GLOBAL IMAGING SYSTEMS INC SERVICE BENCHMARKS Think Globally

GLOBAL IMAGING SYSTEMS, INC. SERVICE BENCHMARKS Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Benchmark = Minimum Acceptable Performance Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Industry Benchmark Model - Copiers Profitability Analysis Category Hardware Supplies Service Rental Total % Mix of Sales GP % Sales Expense Admin Expense 50% 17% 32% 1% 100% 36% 44% 52% 40% 43% -25% 0% 0% 0% -13% -15% -15% Individual Profit % -4% 29% 37% 25% Weighted Profit % - 2. 0% 4. 9% 11. 8% 0. 3% 15. 0% Operating Income Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Industry Benchmark Model - Copiers Revenue Allocation Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks Cost of Goods Sold (COGS) (as a percent of revenue) GP 52 % Salaries 27. 5% Parts 16% Auto 3. 5% Training, etc. 1. 0 Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks Salaries – 27. 5% Service Department Staffing Ø Service Managers/Directors/VP’s Ø Copier Supervisors/Technicians Ø Facsimile Supervisors/Technicians Ø Dispatchers (Charged to Admin Expense) Ø Trainers (Charged to Training, etc. ) Ø Parts Coordinators Ø Service Administration Ø Service - Other 47% of total company staff should be service Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks Parts – 16% All Parts used for servicing machines in the field as well as parts retailed, manufacturers’ rebates and warranty credits. Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks Auto Expense – 3. 5% Reimbursed business miles for Service Techs and Supervisors, fixed dollar auto allowance, paid expenses incurred for company cars used for Service Department; i. e. auto depreciation, maintenance, fuel and insurance Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks Training, etc. – 1. 0% Training salaries, manufacturer training schools, uniforms, computer related expenses for service department (ADS), phones (cell phones & pagers), miscellaneous expenses for Service Department Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Global Imaging Benchmarks Gross Calls Net Calls Incompletes Callbacks Parts per Call Customer Time (screwdriver time) Response Time Travel Time Efficiency Rating 5 4. 2 5% 10% 18. 00 72 min 4 hours 30 minutes 85% Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Staffing Ratios Ø 1 Service Director for 8 Field Service Managers/Supervisors Ø 1 Field Service Manager/Supervisor for 12 -15 Technicians Ø 1 Dispatcher for 14 -16 Technicians Ø 1 Parts Coordinator for 50 Technicians Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Staffing and Productivity Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks Definitions Gross Calls – any calls that are generated by the customer calling in for machine repair, recalls/callbacks, incompletes and dealer originated calls Recalls/Callbacks – service calls received on the same machine from the customer within a specific timeframe or when specific copies between calls has not been achieved Incompletes/Reschedules – service calls that could not be completed by technician (parts, technical escalation, out of time, etc. ) Net Calls – gross calls minus recalls/callbacks and incompletes Response Time – is the time the call is received/generated to the time the technician arrives at the customer’s location Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks Customer Repair and Travel Time Customer Time 72 minutes Travel Time 30 minutes Start at 8: 00 a. m. finish at 5: 00 p. m. Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks 5 Gross Calls per Day First Call Cust Time Second Call Travel Second Call Cust Time Third Call Travel Third Call Cust Time Lunch Fourth Call Travel Fourth Call Cust Time Fifth Call Travel Fifth Call Cust Time 72 30 72 60 30 72 min min min 8: 00 a. m. 9: 12 a. m. 9: 42 a. m. 10: 54 a. m. 11: 24 a. m. 12: 36 p. m. 1: 36 p. m. 2: 06 p. m. 3: 18 p. m. 3: 48 p. m. 5: 00 p. m. Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks Net Calls Per Day Per Technician Average Gross Calls Average Recalls Average Incompletes Average Net Calls 5. 0 10% (0. 5) 5% (0. 3) 4. 2 Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks Call Back Parameters Segment Days/Copies Segment 1 (10 -20 cpm & PC) 30 days or 2, 500 Segment 2 (21 -30 cpm) 30 days or 5, 000 Segment 3 (31 -44 cpm) 10 days or 10, 000 Segment 4 (45 -69 cpm) 10 days or 20, 000 Segment 5 (70 -90 cpm) 10 days or 30, 000 Segment 6 (91+ cpm) 10 days or 40, 000 Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Service Benchmarks Response Time = 4. 0 Hours or Less <2 Hours – High End Machines <4 Hours – Middle Segment Machines <8 Hours – Low End Machines Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Other Service Benchmarks Carryover Calls Less than 2. 0 Calls on the “Board” per Technician at the end of the day Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Other Service Benchmarks Territory Staffing Copiers per Copier Technician - 150 Calculation: Total Contract Copiers multiplied by (1 plus Time & Materials %) divided by Copier Techs and Working Supervisors Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Other Service Benchmarks Territory Staffing Copies per Technician per Month Segments 1 & 2 800, 000 Segments 3 & 4 1, 300, 000 Segments 5 & 6 1, 800, 000 Average 1, 300, 000 Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Other Service Benchmarks Parts and Car Stocks Ø Parts Inventories – minimum of 4 planned per year and 1 random per tech per quarter Ø Target Car Stock (black & white service) – $2, 500 - $3, 500 – Remote territories require more inventory to cut down on incompletes Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Other Service Benchmarks $145, 000 Service Revenue per Service employee (excluding Dispatch) $75 - $95 Service Revenue per Unit in Field per Month 2. 5 Parts Turns $18 Parts per Call per Service Technician Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Industry Standards - Copiers • Annual Sales Per Employee $360, 000 • Annual Revenue Per Admin Employee 1, 100, 000 • Annual Service Revenue Per Service Employee (not including Dispatchers) 145, 000 • Annual Supply Revenue Per Direct Supply Sales Employee 415, 000 • Annual Equipment Revenue Per Sales Employee (not including Supplies or Drivers) 330, 000 Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Performance/Reporting Ø Productivity Report Ø Excessive Call Report Ø Quarterly CPC Report Ø Obsolete Inventory Report Ø Quarterly Inventory Report Ø Pro-Active Reporting Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Post Acquisition Service Performance Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Acquired Company Performance (30 – 45 Days) Service Gross Profit Gross Calls Per Day 24 – 40 % 3. 2 – 6. 5 per day Net Calls per Day Call Back % 2. 1 to 3. 1 20 – 35 % Incomplete % 20 – 25% Parts per Call 19 – 30 per call Response Time 3. 5 – 8 hours Minimal “Pro-Activeness” Heavy Call Volume (incoming calls) Extremely high “total calls on board” at end of day Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Top 5 Contributors Causing Current Performance Level 1) Accountability 2) Product Reliability Concerns 3) Field Structure 4) Quality of Call 5) Lack of Service Reporting Utilization Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Accountability Ø 8: 00 – 5: 00 v We consistently identify technicians arriving late and pulling out early Ø Inaccurate daily reporting of time. Ø Inconsistent work ethic Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Resolution ü We immediately implement “Clearly Defined” expectations at the field level v Tech, Supervisors, etc. v Stress 8: 00 – 5: 00 ü ü We implement AM & PM checks throughout the team Clearly define how daily reporting should happen Monitor reporting in detail for the next 30 -45 days Define our Benchmark of v First Call Completion v Last Call Completion 9: 30 4: 30 ü Monitor first and last call of day (always the longest) Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Product Reliability Issues Ø Heavy call activity Ø No internal benchmarking v Who services what the best Ø Minimal Pro-Activeness v Aggressively addressing excessive service Ø No “total call” procedure in place v No inspection process (audits) Ø Not utilizing all available service reporting to identify reliability issues v Excessive service v Reliability CPC data Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Resolution ü Full implementation of “Total Call” procedure v Audits…”Inspect what you Expect” ü Eliminate “PM” lights ü Aggressively begin visits to all excessive service machines/stop excessive activity v Primarily performed by supervisors or product specialist ü Immediately eliminate hit & run activity ü Train managers to “target” audits ü Begin internal benchmarking at the CPC level v Why are Bill’s machines running so much better? Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Field Structure Ø Most companies are in a “generalist” structure v Techs work on anything within an area Ø Low Territory Integrity v 50 – 60% same tech v No ownership Ø Uneven workload distribution v Bob with 1 call, Jim with 10!! Ø High incomplete rates due to ineffective car stocks Ø Inadequate training/lack of effective car stocks, manuals, etc. Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Resolution ü Perform territory analysis v Determine all machines in each zip code & associate volume v Determine product specialization split, i. e. , 10 cpm to 40 (LV) 41 and (HV) ü Plot workload by copy volume in each zip code ü Develop territories based on volume v Start in most populated areas first ü Analyze parts usage by model (top 50 used parts) ü Develop car stocks based on exact product mix, utilizing parts usage reports by model ü Implement territories with product specialist Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Quality of Call Ø Hit & Run Activity Ø Reliability Issues Ø High Call Back Rate Ø No or Minimal Field Audits Performed Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Resolution ü Full implementation of “total call” procedures ü Field audits to “inspect what you expect” ü Tie audits passed to bonus and reviews Think Globally Act Locally

GLOBAL IMAGING SYSTEMS, INC. Lack of service reporting utilization • DISCUSSION……………… Think Globally Act Locally