Questions and Answers Some questions that may arise about our Strategic Management Consulting Services as they relate to Engineering Architecture and Construction Could you tell us about your firm's background? We are a strategic management consultancy firm that provides solutions in business strategy. That means that we are a consultancy that provides business management solutions at a strategic (big picture) level, rather than a tactical (local) level. Though we manage tactical strategies as well, we incorporate the tactical solutions as a part of the strategic solutions. The firm as Seneca, started 22 years ago in the management of architectural, engineering and construction industry in the United States. We have provided consulting services in various business sectors on over 600 project assignments. These assignments were performed in the public and private sectors. They related to the healthcare, oil and gas, utilities, manufacturing and retail businesses. Over the years we developed unique solutions to business problems which worked very well for our clients. They were able to derive a lot of tangible and intangible benefits. With the advent of recent technology, we were able to expand upon our techniques with software and networked communications. . Tell us more about the strategic management service that you have to offer. Strategic Management looks at a business from a big picture perspective. It thinks in terms of strategy ­ forecasting, planning and implementing ways to address oncoming problems, It finds ways to derive the most benefits for the least cost in doing business. It creates value for the owner, shareholder or taxpayer in tangible and intangible form. Are there any other firms that provide strategic management? Yes, American firms such as McKinsey and Accenture or the French firm Cap Gemini Ernst & Young are in this business; though not exactly in the manner we are. What makes you different from these firms? These firms evolved from a background of being accounting firms or a business administration firm. They are also referred as systems integrator which as the term implies means that they bring in consultants and/or software and integrate a solution. In contrast, we work in a different niche. We focus on our core competency in the context of efficient business basics of 'Capital Efficacy™'. This is focused on "creating capital, spending capital, monitoring capital and oversight of capital" within the context of a business. This competency permeates into a business through discrete business functions (which in their software form are an advanced version of what ERP II used to be). Furthermore these discrete business functions are integrated with Optimized Value Network™ (which is a supply chain and a demand chain optimized between businesses) for each transaction. Thus the benefits and efficiencies permeate within a business as well as interrelate between businesses. We then take this basic core of doing efficient business to various industries that we have been operating in, such as the Architecture, Engineering, Construction, Healthcare, Manufacturing or Utilities. We go deep into the business processes with the knowledge of the industry. We create new strategies and support them with integrated software. In summary, we bring to the table a combination of depth in industry knowledge and business knowledge to create and implement strategy. . We can get things done just fine without you. Why can't we continue doing things our way? It has worked so far after all these years. Why do we need strategic management now? Yes you can continue to do things the present way. However we want to introduce you to the ways that many leading companies are beginning to deploy. Surveys indicate that strategies being created right now will form a basis of doing business over the next foreseeable ten to twenty years. This is so because we are undergoing a transformation both, of doing business internally as well as with each other, on a global level. What is Program Management in the context of Strategic Management. Program Management is a term that means overseeing, developing and implementing a long term program. It is a term used in construction (and other capital-intensive industries) to serve as an umbrella management over individual assignments. This generally includes for each assignment: Needs Assessment, Budgeting, Financing, Resourcing, Procurement, Contract Management, Inventory Management, Production and Fabrication, Logistics Warehousing and Transportation, Financial Management and Oversight. These functions are managed strategically for a cost-effective and efficient delivery of one or more assignments. How does software fit into the big picture? The strategic techniques of the business functions are translated into software which is available on the internet via an ASP (Application Service Provider) model. In this context we are creating integrated content and techniques that were once referred as ERP II (Enterprise Resource Planning II), EDI (Electronic Data Interchange) and Supply Chain Management. Our techniques have wider applications, are more efficient, better integrated, easier to use and cost-effective. The strategic functions are still based on human review, planning, judgment and course of action. Once strategy is set, the software can take over the automated, repetitious and less productive chores with better efficiency and accuracy; but produce very substantial results on an on-going manner. Can't we just use the software like a lot of other software? Why do we need your consulting services? Yes, you could use the software, but after some strategies are set in place in consultation with the end-user, senior management and training of your staff. But we already know how to buy on the internet. What is it that you are doing that is different? We use the internet as a means of communication (the old EDI function) ­ but with additional functionality. The software provides and facilitates the organization's internal enterprise functionality. Furthermore we use the technology as a tool to strategize and facilitate supply chain management and demand chain management. Thus we use the internet not as a broadcast media but as a functional work surface and the means of communications. It is much, much more than just buying on the internet. We think you are just an expensive consultant throwing around some new words to make yourself look good. We don't want any more consultants telling us what to do. However, we are curious to how your participation adds value to what we already do. We add value in tangible and intangible ways. We add to your net operating margins in a tangible and substantial percentage, in turn, increasing the value of your organization. The effects are noticeable with each transaction. The results could be in the savings of millions of US$ per transaction, from the budgeted funds. We provide knowledge, know-how, means and methods to do business that may have escaped you because of your specific industry, location, resources, or knowledge. This in turn increases net profit margins tangibly, as noted earlier. Once you feel comfortable with what we do and how we do, we will get together and discuss your financials to determine how our participation is meaningful to your present state, future growth and competition. We will discuss returns on your investment (as our fees) to make it worthwhile to you. We don't have any money to pay you. What do you charge anyway? We will create money from within your present budgets so both you and ourselves can get the benefits. Our engagement helps save enough money to pay for what we do, many times over. We are a self-funded service, paid as a small percentage of the transaction or a big percentage of the savings commensurate with our risk level. Our software license fee, fees to our consultants and agents, overhead and profits are paid from within this transaction payment. Either way, the downside risk to you is minimal to none. We have to create value for you to earn our keep. We do not charge an upfront fee for the sale of services or software. We do charge a small retainer upon engagement which is applied towards the fees. Please refer to our document that details the increase of Market Capitalization of your firm and the Return-on-Investment of your payments to us. These are calculated on both of the methods noted above. Is there someone else that uses management consulting services such as yours? The financial industry (as a lender), generally requires the borrower to assure that the borrowed funds will be used fairly and wisely, leading to a successful outcome of the borrowed funds. To that extent they require and lend to engage a service such as ours. World Bank is one example. Can we talk with someone who understands what you do? And who has had the experience of using your services? Certainly, we could make arrangements for you to talk with other users. As a courtesy to them, however, we would like to let them know about your impending contact. You may contact us at info@shubnum.com to forward your request. Sounds interesting, tell us more about this strategic management services. Where else can we apply your techniques? And remember we don't have any money to buy anything, let alone your services. We discussed business functions earlier. These are such items as Needs Assessment, Budgeting, Financing, Resourcing, Procurement, and such. We use leading edge business practices for these functions, which comply with the latest Industry Standards. We monitor and incorporate practices used by leading practitioners from institutions such as the Harvard Business School, Institute of Supply Management, The Conference Board and the World Bank, World Trade Organization and the European Union. We apply these practices to various horizontal and vertical markets in the public and private sectors. We also assist in arranging financing and necessary political risk insurance for large capital outlay projects. How would you set up your Strategic Management Services for the Construction Industry in general and Engineering and Architectural services in particular? We would provide strategic management services as Program Managers and then tactical management services as each phase of the program develops into a real project. The entire operation could be spread over several years. Consider the following scenarios all of which not only have a common theme of construction, but also expenditures of large amounts of capital; in the range of say, US$10 million to over US$ 500 million. A local government is considering the expansion of a local shipping port to accommodate larger shipping vessels An oil company is looking to expand an oil refinery to increase production capacity and a new rail spur direct to the shipping port. A group of investors is looking to develop a large tract of land for light commercial/industrial use where new technology firms could set up offices and production facilities. A state government agency is looking to expand its telecommunications infrastructure involving a series of antenna and repeater station sites for satellite reception and transmission. A state government is looking to set up an extension of a roadway and railway link to a new population center. A federal government agency is looking to expand its health facilities in rural areas but with links to access modern diagnostics equipment and facilities in urban areas. A group of investors are looking to invest private funds (with appropriate returns) in creating and upgrading educational facilities in a region (that is not served at present), with new educating techniques and content; so their children could grow up to compete in a modern world. A group of investors is planning to set up a new textile mill and is also looking to set up a distribution network to move the finished goods to the world markets. A city government is looking to expand the street lighting, power, telecommunications, sewer and water utilities with due considerations to the environment and use of solar energy. A farmers Cooperative in a remote region is interested in setting up distribution centers and satellite interlinks to customers worldwide, in a private extranet exchange. They are interested in managing the contracts with the customers and working out the logistics to transport and deliver the raw products to the processing plants. Furthermore and at a later date, they are interested in setting up a processing plant locally and ship only the concentrates directly to the final process and packaging plants 5000 to 10,000 miles away. Lastly, they wish to set up and manage a worldwide distribution network for the final product delivered to the consumer at a retail store. You will notice that such endeavors require a wide variety of business and technical skills, though in simple terms they are all related to the construction industry and involve large expenditures of capital. Our job is to assure that these assignments can be done, that capital is created for the needs, that it is spent wisely and in accordance with pre-set rules, that capital is managed well along the way and that the flow of capital has a transparent oversight by someone removed from the close-up management. On a strategic level, we would serve as Program Managers who would review long term goals, set up strategies to implement them and coordinate all participants. We would review the feasibility in needs, functions, budgets, schedule, oversight and monetary returns of the investor/lender for the overall program, On a tactical level we would set up a Resourcing Program, an Acquisition Program, Logistics Program, a Contract Management Program and a Construction Management Program for each of the projects under consideration. These programs would comply with the requirements of the project for financing, legal requirements, construction functionality, budgets and schedules. We would work with the Architect and Engineer of Record ahead of time to assure that work is accomplished and delivered as planned. Even though the above assignments reflect 'Big Picture ­ Large and long term', projects in the construction industry, we work on many assignments that are a small part of the big picture. These short term assignments can be incorporated with a short training session and subsequent use of software. We have some good friends in the healthcare industry. They are always short on money. Then there are friends in the utilities industry and in the oil business that are developing their plans for future. Would your program work for them? Yes. We could most definitely help your friends in these industries. The program would work in a similar manner as the construction industry example. However it would be tailored to the specific needs and practices within that industry. The things that you are working with, are desirable to have for our organization ­ may be even for our country. Can you come by and talk with our people? We would be glad to discuss this further. We only ask of you to please think about some basic questions regarding your organization, so it could help us focus on the needs of your organization. These questions are noted in the section Questions to Consider.