P3062: CID - Richard Scott Elliott (Kerr-McGee), Deposition Transcript

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Government Exhibit P3062 [Non-designated testimony redacted]

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21	Q Okay. And can you please state your full
22	name and address for the record, sir?
23	A Richard Scott Elliott, 410 North Mercedes
24	Drive, Norman, Oklahoma 73069.

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15	Q Mr. Elliott, what is your current job
16	title?
17	A Human resources portfolio manager for --
18	or in information management and technology.
19	Q And who is your current employer?
20	A Kerr-McGee Corporation.
21	Q And how long have you held this position
22	at Kerr-McGee?
23	A Three years and a few days.
24	Q And can you please give me a general
25	description of your job responsibilities in your

00009
1	current position?
2	A Sure. I manage a group of IT
3	professionals that supports several of our
4	corporate clients, human resources, legal and
5	medical groups.
6	Q How many IT professionals do you manage?
7	A Eight other folks besides me.
8	Q And how many of those report directly to
9	you?
10	A All of them.







18	Q Do you also do any work that would
19	support the financial aspect of Kerr-McGee?
20	A No, that's handled by another group in MI
21	& T.
22	Q Is there another person who would be
23	considered your counterpart that handles the
24	financials?
25	A Yes.

00010
1	Q And who is that?
2	A Bryan Wilks.
3	Q And what's his position?
4	A Portfolio manager as well for financial
5	systems.
6	Q And do your job responsibilities also
7	include responsibility for software procurement?
8	A In an advisement capacity, yes.
9	Q What do you mean when you say in an
10	advisement capacity?
11	A Our strategy at Kerr-McGee is that our
12	customers are the ones who drive software
13	procurement decisions and we are advisors to them
14	in that process.

00011
















17	Q Are you also responsible for working to
18	insure that Kerr-McGee gets the best deal that it
19	can on software procurement?
20	A We act in different roles depending on
21	the, depending on the procurement activities.
22	Q Is it ever a goal to try to get the best
23	value or best price that you can on software
24	procurement?
25	A Always.

00014








9	Q. (By Ms. McKinney) Can you explain to me
10	generally what the nature of Kerr-McGee's
11	business is?
12	A Yes. Again, back to our two main lines
13	of business, oil and gas exploration and
14	production and then chemical manufacturing. Our
15	main product is titanium dioxide, a pigment. We
16	do produce a few other electrolytical chemicals
17	and for a short period of time we still have a
18	small business producing railroad ties. It's
19	being phased out at the end of this year.
20	Q And does Kerr-McGee have any
21	operations -- or let me ask it this way. In what
22	geographical areas does Kerr-McGee have
23	operations?
24	A We have operations, I don't know how many
25	states, but across the United States and to my

00015
1	knowledge we have operations in Brazil, Bonine,
2	Morocco, Australia, China, the Netherlands,
3	Germany, the UK. Those are the major ones.

00018

2	Q So given the definitions that you've just
3	given me, does the oil and gas division have
4	independent authority for procurement of any ERP
5	software?
6	A In my experience at Kerr-McGee, those ERP
7	software decisions have been global decisions,
8	not business unit specific.
9	Q And what do you mean by global decisions?
10	A We, our preferred strategy at Kerr-McGee
11	is to have for each major functional area one
12	global supplier of software. In financials we
13	have one, in HR we have one. We have not been
14	able to accomplish that yet in the supply chain
15	side to my knowledge.

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18	Q. (By Ms. McKinney) And how would you
19	define core functionality on the financial
20	management side?
21	A The general ledger, accounts payable.
22	There are a variety of for us revenue or I should
23	say upstream oil and gas specific accounting
24	functions that would be core for us. I'm sure
25	there's a variety of others that could be listed,

00032
1	but those are the ones that are main ones for us
2	in my opinion.
3	Q Do you know what any of those oil and gas
4	specific accounting functions are?
5	A Some.
6	Q Can you name them for me?
7	A One would be -- the two major items are
8	tracking production and then tracking the revenue
9	that we receive for production.

00033
1	Q. (By Ms. McKinney) Would these
2	accounting functions you've just named, tracking
3	the production and tracking revenue, are those
4	functions that are specific to an oil industry or
5	to an oil company?
6	A That's not my area of expertise, but it
7	would seem to be so because that is oil and gas
8	production and oil and gas revenue.
9	Q Which software vendors offer core
10	financial management functionality?
11	MR. HAMMAKER: Objection, vague and lacks
12	foundation.
13	THE WITNESS: I don't know the complete
14	list. Again, not my area of expertise or
15	responsibility.
16	Q. (By Ms. McKinney) Do you know some?
17	A Yes.
18	Q Which ones would you name?
19	A The ones I can specifically name would be
20	PeopleSoft, Oracle, Lawson and SAP.
21	Q And with regard to human resources
22	management core functionality, which vendors
23	offer HR core functionality?
24	A Again, I don't know the complete list,
25	but I would list the same four.

00034
1	Q Any others?
2	A It's my understanding that Microsoft
3	purchased Great Plains, which I believe offers in
4	name at least those core functionality.




















25	Q But you don't have the same level of

00035
1	knowledge about Lawson, SAP or Microsoft that you
2	do about Oracle and PeopleSoft?
3	A The Oracle and PeopleSoft knowledge is
4	more current than the other two because we did
5	not -- or the other three. We did not have
6	detailed evaluations of Microsoft and of SAP
7	during our selection process. Lawson I do have a
8	feel but not detailed modules or detailed
9	functionality.

00039


3	Q Mr. Elliott, who would you name to be the
4	foremost ERP software vendors currently?
5	MR. HAMMAKER: Objection, vague, lacks
6	foundation.
7	THE WITNESS: Based on our process and a
8	review of Gartner recommendations, the same four
9	I listed previously, PeopleSoft, Oracle, Lawson
10	and SAP.

00040







8	Q. (By Ms. McKinney) And in your opinion
9	what factor or factors drive innovation in the
10	software industry?
11	A I would list competition, business
12	environment changes, customer demands, regulatory
13	changes.

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10	Q Do you consider Kerr-McGee's ERP software
11	needs to be complex?
12	A Yes.
13	Q Do you consider them to be unique?
14	A No.

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23	Q. (By Ms. McKinney) Mr. Elliott, what
24	core financial management software does
25	Kerr-McGee use?

00043
1	A Oracle.
2	Q And --
3	A And Energy Extensions from P2ES.
4	THE REPORTER: P2BS?
5	THE WITNESS: ES.
6	Q. (By Ms. McKinney) Do you know what
7	modules it uses from Oracle on the finance side?
8	A I do not know for sure.
9	Q And what is Energy Extensions?
10	A To my knowledge that deals with all of
11	the oil and gas specific revenue accounting
12	including production.
13	Q Would you consider that a point solution?



17	THE WITNESS: I really could go either
18	way on that. It's integrated with Oracle. I
19	think, my opinion would be that it is not.



23	Q And why would it not be considered a
24	point solution in your opinion?
25	A Oracle integration.

00044




5	Q Is the Oracle financial management
6	software used in both the oil and gas and the
7	chemical manufacturing business units?
8	A Yes.

00045

2	Q Are there any business units within
3	Kerr-McGee that use some other financial
4	management software besides Oracle?
5	A If there are I don't know.
6	Q Do you know when Oracle financial
7	management software was initially purchased or
8	licensed?
9	A Prior to the year 2000.








18	Q Do you know what languages Kerr-McGee
19	operates the Oracle financial management software
20	in?
21	A I do not.
22	Q And do you know what currencies are used
23	on the Oracle financial management software, if
24	there are any foreign currencies used?
25	A I'm sure there are, but I don't know

00046
1	specifically what we use.















17	Q We'll shift to the HR side now.
18	What core HR software does Kerr-McGee
19	currently use?
20	A PeopleSoft.
21	Q And is the PeopleSoft software used in
22	all geographic regions where Kerr-McGee operates?
23	A Yes.
24	Q And are there any business units that do
25	not use the PeopleSoft HR software?

00047
1	A No.
2	Q And when was the PeopleSoft HR software
3	initially purchased or licensed?
4	A 2001.


7	Q And do you recall how much Kerr-McGee
8	paid PeopleSoft?
9	A There are documents that support this. I
10	believe the license fees were in the neighborhood
11	of 1.5 million.
12	Q And did Kerr-McGee pay PeopleSoft any
13	implementation fees?
14	A No. They were not our implementation
15	partner.
16	Q And does it currently pay PeopleSoft,
17	does Kerr-McGee currently pay PeopleSoft any
18	maintenance fees?
19	A Yes.
20	Q And how much does it pay in maintenance
21	fees?
22	A This year it will be approximately
23	360,000,I believe, this year.
24	Q Do you know what it has been in previous
25	years since the implementation?

00048
1	A Yes.
2	Q What has it been?
3	A The first year was 300,000, succeeding
4	year was around 330 and then I believe about 345.
5	Q That brings us to this year, which was
6	360?
7	A Uh-huh.
8	Q What version of the PeopleSoftHR
9	software does Kerr-McGee use?
10	A Is there a specific module that you're
11	asking about?
12	Q I guess we should back up. Which modules
13	were licensed?
14	A We have HR, we have time and attendance,
15	we have licensed payroll, benefits
16	administration, data warehouse. There are three
17	analytic suites that we have licensed, Workforce
18	Analytics, Score Card and Rewards. In case I'm
19	missing any of these there's a document in our
20	material that reflects all of them. Employee and
21	manager self service and a variety of E modules
22	such as compensation, recruiting, compensation
23	manager, E pay.

00049









10	Q In which languages does Kerr-McGee
11	operate the PeopleSoft HR software?
12	A Currently English, German and Dutch.
13	Q And do you have any plans to operate it
14	in any additional languages?
15	A Not at the moment.
16	Q And in which currencies, if there are any
17	foreign currencies involved, does Kerr-McGee
18	operate the PeopleSoft HR software?
19	A Foreign is highly dependent on where you
20	are, but if you're talking non U.S. currencies --
21	Q Non U.S., yes.
22	A Yes. We -- I'm sorry, we also use
23	French. For -- we use the pound in the UK, we
24	use the euro, we also use the Swiss frank, we
25	also have a Canadian dollar. And I believe

00050
1	that's it. I think the rest of our folks are ex
2	pats, and so it would be the U.S. dollar.
3	Q Are these foreign currencies that you
4	named, are those currencies in which employees
5	are being paid?
6	A Yes.

00051







8	Q Is there any other human resources
9	management software that Kerr-McGee uses?
10	A No. We have one global instance.
11	Q Do you use any software from any of the
12	following vendors? And I'm going to go down the
13	list. Do you use any software from SAP?
14	A Kerr-McGee does not. We contract for
15	payroll processing in Germany with a company who
16	does.
17	Q What do you mean when you say you
18	contract for payroll processing?
19	A We pay a fee each year for a company to
20	produce payroll checks for us in Germany.
21	Q Is that similar to outsourcing payroll?
22	A It's outsourcing the production of
23	checks.
24	Q But would you consider it outsourcing of
25	the payroll function?

00052
1	A No.
2	Q Just the check process?
3	A We take care of the function, they
4	produce the checks. It's not BPO.









14	Q Do you use Hyperion?
15	A I believe we do for some financial
16	planning, but I am not 100 percent certain.

00053






7	Q And do you use any software from ADP
8	aside from the payroll processing in Germany?
9	A We outsource payroll, check production to
10	ADP in the United States. And there is a piece
11	of software that lives at our site that enables
12	that to happen.
13	Q Do you outsource any other part of the
14	payroll function aside from check processing?
15	A ADP handles production of checks, direct
16	deposits, tax filing. Other than that we do all
17	of the process work ourselves.

00054







8	Q. (By Ms. McKinney) I'd like to ask you
9	now about the process through which you selected
10	PeopleSoft for HR software.
11	A Okay.
12	Q When did that process begin?
13	A The actual selection process began
14	shortly after my arrival at Kerr-McGee, which
15	would be June 2001.
16	Q And who was the primary person
17	responsible for the selection of new HR
18	management software?
19	A The lead person would have been Lynda
20	Garcia.

00055
1	Q Is she still with Kerr-McGee?
2	A She is.
3	Q Do you know what her title is now?
4	A I do not. She's in the finance
5	organization.





11	Q And do you know if Ms. Garcia was the
12	person who managed the project on a day to day
13	basis?
14	A The selection project?
15	Q Yes.
16	A She was, she was our lead person on the
17	Kerr-McGee side.
18	Q Did she have any title associated with
19	the selection process such as project manager or
20	something similar?
21	A Not that I'm aware of.
22	Q And what was your involvement in the
23	selection process?
24	A I was the I think technical lead was the
25	official title.

00056
1	Q And what did that mean in practical
2	terms?
3	A Practical terms, I managed our group of
4	individuals from the IT side that participated in
5	the selection process. I also participated in
6	day to day activities such as question formation,
7	reviewing demonstrations, doing research if
8	required.

00057







8	Q. (By Ms. McKinney) And what do you
9	recognize this document to be? And let me just
10	say for the record, this document appears to be a
11	Power Point, on the front it's entitled
12	Kerr-McGee HR Financial Analysis, Employee
13	Service Center and HRIS dated September 2001 and
14	Bates labeled Kerr-McGee 008 through 040.
15	Mr. Elliott, what do you recognize this
16	document to be?
17	A This document is a summarization of the
18	HR strategy that our HR organization was pursuing
19	in 2001.

00058























24	Q The first one says project consultants,
25	Scott, Madden & Associates. And who was Scott,

00059
1	Madden & Associates?
2	A An HR consulting firm.
3	Q And what was their role on the HR
4	software selection process?
5	A It's described well here. They were
6	facilitators for the process.
7	Q And what did they do as facilitators?
8	A A facilitator, possibly coordinator is an
9	equally good term. They organized the work
10	products, facilitated discussions, facilitated
11	planning, were responsible for not only the HRIS
12	side but integrating it into the larger HR
13	strategy that this document represents. And that
14	was their sole involvement. As it states here,
15	they do not have or at least did not have at that
16	time an HRIS implementation practice.

00060

2	Q Why did you feel it was necessary to
3	engage a consultant to assist in this process?
4	A I can't answer for Lynda.
5	Q Was it Lynda who made the decision to
6	engage Scott, Madden?
7	A It was the HR organization as a whole and
8	Lynda was our point person.
9	Q And who was the main point person for
10	working with Scott, Madden?
11	A Lynda and I were both part of the, quote
12	unquote, project office, but Lynda was our point
13	person on the project within.
14	Q Do you know how much Kerr-McGee paid
15	Scott, Madden for its consulting services?
16	A I do not.
17	Q Would Lynda know?
18	A It's been a while. You'd have to ask
19	her.





25	Q. (By Ms. McKinney) Now, next on this

00061
1	list it says HRIS project office.
2	A Uh-huh.
3	Q Do you know what that term means?
4	A I know what it means with regards to our
5	selection process.
6	Q Sure. What was the HRIS project office?
7	A Would you like me to read it straight off
8	the document?
9	Q No. I would like to know, you know, what
10	you know. If the document helps to refresh your
11	recollection, that's fine, but I'd like you to,
12	you know, testify based on your knowledge.
13	A My view of the HRIS project office, the
14	responsibilities again are listed here
15	specifically. We as a group were responsible for
16	coordinating, well, the execution of the project,
17	obtaining resources, doing the visits as we
18	discussed. There were a lot of discussions
19	regarding what questions would be asked, what
20	weighting would be assigned to each one of the
21	criteria, how the RFPs or RFIs would look after
22	they were issued and we were facilitators,
23	coordinators on all those. My personal main task
24	was to coordinate the technical resources
25	involved.

00062
1	Q Were you a part of the HRIS project
2	office?
3	A Yes.
4	Q Who else was a part of the HRIS project
5	office, do you know who made up that group?
6	A Lynda Garcia was the main person and
7	officially we included Scott, Madden as a part of
8	the project office.
















25	Q And then these boxes here on Page 7, you

00063
1	said these are all people who participated in the
2	process?
3	A Yes.
4	Q Anda are these all groups that would be
5	end users of the software?
6	A Yeah.




11	Q. (By Ms. McKinney) How were these people
12	selected to participate in the selection process?


15	THE WITNESS: I don't recall the exact
16	process we went through to choose the folks. The
17	goal was to have people representing as many
18	different areas in the HR organization as we
19	could and plus involve technical people in from
20	several of our major areas as well.
21	Q. (By Ms. McKinney) Who selected these
22	people who were participants in the software
23	selection process?
24	A I'll go back to my previous answer. I
25	don't know the exact details of how we selected

00064
1	these people. As I look through here it was I
2	believe my recommendations on the technical side
3	to say these are the people that need to
4	participate based on their areas of expertise.
5	Q And was Lynda Garcia responsible for
6	selecting the other people involved here?
7	A I'll say again, I don't know the details
8	of how they were selected.
9	Q But you selected the people listed in
10	this box labeled technical who are here under
11	your name?
12	A Yes.
13	Q And are those the people you referred to
14	earlier who you were responsible for managing
15	throughout the selection process?
16	A For this process, yes.
17	Q Were you responsible for managing anyone
18	else on this chart?
19	A No.
20	Q Was Lynda Garcia responsible for
21	coordinating the other people in these other
22	boxes on this page?
23	A Yes. She served as the functional lead,
24	if you will.

00065























24	Q Can you tell me what, what the role of
25	subject matter experts was in this process?

00066
1	A As I recall, basically the document says
2	input and guidance. Many of these folks would be
3	consumers of, as I recall, some of the services
4	within the HRIS.







12	Q Did the -- did the technical team that
13	you were responsible for managing meet on a
14	regular basis throughout the selection process?
15	A Yes. We had scheduled meetings plus as
16	needed meetings depending on what was happening
17	in the process.
18	Q Let me back up just a second. How long
19	did the selection process take in total?
20	A We started this in June of 2001, the
21	contract was signed I believe at the end of
22	October 2001.
23	Q And how frequently did the technical team
24	meet during that time?
25	A I don't think there was any standard

00067
1	number of meetings we had on a weekly basis.
2	Q So you didn't have some kind of regular
3	set time for meeting?
4	A No. There was -- as I recall, there were
5	group meetings where the entire group met
6	together.
7	Q Would that have been the entire --
8	A Core selection team.
9	Q -- core selection team?
10	Including your technical team?
11	A Yeah.
12	Q And how frequently were those meetings?
13	A I think it depended on where we were in
14	the process. I can't recall the exact schedule.
15	Q Could you estimate the total number of
16	times that the HRIS core selection team met over
17	the course of the selection process?
18	MR. GORESEN: I'm going to object to the
19	extent it calls for speculation.
20	THE WITNESS: Anything I gave you would
21	be a guess.

00068




5	Q And with regard to your technical team,
6	can you estimate how many times your technical
7	team met on its own throughout the entire
8	selection process?
9	A As an estimate, we were visiting maybe
10	not in total but at least, you know, two or more
11	weekly basis. We did not have a set time where
12	we got together as an entire team, only as
13	needed.











	Q I'm not going to ask any more questions

00069
1	on this document for a little bit.
2	What were the main responsibilities of
3	your technical team in this process?
4	A To review, to the extent we could, the
5	technical soundness of the proposed solutions.

















23	Q Do you know if any presentation was ever
24	made to the CEO or other executives regarding the
25	selection of PeopleSoft?

00070
1	A I believe there was.
2	Q And were you part of that presentation?
3	A No.
4	Q Who did that presentation?
5	A I believe Lynda did.
6	Q Do you know when that was?
7	A I do not know the exact date. My surmise
8	would be either late September or early October.
9	Q Did you work with Lynda at all in
10	preparing that presentation?
11	A Scott, Madden was again the main
12	facilitator for producing documents, but I did
13	participate with Lynda as well.

00072


3	Q In addition to Scott, Madden, did you
4	consult with any other outside resources as part
5	of the selection process?
6	A One would have been Gartner.
7	Q And what was your interaction with
8	Gartner Group?
9	A We asked the question who would be their
10	I believe the term is magic quadrant vendors with
11	regards to the HR space.
12	Q And what did they tell you?
13	A PeopleSoft, Oracle, SAP, Lawson.

00073












13	Q And did you personally have contact with
14	someone at Gartner Group?
15	A I did not.
16	Q Do you know who did?
17	A I believe Lynda.
18	Q And do you know if she met with them in
19	person?
20	A I do not know for sure.
21	Q Do you know if she had personal contact
22	with them at all?
23	A Yes. I know for a fact there was
24	definitely a phone visit. At that time we had a
25	subscription to their services, so I don't know

00074
1	if there was anything else involved.
2	Q Do you know if they provided Kerr-McGee
3	with any written research report?
4	A I don't know. Ours was a fairly simple
5	and straightforward question.
6	Q So you never saw some written research
7	report from Gartner Group?
8	A No.
9	Q So the information that came from Gartner
10	Group you got through Lynda Garcia?
11	A Yes.












24	Q At what stage did you make reference
25	calls?

00075
1	A After, I believe, the field had been
2	narrowed to PeopleSoft and Oracle.
3	Q So you didn't call any references for
4	Lawson or SAP?
5	A None.



















25	Q. (By Ms. McKinney) Do you consider

00076
1	yourself to be a sophisticated customer of EAS
2	software?
3	MR. GOREEN: I'm going to ask for -- are
4	you asking if Scott Elliott considers himself to
5	be a sophisticated customer?
6	MS. McKINNEY: Yes.
7	THE WITNESS: When it comes to
8	Kerr-McGee's needs, yes.
9	Q. (By Ms. McKinney) Could you describe
10	for me the main steps in the process of selecting
11	the PeopleSoft HR software, if you know?
12	A You have the documents that describe all
13	of them. At a high level, again, based on
14	Gartner's recommendations, we identified four
15	companies that we felt like we should pursue.
16	All four companies were contacted to let them
17	know that we were actively engaged in a selection
18	process. PeopleSoft, Oracle and Lawson
19	responded. SAP did not. The request for
20	information and detailed questions were
21	developed, sent out and received back from those
22	three vendors. We had on site demonstrations at
23	Kerr-McGee from those three vendors. The RFI
24	responses and the presentations were graded by
25	the HRIS selection team. Lawson was eliminated

00077
1	based on that grading. PeopleSoft and Oracle
2	returned for additional demonstration. Two
3	visits were made, one to Oracle headquarters, one
4	to a PeopleSoft executive gathering. Reference
5	calls were made. The team made the
6	recommendation to upper management and they
7	approved.




12	Q Were there any other factors that went
13	into developing that list of what four vendors
14	Kerr-McGee would consider?
15	A Yeah, there were two other vendors
16	that -- I'm not sure, I can't remember the exact
17	nature of the research we did, but Baan and J.D.
18	Edwards were both considered in addition to those
19	four folks. Based on what we could determine, I
20	would think primarily from J.D. Edwards website,
21	it looked like they lacked the international
22	functionality that we thought we needed. Baan
23	was in serious financial difficulty prior to
24	their acquisition by SSI.

00078

















18	Q And then you mentioned that all four of
19	the vendors on your list, Oracle, PeopleSoft, SAP
20	and Lawson, were contacted?
21	A Correct.
22	Q In what way were they contacted by
23	Kerr-McGee?
24	A I believe Lynda Garcia phoned each one of
25	them personally.

00079
1	Q And do you know about what time frame
2	this was in?
3	A It would have been in June, I believe.
4	Q And were you on any of those phonecalls
5	that Lynda Garcia made?
6	A No.
7	Q Do you know the nature of the phonecalls
8	or what she said to them?
9	A Back to my previous, previous answer. It
10	would have been that we were actively engaged in
11	an HR selection process and we were contacting
12	them to solicit their participation and to also
13	find out where we should send our request for
14	information.
15	Q At the time that she called each of those
16	four, do you know if Kerr-McGee intended to send
17	each of those four vendors an RFI?
18	A I believe that was our intent.
19	Q And did she ask for any response from
20	them during those phone conversations? That is,
21	was she seeking any response from them prior to
22	sending the RFI?
23	MR. GORESEN: I'm going to object to the

00080


3	A To the best of my knowledge it was to
4	whom and where should we send the RFIs.
5	Q And you said that three responded?
6	A Yeah.
7	Q And which three were those?
8	A PeopleSoft, Oracle and Lawson.
9	Q And SAP did not respond?
10	A Correct.
11	Q And what does that mean?





17	Q. (By Ms. McKinney) Does that mean -- did
18	Lynda talk to anyone at SAP?
19	A I do not know specifically who she would
20	have talked to. They did not provide the
21	information which was who should we send the RFI
22	to and to where should it be sent.
23	Q Do you know if she, if she was able to
24	get anyone on the phone and speak with them?
25	A I do not know.

00081
1	Q Do you know who she tried to call at SAP?
2	A No.
3	Q Do you know if she left a voice-mail with
4	anyone at SAP?
5	A I wasn't in on the call. I don't know if
6	she talked to a person or left a voice-mail.
7	Q Do you know if she ever sent any written
8	communications to SAP?
9	A Not that I'm aware of.
10	Q Do you know if she made any subsequent
11	attempts to contact SAP either by phone or
12	through written communications?
13	A I believe there was more than one
14	attempt. I don't know how many.
15	Q Do you know how long of a time period she
16	spent trying to get in touch with SAP?
17	A No, I don't know exactly. The documents
18	we have we don't list the dates that, you know,
19	exact dates the RFIs went out or when the
20	phonecalls were made or when they were contacted.
21	Q And to your knowledge did SAP ever
22	respond?
23	A Yes.
24	Q Do you know when they responded?
25	A I don't know the exact date.

00082
1	Q Do you know --
2	A Our documents --
3	Q -- the approximate date?
4	A Our documents state that it was while the
5	process was well underway. I believe it was
6	after we had already received RFI responses from
7	the other vendors.
8	Q Do you know how SAP responded at that
9	time?
10	A Other than calling Lynda, no.
11	Q Do you know that they called Lynda?
12	A Yes.
13	Q And do you know -- but you don't know
14	anything else about their response?
15	A No.
16	Q Do you know if they at that point were
17	seeking to compete for Kerr-McGee's HR business?
18	A Yes.
19	Q And Kerr-McGee declined to entertain any
20	bid from SAP?
21	A Correct. We did not send them an RFI.
22	Q Why did Kerr-McGee decline to send SAP an
23	RFI?
24	A They did not meet our requests for
25	information and we were already well underway in

00083
1	the process.
2	Q Was there any other reason that you
3	didn't entertain SAP in the process?
4	A I don't know what it would have been, no.

00085



4	Q. (By Ms. McKinney) Did you have to
5	purchase any new hardware in order to install the
6	PeopleSoft software?
7	A Yes, we did. We did not have the
8	hardware infrastructure that would have supported
9	it.
10	Q Can you describe for me what hardware you
11	had to purchase?
12	A Sure. We purchased a database server,
13	that's HP, we also purchased a file and print
14	server, two application servers, two web servers
15	as well as a load balancer and that was for our
16	production environment. Let me make one slight
17	change. The database server already existed but
18	we purchased a significant amount of disc and
19	memory to upgrade that. We also chose to
20	purchase a test environment that consisted of one
21	database server, one web server, one app and file
22	server.
23	Q Why did you need to purchase new hardware
24	in order to implement the PeopleSoft HR software?
25	A That's what the software called for.

00086
1	Q So, the hardware you had previously would
2	not have been sufficient in order for you to run
3	the PeopleSoft -
4	A No.
5	Q -- software?
















22	Q I guess prior to, prior to the time that
23	you went forward with the selection process and
24	undertook to evaluate different ERP vendors, did
25	you have to develop some sort of business case to

00087
1	justify simply the decision to purchase some new
2	HR --
3	A Software?
4	Q -- software?
5	A A business case I think in the strictest
6	MBA sense was not required. Excuse me. We had,
7	we had the situation in the United States that
8	our vendor was no longer supporting our software
9	and the cost had been such and the limited
10	capability had been such that we knew we had to
11	do something different.
12	Q Did you consider trying to upgrade your
13	existing software?
14	A The vendor was no longer marketing,
15	developing or doing anything with that software.
16	There was not an upgrade path.
17	Q Could it have been upgraded using
18	independent consultants?
19	A In what way?
20	Q Could -- even though the company was not
21	continuing to support that software, could you
22	have hired anyone independently to perform
23	necessary upgrades on that software?
24	A I guess the answer would be yes, we could
25	have, but Kerr-McGee is not into developing

00088
1	software and that's what it would have been.
2	Q Did you ever do an analysis of how much
3	it would have cost to try to do that?
4	A No. It wasn't consistent with our
5	strategy.
6	Q And did you ever consider outsourcing the
7	HR functions that were involved?
8	A To my knowledge no BPO outsourcing
9	consideration was ever given to HR. Currently we
10	do have one piece of HR BPO'd.
11	Q What piece is that?
12	A Health and welfare administration.
13	Q And who does that?
14	A ADP.
15	Q And they handle the entire business
16	process of health and welfare administration?
17	A They do. We have two people on our staff
18	at Kerr-McGee that are in essence, I guess they
19	manage the vendor relationship and serve as a
20	third level escalation, if you will, if there are
21	questions that ADP cannot handle.
22	Q And how long have you used ADP for health
23	and welfare benefits?
24	A I believe a little over about 18 months
25	would be my estimate. Perhaps 19 or 20.

00089
1	Q Why was the decision made to outsource
2	that portion of the human resources function to
3	ADP?
4	A I was not a part of the selection in the
5	project or the decision making on that.
6	Q Who was in charge of that?
7	A Our HR group.
8	Q Would -- I'm sorry, I've forgotten her
9	name. Is it Lynda Garcia?
10	A I do not believe she was in HR at that
11	time.
12	Q Had she moved to finance?
13	A I don't know where she was at that exact
14	moment in time.
15	Q So, the decision to outsource health and
16	welfare benefits was made after your PeopleSoft
17	software had been implemented. Is that correct?
18	A Correct. We were -- yes.
19	Q And had you considered using a PeopleSoft
20	module for that function?
21	A Actually, yes. We have licensed benefits
22	administration. During the PeopleSoft
23	implementation we had a change in HR leadership
24	and in approach and the decision was made to stop
25	the benefits administration implementation.

00091















16	Q Now, did you agree with the decision to
17	outsource health and welfare benefits to ADP?
18	A To be honest, I don't think I either
19	agreed or disagreed. If the HR strategy was to
20	perform all of our functions in-house, then the
21	purchase that we made and the implementation we
22	had embarked on was the correct path. But if our
23	strategy was to, for whatever reason, outsource
24	where appropriate, then at that time it was the
25	right thing to do to stop the benefits admin

00092
1	install.

00096















16	Q Now, in evaluating or in, you know,
17	assessing the interface between the in-house
18	software and the ADP outsourcing process, who was
19	responsible for that?
20	A As I said, Gene Wolz.
21	Q Gene Wolz?
22	A It's not assessing, it was developing the
23	interfaces.
24	Q And did he successfully develop the
25	interfaces?

00097
1	A Oh yeah.
2	Q Was that a problem for him at all?
3	A Actually it wasn't -- it was not him
4	solely who did all the programming, but it was
5	our team that did.
6	Q Did you, did you feel any need to be
7	involved in the decision of whether to outsource
8	this health and welfare benefits function to ADP
9	versus using the PeopleSoft module that was
10	purchased for that purpose?
11	A No.
12	Q Why not?
13	A The reason I'm confused, I felt no need.
14	I'm not sure how to explain what doesn't exist.
15	Q Well, let me -- let me back up. I'm just
16	trying to understand because you were, you were
17	involved in the selection process whereby
18	Kerr-McGee chose PeopleSoft for its HR management
19	function. Correct?
20	A Right.
21	Q And you were responsible for leading the
22	team of IT professionals who were involved in
23	that process. Correct?
24	A Yeah.
25	Q And one of the modules that was purchased

00098
1	would have covered health and welfare benefits
2	functions?
3	A Right.
4	Q But after the PeopleSoft software was
5	implemented, a decision was made to have those
6	functions done through ADP outsourcing instead of
7	through the PeopleSoft module?
8	A Right.
9	Q But you didn't feel that you needed to
10	participate in that decision to shift those
11	functions to outsourcing?
12	A No.
13	Q Did you think the decision made sense?

15	THE WITNESS: I was not a --

17	THE WITNESS: -- participant in the
18	process.
19	Q. (By Ms. McKinney) Did you agree with
20	the decision?

00099

2	THE WITNESS: I've already answered that
3	question previously. Would you like me to answer
4	it again?
5	Q. (By Ms. McKinney) Yes.
6	A As I said before, the HR strategy, if it
7	is to perform those functions in-house, then
8	buying and installing benefits admin was the
9	correct solution. If the strategy is to take a
10	look at different places in the organization,
11	different functions it could outsource, then the
12	function or the strategy of using outsourcers was
13	correct.
14	Q Do you agree with the strategy of
15	outsourcing where appropriate?



19	THE WITNESS: As I answered before, I
20	said that I neither agree nor disagree because
21	agreement is based upon the HR strategy, not
22	business processing as a separate entity.

00100












13	Q Do you have any opinion on whether health
14	and welfare benefits should be outsourced to ADP
15	or should be performed by PeopleSoft software?
16	A As I answered before, if the HR strategy
17	is that those functions should be performed
18	in-house, then I agree that benefit admin
19	implementation and purchase is correct. If the
20	strategy is such that we should look at
21	outsourcing specific functions, then I agree that
22	the strategy of looking at and outsourcing those
23	functions is good.
24	Q So it sounds like from an IT perspective
25	it doesn't make much of a difference to you which

00101
1	path is chosen.
2	MR. HAMMAKER: Objection.
3	THE WITNESS: Yes.
4	Q. (By Ms. McKinney) Either way will work?
5	MR. HAMMAKER: Objection. I don't think
6	that reflects his testimony.
7	THE WITNESS: In my experience at
8	Kerr-McGee, we did not complete the benefit admin
9	implementation, so I cannot speak to whether or
10	not it would work at Kerr-McGee because I have no
11	experience. ADP health and welfare does work
12	because we have been outsourcing with them for
13	over a year and a half.

00102























24	Q I'm going to ask you if the RFI describes
25	some certain features, and so if you can remember

00103
1	please let me know.
2	A Okay.
3	Q Do you know if the RFI described the
4	ability to integrate modules into bundles or
5	suite, into a bundle or suite of associated HR
6	functions?
7	A I'm not sure I understand what you're
8	trying to ask.
9	Q Okay. Did the RFI specify that the
10	software that Kerr-McGee was going to use needed
11	to be able to work as a suite of associated
12	functions?
13	A I believe, I believe there were questions
14	along those lines, but our approach would be that
15	it would be purchased as a suite. We were not
16	considering purchasing part from Lawson, part
17	from Oracle, part from PeopleSoft. It was one
18	vendor to provide all those functions.
19	Q Did the RFI specify that the software
20	needed to support foreign language requirements?
21	A Yes.
22	Q And how about foreign reporting
23	requirements?
24	A Yes, I believe it did. I can't recall
25	the exact questions.

00104
1	Q Did it specify that the software needed
2	to be able to function across multiple
3	jurisdictions?
4	A What's your definition of jurisdiction?
5	Q Different states within the United States
6	and/or different countries?
7	A Yes, there were questions along those
8	lines.
9	Q Did the RFI specify that the software
10	needed to function across different business
11	divisions of Kerr-McGee?
12	A I would have to look.
13	Q Did it discuss at all scale and
14	flexibility to support thousands of multiple
15	users?
16	A I don't recall the specific questions
17	there. It's been a while. We did put either in
18	the RFI itself or in visiting with the vendors in
19	the demonstrations that Kerr-McGee was an
20	inquisitive company and that we had some number
21	of thousands of users and that we expected most,
22	if not all of our users, to be self service
23	users. So that would address the fact there
24	would be many people using it at one time.
25	Scalability was also discussed when receiving

00105
1	specifications from PeopleSoft for our hardware.
2	Q Did the RFI discuss any need for
3	flexibility so that the software could be matched
4	to your unique administrative requirements?
5	A In my interpretation, most of what we put
6	in the RFI did have to do with administration of
7	the HR function across multiple pieces of the HR
8	organization.
9	Q Did you have any requirement of an option
10	to purchase additional functional modules later?
11	A I cannot remember that being in the RFI.
12	Q Did you have any requirement of periodic
13	updates to keep tax and employment laws current?
14	A Yes.
15	Q And how about ongoing maintenance and
16	support?
17	A Yes.
18	Q And was 24 hour technical support
19	addressed in your RFI?
20	A I don't believe it was because we didn't
21	feel that that was required for us. Certainly if
22	something completely broke down we would need
23	help, but as a normal course of business we're
24	fairly self sufficient.
25	Q Did you have a requirement that the

00106
1	software have already been successfully
2	implemented by a comparable customer?
3	A I don't know if that was in the RFI, but
4	that was communicated to the vendors.
5	Q And who responded to the RFI?
6	A As stated before, PeopleSoft, Oracle and
7	Lawson.

00108







8	Do you recall, do you recall if there was
9	any discernible difference in the evaluation of
10	Lawson's RFI response?
11	A Not specifics, only in the realm of
12	international or non U.S. capabilities.
13	Q And what was the -- what was the
14	distinction there in the evaluation of Lawson?
15	A They did not provide the non U.S.
16	capabilities that Oracle and PeopleSoft did.
17	Q And specifically what capabilities did
18	Lawson not provide?
19	A I just stated that I cannot remember what
20	those specifics were.
21	Q Do you remember any further detail on --
22	A No.
23	Q -- the international issue with Lawson?
24	A None.

00109












13	Q And which vendors performed on site
14	demonstrations?
15	A As I stated before, PeopleSoft, Oracle
16	and Lawson.

00112





6	Q And then what happened after the
7	demonstrations?
8	A The presentations were graded by the team
9	and based on the grading and I guess I would say
10	verbal feedback from the team Lawson was
11	eliminated due to lack of non U.S. functionality
12	and reporting.

00113










11	Q Who made the ultimate decision to
12	eliminate Lawson?
13	A The team.
14	Q And who would have communicated that
15	decision to Lawson?
16	A I believe Lynda did.
17	Q In addition to the issue with
18	international functionality and reporting, was
19	there any other reason that Lawson was
20	eliminated?
21	A I cannot recall.
22	Q Do you know how Lynda communicated to
23	Lawson the fact that they had been eliminated?
24	A I do not know.
25	Q Do you know if she told them why they had

00114
1	been eliminated?
2	A I believe she did.
3	Q Do you know if they had some response to
4	her on the issue of their international
5	functionality?
6	A I do not know.
7	Q You never had any direct contact with
8	Lawson on that issue?
9	A On informing them that they were no
10	longer a part of the selection process, no.
11	Q Did you ever have any direct contact with
12	Lawson regarding the issue of their international
13	functionality?
14	A Other than when they made their on site
15	demonstration, no.
16	Q And did you personally evaluate whether
17	Lawson had the international functionality that
18	was needed to meet Kerr-McGee's requirements?
19	A Throughout most of this process Lynda and
20	I neither one voted, but we viewed the
21	demonstrations, asked questions.
22	Q But did you personally assess whether
23	Lawson had the functionality that was required?
24	A In what format?
25	Q Did you make a decision in your mind as

00115
1	to whether Lawson could meet your requirements?
2	A I agreed with the team that they could
3	not.
4	Q And in addition to viewing the
5	demonstration that Lawson did, was there any
6	other source of information on which you based
7	the decision to agree with the team that Lawson
8	couldn't meet the requirements?
9	A No. We had no further contact with them
10	until the decision was made.
11	Q Were any questions posed to Lawson about
12	whether it could make some accommodation to meet
13	Kerr-McGee's requirements in terms of
14	international functionality?
15	A Well, since it's been three years and 24
16	hours worth of demos, I can't remember any
17	specific questions.
18	Q Did you ever talk to any Lawson
19	representative personally at any time?
20	A As I stated, during the demonstration.

00116






7	Q. (By Ms. McKinney) Now, you mentioned
8	that SAP was never sent an RFI. Did it bother
9	you at all that SAP was not sent an RFI?






16	A No.
17	Q And why not?
18	A Again, you're asking me to speculate on
19	that which does not exist or did not occur. We
20	had two companies that provided virtually all of
21	our RFE -- RFI requirements.
22	Q Oracle and PeopleSoft?
23	A Yes. Had we only had one, I don't know.
24	Q Did you feel like you were still going to
25	be able to get a good price with the two vendors

00117
1	competing?
2	A Yes.

00118













14	Q Did you disclose to the vendors who
15	participated in the demonstration round the
16	identity of the other vendors they were competing
17	against?
18	A We disclosed to PeopleSoft and Oracle
19	that they were our finalists. I don't know about
20	the demonstrations.

00119















16	Q Who was in charge of negotiations with
17	Oracle and PeopleSoft?
18	A Lynda Garcia was the point person as far
19	as the actual final price.

00120







8	Q Do you have any knowledge of whether
9	Lynda Garcia negotiated price with Oracle or
10	PeopleSoft?
11	A The answer has to be yes.
12	Q And did she?
13	A I mean --
14	Q I'm sorry, I thought you were answering
15	whether you have knowledge.
16	A Oh, no. The answer would be yes. I
17	think that would be the only reason that we would
18	have lower offers.
19	Q So, did Oracle and PeopleSoft both
20	discount their prices?
21	A Yes.
22	Q And do you know by how much they
23	discounted their prices?
24	A I don't know what Oracle's discount would
25	have been. PeopleSoft would have been in the 45

00121
1	percent range off list.

00122
1	Q And after Oracle and PeopleSoft responded
2	to the RFQ, do you know if there were further
3	negotiations with them on price?
4	A Yes, there were. I don't remember the
5	exact numbers that came back originally, but they
6	were higher than what we ended up with.
7	Q So, both of them came down on price?
8	A Yes.







16	Q Do you have any knowledge of whether
17	steps were taken to try to ensure that Kerr-McGee
18	could get the best possible price on the
19	software?
20	A I don't know the specific steps, no.
21	Q No. That would have been within Lynda
22	Garcia's realm of responsibility?
23	A Yes.




















19	Q And do you know what the reasons were for
20	ultimately choosing PeopleSoft over Oracle?
21	A I don't know the exact reasons why, you
22	know, one person chose PeopleSoft over another.
23	What we produced was the general themes in the
24	documents that we provided. One was Oracle at
25	the time did not have native German language

00124
1	functionality and that was our -- actually was
2	and still is our largest non U.S. location. If I
3	remember right, we rated the vendors, the matrix
4	included vendor viability, vendor service,
5	functionality, technology and cost. And the
6	functionality was pretty much a dead heat, the
7	vendor viability and vendor service were both in
8	favor of PeopleSoft and technology was in favor
9	of Oracle. Probably the best summary statement
10	other than the German functionality would be that
11	there were certain modules such as recruiting
12	that Oracle did not offer at the time and the --
13	what people will euphemistically call the vision
14	thing, the team felt PeopleSoft was farther
15	advanced from a vision what HR could be, should
16	be standpoint than Oracle was at that time.

00125


3	Q And when did the implementation of the
4	PeopleSoft software begin?
5	A We had our kickoff meeting in early
6	January of 2002. We actually had some
7	preparatory work with our implementation partner
8	in December, but the official kickoff was
9	January.

00126




5	Q Which modules have been implemented so
6	far?
7	A The core HR product has been implemented,
8	time and attendance has been implemented, as
9	stated before, the benefits administration
10	implementation was halted. Payroll for the
11	similar reason was also halted. Employee self
12	service view, employee service update, manager
13	self service, the data warehouse and the
14	workforce analytics cube.
15	Q And which modules remain to be
16	implemented?
17	A Manager self service transaction,
18	obviously benefits admin and payroll, E pay, E
19	comp, and the three data marks that live on top
20	of the data warehouse. And those would be
21	Workforce, Score Card -- when I said Workforce
22	Analytics before, I should say just the Workforce
23	cube because Workforce Analytics has not been
24	implemented, Score Card and Rewards have not been
25	implemented.

00127



4	Q Is Kerr-McGee in the process of
5	implementing them right now?
6	A No. We are in the process right now of
7	implementing an additional module that we
8	purchased, learning management. We are engaged
9	in other activities right now and the strategy
10	for going forward is being prepared by our HR
11	group.
12	Q What happened with payroll?
13	A What happened as far as?
14	Q Well, you said that the implementation
15	was halted. How is payroll being handled
16	currently?
17	A Okay. First question, the halting of the
18	implementation of payroll was done for the same
19	reasons as benefit admin, wanted to look at
20	outsourcing the payroll, leaving the payroll
21	production outsourced and possibly outsourcing
22	the payroll function was to be reviewed.
23	Q And --
24	A The indecision is that we are in the same
25	situation as before we started that with ADP

00128
1	being our payroll check producer, tax filer.
2	Q And has a conclusion been reached
3	regarding whether Kerr-McGee will outsource the
4	payroll business function?
5	A The decision was reached, I'm not sure
6	with even a specific project at that time, but
7	currently business process of payroll is not
8	outsourced.
9	Q But the PeopleSoft payroll module has not
10	been implemented?
11	A That is correct.
12	Q So what software is being used for the
13	payroll function currently?
14	A As I stated before, ADP produces our
15	checks, files our taxes and there is a piece of
16	software that lives at our site to enable that to
17	happen.
18	Q And that's a piece of ADP software?
19	A Yes.
20	Q Is there a name for it?
21	A Pay-For-Win. And I'm not sure how to
22	spell that.
23	Q Is there any other software that's used
24	for any part of the payroll function?
25	A No.

00129
1	Q So the --
2	A Well, I mean time and labor feeds
3	payroll, but for actually doing payroll, no.
4	Q So, the Pay-For-Win software that's at
5	Kerr-McGee in combination with the outsourced
6	check processing function is sufficient to cover
7	the entire payroll business process?
8	A In the U.S.
9	Q Is there a different software that's used
10	for payroll overseas?
11	A Each country has its own payroll
12	provider. We chose not to implement global
13	payroll processing due to really the number of
14	employees we have in different countries.
15	Q And why did the number of employees cause
16	you not to implement the payroll module?
17	A We did not feel it would be cost
18	justified to do so.

00130




5	Q Is there currently any future plan to
6	change the way that Kerr-McGee processes payroll?
7	A Where?
8	Q Let's say first in the United States. Is
9	there any future plan to change the payroll
10	system?
11	A No plans at this time.
12	Q And how about overseas, is there any plan
13	to change the way that Kerr-McGee uses a
14	different payroll provider in each country?
15	A No.
16	Q And you said earlier that the time
17	keeping function feeds into payroll?
18	A Yes.
19	Q Does that mean that the PeopleSoft time
20	keeping software has to interface with the ADP
21	payroll software?
22	A Yes.
23	Q And did you have to go through some
24	process to make sure that those softwares could
25	interface together?

00131
1	A We prepared the interface.

00132













14	Q Was he able to develop an effective
15	interface?
16	A Oh yeah.
17	Q Have there been any problems with that
18	interface?
19	A Not any more than, you know, any other
20	piece of software, an occasional bug. But no, we
21	have not had a single instance of missed payroll
22	or wholesale failure.

00133








9	Q In the countries where it has been
10	implemented, is it functioning in the foreign
11	languages used in those countries?
12	A We use English outside of Germany and
13	Netherlands. We don't -- we have such a low
14	concentration of employees in other non English
15	speaking countries that it was not worthwhile to
16	consider doing self service there in another
17	language.
18	Q So, the only foreign languages you need
19	it to operate in are German and Dutch?
20	A Currently.
21	Q Currently? Do you anticipate using it in
22	other foreign languages in the future?
23	A I haven't been made privy to any
24	acquisition plans yet.
25	Q And then how about the manager self

00134
1	service module, is that the same situation with
2	regard to languages?
3	A Yes, waiting on approval.
4	Q So at the present time the PeopleSoft
5	software is not being used in any foreign
6	languages?
7	A That's not what you asked earlier.
8	Q That's what I'm asking now.
9	A That's incorrect. The HR software is
10	being used in German and Netherlands.











22	Q HR core functionality is being used in
23	German and Dutch?
24	A Yes.

00136









10	Q Was the implementation completed on
11	schedule?
12	A As I stated before, benefit admin and
13	payroll, no, because we just close to discontinue
14	that. The HR was actually implemented ahead of
15	schedule and then we brought out, we brought up
16	some non U.S. locations prior to the U.S.

00137






7	Q And when you say you requested additional
8	money, did that mean you had to exceed your
9	budget for implementation?
10	A Yes.
11	Q And by how much?
12	A One point nine million.
13	Q What was the original budget?
14	A Just shy of 7 million.
15	Q And then you had to add another 1.9
16	million on top of it?
17	A Yes.
18	Q And do you know why the implementation
19	exceeded the original budget you had planned?
20	A My -- yeah. We had a large number of
21	reporting requirements that were what I would
22	call nonstandard. And as an organization we were
23	not willing to do without some of them or do the
24	analysis that it would take to eliminate a number
25	of them. And so we spent a large quantity of

00138
1	money on developing reports.



















21	Q And what customization was required?
22	A I don't have the complete list of
23	customizations that we've done.
24	Q Do you know how many customizations you
25	had to do?

00139
1	A Approximately -- well, this is over the
2	life of our implementation. I don't know, you
3	know, depending on what point. But as we sit
4	here today approximately fifty affecting twenty
5	different objects.
6	Q And what do you mean by object in that
7	context?
8	A An object would be a screen, a page, a
9	program, some definable piece from a programming
10	standpoint.
11	Q Did you know when you made the selection
12	of PeopleSoft that you would need to do that much
13	customization in order to implement the software?
14	A Actually, I don't know. No.
15	Q Was that customization customization that
16	you did out of necessity or was it because
17	Kerr-McGee made a choice to customize?
18	A For us it's always a choice. Our first
19	choice is not to. And evidently from other
20	implementations, this was a fairly low number,
21	fairly noninvasive.
22	Q And what would cause Kerr-McGee to make a
23	choice to customize some object?
24	A Fair question. For us it's really, it's
25	really a binary question. If there's something

00140
1	in the software that doesn't meet what we need,
2	then it's a choice, do we change our business
3	process, whatever that may be, to match the
4	software or do we not. And if we make a decision
5	that the time invested in the customization is
6	worthwhile in our estimation, we'll go ahead and
7	do it. Our preference would be to change the
8	business process first though.
9	Q So the initial impetus is that the
10	software won't be able to meet some need of some
11	existing business process?
12	A Yes.
13	Q Is that right?
14	A Uh-huh.

00142








9	Q Are you currently satisfied with the
10	PeopleSoft modules that have already been
11	implemented?
12	A Actually, yes.

00144






















23	Q. (By Ms. McKinney) Do you view SAP as a
24	competitor to Oracle and PeopleSoft?
25	A Yes, I do.

00145










11	Q Do you have any plans to go through any
12	procurement of HR software any time in the near
13	future?
14	A None whatsoever.


17	Q Have you engaged in any evaluation of HR
18	software since the time of your PeopleSoft
19	selection?
20	A No.
21	Q So that's been put aside for now I take
22	it?
23	A PeopleSoft is our system strategy.

00150










11	Q What were your views of what the effect
12	of the merger would be on you?
13	A I guess the two immediate effects would
14	be, in our opinion, reduced competition, which
15	would lead to reduced price and innovation
16	pressure and the second piece would be some
17	economic hardship should Oracle's plan be
18	executed as I understand it, which would be to
19	halt the marketing of PeopleSoft software.

00154








9	MS. McKINNEY: Let me mark the next
10	exhibit. I guess this is 1932?







18	Q And what is this document?
19	A My declaration given with regards to the
20	Oracle proposed acquisition --

22	THE WITNESS: -- of PeopleSoft.

00155






















23	Q Now, who drafted this declaration?
24	A The declaration was initially drafted by
25	Kent Brown.

00156
1	Q And was there some --
2	A It was earlier.
3	Q -- earlier draft of this document that he
4	provided to you?
5	A Yes.
6	Q And do you still have a copy of that
7	draft?
8	A I believe we returned it to Kent.

00157



4	Okay. So, during that, that in person
5	meeting with Mr. Brown, do you recall making any
6	changes to the draft of the declaration that you
7	were reviewing with him?
8	A Yes.
9	Q And do you recall what those changes
10	were?
11	A Not in detail.
12	Q Do you recall the subject matter of any
13	of those changes?
14	A From a tenor perspective, the document as
15	it exists and as I signed was changed to reflect
16	an opinion rather than facts on what would happen
17	should the acquisition come through. Just my
18	crystal ball doesn't work any better than anyone
19	else's.
20	Q So, you were changing it to reflect the
21	thoughts on the merger were your opinions?
22	A The thoughts on the merger would be
23	things that could possibly happen rather than
24	things that absolutely would happen.

00163















16	Q With regard to your declaration, is there
17	anything in it now that you're not comfortable
18	with?
19	A I read it over last night and no.
20	Q Is there anything when you read through
21	it, was there anything you saw that you thought
22	needed clarification?
23	A I'm probably, I'm probably -- it's like a
24	programmer trying to judge whether their own
25	program is good. I know what I said. No.

00165






















23	Q Do you have an opinion of the company
24	Oracle Corporation?
25	A Yes.

00166
1	Q What's your opinion?
2	A Overall my opinion is good. We use them
3	worldwide for financials.

00167













14	Q Could you please take a look at Page 5 of
15	that Power Point Bates labeled Kerr-McGee 137?
16	A Yes.
17	Q Under the right hand column it says
18	Oracle cons.
19	A Uh-huh.
20	Q And then there's a box that says vendor
21	service and lists several items.
22	A Yes.
23	Q Were you aware of any of these issues
24	that are listed here in this box?
25	A Yes, at the time we made the selection

00168
1	these items had come out.
2	Q And the first one says recent bad press
3	regarding customer service. Do you know what
4	that's referring to?
5	A I believe -- well, I don't know for sure.
6	Q What do you think it was?



10	THE WITNESS: The only thing I can say
11	with confidence is that it regards the service of
12	existing customers and their software
13	implementations.

00170
1	Q Was Kerr-McGee part of an Oracle user
2	group at that point in time?
3	A Yes.
4	Q And had Kerr-McGee experienced Oracle
5	separating itself from Kerr-McGee's user group?
6	A I believe we participated with, I don't
7	know what the name was, OAUG at that time, yes.
8	Q What is OAUG?
9	A I don't know what -- I assume it's Oracle
10	and I assume it's user group, but I don't know
11	what the A stands for.
12	Q So Kerr-McGee was apart of that user
13	group?
14	A Yes.
15	Q And Oracle separated itself from that
16	user group?



20	Q How did Kerr-McGee react when that
21	happened?
22	A I don't recall having any specific
23	conversations with what we should or should not
24	do as a result of that.

00172























24	Q You mentioned earlier that when you
25	talked to the Justice Department about your

00173
1	opinion of the effects of the merger, the two
2	items you mentioned were reduced competition and
3	economic hardship based on Kerr-McGee's
4	investment in PeopleSoft?
5	A Yeah.



9	Q. (By Ms. McKinney) With regard to the
10	first item relating to competition, what is your
11	view on the potential impact of the merger on
12	competition?
13	A Our view, as I state in my declaration,
14	would be that should the merger be consummated
15	that it would reduce the competition in the ERP
16	HR space, particularly those companies we feel
17	could possibly supply Kerr-McGee with that type
18	of software.
19	Q And what's the basis for your viewpoint?
20	A Our selection process identified really
21	only four people that could possibly in our view
22	supply the HR software that we needed, one of
23	which we did not have detailed knowledge about,
24	one of which we eliminated due to functionality
25	at that time, and so the largest possible pool in

00174
1	our view at the moment would be three. Should
2	one of those be eliminated we would view three to
3	two as a fairly substantial decrease in the
4	competitive environment.
5	Q Your selection process was in 2001.
6	Correct?
7	A That is correct.
8	Q And you testified that you haven't
9	engaged in any additional analysis of software
10	vendors since that time. Correct?
11	A That is correct.
12	Q And how -- do you think that the reduced
13	competition you anticipate would affect
14	Kerr-McGee?
15	A Yes.
16	Q And how do you think that that would
17	affect Kerr-McGee?
18	A I suppose there could be a lot of answers
19	there, but our standpoint is that innovation
20	within the software itself could be negatively
21	affected. The development of new modules and new
22	functionality could be negatively affected. The
23	overall customer service environment could be
24	affected. That would be my top three.
25	Q All three of those items relate to

00175
1	Kerr-McGee's use of PeopleSoft software.
2	Correct?
3	A Those three relate to not just our use of
4	PeopleSoft in particular but future development
5	in the HR space.




10	Q The merger is not going to affect
11	Kerr-McGee with regard to any future -- it's not
12	going to affect Kerr-McGee with regard to any
13	impending software procurements, is it?
14	A Hate to be obtuse. Please define what
15	impending is in your mind.
16	Q Well, you testified earlier that you have
17	no plans right now to look at procurement of new
18	HR software. Correct?
19	A My understanding of your question is that
20	a new HR software package or vendor. In that
21	case that is correct. If you refer to purchasing
22	perhaps additional modules, we have no plans at
23	the moment but could very well see purchasing
24	additional modules from existing vendors.
25	(A brief pause.)

00176
1	Q Mr. Elliott, could you please take a look
2	at your declaration? And on Page 12, if you
3	could look at Paragraph 42. And in this
4	paragraph you state in the second sentence, a
5	merger could reduce the competitive pressure that
6	now causes both firms to continue to improve
7	their software.
8	A Yes.
9	Q What's your basis for this statement?
10	A My opinion is that should this
11	competition not exist, there would not be the
12	same level of pursuit of innovation and
13	improvement in software, as a general statement
14	about HR software.
15	Q And do you have any other basis for this
16	statement aside from your own opinion?
17	A I do not have familiarity with Oracle's
18	current or future development plans for their HR
19	software. What I have seen is a large push on
20	the PeopleSoft side for both new functionality,
21	new modules and improved ownership experience.
22	Q And you anticipate that a merger would
23	negatively impact that development?
24	A That's my opinion.
25	Q Are you aware of Oracle's public

00177
1	commitment to continue supporting PeopleSoft
2	software even if a merger takes place?
3	A Yeah. I did not look up the details, but
4	what I believe I'm familiar with is their
5	commitment to maintain support for ten years
6	should the merger occur.
7	Q And does that affect your view at all?
8	A No, not at all.
9	Q And why not?
10	A Supporting problems that crop up with
11	existing software is far different than
12	innovation and development and adding features
13	and new modules to software.
14	Q In the next sentence in that paragraph
15	you state, PeopleSoft and Oracle now compete for
16	the same customers and this competition drives
17	both vendors to make significant investments and
18	better products.
19	A Uh-huh.
20	Q Now, what's your basis for this
21	statement?
22	A I could not find a document that would
23	support this, but during the selection process
24	both PeopleSoft and Oracle made what I would say
25	an emphasis or a big deal of the amount of money

00178
1	that they both invest in R and D.
2	Q And for the part of the statement that
3	says PeopleSoft and Oracle compete for the same
4	customers, do you have any particular basis for
5	that statement?
6	A Both the PeopleSoft sales rep and the
7	Oracle sales rep both during the course of
8	conversation indicated that each company was a
9	frequent competitor of the other.
10	Q Now, down in Paragraph 43 in the second
11	sentence you state, in my experience --
12	A Uh-huh.
13	Q Excuse me. Software vendors that
14	discontinue marketing a product typically reduce
15	or eliminate new development initiatives for that
16	product and focus their resources on developing
17	the product that continues to be marketed and on
18	switching customers of the discontinued product
19	to another product.
20	A Yes.
21	Q Now, what experience are you referencing
22	here?
23	A I have two recent ones. Our experience
24	with N Power from Integral. The same thing
25	happened. They stopped marketing N Power as a

00179
1	viable product and then therefore soon after
2	stopped development and then therefore soon after
3	stopped support. We have a legal software
4	product called E-Tech that we've experienced the
5	same situation. It's no longer marketed, now
6	there's no more development going on. I'm not
7	sure if the support shoe has dropped yet or not.
8	Q So that contributes to your opinion that
9	if Oracle were to acquire PeopleSoft the same
10	thing might happen?
11	A Yes.





17	Q How much do you think Kerr-McGee has
18	invested in its PeopleSoft HR software all in
19	total?
20	A The out of pocket costs are the 9 million
21	as stated in the documents that have been
22	provided.
23	Q And are there additional costs as well?
24	A Not that we've quantified. We don't --
25	at least it hasn't been a practice in the past

00180
1	where we have capitalized or tracked the amount
2	of internal labor. It's safe to say that it
3	would be tens of thousands of hours.

00181







8	Q If you knew that SAP was a vendor that
9	would be able to meet Kerr-McGee's needs in terms
10	of ERP software, would you still have concerns
11	about the Oracle, PeopleSoft merger's effect,
12	potential effect on competition?


15	THE WITNESS: Yes, I would still have
16	concerns.
17	Q. (By Ms. McKinney) And why is that?
18	A Because I view three moving to two as a
19	significant decrease in competition.

00182















16	Q Mr. Elliott, you've referred in your
17	testimony this afternoon to a declaration that
18	you provided to the United States Department of
19	Justice in this matter. Does what we have marked
20	as Government Exhibit 63 appear to you to be a
21	complete copy of the -- with exhibits of the
22	declaration that you provided to the Department
23	of Justice?
24	A It does appear.

00183




5	Q Do you see, is that your signature at the
6	bottom of Page 13?
7	A Yes, it is.









17	Q Thank you.
18	To the best of your information and
19	belief, Mr. Elliott, is the declaration which has
20	been marked as Government Exhibit 63 true and
21	accurate?
22	A I'm sorry, say it again, Mike.
23	Q Is the --
24	MR. HAMMAKER: Could you read the
25	question back, please?

00184
1	(The record was read as requested.)
2	THE WITNESS: Oh, yes.

Elliot 05-20-04

Updated August 14, 2015