Agenda Identify and report significant data findings Current state organizational

processes and systems documents 2013 EYGM Limited Slide 2 Recommend

and prioritize improvement opportunities and initiatives Assess current state
organization al processes and technology Future state roadmap Supplement
efforts to enable a high level business case model stating costs and benefits .

We have the largest repositories of best industry practices 2. Analyze the data
provided to us by Inala 2. Recommend changes and strengthen existing systems
in place 5. 3. Provide a crystal clear approach to an improvement in the market.
Procure to pay (P2P) is the process of obtaining and managing the raw
materials needed for manufacturing a product or providing a service. Put forward
a potential course of action to regain the lost advantage Page 3 Why EY? 1.
meaning we are the most connected. Approach 1. is a global company that
designs and markets sports and fitness products. apparel and accessories. 6.
Provide exceptional client service. including footwear.Background and Approach
INALA Inala International Limited. Compare Inalas processes to best industry
practices 4. crossservice line teams who bring diverse perspectives and
experiences EY . It involves the transactional flow of data that is sent to a
supplier as well as the data that surrounds the fulfilment of the actual order and
payment for the product or service. responsive and insightful to our clients
needs 3. Operate as a truly borderless organization allows us to serve our clients
through cross-border. Report on key findings from the analysis.

Executive Summary OBSERVATIONS IMPLICATIONS Frequent Order Changes

Material demand inventory isnt Discontent of suppliers meeting customers Inala
resorts to spot market with a higher cost and also further results to dissatisfied
customers ERP system is too complex Segregation of duties are unorganized
logical access Parts of Procure to Pay Processes excluded from ERP System not
clear and Process flow delay and quality checking hindered Duplicate invoices
are generated and invoice Cash disbursement recorded does not match the
system is obsolete invoice amount resulting in losses for the company Page 4 .

Current State findings Risks Rating Frequent order changes with risk of not
procuring enough material for producing output High Inala changes the orders so
often that the vendors are having a difficult time invoicing and shipping the
products ordered Inala does not receive electronic invoices leading to duplicate
invoices Page 5 Medium High Frequent emergency changes makes the suppliers
unhappy with the risk of losing them Moderate IT department enters new
suppliers and vendors even though they arent authorized Moderate The
purchasing department isnt in control of the purchase orders High .

Complicated ERP Long cycle times due to change in POs which is forcing Inala to
do spot market purchases 3 way match Current process takes time . Spot market
purchase The purchase department is forced to make changes in the PO due to
change in customer order and thus not meeting materials demand. This is
leading to employees dissatisfaction and waste of valuable resource time. Rise in
FTE.Current State Summary: Focus Dimensions Our review of the Procure to
Pay Process reveals our observations against the below given dimensions:
Vendor Concerns Purchase Order System Deficiency
Purchase Cycle Page 6 85% of the suppliers are uncertified because of
which we have to do processing of invoice manually. 3 way match Duplicate
invoice and fictitious vendors are generated.

the The system warns in the invoice number must be checked for event of a
potential existence in the master invoice table.one for approved vendors and the
pother for System does not allow unaaproved vendors. the invoice should be
rejected and the AP supervisor should be alerted. It must be verified by the
captured in the Purchasing purchase manager/supervisor as and when
Information Record a PO is raised through the unique PO number. There should
be two tables. Purchase to Pay 5. . Purchase to Pay 1 January 2014 Presentation
title Control Objective Control Each transaction pertainng to disbursement of
cash must be mapped to the respective invoice by the authorised personnel of
AP department.3 Accounts Payable Fictitious/duplicate invoices are recorded.1
Purchasing Purchase Information Records are incomplete or inaccurate.Risk and
Control Matrix Process Page 7 Control Numbe Sub Process r What Could Go
Wrong 1.1 Accounts Payable Cash disbursements recorded differ from amounts
paid.RACM. Purchase to Pay 1. Ensure that the check amount is the same as the
invoice amount. Purchase information must be entered by the person placing the
PO (maker) on the All key information is same day. There should be a master
invoice table wherein the unique invoice number is recorded. The vendor's name
vouchers to be created for against each voucher raised must be invalid and/or
unapproved checked for in the approved table. If the duplicate invoice. Once an
invoice is raised. the voucher should be rejected and the AP supervisor should be
alerted. validation is true.2 Supplier Invoicing Duplicate invoices are processed
for payment. Purchase to Pay 3. If the vendors validation.

RACI. Consulted. Accountabilities.Responsibilities. Informed Page 8 1 January

2014 Presentation title .

High Cost 4.Future state finding.Transformation in the ERP system Prioritize

improvement ideas 2. Structured and Managed System 3.On information from all
3 departments 6. Dependencies . Risk.long term 7.Functionality Low 1 High 1.
Suggestion for a new ERP system ore changes In the existing Ease of
implementation Recommendations 5. Timing. Training is required to implement
the new system Page 9 Short term Long term Benefits realization .

Risk. Organized Delegation of roles in an improved way Short term Long term
Benefits realization Page 10 .Change in Responsibility and Accountability
Recommendations Prioritize improvement ideas 3. People need to be apprised of
their new roles and responsibilities Low 1 High 2. No Cost 4. Benefits.Less time
7.Low Risk 5. Timing.Coherent logical access Ease of implementation 1.
Dependencies.Responsible execution of roles 6.
Low Cost 4.Duplicate Invoices: Recommendations 3. Prioritize improvement ideas
Short term Long term Benefits realization Page 11 . If the Extended Invoice no.
Risk.Control on payments. Benefits. already existing in master invoice table.
Train people in the organisation to use the Application.Could lead to
discrepancies depending on master table. 5. Low 1 High 2. Timing. will be
recorded in the master invoice table.Less time 6. Ease of implementation 1.
Unique invoice no.

49 2012 2013 2014 2015 2016 .Costs and benefits.9 10 Benefits Costs Moving
average (Costs) 8 6 4 2 0 Page 12 0. cumulative net benefits and payback 16
14.36 0.7 9.4 0.05 11.44 0.8 10.33 0.36 14 12 13.

885) $ (1.07.277 $ 1.26.47.00.000 - $ 1.57.51.938 $ 1.297) NPV #NUM! IRR

Date: 03/03/2016 Benefits Labor arbitrage Headcount reduction Increased
process efficiency Process standardization Working capital reduction Occupancy
savings Software license savings Economies of scale Total Benefits Costs
Transition/work shadowing Relocation Training Capital expenditure Software
licenses Recruiting expense IT infrastructure Severance Retention Project team
Other Total Costs Net impact 2012 2013 Page 13 2015 2016 Total $ $ $ $ $ $ $ $
3.988) .445 $ 1.20.91.57.83.39.11.189.63.985 11.43.99.69 - $ $ $ $ $ $ $ $ $ $
99.06. cumulative net benefits and payback 10% Discount rate (WACC) ## years
Payback ($4.216 $ $ 4.000 5.42.593 30 US Asia-38120 PT-18 2014 47840 $ $ $ $
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 20.314 20.63.938 $ $ 3.55.91.04.216 $ $ $
$ $ 4.51.07.50.190 $ 99.69.30.91.18.43.30.000 3.445.94.277 - $ $ $ $ $ $ $ $ $
1.974) $ (94.36.17 - $ $ $ $ $ $ $ $ $ $ 1.68.99.47.79.302 11.69.047) $ America-
51982 23 USD Europe.985 $ (1.560 $ $ $ $ 4.805) $ (1.405 $
1.38.06.70.15.36.000 $ $ $ $ $ 3.18.63.70.600 $ $ $ $ 4.600 $ $ 4.277) $ (1.302
(5.Costs and benefits.560 $ $ 4.405 - 1.91.00.15.314 $ $ $ $ $ $ $ $ $ $ $ $ 5.

Easier delivery of Information of products 4. Integration with ERP system . 2. .

Increased product and brand awareness Page 14 Risks/Cost 1. Low cost of
integration of Website with ERP System. Low cost of maintenance of website.real
time inventory status of products 3. 24X7 Accessibility to customers Avoid
overhead costs of physical stores with global reach 2. New promotions can be
introduced through website 5.Way ahead . 3. Centralised order taking platform
for global customers Benefits 1.Inalas E-Commerce Store Recommendations: 1.
Medium investment required initially for development of website. Open up a new
e-commerce store for customers 2.

ERP Invoice Conversion Tool Recommendations: 1. E-invoices will result in

improved companyvendor relationship. The AP process will have improved
visibility over invoices. . 3. 4. Benefits 1. The tool can be integrated with ERP for
fetching electronic invoices. 2. Page 15 Risks/Cost 1. Introduce an automated
tool for converting hard copy invoices to electronic form. Tool must be checked
for possible vulnerabilities before implementing with ERP system. Improved
compliance. Low development cost 2. 2. Low integration cost with ERP System 3.
Standardized invoices for purchases made through both approved suppliers and
spot purchases.

Thank You! Page 16 1 January 2014 Presentation title .