SarbanesOxley Compliance and Performance Improvement Approach

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eKuber Ventures Inc.

• Sarbanes-Oxley Compliance and Performance
  Improvement Approach

October, 2007
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Table Of Contents

• Introduction
• Sarbanes-Oxley Strategic Overview
• Compliance and Performance Improvement Strategy
• Compliance Overview
• Key Enabler Strategic Overview
• Final Observations and Immediate Next Steps

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Sarbanes Oxley Strategic Overview
eKuber Ventures Inc.

• Aligning the Operational Strategy to Deliver
  Compliance and Performance Improvement

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You have the challenge of Return on Investment
related to providing increased compliance
capabilities

• Addressing the challenge requires an innovative
  approach to executing the compliance framework
  and produce realizable benefits
• Filling this gap cannot be accomplished through
  the Traditional approaches

• This gap can be addressed through several
  mechanisms including
• Process-centric benefits of a Enterprise Wide
  flexible Business Process approach, increasing
  the yield of all functional departments
• Leveraging the IT infrastructure to strengthen
  controls and reduce costs
• Utilizing a non-traditional design paradigm to
  emphasize finance leadership and integration with
  suppliers and customers

(Level of Compliance and Performance Improvement
expectations)
(Level of traditional expectations)
New Funding
Traditional Funding
Understanding how to successfully fill this gap
represents a significant new business opportunity
for the you
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Performance Improvement, along with Compliance,
is a leading goal for most organizations

• The Sarbanes-Oxley Act identified the following
  compliance tenets
• Section 302- Requires the CEO and CFO to certify
  that the content of quarterly and annual SEC
  filings is accurate and the controls that the
  company has designed to meet its periodic
  discosure obligations are sufficient
• Section 404- Requires companies to provide a
  onetime internal control report to attest to the
  integrity of their processes for handling
  corporate financial-related data, and to
  stipulate that these processes are safeguard from
  fraud and sabotage
• Section 409- Requires companies to Disclose in
  real-time material events and financial-related
  information
• Section 802- Requires companies to store in
  accessible fashion audit documents and other
  financial-related data
• These tenets address the following four
  categories
• Section 302- Personal responsibility
• Section 404- Ensure quality of financial
  information
• Section 409- Timeliness
• Section 802- Audit trail

This mandate presents companies with an
opportunity to evaluate, document, analyze and
improve the way that they do business
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Leveraging Compliance for Performance Improvement

• The Sarbanes-Oxley Act helps address the
  following four value levers
• Revenue Growth
• Operating Margins
• Return on Assets
• Governance Operational Excellence
• Following are the big corporate challenges
• Key Components of Sarbanes-Oxley May Not have
  Been Effectively Implemented
• Process for Assessing Ongoing Performance Lacks
  Rigor
• Organizations have Not Begun to Measure the
  Performance against Sarbanes-Oxley Goals
• Building the Sarbanes-Oxley tenets in the
  organizational structure, culture and processes
  No quantitative measures for TOC, OE or Customer
  Satisfaction have been identified

This mandate presents companies with an
opportunity to evaluate, document, analyze and
improve the way that they do business
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Realizing Compliance and Performance Improvement
hinges on five key strategies

• Focus on cost reduction and revenue enhancement
  leading to performance improvement
• Map and analyze the AS-IS processes model against
  the organizational metrics and goals
• Evaluate the compliance tenets and leverage them
  to enhance cost and revenue improvement
  opportunities
• Leverage BPR, Six Sigma, Lean and BPM concepts as
  enablers
• Leverage IT strategies and drive IT effectiveness
  to the next levels on IT maturity model
• Identify the current level of maturity against
  the maturity model
• Analyze the IT effectiveness and identify the
  opportunities against organizational goals
• Adopt IT strategies that would address the
  opportunities and enhance compliance and control
• Optimize the internal control structure by
  strengthening the integration with suppliers,
  employees and customers
• Identify and invest in core integration
  activities and opportunities that add value
• Enable the organization structure to develop and
  deploy to future capabilities
• Develop visibility across functional departments
  to drive whole value chain
• Leverage existing technology, processes, and
  infrastructure wherever possible
• Identify opportunities for integration across
  departments
• Transform finance and accounting to lead the
  compliance effort and take the organization to
  the next level
• Develop the financial tools and processes to
  guide critical cost analyses and proactive
  decision-making

All efforts and investments need to drive these
strategic objectives
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Successful implementation of these 5 strategies
require enabling elements to be in-place

• Governance
• Defines an efficient and effective mechanism for
  fact-based decision-making
• Organization
• Allocates resources to key activities
• Clearly articulates individual and organizational
  roles, responsibilities and interfaces
• Processes
• Links the strategic objectives to specific
  day-to-day activities
• Metrics
• Determines how progress will be measured, tracked
  and managed
• Defines quantitative performance objectives for
  all key aspects of the business
• Planning
• Provides realistic and detailed plans for
  implementation
• Enables the multitude of organizations efforts
  to be aligned and integrated for maximum
  effectiveness
• Communications, Training and Tools
• Enables expectations to be expressed and managed
• Provides tools to support implementation
• Serves as a leading mechanism to drive cultural
  change

Tactical Enablers
GOVERNANCE
METRICS
PLANNING
ORGANIZATION
PROCESSES
COMMUNICATIONS
TRAINING TOOLS
Focus on cost reduction and revenue enhancement
leading to performance improvement
Leverage IT strategies and drive IT effectiveness
-
-
to the next levels on IT maturity model
Optimize the internal control structure by
strengthening the
-
KEY STRATEGIES
integration with suppliers, employees and
customers
Develop visibility across functional departments
to drive whole value chain
Transform finance and accounting to lead the
compliance effort
and take the organization to the next level
These elements are essential in driving the
day-to-day execution of the strategy
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Summary

• Summary
• We have an excellent opportunity to define the
  measures of our own success
• View SOX as a tool to be built in the
  comprehensive strategic framework
• Requires a Business Case and Execution Strategy
• We must get out of crisis management mode and
  focus on deliberate planning