|
|
Enron Mail |
Budget update/suggestions:
=20 Piper, Richter, and Webb met with Whalley this Saturday for a few hours on = overall EnronOnline strategy and budget. We showed him the development com= pleted to date and the general development list going forward. We also sho= wed him the down time report as well as some growth numbers over the last 1= 2 months. We also explained a few of the commercial objectives going forwa= rd. Finally, we showed him the same suggested EOL budget plan we showed yo= u, including 2001 plan vs. 2001 forecast vs. 2002 plan as well as the alloc= ation methodology. Greg is generally OK with the total 2002 plan number fo= r EOL ($37.7 million fully loaded with bonus, indirects and depreciation), = why we want that money and where it would be spent. What he did not like w= as the allocation methodology, which is currently cost based and based on d= evelopment and products. He suggested a charge that included a fixed fee p= lus a product setup fee plus a product maintenance fee plus a per transacti= on charge, etc. Richter and Webb are researching that and will try to see = if it will work. I think you and I can agree the $37.7 million is good for= 2002 but we still need to agree on your part for EA. The current cost bas= ed suggestion for EA for EOL for 2002 is about $22 million. A question is,= will you and Lavo accept any charges for 2002 for EOL based on transaction= s? Sheriff also has the entire EOL suggested budget and his part. We meet= EIM and EGM today on their total ENW charges. =20 On Operations, the current suggested 2002 EA charge is $44.7 million, which= is also a fully loaded number and is slightly down from 2001 forecast (Sal= ly and Bob and I can explain that in detail this week). What I would like = to do is agree between you and I that you will accept that as EAs budget nu= mber for 2002 plan for Operations. What we still need to work on is how we= would possibly bill that in some fixed and variable form that includes tra= nsaction counts. =20 On infrastructure, the current suggested EA plan number for 2002 $40.9 mill= ion. This is down from 2001 forecast. This does not include the $10.5 mil= lion of controllable expense you budget directly for EA. The issue left he= re is what is EAs headcount, what is the headcount in IT development and wh= at is the server infrastructure charge related to IT development that would= effect the EA number. On the first issue, we have the EA headcount as rep= resented by HR. The current EA infrastructure charge assumes that complete= number. It is larger than the number you have. You have requested we dea= l with some of that additional headcount differently since EA can't bill ou= t those on a fully loaded basis. We will work with Wes and his team on tha= t today and tomorrow to come up with a plan. =20 On IT Development, the current suggested 2002 plan expense number for EA, f= ully loaded, is $$44.5 million vs. a 2001 forecast of $34.4 million. Also,= the 2002 suggested capital number for EA is $50.1 million vs. a 2001 forec= ast capital number of $50 million. The question is, what did you get for y= our $84.4 million in 2001 and what would you get for $94.6 million in 2002?= First, Mark and Sally and I met on Sunday and we want the 2002 plan numbe= rs to be down from 2001 forecast. What we need to do in the next three day= s is finalize what are the critical maintenance and new development project= s for 2002 for EA. Our team is Bob Hall, Mark Pickering (Mark will call on= Stock and Perlman and Rao and Hotte as he sees necessary) and Greg Piper w= ith Pickering having the final say for ENW. Can you tell me who you want fr= om your side (Story? Belden?) to work with us three over the next few days = until we agree? We want to work on it around the clock until it is at leas= t approximately right. =20 Your thoughts? =20 GP =20 =20 Greg Piper=20 President & CEO=20 Enron Net Works LLC _____ =20
|