SAP implementation at Canadian National Railway Americas SAP

SAP implementation at Canadian National Railway Americas SAP User Group – Quebec Chapter Tuesday March 25 th 2003 Alain Sénéchal, CA Manager, SAP Optimization Business Integration - Corporate Accounting Tel: (514) 399 -6405 Pager: (514) 440 -3612 Email: alain. senechal@cn. ca

Who is CN? n One of North America’s largest Class 1 railroads n An innovative, industry-leading transportation company n North America’s only tri-coastal NAFTA railroad n Unmatched access to all three NAFTA nations n A former Canadian government Crown Corporation - privatized in 1995 and now listed on the NYSE and Toronto Stock Exchange

CN’s Geographical Operations

CN Quick Facts 2002 n $6 billion revenues n $12 billion of assets n 22, 868 employees n 17, 986 route miles of track n 1, 500 locomotives n 61, 800 railcars n 3 million pieces of signal equipment

SAP Implementations – A 3 Phase approach October 1999 January 2001 PHASE 2 CN/GT Inventory Requisitioning Bar Coding Purchasing IC Rollout Intranet Requisitioning IC Field Inventory General Ledger Financial Reporting Accounts Payable IC Rollout Projects System Asset Accounting Recoverable Billing CN Management Employee Information Compensation & Succession Time & Gross Payroll US Rollout All Unionized Employees Time Reporting April 22, 2002 PHASE 3 Network Assets S&C Configuration Mgmt Procurement Cards Expense (OCS) Travel Booking (Pilot Sept 14) Field Inventory/Rail Shop Inventory Management Business Warehouse (Sept 9, 2001) Budget Planning (Sept 24, 2001) Workforce Planning/Qualifications Employee Self-Service Employee Health & Safety Net Payroll Canadian & US Benefits Mobile Assets (Loco/Car) Work Equipment Main Shops (Transcona) Engineering Supply Management BPS/BW Finance Human Resources Mechanical

Scope of each phase n Phase I: go-live Oct 1999 • FI: G/L, A/P, Financial Reporting (using SPL for Regulatory Reporting) • MM: purchasing & inventory mgmt (Canada only) • n HR: management admin & payroll Phase II: go-live January 2001 • FI: capital, project mgmt, recoverables (Non Freight Billing) • MM: purchasing & inventory mgmt (US), e. Procurement (ARIBA) • HR: union admin and payroll, time keeping

Scope of each phase (Cont’d) n Phase III: go-live April 29, 2002 • Plant Maintenance: • Rail cars and locomotives • Rail network assets • Facility maintenance (one location) • Employee qualifications • Gross-to-net payroll • Travel expenses • EH&S (Risk Management)

SAP Quick Facts n 27, 000 SAP/ESS users n 9, 000 SAP users n HP/Unix on Oracle

Business Warehouse (BW) n Used for SAP financial data used in budgeting, forecasting, Projects and recoverable expense accounting n Budgeting at CN is currently done using a tool called Business Planning & Simulation (BPS) within SEM (Strategic Enterprise Management) n Currently Upgrading SAP BW to version 3. 0 B and SEM to version 3. 1 B. n Next cubes to be deployed are A/P for Spend Management and HR for labor relations

WHAT’S AHEAD? n Integrating Fuel Consumptions n Implementing Service PO module n Expand scope of Natural Language Understanding (NLU) applications to facilitate SAP front-end input n Implement and expand SAP workflow links with Lotus Notes, email, fax, documents, forms and SAP transactions with a document management solution n SAP no longer supports the CIV invoice validation module and the migration to LIV is required in order to maintain a stable platform for invoice processing