audit 100% of the sales commission payments, which will result in the reduction of headcount in audits from 9 to 3. The assumption is that, in the “End State”, errors will be reduced to a level requiring only 33% of payments to be audited. This project will be completed by November 1, 2003.

3. 3 Project Definition n Project Benefits: Of the 29 Phoenix commission employees, 9 employees perform a 100% audit on approximately 3500 commission payments per month. A soft benefit is improving sales rep satisfaction.  Financial Benefits: A reduction of headcount from 9 to 3 will result in a headcount savings of $256,320. ($42,720/head -- Labor cost provided by Frank Eaton). n Project Metric “Y”: Y 1 = Incorrect commission payment requests as defined by a percentage of Incorrect Commission Payment Worksheets divided by the total number of Worksheets received.

4. 4 Project Definition, Cont’d n Defect Definition: Commission payment request that must be audited and adjusted due to errors in the submission before payment can be made. n Leveragability: This should be leveraged at the Houston and Atlanta CCC's; Preliminary indication does not indicate a large volume of commission errors at the Glastonbury CCC. Houston headcount reduction of 6 x $51,036 = $306,216. Atlanta reduction of 3 x $44,736 = $134,208.

5. 5 Financial Impact

6. 6 Project Team n Champions – Bill Carpou, INA LA and Donna Wood, HSSC n Financial Analyst – Tina Johns n Black Belt – Tony Belfiglio n Process Owner – Susan Hicks, Sr. Manager Transaction, Accounting & Rita Anderson, Sr. Manager US Payroll n Team Members: Sales – Shannon Lawson (AE- PHX), Terrie Day (SAE- PHX), Catherine Fallis (AE -PHX) Sales – Jon Elwell (GSM), PHX Marketplace OC – Tina Elick, PHX Order Coordination Manager Commissions – Jeff Brown (Consultant SCS), Marie Eggleston (Supervisor PHX CCC) Auditors – Tina Sparrazza (Acting Supervisor PHX CCC) Master Black Belt – Bob Conrad

7. 7 Communications Plan

8. 8 CT TREE

9. 9 Defining Y=f(x) Relationships Big Y= Incorrect Commission Payment Request Y= f(x 1, x 2, x 3,x n ) x 1 =Sales x 2 =Order Coordination x 3 =Commissions y= f(x 1, x 2, x 3,x n ) x 1 =Standard Forms Package – i.e. Price Book x 2 =FY’03 Comp Plan x 3 =Experience/Training

10. 10 Defining Y=f(x) Relationships Big Y= Incorrect Commission Payment Request Y= f(x 1, x 2, x 3,x n ) x 1 =Sales x 2 =Order Coordination x 3 =Commissions y= f(x 1, x 2, x 3,x n ) x 1 =Sales Commission System (SCS) x 2 =Commission Analysts/Auditors x 3 =Experience/Training

11. 11 SIPOC

12. 12 FLOW CHART Sales Commission Overview

13. 13 FLOW CHART Sales Commission DATA POINT 1

14. 14 Flow Chart Sales Commission Detailed

15. 15 Flow Chart Sales Commission Detailed DATA POINT 2

16. 16 Where to go next? DATA

17. 17 Data Point 1 3,025 deals in the month

18. 18 Where are the errors? 920 deals in the month

19. 19 Where is the best practice?

20. 20 Descriptive Stats on % Good

21. 21 Defects Upper Limit Lower Limit

22. 22 Capability Analysis on % Good Packages DPMO = 851,900 Z = -1.045

23. 23 Next Steps….. What we learned in Week 2 Need to do Detailed Process Map Need to do Matrix C & E Need to do FEMA Need Data Point 2

24. 24 Project DMAIC Checklist/Status Problem Statement: Inconsistent administration of sales commissions is affecting sales rep morale and wasting IKON dollars in the administration of the sales commission "errors". Sales commission administration is currently handled at the four customer care centers (Phoenix, Atlanta, Houston & Glastonbury), but is being centralized to the MSSC. The Phoenix CCC will be the first to be centralized November 1.         