GLS Benefit ServicesGLS Benefit ServicesBenefits Outsourcing In The MidBenefits Outsourcing In The Mid--size Marketsize Market

A Presentation for Prospective Partners

June 2002

2

Overview ─ GLS Leadership

Executive HR ManagementHR Technology Consulting

Business Development

CEO Organization DevelopmentGary Gabel

Brian Beatty

Mark Toth

Carol Rito

MichaelMamish

Brian Leary

Patsy Pennington

ManagerManager Came FromCame From ExperienceExperience CompetencyCompetency

24 years

Financial and Benefit Systems Development

Towers Perrin

EDS

Labor RelationsHealth & Welfare

Benefits AdministrationBenefits Communications

Retirement Administration ConsultingHR Service Delivery

Comerica

RockwellPepsiCo

Watson Wyatt

Retirement

CTO

Compliance #

#

#

#

8 years

20 years

20 years

22 years

15 years

23 years Benefits AdministrationBenefits Compliance

Watson Wyatt

Comerica

PositionPosition

# Owners

Patricia D’Anna

Robin Spivey Carrier AdministrationBenefit Administration Outsourcing

BSC

Acc’t Mng’t

20 years

15 years Benefit Administration OutsourcingProject Management

HewittBC/BS

MetSource

3

Management TeamManagement Team

Owner TeamOwner Team

Strategy TeamStrategy Team

Original 4 owners still involved

Combined 80+ years of experience

Manage overall business risks

Monitor ROI

Determine corporate strategy and direction

Accumulated 95+ years of experience

Continually monitoring competition, trends and client preferences

Experienced practitioners

Responsible for “running the business”

Overview – Decision Forums

4

Overview ─ Mission, Vision and Values

5

Overview – The GLS Outsourcing Model

G L SG L S

Actuary Provider

401K Provider

Insurance Carrier

Other Data Providers

Our peopleOur people

Our processOur process

Our technologyOur technology

Client HR Data

Retirement HealthAnd

Welfare

Employees

Retirees

Human Resources

WEB

ServiceCenter

IVR

6

Overview – Financial Characteristics

1995 ‘96 ‘97 ‘98 ‘99 2000

2

4

6

8

10

12

14

16

18 30% growth rates

20% profit margins

Client retention > 90%

New contracts ~ 4.5 years

30% growth rates

20% profit margins

Client retention > 90%

New contracts ~ 4.5 years

$ Million

‘01

‘03

‘04

‘02

$13M revenue$41M under contract36 clients1.3M participants27 million records

Retirement

$20

No debt No debt ── steady growth steady growth a profitable business with a focus on reinvestmenta profitable business with a focus on reinvestment

7

Overview – Competitive Strengths

Entrepreneur Of The Year finalist 1999Entrepreneur Of The Year Winner 2001Michigan Future 50 Company (4 of 6 years)

Experienced Experienced PeoplePeople

Core Core CompetenciesCompetencies

Speed to Speed to MarketMarket

Experienced management teamConsultative demeanor ─ flexibleStrong “practitioner” backgroundEmployee culture is aligned for success

Intense focus on customer serviceDevelopment of core applications technologyExecution, in an industry not noted for quality Client relationship management

Our strength is our benefits expertiseOur strength is our benefits expertisedelivered through technology solutionsdelivered through technology solutions

8

Overview – Market Focus

Demanding Industries: Public Sector, Energy, Financial, Manufacturing, Insurance

Complex organizations and benefit plans

Clients mostly have paternalistic culture

Clients who prefer evolutionary HR technology

What is a problem for competitors – is an opportunity for GLS

““Winning in the markets in which we choose to competeWinning in the markets in which we choose to compete””

Traditionally GLS has secured business from complex clients and built customized solutions to meet their needs

9

Cook County (IL)Detroit Public SchoolsMichigan SenateSedgwick County (KS)School Districts, Universities and Counties

ArvinMeritorCCG (NY)Bechtel Bettis (PA)Blue Cross Blue Shield of MichiganComerica Incorporated

Overview – Customer Focus

CompuwareDTE EnergyFisher & CompanyHeller Financial (IL)Henry Ford Health SystemsStanCorp (OR)TRW Automotive (OH)

Commercial SectorCommercial Sector Government SectorGovernment Sector

10

Historically — regional growth while exploiting national opportunities

Have attracted key individuals with national reputations to lead GLS

COI strategy launched to increase national market awareness

Have a model for service delivery that can be replicated anywhere in the U.S.Represents significant opportunity to grow business

Speed to market is essential

Overview – Market Focus

GLS is expanding as a national player —and growing its base of larger clients

11

Grow 30% annually ─ projected $20M in three years

Maintain 20%+ profit margin (pretax)

Continue to expand on core benefit services

Minimum 3 year contracts ─ seek 5 year

Sell to mid-market (N=1,000 to 20,000)

Traction on 5,000 – 10,000

Respond opportunistically to > 20,000

Lead with Ongoing Administration; will accept annual enrollments

Build the Retirement Administration business

Flawless execution ─ absolute customer satisfaction

Overview – Strategy

12

Source: “Demand Analysis of Integrated, Multiprocess HR Outsourcing,” Dataquest Focus Report, Dataquest - Gartner Group, September 20, 1999.

1999

HR Outsourcing Market

2003

Source: “Human Resources Business Process Outsourcing: A Market Overview and Service Provider Analysis” - IDC, December 1999

Total HR Outsourcing

HR Processing Services; BPO

$ Billion

0

10

20

30

$40

$13.9

$37.7

$6.7

$10.2

The total HR outsourcing market is valued at $13.9Band is expected to rise to $37.7B by 2002

The 2000 – 2001 recession simply acted to delay trend

Total HR outsourcing expected to grow 28% each year

BPO expected to grow at ~ 11% C.A.G.R.

This represents $3.5B revenue stream for BPO services over next 4 years

Industry ─ Total HR Outsourcing

13

Single Service/System

Single Service/System

Systems orServices

Systems orServices

All Services/ Systems

All Services/ Systems

InIn--sourcedsourced OutsourcedOutsourced

“Best of breed” provider ─ benefits onlyRely on client’s core HR data re: participantsMaintain data via proprietary application systemsManage participant contact and documentationProvide plan-specific eligibility data to carriersReconcile billing as per client need

Multiple/VariedServices

GLS Benefits AdministrationGLS Benefits Administration

Business ProcessOutsourcing Models

Industry – GLS’ Position

HR Admin / Call Centers

CoCo--sourcedsourced

14

Within BPO administrative services, Benefits is projected to have the largest growth opportunity

Estimated $350M - $375M per year

GLS owns .12% of market

Given 30% revenue targets, GLS market share will rise .07%

2001 ‘02 ‘03 ‘04

12

16

$ 20M$Million

9

Fragmented and competitive market

GLS has opportunity to increase market share

GLS need only to keep pace with the market to maintain a 20% growth in revenue

0

20

40

60

80

100 %

Relocation

Benefit Administration

Training

Payroll

RecruitmentMng’tDevelop’t

HRIS

55 49 36 26 18 18 7

2028

34

54

8284

64

Industry – Benefit Administration Services

19992003

15

Small boutiques and regional vendorsLarge “one size fits all” national vendors

• Wanting to consolidate vendors

• Desiring integrated services and “total compensation”

• Reduced staff and expertise

• Needing more self-service

• More vendor choice• More vendor switching

Large experienced HR Consulting housesTotal HR outsourcing providersJU

MB

O

CLI

ENTS

SMA

LL

CLI

ENTS

Cost pressures increasingServices becoming commoditizedVendor “shakeout”likely for “low-cost”providersHealth care costs driving frequent change in plan design

GLSGLSA strong A strong player in player in the midthe mid--marketmarket

Client Trends Market Trends

Industry – TrendsM

IDD

LE M

AR

KET

CLI

ENTS

16

Size . . . scale economics

State-of-the-art call center and core applications technologies

Experience, competency, long-term clients (e.g. Hewitt, Towers Perrin, Mercer)

Brand name recognition (e.g., Fidelity, ADP, etc.)

OTHERS GLSFlexible customized services with scalable processes

Technology applied to service solutions – higher leveraged investments in adopting technology

Truly integrated technology solutions – competitive edge

Relationship capital – “clients are best advocates”

Clients get better price-to-value

Client relationship model

Discovery Process

Project Management

Benefit Practitioners

Strong management team

Building recognition

Industry – Differentiators

Explainedmorefully later

17

We are “best-of-breed” in benefits outsourcing

GLS does not intend to play in the “total HR outsourcing” world

Clients consider GLS’ expansion of service as a natural extension of our benefits expertise

Rapid growth for Retirement Administration Services

Potential added implementation services (change management, communications)

Continue with BPO model

No alliance with ERP – we can deal with all of them

People Strategy a differentiator ─ competency and quality, not simply a “low cost” provider

Industry – GLS’ Position

18

Current Client Development Program

Capitalize on established relationships - broaden services

Low cost-of-sales

Center of Influence Program

Independent consultants that influence client buying decisions

Provides “qualified” leads

Efficient – low cost of sales

Discriminating audience

GLS “shows” well – establish credibility and competency

Direct Channel

Industry-specific Conferences / Trade Shows / Seminars

Promotion of “case studies” / articles / infomercials

Industry – GLS’ Going To Market

19

Customer gets “one-stop” vs “fragmented” service

Greater flexibility in client coverage

Requires broader competency for job entry ─ higher level of training

Improves career paths ─ lowers turnover

Process ─ Service Center Model

Organize by population types

Organize by plan

Actives Retirees Union / Hourly

Pension

MedicalCustomer

We deploy a “generalist” model because it delivers higher levels of quality and customer satisfaction

GLS ─ A “generalist” model

All populations and plans of accountGLS Administrator

COBRAFSA

20

The cornerstone of our quality is our approach to measurement and

continuous improvement

Call Management/ Recording

Cases OpenResolution TimeAging Cases OpenTypes of CasesSources of Cases

Calls AcceptedHold TimeTalk TimeAbandon RateFaxback Volume

TransactionsCharacteristicsTime to ProcessEmployee Access “Hits”

Accuracy RatingConsistency Rating

Case Management Web Management

ManagementReporting

Process – Quality linked directly to our measurement process

Results versus service level agreement

21

Our client relationship model consists of a communications approach focused on customer satisfaction

GLS

Process – Client Relationship Model

TechnologySME

TechnologySME

Account ExecutiveAccount

Executive

Project ManagersProject

Managers

Process SME

Process SME

TechnologySME

TechnologySME

HR Leadership

HR Leadership

Project Manager &

Benefit Experts

Project Manager &

Benefit Experts

Process SME

Process SME

Client

22

Our Discovery Process is a best-in-class that moves us through the negotiation process and reduces conversion risks

Account ExecutiveProject Manager

Project ManagerImplementation Specialist

HR LeadershipPurchasing

HR SME'sVendors

Agreement Process

Discovery Process

Agreement / Service Levels

Data / Technology / Process

MutualContract

SharedPlan

GLS Project Management

ClientResources

Process – Discovery and Negotiation

23

Process – Project Management CapabilityMay June July August Sept Oct Nov Dec Jan ‘03 Feb Mar Apr

Start-Up / Requirements

Design Process & ProceduresTest, Load & Conduct

Enrollments

Start-up/RequirementsDesign Process & Procedures

Transition

Training

Ret

irem

ent

Ong

oing

H&

W A

dmin

istr

atio

nA

nnua

l Enr

ollm

ent

• Plan project & resources• Finalize contract• Collect / document requirements

• Make plan design decisions• Design forms, Web & IVR• Create/test interfaces, feeds & reports• Develop communications plan• Develop annual enrollment materials (workbooks, newsletters, stationary, etc.)

• Test/load production data, election forms and confirmation statements, Web & IVR

• Download participant’s elections• Print collate & deliver confirmation materials• Generate feeds/reports to carriers and payroll

• Develop detailed work plan• Review current methods and technology• Determine service levels

• Develop/document ongoing administration processes• Design new ongoing enrollment and change

event forms• Design Web/IVR flow for ongoing administration• Design data interfaces • Train Benefit Service Center Representatives

• Create/test feeds/reports

Start-up/Requirements Design Process, Procedures, and Technology• Review current services and technologies for both defined benefit plan and post retirement services.

• Define requirements for desired state on defined benefit plan, post retirement services, retiree H&W open enrollment, and on-going services.

• Determine service levels• Develop detailed work plan

Develop/document specifications and design of HOW the requirements will be delivered for pension administration and post retirement benefits, and configure technology

• Database, data history and on-going updates• Pension calculation and eligibility rules• Employee communication packets• Workflow and administrative process automation• Self service components• Coding and unit testing

Data Clean Up

We have a plan that can manage complex conversions across our full suite of services

We have a plan that can manage complex conversions across our full suite of services

24

Self Service Technology

Mixed Service Delivery Model

Comprehensive Customer Interaction Support

Measurement / Analytics

2002 2005

Technology – Trends

25

Technology – Strategy

Enterprise ApplicationsEnterprise ApplicationsFlexibleFlexibleRules BasedRules BasedWorkflowWorkflow

Web Web NativeNativeArchitectureArchitecture

BenefitBenefitPortalPortal

A “Competitive Advantage”By Controlling Enterprise Applications

Interaction ManagementInteraction ManagementEase of InterfaceEase of InterfaceMultimediaMultimediaCustomer FocusedCustomer Focused

Alliance PartnersAlliance PartnersEase of IntegrationEase of IntegrationStandards BasedStandards BasedComplementaryComplementary

Knowledge ManagementKnowledge ManagementData DrivenData DrivenComprehensiveComprehensiveSharedShared

26

Technology – Enterprise Applications

Knowledge Management

Health &

Welfare and R

etirement A

dministration

XMLXML

Inte

grat

ed D

eliv

ery

via

Port

al

Business Rules Engine

Client and Partner Back-End Systems

EmployeeSelf Service

&Manager

Self Service

Recordkeeping&

BusinessAnalytics

EnrollmentServices

&Event

Processing

FlexibleSpendingAccounts

&COBRA

CaseManagement

&Interaction

Management

RetireeHealth And

Welfare&

PensionAdmin

27

Technology – Knowledge Management

PublishersPublishers

TransactionsTransactions

data

InteractionsInteractions

data

Plan DesignPlan Design

data

SubscribersSubscribers

ApplicationsApplications

Info

AnalyticsAnalytics

Info

Self ServiceSelf Service

Info

Clients / EmployeesClients / Employees

Service CenterService Center

Customer FacingCustomer Facing

Transactions + Interactions + Benefits Expertise = Client Knowledge

Shared and Shared and PersonalizedPersonalized

Centralized Centralized RepositoryRepository

Information Tech.Information Tech.

Quality and MeasurementQuality and Measurement

GLSGLS

Clients / EmployeesClients / Employees

Enterprise DatabaseEnterprise Database

28

Technology – Interaction Management

InteractionsInteractions

Interaction ManagerInteraction Manager

PhonePhone FaxFax

Web / Web / ChatChat

EE--MailMail

Workflow

Rules

Agents

Call RecorderCall RecorderPBX / ACDPBX / ACD Agent DesktopAgent Desktop

Self Self ServiceService

IVRIVR

SystemSystemInterfacesInterfaces

CaseCaseManagementManagement

CapabilitiesCapabilities

InteractionInteractionHistoryHistory

Service Level Service Level AssuranceAssurance

Collaborative Collaborative BrowsingBrowsing