Presentation from the CIO event held by WinWire Technologies with KapStone

1. Leveraging Microsoft Technologies to Enable M&A GrowthByChristophe DeslandesChief Information OfficerKapStone

2. About KapStone was started as a Special Purpose Acquisition Corporation (SPAC) for the purpose of building a domestic paper-and-packaging business through acquisitions. Stated goal to grow to $2B - $5B range within 2-5 years.

3. KapStone Today 2 Kraft paper mills+ 1 lumber mill Headquartered near Chicago Publicly traded on NYSE ± $800MM revenue 1,600 employees IT team: 30 full-time, 39 FTE

4. KapStoneTimeline Listed NASDAQ Listed NYSE Second Acquisition First Acquisition Founded As S.P.A.C. Third Acquisition? Small Divestiture 2005 2006 2007 2008 2009 2010 2011 ERP Upgrade ERP Goes Live ERP Project Begins Corporate Apps Complete 4

5. Part 1Building a Company

6. Initial Challenges As of Jan 1, 2007: $270MM business No IT infrastructure of our own 18 months to migrate from seller’s systems IT staff: 7 + 1 non-IT transition manager Most applications already selected but no plan to integrate them Challenge: traditional ERP model doesn’t fits well in a process industry

7. KapStone’sApproach Collaboration and Analytics Backbone

8. Technology Stack ERP CMMS OE/MES Fiber CRM Lumber Presentation,BI, DMS & Collaboration Orchestration DBMS/BI Configuration Platform

9. Risk Mitigation To facilitate system integration, we enforced the following requirements for our apps: Windows®-based SQL Server®-based Active Directory authentication Robust integration layer (BizTalk, SOAP or XML preferred) For cloud services: SOAP/XML interfacing Clearly define the process boundaries between systems i.e. once a transaction becomes $$$, feed to ERP! Maximize support from Microsoft

10. System Integration Model ERP OE/MES CRM BizTalk Connector BizTalk Connector Text Files Fiber CMMS XML/MSMQ XML XML Rail Lumber XML X12 BANKS XML EDI VAN Bus. Activity Monitoring All interfacing and integration is done through BizTalk Server. We support a variety of formats. Leverage BizTalk BAM to create self-service interface management portals for end users.

11. What About the Front End? Integrating multiple apps has many advantages: Flexibility No or little customization Easy to upgrade And one big disadvantage: Multiple, loosely linked reporting sources

14. Customer-Facing Infrastructure customer-side integration platform customer DMZ transactions web services auth. data SSRS Active Directory 1-way trust replication Active Directory Active Directory

16. Part 2Support Growth Through M&A

17. The M&A Market is Heating Up “The volume of mergers and acquisitions grew in 2010 by 25%. (…) A survey of top bankers (…) expect deal volume to increase by at least 15% in 2011 from the previous year.” The Wall Street Journal, January 3, 2011

18. M&A Challenges: 10 Things to Remember Typical M&A challenges for IT: IT isn’t always “in the loop” Acquisitions are often behind on IT investments Pressure to get off seller’s systems quickly Pressure to consolidate financials & BI quickly Don’t always know where IT growth will be Manage Communication Security is a big concern IT must take the lead on non-IT activities Must be compliant within 12 months Acquisitions lead to divestitures

20. Ask them if they’d want to know the true cost of merging IT asset before or after negotiating a price!

21. Be ready with:migration cost models system documentation (especially interfacing) methodologies app & technologies portfolio standards

23. Be ready to roll out new desktops (real or virtual) right away

24. Acquisitions are a good opportunity to get out of unwanted support contracts  upgrade Day One!

25. Technologies to leverage:Hyper-V server virtualization, Terminal Services, desktop virtualization

27. Go after low hanging fruits (email, DMS)

28. Migrate legacy apps to virtual instances in your datacenter

29. Technologies to leverage:

31. Upgrade from Excel-based consolidation:

32. Leverage middleware

33. Automate consolidation (at least on your end)

34. Technologies to leverage:

36. Exchange

37. BizTalk

38. SQL Server

39. Terminal Server

41. Keep them in the loop but control leaks

42. Social media isn’t making this any easier

44. Communicate early and often

45. Listen to their concerns

46. Explain that there will be changes and why

48. Lay down the law on Day One:

49. Password complexity rules

50. Computer Use policy

51. Firewall rules

52. Server protection & configuration management

53. Engage an independent security auditor

54. Technologies to leverage:

56. Share your collaboration tools with the other departments

57. Provide testing sandboxes

58. Technologies to leverage:

60. Implement Change Management, Access Control and Configuration Management policies on Day One

61. Technologies to leverage:

63. Virtualize divisional apps and integrate them through middleware to allow for easy decommissioning

64. Technologies to leverage: