Once considered the most complex solution, we are now driven by market feedback to believe there may be simpler and more elegant solutions to our customers' requirements. This may also have a positive impact on IT developers by freeing them to work on new IT applications. ? As announced in our e-mail on July 21, we have started discussions with our technology partners about a number of possible IT solutions. We are in mid- to late-stages discussions with vendors to eliminate potential barriers to the technology partnerships and are making good progress. We have also started testing the first set of prototypes of these IT solutions. ? In September our senior management will brief you on our plan and prospects. ? We have been in regular contact with analysts who follow Enron. We will also share with you the key messages from these analyst interviews. An appendix to this memo will give you some key data on our financial performance. Please let us know if you have any questions. Regards, Klaus Further to Klaus' presentation today, there are a few follow-up questions: Will the functionality from the existing workflow applications be transferred to the new IT infrastructure, or is there some sort of investment in the development of workflow functionality specific to the new architecture? Will the scope of this investment be limited to Worklife, or will the scope be expanded to include other applications? What is the timeframe for implementation? It's been rumored that implementation will begin in 2002, but I haven't heard a specific announcement regarding implementation timeframes. The last bullet above suggests that there is a large amount of workflow functionality within Worklife. What is the estimated percentage of worklife transactions which utilize workflow? Is the Worklife transaction functionality currently utilizing the capacity on the existing infrastructure, and, if so, how does the forecasted roll-out of the IT infrastructure support additional workflow processing? What is the implementation timeframe for financial trading workflow? Thanks, David David Ikenberry 10/16/2001 03:09 PM To: Nicki Daw/NA/Enron@Enron, Jeff Skilling/Corp/Enron@ENRON, Kenneth Lay/Corp/Enron@ENRON, John Thompson/LON/ECT@ECT, Karen S Owens@ees, Andrew S Fastow/HOU/ECT@ECT, Mark Frevert/NA/Enron@Enron, Kevin P Hannon/Enron Communications@Enron Communications,iya cc: Donald M- ECT Origination Black/HOU/ECT@ECT, Barry S Williams/Enron@EnronXGate, Rodney Malcolm/Enron@EnronXGate Subject: Workflow and other following-up There were several questions that came up during today's discussion on our options for dealing with the WorkFlow/EnTelligence tool. These are the initial options as I understand them: Option 1 - No action - do nothing and let Milnthorp and his team sort out the contractual issues. The risks here are that we have no perceived need/use for the tool (and we are locked into only one vendor) and that we have a potential $10Million expenditure with Milnthorp at a time when we are trying to minimize expenses. Option 2 - Terminate for $1 - obtain a one year license from the current vendor, PeopleBank, terminate the current agreement and allow the current vendor to complete the WorkFlow project in its current form. The risks here are that we terminate an agreement with a vendor in the middle of a project that may have lower switching costs, that the new product is perceived as a disappointment (due to our involvement) and that there is a perceived $10Million expenditure at a time when Milnthorp is focused on cost cutting/opportunities to reduce expenditures. Option 3 - Terminate for $2 - Terminate the agreement and obtain a two year license from the new vendor, PeopleBank. This option assumes that we have the ability to negotiate an arrangement with PeopleBank to minimize our payment and therefore we have no $ risk. The risk with this option is that we have no WorkFlow/EnTelligence product for one or two years. I assume that PeopleBank will allow us to roll the current WorkFlow project over into the product that they will develop for us for a one time payment. The upside of this option is that we are able to minimize the costs to Enron by leveraging PeopleBank's product development capabilities. The group is still considering all the options and I will continue to reiterate the risks of the different options. Please direct any questions or requests for additional information to myself at 713 853 3174. Dave