benefits case. 12/20/2015 - 2 - valuing the gap a b "as-is" "to-be " how much is...

Benefits Case

04/21/23 - 2 -

Valuing the Gap

A

B

"As-Is"

"To-Be "

How much isit worth?

"Gap"

04/21/23 - 3 -

We Are Building a Foundation for the Future Beyond Consolidation

04/21/23 - 4 -

The Benefit Case Sets the Baseline

What is it?

• It is a Gemini deliverable to XXXX that sets the financial context, opportunities, and benefits to be delivered during implementation

Why do we do it?

• To quantify the financial impact of opportunities that were identified during the analysis

• To explain the impact of benefits beyond implementation

• To begin to estimate the timing and sequence of benefits during implementation

• To create a rationale for making tough decisions and staying on track after the emotion of discovery has worn off and the challenges of implementation set in

04/21/23 - 5 -

Triangulating on the Benefits

Benchmarks

Internal or External Validation of Opportunity Range

Probes

In-Depth Sampling and Analysis

BenefitEstimation

Brown Papers

Process Assessment of Opportunities and Causes

04/21/23 - 6 -

Building the Benefits

Benchmarks

Probe

Probe

Probe Probe

Probe

Probe

PreviousGemini

Experience

ExternalBest Practice

Internal Best Demonstrated

Performance

• • •

CapitalReduction

RevenueEnhancement

CostReduction

CostAvoidance

04/21/23 - 7 -

Benefits Will Be Translated Into Measurable Results During Implementation

Analysis & Design

Benefit Tracking

Benefit Summary

Revenue$-$$

Expense$-$$

Capital$-$$

Total$-$$

Cash Flow Projection

Results DeliveryProject Start-up

$ 2 year ROI

Breakevent

Max Out of Pocket

$$

J F M A M J J A

Plan

Actual

S

04/21/23 - 8 -

Benefit Estimation

"Soft or Stretch" Confident, delivery mechanism and means of

measurement not as clear. May require a significant

stretch on the part of Lanier organization

"Potential" With respect to growth opportunities, represents the market or revenue gains achievable through implementation

"Hard" High confidence level, delivery mechanism and means of measurement well understood

"Quick Hits" Hard benefits that can be substantially realized within six months of project start.

04/21/23 - 9 -

$23-44 MM in Operational Improvement Benefits Identified

Breakeven Reductions

Revenue Enhancements

Capital Reductions

One Time

$1.6 – 7.5MM

$1.6 – 7.5MM

Annualized

$14.9 –23.1MM

5.6 – 10.7

$20.5 –33.8MM

04/21/23 - 10 -

Benefits Summary

Customer Service

Sales Force Turnover

Inventory and Distribution

Collections

Streamline AOP Process

revenueEnhancement

Capital Reduction

$1.6 –

7.5MM

BreakevenReduction

$0.9 –1.1MM

4.7 – 9.6

$16.1 –

25.9MM

$9.5 –15.6MM

1.1 – 2.1

2.9 – 3.4

1.4 – 2.5

1.4 – 1.8$5.7 –

10.8MM

$1.6 –

7.5MM

04/21/23 - 11 -

Benefits Summary

Customer Service



Collections


revenueEnhancement

Capital Reduction

BreakevenReduction

$0.9 –

1.1MM

$9.5 –15.6MM

04/21/23 - 12 -

Customer Service Benefits

Service Call Quality

Increased First Call Completion

Meter Billing Accuracy

0.9 –1.1MM

revenueEnhancement

Capital Reduction

$0.9 –

1.1MM

BreakevenReduction

$5.7 –11.4MM

3.8 – 4.2

Total $9..2 –

15.9MM

04/21/23 - 13 -

People are Doing What They Are Rewarded to Do

However, the measurement structure doesn't always support good business decisions or XXXX customer vision.

However, the measurement structure doesn't always support good business decisions or XXXX customer vision.

Service ManagerCustomer Service Representative (CSR)

Customer

Lanier promises98% up-time

Get there fastdo as many aspossible useminimal parts

Get their fastdo as many aspossible

ButBut

Number of CallsResponse Time

Measurement Rules

Materials ExpenseCSR Number of CallsCSR Response Time

Measurement RulesHELP!

DOWNTIME

AOPPerfectMatch

HELP!

HELP!

Parts

Money

Customer Service

04/21/23 - 14 -

45% of the Calls a Technician Makes are Repeats of Calls Made in the Previous 30 Days

Most importantly, the customer will have increased up-time and drive them closer to a delighted state. The less they see us the more they love us.

Most importantly, the customer will have increased up-time and drive them closer to a delighted state. The less they see us the more they love us.

*Lanier Internal Best Practice is the best quarterly performance by a district in July - September 1992 Source: CSR Activity Reports

Right the First Time Completions (RTFT)

Attaining the XXXX Best Practice for RTFT will allow XXXXr to:

• Eliminate at least 115,000-230,000 redundant service calls annually

• Provide $5.7-11.4 MM in service costs which can be reinvested

58 5651 51

55 5755%

70%

45% RepeatCalls

Lanier Average

Lanier

Best

Practice*

Customer Service

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Piedmont Southwest Western Midwest Atlantic

Coastal

Southeastern

04/21/23 - 15 -

15% of Service Calls Require Additional Visits

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Piedmont Southwest Western Midwest AtlanticCoastal

Southeastern

*XXXXr Internal Best Practice Average is the Average of the top 25 non-100% FCC performance technicians nationwide July-September 1992Source: CSR Activity Reports

First Call Completions (FCC)

Attaining the XXXXX for First Call Completions could:

• Eliminate 76,000+ redundant service contacts annually

• Provide $4MM resources which can be reinvested

83 87 86 87 84 8485%95%

Customer Service

Lanier

Average

Lanier

Best

Practice*

04/21/23 - 16 -

A Major Drag on FCC Is Parts Availability

Measurements and rewards create on environment where what seems economical on a district level is non-economical for XXXXX.

Measurements and rewards create on environment where what seems economical on a district level is non-economical for XXXXX.

Source: Vision System

Parts Causing Interrupted Work Orders

For instance, an investment of $200,000 in district parts cost, can eliminate a cost of $500,000 labor

2022 = Total parts for 1 monthCumulative Parts Line Items

Cu

mu

lati

ve

In

teru

pte

d W

ork

Ord

ers

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

11000

0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200

10651

95898995

8560

6913

5549

3332

1547

508

8148

Customer Service

20% of the unstocked parts generate 80% of the interrupted calls

04/21/23 - 17 -

Meter Billing Inaccuracies Leave Money on the Table

XXXXXX Copies

XXXXXX Copies

XXXXXX Copies

Improved meter readings and access will provide immediate revenue enhancements, as well as better product tracking information.

Improved meter readings and access will provide immediate revenue enhancements, as well as better product tracking information.

Source: Random sampling meter cards

$1 million

$24.4MMMeter Cards

per year

At least 18% of the cards are off by 16%

Minor Inaccuracies

Customer Service

18%

3% Error

72% 1% Error

04/21/23 - 18 -

Benefits Summary

Customer Service



Collections


RevenueEnhancement

Capital Reduction

BreakevenReduction

$0.9 –1.1MM

4.7 – 9.6

$9.5 –15.6MM

1.1 – 2.1

04/21/23 - 19 -

Sales Force Turnover Benefits

Senior Rep Retention

Junior Rep Retention

RevenueEnhancement

Capital Reduction

$4.7 –9.6MM

BreakevenReduction

$3.6 –7.3MM

1.1 –2.3MM

Total $1.1 –2.2MM

$0.8 –1.6MM

0.3 –0.6MM

04/21/23 - 20 -

Experienced Sales Reps Are the Largest Share of Turnover

Tenure of Sales Reps

Voice 76.3% (304 sales reps)

Image 75.6% (637 sales reps)

1992 Turnover

Source: Total 1992 Turnover

Sales Representative Life Cycle

0

5

10

15

20

25

30

35

0-3Months

4-6Months

7-12Months

12+Months

Image

Voice% of Turnover

40

(70 reps)

(52 reps)

(55 reps)

(142 reps)

(79 reps)

(202 reps) (223 reps)

(118 reps)

04/21/23 - 21 -

The Primary Reasons for Leaving Lanier Are Manageable

0-3 Months– Unrealistic view of the job– Just a poor hiring decision

3-6 Months– Need more coaching, encouragement– Need more training in products and selling skills

6-12 Months– Reality of selling sets in – salary ends– Cold calls are difficult– Want more coaching and team selling

12+ Months– Believe there is better compensation elsewhere– Poor compensation for high expenses– Environment not conducive to professional growth– Large sales can take a long time – too many lean months


04/21/23 - 22 -

Though the Cost to Replace an Individual Sales Rep Is Significant . . .

Tenure of Sales RepsVoice Division

Image Division

Source: Cost of draw, benefits, hiring fees, schools, and manger time as provided by HR


0

$5K

$10K

$15K

$20K

$25K

$30K

0-3Months

4-6

Months

7-12

Months

12+

Months

Cost to Replace

($27,000)

($21,000)

04/21/23 - 23 -

Lost Sales Are 4 to 5 Times Greater

0

$2K

$4K

$6K

$8K

$10K

$12K

$14K

$16K

$18K

$20K

1 2 3 4 5 6 7 8 9 10 11 12

$9,415/mo.

$6,098/mo.

$2,625/mo.

Lost Sales

Senior Rep Average Sale = $15,078/mo.

Average Monthly

Sales

Tenure of Reps (mo.)

Lost Sales = $98,277

Image

Voice

Source: Voice average sales/mo. provided by HR. Image average

sales/mo. as calculated from marketing and HR Reports


Average Monthly

Sales

Tenure of Reps (mo.)

Lost Sales = $125,411

0

$2K

$4K

$6K

$8K

$10K

$12K

$14K

$16K

$18K

$20K

1 2 3 4 5 6 7 8 9 10 11 12

$22K

$14,018/mo.

$10,027/mo.

$4,226/mo.

Lost Sales

Senior Rep Average Sales = $20,671/mo.

04/21/23 - 24 -

A Departing Senior Reps Each Take $120-150K in Lost Sales and Investment with ThemImage

Voice


0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

0-3 Months 4-6 Months 7-12 Months 12+ Months

$20,400 Lost Sales

$11,600 Cost

$32K

$64,300 Lost Sales

$17,500 Cost

$81.8K

$81,300 Lost Sales

$19,700 Cost

$101K

$119K

$98,300 Lost Sales

$20,700 Cost

Tenure of Sales Rep

Cumulative Lost

Dollars

$27,200 Cost

Tenure of Sales Rep

Cumulative Lost

Dollars

0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000


$13,000 Cost

$23,800 Lost Sales

$53,600 Lost Sales

$20,600 Cost

$85,500 Lost Sales

$22,900 Cost

$125,400 Lost Sales

$152.6K

$108.4K

$74.2K

$36.8K

04/21/23 - 25 -

The Total Cost of Turnover Was $93MM in 1992Image

Voice


Costs and

Lost Sales

0

$5M

$10M

$15M

$20M

$25M

$30M


1.4 Lost Sales

.8 Cost

2.5 Cost

9.1 Lost Sales

4.0 Cost

16.4 Lost Sales

21.9 Lost Sales

4.6 Cost

$2.2M

$11.6M

$20.4M

$26.5M

Total Costs and Lost Sales = $60.7M

Costs and

Lost Sales

Total Costs and Lost Sales = $32.5M

0

$2M

$4M

$6M

$8M

$10M

$12M

$14M

$16M

$18M


1.2 Lost Sales

.7 Cost 2.9 Lost Sales

$1.9M $4.0M

1.1 Cost

6.8 Lost Sales

1.8 Cost

14.8 Lost Sales

3.2 Cost

$8.6M

$18.0M

04/21/23 - 26 -

Opportunities

• Reduce senior rep(over 12 months) turnover by 10 - 20% and realize a benefit of $4.4M to $8.9M in reduced cost and increased revenue

• Reduce junior (6 - 12 months) rep turnover by 5 - 10% and realize a benefit of $1.4M to $2.9M in reduced cost and increased revenue

• Consider migrating Voice's possible best practice, Sales Rep Development Team, to other areas of the company

04/21/23 - 27 -

Each 5% Reduction in Senior Rep Turnover Can Save Lanier $2.2MM

Image: 44 senior reps (20%) at $119,000 =

Voice: 24 senior reps (20%) at $152,600 =

OPPORTUNITY

$5.2MM

3.7MM

$8.9MM

Image: 22 senior reps (10%) at $119,000 =

Voice: 12 senior reps (10%) at $152,600 =

OPPORTUNITY

$2.6MM

1.8MM

$4.4MM

Source: In 1992, 223 senior reps left Image and 118 senior reps left Voice


04/21/23 - 28 -

Each 5% Reduction in Junior Rep Turnover Can Save XXXX $1.4MM

Image: 20 Junior reps (10%) at $101,000 =

Voice: 8 Junior reps (10%) at $108,000 =

OPPORTUNITY

$2.0MM

$0.9MM

$2.9MM

Image: 10 Junior reps (5%) at $101,000 =

Voice: 4 Junior reps (5%) at $108,000 =

OPPORTUNITY

$1MM

$0.4MM

$1.4MM

Source: In 1992, 202 6-12 mo. reps left Image and 79 left Voice


04/21/23 - 29 -

Benefits Summary

Customer Service



Collections


RevenueEnhancement

Capital Reduction

BreakevenReduction

$0.9 –1.1MM

4.8 – 9.7

$9.2 –15.9MM

1.1 – 2.1

2.0 – 2.7

04/21/23 - 30 -

Inventory and Distribution Benefits

Reduce Expedite Cost

Reduce Days-on-Hand

Total

revenueEnhancement

Capital Reduction

BreakevenReduction

$2.0 –

2.7MM

$1.0 –1.2MM

1.0 –1.5MM

04/21/23 - 31 -

Our Focus on Managing Inventory Dollar Levels Affects Other Parts of the Business

Total World-wide Inventory

Total World-wide Inventory

Backordered lines as a percentage of all lines ordered

FY 1991

$(0

00

)

J A S O N D J F M A M JAOP 6/30/92

AOP 6/30/91

Gross Inventory

Gross Inventory

1st Qtr.FY1992

1st Qtr.FY1993

6%

7%

Reducing inventory dollar levels at the end of the FY affects. Backorders at the beginning of the next FY.

Reducing inventory dollar levels at the end of the FY affects. Backorders at the beginning of the next FY.

FY 1992

$(0

00

)

J A S O N D J F M A M J

04/21/23 - 32 -

Expedited Orders Now Constitute a Significant Proportion of Total Freight Costs

Total Freight Cost

$2,030,000ExpeditedShipments

17%

RegularShipments

83%$9,459,000

Expedited orders increase shipment cost.Expedited orders increase shipment cost.

$11,489,000

04/21/23 - 33 -

Expedited Shipments Are Growing

8% Growth

Air Small Package International Air Air Freight

FY1991 FY1992

$1,458,000

85% Growth

$156,000

12% Growth

$145,000

$

$1,578,000

$289,000$163,000

04/21/23 - 34 -

The Cost of Inventory Is the Sum of Shipping Cost and Holding Costs

Cost

Inventory

Cost

Inventory

Cost

Inventory

If one goes up the other should go down.If one goes up the other should go down.

Inventory Holding Cost Shipping Cost Total Cost

04/21/23 - 35 -

But Both Inventory Costs and Expedited Shipment Costs are Going Up

TotalExpeditedShipments

TotalWorldwideInventory

FY 1992 Up 15%Over FY 1991

12 Month AverageDays On Hand

Up 6%

Inventory does not equate to our client's demand.Inventory does not equate to our client's demand.

04/21/23 - 36 -

Inaccurate Demand Forecasts Cause Large Swings In Inventory

Upward swings increase DOH increasing costsUpward swings increase DOH increasing costs

1992

Nu

mb

er

of

Ma

ch

ine

s

April May June July August Sept.

Forecast

Actual Demand

Inventory

Inventory

04/21/23 - 37 -

A Major and National Account "Surprises" Affect Inventory Levels

We can get somefrom Chicago, somefrom Harrisburgand some from Atlanta and expediteshipment! I can sell a lot of

copiers to BronxHospital if we can ship now!

We don't ask national and major account sales reps for formal forecastson new or existing accounts

We don't ask national and major account sales reps for formal forecastson new or existing accounts

Distribution

Sales

04/21/23 - 38 -

Large Account "Surprises" Will Increase As Major and National Account Activity Grows

$71M

$112M

$100M

$85M

Years

Re

ve

nu

e

1888 1989 1990 1991 1992

More large orders will result in more “surprises”.More large orders will result in more “surprises”.

Copy National and Major Account Revenue

04/21/23 - 39 -

LTMP Benchmarking Shows There Is Room to Improve DOH

04/21/23 - 40 -

Reduce Expedited Shipments by: $1,015,000 to $1,67,000

Estimated 1993 Air Freight

2,334,000

x .50

1,167,000

FY 1992 Air Freight

2,030,000

x .50

1,015,000

04/21/23 - 41 -

Reduce Voice and Image Inventory Days on Hand 10% to 15%: $975,000 to $1,471,000

Voice

62,620,000÷ 365

172,000

x 21 to 323,612,000 to 5,504,000

x .11397,000 to 605,000

Cost of Goods Sold

Value of One Days Inventory

10% to 15% of Days on Hand

8% Inventory Holding Cost3% Value of Capital

Image

137,005,000÷ 365

375,000

x 14 to 215,250,000 to 7,875,000

x .11578,000 to 866,000

04/21/23 - 42 -

Benefits Summary

Customer Service



Collections


RevenueEnhancement

Capital Reduction

$1.6 –7.5MM

BreakevenReduction

$0.9 –1.1MM

4.7 – 9.6

$9.5 –15.6MM

1.1 – 2.1

2.9 – 3.4

0.0 – 0.2

04/21/23 - 43 -

Collections Benefits

Streamline Collection Process

Streamline Accounts Receivable Process

Reduce Accounts Receivable

RevenueEnhancement

Capital Reduction

BreakevenReduction

$1.6 –7.5MM

$0.0 –0.3MM

$0.0 –0.1MM

0.0 –0.2MM

$1.6 –7.5MM

04/21/23 - 44 -

“Best Practices” in Collections Suggest Large Improvements in Collection Efficiency

Voice / Fax

Location of Collectors District Offices (50) RSSCs (4)

Collection Personnel 50 68

Time Dedicated 50% 100%

Effective Full-Time Collectors 25 68

Accounts Receivable ($ A/R) $ 26.4MM $ 42.7MM

$ A/R per Effective Full-Time Collector $ 1.1MM $.6MM

Total Number of Items 76,992 133,110

Items per Effective 3,080 1,958 Full-Time Collector

Opportunity in Imaging = 23 - 30 ResourcesOpportunity in Imaging = 23 - 30 Resources

Opportunity in Imaging = 20 - 25 ResourcesOpportunity in Imaging = 20 - 25 Resources

Imaging

04/21/23 - 45 -

Voice / Fax Accounts Receivable

AccountsReceivable

Thought Processing $ 19.5MM 57 Days

Fax 7.0MM 52 Days

TOTAL $ 26.5MM 56 Days

Opportunity to Reduce to 44 Days = $5.5MMOpportunity to Reduce to 44 Days = $5.5MM

Opportunity of $1.2MM - $5.5MM with cost reduction of $0.1MM - $0.2MM.Opportunity of $1.2MM - $5.5MM with cost reduction of $0.1MM - $0.2MM.

Days SalesOutstanding

AccountsReceivable

Opportunity to Raise to 90% = $1.2MMOpportunity to Raise to 90% = $1.2MM

% A/R < 31 DaysPast Due

Thought Processing $19.5MM xx.x%

Fax 7.0MM xx.x%

TOTAL $26.5MM 85.5%

04/21/23 - 46 -

Imaging Accounts ReceivableAccounts

Receivable

Atlanta-Orlando-BO $ 12.6MM 47 Days

Chicago $ 6.0MM 44 Days

Dallas / LA $ 14.2MM 44 Days

Washington $ 10.0MM 50 Days

TOTAL $ 42.6 MM 46 Days

DSO Reduction Opportunity = $2.0MMDSO Reduction Opportunity = $2.0MM

Opportunity of $1.4MM - $2.0MM with cost reduction of $0.1MM.Opportunity of $1.4MM - $2.0MM with cost reduction of $0.1MM.

Days SalesOutstanding

AccountsReceivable

A/R Reduction Opportunity = $1.4MMA/R Reduction Opportunity = $1.4MM

% A/R < 31 DaysPast Due

Atlanta-Orlando-BO $ 12.6MM 86.6%

Chicago $ 6.0MM 86.8%

Dallas / LA $ 14.2MM 87.0%

Washington $ 10.0MM 86.2%

TOTAL $ 42.6 MM 86.6%

RSSCs

RSSCs

04/21/23 - 47 -

Cumulative Results Identify a Large Opportunity in Collections

Collection Processes - Cost Reduction $ 1,000K - $1,500K

Accounts Receivable - Cost Reduction $ 400K - $1,000K

Cost Reduction Opportunity $ 1,400K - $2500K

Accounts Receivable - Cash Flow Improvement $ 1,600K - $7,500K

Measurement Range of Opportunity

04/21/23 - 48 -

“Best Practices” in Accounts Receivable Point toCost Savings and Capital Reductions

Best Practices

Days Sales Outstanding 44 Days

% A/R Current or 1 - 30 Days Past Due 90%

Measurement Goal

04/21/23 - 49 -

Benefits Summary

Customer Service



Collections


revenueEnhancement

Capital Reduction

BreakevenReduction

$0.9 –1.1MM

4.7 – 9.6

$9.5 –15.6MM

1.1 – 2.1

2.9 – 3.4

0.0 – 0.2

1.4 – 1.8

$1.6 –7.5MM

04/21/23 - 50 -

The Budget / Planning Activities Are One of the Most Important Company Activities

Budget / Planning

Time

Energy

OpportunityPassed-Up

StrategicObjectives

Deliver aMessage Tothe Market

Scorecard

AOP Budget/Planning Process

04/21/23 - 51 -

Credibility Comes From Consistently Meeting Commitments

Revenues Actual

1992 Forecast

Other Forecasts

x

900

950

1,000

1,050

1,100

1,150

1989 1990 1991 1992 1993 1994 1995

1,134

1,086

1,038

1,033

1989 Forecast

1990 Forecast

1991 Forecast

1992 Forecast

Annual Revenues

($MM)

x

x

x

Without credibility we tend to discount the value and our confidence in strategic objectives is limited.

Without credibility we tend to discount the value and our confidence in strategic objectives is limited.


04/21/23 - 52 -

Preparing the AOP for the Upcoming Year is a Tiresome Activity

Quite an undertaking for an internal scorecard.Quite an undertaking for an internal scorecard AOP

Sales ForceIs Busy

Doesn't MatchExpectations

Can't Makethe Forecast

Division AccountingPrepares Data

Results ChangeWhich Changes

the AOP SystemsDon'tMatch


04/21/23 - 53 -

The Real Value of Streamlining Financial Processes Is Not Cost Reduction

Valueto

XXXXX

Analysis

Reporting

PlanningAnalysis

ReportingInformation

Planning

Planning

Collecting

04/21/23 - 54 -

Is the Final Product Worth $6MM(Not Including Europe and ICD or Sales Opportunity Passed Up

AreaAnnual Hours

Involved

Divisions

Corporate

210M

20M

230M

$1.3 - 1.7MM

0.1 - 0.1MM

$1.4 - 1.8MM

1

Source: Survey of Managers Involved in Process, Hourly Cost Assumed @ $25/hr.


25%Reduction

$5.5MM

0.4MM

$5.9MM

AnnualCost

04/21/23 - 55 -

Benefits Summary

Customer Service



Collections


Total Benefits

revenueEnhancement

Capital Reduction

BreakevenReduction

$1.6 –7.5MM

$1.6 –7.5MM

$9.5 –15.6MM

1.1 – 2.1

2.9 – 3.4

0.0 – 0.2

1.4 – 1.8

$14.9 –23.1MM

$0.9 –1.1MM

4.7 – 9.6

$5.6 – 10.7MM

04/21/23 - 56 -

Unquantified Opportunities

• Credit Screening & Tracking Effectiveness

• Inactive Rental Equipment Activation

• Air Freight Container Utilization

• Sales Order Process Streamlining

• Sales Force Effectiveness – CMS Utilization

• Is Project Management Effectiveness

• GMA Cost Analysis and Pricing

• GMA Auto-Renewal Collection

• Increase TAC Phone Save Performance

04/21/23 - 57 -

Quick Hit Opportunities

• Meter Billing Accuracy

• Sales Force Turnover

• Inactive Rental Equipment

• Air Freight Container Utilization

• Eliminate Corporate Jet

• Tie Executive Comp to Gemini Utilization

• Reduce Lead Analyst Air Time

Business Growth Foundation

04/21/23 - 59 -

XXXX’s Recent Performance Inconsistent with Growth Aspirations

Reaching the desired revenue level in the specified timeframe will require significant growth . . .

Source: Lanier Financial Statements

"I would like this company to be $2 billion (revenues) in five years."–Wes Cantrell

1990 1991 1992 1998Harris

Aspiration

1998WC

Aspiration

Lanier Revenues($ Millions)

CAGR 17%$94

$908 $907

$1,461

$2,000

ICD

Europe

VPDImage

04/21/23 - 60 -

. . . However, Lanier's Existing Core Markets Are Flat or Declining

XXXXX will need to identify new growth opportunities to achieve its $2 billion aspiration.

XXXXX will need to identify new growth opportunities to achieve its $2 billion aspiration.

Source: CBBMA

DictationEquipment

Growth Avenues

1. Increase penetration in

existing markets

2. Expand geographic

penetration

3. Enter related or new

markets

Facsimiles CopierEquipmentand Service

U.S. Business EquipmentSegment Value

($ Millions)

1995

1991

1985

Dictation (0.1%)

Facsimile (4.2%)

Copier Equipment 0.1%

1991-1995CAGR

$364 $382 $281 $596$1,362

$452

#13,102

$15,029 $15,169

04/21/23 - 61 -

Removing Obstacles to Sales Force Cross-Selling Effectiveness Can Enhance Revenues via Increased Penetration

Opportunities for improving copy/fax cross-selling are good due to:• Current low level of cross-sold customers.• Customer commonality.

Opportunities for improving copy/fax cross-selling are good due to:• Current low level of cross-sold customers.• Customer commonality.

Source: CMS, Gemini analysis.

INCREASED SHARE GROWTH AVENUE

100% - 729,000

Assumptions

• Customer buying patterns remain constant

• Average revenue/ customer by segment remains constant

• XXXX increase "share of customer's wallet"

If 10% of copy only and 15% of fax only customers become copy and fax customers . . .

. . . then XXXXr's U.S. revenues would increase by $20 million

DecreasedCross-Selling

All OtherFaxCopy and Fax

$554

Actual

Fax16%

Voice25%

Copy45%

ALL2%

$574

Copy

04/21/23 - 62 -

Certain Existing Related Product Markets May Represent Growth Opportunities . . .

. . . And, with the convergence of copier, printer, and fax technologies, XXXX will need to develop a strategy to address these markets.

. . . And, with the convergence of copier, printer, and fax technologies, XXXX will need to develop a strategy to address these markets.

Source: Computer Reseller News, 8/31/92.

NEW PRODUCT MARKET GROWTH AVENUE

Implications to XXXXXX

• Can be different

purchase

decision-?? than

copiers

• Requires computer/

technical

knowledge for

selling, service,

hardware and

software

Laser PrinterProduct Evolution

• Decreasing price

• Improving speed,

reliability

• Digital technology

• Networkable

Worldwide13 PPM - 26 PPM

Laser Printer Market($ Millions)

$2,951

1986 1992 1993 1994

$865

$2,672

$3,173

CASE EXAMPLE

04/21/23 - 63 -

Evolving and Emerging Markets Outside of XXX's Existing "Core" Businesses also Represent Future Growth Opportunities

Success in these new market segments will require XXX to address the future connectivity challenge.

Success in these new market segments will require XXX to address the future connectivity challenge.

Source: The Association of Information and Image Management.


Implications to XXXXX

• Different customer

from ???

• Longer, more complex

purchase process

• Ability to sell and ??? a

networked solution

• Profit from service, not

hardware or supplies

• Potential giants and

nim???? as competitors

Customer PurchaseCriteria

• Product standards

• Support

• Quality

• Speed

• Ease of use

• Solutions

Electronic ImagingMarket

($ Billions)

$2.8

1992 1993 1994

$1.3

$1.9

$8.9

CASE EXAMPLE

1995 19961991

$4.1

$6.1CAGR 47%

Each 1% market share represents

$20 million in incremental revenues

(based on 1992 $)

04/21/23 - 64 -

In Addition, There Are Several Other Product Portfolio Management Improvements Opportunities That Are Not Quantifiable . . .

. . . but should facilitate XXXXX's "out of box" product/market growth

thinking.

. . . but should facilitate XXXXX's "out of box" product/market growth

thinking.Source: Lanier Financial Statements


Average "Out of Box" New

Products/Markets Responsibility

Formalize Integration of Europe,

ICD, and Corporate Development in

Product Plan??

???????????? Information

Sharing between Advisors

???? and Standardize Product

Management Process on "Best

Practices"

Improve Market Data Availability

04/21/23 - 65 -

In Short, XXXX Needs a New Foundation for Pursuing Growth Opportunities

Implications:XXXXX needs to identify both where and how to compete in a changing market in order to achieve its growth aspirations.

Implications:XXXXX needs to identify both where and how to compete in a changing market in order to achieve its growth aspirations.


• XXXX's revenue aspiration requires a compound annual growth rate for over 10%.

• XXXX's exist core markets are flat or declining.

• XXXX's unlikely to achieve its growth aspiration solely by increasing share of existing markets.

• Product technology evolution presents both opportunities and threats.

04/21/23 - 66 -

In Short, XXXX Needs a New Foundation for Pursuing Growth Opportunities

XXXXs ability to think "outside the box" may inhibit its ability to establish the required business growth foundation.

XXXXs ability to think "outside the box" may inhibit its ability to establish the required business growth foundation.


• Understanding of targeted market segments and customer needs.

• Assessment of existing sales force effectiveness and barriers to success.

• Understanding of how to leverage existing Lanier competencies.

• Development of XXXX growth market identification and screening process.

• Identification of specific product/market opportunities and success factors.

04/21/23 - 67 -

In Addition, There Are Several Other Product Portfolio Management Improvements Opportunities That Are Not Quantifiable . . .

. . . but should facilitate Lanier's "out of box" product/market growth thinking.

Source: Lanier Financial Statements


Average "Out of Box" New

Products/Markets Responsibility

Formalize Integration of Europe, ICD, and Corporate Development in

Product Plan??

???????????? Information

Sharing between Advisors

???? and Standardize Product Management Process on "Best

Practices"

Improve Market Data Availability

04/21/23 - 68 -

Title

04/21/23 - 69 -

Which Is Declining , Not Growing

Discounted Cash Flow Valuation Based on AOP

In two years XXXX Lost 27% of its valueIn two years XXXX Lost 27% of its value

0

$150MM

$300MM

$450MM

$600MM

$750MM

$900MM

1990 AOP 1992 AOP

$1,000MM

Lost Value = $229MM

Lanier's Value = $620MM

Lanier's Value = $849MM

04/21/23 - 70 -

And if the Downward Trend Continues . . .

. . . XXXX will lose another $186MM in Value by 1994. . . XXXX will lose another $186MM in Value by 1994

0

$100MM

$200MM

$300MM

$400MM

$500MM

$600MM

$700MM

$800MM

$900MM

$1,000MM

1990 AOP 1992 AOP Est.1994 AOP

$849MM

$620MM

$434MM

04/21/23 - 71 -

The XXXX/Gemini Joint Business Case Identifies Benefits in the As-Is to Identify Ways to Maximize the Value of XXXXX

Revenue 907 911

Cost of Sales 523 516

Expenses 345 352

Net Income 39 42

Return on Capital 11.2% 13.4%

Profit Margin 4.3% 4.7%

FY 1992 FY 1993 ($ MM) ($ MM)

04/21/23 - 72 -

Streamline AOP Process Benefits


revenueEnhancement

Capital Reduction

BreakevenReduction

$1.5 –2.0MM

$1.5 –2.0MM

04/21/23 - 73 -

$ to MM Represents the Portion of Operational Improvements Which Are Quick Hits

Meter Billing Accuracy


revenueEnhancement

Capital Reduction

BreakevenReduction

Quick Hits

benefits case. 12/20/2015 - 2 - valuing the gap a b "as-is" "to-be " how much is...

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