THE WELCH COMPANY
440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700

July 17, 2000

03 00050 61 00071701

Mr. Bill DeHart, PMP
bdehart@home.com
Pacific Gas & Electric Company
Grid Customer Services
77 Beale Street; Room 2359, Mail Code N6D
P.O. Box 770000
San Francisco, CA 94105

Subject:

Customer Rewards, Perceived Value, SDS

Dear Bill,

Thanks very much for taking time from your family visit on Sunday evening, July 9, to discuss SDS.

After you hung up, Morris noted important points you made, and suggested getting some clarifications, when it is convenient for you to comment further, as follows....

1. Bill seemed to explain a benefit of SDS is "organizing" information, and Rod explained the benefit derives partly from a design based on time that builds chronologies of cause and effect, so that information naturally occurs in context that is easier to find and apply.

   How much of this benefit is actually based on the SDS design, and how much of it is generated by the user, in this case Rod, putting in a lot of extra time to analyse that isn't really needed to make money, so not enough people care about context and "intelligence" (i.e., understanding cause and effect) to make a viable market for selling SDS?

2. Does the SDS design make it easier to organize information so that later on it is easier to find prior information in SDS in order to analyse new information? In other words, is the SDS design self-reinforcing; or, is it just Rod putting in extra time, and the analyses could be done in Word or Outlook just as well, by anyone who cares about it enough to invest the time?

3. Are people not looking for an SDS type solution, because they don't care about adding "intelligence" to management? Or, have people, as in Dave Vannier's case at Intel, given up trying, i.e., they tried and failed and so don't believe it can be done, or they don't believe they can get approval to do it, even if it could be done, because it looks like a lot of unnecessary paperwork to executives who don't have enough time to think due to information overload, discussed at the PMI meeting on September 9, 1997?