Retail PLM Industry Solution

Business Case for Management Review Mar-2008

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Business Opportunity Aberdeen_PLM_for_FSA_Jan08.pdf

Top Pressures on Retail/ Apparel product development (Aberdeen- Jan2008)
Respond rapidly to changing consumer demand Complex supply chain and its early involvement in product development Shorter competitor lifecycle, tight schedules for ramp-to-shelf Maintain low costs (direct and landed)

Key Market Indicators from independent analysts

PLM has made significant advances into the CPG, Apparel & Footwear ARC, PLM Market Analysis & Forecast through 2010 ARC_PLM_worldwide_outlook_Jan07.pdf More than 80% of companies in consumer industries view product innovation as very Aberdeen_PLM_for_FSA_Jan08.pdf important or critical- Aberdeen As we approach 2011 there will be larger growth in segments such as apparel and CIMdata_PLM Market Analysis_Nov07.pdf retail CIMdata, 2007 PLM Market Analysis, Sep, 2007 Apparel industry needs a system to manage the changing fashions, the multitude of product lines, and a calendar of activities, all of which can be supported by PLM AMR_PLM Market Landscape_Feb08.pdf AMR- PLM Market Landscape, Feb-2008 Retailers leading PLM initiatives: Target, Jones Apparel, Macys, ToysRus Average spend by a retailer on PLM is expected to be 2 Million: AMR Spend Analysis
AMR_Retail_budget_2006.pdf

Retail Industry has to Stitch Product Design, Supply Chain and Manufacturing functions across Globe by PLM
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Our Proposal
TCS and Siemens PL to develop Retail/ Apparel PLM Risk and Reward business model
TCS recovery is based on SW and Maintenance Royalty and Incremental Services

Revenues based on Projected sales scenarios

Best: TCS: 23.1 M (5 years) License Royalty 7 Mn, Services Revenue 16 Mn Moderate: TCS: 15.2 M (5 years) - License Royalty 7 Mn, Services Revenue 8 Mn

Release to Market End of 2008 (Based on TC2008) TCS as preferred PLM SI for the Retail segment with clear $ commitments Intellectual Property owned by TCS with options to transfer at set milestones. TCS will continue to run the maintenance and enhancements as project

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Competitive Landscape

TCS

Current provider space is polarized Dassault System (partner Zymmetry and Geometric) PTC (partner KSA and ITC Infotech) Niche Players: Gerber, Assyst Bulmer, Lectra Siemens is looking for TCS to be solution partner
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Retail/Apparel PLM Solution Opportunity Projected Revenue

Product License Revenue 7 Mn Implementation Revenue Forecast Best Scenario: 16 Mn Moderate Scenario: 8 Mn Guaranteed to recover 3.9 Mn in case of any adversity to recover opportunity cost

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Siemens inputs for business pipeline

Targets
New Pursuits
Jockey International Inc. Sears Holdings Corp. Kellwood Company Inc. Belk Inc. Payless Shoesource Inc. Sports Authority Inc. Target Jones Apparel Group Dicks Sporting Goods Macys Inc. Gap Inc Levi Strauss VF Corp Ann Taylor Kohls Inc Chicos FAS Perry Ellis American Eagle Outfitters

Up sell existing customer targets

Potential replacement at:

Month 2007

Author

UGS PLM Software

Confidential / Copyright Siemens PL AG 2007. All rights reser

Investment
Opportunity Cost: 3.5 Mn Actual TCS Development Cost: 1.4 M
(Person Years)

2008 1.5 18.5 20

2009 1.5 12 13.5

2010 0.5 5 5.5

2011 0.5 5 5.5

2012 0.5 5 5.5

Total 4.5 45.5 50

Onsite (Cinci) Offshore (Hyd) Total

Returns
65 % Net Margin on the baseline License Revenue of USD 7 Mn 46 % Net Margin on minimum guaranteed revenue 3.9 Mn (exit clause) 15 Mn professional services revenue 1.0 Mn/ yr ongoing maintenance project revenue after 5 years 1.0 Mn/ yr End-customer funded enhancements

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Risk Protection for TCS

IP owned by TCS till target is achieved Siemens to invest equally in R&D Baseline for TCS established at $7M Siemens will not develop solution on their own TCS will be the preferred Go-To-Market partner

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Summary of Proposal

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Gartner_concept-to-store_process_PLM_May07.pdf
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