Breakout Session # 302 Luis M Huix, Global Contracts Operations Hewlett-Packard Company Date: Mon 25 April 2005

1. IACCM European Conference 2003

2. Maximizing Performance and Minimizing Risk Effective Contracts Management at HP • Breakout Session # 302 • Luis M Huix, Global Contracts Operations • Hewlett-Packard Company • Date: Mon 25 April 2005 • Time: 1:30pm IACCM European Conference 2003

3. Luis Huix - A Biography • Luis has worldwide responsibility for Hewlett-Packard's Global Contracts Operations, including providing contracts expertise, and leading the design, development, implementation, support and maintenance for worldwide usage and leverage of Terms & Conditions documents, commercial contracts, partners programs, agreement templates and exhibits, contracting processes, contracts applications, tools, and contracts policies • Luis was a Subcontracts, Contracts and Negotiations Manager for the Kaiser Aerospace Company in San Jose, Ca in the late 1970's. He then joined the Hewlett-Packard Company in 1984 in the Federal Marketing group. Over the past nineteen years at HP, he has worked in field, group, sales marketing, corporate, and worldwide/global business and operations entities • Luis is a member of the NCMA, and of the International Association for Contract and Commercial Management (IACCM) • Born in Vilafranca del Penedes, Barcelona, Spain he holds a BA degree from the University of Santa Clara, Santa Clara, CA. Outside of work, he enjoys spending time with his wife and daughter, swimming, and is an avid lifetime Futbol Club Barcelona fan IACCM European Conference 2003

4. Hewlett Packard Company- Fast Facts HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. Revenues were $79.9 billion for the fiscal year that ended October 31, 2004. The way we get things done IACCM European Conference 2003

5. Hewlett Packard Company is … • #1 globally in inkjet, all-in-one and single-function printers, mono and color laser printers, large format printing, scanners, print servers, and ink and laser supplies#1 globally in x86*, Windows*, Linux*, UNIX* and Blade servers#1 in total disk storage systems#2 globally in notebook PCs #1 globally in Pocket PCs#1 in Customer Support #1 in customer satisfaction The way we get things done IACCM European Conference 2003

6. Hewlett Packard Company- Fast Facts • Hewlett-Packard Company (NYSE, NASDAQ: HPQ) • Headquarters: Palo Alto, California • HP serves more than one billion customers in more than 160 countries on five continents. • HP has 150,000 employees worldwide. • HP's 2004 Fortune 500 ranking: No. 11 The way we get things done IACCM European Conference 2003

7. Hewlett Packard Company - Fast Facts • HP's mission is to invent technologies and services that drive business value, create social benefit and improve the lives of customers—with a focus on affecting the greatest number of people possible. • HP dedicates $4 billion (U.S.) annually to its research and development of products, solutions and new technologies. The way we get things done IACCM European Conference 2003

8. At Hewlett Packard we are passionate about customers We put the customer first in everything we do and in every decision we make. We have a culture and management processes that motivate and empower employees to act in the best interests of the customer. The way we get thingsdone IACCM European Conference 2003

9. The Case

10. The Case: Background • The pre-systems approach • Each ‘their own’ • Still some manual processes • Still paper-based • No central repository • No control over documents and processes • Development of eCommerce - e Procurement • e Sourcing/RFP • e Contracts • e Travel • e Assets IACCM European Conference 2003

11. The Case: Why Invest Now • Why invest in e-Contracts and automate Contracts Management? • Contracts central to many other processes • Streamline operations, reduce manual processes • Provide better response and visibility to stakeholders IACCM European Conference 2003

12. Maximizing Performance and Minimizing Risk Effective Contracts Management at HP:The Initiative

13. How did Hewlett Packard’s contract management initiative start? With a management mandate to put in place a new contracts management solution, to be used for assembly, creation, renewal, amendments, storage, and retrieval, of all sales and marketing contracts. IACCM European Conference 2003

14. Additionally it also meant …making Contracting a Competitive Advantage Maximizing Performance by assemblingin one location the most customer contractual informationMinimizing Risks by establishing better quality and consistency in the creation and management of our sales & marketing contracts, Reducing the global cost of managing contracts. IACCM European Conference 2003

15. What were our objectives? Objectives 1 and 2 - Replace existing, outdated sales contract document management systems with a new centralized contracts application. • Identify, plan and execute changes to improve all of HP’s worldwide Contract management processes. IACCM European Conference 2003

16. What were our objectives? Objectives 3 and 4 • Ensure addressing of regulatory and reporting compliance challenges. • Leverage the new centralized contracts management application for use by other HP organizations. IACCM European Conference 2003

17. What we looked for in a contract management solution Evaluation of vendors and solutions was based on many elements, including: 1. Quality product that met HP’s requirements2. Top Service and Responsiveness 3. Available ‘off-the-shelf’ Product 4. Competitive Pricing5. Proven track record 6. Joint process improvement ideas IACCM European Conference 2003

18. … and the contracts management solution initiative became … The Total ContractsSolution

19. Implementing the Total Contracts Solution - Global Contracts Ops. Global Contracts Operationsrole,is to provide value added contracts expertise, and to lead in the business design, development, implementation, and maintenance for global and regional contracts centers usage, and leverage of: • terms and conditions documents • sales & marketing contracts programs • purchase agreement templates & exhibits • contracting processes • contracts systems and tools IACCM European Conference 2003

20. Our requirements for theTotal Contracts Solution (TCS) Our general requirements were • A centralized global approach • Regional localization and local language capability • High visibility and easy access to contracts and related docs • Extensive document creation and management capabilities • Product and pricing lists included in contracts • Extensive workflow support • Event management with user notifications • Advanced management functions including risk, compliance, and performance tracking IACCM European Conference 2003

21. Our multiple steps to get there Our TCSproject steps included • Requests for Information (RFI) • Request for firm fixed price proposal • Identification of mandatory / optional requirements • Evaluation of potential solutions • Evaluation of potential vendor/partners • Installation and testing of vendor/partner software • Business workshops for screen configurations desired • Testing of configurations • Testing of regional and localization processes • Selection Assignment of super users • Overall training program • Production go-live, and start of support • Obsolescence of old contracts systems IACCM European Conference 2003

22. What contract management solution did we choose Upside Softwarewas our best choice based on . . .1.Met our defined requirements 2. Most robust and comprehensive functionality3. Available ‘off-the-shelf’ product 4. Very competitive bid 5. Solid track record/references6. Flexible company to deal with – Win-win and customer first approach IACCM European Conference 2003

23. Maximizing Performance and Minimizing Risk Effective Contracts Management at HP:The Challenges

24. Organizational challenges – assuring success from the beginning pulling together a global ‘contracts +’ community - Global representation on the project team - Solid executive management support at corporate, and at regional levels - Involve users in many geographies to participate in testing, and in early internationalization/localization IACCM European Conference 2003

25. Organizational challenges – assuring success from the beginning pulling together a global ‘contracts +’ community - Serious need to recognize the cultural diversity within the company - Constant effective communications to all stakeholders - Win-win relationship with all the stakeholders , and vendor/partner IACCM European Conference 2003

26. Functional challenges – meeting everyone’s needs Customize the packaged software, or use as-is? - “Customization” is a BAD word … - We leveraged the software AS IS (no customizations), which meant ‘serious adaptation of our processes’ - We picked a product that is highly flexible and configurable – it met the vast majority of our requirements without any customizations IACCM European Conference 2003

27. Functional challenges– meeting everyone’s needs Not all requirements can ever be met …As part of their product development process, Upside Software continues to work with HP and other customers when planning product changes and enhancements for future releases. This partnership ensures that we do not have to customize the solution now, or ever. IACCM European Conference 2003

28. TCS Progress To Date - we are Maximizing Contracts and HP overall Performance by having assembled in TCS the most customer contractual information- we are Minimizing Risks together with continuous quality improvement, with Contract Centers, and others increasing use of TCS for contracts creation, and mgmt - we are further Reducing the global cost of managing contracts, by including the use of TCS in Contracts Off Shore locations. IACCM European Conference 2003

29. TCS Progress –Added Value - we are demonstrating significant Added Value to stakeholders through increased visibility and access to contracts reports - we are also beginning to see early value in various geographies through better contract controls and global standardization IACCM European Conference 2003

30. TCS Progress –Leveraging * LEVERAGING- seeing expansion of the TCS initiative to meet needs across sales & marketing Contracts related organizations: Negotiators, HP Legal Department, and Strategic Alliances - as well as across non-related sales & marketing Contracts: Direct and Indirect Procurement Contracts, IPG Printing Division, Labs IACCM European Conference 2003

31. TCS Progress – Off Shoring * OFF SHORINGwe are further reducing the global cost of managing contracts, by including the use of TCS in our Contracts Off Shore locations. IACCM European Conference 2003

32. TCS + Position Upgrading and … we are Maximizing Global Contracts Ops resource time availability with increasing use of TCS, allowing our folks to upgrade their positions, and enhance their professionalism, with the help of available learning resources IACCM European Conference 2003

33. HP Global Contracts OperationsBest Practices

34. GCO Best Practices list Our List 1. Central repository of all sales and marketing contracts at HP, and … eventually ALLcontracts IACCM European Conference 2003

35. Best Practices TCS - TCS we are Maximizing Contracts and HP overall Performance by having assembled in TCSthe most customer contractual information IACCM European Conference 2003

36. GCO Best Practices list Our List 2. a new contracts management solution, to be used for assembly, creation, renewal, and maintenance of all sales and marketing contracts … and LEVERAGING IACCM European Conference 2003

37. Best Practices Leveraging * LEVERAGING- seeing expansion of the TCS initiative to meet needs across sales & marketing Contracts related organizations: Negotiators, HP Legal Department, and Strategic Alliances - as well as across non-related sales & marketing Contracts: Direct and Indirect Procurement Contracts, IPG Printing Division, Labs IACCM European Conference 2003

38. GCO Best Practices list Our List 3. Implemented standardized terms and conditions globally IACCM European Conference 2003

39. GCO Best Practices list – T’s & C’sHP Ease of Doing Business Project • Goal is to make contract terms and conditions and contract processes simpler & total customer friendlySelected legal and functional representatives review current hardware, software, standard support and professional services exhibits, and develop new version based on current market trendsNew version approach to be ‘modular design’, withterms to address product purchases, software licensing, support and professional services Implementation of new version is 1H05CONTRACT AS COMPETITIVE ADVANTAGE IACCM European Conference 2003

40. GCO Best Practices list Our List 4. Pro-active change management / great communication skills IACCM European Conference 2003

41. GCO Best Practices listChange Management We believe the ability of Contracts (and all) employees to accelerate change is a key differentiator from our competitorsIn Jan 2005, HP adopted a new, integrated approach for leading organizational change, which helps accelerate change in Contracts “Best of the Best” is now available at @hp website. By selecting your role, you receive the tools and resources to help effectively manage change IACCM European Conference 2003

42. GCO Best Practices list Our List 5. Manage by exception, with HP Legal having visibility of Contract variation IACCM European Conference 2003

43. GCO Best Practices list Our List 6. Empowerment of Contracts individuals IACCM European Conference 2003

44. GCO Best Practices listEmpowerment Create the proper environmentProvide the proper toolsGet involvedProvide feedbackSupport decision makingSet-up for continuous improvement Job Performance ++ . IACCM European Conference 2003

45. GCO Best Practices list Our List 7. Ownership and Accountability IACCM European Conference 2003

46. GCO Best Practices listOwnership & Accountability Have clear accountability standards for individual members, the team leader, and the team as a wholeBalance Individual and Collective Owner/AccountabilityBalance Owner/Accountability of Team Leader and Team MembersBuild Owner/ Accountability through ConsultationCreate Opportunities to Specify and Confirm CommitmentsSummarize and Confirm Action StepsLink team and individual results with org for goal setting, performance evaluation, compensation, and promotion in ways that team members clearly understand IACCM European Conference 2003

47. GCO Best Practices list Our List 8. Customer # 1 IACCM European Conference 2003

48. GCO Best Practices list Our List 9. Off Shoring of Contracts’ daily / routine tasks IACCM European Conference 2003

49. GCO Best Practices * OFF SHORINGwe are further reducing the global cost of managing contracts, by including the use of TCS in our Contracts Off Shore locations IACCM European Conference 2003

50. GCO Best Practices list Our List 10. Development of our people with Contracts Training and Career Path IACCM European Conference 2003