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An Overview of Internal Operations At Oracle

Wayne Bobby – Vice President, Oracle Public Sector

Agenda

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• Oracle Corporation• Consolidate & Simplify IT• Shared Services• Global Operations – Oracle Case Study• Success Factors• Success Factors• Q&A

© 2008 Oracle Corporation – Proprietary and Confidential

Oracle Corporation•Scale

• $31.9B in revenue on a trailing twelve-month basis*• #1 in 50 product or industry categories• 370,000 customers in 145 countries• 20,000 partners • 104,500 employees

10 illi d l i O l li iti• 10 million developers in Oracle online communities

•Innovation and Investment• 29,000 developers and engineers29,000 developers and engineers• 15,500 customer support specialists, speaking 27 languages• 20,000 implementation consultants• 1.5 million students supported annuallypp y• 870 independent Oracle user groups with 355,000 members

Global Single Instances:Consolidate & Simplify IT

AO2

Slide 5

AO2 Add BEA employeesAnne Ozzimo, 5/16/2008

Issues Before Consolidation

• Multiple Data Centers• Multiple Databases• Multiple Environments • Variety of Applications DeployedVariety of Applications Deployed• Variety of platforms and Operating Systems• Inconsistent Usage of Applications• Multiple Support Groups• Inconsistent Business Practices within each LOB,

Division, CountryDivision, Country

Why Consolidate & Go Global?

• It’s all about the VALUE OF INFORMATION"H l k t O l ?"• "How many people work at Oracle?"

• Quality • Availability/Access

• Majority of Information Benefits AreTied to Standardized Processes

• Improved ServiceImproved Service• Reduced costs

• HardwareF iliti• Facilities

• Headcount

Data Consolidation Createsa Valuable By Producta Valuable By-Product

“The value of information“The value of information

EllisonEllison’’s Law:s Law:

The value of information The value of information increases exponentially as increases exponentially as fragmentation is reduced.”fragmentation is reduced.”

Level of Consolidation

Data consolidation creates the foundation to Data consolidation creates the foundation to understand your business operationsunderstand your business operationsunderstand your business operationsunderstand your business operations

Types of Consolidation

• Each type of consolidation provides increasing levels ofEach type of consolidation provides increasing levels of return• Hardware/System Services

S ft /D t b• Software/Databases • Business Processes & Functions• Shared Services/Process Administration

Consolidate As Much As Possible!

Oracle’s Global Transformation(1998 2003) O ti l E ll(1998-2003): Operational Excellence

Enterprise Performance Management

ERPGoal: Save $1 Billion Per Year

Strategies:

Fusion Middleware

World ClassPerformanceWorld ClassPerformance

1. Simplify information systems

2. Standardize data, systems, and

Governance, Risk and

Compliance

Sta da d e data, syste s, a dprocesses

3. Automate processes

4. Move to shared services

Oracle's Global Consolidation

• Email• Before: 97 Systems, Multiple Data Centers, Duplicate Support• Now: 2 Systems Austin Based LinuxNow: 2 Systems, Austin Based, Linux

• Financial/Back Office (ERP) Business Systems• Before: Over 65 Systems, Multiple Data Centers, Mixed Platforms,

Mixed Processes Inconsistent Set of ModulesMixed Processes, Inconsistent Set of Modules• Now: Global EBS, Austin Based, Linux, Global Processes

• Front Office (CRM) Business SystemsB f N i l b d t• Before: Numerous regional based systems

• Now: Global Siebel, Austin Based, Linux, Global Processes• Business Intelligence (BI)

• Before: Numerous LOB & Regional based systems• Now: Global BI, Austin Based, Linux, Global Processes, Available

to Everyone

Oracle's Global Consolidation

• Internal Support System• Before: Country based, Mixed Platforms, Mixed Solutions• Now: Global EBS (iSupport/Teleservice) Austin BasedNow: Global EBS (iSupport/Teleservice), Austin Based

• Demo Services• Before: Country/Sales Org Based, Inconsistent, Mixed Platforms

N Gl b l A ti B d Li M t D i• Now: Global, Austin Based, Linux, Master Driven• Education Systems

• Before: Country based, Mixed Platforms, Unreliable• Now: Global, Austin Based, Linux, Master Driven

• External Support Systems• Before: Region/Product Based, Non-integrated, Customg , g ,• Now: Global, Austin Based, Standard Processes• Underway: Siebel Product

Oracle Case Study: “Before”9 S97 Servers Worldwide; Multiple Domains

1997AE NODE1

NODE77NODE78

AR NODE2AT NODE3AU NODE4BE NODE5BR NODE6CA NODE7CH NODE8CL NODE9CN NODE10CO NODE11CR NODE12

NODE60NODE61NODE62

NODE79NODE80NODE81NODE82NODE83NODE84NODE85

NODE63NODE64NODE65NODE66NODE67

NODE5

7

ORACLECR NODE12CZ NODE13DE NODE14DK NODE15ECE NODE16ES NODE17FI NODE18FR NODE19GR NODE20HK NODE21HR NODE22

NODE85NODE86NODE87NODE88NODE89NODE90NODE91

NODE67NODE68NODE69NODE70NODE71

• 24 x 7 staffing per center

HR NODE22HU NODE23ID NODE24IE NODE25IL NODE26

N 9NODE92NODE93NODE94NODE95NODE96NODE97

• Duplication of tasks• Servers underutilized• Data replicationp

Oracle Case Study: “After”S 3 S C SSingle 3xServer Cluster; Single Domain

Established 1999

• Saved $13M first year, $11M subsequent years • Easier administration • Improved availability & reliability• Reduced hardware costs • Single unique email address for each employee• Single unique email address for each employee

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Shared Services

Oracle’s Shared Service Functions

• Tactical Purchasing • Revenue Accountingg• Accounts Payable• Order Administration

• Revenue Accounting• Revenue Recognition• General Accounting

• Accounts Receivable• Cash Management

g• Collections• Data Librarians

• Customer Data

Benefits of Shared Service Consolidation

Quantitative Qualitative

People • HC lower by 25%Lo er $ per head

• Higher service Redeplo ment of skills• Lower $ per head • Redeployment of skills

Process • Increased efficiency• Improved quality through

• Standardized global processes• One change for allp q y g

self-serviceg

• Greater agility to respond to changeTechnology • Consolidated infrastructure

• Faster upgrades• Management dashboards• Easier support & maintenance

• Scalable platformBusiness • F&A costs lower by 30%

• Payback in 28 months• Focus on the business & control• Integrate acquisitions faster• Corporate governance & compliance

Information • Accurate, meaningful, consistent & timely

• Improved decision making

Oracle Shared Service CentersSupports all 4 Divisions 62 Countries 19 LanguagesSupports all 4 Divisions, 62 Countries, 19 Languages

Americas SSCRocklin, CA13 i

EMEA SSCDublin, IE

42 countries

• Financial Control & Reporting

13 countries 42 countries

India SSCBangalore, IN

Global Functions

g• Order Entry

• Revenue Recognition

Global Functions

AsiaPac SSCSydney, Australia• Order Entry

• Financial Control & Reporting

• Revenue Sydney, Australia13 Countries

Order Entry• AR / Cash Apps• T&E Payments• AP invoices• Procurement

• Revenue Recognition

• Fixed Assets• Project Acctg• Customer Data• Sales Comp

• Financial Control & Reporting

• Revenue Constantly Evolving• Collections Recognition

y g

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Global Operations:Oracle Case StudyOracle Case StudyE-Business Suite

Simplify Information Systems

1998 Now65+ fi i l i t 1 fi i l i t• 65+ financial apps instances • 1 financial app instance

• 40 data centers • 2 data centers (back-up included)included)

• Inconsistent business processes

• Global standard processes

• Fragmented data • Consistent data and globalFragmented data Consistent data and global business intelligence

• Decentralized decision making • Centralized decision making• Geography• Line of business

• Global process owner• Divisional process owner• Global application owner

Examples of HR Global Processes

• Proof of Employment• Maintenance of Beneficiariesa e a ce o e e c a es• Address Change• Time & Vacation Entry & Query• Pay slip and Income (ex. W2) Queries• Bank Account Information• Promotions & Title ChangePromotions & Title Change• Compensation Changes – Hours, Salary, Stock, Bonus• Cost Center, Job Code, Location & Manager Changes• Transfers

HR StaffingThe Oracle Story (2001 to 2004 Comparison)The Oracle Story (2001 to 2004 Comparison)

HR Administrator Ratio 1:1000 1:2000

HR Professional Ratio 1:350 1:600

Overall HR:Staff Ratio 1:125 1:225

HR Operations Staff 40 9

Examples of Purchasing & Expense Global ProcessesAll transactions enforce corporate policy

• Business CardsEd ti /T i i Cl• Education/Training Classes

• Office Supplies• Computer EquipmentComputer Equipment• Travel

• Flights• Hotels• Hotels

• Expenses• Credit Card Enrollment• Credit Card Transactions download• Per Diem• Mileage• Expense Reimbursement

Procure to Pay (P2P)The Oracle Story (2001 to 2004 Comparison)The Oracle Story (2001 to 2004 Comparison)

P2P Transaction Expense $150 $30-40

Cost Savings per Year $20M $40M

Expense Processing * < $5$25

Tra el * $$45Travel * $25

Travel (Average Ticket Price) 10%

$45

Total Savings $115M* Cost per transaction

Examples of Support, Marketing & SalesGlobal Processes All transactions enforce corporate policy

• TAR/Support Call loggingTAR/Support Call logging• Issue Resolution• Webinars• Demos• Forecasting• Sales Credits & CompensationSales Credits & Compensation

• Territory Accuracy• Sales Credit Allocation• Payments• Payments

• Order Entry (iStore)

Support The Oracle Story (2001 to 2004 comparison)The Oracle Story (2001 to 2004 comparison)

Phone Volume 517,000 66,000(per Qtr)(p )

Online Requests (% of all requests) > 78%

Headcount 14%

Total S pport Acti it 200%Total Support Activity 200%

Cost per Request 60%p q

Resolution Time 41%

Marketing - Campaign To Lead The Oracle Story (2001 to 2004 comparison)The Oracle Story (2001 to 2004 comparison)

Direct Mail vs. E-mail $3.00 $0.01$ $

Response Rates 2% 20%

On Site vs. Web Seminars $2$1000

Remote Demos s On Site 100s1000sRemote Demos vs. On Site 100s1000s

Sales - Opportunity To Order The Oracle Story (2001 to 2004 comparison)The Oracle Story (2001 to 2004 comparison)

Sales Person Productivity (Content) + 10-20%

Orders via Web $2M/Qtr $100M/Qtr

Cost of Entering Order - 80%

Forecasting Efficiencies 12 Hr 2 Hr/MonthForecasting Efficiencies 12 Hr 2 Hr/Month

Quota/Comp Efficiencies 12 Wk 1 Wk/ Year

Cost Reduction SummaryThe Oracle Story (2001 to 2004 comparison)The Oracle Story (2001 to 2004 comparison)

Expenses & Procurement $115Mp

Self-Service Support Calls $250M

Sales/Marketing Leverage $300M

S l F P d ti it 10 20%Sales Force Productivity + 10-20%

Global Savings $665M

The Oracle Experience

P i (2004) N (2008) G l/P i (2004) N (2008) G l/

Oracle’s $2+ Billion Dollar Savings Estimate

Previous (2004) New (2008) Goal/Goal $1000 Mil*** Estimate $2000+ Mil

Consolidate IT $200 $250+

Previous (2004) New (2008) Goal/Goal $1000 Mil*** Estimate $2000+ Mil

Consolidate IT $200 $250+Consolidate IT $200 $250+Sell Side $550 $1,450+Buy Side $150 $200+

Consolidate IT $200 $250+Sell Side $550 $1,450+Buy Side $150 $200+Buy Side $150 $200+Inside $100 $100+Total $1,000 $2,000+

Buy Side $150 $200+Inside $100 $100+Total $1,000 $2,000+Total $1,000 $2,000Total $1,000 $2,000

Achieved through consolidation, simplification, global processes shared services and the use of standard product

Note: Based on Oracle estimates.*** Achieved 2004

processes, shared services and the use of standard product

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Success Factors

Keys to Success

• Obtain & leverage executive management commitment • Build a realistic business plan-and execute it!Build a realistic business plan and execute it!• Organize globally• Consolidate as much as possible

A t t d l b li b i• Automate and globalize business processes• Deploy standard, out of the box products

• Don’t customize, extend if necessary• Move to a shared services model• Leverage self service• Don’t underestimate the hardest part-MANAGING CHANGE!Don t underestimate the hardest part MANAGING CHANGE!