©2001 i2 Technologies, Inc. CONFIDENTIAL Slide 1.


Field Education Solution Training


Levels of Training

TradeMatrix Solution Overview (TMSO) 2 days For: New Hires and Partners What: Level 1 Messages & Exec Customer Presentations

Solution Essentials: 1-2 days each For: Sales, Presales, BDRs, SSG, Partners What: Level 1-2 Messages, Capabilities & Selling

Demo Workshops: 1-3 days per component For: Presales & Partners What: Level 2-3 messages, capabilities, demoing & selling


Solution Essentials


Objectives of Solution Essentials

Gain insight about the world of key buyers

Learn how the i2 solution works and what makes it unique

Improve your ability to position, present, and demo


Course Names

Solution Essentials Content & Platform – 1 day CRM – 1 day SCM – 2 days

(including Fulfill & Service that are also CRM) SRM – 1 day

Frequency: Monthly in US, added soon in EMEA


Standard Agenda – Solution Essentials

Setting the Stage Business Background & Customer Problems i2 Solution Message Differentiators Benefits

Act 1: Solution Details Whiteboard of Solution Overview ** Flow between Components Component Capabilities Key Workflows: Users, Diagram, Demo

Touchpoints to other i2 Solutions Quiz on Solution Knowledge **


Standard Agenda – Solution Essentials

Act II: Sales Techniques Qualifying

Ideal Customer Profile Survey Questions Objection Handling Survey & Objection Handling Exercise **

Competitive Analysis Value Analysis Solution Roadmap Sales Techniques Quiz Case Study Exercise **


When you Leave you should be able to….

In 5 minutes define: what the solution does, it’s value to a prospect, and what is unique about i2’s offering

Credibly present a whiteboard overview Successfully contribute to a survey Map customer problems to the proper solution component

Select appropriate accounts to target Deliver a 30 min. solution overview presentation Be able to identify value areas for a solution Understand competitive landscape and how to find specific

competitive details


How you will be Assessed

Quizes & Activities in class

Formal Solution Assessments Sales: Present to manager and your sales team

15-20 min i2 overview 30 minute Solution overview & Whiteboard Be prepared to handle objections & competitive questions

Presales: Present to manager/mentor Same expectations a sales except: Solution overview is 45 minutes Add 30 minute screencam or HTML solution demo


Demo Workshops


Objectives of Demo/Capabilities Workshops

Product/Component Capabilities Hands-on with Demos Technical Selling Techniques


Demo Workshops: Every 5-6 weeks

CRM - Market, Sell & Fulfill – 3 days CRM - Order Management – 2 days SCM - Demand Planning – 1.5 days SCM - Supply Planning – 2 days SCM - Factory Planning & Scheduling – 1.5 days SCM/CRM – Fulfill – 2.5 days SCM/CRM – Service – 2.5 days SRM - Design – 1 day SRM - Source & Negotiate – 2 days SRM – Buy - 2 days Content Demo Workshop - 2 days


Standard Agenda – Demo Workshops

1. Review Total Solution & Interaction of Components

2. Component Details:1. Problems addressed, Message, differentiators

2. Underlying concepts: best practices, solvers, data model

3. Hands-on Demo exercises

4. Architecture

5. Selling & Case Study

6. Value Prop Tool

7. Implementation Guidelines

8. Component Roadmap

9. Demo Customization


When you Leave you should be able to….

In 5 minutes define: what the solution component does, it’s value to a prospect, and what is unique about i2’s offering

Credibly present a whiteboard of key concepts Successfully contribute to a survey or SOA Map customer problems to component capabilities

Deliver a 45 min. solution component overview presentation Present a standard demo with live software or a hosted

application


How you will be Assessed?

Quizes & Activities in class

Formal Solution Assessments 1 hour solution presentation with real value prop 45 min live solution/product demo Include competitive positioning & Customer Stories


Revenue Recognition Mark Trivette

Michelle Johnson Kasiya Muteba

Terri [email protected]


Overview

The Four Basic Revenue Recognition Criteria

The Six License Revenue Recognition Methods

Other Revenue Recognition Issues


The Four BasicsSigned Agreement by Both Parties

Agreement must be received by i2 Legal and must have an English translation if in a foreign language.

Must be the final license agreement. Not a Letter of Intent or Memorandum of

Understanding. ALL terms and conditions of the agreement

must be included in the legal document. Use product names from the current price list.


The Four BasicsDelivery of Software

Must be through a third-party shipping agent (i.e.: FedEx), not hand-delivered.

FOB shipping point terms should be included in every agreement to ensure the delivery requirement is met once the software leaves i2.

Electronic delivery via ftp: site is acceptable, except for Content Reference Databases. Confirmation of receipt from customer is needed.


The Four BasicsFixed and Determinable Fee

Fee must not be subject to variation or concession. All license fees must be due within 1 year. Fees cannot be subject to forfeiture or refund. License fees should not be tied to implementation

milestones. License fees should not be linked to performance

payments. Agreement should not include items that pricing

cannot be established for, such as Joint Development or future products that are not currently available.


The Four BasicsCollectibility is Probable

No known credit risks. Credit Department should review in advance. Avoid payment terms that extend several

months from the agreement date. Significant portion payable up-front or within 90 days of agreement.

Source of funds must be certain. Equity in customer may not result in revenue

and creates other issues for i2. Contact i2 Ventures.


The Traditional ModelPerpetual License Do’s

Meet the Four Basics. First year maintenance sold within established pricing. Payments due within 12 months. Services sold within established pricing. Content Reference Databases sold within established

pricing.


The Traditional ModelTerm License Do’s

Same as perpetual plus: Term is greater than 1 year (i.e. 2-year term). Only first year of maintenance sold. Renewal pricing for term license equals or exceeds

current pricing.


Path to Other Recognition Models

Extended Payment Terms If – License fee payment terms extend beyond 12 months from

the agreement date Then – License revenue is recognized as payments become due

under the contract. Due and Payable

If – Significant risk of collectibility exists or payment terms differ from i2’s normal practice

Then – License revenue is recognized as payments become due under the contract.



Subscription Accounting If – Contract provides for delivery of unspecified products,

enhancements, or upgrades, or If – You sell a term license with a term of 1 year or less Then – License revenue is recognized over the term of the

agreement. Cliff Accounting

If – Contract provides for delivery of specified future products, enhancements, or upgrades

Then - License revenue is deferred until the specified product, enhancement, or upgrade is delivered.



Contract Accounting If – Services required by customer are essential to the use of the

software Then – License revenue is recognized either as the project is

completed or at the end of the project. Services equal to or greater than 100% of the license total will

cause revenue recognition concerns/questions. References to the consulting agreement, or i2’s obligations

under a consulting agreement, should not be included in the license agreement.


Other Revenue Recognition

Discussion Items


Maintenance Maintenance MUST be sold with the license. If separate maintenance is not sold with the license, first

year maintenance is assumed to have been sold with the license.

Maintenance begins on contract date. Any delay in the maintenance period can result in a carve-out of license revenue.

Current Maintenance Minimums are as follows: 18% to 15% for Silver 20% to 17% for Gold 23% to 19% for Platinum

These above minimums apply for ALL years of maintenance sold in the contract.

Maintenance given away at no charge in perpetuity will result in NO license revenue.


Consulting, Content and Other Services

Discounts US Consulting 15% Non-US Consulting 10% Training 10% SOAs 10% Content 15% Content data services 15%

Carveouts 20% of consulting estimate for fixed fee consulting 20% of consulting estimate for travel and expenses at

no charge


Consulting Full-Time Equivalents (FTEs)

FTE rates are discounted rates offered to customers due to their commitment to utilize personnel on a continuous basis for at least six months.

Standard practice is the customer prepays a minimum of six months to qualify for FTE rates.

Deviations from the prepay or six month requirements must be approved by Reagan Lancaster.

See price list for current FTE rates.


Financing – Do’s and Things to Avoid

DO’s: DO separate the financing agreement from the license

agreement; i2 should not be a party to the financing arrangement.

DO ensure the financing document is in place if the customer intends to finance before or in conjunction with the signing of the license agreement.

You can introduce a customer to a financing party. You can do a rate buy down. Interest cost, if charged to i2, is

removed from commissionable and recognizable license revenue. AVOID:

Do NOT commit to pay the financing company ANY amount of money in the event of default from the customer even if the amount can be quantified.

Do NOT execute an underlying agreement that contains extended payment terms.


Acceptance Criteria, Expected Results, and Warranties

Acceptance criteria cause deferral of all license, possibly even any portion not subject to the acceptance provisions.

Offering the customer additional consideration in return for acceptance will result in cash basis accounting since this equates to a concession.

Acceptance criteria should not be included in consulting arrangements. If it must be included, at a minimum we should state that the acceptance does not apply to the Licensed Software.

Expected results documents should clearly be marked as “for informational purposes only” with no payment of the license amount tied to performance or attainment of milestones.

Any alteration of the standard license agreement warranty provisions may cause a revenue recognition problem and deferral of license.


Performance Payments

Do not tie performance payments to the total license amount in the contract.

If any payment is tied to the attainment of performance goals, it should be separated from the initial license and classified as a performance payment or bonus payment.

Such performance payments are recognizable only upon completion of the specified performance criteria.

Classification of performance payment revenue is dependent on the nature of the payment.

Written documentation from the customer recognizing the attainment of the performance goals should be obtained to ensure recognition.


Customization of Software(Formerly Joint Development)

Do NOT reference Customization of Software or JDP in the license agreement even with no commitment to specific development efforts.

If - Customization of software is included in a license agreement

Then – License revenue is usually recognized on a percentage of completion basis.

Customization must be negotiated separately from the license agreement (i.e. several months apart).

Customization agreements executed in close proximity to a license agreement will result in the two agreements being treated as one agreement.


Future Discounts If a future discount is greater than the discount

currently offered in the contract, and the maximum amount of future discount promised is not quantifiable, then revenue for each element in the contract will be reduced by the rate of the incremental discount promised.

This will require pricing support by product if granted in an agreement via the pricing configurator.

Future discounts on additional users, renewal of term license, additional spokes, etc. must be assessed when offered at time of sale.

Example: If a 30% discount in granted in the current agreement, and the customer is offered a 40% discount for 12 months after the effective date, 10% of the net license of the current deal will be deferred. This amount will be recognized ratably over a 12 month period.


Content Reference Databases Content reference databases are currently sold on an

annual subscription basis. Reference database revenue is recognized over the term

of the subscription. Maintenance is included in the annual subscription. Types of content databases:

Reference Content Products :VIP Database, LCP Database, VIS Database, MRO Database

Custom Catalogs Maximum discounts on Content subscriptions = 15%.


Hosting (Customization and Configuration)

Hosting during implementation is not free. If it is given away or discounted, this will result in a

carve-out from license. Find out if hosting is needed based on the products you

are selling before your customer executes the deal. Contact Scott Milward for specific pricing estimates and

questions.


Other Revenue Recognition Issues in a Traditional License Agreement

Reciprocal Agreements: Separate contracts signed within a short time frame

from one another are regarded as ONE agreement. Reciprocal arrangements include:

Services agreements (including SOWs) JDP agreements Equity transactions (must have i2 Ventures approval) Purchases of assets

Reseller arrangements generally do NOT result in up-front license revenue.

No option to return/exchange the software except as noted in our standard warranty language.

Purchase Order Exception Form Policy.


Other Revenue Recognition Issues in a Traditional License Agreement

Beta Products Beta products are considered undelivered future products. Sale of Beta products in a license agreement that includes commercially

available products will result in the deferral of ALL license revenue for the deal until the GA version of the beta product is delivered.

Concessions are not permitted. Examples include: Reduction of an amount due fee on an executed agreement. Revision to original payment terms. Addition of new products or users at no additional charge or at a significant

discount. Extension of original maintenance term beyond 1 year. Signing a rate buy down agreement after the license is executed.


Contract Negotiations Legal and Practical Issues

i2 Legal

i2 confidentiali2 confidential


Introduction

The purpose of this presentation is to discuss the typical legal issues which arise in contract negotiations, and to give you a brief on what Legal requires from you in order to do its job.

You will also hear about business issues which may bring about discussions with the legal department during document preparation and negotiations.

YOU WILL BE TESTED ON THESE SUBJECTS – every day during your i2 employment!


First Step - NDAs

Your first dealings with Legal should always be to request an NDA for your prospect. You will receive no contractual documents without an i2 NDA in place.

An NDA must be executed before you may disclose any i2 non-public information. Failure to adhere to this requirement jeopardizes i2’s business.

To receive the NDA, go through the i2 Intranet – Corporate Services, Legal, NDA Request. Historically, it takes less than 24 hours for you to receive an NDA if you use this process properly, however, end of quarters and other circumstances may cause the turn time to be greater than 24 hours.


Recap on NDA’s

ALWAYS have a valid NDA in place, you will not get legal documents until such NDA is accepted, executed, and logged.

The NDA may be obtained by requesting one through the i2 Intranet web page.

Turn time is generally less than 24 hours. Do not request NDA’s directly from Legal – always use the web

page. If it is urgent, state that in the remarks section.


Second Step - Deal Sheets

Deal Sheets must be approved before Legal will issue any contractual documents.

Legal is notified electronically whenever a deal sheet is approved.

Legal will structure the contract exactly as it is set out on the deal sheet.

If you need changes after the deal sheet is approved, contact “Deals” via email and have them reject the approved Deal sheet. You may then submit the changes for approval, at which time Legal will be notified to make the changes.


Recap on Deal SheetsSimple – No approved Deal Sheet – No Master

Agreement or Addendum thereto.

Note: Once the deal sheet is approved, generally, Legal will not need to contact you. However, you should email the proper customer address to your legal rep, and answer any other questions they may ask. Please understand, specific deals may require Legal to address business issues with you in order to complete the documents and/or negotiations, in other words we need to know what we are negotiating. All documents will be returned to you, not forwarded to the customer.

Legal understands that the initial deal as approved is not cut in stone; you will probably require changes as the deal comes closer to close. Keep in mind, changes may require resubmission of the deal sheet, or further discussions.


The Master Agreement

Always present to the Customer the i2 standard Master Agreement and push hard to use that document. Remember, the Software is only licensed, the asset remains i2’s – therefore, i2 prefers to use its own license terms.

Legal spends a great deal of time continually upgrading the Master Agreement to keep it in compliance with industry standards and in accordance with i2’s business initiatives.

Keep in mind, if i2 is forced to use a customer document, which it rarely does, it will always INCREASES YOUR SALES CYCLE.


Legal Involvement The following is a brief outline of the provisions which legal will take the lead in

the negotiation cycle.

1. Product warranty i2 warrants the software will conform to the documentation or i2 will fix

or provide a work-around acceptable to the customer. i2 warrants for 6 months from the effective date of the Agreement The

negotiation may increase this period to a certain degree, however we try not to ever increase the 6 month period.

warranties beyond this require special review and negotiation. Do not include performance warranties; the deal cannot book. i2’s agreement contains a standard warranty disclaimers –

merchantability and use for a particular purpose are not appropriate to a software license.

DO NOT confuse warranty with maintenance – they remain two different issues.


Legal

2. Infringement indemnity: i2 retains all ownership rights, and therefore will indemnify and

hold harmless the customer should a 3rd party file an infringement suit.

Should an infringement occur, or in i2’s opinion be likely to occur, i2’s agreement provides for replacement, modification or limited refund, all in accordance with industry standards.

Please note, there is little room for negotiation in the infringement indemnity section.


Legal

3. Confidentiality In addition to the NDA, the License Agreement contains

additional non-disclosure provisions which remain in effect for the license term, as well as account for the specific protection of the Software, Documentation and other information disclosed under the Agreement, but solely in the agreement. It does not take the place of an NDA.


Legal

4. Maintenance/Support Provided the Customer elects and pays for maintenance, i2 shall

provide telephone support, updates, enhancements, etc in accordance with the Plan selected by Customer.

Remember - enhancements do not include new products, which are separately priced and marketed. This is your opportunity for future sales and upgrades.

Support options are as follows: Silver, 5x8, for 18% of net license fee, Gold, 7x24 for critical downs, for 20% of net license fee and Platinum, 7x24, 23% of net license fee – always check your price book for changes that may occur in maintenance pricing.


Other things to remember

1. Services are performed on a time and materials basis, billed monthly. As all services shall be built upon existing i2 intellectual property, anything developed shall remain the sole property of i2.

2. Joint development work is separately negotiated and requires corporate participation, JD most likely will effect booking, always talk with Rev Rec to assure revenue can be recognized.

3. i2 has implemented an international tax structure where an i2 wholly-owned Dutch subsidiary will be the preferred licensor for all Agreements outside of the USA. The terms and conditions of their MA are the same as those in the US Agreement, except for local laws.


Recap of Legal Involvement

Legal will assist you with negotiating these provisions and requirements: Non-disclosure/confidentiality agreements Warranty Indemnification Ownership Limitation of Liability Assignment Acceptance Criteria

The above are the issues which seem to bring about the most discussions with customers. Do not be concerned, we deal with them everyday and have successfully resolved them in every instance. Keep in mind, for the most part, i2’s standard license is very fair to the customer.


Other Legal Business

While the NDA and the Software License Agreement are the most requested documents, i2 also provides the following agreements: Consulting, VAR, Reseller, Alliance, Federal Teaming,

Subcontracts, Finder Fee, Temporary License, SOAs, Service, Demo License, Planet Sponsor, Equity, Web Based Training, Public MarketPlace, ASP, Joint Development, and whatever other type of agreement which may be required to meet the needs of i2 and its customers.

Legal also files all requisite documents to assure i2’s assets are protected (patent applications, trademark filing, tradename registrations etc.)

Legal handles all legal processes that may be required by the courts or the government (Securities Exchange, Equity ventures, etc.)


What i2 can NOT accept

Regardless of the type of agreement, i2 cannot assume unusual or future obligations examples of unusual obligations are

performance guarantees Refunds or credits commitments to new or improved functionality Acceptance or test periods Customer ownership of developments Extensive warranty periods Free maintenance periods Perpetual support availability Perpetual maintenance caps


Collection and Shipment

Remember, it is in your interest and i2’s interest to have license fees paid upon execution of the Agreement – i2 is not a bank .

Shipment is the date the software is shipped by i2 and is controlled by finance.

Delivery is always FOB i2’s facility - i2 pays, this is critical for booking and rev recognition.

You must send a completed Internal Software Release Form to the appropriate people before the software will be shipped. (find form on i2 intranet legal page).

You must complete the PO exception form or fax the PO before the software will ship – this is not a legal requirement, but we must abide by the corporate guideline.

©2001 i2 Technologies, Inc. CONFIDENTIAL

Legal Representatives Bob Donohoo – Corporate Counsel

Carey Dunn - Contract Manager Jeff Garrett - Assistant Corporate Counsel Jim Jorgenson – Associate Corporate Counsel Ryhoei Kakuta – Assistant Corporate Counsel - Japan Kay Klafehn - Manager, Legal Operations Keith Larney - Associate Corporate Counsel Doug Linebarger – Assistant Corporate Counsel Kathleen Lisowski -Contract Manager David Menefee – Assistant Corporate Counsel Peter Mittereger – Vice Corporate Counsel – Europe Azmeen Moiz – Assistant Corporate Counsel - APA Roxanne Morgan -Assistant Corporate Counsel Lois Ross, Contract Manager Cynthia Yamagata – Contract Manager


Legal Assistants

Shea Dugger (to Doug, Kathleen, Kay and Keith) Laurie Harris (to Bob, Carey, David and Lois) Natasja Herreman (supports all of Europe – including

Peter) Emmanuel Nathan – (supports all of APAC –

including Azmeen) Christine Thierbach (to Cynthia and Roxanne) Diane Wilson (to Jeff and Jim)

Note: email “Document Control” to get a PDF copy of any customer’s existing contractual document, do not contact the Legal Assistants.


Summary

Legal’s mission is to assist you in closing a deal that is beneficial to i2 as well as the customer; Legal and Sales must work as a unit for i2 to succeed.

Remember to involve Legal in negotiations early in the cycle; before positions are fixed. Doing so can prevent discord and disagreements with your prospect. (Be proactive)

Properly protecting i2’s intellectual property is vital to i2’s success in remaining the industry leader; remember - that is Legal’s main goal.


Together we can assure i2’s success!

So……….


Please feel free to contact any of the Legal team with questions / comments. Remember – we are all shareholders, so we must work together for the success of i2 and ourselves! So - Hop to it, go get and close good business to achieve i2’s goals and make us all wealthy!


i2’s new Pricing for 2001


Agenda

Pricing What has changed? What do I sell? How do I price it? How do I package it? How do I defend it?

Compensation What has changed? How are my sales rewarded?


Key Changes for 1Q01

Fresh Solution Packaging SCM, SRM, CRM solution groups Product names to match Planet / Q1 announcements

Continued emphasis on recurring revenue

Decreased prices; reduced discount levels Simplification: 17-page price book vs. 40

“Our analysis indicates that the market is valuing B2B enablers as just software stocks with no potential to earn economic rents from revenue

sharing or equity stakes in exchanges. As such, we believe there existssignificant valuation upside in the space for investors patient enough to

wait for business models to be borne out.”David M. Garrity, Dresdner Kleinwort Wasserstein, 08 January 2001


What do I Sell? Solutions

SRMSRM SCMSCM CRMCRM

SuppliersSuppliers CustomersCustomers

CLIENT

Common language for communication

Common process for transactions

Why am I wearing green pants?


What do I Sell?Deal Scope Enterprise

Traditional license sale “Inside the four walls”

Private Marketplace Extension of an enterprise to its trading partners One-to-many relationship

Public Marketplace Many-to-many relationship Usually consortia or .com


Enterprise/Private Marketplace Products SCM

Strategic Planning Demand Planning Supply Planning

SCP, FP, RP, Scheduler; or,

Total Suite Value Chain Planner

Fulfillment Planning Transportation Planning

TM, TO, CBO; or Total Suite

EXE Warehouse Management

SRM Design & Mfg Collaboration Negotiate MRO Manager Supply Collaboration Supplier Order Management Strategic Sourcing Strategic Design Lifecycle Planner Ariba Buyer


Enterprise/Private Marketplace Products CRM

Marketing Sell

Catalog Storefront Config/Pricer

Market/Sell Total Suite Demand Collaboration Auction Fulfillment Planning

Customer Order Mgmt Demand Fulfillment BTO Demand Fulfillment Order Promising

Service Parts Planner Click - Service Scheduler Broadvision - One to One

Content Discovery Content Exchange Reference Databases Content Services

Platform Base Platform Marketplace Extension Extensions

Analytical Components Integration Components

Pronto


How Do I Price It?

Develop List Price using resources at cww.i2.com Price book Price configurators

Contact Global Deals Desk @ [email protected] for guidance or questions


Pricing Parameters

Parameter

Enterprise / Private Marketplace

Public Marketplace

Licensing All Standard Types 3-Year Term

Scale factor Customer Revenue Addressable Marketplace Opportunity

Recurring

Elements

Term License

Spoke Fee

Term License

Revenue Share

Industry factor Yes No

Geographic factor

Yes Yes

Users Yes No


4 Standard Deal Types

Standard Perpetual license Move to average discount of 30%

Term license Used to protect scalability for i2 based on unlimited/unlimited

licensing typical on internet apps Flex contract

License for flexible configuration of products at fixed discount Configuration must be determined in maximum 6 months Products must be on current price list

Value-based contract Mark up price by 1.25 Tie 40% to mutually agreed-to business metrics (“at risk”) Remaining 60% paid upfront


Perpetual and Term

Perpetual License – right to use software forever

Term License – right to use software for a fixed period of time Used either to protect i2 scalability or future revenues Avoids cannibalization

0

0

8

3 6 9…

$

$ $ $ $ $


Maintenance

Maintenance is 13% of total i2 revenues 200 people in 7 countries at 13 support centers

Pricing based on level of support Silver – 18% of net license Gold – 20% Platinum – 23%

Required with all contract types Included in price of Hosted Planning only


Selling with Partners

i2 can resell certain partner products Broadvision One to One Ariba Buyer EXE Warehouse Management

Proceeds to i2 are net price less royalty to partner Certain Partners can resell i2 licenses

EDS/ATK “2Source” – SRM suite Broadvision – IFS, Configurator, Pricer, Discovery, Exchange Ariba – Certain SCM applications

Proceeds to i2 in form of royalty from partner


How Do I Package it?

Create a Comprehensive Solution Software Maintenance and Support – esp. Gold and Platinum Services – i2 or third party Training Hardware

Understand Investment Alternatives Upfront payment Leasing plans with i2 Financing Partners Value-based contract Hosting with i2 Hosting Partners


Revenue Recognition Traps

Give-aways (e.g. training, consulting, SOAs, etc.) Extended Payment Terms Future Functionality (Products not GA) Future Discounts Acceptance/Guarantee Provisions Term license including maintenance Collectibility concerns Many others… Every deal must be reviewed by RevRec prior to signing


How do I Defend it?

Value Discovery Value Prop Value Assessment SOA

Complete Proposal Benefit-driven solution configuration Value Assessment/Business Case Value Delivery and Deployment plan

FAQs/Objection Handling Guide available on intranet


Leasing


Leasing Program

i2 customers may finance their software through leasing companies.

By financing, i2 receives the funds for the software upfront, while the customer pays the leasing company over a period of time, perhaps quarterly or once each six-months.

Financing has benefits for the i2 sales force, i2 as a company, and the customer.

For details on financing, logon to the intranet, go to the sales support page, and click the link for the leasing program. Jeff Edwards can also offer assistance at 469-357-6641, or Gary Siemer at 469-357-3897.


Example of Traditional Transaction Vs. Financed

Traditional

(15,000)

(10,000)

(5,000)

-

5,000

10,000

15,000

1 2 3

Year

$ in

Tho

usan

ds Outflow

Benefit

As a sample of the benefits to the customer, consider the traditional transaction, with the customer paying the license fee upfront, allowing i2 to recognize revenue, but with the actual benefits to the customer starting in the second year of the relationship.


Example of Traditional Transaction Vs. Financed (Continued)

Financed

(4,000)

(2,000)

-

2,000

4,000

6,000

8,000

10,000

12,000

1 2 3

Year

$ in

Tho

usan

ds

Outflow

Benefit

Now consider the alternative where a customer finances the same transaction, more effectively matching the payment stream to the benefits received. This could be a powerful negotiating point.


Steps in a Leasing Transaction

1. Determine that the customer is interested in a leasing transaction.

2. Contact one or more leasing vendors for a credit check and/or a quote - the quote may contain actual payment terms, a leasing factor, or simply a rate. The leasing companies are interested in our business and will work to give us the information we desire.

3. Work with i2 legal and/or treasury departments to structure the deal properly and allow revenue recognition.

4. Close the deal and get paid!


Leasing Structures

Capital Lease Customer carries lease on balance sheet Asset is depreciated over useful life Generally, customer must use capital budget to cover

obligations Operating Lease

No balance sheet impact Lease expensed over lease period

©2001 i2 Technologies, Inc. CONFIDENTIAL Slide 1.

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