IT EXPENSESBUSINESS GROWTH

BUDGET CONTROL OR INVESTMENT PAYBACK ANALYSIS

Stephen M. Ragow, CFOCAR SOUND EXHAUST SYSTEM, INC

October 2007

AGENDA INTRODUCTION

BUDGET APPROACH

INVESTMENT APPROACH

EXAMPLES

MEASUREMENT

INTRODUCTIONThe On-Going Battle For $$$

BUSINESS GROWTH Increased Space Added People Increased Expenditures Added Revenues Added Profits

CHANGE Reliance on Technology

How does a company keep Technology (IT) expenses inLine with the growth?

BUDGET APPROACH % Of Revenues

Use prior year figures plus some uplift

Projects = Problem New Efforts Replacements - Upgrades

Staff Adds = Problem

Impact Growth Support Efficiency

INVESTMENT APPROACH Every decision is a

business decision – not an IT decision.

Every decision must have payback (ROI)

Every decision must involve management and department personnel.

EXAMPLES Review – Business

Processes

Improvement Change

Select – Implement ERP System

Support Business Processes

Rework Existing System

Networks - Wireless

Select – Implement Other Software EDI Fax To Order WMS Document Management

Automate Other Areas Production Floor Laboratory IT-User Support Back-Up Cell Phone Integration Staffing

MEASUREMENTS Focus on Operational

Areas

Accept Where You Are – Set Goal For Where You Want To Be.

Collect Data – Current Year Prior Year(s) Graphic - Numerical

MEASUREMENTS Operational Measures

# of orders New business (backlog) Billings

By Product Line Credits Cancelled Order Lines

By Product Line Production

Labor Cost Units

Inventory Warranty - $ Values

Issues By Product Line Issues By Customer Issues By Reason Code

Order Profiles Order Fill Rates Order On Time Delivery