Government Exhibit Unmarked [Non-designated testimony redacted]
| 00285 | | 1 | UNITED STATES DISTRICT COURT | | 2 | FOR THE NORTHERN DISTRICT OF CALIFORNIA | | 3 | SAN FRANCISCO DIVISION | | 4 | --------------x | | 5 | UNITED STATES OF AMERICA, : | | 6 | et al., : | | 7 | Plaintiffs, : | | 8 | v. :CASE NO. C-04-00807 (VRW) | | 9 | ORACLE CORP., : | | 10 | Defendant. : | | 11 | --------------x | | 12 | SOME PORTIONS DESIGNATED HIGHLY CONFIDENTIAL | | 13 | | | 14 | | | 15 | Deposition of DAVID L. DORTENZO | | 16 | Volume II | | 17 | Washington, D.C. | | 18 | Tuesday, May 18,2004 | | 19 | 9:30 a.m. |
| 00290 | | 2 | DAVID L. DORTENZO | | 3 | having been duly sworn, testified as follows: | | 13 | Q During Mr. Brown's analysis, examination, I | | 14 | believe you testified that in many implementations | | 15 | localizations are required? | | 16 | A Yes, I did. | | 17 | Q What are localizations? | | 18 | A Localizations have to do with regulatory or | | 19 | financial reporting requirements that are necessary by | | 20 | local jurisdictions, whether they be governmental or | | 21 | whether they be agencies in different countries. | | 22 | Localizations usually require tailoring of | | 23 | the software to manipulate data that can be made | | 24 | available for reporting purposes for the regulatory | | 25 | and federal agencies. |
| 00291 | | 1 | Q And how is the -- the software tailored, as | | 2 | you say? | | 3 | A There are two ways the software might be | | 4 | tailored. We might take data from the database and | | 5 | create a specialized report that would report that | | 6 | data and that information for the purposes. | | 7 | In some cases, depending on the business | | 8 | requirements associated with that localization, it may | | 9 | require custom reporting. So, it might require some | | 10 | actual customization, software customization in | | 11 | certain cases, or reporting customization, so that the | | 12 | requirements can be met. | | 13 | Q What is software customization? | | 14 | A Software customization is the process | | 15 | whereby a technologist will go into the source code | | 16 | and they change to the source code so that the means | | 17 | of manipulating the data would be different than what | | 18 | was originally shipped with the software package. | | 19 | Q And is that something Deloitte does? | | 20 | A We, on rare occasion, will do that. It's | | 21 | not a core part of our business. | | 22 | Q Does Deloitte perform localizations for | | 23 | clients? | | 24 | A We do do perform -- sorry -- we do perform | | 25 | localizations for our clients. We may do that -- we |
| 00292 | | 1 | may do the requirements and hand off the technical | | 2 | development to either one of our subcontractors or a | | 3 | third party. Again, we do that on our own basis. | | 4 | Q But Deloitte would hire a subcontractor to | | 5 | do that? | | 6 | A That's right. | | 7 | Q Are localizations required for Oracle, | | 8 | PeopleSoft, SAP and Lawson software? | | 9 | A Yes, they're required. They're usually, | | 10 | independent of the software, they're required by the | | 11 | local governing bodies. | | 12 | Q I've seen in the -- in some of the | | 13 | documents produced by Deloitte reference to, I think, | | 14 | it's a fit-gap analysis? | | 15 | A Yes. | | 16 | Q Are you familiar with that? | | 17 | A Yes, I am. | | 18 | Q What is a fit-gap analysis? | | 19 | A Fit-gap analysis is a part of our system | | 20 | development life cycle methodology, it has to do with | | 21 | business requirements. And typically what we will do | | 22 | is we'll go into a client environment, and we'll | | 23 | understand their business requirements, understand | | 24 | what their intended business process work flow would | | 25 | be, what data is required to support that work flow, |
| 00293 | | 1 | and what reporting or information management might be | | 2 | required to support that business process. | | 3 | Typically that constitutes a requirement | | 4 | specification. We take the requirement specification, | | 5 | in some cases -- well, in all cases, I guess -- and we | | 6 | will map that software or that specification to the | | 7 | software to understand how the business software will | | 8 | support those business process requirements, the data | | 9 | requirements for the information management | | 10 | requirements. | | 11 | The result of which ends up as a gap | | 12 | analysis or a fit analysis. So if the software | | 13 | inherently fits the business process, at all, then | | 14 | there's a fit. And if there is a lack of fit or the | | 15 | fit is not quite as expected by the client | | 16 | organization then that would result in a gap and we | | 17 | would call it, obviously, a gap. | | 18 | So it's a fit-gap analysis that would | | 19 | correspond to the business requirements that would | | 20 | identify where there might be fits or gaps. | | 21 | Q And if there's a gap you call that out for | | 22 | the client? | | 23 | A We will do that, yes. | | 24 | Q And what will you -- will you make any | | 25 | suggestions to the client in terms of what can be done |
| 00294 | | 1 | to fill the gap? | | 2 | A We do do that. It's not automatic that we | | 3 | would do that. Sometimes the clients are looking for | | 4 | a degree of fit with a particular software vendor. | | 5 | Sometimes they're looking for the actual solution of | | 6 | how to get around that. | | 7 | There could be different ways to resolve | | 8 | that particular issue, some of which involve changing | | 9 | the client's business processes. If they are -- | | 10 | sometimes they're anti customization. They don't | | 11 | really want to pay for or they're concerned with the | | 12 | risk of customization in terms of maintenance and | | 13 | reliability, so sometimes they won't even go that far | | 14 | in terms of identifying the resolution of a particular | | 15 | gap. They may change their business process. | | 16 | On the other hand, we do understand what | | 17 | the gap might entail, and different ways to work | | 18 | around that gap or different ways to resolve that gap, | | 19 | sometimes, which would result in the customization | | 20 | which would require specification of design and build, | | 21 | etcetera. | | 22 | Q When you say some clients are anti | | 23 | customization, what do you mean? | | 24 | A There's -- basically when the software is | | 25 | shipped -- when the software is sold, I should say -- |
| 00295 | | 1 | all the clients that I've ever dealt with have bought | | 2 | these software vendors' maintenance that goes along | | 3 | with that software package. | | 4 | The software is updated by the software | | 5 | vendors on a periodic basis, and the basis can vary by | | 6 | particular vendor. Customization may entail the fact | | 7 | that that source code, as I mentioned earlier, could | | 8 | be changed. | | 9 | If that source code, if it's the case that | | 10 | the source code is changed, and the software vendor | | 11 | comes out with a subsequent release of the software or | | 12 | an updated version of the software, or a patch of the | | 13 | software, that software update, patch or release might | | 14 | interfere in the event that a customization had been | | 15 | made to the software. And, therefore, the client | | 16 | would not be able to maintain its course very easily | | 17 | on the maintenance program that the vendor has set up. | | 18 | Therefore, if clients have a concern that | | 19 | they're not going to be able to be enabled by the | | 20 | release process, and that a customization might, | | 21 | perhaps, interfere with that release process, they may | | 22 | be hesitant to customize or hesitant to -- to follow | | 23 | that course of action. | | 24 | Q And they're hesitant because they're | | 25 | worried that they will have to spend additional |
| 00296 | | 1 | dollars down the road when new releases or patches or | | 2 | upgrades come out to do further customization? | | 3 | A That is correct. Depending on the degree | | 4 | of customization they might be worried that they fall | | 5 | completely off of that vendor's migration strategy for | | 6 | a longer period of time. | | 7 | So if the degree of customization is high | | 8 | or longer in the front end, and it becomes difficult | | 9 | to maintain the software product based on the vendor's | | 10 | release strategy, then they would have to spend time | | 11 | or dollars or schedule interruptions or maybe business | | 12 | interruptions, depending on the degree of | | 13 | customization, and if the magnitude of that process | | 14 | grows to a point where it's unmanageable from a cost | | 15 | or business perspective then the clients would not | | 16 | want to be on that path, typically. | | 17 | Q Could you give me some examples of clients | | 18 | that you're aware of, of Deloitte, that are anti | | 19 | customization? | | 20 | A Well, I would say by and large the going in | | 21 | position of clients, nowadays, is to be anti | | 22 | customization. So, I would say in most cases, | | 23 | generally speaking, our clients will be anti | | 24 | customization. | | 25 | When we do the fit-gap analysis, and we |
| 00297 | | 1 | talk about solutions in the event that a client is | | 2 | unwilling to change their business processes, then if | | 3 | a customization is even feasible what we generally do | | 4 | is go back with a client and go through a business | | 5 | case analysis that says if they're going to spend "X" | | 6 | amount of dollars to make this customization then why | | 7 | should they do that, this is generally a question we | | 8 | usually ask our clients to ask themselves internally, | | 9 | in that process we encourage senior managements in our | | 10 | client organizations to go back and investigate what | | 11 | good business rationale might exist for them to | | 12 | undertake that customization process. | | 13 | In some cases, not all cases, our clients | | 14 | will proceed with customizations. In the event they | | 15 | proceed with customizations, and there are some | | 16 | examples of clients who have declined and denied those | | 17 | customizations and tried to stay pure vanilla, or some | | 18 | of the clients who have actually gone on and done | | 19 | customizations. So, there's examples on both sides of | | 20 | the equation, Chris. | | 21 | Q Is it fair to say that part of your | | 22 | practice at Deloitte is advising clients on how to | | 23 | change their business practices in order to, in the | | 24 | sense, fit the software? | | 25 | A That-- that is the case. |
| 00298 | | 1 | Q And could you explain that, please? | | 2 | A Well, yes, the vendor software that's on | | 3 | the marketplace today is very flexible from the | | 4 | standpoint of there are multiple means of configuring | | 5 | that software to satisfy business requirements. | | 6 | It's our job to try to make those | | 7 | implementations go as smoothly as possible. And one | | 8 | of the best practices in making it go smoothly is to | | 9 | try to avoid the customization path. | | 10 | What we will do is understand that | | 11 | flexibility that's associated with the software | | 12 | product. And we will try to explain different | | 13 | methods, i.e. that flexibility to our clients, so that | | 14 | they understand the various alternatives in setting up | | 15 | that software to meet their business processes. | | 16 | If it's the case, again, that that software | | 17 | doesn't exactly meet their requirement, we might talk | | 18 | about customization, in which case, again, we try to | | 19 | weigh the pros and the cons, whether it be costs or | | 20 | whether it be maintainability, at some point, and then | | 21 | try to make the best decision for the client | | 22 | situations in that case. | | 23 | If we decide against the customization then | | 24 | it almost always requires a client to go back and | | 25 | adjust its business processes so that they can avoid |
| 00299 | | 1 | that customization. | | 2 | Q And when you're talking about degree of fit | | 3 | in terms of software from Oracle, PeopleSoft or SAP, | | 4 | are you talking about the fact that those software | | 5 | packages will not necessarily meet all of a client's | | 6 | needs? | | 7 | A Let me try and understand your question. | | 8 | If we're talking about those four products when we go | | 9 | through fit-gap analysis probably in all cases those | | 10 | softwares won't meet a hundred percent of the | | 11 | requirements, but the concept is that the -- those | | 12 | software products will meet a great degree of those | | 13 | requirements. And a great degree could mean anything, | | 14 | at least in my mind, from probably 75 to 85, 90 | | 15 | percent. | | 16 | In all cases none of these software | | 17 | products, to my knowledge, have all the report | | 18 | requirements configured. So, there is, in each and | | 19 | every implementation that I've ever been involved | | 20 | with, in all the different vendors that I've worked | | 21 | with, there's always tailoring in the software that | | 22 | has do with that flexibility and different options; | | 23 | there is reporting required that is I like to call it | | 24 | personal or more related to a particular company's | | 25 | needs; and the vendors can't have everything available |
| 00300 | | 1 | for all those companies. | | 2 | So when we talk about 75 or 85 percent a | | 3 | lot of the difference has to do with the fact that the | | 4 | tailoring the software and doing some of the | | 5 | reporting, and in some case that customization will | | 6 | also be part of that. | | 7 | Q And part of -- part of Deloitte's role is | | 8 | to -- is to take the software from meeting 75 percent, | | 9 | let's say, of the client's needs, and providing | | 10 | bolt-ons and whatever else the client might need in | | 11 | order to try to achieve the client's business | | 12 | objectives? | | 16 | Q I'm talking about software from SAP, | | 17 | Oracle? | | 18 | A It is our job to try to take that software, | | 19 | as delivered from the vendor, and make it, through our | | 20 | business transformation approach, tailor it as close | | 21 | to the client's business needs as we possibly can. | | 22 | Q And part of that might be with what I think | | 23 | you testified last time are called blot-on products? | | 24 | A There could be bolt-on products involved. | | 25 | I think the example we talked about, one example, was |
| 00301 | | 1 | Vertex, which might be specific tax functionality | | 2 | sales and use tax functionality. | | 3 | So, we might take another piece of software | | 4 | from another vendor and interface that into the | | 5 | applications architecture or the solution that we're | | 6 | driving for that particular client, and that might be | | 7 | part of the solution set that we use to meet the | | 8 | client's requirements. | | 9 | Q Are you aware of any sort of standard | | 10 | formula that estimates the amount of implementation | | 11 | costs as a multiple of software license fees? | | 12 | A Formula might be a more formal term than I | | 13 | would use. There are some rules of thumb, if you | | 14 | will. | | 15 | Q Sure. | | 16 | A Those rules of thumbs vary depending on the | | 17 | company's complexity and its architecture and the | | 18 | nature of its operation. | | 19 | I have heard rules of thumb, over the past | | 20 | ten years, that have changed, that have reduced as the | | 21 | market's become more competitive. | | 22 | Initially those rules of thumb were | | 23 | probably three to five times the magnitude of the | | 24 | software cost, today I would say the range is probably | | 25 | closer to one to three times, three being pretty much |
| 00302 | | 1 | on the high end. | | 2 | Q And- | | 3 | A But, again, it depends, it goes back to the | | 4 | company's operations complexity and requirements. | | 5 | Q Sure. The more complex the company the | | 6 | more -- | | 7 | A Higher -- | | 8 | Q The higher the multiple? | | 9 | A That's right. | | 10 | Q And when you say that the rule of thumb has | | 11 | come down from approximately three to five times | | 12 | software license fees to one to three times, you | | 13 | referred to competition, is that competition from | | 14 | BearingPoint, people like that? | | 15 | A I think it's competition on two levels. | | 16 | The software products continue to sophisticate and | | 17 | enhance their functionality, so over time, and this | | 18 | period that I talk about is probably the last 10 or 15 | | 19 | years, the software vendors have sophisticated their | | 20 | products so they are more readily developed to meet | | 21 | the company's needs. | | 22 | The second aspect of the multiplier, the | | 23 | change in the multiplier, is the fact that there are a | | 24 | lot of integrators who are trying to develop | | 25 | pre-defined solutions that are trying to compete using |
| 00303 | | 1 | offshore technologies, and things like that, that have | | 2 | driven the costs of the implementations lower and | | 3 | therefore the multipliers are coming down, the | | 4 | competition has increased. | | 5 | So we're all looking for ways to implement | | 6 | these products on a more rapid basis with less | | 7 | customizations, if possible, and with reduced | | 8 | schedule. | | 9 | Q You used the word integrators in your last | | 10 | answer, what are integrators? | | 11 | A When I saw integrators I refer primarily to | | 12 | company's like Deloitte, also the BearingPoints that | | 13 | you mentioned, could also be IBM, could also be some | | 14 | of the implementation boutiques or their companies, | | 15 | such as EDS, who have Oracle implementation or SAP | | 16 | implementation practices, companies like that. | | 17 | So when I say integrators there's usually a | | 18 | role for a particular external service provider that | | 19 | has to do with trying to take their Legacy | | 20 | environment, manage the introduction of new software | | 21 | products, or any of the bolt-ons and trying to tie | | 22 | that all together, which is the integration job, | | 23 | therefore, system integrators. | | 24 | Q Are you familiar with a company called CSC? | | 25 | A I am, yes. |
| 00304 | | 1 | Q Is that an integrator? | | 2 | A It is an integrator. | | 3 | Q While you've been at Deloitte have you been | | 4 | involved in any implementations of software where the | | 5 | client has used someone other than a Deloitte or | | 6 | BearingPoint, and Accenture, one of the big five | | 7 | consulting firms, to do basically to conduct the | | 8 | software evaluation? | | 9 | A Let me -- restate that for me, Chris. I | | 10 | want to make sure I understand. | | 11 | Q Sure. I want to figure out when you | | 12 | conduct an implementation at Deloitte if you've become | | 13 | aware that a client has used someone other than a big | | 14 | five consulting firm to help it in the software | | 15 | evaluation, maybe it's a Gartner, maybe it's a CSC, or | | 16 | whomever it might be? | | 17 | A We do have situations like that. We have | | 18 | situations, for example, in the public sector, where | | 19 | the firm that might be involved in the selection | | 20 | activity is precluded from doing the implementation | | 21 | starting a little bit on those implementations. | | 22 | Our clients do, it's a growing trend, make | | 23 | more and more use of Gartner and the Meta group, and | | 24 | other firms like that, who are third-party evaluators | | 25 | of the software products that try to understand its |
| 00305 | | 1 | capability and its reach in a particular market, how | | 2 | well it might fit in a particular market. And, yes, | | 3 | we have been involved in a situation where those | | 4 | companies have advised our clients. | | 5 | Q And have you spoken with any of those | | 6 | clients about why they've chosen to use Gartner over | | 7 | Meta Group or some other entity in the evaluation | | 8 | process? | | 9 | A Gartner is the firm that is top of mind, | | 10 | and probably most respected from the research firms | | 11 | vantage point within the software industry. So | | 12 | Gartner becomes the top of the pile, if you will. | | 13 | Some of the other companies have imitated | | 14 | what Gartner has done or they've tried to create niche | | 15 | practices around research that may deal in certain | | 16 | topics, like advanced planning and scheduling, and | | 17 | they may try to exploit a particular business area in | | 18 | an effort to throw their competitive position against | | 19 | the Gartner, but Gartner appears to be or is the known | | 20 | commodity in the business. | | 21 | Q Are you familiar with an SAP product called | | 22 | NetWeaver? | | 23 | A I'm not familiar with it, I've heard of it, | | 24 | but I don't know anything about the product. | | 25 | Q What about Hyperion, are you familiar with |
| 00306 | | 1 | that product? | | 2 | A I am familiar with that product, it's | | 3 | H-y-p-e-r-i-o-n. | | 4 | Q What is Hyperion? | | 5 | A Hyperion is a software product that is | | 6 | utilized for financial reporting or consolidation | | 7 | purposes. It is -- it is also used as a data | | 8 | warehousing or a data management tool set in that when | | 9 | you install Hyperion inside your application | | 10 | architecture, and within your software environment, | | 11 | you would extract data through the Hyperion product, | | 12 | manipulate that data, and use that particular tool to | | 13 | format the different reports and information that's | | 14 | required from the systems, from the Legacy systems or | | 15 | the new software products. | | 16 | Q Is Hyperion sometimes used by corporations | | 17 | that have acquired divisions or subsidiaries that have | | 18 | existing Legacy systems that may not be the same as | | 19 | the system that the -- that the headquarters is using? | | 20 | A That is. | | 21 | MR. BROWN: Vague. Objection, vague. | | 22 | BY MR. YATES: | | 23 | Q You may answer. | | 24 | A That is the case. I've seen it used a | | 25 | number of times in that capacity. |
| 00307 | | 1 | Q How is it used in that capacity? | | 2 | A Company officers are interested in making | | 3 | sure that they report their financial results, | | 4 | particularly when they're governed by the SEC. And, | | 5 | as such, when merger acquisition activities takes | | 6 | place, consolidation activities take place, those | | 7 | financial officers, in particular, are interested in | | 8 | making sure that they have a certain amount of | | 9 | reliability on both their business systems and their | | 10 | business processes so that they can report on those | | 11 | requirements and those regulatory requirements | | 12 | appropriately. | | 13 | A lot of times a Hyperion product will be | | 14 | installed into that particular type of situation. | | 15 | And, as I explained earlier, that data will be input | | 16 | or extracted from Legacy systems into Hyperion and | | 17 | then utilized for reporting purposes. | | 18 | A lot of times that can be -- if I can | | 19 | think of the term -- can be an interim, an interim | | 20 | strategy that CFO's do deploy in these particular | | 21 | situations. | | 22 | So that until a company can either decide | | 23 | what its capital spend will be on these systems or can | | 24 | decide what its information strategy will be the | | 25 | Hyperion solution will maintain the plan for reporting |
| 00308 | | 1 | requirements, in the meantime. | | 15 | Q And talking - let's talk a little bit | | 16 | further about , as I understood your REDACTED | | 17 | testimony had a full Oracle suite in REDACTED | | 18 | place? | | 19 | A They did in their Legacy software REDACTED | | 20 | systems. | | 21 | Q And the side had a full SAP system in REDACTED | | 22 | place? | | 23 | A That's correct. | | 24 | Q And by full ERP I mean it had financial | | 25 | management software, CRM's, supply chain, and human |
| 00309 | | 1 | resource. | | 2 | A ERP, to oil and gas, usually infers to back | | 3 | office accounting functionality, it would include | | 4 | human resource functionality, it would include the | | 5 | downstream business operations, which I think they may | | 6 | have mentioned last time is everything from the | | 7 | refinery gate. | | 8 | So, once the crew comes into the refineries | | 9 | and starts to leave the gate as gas, however that be | | 10 | shipped, whether it be freighter or pipeline, | | 11 | etcetera, everything from the refinery gate through | | 12 | the retail operations, not necessarily including the | | 13 | retail operations, but through the front door of the | | 14 | retail operations, some of the retail functionality | | 15 | was targeted functionality for growth within the SAP | | 16 | and the Oracle applications in those particular cases. | | 17 | But primarily it was back office and | | 18 | downstream operations, did not include upstream | | 19 | operations, which is the refined or the research and | | 20 | development and the exploration up to the final point. |
| 00310 | | 13 | Q And I believe we established last time that | | 14 | People Soft does not have functionality for the oil and | | 15 | gas industry; is that correct? | | 16 | A That is my understanding, yes. | | 17 | Q Is it -- is it fair to say that the term | | 18 | ERP can have a different meaning in oil and gas | | 19 | industry, as opposed to discrete manufacturing? | | 20 | A Yes. | | 21 | Q And I believe you testified last time that | | 22 | -- that Deloitte conducted an analysis for REDACTED | | 23 | of whether should migrate REDACTED | | 24 | its Legacy operations to a -- to an SAP REDACTED | | 25 | application; is that correct? |
| 00311 | | 1 | A The job that was referenced, the project | | 2 | that was referenced, was an ERP strategy study. And | | 3 | the ultimate question was because Legacy ran on REDACTED | | 4 | Oracle, which I think we established last time was a | | 5 | product that had developed and then sold to Oracle. REDACTED | | 6 | Q Right? | | 7 | A And that Legacy operations ran on REDACTED | | 8 | SAP, the question in the CFO's mind, who was our | | 9 | client, was it's going to cost a lot to put both of | | 10 | these operations onto a single platform, because I | | 11 | have two extremely large corporations that we're | | 12 | pulling together. | | 13 | So, my question, paraphrasing him, my | | 14 | question as the CFO would be does it make sense for me | | 15 | to have a single platform or not, does it make sense | | 16 | for that platform to be either SAP or Oracle, and if | | 17 | it doesn't make sense for me to consolidate onto that | | 18 | platform then what would I do. | | 19 | So, that was the purpose of the study. And | | 20 | the result of the study was that over the longer term | | 21 | it did make sense to consolidate onto a single | | 22 | platform, that that would be a multi-year strategy. | | 23 | The cost would be very large, in the hundred, hundred | | 24 | to 200 million dollar range, and that on an interim | | 25 | basis that they could absolutely pursue a strategy of |
| 00312 | | 1 | utilizing, both of those products in a hybrid | | 2 | environment, and that they could establish strategy | | 3 | around middleware to consolidate some of the | | 4 | information from those environments where they needed | | 5 | to for consolidation or for operational reporting | | 6 | processes. | | 7 | Q Do you recall when Deloitte conducted that | | 8 | study. | | 9 | A That study was conducted July of 2000, it | | 10 | began, maybe, in May of 2000, and it actually went on | | 11 | for probably by way of our system accounting probably | | 12 | about nine months. | | 13 | There were a couple of phases to it. And | | 14 | the first phase was about four to six months, and then | | 15 | there was some subsequent activity involved around it. | | 16 | Q So, it's fair to say that it was probably | | 17 | over in the first quarter, first quarter of 2001? | | 18 | A That's right. That's right. | | 23 | Q Did you have an understanding of whether REDACTED | | 24 | has migrated to an SAP platform or any full suite | | 25 | platform? |
| 00313 | | 1 | A It's my understanding that they have not | | 2 | migrated their operations entirely onto SAP, at this | | 3 | point in time. | | 4 | Q And you mentioned they pursued of some | | 5 | middleware strategy, instead. What do you mean by | | 6 | middleware? | | 7 | A Middleware is a technology that's | | 8 | associated with the integration of different | | 9 | technology, whether they be technology infrastructure | | 10 | or software environments. | | 11 | And middleware provides a technical means | | 12 | of extracting data, manipulating that data and | | 13 | reformatting that data so that it's able to be used | | 14 | within a different environment. | | 15 | So, it, in essence, ties together systems | | 16 | and can be used to extend particular functionality in | | 17 | those Legacy system architectures so that a company | | 18 | could deploy a middleware strategy and further evolve | | 19 | some of the functionality that it has as an | | 20 | alternative to displacing softwares. | | 21 | Q Is it-is it fair to say that , for REDACTED | | 22 | capital expenditure reasons, elected to pursue the | | 23 | middleware strategy at least for some period of time? | | 24 | MR. BROWN: Objection. Nevermind, I | | 25 | withdraw the objection. |
| 00314 | | 1 | A pursued that strategy more so because of REDACTED | | 2 | the scale of their operations and the need, based on | | 3 | the consolidation of these two corporate entities, the | | 4 | need for extended functionality and reporting. | | 5 | The SAP implementation and strategy that | | 6 | eventually was developed would be that the REDACTED | | 7 | organization would migrate to SAP over a period of two | | 8 | to three years. | | 9 | So, the challenge for that CFO became what | | 10 | do I do in the meantime, where I need to have | | 11 | improvements made to my business or to my information | | 12 | technology infrastructure, again, either software or | | 13 | hardware. | | 14 | So, he was not willing to necessarily stand | | 15 | still. And there were a lot of Legacy applications | | 16 | that had been developed in the environment that REDACTED | | 17 | were very germane and very specific to the business | | 18 | requirements that existed in the oil and gas sector, | | 19 | because many of the software vendors had not evolved | | 20 | their softwares along that capability. | | 21 | So, there were some very unique and very | | 22 | well developed software, in-house software, I should | | 23 | say, that had high levels of utility and low degrees | | 24 | of technical sophistication that were still very good | | 25 | tools, from a business perspective. |
| 00315 | | 1 | So to try to leverage those particular | | 2 | tools, without having to traverse that whole two to | | 3 | three year implementation timeframe, they might take | | 4 | some of those Legacy applications that were highly | | 5 | functional and then leverage them into that | | 6 | environment by use of middleware, or by sending that | | 7 | functionality through some of the development that | | 8 | went along with the middleware. | | 9 | Q Do you have an understanding of what sort | | 10 | of internally developed in-house software was being | | 11 | run at ? REDACTED | | 12 | A I do have an understanding. One example | | 13 | would be in their supply function. So, as they tried | | 14 | to -- they tried to forecast their business | | 15 | requirements around production, around what the supply | | 16 | side of the business might require from the standpoint | | 17 | of gasoline production into the different markets that | | 18 | they served, they would certainly try to forecast | | 19 | those production requirements and then manage | | 20 | backwards into its inventory. | | 21 | There were some, and then, of course, | | 22 | supply then leads backwards into the distribution | | 23 | function into the terminals back to the refinery and | | 24 | back to the upstream operations. | | 25 | So many of the operational business |
| 00316 | | 1 | processes that they had were supported by some of | | 2 | these home grown, in-house developed software tools, | | 3 | and that's where a lot of the functionality existed, | | 4 | mostly around the operations as opposed to some of the | | 5 | back office functionality that we've talked about. | | 6 | Q Shifting gears a little bit, while you've | | 7 | been at Deloitte have you been involved in some | | 8 | evaluations of software for clients? | | 9 | A I'm pausing because I'm trying to think | | 10 | back over the ten-year period and whether I've | | 11 | actually ever done a selection project in my tenure at | | 12 | Deloitte. And I can pretty assuredly tell you that I | | 13 | have not. | | 14 | Q Okay. | | 15 | A It's, again, when I came into the firm the | | 16 | policy was that we tried to avoid software selection | | 17 | types of projects and that we focused on the | | 18 | implementation based on the revenue stream associated | | 19 | with that part of our business. | | 20 | Q The implementations of a more attractive | | 21 | business? | | 22 | A That's correct. That's correct. And the | | 23 | software vendor always gets upset when he did a | | 24 | selection. So as we partner with software vendors in | | 25 | certain cases it's a difficult balance to strike, |
| 00317 | | 1 | sometimes, when they come head to head in competition. | | 2 | Q And that's because Deloitte has alliances | | 3 | with SAP and with Lawson and with Oracle and with | | 4 | People Soft? | | 6 | Q Are you aware of instances from your | | 7 | implementation work or just your general experience in | | 8 | which clients have decided to defer purchases of ERP | | 9 | software because of budget reasons? | | 10 | A Yes. | | 11 | Q And can you give me some examples? | | 12 | A A couple of different categories I think | | 13 | that answer could fall into. Sometimes the company's | | 14 | overall economics might fall upon hard times and they | | 15 | may shift expense so an ERP system selection, or | | 16 | system decision, I should say, becomes deferred. | | 17 | Correspondingly, if the software's been -- | | 18 | in 's case this was part of the issues -- the REDACTED | | 19 | software spend was significant so when a CFO tries to | | 20 | understand how he's going to budget a hundred fifty or | | 21 | 200 million dollar project that requires some careful | | 22 | planning, that requires some fiscal planning and is | | 23 | material in terms of a company's business, so they | | 24 | proceed very carefully and they may defer. | | 25 | Sometimes our clients will become aware |
| 00318 | | 1 | from a research and development perspective of what a | | 2 | company is evolving their product towards, and | | 3 | sometimes they will make a decision to either maintain | | 4 | their Legacy environments or not migrate to a new | | 5 | software product because they really believe that it | | 6 | might be a better strategy to wait until that next | | 7 | software release, because something new is coming, CRM | | 8 | functionality might be coming, and why take another | | 9 | brand in the situation when maybe I could stay on that | | 10 | single vendor platform and it would make certain | | 11 | things easier. | | 12 | MR. BROWN: I'm going to object to the | | 13 | answer and move to strike on the grounds that it's not | | 14 | -- it's vague as to the reference as to ERP. We had a | | 15 | discussion about CRM, for example. | | 16 | BY MR. YATES: | | 17 | Q In your -- in your answer, when you were | | 18 | referring to ERP, what did you mean, sir? | | 19 | A ERP, to me, is financial and back office, | | 20 | as well as the operational and the supply chain | | 21 | management. I'm sorry, operational is -- let me | | 22 | restate -- financial and HR, from a back office | | 23 | perspective, supply chain management as well as | | 24 | customer relationship management is what I think of | | 25 | when I think of ERP. |
| 00319 | | 1 | Q And that's the way you were referring to | | 2 | ERP in your answer? | | 3 | A That's the way I was referring to it in my | | 4 | answer. | | 5 | Q Now, were you done with your answer before | | 6 | there was an objection? | | 7 | A I believe so, yes. | | 8 | Q Okay. Is the -- is the decision to defer | | 9 | purchase of ERP software is that -- is that sometimes | | 10 | referred to as a - as a do nothing choice? | | 11 | A Could be referred to as that, sure. | | 12 | Q To your knowledge, if -- if a company is -- | | 13 | is evaluating new ERP software, or upgrading its ERP | | 14 | software, will the -- will the company ever threaten | | 15 | to do nothing in order to try to obtain a better price | | 16 | from the software vendors? | | 17 | MR. BROWN: Lack of foundation, vague. | | 18 | A I don't know that I've seen that to be the | | 19 | case. I guess I don't recall an executive ever having | | 20 | a discussion with me in that particular situation | | 21 | where they have tried to utilize that strategy to | | 22 | reduce the software price or the implementation price. | | 23 | Q Deloitte's clients are pretty much all | | 24 | large organizations, correct, over 500 million dollars | | 25 | a year in revenue I think you testified last time? |
| 00320 | | 1 | A That's a fair statement. That's a fair | | 2 | statement. We do have clients that are smaller than | | 3 | that. We do have a strategy in place right now to | | 4 | evaluate the smaller market segment to determine if a | | 5 | client does not meet that threshold why would we go | | 6 | after that particular -- why would we pursue that | | 7 | client. We will pursue those clients if there's good | | 8 | business rationale to do that. | | 9 | Q And what are some of the factors that you | | 10 | will consider when you look at clients under 500 | | 11 | million dollars a year, annually? | | 12 | A We will look at where they're at in terms | | 13 | of their gross strategy. We will look at where | | 14 | they're at in terms of their market, it might be a new | | 15 | entry to a new market to us. | | 16 | We also look at whether or not it makes | | 17 | sense to implement that particular implementation, and | | 18 | if we can do something for our internal business, if | | 19 | we can grow our business depth or our staff to have | | 20 | greater skills in a certain particular area supply | | 21 | chain in our HR, any of those types of things, those | | 22 | are usually the reasons. | | 23 | Q I realize you haven't been involved in the | | 24 | software evaluation, but have you ever discussed with | | 25 | any -- any clients or advised clients on how they |
| 00321 | | 1 | might obtain the best price for ERP software? | | 2 | A Yes. | | 3 | Q Okay. And what do you tell clients? | | 4 | A The biggest secret over trying to obtain | | 5 | preferred pricing is to, if the timing is right, to | | 6 | try to time your purchase towards that software | | 7 | vendor's year end or quarter end, in that particular | | 8 | order. That's -- that's really the primary leverage | | 9 | point. | | 10 | I guess the other -- the other leverage | | 11 | points that we advise our clients on is depending on | | 12 | how well established that particular software vendor | | 13 | might be in a particular marketplace, then the clients | | 14 | sometimes have leverage, or if the clients are in a | | 15 | situation whereas we discussed before, the software | | 16 | vendor might be evolving its product to a new set of | | 17 | functionality, or a new solution, sometimes the | | 18 | clients can obtain preferred pricing by being first or | | 19 | by being an early adopter is probably a better | | 20 | business term to use. | | 21 | Q Any other advice that you can recall giving | | 22 | to clients, other than I think the three or four | | 23 | categories you've mentioned? | | 24 | A The other thing that we might entertain is | | 25 | sometimes we're aware of -- sometimes we're aware of |
| 00322 | | 1 | what the discount structure has been for a particular | | 2 | software products, and we may -- a client may say, | | 3 | gee, I've got a discount of "X" percent, do you think | | 4 | that's good or bad. | | 5 | And sometimes we may offer an opinion that | | 6 | in this industry we've seen it vary from Y to Z, but | | 7 | generally speaking that's a pretty broad range, and | | 8 | general information. | | 9 | So, it's -- it comes down to the specific | | 10 | client's application of that particular software | | 11 | product, and some of the pricing factors, and as the | | 12 | pricing methodologies change within the software | | 13 | vendors, radically and often, it's -- it's hard to | | 14 | give a lot of logical advice and try to stay on the | | 15 | business side of logic, so it becomes a little bit | | 16 | more subjective in that case. | | 17 | Q You first talked about trying to time | | 18 | purchases towards year end or quarter end, why would | | 19 | that be advantageous to a client? | | 20 | A The software vendors have to report their | | 21 | earnings, quarterly releases or annual releases, to | | 22 | maintain its shareholder value for its stockholders. | | 23 | So, there has always been phenomena in the | | 24 | industry where there is a push within the software | | 25 | houses to try to maximize the amount of sales that are |
| 00323 | | 1 | going through that particular company at those times. | | 2 | So the company can enhance its financial | | 3 | reputation, its business reputation, or its market | | 4 | reputation, if it continues to post strong results at | | 5 | that quarterly or year end basis. | | 6 | Q And a client might be able to obtain a | | 7 | better price at a quarterly or year end? | | 8 | A That's correct, and the sales people, | | 9 | generally speaking, are trained accordingly, and they | | 10 | know that they're rewarded accordingly. | | 11 | So the sales people become more aggressive | | 12 | in terms of their deal making capabilities and | | 13 | interests at those time frames. | | 14 | Q And when you are talking the sales people | | 15 | you're talking about, for example, an SAP sales | | 16 | person? | | 17 | A An SAP sales person or PeopleSoft sales | | 18 | person or sales management, as well. | | 19 | Q And when you say that they're rewarded do | | 20 | you mean that their compensation is dependent, at | | 21 | least in part, on sales? | | 22 | A That's absolutely the case. | | 23 | MR. BROWN: I object on foundation, here. | | 24 | BY MR. YATES: | | 25 | Q What's the basis of your understanding that |
| 00324 | | 1 | the sales people are rewarded on at least in part or | | 2 | compensated in, at least in part, on sales? | | 3 | A I've seen actual comp plans of the sales | | 4 | people and understand how they are paid from a salary | | 5 | perspective. | | 6 | And there are tiering plans. There are | | 7 | levels that if a software sales person achieves a | | 8 | certain amount of sales their bonus structure may | | 9 | increase over time. | | 10 | So, again, sometimes you might find a sales | | 11 | person being more aggressive in a particular quarter | | 12 | because he's real close to the next threshold, so that | | 13 | person, he or she, may really want to get that deal | | 14 | done and may try to lever that into the -- the | | 15 | equation, into the transaction, I should say. | | 16 | Q And I believe you testified that another | | 17 | leverage point was how established the vendor is in a | | 18 | particular marketplace or vertical? | | 19 | A I did say that. | | 20 | Q And how would that -- how would that impact | | 21 | the advice that you give to clients in terms of trying | | 22 | to obtain the best price from the vendor? | | 23 | A What we would try to do in that situation | | 24 | is help a client appreciate -- a good word -- what the | | 25 | software vendor's position is in a particular market |
| 00325 | | 1 | segment. | | 2 | If that vendor is trying to exploit a piece | | 3 | of that segment or that entire segment then we will | | 4 | want to point out to the client their value of being a | | 5 | piece of that software vendor's client portfolio. | | 6 | So, if a client is a new entrant for that | | 7 | particular software vendor's marketplace then they may | | 8 | be able to negotiate a more advantageous discount in | | 9 | the software purchase or the implementation, for that | | 10 | matter, as well, works against us, as well. | | 11 | Q And you also said another potential | | 12 | leverage point for -- for a client, at least that you | | 13 | might advise a client on, is whether the vendor had an | | 14 | evolving product; what did you mean by that? | | 15 | A If a vendor is -- if a vendor has its | | 16 | product in its research and development function, or | | 17 | is trying to, I used the term earlier, sophisticate | | 18 | its product or is trying to extend its functionality | | 19 | in a particular application that exists today, we've | | 20 | talked about localizations as an example, some of the | | 21 | software vendors are evaluating whether it makes sense | | 22 | for them to try to develop the capability to deliver | | 23 | that localization functionality off the shelf, as a | | 24 | term, readily available to the marketplace is what I | | 25 | mean by that, that's an example, or sometimes the |
| 00326 | | 1 | vendors might be evolving their human resource | | 2 | products along the lines to manage and set up | | 3 | compensation, as we used the example of our sales | | 4 | person in the vendor sales. They look to evolve | | 5 | further their products along the business process | | 6 | continuum that's out there. | | 7 | If a company is evaluating its business | | 8 | requirements, as we talked about fit-gap earlier, and | | 9 | a software vendor's product is not as evolved in a | | 10 | certain place and the software vendor determines that | | 11 | it might be advantageous for its business to leverage | | 12 | its research and development or its software | | 13 | development capability to further build that product, | | 14 | sometimes that software vendor will approach a | | 15 | prospect, a client, and suggest that they might want | | 16 | to partner or venture together to undertake that new | | 17 | software development. | | 18 | And that might result in a preferred | | 19 | pricing, or it might result in the application of the | | 20 | software to that client's situation, even on a gratis | | 21 | basis, so that that client becomes, again, number one, | | 22 | and becomes somewhat of a proof concept or a showcase | | 23 | for that particular vendor, which might be a means of | | 24 | opening a new market to that vendor and, therefore, a | | 25 | new revenue stream and, therefore, quarterly results |
| 00327 | | 1 | and, therefore, shareholder value. | | 2 | Q I've heard the term shelfware used in | | 3 | connection with software, are you familiar with the | | 4 | use of that term? | | 5 | A I'm familiar with it. | | 6 | Q What's your understanding? | | 7 | A Shelfware, from a software delivery | | 8 | perspective, would mean that a software vendor's | | 9 | product, as delivered to the particular client, would | | 10 | be able to be used or applied to its business | | 11 | processes or requirements straight from the shelf, | | 12 | without customization. Without customization is | | 13 | probably the best way to put it. | | 14 | The other term I've heard the term | | 15 | shelfware used for, Chris, is where a vendor might | | 16 | sell an entire product suite to the client, and the | | 17 | client doesn't take advantage of the entire suite, | | 18 | supplemented by its financial HR applications they put | | 19 | the finance in and the HR applications are not | | 20 | installed, and they are shelfware. | | 21 | Q And are you aware of instances in which | | 22 | clients have purchased a full ERP suite and just | | 23 | implemented the financials or some piece of it? | | 24 | A Yes, I am. | | 25 | Q And can you describe them, the ones you're |
| 00328 | | 1 | aware of? | | 2 | A There are -- there are any number of | | 3 | companies, I can think of examples in Oracle as well | | 4 | as SAP, where we have had discussions with the | | 5 | software sales teams to understand what companies have | | 6 | purchased and implemented. | | 7 | And in many cases when the sales | | 8 | transactions are being finalized the software sales | | 9 | function of a particular software vendor might try to | | 10 | enhance its sales offering to a particular client by | | 11 | incorporating the entire software suite or all of the | | 12 | applications that a software might deliver, a software | | 13 | vendor might deliver, into a sales transaction even | | 14 | though that company might not be looking for all of | | 15 | those applications. | | 16 | And in one of our Oracle clients the client | | 17 | was offered the full suite of licenses for the full | | 18 | number of users for the entire corporation. The | | 19 | client bought that and continued along its | | 20 | implementation journey to implement a subset of the | | 21 | functionality in a subset of its employee base. | | 22 | As that transaction -- as the | | 23 | implementation transaction took some time, and the | | 24 | company did not act on the balance of that particular | | 25 | transaction, what it ended up with was a number of |
| 00329 | | 1 | software licenses for a large number of users that it | | 2 | hadn't implemented. | | 3 | And, overtime, because of the software | | 4 | release and migration strategy, the software had | | 5 | multiple patches that was released, but the company | | 6 | didn't take advantage of those because it hadn't | | 7 | implemented that functionality. And, therefore, that | | 8 | software, over time, became stale or inappropriate for | | 9 | use or not up to date. | | 10 | So, and that's one example, and one of our | | 11 | clients where the whole suite was sold for multiples | | 12 | of licenses, and we do have discussions around that | | 13 | because that might represent a particular new | | 14 | opportunity of business for the firm, and we like to | | 15 | be aware of that so that we might have a discussion | | 16 | with a client to understand if there's any business | | 17 | benefit associated with implementing those | | 18 | applications that might be on the shelf so that they | | 19 | generate improvements, we generate fees. |
| 00330 | | 25 | Q During your testimony May 5th you mentioned |
| 00331 | | 1 | a client that had implemented Oracle's general ledger | | 2 | and had implemented that alongside I think it was its | | 3 | Legacy AP system, do you recall that testimony? | | 4 | A We are -- we're undertaking a project like | | 5 | that right now, in a financial institution, yes. I | | 6 | think that's the one that I was referencing. | | 7 | Q Okay. And are -- my recollection was that | | 8 | the client had elected not to implement or perhaps | | 9 | purchase -- let me withdraw the question -- the client | | 10 | you have in mind would you mind just naming them? | | 11 | A . REDACTED | | 12 | Q ? Did that client buy the entire REDACTED | | 13 | financial suite, an entire ERP suite, or something | | 14 | more narrow? | | 15 | A No, they bought something more narrow. | | 16 | Q What did they buy? | | 17 | A They bought general ledger and accounts | | 18 | payable. | | 19 | Q And when -- when you purchase general -- | | 20 | that's a subset of the financial suite? | | 21 | A Yes, it is. | | 22 | Q And when you purchase general ledger and | | 23 | accounts payable can you call those modules? | | 24 | A Yes, modules, or applications is another | | 25 | synonym. |
| 00332 | | 1 | Q So, it's possible to buy just a module or | | 2 | application from a vendor such as Oracle? | | 3 | A It is. | | 4 | MS. SABO: Let's designate any discussion | | 5 | about financial practices as highly REDACTED | | 6 | confidential. | | 7 | MR. BROWN: And, in addition, I want to | | 8 | designate -- object -- not designate -- I want to | | 9 | object to the characterization of the question of such | | 10 | as Oracle as if that's implicating that you could | | 11 | purchase the general ledger and accounts payable | | 12 | modules from any vendor. | | 13 | BY MR. YATES: | | 14 | Q Are you aware of whether or not you can | | 15 | purchase a general ledger or accounts payable module, | | 16 | for example, from SAP? | | 17 | A I believe that you can. | | 18 | Q And how about -- | | 19 | A We talked last time about how coupled their | | 20 | strategy was, but they moved to try to enable | | 21 | themselves to have a sell strategy, where you don't | | 22 | have to buy the entire suite of SAP. You definitely | | 23 | can, for PeopleSoft. You definitely can for some | | 24 | others. You definitely can for JD Edwards. | | 25 | Q So, it's fair to say that bought, it REDACTED |
| 00333 | | 1 | sounds like, two modules of the financial software | | 2 | package from Oracle? | | 3 | A That's our understanding, right now, the | | 4 | transaction is in process. | | 5 | Q And your understanding is at the moment | | 6 | they're only going to implement the general ledger? | | 7 | A That's right, that's the first application | | 8 | to go into their implementation strategy. | | 9 | Q And do you have an understanding of when | | 10 | they're going to implement the accounts payable | | 11 | module? | | 12 | A They were talking within a few months of | | 13 | the general ledger, in this case. | | 14 | Q Now, I've got on my computer the CD that | | 15 | was Exhibit 103,I believe it was the spreadsheet we | | 16 | looked at last time? | | 17 | A Yes. | | 18 | Q And I will turn it on in a minute, but if | | 19 | we can do it without displaying the spreadsheet for | | 20 | the moment, what I want to know is do you have an | | 21 | understanding of how, for example, -- the REDACTED | | 22 | project involving implementation of just the REDACTED | | 23 | general ledger would be listed in the target database. | | 24 | A Sure. | | 25 | Q How would it be listed? |
| 00334 | | 1 | A We list it by client name, and there would | | 2 | be client group, if that client is a business unit | | 3 | within a particular consolidated company. There is | | 4 | usually a project name. There's a detailed project | | 5 | description, so that it might say, as this example, | | 6 | might say , and it might say as a REDACTED | | 7 | project specific general ledger implementation. | | 8 | So there would be a higher to lower order | | 9 | of information depending on the category or the column | | 10 | that was in that spreadsheet. | | 11 | Q So, is it fair to say that there is | | 12 | information in the target database that concerns just | | 13 | the implementation of one module of financial | | 14 | management packaging? | | 15 | A Yes, if that's the scope of what that | | 16 | project is, and the project is being managed within | | 17 | the firm as an individual pursuit as opposed to | | 18 | managing a pursuit around the entire financial | | 19 | strategy, it could absolutely be listed that way. |
| 00336 | | 15 | Q In these extensions, in the pharmaceutical | | 16 | and life sciences industries, are they related to core | | 17 | financials and core HR or are they something | | 18 | different? | | 19 | A It could be either, it could be financials, | | 20 | it could be HR, or it could be I think it's been | | 21 | referred to it as an extended footprint. So you will | | 22 | find those business opportunities spanning the | | 23 | software. | | 24 | I would submit that in the financial, more | | 25 | so than in the HR, and then definitely more so than |
| 00337 | | 1 | CRM and supply chain. I think you find that order, | | 2 | that financial products are the most mature offerings | | 3 | of the software vendors, probably followed by HR, then | | 4 | by supply chain, then by CRM. So you find more | | 5 | opportunities at CRM, perhaps, than you might find in | | 6 | finance, in my example. | | 7 | Q Are you aware of instances in which a | | 8 | client's interest in a CRM or an SCM portion of an ERP | | 9 | suite has basically driven the purchase? | | 10 | A Yes, I am. | | 11 | Q And can you give me examples of what you're | | 12 | talking about? | | 13 | A We talked last time about , and REDACTED | | 14 | is about a 2.1 billion dollar company in terms REDACTED | | 15 | of its revenue size. Fifty percent of their business | | 16 | is represented by their service function. They sell | | 17 | automated teller machines, they sell bagging devices, | | 18 | surveillance systems, so they sell a lot of products | | 19 | and hardware and software to the financial services | | 20 | industry. | | 21 | So, while the product sales is important, | | 22 | half of their business is around service, maintenance, | | 23 | customer management. | | 24 | And in their evaluation of different | | 25 | products that dealt with that particular software |
| 00338 | | 1 | functionality they did evaluate, on their own, several | | 2 | different products and arrived at an Oracle decision. | | 3 | And Oracle was keen to get that business | | 4 | and keen to further develop its software on the basis | | 5 | of what was going to try to use the software REDACTED | | 6 | for. And so that was the -- that was the situation, | | 7 | there, that I think corresponds to your question. | | 14 | Q Mr. Dortenzo, during Mr. Brown's | | 15 | examination, on May 5th, I think you testified that | | 16 | Deloitte has a separate human capital practice? | | 17 | A It does. | | 18 | Q Would you tell me what that practice | | 19 | entails, if you know? | | 20 | A Our human capital practice is oriented | | 21 | towards both technology as well as human resource | | 22 | management functions. And what we've done is we've | | 23 | combined those two business functions of the firm | | 24 | together to target human resource organizations who | | 25 | are used to dealing with business problems that are |
| 00339 | | 1 | much broader than technology. So, we think technology | | 2 | is part of that solution, but we don't think it drives | | 3 | that solution. | | 4 | So in our business transformation driven | | 5 | approach we try to understand all of the different | | 6 | functions that exist in the human resources management | | 7 | capacity. | | 8 | And so when we talk about our human capital | | 9 | practice or our human resource dynamics practice we | | 10 | try to understand the management of personnel, we try | | 11 | to understand human resource policies, we try to | | 12 | understand things like succession planning, we try to | | 13 | understand technology as a piece of that offering. | | 14 | And we think that it's more advantageous to us to | | 15 | approach the market in that particular manner. | | 16 | So, we have made a conscious decision to | | 17 | move our technology implementation processes that are | | 18 | associated with human resource management into the | | 19 | human capital practice. | | 20 | And so, as such, my responsibilities in the | | 21 | firm right now do not include the implementation of | | 22 | Oracle human resource products as I have | | 23 | responsibility for the Oracle products. | | 24 | So we could work together with our human | | 25 | capital practice, and the idea is we would take a |
| 00340 | | 1 | broader business perspective into a client's situation | | 2 | because we're not just dealing with technology. | | 3 | Q Why do you feel that's more advantageous to | | 4 | your clients to approach the market in that sort of | | 5 | two pronged or multi pronged perspective? | | 6 | A It's client driven perspective is why we've | | 7 | done it. Our clients in the human resource function | | 8 | don't think in terms of technology. They think in | | 9 | terms of people. | | 10 | So, we find in dealing with the people or | | 11 | the management issues it's much easier to bring the | | 12 | context of technology into the discussion than to lead | | 13 | with technology. So, that's the primary driver. | | 14 | Q Do you have an understanding of whether the | | 15 | human capital practice deals with solutions other than | | 16 | packaged software, outsourcing, for example? | | 17 | A It will. | | 18 | MR. BROWN: Objection, foundation. | | 19 | A It will deal with outsourcing. We also | | 20 | deal with outsourcing in the enterprise application | | 21 | side of our practice. So both our human capital and | | 22 | our enterprise application packages practice do deal | | 23 | with outsourcing. | | 24 | Q What kind of outsourcing do you deal with | | 25 | on the enterprise applications side of things? |
| 00341 | | 1 | A Enterprise applications will facilitate an | | 2 | introduction of our outsourcing practice into a | | 3 | client's situation when a client is doing one of three | | 4 | things. And some of this has changed recently, so | | 5 | I'll also talk about that change. | | 6 | If a client is looking to entertain a | | 7 | strategy around outsourcing we have outsourcing | | 8 | advisory services that try to help them evaluate | | 9 | whether outsourcing is feasible or not. | | 10 | Today, in the firm, our outsourcing | | 11 | practice is aligned to two particular service areas, | | 12 | one being application maintenance outsourcing, which | | 13 | is a follow on activity to an implementation set of | | 14 | services where we might offer to maintain software | | 15 | products for our clients, or we may also introduce the | | 16 | application and the services into a client that we | | 17 | haven't done the implementation. So, that's one | | 18 | service area. | | 19 | The other service area is business process | | 20 | outsourcing. And that usually entails a client's | | 21 | evaluation of routine business processes where they | | 22 | may want to either supplant, supplement or displace | | 23 | their current function with an external service | | 24 | provider. | | 25 | And up until this past fiscal year, or this |
| 00342 | | 1 | past six, I should say this calendar within this | | 2 | fiscal year, so said differently, up until through the | | 3 | calendar year 2003, for the past couple of years, the | | 4 | Deloitte outsourcing practice had entertained whether | | 5 | or not it wanted to be in the hosting or in the actual | | 6 | information technology outsourcing piece of the | | 7 | business more similar to what a CFC or an EBS, for | | 8 | example, might do. Whereby, we would provide the | | 9 | technology infrastructure environment for our clients | | 10 | to run the application. | | 11 | So our enterprise application practice will | | 12 | work with client's CIO's and client executives to | | 13 | determine if there is an outsourcing play or an | | 14 | outsourcing strategy available to our clients. And we | | 15 | will work with them in the particular package areas or | | 16 | we'll bring in our outsourcing capabilities to help | | 17 | inform a client as to think about outsourcing, whether | | 18 | it makes sense or not, in a situation. | | 19 | Q And, still, in the enterprise applications | | 20 | area does Deloitte consulting currently offer any -- | | 21 | any hosting of applications for clients? | | 22 | A We are providing a hosting solution in the | | 23 | example, as I mentioned , in the REDACTED | | 24 | example. REDACTED | | 25 | Q And what are you hosting for ? REDACTED |
| 00343 | | 1 | A We're hosting their Legacy environment as | | 2 | well as their new Oracle applications that they are | | 3 | implementing, at current. | | 4 | Q Does that mean that you're running the | | 5 | Oracle applications for them? | | 6 | A Yes, it does. | | 12 | Q Going back to the human capital or the HR | | 13 | side do you have an understanding of what the | | 14 | outsourcing practice there is at Deloitte? | | 15 | A I do. | | 16 | Q And what's your understanding? | | 17 | A One of the services that we would provide | | 18 | is to help a company understand if it might be | | 19 | advantageous to outsource their particular human | | 20 | resource functions to a third party firm, an example | | 21 | might be an ADP, for payroll services, or it might be | | 22 | to a towers parent for benefits administration. | | 23 | So we will, again, become involved with our | | 24 | executive human resource -- resource clientele to help | | 25 | understand what their overall business strategy is, |
| 00344 | | 1 | what their internal capabilities are, whether or not | | 2 | an external service offering may make sense or be | | 3 | feasible from a cost perspective. | | 4 | And then we may advise them on who to | | 5 | contact in a particular situation, for me in the | | 6 | capital perspective, as they evaluate different | | 7 | service offerings. | | 8 | Q And using as an example I believe REDACTED | | 9 | you testified during Mr. Brown's examination that the | | 10 | considered outsourcing its HR function to ADP? REDACTED | | 11 | A Yes, it is. | | 12 | Q And it didn't make -- it did consider | | 13 | outsourcing? | | 14 | A It is still evaluating that decision. It | | 15 | is evaluating, more so, its payroll strategies as part | | 16 | of its human resource suite. | | 17 | Whether or not they should outsource the | | 18 | payroll applications that were going to exist in the | | 19 | other than US, or their international locations, as | | 20 | the Oracle software product had some issues in terms | | 21 | of its ability to process some of the company's | | 22 | specific requirements in the US location it was | | 23 | concerned that if it took the payroll application to | | 24 | international locations it might have different or | | 25 | less common than what is implemented in the US types |
| 00345 | | 1 | of business processes that that software product may | | 2 | not fit. | | 3 | Their confidence level in the software | | 4 | product and the ability to fit is lower than it would | | 5 | - than would like it to be. REDACTED | | 6 | Therefore, they have undertaken a strategy | | 7 | to understand whether it made better sense to | | 8 | outsource its payroll applications on a more global | | 9 | basis to ADP, which is the study that they were | | 10 | undertaking. | | 11 | Q Are you aware of any Deloitte clients, this | | 12 | is obviously you, personally, who have decided to | | 13 | outsource their -- their HR function to a business | | 14 | process outsourcing? | | 15 | A I'm not aware of that, Chris. I think that | | 16 | there have been discussions, but I can't site an | | 17 | example. | | 18 | Q Are you aware that there are business | | 19 | process outsourcers who have their own software or | | 20 | applications and will run your -- your HR processes | | 21 | for you? | | 22 | A There are service providers out there that | | 23 | do that. I am familiar with seeing them at the | | 24 | software shows that we do participate in. | | 25 | Q Who are you familiar with who does that? |
| 00346 | | 1 | A I think of Cognos is one that's out there. | | 2 | There is -- I would have to look it up at the break -- | | 3 | there's a firm that specializes in Oracle HR | | 4 | outsourcing and implementations, they do both. | | 5 | So, I'm familiar with them. They've | | 6 | approached us on a number of occasions to try to | | 7 | partner with us. | | 8 | Those are the ones that I'm primarily -- | | 9 | ADP, as I've mentioned earlier. Ceridian is another | | 10 | one that I'm familiar with. | | 11 | Q Are you familiar with fidelities APO HR | | 12 | offer? | | 13 | A I am not. | | 14 | Q How about IBM, do you know if IBM has | | 15 | entered the APO HR outsourcing business? | | 16 | A I know that IBM has an APO offering. I'm | | 17 | not familiar with how extensive it is, so I can't | | 18 | answer if it is capable of outsourcing. But I know | | 19 | that they have invested significantly and done some | | 20 | acquisitions around business process outsourcing. And | | 21 | they see it as a fundamental part of its strategy | | 22 | going forward. | | 23 | MR. BROWN: I object to the last portion | | 24 | about the witness' testimony about IBM's strategy | | 25 | going forward. |
| 00347 | | 1 | BY MR. YATES: | | 2 | Q You testified -- | | 3 | MR. BROWN: No foundation. | | 4 | BY MR. YATES: | | 5 | Q You believe that the fundamental portion of | | 6 | IBM's strategy going forward is outsourcing; what's | | 7 | the basis for that? | | 8 | A We have an alliance with IBM and we have a | | 9 | very senior partner that's associated with that | | 10 | alliance, his name is Robert Dalton. And in partner | | 11 | meetings we have discussed the fact that we talk about | | 12 | IBM and the competitive nature of IBM and where it can | | 13 | impact our business. | | 14 | So we are aware of emerging trends of our | | 15 | competitors, and that was the basis of my answer. | | 16 | Q IBM as a consulting business, the former | | 17 | PriceWaterHouse consulting business? | | 18 | A Together with IBM Global Services, yes. | | 19 | Q And IBM also has a software business? | | 20 | A They have a software implementation | | 21 | practice. | | 22 | Q Are you aware of IBM, and I'm talking about | | 23 | IBM Corporate, are you aware that it has a database | | 24 | business? | | 25 | A Yes. |
| 00348 | | 1 | Q Is it fair to say that Deloitte Consulting | | 2 | both partners with IBM and competes with IBM in | | 3 | certain circumstances? | | 4 | A That is true. | | 5 | Q And I believe you testified on May 5th, in | | 6 | response to some of Mr. Brown's questions, that | | 7 | was also considering some sort of best breed REDACTED | | 8 | strategy? | | 9 | A Yes, I did say that. | | 10 | Q And what was the strategy they were | | 11 | considering? | | 12 | A The strategy was to evaluate whether or not | | 13 | it made sense to have a single vendor provide all its | | 14 | application software -- excuse me -- or it should have | | 15 | a multiple vendor approach and the different | | 16 | components of what they were looking at from a multi | | 17 | vendor perspective or human resource. | | 18 | Whereas procurement was manufacturing and | | 19 | the financial applications. So, they had decoupled | | 20 | their decision to evaluate a best of breed versus an | | 21 | integrated strategy on those four bases, and in trying | | 22 | to evaluate different vendors in the marketplace at | | 23 | that time who could supply those solutions in trying | | 24 | to determine on a cost or business benefit basis if | | 25 | one was advantageous versus the other, and that was |
| 00349 | | 1 | the scope of that study. | | 2 | Q If we can switch gears a little bit, are | | 3 | you aware that Deloitte has been engaged by the State | | 4 | of North Carolina to evaluate its current business | | 5 | systems and its strategy going forward? | | 6 | A I have awareness that we're involved with | | 7 | the State of North Carolina. | | 8 | MR. YATES: I would like to mark as, I | | 9 | believe, Exhibit 1433, a document entitled State of | | 10 | North Carolina Business Systems Infrastructure Study | | 11 | Phase Two, bearing the Deloitte logo, dated January 5, | | 12 | 2004. | | 17 | (Oracle Deposition Exhibit No. 1433 was | | 18 | marked for identification and was attached to the | | 19 | transcript.) | | 20 | BY MR. YATES: | | 21 | Q Mr. Dortenzo, Exhibit 1433 has been placed | | 22 | in front of you, if you could just take a moment to | | 23 | examine it, please? | | 24 | Have you had a chance to review Exhibit | | 25 | 1433? |
| 00350 | | 1 | A Sure. Yes. | | 2 | Q And Exhibit 1433 was prepared for the State | | 3 | of North Carolina, by Deloitte; correct? | | 4 | A That is correct. | | 5 | Q And it was prepared as part of an | | 6 | engagement for the State of North Carolina to evaluate | | 7 | the state's current business infrastructure to suggest | | 8 | different approaches going forward? | | 9 | A That's right. | | 10 | Q And Exhibit 1433 was prepared in the | | 11 | ordinary course of business at Deloitte; right? | | 12 | A Yes. | | 13 | Q And it was provided to Deloitte's client, | | 14 | the State of North Carolina? | | 15 | A Yes. | | 16 | Q And if you go to page two of Exhibit 1433, | | 17 | it says, under background, that North Carolina state | | 18 | government is a large, complex organization; do you | | 19 | see that? | | 20 | A Yes, I do. | | 21 | Q Do you have any understanding of whether | | 22 | the North Carolina state government is a large, | | 23 | complex organization? | | 24 | MR. BROWN: Objection, foundation. | | 25 | MR. YATES: The question was do you have an |
| 00351 | | 1 | understanding, but go ahead, you may answer. | | 2 | A I don't have personal familiarity with the | | 3 | state's organization and business processes, I don't. | | 4 | I know what that generally means when we talk about it | | 5 | in a document. | | 6 | Q What does it generally mean when Deloitte | | 7 | calls an organization a large, complex organization? | | 8 | A It generally means that there is a large | | 9 | number of entities involved in the organizational | | 10 | structure, and that there are business processes that | | 11 | are significant in number and that can be difficult to | | 12 | manage for that particular organization in terms the | | 13 | meeting its business process requirements or having | | 14 | supporting processes or people around that, it's a | | 15 | term that we typically use in that particular | | 16 | scenario. | | 17 | Q And if you turn to page three of Exhibit | | 18 | 1433, there's a heading, "background"; do you see | | 19 | that? | | 20 | A Yes, I do. | | 21 | Q And does page three attempt to summarize | | 22 | the scope of Deloitte's engagement for the State of | | 23 | North Carolina? | | 24 | A That is correct. | | 25 | Q If you turn to page seven of Exhibit 1433? |
| 00352 | | 1 | A Mm-hmm. | | 2 | Q The -- the second -- there are two arrows; | | 3 | do you see that? | | 4 | A Yes. | | 5 | Q The second arrow reads: To prepare the | | 6 | business case Deloitte evaluated several approaches to | | 7 | address the state's business needs. These | | 8 | alternatives were the first bullet point ERP, | | 9 | enterprise resource planning implementation; second | | 10 | bullet point, outsourcing; third bullet point, stand | | 11 | alone packages; fourth bullet point, custom | | 12 | development; fifth bullet point, enhances to current | | 13 | system; and sixth bullet point, best of breed; do you | | 14 | see that? | | 15 | A I do. | | 16 | Q These were, to your understanding, | | 17 | approaches considered by Deloitte to address the State | | 18 | of North Carolina's business needs? | | 19 | MR. BROWN: Objection, foundation. | | 20 | BY MR. YATES: | | 21 | Q You may answer. | | 22 | A Yes, that is the case. | | 23 | Q And do you have an understanding of what's | | 24 | meant by stand alone packages, on page seven of | | 25 | Exhibit 1433? |
| 00353 | | 1 | MR. BROWN: Objection, no familiarity with | | 2 | the document mentioned. | | 3 | A Stand alone packages would reference point | | 4 | solutions for single solutions that might satisfy a | | 5 | particular business process or technology need. | | 6 | Q And are stand alone packages a term used at | | 7 | Deloitte? | | 8 | A Yes, it is. | | 9 | Q And custom development, is that a term | | 10 | that's used at Deloitte? | | 11 | A Yes, it is. | | 12 | Q And do you have an understanding of what | | 13 | custom development means? | | 14 | A Yes. | | 15 | MR. BROWN: Objection as to what the term | | 16 | means in the document. | | 17 | BY MR. YATES: | | 18 | Q In general, what does it mean, sir? | | 19 | A Custom development is the process of | | 20 | creating software or code from scratch, based on a | | 21 | company's business process requirements. | | 22 | And it usually involves our staff building | | 23 | technical specifications and then following through on | | 24 | the development of programs to create software to | | 25 | support businesses processes. |
| 00354 | | 1 | And it is a significant portion of our | | 2 | business in the public sector. | | 10 | Q And enhancements to current system, is that | | 11 | a phrase that you're familiar with from your work at | | 12 | Deloitte? | | 13 | A Yes, I am. | | 14 | Q And what's your understanding of what that | | 15 | means in general usage at Deloitte? | | 16 | A That is taking a look at the current state | | 17 | of technology in a company, understanding what its | | 18 | capability is in terms of a business process or | | 19 | function, and then suggesting that to expand the | | 20 | functionality associated with a piece of software that | | 21 | you could enhance or create a change to that | | 22 | particular environment to deliver more functionality. | | 23 | Q Have you personally advised clients on | | 24 | making enhancements to current systems? | | 25 | A I have. |
| 00355 | | 1 | Q And can you give me some examples? | | 2 | A One of the examples that we had in the | | 3 | situation was that service technicians in the REDACTED | | 4 | field would want to understand precisely when a | | 5 | service order came in from a customer. | | 6 | The software didn't have the capability to | | 7 | put a time stamp on the particular service order, so | | 8 | in this particular case there was an enhancement | | 9 | created to actually time stamp and date and time stamp | | 10 | when that service order came in, and that was built | | 11 | into the Oracle functionality. | | 12 | Q Are you aware of any other enhancements | | 13 | made to current systems that you are personally aware | | 14 | of, personally involved in? | | 15 | A I've been involved in different systems, | | 16 | over the years, where a maintenance system, as an | | 17 | example, we tried to identify different skills that | | 18 | were required to accomplish work orders. We have done | | 19 | enhancements around localizations, as I mentioned a | | 20 | bit earlier in an explanation there, where we, within | | 21 | South America, had to track different levies that were | | 22 | taxed on top of different shipments depending on the | | 23 | type of shipments that were -- there are a number of | | 24 | enhancements that we do to systems, some can be around | | 25 | strategic sourcing, some can be around financial |
| 00356 | | 1 | reporting, based on different requirements some can be | | 2 | around on taxing based on sales tax that are paid to | | 3 | different companies and meet different requirements | | 4 | the companies have in financial reporting. | | 5 | Q Have you ever worked with clients on | | 6 | enhancements to an ERP system as part of an effort to | | 7 | extend the life of a system? | | 8 | A We have, as a firm. I have not done that | | 9 | personally, but most of my work centers in the | | 10 | commercial environment, but I know we do have a | | 11 | business in our public sector in state and local | | 12 | government that almost exclusively focuses on that. | | 13 | Q And best of breed, just to complete this | | 14 | page, do you have an understanding of what that means, | | 15 | generally, at Deloitte? | | 16 | A Best of breed usually infers that there is | | 17 | a combination of software products that would be | | 18 | interfaced together to provide a total solution to a | | 19 | client. | | 20 | So, it infers a fewer number of software | | 21 | vendors, two or three, usually the case, where their | | 22 | enterprise solution would be provided based on those | | 23 | vendor's offerings. | | 24 | Q If you could turn to page 10 of Exhibit | | 25 | 1433? |
| 00357 | | 1 | A Okay. | | 2 | Q And this is a PowerPoint slide entitled | | 3 | strategies by core business system, are we on the same | | 4 | page? | | 5 | A Yes. | | 6 | Q And then there's a chart listing the | | 7 | various systems, short-term actions and then future | | 8 | actions; do you see that? | | 9 | A I do. | | 10 | Q Under PMIS, or human resources, a future | | 11 | action reads: Install replacement package or | | 12 | outsource non-management function; do you see that? | | 13 | A I do. | | 14 | Q Do you have an understanding of what's | | 15 | meant by that, sir? | | 16 | A Well, based on the company's business | | 17 | processes, the replacement package would deal with the | | 18 | functionality associated with the human resources | | 19 | function. | | 20 | If the company or the state, in this | | 21 | particular case, did not see that as a feasible | | 22 | strategy, then they were given an option that | | 23 | suggested that they might find someone that could run | | 24 | that particular function for them and perform the | | 25 | associated business functions and processes, that |
| 00358 | | 1 | would be the outsourcing option. | | 2 | Q If you could turn to pages 14 and 15 of | | 3 | Exhibit 1433, sir? | | 4 | A Yes. | | 5 | Q And this is a -- these pages are entitled | | 6 | representative state replacement strategies; do you | | 7 | see that? | | 8 | A Correct, I do. | | 9 | Q Does -- stepping away from Exhibit 1433 for | | 10 | one moment -- does Deloitte attempt to identify for | | 11 | clients similarly situated entities and -- and tell | | 12 | the client how they may have addressed a business | | 13 | issue? | | 14 | A We do do that, yes. | | 15 | Q Why do you do that? | | 16 | A We do that to help a client evaluate | | 17 | whether or not its strategy is something that's | | 18 | commonly practiced within a particular industry, its | | 19 | industry, or by its competitors, so that they might | | 20 | feel more comfortable that they are pursuing an | | 21 | appropriate strategy for their business. | | 22 | Q So, for a state you might look at what | | 23 | other states have done, as an example? | | 24 | A That's correct. | | 25 | Q And you might look at what they've done on |
| 00359 | | 1 | the financial management side and the human resource | | 2 | management side? | | 3 | A That's correct. | | 4 | Q And if we go back to Exhibit 1433, sir, let | | 5 | me -- let me withdraw that -- generally, where is -- | | 6 | where does Deloitte go to attain information about | | 7 | similarly situated states or companies in the | | 8 | commercial sector? | | 9 | A In the public sector it's, generally | | 10 | speaking, easy to find as a matter of public record. | | 11 | In the second instance, where we're talking | | 12 | about commercial applications, sometimes we'll go to | | 13 | our company intranet site and understand if we've done | | 14 | a project for company "X" or company "Y", or a company | | 15 | in a particular industry, we will go and research and | | 16 | search on our previous accomplished results and look | | 17 | for whether or not the report is on file, might | | 18 | generate that information. | | 19 | Sometimes we will actually approach the | | 20 | software vendors and look for some of that detailed | | 21 | knowledge. | | 22 | And the other place that we might go is to | | 23 | a third-party evaluator, like we mentioned earlier, | | 24 | like Gartner or, too, Meta, or we have a number of | | 25 | third-party evaluators that we talk to or trade |
| 00360 | | 1 | information with, so those are probably the primary | | 2 | sources. | | 3 | Q And you say the data is typically easy to | | 4 | find in the public sector? | | 5 | A Yes. | | 6 | Q Why is that? | | 7 | A It's a matter of public record. | | 8 | Q Going back to Exhibit 1433, there's a | | 9 | listing in Exhibit 1433 of looks like 23 states, to | | 10 | me, including the State of North Carolina; do you see | | 11 | that? | | 12 | A Yes. | | 13 | Q And the third state listed is Illinois. | | 14 | And under Illinois and under systems strategy | | 15 | replacement it says installed AMS financial | | 16 | application; do you see that? | | 17 | A I do. | | 18 | Q Do you have a familiarity with what the AMS | | 19 | financial application is? | | 20 | A AMS is a company that's located in | | 21 | Virginia, it is, to my knowledge, more specialized | | 22 | around public sector applications in finance and HR, | | 23 | it is a competitor to our public sector practice. And | | 24 | we have hired some other people from AMS, so I do | | 25 | understand a little bit about their practices and a |
| 00361 | | 1 | little bit about their business. | | 2 | Q Do you have an understanding concerning | | 3 | whether they sell any software products? | | 4 | A My understanding is they do market their | | 5 | own products. | | 6 | Q Do you have an understanding concerning | | 7 | whether the State of Illinois has installed an AMS | | 8 | financial application? | | 9 | A I do not. | | 10 | Q Under the fourth state listed is Florida, | | 11 | and they appear to be listed in terms of annual IT | | 12 | budgets spent, that appears to be the rank order; do | | 13 | you see that? | | 14 | A Yes. Yes, I do. | | 15 | Q And Florida is the fourth one, and under | | 16 | system strategy replacement the first arrow says: | | 17 | Outsourcing various functions, including human | | 18 | resources and payroll; do you see that? | | 19 | A I do. | | 20 | Q Do you have an understanding of what's | | 21 | meant by that, sir? | | 22 | A I have an understanding of what is meant. | | 23 | I don't have first-hand knowledge of the State of | | 24 | Florida. | | 25 | Q Have you heard of a company called |
| 00362 | | 1 | Convergys? | | 2 | A Yes. | | 3 | Q Do you understand what they do? | | 4 | A Convergys, my understanding, is they do | | 5 | offer some applications. They also offer | | 6 | implementation services and software development | | 7 | services. | | 8 | Q Do you have an understanding of whether | | 9 | they offer any sort of HR business process | | 10 | outsourcing? | | 11 | A I do know that they offer HR business | | 12 | processes. | | 13 | Q Do you know whether or not the State of | | 14 | Florida's outsourced its human resources and payroll | | 15 | to Convergys? | | 16 | A I don't know that. | | 17 | Q The sixth state listed is the State of | | 18 | Pennsylvania, the state that you're from? | | 19 | A Yes. | | 20 | Q And according to Exhibit 1433 the Deloitte | | 21 | report for the State of North Carolina, Pennsylvania | | 22 | is in the final stages of implementing SAP financials, | | 23 | human resources and payroll; do you see that? | | 24 | A Yes, I do. | | 25 | Q Do you have an understanding of whether or |
| 00363 | | 1 | not the State of Pennsylvania is implementing the SAP | | 2 | products listed? | | 3 | A I do. I do. | | 4 | Q What's your understanding? | | 5 | A They are implementing SAP. | | 6 | Q Is Deloitte involved in that in any way? | | 7 | A Deloitte is involved in that. | | 8 | Q Is Deloitte participating in the | | 9 | implementation? | | 10 | A Yes. | | 11 | Q Are you personally involved? | | 12 | A No, I'm not. | | 13 | Q The seventh state listed is the State of | | 14 | Michigan, and the first arrow says installed RSTARS, | | 15 | for financials; do you see that? | | 16 | A I do. | | 17 | Q Do you have an understanding of what RSTARS | | 18 | is? | | 19 | A No, I don't. | | 20 | Q The second arrow says implemented loss of | | 21 | human resources and payroll; do you see that? | | 22 | A I do. | | 23 | Q And is your understanding Lawson is the | | 24 | Lawson Software Company that you've referred to over | | 25 | today and the first day of your deposition? |
| 00364 | | 1 | A That is my understanding. | | 2 | MR. BROWN: Objection, no foundation as to | | 3 | the testimony about what -- no foundation as to the | | 4 | testimony about what this document means. |
| 00365 | | 15 | Q Let's - let's talk a little bit further | | 16 | about Lawson. We talked about Lawson during Mr. | | 17 | Brown's examination on May 5th; right? | | 18 | A Yes. | | 19 | Q And Deloitte has an alliance with Lawson; | | 20 | correct? | | 21 | A We do. | | 22 | MR. YATES: Let's mark as Exhibit 1434 a | | 23 | document produced by Deloitte bearing Bates numbers | | 24 | DS, many zeros, and two to three. | | 25 | (Oracle Deposition Exhibit No. 1434 was |
| 00366 | | 1 | marked for identification and was attached to the | | 2 | transcript.) | | 13 | BY MR. YATES: | | 14 | Q Have you had a chance to review Exhibit | | 15 | 1434? | | 16 | A Yes. | | 17 | Q What is it, sir? | | 18 | A It is a brief on a project that we | | 19 | performed for the City of Dallas. | | 20 | Q When you say a brief what do you mean by | | 21 | that? | | 22 | A A lot of times we will write white papers | | 23 | and maintain them in our internal system as a | | 24 | reference to a particular project to understand the | | 25 | description of the project, solution that was |
| 00367 | | 1 | implemented as a qualification that we might use in a | | 2 | different proposal opportunity. | | 3 | So, this is the kind of information that's | | 4 | maintained to synopsize what the work was that was | | 5 | performed on a particular client. | | 6 | Q So - so this could be - the Exhibit 1434 | | 7 | could be the kind of material that Deloitte might turn | | 8 | to if it was trying to work on a project for another | | 9 | city and wanted to see what had been done in Dallas? | | 10 | A That's correct. | | 11 | Q And so you believe that in your -- withdraw | | 12 | that -- in your experience do other documents, like | | 13 | Exhibit 1434, prepared in the ordinary course of | | 14 | business at Deloitte? | | 15 | A Yes, they are. | | 16 | Q And you believe that Exhibit 1434 was | | 17 | prepared in the ordinary course of business? | | 18 | A That would be my supposition. | | 19 | Q And do you have an understanding of whether | | 20 | the people who prepare the synopses that are going to | | 21 | be posted on the Deloitte internal system make an | | 22 | effort to be accurate when they prepare such | | 23 | documents? | | 24 | A Yes, they do. | | 25 | Q And they make an effort to accurately |
| 00368 | | 1 | reflect what was done on a project? | | 2 | A Absolutely. | | 3 | Q And that's because information is later | | 4 | going to be relied on by other Deloitte personnel? | | 5 | A It's our reputation, so we're very careful | | 6 | about reviewing these types of documents at the | | 7 | partner level before we do publish them. | | 8 | Q And Exhibit 1434 describes an | | 9 | implementation of Lawson HR software by Deloitte for | | 10 | the City of Dallas; right? | | 11 | A That is correct. | | 12 | Q And according to Exhibit 1434 Dallas is the | | 13 | eighth most populous US city and has over 12,000 | | 14 | employees and 3,000 retirees? | | 15 | A That's right. | | 16 | MR. BROWN: I object to - to your - no | | 17 | foundation as to the witness' knowledge of Dallas. | | 18 | BY MR. YATES: | | 19 | Q Do you -- do you have any personal | | 20 | knowledge of Deloitte's implementation of Lawson HR | | 21 | for the City of Dallas? | | 22 | A I'm aware that we had done the project. | | 23 | Q You were not personally involved in that | | 24 | implementation? | | 25 | A No, I was not. |
| 00369 | | 7 | BY MR. YATES: | | 8 | Q Do you have an understanding that Deloitte | | 9 | did work for the City of Dallas involving Lawson | | 10 | software? | | 11 | A Yes. | | 12 | Q And what's your understanding of that? | | 13 | A I was aware that we had undertaken that | | 14 | project. I'm friends with the software package lead | | 15 | within our public sector industry practice, and I knew | | 16 | that this was a transaction that had taken place. | | 17 | Q Do you have a recollection of when Deloitte | | 18 | did the implementation work for the City of Dallas? | | 19 | A Not in detail, it was early 2000s. | | 20 | MR. YATES: Marked as next in order, | | 21 | Exhibit 1435, a document produced by Deloitte bearing | | 22 | Bates numbers DS4 and 5. | | 23 | (Oracle Deposition Exhibit No. 1435 was | | 24 | marked for identification and was attached to the | | 25 | transcript.) |
| 00370 | | 1 | Q Exhibit 1435 has been placed in front of | | 2 | you, Mr. Dortenzo, could you take a moment to review | | 3 | it, please. What is Exhibit 1435? | | 4 | A It is a project brief on the Montgomery | | 5 | County school system. | | 6 | Q And is this similar to Exhibit 1434 in | | 7 | terms of being a document that could be posted on | | 8 | Deloitte's internal reference -- | | 9 | A Yes, it is. | | 10 | Q -- database? | | 11 | A Yes, it is. Excuse me. | | 12 | Q And your understanding is that Exhibit 1435 | | 13 | is prepared in the ordinary course of business by | | 14 | Deloitte? | | 15 | A Yes. | | 16 | Q And it's your understanding that the people | | 17 | who prepared Exhibit 1435 would make every effort to | | 18 | be accurate in preparing it? | | 19 | A Yes. | | 20 | MR. BROWN: I object to questioning this | | 21 | witness about this document. He hasn't -- there is no | | 22 | testimony that he has even seen the document before. | | 23 | BY MR. YATES: | | 24 | Q And there's a reference on the second page | | 25 | of Exhibit 1435 to Frank Garvey? |
| 00371 | | 1 | A Yes. | | 2 | Q And it's your understanding that Mr. Garvey | | 3 | is the -- is the lead for the Lawson practice at | | 4 | Deloitte? | | 5 | A Yes, he is. | | 6 | Q Do you have any personal knowledge of | | 7 | Deloitte's implementation work for the Montgomery | | 8 | County school system involving Lawson software? | | 9 | A Just awareness. | | 10 | Q What's your awareness ? | | 11 | A I knew that we had won this project, as | | 12 | well. | | 13 | Q Based upon your -- based upon your | | 14 | relationship? | | 15 | A My leadership role and the packages | | 16 | practice in reviewing the larger transactions. | | 17 | MR. YATES: Let's mark as next in order | | 18 | Exhibit 1436, a document produced by Deloitte bearing | | 19 | Bates numbers DS108 through 115. | | 20 | (Oracle Deposition Exhibit No. 1436 was | | 21 | marked for identification and was attached to the | | 22 | transcript.) | | 23 | MR. BROWN: What was this exhibit number? | | 24 | MR. YATES: I think it was 1436. | | 25 | MR. BROWN: 1436? |
| 00372 | | 1 | MR.YATES: That's right. | | 2 | MR. BROWN: Thank you. | | 3 | BY MR. YATES: | | 4 | Q Would you take a moment to review Exhibit | | 5 | 1436, Mr. Dortenzo? | | 6 | A Sure. | | 7 | Q Thank you. What is Exhibit 1436? | | 8 | A It's an extract of our Lawson wins from our | | 9 | target system. | | 10 | Q And when you refer to the target system | | 11 | what are you referring to? | | 12 | A The target is our Siebel application that | | 13 | we use internally to monitor our pursuits and the | | 14 | status of those pursuits, win, lose or abandon. | | 15 | Q And if you look at the top of Exhibit 1436, | | 16 | the first page says DOJ Lawson wins plus extra fields; | | 17 | do you see that? | | 18 | A Yes. | | 19 | Q Is it your understanding that Exhibit 1436 | | 20 | only contains the Lawson wins? | | 21 | A Yes, that is my understanding. | | 22 | Q And is it your understanding that Exhibit | | 23 | 1436 is a printout of information extracted from a | | 24 | database? | | 25 | A Yes. |
| 00373 | | 1 | Q And is it your understanding that the | | 2 | database from which the information found in Exhibit | | 3 | 1436 is information kept in the ordinary course of | | 4 | business by Deloitte? | | 5 | A Yes, it is. | | 6 | Q Now, do you have an understanding of | | 7 | whether Exhibit 1436 was provided to the Department of | | 8 | Justice during its investigation? | | 9 | A Yes, it was. | | 10 | Q What's that -- what's that understanding | | 11 | based on? | | 12 | A It's my understanding that the Department | | 13 | of Justice had requested information from the firm | | 14 | with respect to the software package practices that we | | 15 | do have, as particularly that it relates to this | | 16 | exhibit around the wins for Lawson. | | 17 | Q Let me -- my understanding is that Exhibit | | 18 | 1436 was produced only on May 5th, that's the second | | 19 | -- the first day of your deposition? | | 20 | A Mm-hmm. | | 21 | Q Does that refresh your recollection | | 22 | concerning whether or not Exhibit 1436 was provided to | | 23 | the Department of Justice during its examination -- | | 24 | investigation -- excuse me. | | 25 | A It was provided as a subsequent data |
| 00374 | | 1 | request which would correspond to the timing that you | | 2 | indicate. | | 3 | Q Do you have an understanding of why the | | 4 | information found within Exhibit 1436 was not | | 5 | presented in Exhibit 103, which is the CD containing | | 6 | the database produced to the Department of Justice? | | 7 | MS. SABO: Yeah, counsel, can I have a | | 8 | minute to -- to pull those -- pull those previous | | 9 | databases? | | 10 | MR. YATES: Certainly. Certainly. | | 11 | MS. SABO: And refresh the witness' | | 12 | recollection. | | 13 | MR. YATES: Why don't we go off the record. | | 14 | (Recess.) | | 15 | MR. YATES: Let's go back on the record. | | 16 | BY MR. YATES: | | 17 | Q Before we took a break, Mr. Dortenzo we | | 18 | were taking a look at Exhibit 1436? | | 19 | A Right. | | 20 | Q Do you have a refresh your recollection of | | 21 | Exhibit 1436? | | 22 | A I do. | | 23 | Q What is that? | | 24 | A Melanie and I stepped out, this information | | 25 | was furnished based on a request from Oracle, from |
| 00375 | | 1 | yourself, Oracle's counsel, to provide information | | 2 | with respect to Lawson. | | 3 | The description of the information I gave | | 4 | earlier is still correct, it was from our target | | 5 | system, it does represent our Lawson, it was made in | | 6 | reference to your request. | | 7 | Q Do you have an understanding of why it was | | 8 | not provided, the information found in Exhibit 1436 | | 9 | was not provided to the Department of Justice during | | 10 | the investigation? | | 11 | A I do. | | 12 | Q What's your understanding? | | 13 | A When we provided the information originally | | 14 | we responded with respect to Deloitte Consulting's | | 15 | operations. Deloitte Consulting had more or less -- | | 16 | more -- had separated, I'm sorry, strike that -- | | 17 | Deloitte Consulting had separated the loss in practice | | 18 | from our Deloitte Consulting operations, had separated | | 19 | from our Deloitte Consulting operations the loss in | | 20 | practice into Deloitte and Touche's Solutions | | 21 | Consulting practice. And, therefore, the Lawson | | 22 | practice was a separate operation, at the time. | | 23 | We responded to the request for information | | 24 | to supply the Lawson information on May 5th. I think | | 25 | we provided that to you. |
| 00376 | | 1 | Q And you testified a little bit last time | | 2 | about the Lawson practice being with the Deloitte and | | 3 | Touche entity? | | 4 | A Yes. | | 5 | Q And can you refresh my recollection of | | 6 | concerning when the Lawson practice was -- is brought | | 7 | or merged back into Deloitte Consulting? | | 8 | A Sure. The consulting organization has been | | 9 | reorganized and the Lawson practice brought back into | | 10 | the consulting, Deloitte Consulting operations, as of | | 11 | the January -- actually it was December 28th, 2003. | | 12 | Q And so is it fair to say that the target | | 13 | database, which is the database form, the basis for | | 14 | Exhibit 103, that spreadsheet marked during Mr. | | 15 | Brown's examination, that if you queried that database | | 16 | today it would also be information found on Exhibit | | 17 | 1436? | | 18 | A That is correct, the reorganization of the | | 19 | first of the year, essentially. | | 20 | Q And, just so we're clear now that your | | 21 | recollection has been refreshed, Exhibit 1436 is a -- | | 22 | is a spreadsheet containing data extracted from the | | 23 | target database? | | 24 | A That's right. | | 25 | Q And the target database is a CRM database |
| 00377 | | 1 | maintained by Deloitte? | | 2 | A Yes. | | 3 | Q And it's maintained in the ordinary course | | 4 | of business? | | 5 | A Yes, it is. | | 6 | Q And turning to Exhibit 1436, the listing of | | 7 | Lawson wins, first, let's -- let's take a look at | | 8 | there's a WLA system date; do you see that? | | 9 | A Yes. | | 10 | Q And then there's some -- some stars, and if | | 11 | you go down to the bottom it says: W/L/A date may not | | 12 | reflect actual win date because data was migrated from | | 13 | one database to another in 2003? | | 14 | A Yes. | | 15 | Q Any entries in the previous database that | | 16 | did not indicate the win date were given a default win | | 17 | date of 10/31/03; do you see that? | | 18 | A Yes, I do. | | 19 | Q Mr. Dortenzo, I've taken a look through the | | 20 | entries in Exhibit 1436, and they're about four | | 21 | printed pages of Lawson wins. And many of these wins | | 22 | appear to have opportunities start or end dates in | | 23 | 2004; do you see that? For example, if you turn to | | 24 | page Bates number 112, 113? | | 25 | A I do see those, yes. |
| 00378 | | 1 | Q When I went through Exhibit 1436 I did not | | 2 | see any -- any Lawson wins listed from 2001 or 2002; | | 3 | do you see any? | | 4 | A There's one in there, at least, from 2001. | | 5 | Q Where is that, sir? | | 6 | A It's like the fourth page. It's the fourth | | 7 | page. | | 8 | Q Do you have a Bates number? | | 9 | A Yes, 111, and 115, those two pages that | | 10 | correspond to each other. | | 11 | Q I see. | | 12 | A So it looks like fifth, third back, I | | 13 | believe, if I have those lined up correctly. | | 14 | Q Do you have any knowledge of any -- any | | 15 | Lawson wins between May 31st, 2001, and October 31 of | | 16 | 2003, that are not reflected within Exhibit 1436? | | 17 | A No, I don't. | | 18 | Q Do you have any knowledge one way or the | | 19 | other? | | 20 | A No, I don't. I could only assume that | | 21 | there are wins because I know that the Deloitte and | | 22 | Touche firm's practicing at the time, that's all I can | | 23 | tell you. | | 24 | Q For example, if you look back at Exhibit | | 25 | 1434, which is the -- the brochure, the Deloitte |
| 00379 | | 1 | brochure concerning the implementation of Lawson with | | 2 | Dallas that infers to implementation in approximately | | 3 | July of 2002? | | 4 | A Yes. | | 5 | Q Yet there's no information for the City of | | 6 | Dallas in Exhibit 1436; correct? | | 7 | A That's right. | | 8 | Q Do you have any knowledge why, for example, | | 9 | the information -- the information concerning the City | | 10 | of Dallas is not found within Exhibit 1436? | | 11 | A It might be that the Deloitte and Touche | | 12 | organization -- I know they did have a separate | | 13 | mechanism for tracking. I thought they had one for | | 14 | tracking their sales processes that may not have been | | 15 | Siebel, S-i-e-b-e-l. | | 16 | Q So, it's your understanding that the | | 17 | Deloitte and Touche had some sort of different | | 18 | database for tracking the sales opportunities? | | 19 | A I know they did not use Siebel. I'm not | | 20 | sure what they did use. | | 21 | Q Did you have an understanding concerning | | 22 | whether all of the information found in the database, | | 23 | the Deloitte and Touche database that you're referring | | 24 | to, was migrated into the target database? | | 25 | A I don't know that it was migrated in or |
| 00380 | | 1 | not. | | 15 | Q Do you have any knowledge of Deloitte's | | 16 | work for ? REDACTED | | 17 | A No, I do not. | | 18 | Q Are you aware of any of Deloitte's work for | | 19 | ? REDACTED | | 20 | A No, I'm not. | | 21 | Q How about , another entity REDACTED | | 22 | listed on the first page of Exhibit 1436, do you have | | 23 | any knowledge of Lawson's work for that entity? | | 24 | A No, I don't. | | 25 | Q I may have misspoke, Deloitte's work for |
| 00381 | | 1 | that entity? | | 2 | A I'm not aware of , in my firm REDACTED | | 3 | experience. | | 4 | Q If you turn to the second page of Exhibit | | 5 | 1436, Bates number DS109? | | 6 | A Yes. | | 7 | Q There's a reference to some Deloitte | | 8 | projects for , Inc.; do you see that? REDACTED | | 9 | A Yes, I do. | | 10 | Q You mentioned during your testimony on REDACTED | | 11 | May 5th; correct? | | 12 | A Yes. | | 13 | Q You're aware of some Deloitte -- Deloitte | | 14 | work for -- for involving Lawson's software? REDACTED | | 15 | A Yes, I was. | | 16 | Q What is ? REDACTED | | 17 | A is a health care conglomerate, I think REDACTED | | 18 | it stands for . REDACTED | | 19 | Q Do you have an understanding of REDACTED | | 20 | revenues or its numbers of employees? | | 21 | A No, I don't. | | 22 | Q Do you have an understanding of its needs | | 23 | for complex software? | | 24 | A I know that we were involved in a multi | | 25 | year rollout of software that would have been a multi |
| 00382 | | 1 | million dollar project for the firm, that's my basic | | 2 | understanding. | | 6 | Q How about any work by Deloitte involving | | 7 | Lawson software for the , do you have any REDACTED | | 8 | awareness of that? | | 9 | A I'm aware that we did do a project for the | | 10 | with Lawson. REDACTED | | 11 | Q What's your awareness, sir? | | 12 | A Just that it was a large system | | 13 | implementation that our Lawson practice was involved | | 14 | in, that is that it was a rather significant | | 15 | implementation for the Lawson practice in terms of its | | 16 | importance and size. | | 17 | Q In going back to Exhibit 103, which is the | | 18 | spreadsheet that was produced in response to some of | | 19 | the Department of Justice's inquiries? | | 20 | A Mm-hmm. | | 21 | Q Deloitte Consulting produced a spreadsheet | | 22 | to the Department of Justice during the investigation | | 23 | process; is that correct? | | 24 | A Yes, it did. | | 25 | Q And then there was a spreadsheet that was |
| 00383 | | 1 | produced in this litigation with client names added in | | 2 | once the litigation commenced? | | 3 | A That's right. | | 9 | Q Mr. Dortenzo, I'm now displaying on a | | 10 | screen, in a similar fashion that Mr. Brown did on May | | 11 | 5th, a portion of Exhibit 103, which is the | | 12 | spreadsheet produced by Deloitte in this litigation; | | 13 | do you see that. | | 14 | A Yes, I do. | | 15 | Q And Mr. Brown went through all of the | | 16 | columns and discussed them with you, and I'm not going | | 17 | to go through all of them. I want to take a look at | | 18 | the one entitled opportunity solutions; do you see | | 19 | that? | | 20 | A Yes. | | 21 | Q And there appears to be a note on that | | 22 | column which says: Note, ERP solution is the default, | | 23 | meaning that the specific product function is not | | 24 | mentioned or that the work was not tied to a specific | | 25 | product function. The data included is a combination |
| 00384 | | 1 | of what was entered into the database and information | | 2 | gleaned directly from the opportunity name or | | 3 | description fields; do you see that? | | 4 | A Yes, I do. | | 5 | Q And at the bottom of the projected image it | | 6 | says sell WiFi, which is the cell we were just reading | | 7 | from, commented by Megan McNamara; do you see that? | | 8 | A Yes. | | 9 | Q Who is Megan McNamara? | | 10 | A Megan McNamara is the chief of staff in the | | 11 | enterprise applications process. | | 12 | Q She works with you? | | 13 | A Yes, she does. | | 14 | Q And do you have an understanding of what's | | 15 | meant by the comment when it says the data included is | | 16 | a combination of what was entered into the database | | 17 | and information gleaned directly from the opportunity | | 18 | name or description fields? | | 19 | A Yes. | | 20 | Q What's your understanding? | | 21 | A If there was an empty cell that empty cell | | 22 | was analyzed in terms of the project description to | | 23 | try to make an informed decision about the type of | | 24 | service that was rendered or the solution that was | | 25 | titled in the column. |
| 00385 | | 1 | Q Is it fair to say that not all of the | | 2 | information found within the opportunity solutions | | 3 | column within the US work region tab within Exhibit | | 4 | 103 is information derived from Deloitte's CRM | | 5 | database? | | 6 | A Let me make sure, to restate it. | | 7 | Q Sure. | | 8 | A Is it fair that it is derived? | | 9 | Q Is it fair that some of it is not. | | 10 | A Some of it is not derived. Some of it | | 11 | would not be derived. | | 12 | Q Some of it as to quote the -- | | 13 | A Right. | | 14 | Q -- the comment to in column Y, was, quote, | | 15 | gleaned from the opportunity name or description | | 16 | fields? | | 17 | A Right, that's correct. | | 18 | Q And does that mean that someone from | | 19 | Deloitte went through and tried to determine if they | | 20 | could figure out what the opportunity solution was? | | 21 | A That was the case. |
| 00386 | | 9 | Q And do you have an understanding of whether | | 10 | fiscal year and calendar year are columns or fields | | 11 | that appear in the Deloitte target database? | | 12 | A They do appear in the database. | | 13 | MR. YATES: I would like to mark as next in | | 14 | order Exhibit 1437, a copy of a letter from Mr. Weiss, | | 15 | of Preston Gates, to Kent Brown, at the Department of | | 16 | Justice, dated October 17, 2003. | | 17 | (Oracle Deposition Exhibit No. 1437 was | | 18 | marked for identification and was attached to the | | 19 | transcript.) | | 20 | BY MR. YATES: | | 21 | Q If you can take a moment to review what's | | 22 | been marked as Exhibit 1437; have you had a chance to | | 23 | review Exhibit 1437? | | 24 | A Yes. | | 25 | Q The second page of Exhibit 1437, Bates |
| 00387 | | 1 | number DOJ-DC-CORR-000005, do you have that? | | 2 | A Yes, I do. | | 3 | Q And this is the letter from Mr. Weiss to | | 4 | Mister -- of Preston Gates, to Mr. Brown, at the | | 5 | Department of Justice, it says: The suspected package | | 6 | title is suspected and not certain because the person | | 7 | entering the data did not always enter this field. | | 8 | Accordingly, column A was created from the other data | | 9 | that was available in the report; do you see that? | | 10 | A Yes. |
| 00388 | | 20 | Q Turning to Exhibit 103, which is the | | 21 | database that was provided to the Department of | | 22 | Justice, suspected package, that's column A; do you | | 23 | see that, sir? | | 24 | A Yes, I do. | | 25 | Q Was all of the information found within |
| 00389 | | 1 | column A, the suspected package column, found or | | 2 | contained within Deloitte's target database? | | 3 | A Was in the database or derived through what | | 4 | -- what the -- for what it states in the letter. | | 5 | Q Well, let's -- do you -- do you have a -- | | 6 | is it -- is it fair to say that each and every entry | | 7 | within the suspected package column was not found | | 8 | within the Deloitte target database? | | 9 | A Yes. | | 10 | Q And some of the information was populated | | 11 | -- was added to the -- to column A, by Deloitte, in | | 12 | response to the Department of Justice requests? | | 13 | A That's correct. | | 14 | Q I'm now going to move down Exhibit 103 to I | | 15 | believe it's row 269, if you bear with me. Yes, under | | 16 | row 269 the suspected package is listed as Oracle; | | 17 | correct? | | 18 | A Yes. | | 19 | Q And the client is , Inc.? REDACTED | | 20 | A Yes. | | 21 | Q And if you go down, under opportunity, it | | 22 | says package selection for replacement HRMS; correct? | | 23 | A Yes. | | 24 | Q And do you have an understanding of what | | 25 | that means in -- in Deloitte's usage of those terms? |
| 00390 | | 1 | A Human resource management system. | | 2 | Q So, it's your understanding this is an | | 3 | effort to help choose a human REDACTED | | 4 | resource management system, this opportunity? | | 5 | A Yes, that is what is inferred. | | 6 | Q And under description it says -- actually, | | 7 | if you can read the description into the record, | | 8 | please? | | 9 | A Sure. is seeking a REDACTED | | 10 | partner to assist in the selection of a replacement | | 11 | HRMS. has chosen to consider JD Edwards, REDACTED | | 12 | Lawson, Oracle, and PeopleSoft packages. They will | | 13 | also be looking for an integration partner for HRMS | | 14 | and financials. | | 15 | Q Thank you. Do you have an understanding of | | 16 | why Oracle is listed as the suspected package in row | | 17 | 269, the row for , Inc.? REDACTED | | 18 | A Listing might have to do with the data | | 19 | entry person's perspective on the kind of opportunity | | 20 | it might be. So they may have had a perspective that | | 21 | Oracle could have been the leading software product in | | 22 | this field of vendors. | | 23 | Q From the information found within Exhibit | | 24 | 103, and particular in row 269, the row for , REDACTED | | 25 | it's fair to say that , Inc., REDACTED |
| 00391 | | 1 | considered Lawson software? | | 2 | A Yes. | | 3 | Q Is it a fair conclusion, then, that where | | 4 | SAP or Oracle or PeopleSoft is listed as the suspected | | 5 | package in Exhibit 103 the client may have considered | | 6 | Lawson or another vendor, too? | | 7 | A That could be the case. | | 8 | Q There simply isn't a way to tell from the | | 9 | information presented in Exhibit 103, unless all the | | 10 | potential vendors are listed, as is the case with | | 11 | ; is that correct? REDACTED | | 12 | A That is correct. | | 16 | Q There isn't a way to tell unless potential | | 17 | vendors are listed within Exhibit 103 and, in | | 18 | particular, the description or opportunity fields; | | 19 | correct? | | 20 | A That's correct. | | 21 | MR. YATES: I would like to mark as next in | | 22 | order Exhibit 1438, a document produced by Deloitte | | 23 | Consulting bearing Bates number DEL 005403, through | | 24 | DEL 005482. | | 25 | (Oracle Deposition Exhibit No. 1438 was |
| 00392 | | 1 | marked for identification and was attached to the | | 2 | transcript.) | | 13 | Q Before we talk about Exhibit 1438 I would | | 14 | like to ask you another question or two about Exhibit | | 15 | 103, this spreadsheet that's being displayed? | | 16 | A Okay. | | 17 | Q It's true, is it not, that not all the | | 18 | information that's found within Exhibit 103 comes from | | 19 | Deloitte's CRM target database? | | 20 | A Correct. | | 21 | Q And some of the information within Exhibit | | 22 | 103 was added at the request of the Department of | | 23 | Justice? | | 24 | A Yes, it was. | | 25 | Q Now, turning to Exhibit 1438, this document |
| 00393 | | 1 | reads: ERP Vendor Comparison, Oracle 11i, Lawson | | 2 | eight, PeopleSoft eight; do you see that? | | 3 | A Yes, I do. | | 4 | Q Do you have an understanding of what Oracle | | 5 | 1i is? | | 6 | A Yes, it's a recent version of Oracle's | | 7 | application software. | | 8 | Q And how about Lawson eight? | | 9 | A Same thing. | | 10 | Q And PeopleSoft, same thing? | | 11 | A Same thing. | | 12 | Q And if you turn to page DEL 00405, the | | 13 | third page in, in Exhibit 1438? | | 14 | A Yes. | | 15 | Q It refers to company XYZ; do you see that? | | 16 | A Yes, I do. | | 17 | Q Why was the company name removed from | | 18 | Exhibit 1438? | | 19 | A This document was pulled from our intranet, | | 20 | and when we published sample documents on the intranet | | 21 | that's our policy, to eliminate company names. | | 22 | Q Why are -- why are documents such as 1438 | | 23 | published to Deloitte's intranet? | | 24 | A They're published as examples or | | 25 | representative documents for the staff and partners of |
| 00394 | | 1 | the firm to look at to understand best practices or | | 2 | comparative analytical practices or tasks that may | | 3 | have occurred or the deliverables that may have | | 4 | occurred in any of our projects. | | 5 | Q And do you believe Exhibit 1438 was | | 6 | prepared in the ordinary course of business at | | 7 | Deloitte? | | 8 | A Yes, I do. | | 9 | MR. BROWN: I object to questions about the | | 10 | document. We do not know who the document is about. | | 11 | MR. YATES: Well, let's see if we can | | 12 | figure that out. | | 13 | BY MR. YATES: | | 14 | Q Do you have an understanding concerning | | 15 | which client Exhibit 1438 concerns? | | 16 | A Do I? Yes, I do. | | 17 | Q Yes, what client? | | 18 | A . REDACTED | | 19 | Q And what is the , if you know? REDACTED | | 20 | A , I thought the nature of REDACTED | | 21 | their business was financial services in the insurance | | 22 | business. Let me -- let me retract that. | | 23 | Q Sure. | | 24 | A I believe the was -- I should REDACTED | | 25 | double check -- I believe the was a -- REDACTED |
| 00395 | | 1 | part of the break-up of the Blue Cross and Blue Shield | | 2 | system. | | 3 | Q That's my understanding. | | 4 | A Yeah, so that was my reference, early | | 5 | reference to insurance, thinking of them as insurance | | 6 | providers. | | 7 | Q Are you -- are you familiar with a document | | 8 | prepared by Deloitte called a scorecard? | | 9 | A There's not a -- there are balance | | 10 | scorecards, which have to do with financial | | 11 | performance of a company. I don't think that's the | | 12 | inference. There could be scorecards that might be | | 13 | associated with vendor selection activities. And I've | | 14 | heard that term used in reference to either. | | 15 | Q What are scorecards in connection with | | 16 | vendor selection activities? | | 17 | A Scorecard would relate to the ability of a | | 18 | vendor to provide a solution pursuant to the fit-gap | | 19 | analysis discussion that we had earlier. | | 20 | So a scorecard would be a visual means of | | 21 | analyzing that fit-gap and providing a quantitative | | 22 | scoring mechanism against that fit-gap to help a | | 23 | client try to understand the degree of fit or the | | 24 | closeness of fit by particular business function or on | | 25 | an aggregate basis. |
| 00396 | | 1 | MR. YATES: Let's mark as next in order | | 2 | Exhibit 1439, a document produced by Deloitte | | 3 | Consulting. The second two pages have Bates numbers | | 4 | DEL005110to5111. | | 5 | (Oracle Deposition Exhibit No. 1439 was | | 6 | marked for identification and was attached to the | | 7 | transcript.) | | 8 | THE WITNESS: Excuse me. | | 9 | BY MR. YATES: | | 10 | Q Have you had a moment to review Exhibit | | 11 | 1439. | | 12 | A Yes. | | 13 | Q What is Exhibit 1439, sir? | | 14 | A It is entitled final scorecard from the | | 15 | REDACTED | | 16 | Q Do you -- do you believe Exhibit 1439 was | | 17 | prepared in the ordinary course of business, by | | 18 | Deloitte, for the ? REDACTED | | 19 | A Yes, I do. | | 20 | Q And according to Exhibit 1439 Lawson's | | 21 | overall score was 57.71; correct? | | 22 | A Yes. | | 23 | Q And PeopleSoft's was just a little bit | | 24 | higher, 58.66? | | 25 | A Yes. |
| 00397 | | 1 | Q Oracle was 50.44? | | 2 | A Correct. | | 3 | Q And it's your understanding that that would | | 4 | indicate Deloitte's evaluation of those three pieces | | 5 | of software for the ? REDACTED | | 6 | A Yes, it does. |
| 00402 | | 16 | Q And when you're talking about the costs | | 17 | involved are you talking about just the software | | 18 | license fees, or are you talking about integration | | 19 | fees, what are you talking about? | | 20 | A It could be both. It might be the case | | 21 | where a client is trying to make a decision based on | | 22 | just the price of the software, plus the maintenance, | | 23 | or they may be trying to make a decision based on the | | 24 | bundled price associated with the software plus the | | 25 | implementation cost. And the third factor could be |
| 00403 | | 1 | over a period of time. | | 2 | Sometimes clients consider the horizon over | | 3 | the period of usefulness that a software package might | | 4 | have, or a software solution might have, and they may | | 5 | try to analyze that cost over time. So they're | | 6 | usually the pieces of the decision process. | | 7 | MR. YATES: Let's go off the record for one | | 8 | moment. | | 9 | (Discussion held off the record.) | | 10 | MR. YATES: Let's go back on the record. | | 11 | BY MR. YATES: | | 12 | Q Turning back to Exhibit 103, which is the | | 13 | spreadsheet that's being displayed on -- on the | | 14 | screen, Mr. Dortenzo, if you sort the suspected | | 15 | package column in the US work region portion of | | 16 | Exhibit 103 for SAP you come up with 723 out of the | | 17 | 1109 records found involve SAP; do you see that? | | 18 | A Yes, I do. | | 19 | Q Do you know why SAP is -- is listed most | | 20 | often within the US work region spreadsheet within | | 21 | Exhibit 103? | | 22 | A I would say that it's proportionate to the | | 23 | number of both pursuits and projects that we deliver | | 24 | with respect to our SAP practice and business versus | | 25 | the other vendors. |
| 00404 | | 1 | Q Is it your understanding that SAP has a -- | | 2 | has a large market share than most verticals? | | 3 | A Yes. | | 4 | Q Is your understanding that SAP competes | | 5 | vigorously with Oracle for new business? | | 6 | A Yes, it does. | | 8 | MR. BROWN: I - I object on the grounds | | 9 | that there's not a specific indication of a -- of | | 10 | customers or verticals. | | 12 | Q Is it your understanding that SAP is moving | | 13 | towards more open software interfaces? | | 14 | A Yes, it is. | | 15 | Q Do you have an understanding of why it's | | 16 | doing that? | | 17 | A There was concern within SAP that customers | | 18 | would not evaluate its solution for subsets of the | | 19 | different applications that a company might consider | | 20 | in its ERP solution. | | 21 | So, they did the uncoupling to try to | | 22 | increase their competitive -- competitive chance of | | 23 | garnering a larger portion of the market. |
| 00407 | | 11 | Q So, in the case of , when REDACTED | | 12 | there were -- there were 22 items listed for REDACTED | | 13 | in the US summary portion of the Exhibit 103, REDACTED | | 14 | it's fair to say that at least on the portion of the | | 15 | screen that's being depicted about seven or eight of | | 16 | those are simply extensions of previous work? | | 17 | A Yes. And in the case of we REDACTED | | 18 | had signed a master services agreement at the front | | 19 | end of that relationship, and statements of work would | | 20 | represent different pieces of their operations. And | | 21 | as we worked within different pieces of their | | 22 | operations then we would have in the normal course of | | 23 | business extended some of those projects or created | | 24 | follow on activities which are represented by the line | | 25 | items. |
| 00408 | | 1 | Q So, it's fair to say that there weren't | | 2 | necessarily 22 separate projects, but -- but, rather, | | 3 | a few projects and then a variety of extensions and -- | | 4 | of the scope of work? | | 5 | A That's -- that's fair, it could be -- it | | 6 | could either be new projects or it could be the | | 7 | extension of a particular project to move into a next | | 8 | business process or functional area, so both | | 9 | explanations would apply. | | 10 | Q Let's go back to the US summary tab within | | 11 | Exhibit 103. I would like to take you down to REDACTED | | 12 | ; do you see that? REDACTED | | 13 | A Yes, I do. | | 14 | Q That's a column A, and then column F it | | 15 | says there are 60 instances for ; do you REDACTED | | 16 | see that? | | 17 | A Yes, I do. | | 18 | Q Do you have an understanding of what REDACTED | | 19 | is? REDACTED | | 20 | A My knowledge would indicate that's our | | 21 | relationship with . And they would be REDACTED | | 22 | opportunities where we have been in pursuits for . REDACTED | | 23 | Q Do you have any understanding of what | | 24 | services have been provided to by REDACTED | | 25 | Deloitte? |
| 00409 | | 1 | A I have a general understanding. I don't | | 2 | have detailed knowledge of all the services. | | 3 | Q What's your general understanding? | | 4 | A I know we've been in consulting | | 5 | relationships and hired by to deliver REDACTED | | 6 | consulting services. Some of the services have been | | 7 | technology oriented, some of those have been business | | 8 | oriented, and that we do consider as REDACTED | | 9 | one of our strategic relationships within the firm. | | 10 | Q Let's go back to the US work region tab in | | 11 | Exhibit 103 and sort for services under client. REDACTED | | 12 | And we have row -- I'm going to ask you some questions | | 13 | about row 502? | | 14 | A Mm-hmm. | | 15 | Q Would you read the description of the | | 16 | project in row 502 into the record, please? | | 17 | A It says merger- legal review, EXT dot, REDACTED | | 18 | that means extension. | | 19 | Q Do you have an understanding of what | | 20 | services Deloitte was providing to services based REDACTED | | 21 | upon that entry? | | 22 | A This would likely be our merger and | | 23 | acquisition group providing some service around | | 24 | potential merger that they had going on at the time. | | 25 | Q When you say your merger and acquisition |
| 00410 | | 1 | group what do you mean? | | 2 | A There is a piece of our consulting business | | 3 | that focuses on merger and acquisition. They possess | | 4 | skills that are related to merger transactions or | | 5 | acquisition transactions where we advise our clients | | 6 | -- we advise our clients on technical, on business, on | | 7 | transactional issues that might exist around the | | 8 | particular movements of business. | | 15 | Q Do you have an understanding of whether the | | 16 | work that's being described in -- in row 502 for | | 17 | Services is an ERP solution? REDACTED | | 18 | A I'm not led to believe by that description | | 19 | that it is an ERP solution. However, in our merger | | 20 | and acquisitions activity we will oftentimes get | | 21 | involved in advising a client on their applications | | 22 | architecture and potential thinking around the use of | | 23 | ERP in a particular business. | | 24 | Q Do you have in the suspected packages | | 25 | listed as SAP - |
| 00411 | | 1 | A Mm-hmm. | | 2 | Q -- do you have an understanding of whether | | 3 | uses any SAP software? REDACTED | | 4 | A does use SAP. REDACTED | | 5 | Q Do you have an understanding of whether the | | 6 | merger legal review that's described within row 502 | | 7 | was related in any way to SAP ERP software? REDACTED | | 8 | A I can't tell for sure. I don't know that. | | 9 | Q Is it -- is it fair to say that not all of | | 10 | the entries in the US work region portion of Exhibit | | 11 | 103 are software selection or implementation projects? | | 12 | A That is a fair statement. | | 13 | Q There are also -- there are entries within | | 14 | -- within Exhibit 103, in particular the US work | | 15 | region spreadsheet, for CRM projects; correct? Hang | | 16 | on, I can show you one. | | 17 | A Yeah, that would likely be the case. The | | 18 | CRM is part of our enterprise applications practice. | | 19 | Q So, it's your understanding that Exhibit | | 20 | 103, in particular the US work region spreadsheet, | | 21 | would have projects related to CRM? | | 22 | A Yes, it would. | | 23 | Q And also supply chain management, SCM? | | 24 | A Yes. |
| 00412 | | 2 | Q So, it's fair to say that Exhibit 103, in | | 3 | particular the US work region spreadsheet, contains | | 4 | information about projects beyond core financial and | | 5 | core HR projects? | | 6 | A That's correct. | | 7 | Q We -- when -- when Mr. Brown was asking you | | 8 | some questions, on May 5th, he provided some testimony | | 9 | about Microsoft Software product called Great Plaines; | | 10 | do you recall that? | | 11 | A Yes, I do. | | 12 | Q Do you have more familiarity with a more | | 13 | recent Microsoft Software product called Axapta? | | 14 | A I do not. | | 15 | Q You do not? | | 16 | A I've heard of it. I don't have personal | | 17 | familiarity with it. |
| 00413 | | 5 | Q When -- when did you first become aware of | | 6 | PeopleSoft in your practice? | | 7 | A My introduction to PeopleSoft was probably | | 8 | around 1996. | | 9 | Q And do you have a recollection of what | | 10 | PeopleSoft's product offerings were, at the time? | | 11 | A Primarily, human resource systems. They | | 12 | had an emerging product around financial systems, at | | 13 | that time. | | 14 | The other emerging area that they were | | 15 | talking about or developmental area was around | | 16 | manufacturing, which is how I got first introduced to | | 17 | the company. | | 18 | Q And when you say an emerging product what | | 19 | do you mean? | | 20 | A They had a product that was in their | | 21 | software development lab, and they were trying to | | 22 | develop business applications that could be used in | | 23 | companies whose primary business was manufacturing. | | 24 | The applications would deal with what we've | | 25 | been talking about in the last two discussions, more |
| 00414 | | 1 | of about supply chain management. | | 2 | So, everything that had to do with | | 3 | inventory management, everything that had to do with | | 4 | manufacturing, planning and control, MRP, and those | | 5 | types of applications, was the product suite that | | 6 | PeopleSoft was investing in and trying to bring to | | 7 | market. And that's how I got introduced to them the | | 8 | first time. | | 9 | Q And do you know if PeopleSoft was | | 10 | successful in bringing that emerging product to | | 11 | market? | | 12 | A They were not successful in bringing that | | 13 | to market. | | 14 | Q What about you also mentioned that | | 15 | PeopleSoft had an emerging from a financial product, | | 16 | at the time? | | 17 | A Yes. Yes. | | 18 | Q Was PeopleSoft successful in bringing that | | 19 | product to market? | | 20 | A Yes, they have been successful in doing | | 21 | that. | | 22 | Q Do you have an understanding of how | | 23 | PeopleSoft was able to break into the financial | | 24 | management product in the mid to late 1990s? | | 25 | A My understanding was with the specialty in |
| 00415 | | 1 | HR they found themselves in a lot of back office | | 2 | strategist discussions. The financial strategy within | | 3 | the company did not lack the human resources strategy, | | 4 | by far, at all, or by in terms of--- by terms of | | 5 | investment. | | 6 | So, they had a -- they had a good client | | 7 | base in which they could cross sell both those | | 8 | applications. So they became involved in a financial | | 9 | implementation -- excuse me -- they could bring in the | | 10 | HR applications. If they became involved in HR they | | 11 | could bring in the financials. And it was easy to do | | 12 | that because they were working usually with the same | | 13 | executive group responsible for a lot of back office | | 14 | operations. |
| 00418 | | 5 | Q And I just want to -- just to -- just to | | 6 | make sure I understand, in your Lawson practice at -- | | 7 | at Deloitte Consulting, today, you have approximately | | 8 | 71 professionals; is that correct? | | 9 | A That's right. | | 10 | Q And the entire size of the practice is REDACTED | | 11 | million dollars in revenue? | | 12 | A That's a fair estimate. | | 13 | Q Does that sound right? | | 14 | A Yes. | | 15 | Q And that compares with the Oracle practice, | | 16 | in which you have 300 individuals who are solely | | 17 | dedicated to Oracle, just in the United States; is | | 18 | that correct? | | 19 | A That's right. | | 20 | Q And -- and you have another 1200 that are | | 21 | -- that are partially dedicated to Oracle in the | | 22 | United States, and the rest of the word; is that | | 23 | correct? | | 24 | MR. YATES: Objection, mischaracterizes the | | 25 | witness' previous testimony, and argumentative. |
| 00419 | | 1 | BY MR. BROWN: | | 2 | Q Is that correct, what I said? | | 3 | A I believe that is the number that we talked | | 4 | about? | | 5 | Q And I believe that of your total 1500 | | 6 | individuals who are solely dedicated or partially | | 7 | dedicated to the Oracle practice about 20 percent of | | 8 | those were outside the United States; is that right? | | 9 | A That's right. | | 10 | Q Okay. And the size of your -- your Oracle | | 11 | practice in -- in just the United States, alone, is | | 12 | million dollars in revenue a year; is that right? REDACTED | | 13 | A It's nearing that number, yes. |
| 00422 | | 2 | Q Okay. And I would just like to -- you to | | 3 | refer for a moment to a document, 1433, which was | | 4 | shown to you by defense counsel? | | 5 | A Yes. | | 6 | Q This is the -- the document that Deloitte | | 7 | prepared for the State of North Carolina? | | 8 | A That's right. |
| 00423 | | 16 | Q Does the document discuss -- does the | | 17 | document show whether there is -- whether -- whether | | 18 | it would be cost effective to use one or another of | | 19 | any of those alternatives? | | 20 | MR. YATES: Objection, vague as to cost | | 21 | effective, and lacks foundation. | | 22 | A There are references on page eight to | | 23 | orders of magnitude of cost that are listed in the | | 24 | comments column. So some reference has been made to | | 25 | cost, but nothing that's specific, at least in my |
| 00424 | | 1 | estimation. | | 2 | Q Okay. So, is there -- can you tell from | | 3 | this document which -- which alternative is the least | | 4 | costly? | | 5 | A Not with certainty. | | 6 | Q Can you -- can you tell from this document | | 7 | which alternative will lead to the greatest financial | | 8 | benefits after implementation? | | 9 | MR. YATES: Objection, vague as to | | 10 | financial benefits. | | 11 | A There is a comment underneath the single | | 12 | ERP solution that suggests that there are the most | | 13 | benefits provided by the single ERP solution option | | 14 | three. | | 15 | Q Yes. Now, can you tell whether from that | | 16 | comment that that's the solution that Deloitte would | | 17 | recommend if -- if asked for its recommendation? | | 18 | MR. YATES: Objection, lacks foundation. | | 19 | A You can not assume that. | | 20 | Q Can -- can you tell from anything in this | | 21 | document what -- what would be the -- a viable | | 22 | alternative for the state in this case in -- in -- in | | 23 | this instance for the State of North Carolina? |
| 00425 | | 1 | A I believe that all three are viable and the | | 2 | firm's position is that all three are viable, it | | 3 | really depends on the constraints that the state would | | 4 | have. | | 5 | Q And what are the constraints? | | 6 | A The scope, scope of management and control, | | 7 | what exactly they're going to implement, timing being | | 8 | the schedule, the resources that it can bring in terms | | 9 | of state's capability to get things done over the | | 10 | resources they might be able to bring from a financial | | 11 | perspective. | | 12 | Q So, can you tell whether if the cost of one | | 13 | alternative were to go up, even by ten percent, it | | 14 | would make another alternative preferable? | | 17 | A I don't believe you could infer that from | | 18 | the document, Kent. | | 19 | Q Okay. I would like to show you what I have | | 20 | -- well, I just want to -- now, in your Oracle | | 21 | practice you haven't run into Lawson in any | | 22 | competition, have you? | | 23 | MR. YATES: Objection, asked and answered. | | 24 | A I, personally, have not run into Lawson. |
| 00426 | | 4 | MR. BROWN: I will show you what is marked | | 5 | as Government Exhibit 61. Back on the record. Back | | 6 | on the record. I will show you what's been marked as | | 7 | Government Exhibit 61. | | 8 | (Government Deposition Exhibit No. 61 was | | 9 | marked for identification and was attached to the | | 10 | transcript.) | | 11 | BY MR. BROWN: | | 12 | Q Could you please take a quick look at that, | | 13 | Mr. Dortenzo? | | 14 | A Sure. | | 15 | Q This is a document that was produced | | 16 | pursuant to Oracle's subpoena, it's marked DS 000010, | | 17 | to 11, and the title of the document is Deloitte | | 18 | Public Sector, have you had a chance to see the | | 19 | document, take a look at it? | | 20 | A Yes. | | 21 | Q Do you know if this is some additional | | 22 | material that -- that -- that Deloitte has prepared to | | 23 | discuss its -- its implementation and enterprise ERP | | 24 | services with respect to the public sector? | | 25 | A Yes, I do believe that is the case. |
| 00427 | | 1 | Q Okay. And I just like to refer you for a | | 2 | moment, if you could, to the second page, which is | | 3 | Bates stamped 000011, in the middle column; do you see | | 4 | that? | | 5 | A Yes, I do. | | 6 | Q Now, there's a bullet point on that page, | | 7 | and -- and then there's several dashes. Do you see | | 8 | the last dash, where it says performance management? | | 9 | A Yes. | | 10 | Q Now, in that, if you go down to the -- to | | 11 | the second sentence on that dash, it says: Our group | | 12 | of trained Lawson professionals, comprising more | | 13 | Lawson certified consultants than any other Lawson | | 14 | business partner, specializes in the implementations | | 15 | of Lawson software applications, including financials, | | 16 | HR, payroll, procurement and enterprise relationship | | 17 | management. | | 18 | Are you familiar with the claim that | | 19 | Deloitte makes that -- that -- that it is -- that its | | 20 | Lawson practice comprises the largest of--- of all the | | 21 | -- the partners of Lawson? | | 22 | A I was not familiar with that statement. | | 23 | Q Do you have any reason to believe that | | 24 | that's not an accurate statement? | | 25 | A I don't have a basis to judge it, no. |
| 00428 | | 21 | Q Now, of the - the software, of the ERP | | 22 | software that's used by Deloitte's clients, what | | 23 | software, what ERP software is most configurable? | | 24 | A I don't know that there's one that is most | | 25 | configurable. I consider the software partners that |
| 00429 | | 1 | we've got alliances with to all have highly | | 2 | configurable solutions, otherwise we would not have | | 3 | qualified them onto that partner list. So I'm not | | 4 | sure that you can compare one to the other and say | | 5 | most configurable. | | 6 | Q Okay. Well, did you -- is it -- is it -- | | 7 | are PeopleSoft, SAP and Oracle the most configurable | | 8 | of the -- of the financial management and the HR | | 9 | package software? | | 10 | A Again, I am not sure about most, Kent. I | | 11 | don't know that I can say most. I don't have | | 12 | familiarity with Lawson's financial configurability or | | 13 | any of the other softwares that we've talked about to | | 14 | say that they're the most. They are three highly | | 15 | configurable products. | | 16 | Q All right. Are you aware of any software | | 17 | that's more configurable than PeopleSoft, Oracle and | | 18 | SAP for their financials or HR management functions? | | 19 | A No. | | 20 | Q In your examination this morning you | | 21 | discussed -- you discussed the example of , do you REDACTED | | 22 | recall? | | 23 | A I do. | | 24 | Q And -- and I think in that examination, in | | 25 | your examination, you discussed that, that was REDACTED |
| 00430 | | 1 | on one ERP system, that was SAP, and -- and was on REDACTED | | 2 | another ERP system, that was Oracle; is that correct? | | 3 | A Yes. | | 4 | Q And that a decision was made to converge | | 5 | onto SAP; is that correct? | | 6 | MR. YATES: Objection, argumentative, | | 7 | mischaracterizes the witness' testimony. | | 8 | A That was correct. | | 9 | Q But that in the meantime there is a -- | | 10 | there have been efforts made to -- to -- to integrate | | 11 | those systems so that they can continue operating | | 12 | while the convergence -- convergence is taking place; | | 13 | is that accurate? | | 14 | A Not so much to integrate the systems, but | | 15 | to take the outputs of those particular systems so | | 16 | that they could meet their financial reporting | | 17 | requirements. | | 18 | Integrating those two systems would mean | | 19 | that there is interfacing or the passing of data back | | 20 | and forth between the systems. So that's not what I | | 21 | was inferring. I was inferring to meet the | | 22 | requirements they did as I just stated. | | 23 | Q And -- and can you tell me what is the -- | | 24 | what are the advantages to a -- for a firm like to REDACTED | | 25 | integrate, or not integrate, but to converge onto just |
| 00431 | | 1 | one platform? | | 2 | A The advantages would be to reduce the | | 3 | complexity associated with its technology environment. | | 4 | Therefore, they would have one software vendor from | | 5 | which to administer maintenance programs and one | | 6 | software to maintain. So, that's -- that's attractive | | 7 | from a cost of maintenance perspective. | | 8 | It's also attractive because it could, | | 9 | perhaps, reduce the amount of manpower, people power | | 10 | that's required to support that from an hours of | | 11 | maintenance perspective. | | 12 | And it would provide a single systems | | 13 | interface to the user or organization so that everyone | | 14 | would have a common system and a common language in a | | 15 | common toll set for transacting business. Those are | | 16 | the primary best benefits I believe that would be | | 17 | there. | | 18 | MR. BROWN: Okay. I just want to show you | | 19 | a document that we will mark as Government Exhibit 62? | | 20 | (Government Deposition Exhibit No. 62 was | | 21 | marked for identification and was attached to the | | 22 | transcript.) | | 23 | Q Have you had a chance to look at | | 24 | Government's Exhibit 62, Mr. Dortenzo? | | 25 | A I have. |
| 00432 | | 1 | Q This document was produced pursuant to -- I | | 2 | think this was in response to the -- I'm not sure if | | 3 | this was in response to the government's subpoena or | | 4 | to Oracle's subpoena, but it's numbered DEL 015304 | | 5 | through 15320, and it purports to be a project Gemini, | | 6 | Gemini North American ERP road map regarding . REDACTED | | 7 | Are you familiar with -- with that project in | | 8 | Deloitte? | | 9 | A I was familiar with that client, and a | | 10 | little bit about this project, yes. | | 11 | Q Okay. Is - do you know if Government | | 12 | Exhibit 62 is a - is a presentation that Deloitte | | 13 | prepared for presentation to the steering committee | | 14 | for the -for the client? REDACTED | | 15 | A That is the case. | | 16 | Q And was this document prepared in the | | 17 | ordinary course of business at Deloitte? | | 18 | A Yes. | | 19 | Q And has it been kept in the ordinary course | | 20 | of business? | | 21 | A Yes. | | 22 | Q Was the project actually presented to -- to | | 23 | ? REDACTED | | 24 | A Yes, it was. | | 25 | Q Okay. Was -- this is -- is this a project |
| 00433 | | 1 | that was being evaluated similar to the -- the REDACTED | | 2 | project in which had to make a decision as to REDACTED | | 3 | whether it should continue on two separate ERP systems | | 4 | or go with a -- a third option? | | 5 | A There were similarities between the two | | 6 | projects. I think the company had grown, , the REDACTED | | 7 | company had grown on a decentralized basis, and had | | 8 | disparate and separate solutions, different solutions, | | 9 | I should say, as opposed to , who was the result of REDACTED | | 10 | a merger. | | 11 | Q Uh-huh. | | 12 | A So I think that's the one difference that | | 13 | exists, Kent, between the two. | | 14 | Q But in the case of there was Oracle REDACTED | | 15 | ERP solution in the United States and -- and SAP was | | 16 | on -- on -- was -- was conducting the Canadian | | 17 | operations; is that correct? | | 18 | A That's right. | | 19 | Q And was there an evaluation made as to | | 20 | whether should move onto a single system? REDACTED | | 21 | A Yes, that was the case. | | 22 | Q And if you turn to -- if you turn to page | | 23 | -- to page four, DEL 015308, is that - is the - if | | 24 | you look at the table there's a -- there's a column | | 25 | called bridge, is this a -- is this a -- a -- another |
| 00434 | | 1 | alternative that was evaluated as to whether the | | 2 | company should continue with both its Oracle and its | | 3 | SAP systems? | | 4 | A Yes, I believe that is the case. | | 5 | Q And -- and -- and did Deloitte recommend | | 6 | that - that not go forward with the bridge REDACTED | | 7 | solution? | | 8 | A It did recommend that in this document, | | 9 | yes. | | 10 | Q And do you know why? Maybe, to help you, I | | 11 | can refer you to -- to page three on DEL 015307. And | | 12 | -- and did Deloitte recommend that consolidate REDACTED | | 13 | onto an SAP solution? | | 14 | A It did. | | 15 | Q But did it also conclude that there would | | 16 | be significant benefits if Alcatel were -- were to | | 17 | decide to conclude on the Oracle solution, were to | | 18 | consolidate on the Oracle solution? | | 19 | MR. YATES: Objection, vague. | | 20 | A That is stated in the fourth bullet point | | 21 | on page three, where it talks about business benefits, | | 22 | that bridge would not -- | | 23 | Q Okay. | | 24 | A -- meet that -- that criteria. | | 25 | Q So, in that fourth bullet point does it say |
| 00435 | | 1 | business benefits identified by consolidating on one | | 2 | ERP will accrue regardless of the package chosen? | | 3 | What does that mean? | | 4 | A It means that the company should be | | 5 | indifferent from a benefits attainment perspective | | 6 | with respect to the software decision. | | 7 | Q As between Oracle and SAP? | | 8 | A That's right. | | 9 | Q Now -- now should the -- now, the next | | 10 | sentence says: These benefits will not accrue if | | 11 | chooses the option three, bridging the SAP and REDACTED | | 12 | Oracle; what does that mean? | | 13 | A Option three was a hybrid of using those | | 14 | two packages. | | 15 | Q Now, do you know why the benefits would not | | 16 | accrue if the consolidation did not occur? | | 17 | A On a business process perspective I would | | 18 | not know when that would be the case. From a cost of | | 19 | ownership and management of the software platforms I | | 20 | would understand that they would have two sets of | | 21 | costs by maintaining two different software platforms. | | 22 | Q And was a -- was there a summary of the | | 23 | costs of all three options on page 12, DEL 015316? | | 24 | A Yes, there is. | | 25 | Q And this is the implementation cost; is |
| 00436 | | 1 | that correct? | | 2 | A Yes. | | 3 | Q And -- and -- and -- and the implementation | | 4 | costs are cheaper for the bridge solution; is that | | 5 | right? | | 6 | A That's right. | | 7 | Q Okay. Now, if you turn to the next page, | | 8 | what is this page showing, page 13, DEL 1 -- | | 9 | A Thirteen? | | 10 | Q Go ahead. | | 11 | A I'm sorry, 13 is oriented towards the | | 12 | support and maintenance costs required for all three | | 13 | of the options. | | 14 | Q And does it also conclude -- show a -- a | | 15 | present value of the -- the total cost of all three | | 16 | options? | | 17 | A Yes, it does. | | 18 | Q And -- and -- and -- and the option for | | 19 | SAP, the total cost is 38 million; is that correct? | | 20 | A Yes. | | 21 | Q And for Oracle it's a little more than 53 | | 22 | million five hundred thousand? | | 23 | A Yes. | | 24 | Q And for the bridge solution it was 67 | | 25 | million? |
| 00437 | | 1 | A Yes. | | 2 | Q I just want to refer you for a moment to | | 3 | Exhibit 103, which is on the screen. Now, do you | | 4 | recall today that defense counsel showed you a letter | | 5 | that discussed some data produced by Deloitte, Exhibit | | 6 | 1437? | | 7 | A I do remember that. | | 8 | Q Okay. Now -- now, the date on that letter | | 9 | is October 17th, 2003; is that correct? | | 10 | A That's right. | | 11 | Q Okay. Now, do you recall in your testimony | | 12 | you testified that the data that is on Exhibit -- | | 13 | MR. BROWN: Is it 103? | | 14 | MR.YATES: Correct. | | 15 | THE WITNESS: Mm-hmm. | | 16 | BY MR. BROWN: | | 17 | Q That the data that is on Exhibit 103 is the | | 18 | same data as the exhibit that you discussed in your | | 19 | declaration -- | | 20 | A Yes. | | 21 | Q -- for the government? | | 22 | A I do recall. | | 23 | Q Which is Exhibit 104? | | 24 | A Yes. | | 25 | Q I want to show you your exhibit, your |
| 00438 | | 1 | declaration. Okay. Now, if you look at your | | 2 | declaration, in paragraph three do you see that -- | | 3 | that you're talking about spreadsheets that were | | 4 | submitted to the United States Department of Justice | | 5 | on January 12th, 2004? | | 6 | A I do. | | 7 | Q Okay. So, that's -- this is a -- a | | 8 | different analysis or a different -- this is not the | | 9 | same data as -- as the data that's discussed in the | | 10 | October letter, it's a different set; is that correct? | | 11 | MR. YATES: Objection, vague as to the data | | 12 | and whether it's a completely different set. | | 14 | Q Let me -- let me ask a slightly different | | 15 | question that might help you to put this in | | 16 | perspective. | | 17 | Do you know if after Deloitte produced the | | 18 | information that accompanied Mr. Weiss' letter, which | | 19 | is document, what is it, 1437, that Deloitte was asked | | 20 | to make corrections in the data and to provide more -- | | 21 | more definitive information about what the data -- | | 22 | what that -- what was included in that data? | | 23 | A I do know that, I believe there was two | | 24 | different submissions. | | 25 | Q And -- and -- and was the second submission |
| 00439 | | 1 | made on January 12, 2004? | | 2 | A Yes, it was. | | 3 | Q And -- and is that the -- the data that you | | 4 | discuss in your declaration, Exhibit 104? If you look | | 5 | at paragraph three. | | 6 | A It is, with respect -- yes, it is. | | 7 | Q Okay. Now -- now, with respect to the data | | 8 | that was submitted on January 12th? | | 9 | A Right. | | 10 | Q Did you discuss in your declaration how the | | 11 | designations were made for column A, the suspected | | 12 | package column? | | 13 | A We did. We did. Yes, I did. | | 14 | Q And -- and -- and do you know -- and -- and | | 15 | -- and did Deloitte use its best efforts within the | | 16 | scope of looking at the information in the database to | | 17 | identify the -- the company who was the -- the vendor | | 18 | of the ERP system discussed on each project line in | | 19 | Exhibit 103? | | 20 | A Yes. | | 21 | Q And I just want to -- if you go to the drop | | 22 | down menu for column A, oh, uh-oh, the red one? Oh, | | 23 | okay, I see. And -- and sort for SAP, you find that | | 24 | there are 723 of 11 -- of 1109 entries; is that | | 25 | correct? |
| 00440 | | 1 | A That's right. | | 2 | Q If you go to the drop down menu and sort | | 3 | for Oracle how many entries are there? | | 4 | A 127. | | 5 | Q Okay. And if you go to the drop down menu | | 6 | and sort for PeopleSoft how many entries are there? | | 7 | A 134. | | 8 | Q And if you go to the drop down menu and | | 9 | sort for JD Edwards how many entries are there? | | 10 | A 40. | | 11 | Q And, finally, in the drop down menu is it | | 12 | -- there's only one other firm listed, and that's | | 13 | Retek; is that correct? | | 14 | A That's right. | | 15 | Q And you discussed Retek in your declaration | | 16 | 104; is that right? | | 17 | A Yes. | | 18 | Q And how many entries are there for Retek | | 19 | listed on that? | | 20 | A Seven. | | 21 | Q Okay. Now, this data goes through October | | 22 | 10th, 2003; is that correct? | | 23 | A Yes. |
| 00442 | | 6 | Q Okay. Now, counsel asked you about the | | 7 | service about whether these were all financial | | 8 | management or HR management projects, and you | | 9 | indicated that there might be some CRM or SCM projects | | 10 | on here; do you recall that testimony? | | 11 | A I do. |
| 00446 | | 7 | Q Okay. Now, in the drop down menu there's | | 8 | no Siebel. You have a partnership with Siebel or an | | 9 | alliance with Siebel; is that correct? | | 10 | A We have an alliance. We do have an | | 11 | alliance with Siebel. | | 12 | Q But Siebel isn't listed in any of these, | | 13 | does that mean that -- that -- that a Siebel | | 14 | implementation would be listed under a different | | 15 | service area term in column C? | | 16 | A There was a period of time when this, under | | 17 | the dates that this data exists, that are CRM activity | | 18 | was managed in a separate database, which is likely | | 19 | where you would find the Siebel specific. | | 20 | Q And were your supply chain implementations | | 21 | also managed under a different service area? | | 22 | A For a portion of that period of time the | | 23 | same case would exist where supply chain and things | | 24 | like an Ariba would show up on a separate list. | | 25 | Q Okay. Okay, now, I want to refer you, if I |
| 00447 | | 1 | could, to what counsel marked as -- as defense Exhibit | | 2 | 1434? | | 3 | A Okay. | | 23 | Q Did Deloitte make the same sort of | | 24 | assessments in deciding whether or not these projects | | 25 | were Lawson projects in Government (sic) Exhibit 1436? |
| 00448 | | 1 | A Assessments, Kent, meaning? Could you | | 2 | restate the question, just to make sure I understand | | 3 | it? | | 4 | Q Well, for example, did -- did Deloitte have | | 5 | to -- did Deloitte have to make an assessment based on | | 6 | information in the -- a decision based on information | | 7 | into the -- that was entered in the database to | | 8 | identify the -- the package as Lawson for some of | | 9 | these projects? | | 10 | A I think these entries, to the best of my | | 11 | knowledge, were pulled directly from Lawson data. So, | | 12 | I don't believe there was interpretation in | | 13 | determining what went into column one. | | 14 | Q Okay. Well, let me -- let me just look at | | 15 | -- at -- at some of these, these entries. | | 16 | First, if you look under the client name, | | 17 | is it fact that many of these entries there's multiple | | 18 | entries for the same client? | | 19 | A That's fact. | | 20 | Q So, even though there's four pages of | | 21 | entries with multiple numbers of projects on the pages | | 22 | there's a -- there's fewer numbers of clients involved | | 23 | than there are entries; is that correct? | | 24 | A That's correct. | | 25 | Q And -- and second, is it -- is it the fact |
| 00449 | | 1 | that -- is it a fact that a number of these projects | | 2 | are not implementations? | | 3 | A They are not -- the line items are not | | 4 | implementations in and of themselves. The -- the | | 5 | scope of work associated with the opportunity | | 6 | description in all of these cases appears to be | | 7 | related to an implementation project. | | 8 | Q Is -- I'm looking at, for example, in the | | 9 | middle of the first page of Exhibit 1436? | | 10 | A Right. | | 11 | Q Where -- do you see there's a -- there's a | | 12 | number of projects for , Inc.? REDACTED | | 13 | A Yes. | | 14 | Q And if you look at -- there's one that says | | 15 | procurement support under the opportunity name and | | 16 | opportunity description? | | 17 | A Yes. | | 18 | Q Is that an implementation project? | | 19 | A That is services to be rendered to the | | 20 | procurement function around their implementation. So | | 21 | it may be trying to assist the buyers or procurement | | 22 | agents in the course of their job responsibilities as | | 23 | they operate the system. Otherwise it probably | | 24 | wouldn't be on this list. | | 25 | Q Okay. Well, you're saying otherwise it |
| 00450 | | 1 | probably wouldn't be on the list, why are the projects | | 2 | on the list in government Exhibit 103? | | 3 | A Because those constituted the body of work | | 4 | that we did around packages or our IES practice at the | | 5 | time that the data -- the time consistent with the | | 6 | data requests. | | 7 | Q Are -- are the numbers that -- that you | | 8 | read off for -- in column A, when we -- when we sorted | | 9 | by SAP, Oracle, PeopleSoft and JD Edwards, are those | | 10 | approximate representative of the -- of the numbers of | | 11 | projects involving the ERP work you've done for -- for | | 12 | those four vendors? | | 13 | MR. YATES: Objection, over broad, vague as | | 14 | to ERP. | | 15 | A Yes. | | 16 | Q Okay. Now, I think you said that this data | | 17 | in Exhibit 1436 was -- was taken from your target | | 18 | database? | | 19 | A Yes. | | 20 | Q Is that correct? | | 21 | A I did say that. | | 22 | Q Now -- now -- now, this data was not even | | 23 | in the target database until 2004; is that correct? | | 24 | A Yes. | | 25 | Q So -- so that means that -- that -- that |
| 00451 | | 1 | any data that is dated before 2004 came from another | | 2 | -- was entered initially in some other system; is that | | 3 | -- is that true? | | 4 | A Or was maintained within our Deloitte and | | 5 | Touche solution organizations, yes. | | 6 | Q Somehow it was maintained somewhere in | | 7 | another organization that you weren't a part of; is | | 8 | that correct? | | 9 | A That's right. | | 10 | Q And you don't know how it was maintained, | | 11 | do you? | | 12 | A I am not familiar with their procedures. | | 13 | Q And you don't know how it was recorded? | | 14 | A No. | | 15 | Q You don't know how they designated it; is | | 16 | that correct? | | 17 | A Other than what's reported here, now, yeah. | | 18 | Q And the only thing you know is that there | | 19 | was some effort to make some conversion into the | | 20 | target database; is that correct? | | 21 | MR. YATES: Objection, argumentative, over | | 22 | broad. | | 23 | A I knew that they tracked their | | 24 | opportunities. I wasn't aware of the procedure and | | 25 | that there was an effort made around conversion. |
| 00453 | | 19 | Q Now, can you tell when that project was? | | 20 | A There is a reference to column SNT, also | | 21 | stated on reference DS triple zero 111, that talks | | 22 | about an indication of the win dates in column SNT, | | 23 | which is the opportunity project start date and end | | 24 | date. So in this particular line item there are start | | 25 | dates of 1/1/2004, and end dates of 5/31/2004. |
| 00455 | | 1 | Q Okay. So you -- | | 2 | A And that might be a more accurate | | 3 | representation. | | 4 | Q Okay. So you would look at the start dates | | 5 | and the -- and the project end dates? | | 6 | A The win date and the start date are usually | | 7 | within days if not the same day of each other. | | 8 | Q Okay. Very good. | | 17 | Q Mr. Dortenzo, this morning you spoke about | | 18 | ; do you recall that? REDACTED | | 19 | A Yes. | | 20 | Q That's one of Deloitte's clients? | | 21 | A Yes. | | 22 | Q And in -- and if I understood you correctly | | 23 | did you say that -- that acquired a general REDACTED | | 24 | ledger and an accounts payable packages, and is | | 25 | implementing them in one after another? |
| 00455 | | 1 | A That was their implementation strategy, | | 2 | yes. | | 3 | Q Okay. Now, what was the software that | | 4 | acquired? REDACTED | | 5 | A Oracle. The product? | | 6 | Q Yeah. | | 7 | A Yeah, Oracle was the vendor. I'm sorry. | | 8 | The vendor was Oracle. | | 9 | Q Oracle general ledger and Oracle accounts | | 10 | payable? | | 11 | A That's right. | | 12 | Q Okay. Now, did acquire any other, REDACTED | | 13 | at the same time, any other financial software from | | 14 | another vendor to integrate together with its general | | 15 | ledger and accounts payable system? | | 16 | A No, they did not. | | 17 | Q Okay. And -- and is it -- is it your -- is | | 18 | it your experience that -- that companies are not | | 19 | acquiring a variety of financial management modules to | | 20 | -- to tie together, integrate together in one ERP | | 21 | package? | | 22 | MR. YATES: Objection, over broad. | | 23 | A Companies pursue both strategies, of buying | | 24 | all the financial modules at once, and some companies, | | 25 | based on need, will buy certain of the financial |
| 00456 | | 1 | modules, such as the case, GL, accounts REDACTED | | 2 | payable, etcetera, depending on their system strategy | | 3 | and what business benefits they're trying to achieve. | | 4 | Q Okay. Now, do you see the -- are the -- | | 5 | are the -- are the clients that you work with in | | 6 | Deloitte have you seen any of those clients acquire | | 7 | those components of the financial management system, | | 8 | general ledger, accounts payable, accounts receivable | | 9 | from different vendors and then integrate them | | 10 | together? | | 11 | A We have seen that in our practice. | | 12 | Q Okay. When was the last time you saw that? | | 13 | A I would say as a generalization, Kent, that | | 14 | practice probably stopped around right after the year | | 15 | 2000. | | 16 | Q Why did it stop? | | 17 | A Companies started to evaluate their | | 18 | purchases on -- on more of an integrated basis, for | | 19 | the reasons that we discussed. I can't think of an | | 20 | example where a company has purchased from two | | 21 | different software vendors financial modules that's | | 22 | occurred in at least my recent experience. | | 23 | Q Okay. Do you know if is planning to REDACTED | | 24 | -- to expand its Oracle financial management system | | 25 | beyond the general ledger in accounts payable? |
| 00457 | | 1 | A That is the strategy, yes. | | 2 | Q Do you have any idea which additional | | 3 | modules they -- they ultimately are intending to | | 4 | purchase? | | 5 | A They're for general ledger, fixed assets, | | 6 | accounts payable and accounts receivable on targets. |
| 00458 | | 6 | Q On Exhibit 1436, Mr. Dortenzo. It's your | | 7 | understanding that Exhibit 1436 -- and this is the | | 8 | spreadsheet of Lawson wins -- it's your understanding | | 9 | that this information was kept in a database | | 10 | maintained in the ordinary course of business by | | 11 | Deloitte and Touche; is that correct? | | 12 | A That's correct. | | 13 | Q And it's currently been migrated into a | | 14 | database that's been a database for the entire | | 15 | Deloitte organization? | | 16 | MR. BROWN: Can I make one objection? I | | 17 | object as to speculation the question about what the | | 18 | -- how it was kept at Deloitte and Touche. | | 19 | BY MR. YATES: | | 20 | Q And, Mr. Dortenzo, within the Deloitte | | 21 | organization, at the moment, does Deloitte and -- do | | 22 | Deloitte employees rely on information found in the | | 23 | target system such as Exhibit 1436? | | 24 | A Yes. |
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