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Global Operations: Oracle Case Study Bret FullerSenior Vice-President, Applications Operations

The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions.The development, release, and timing of any features or functionality described for Oracle’s products remain at the sole discretion of Oracle.

“This presentation is for informational purposes only and may not be incorporated into a contract or agreement.”

Bret FullerSenior Vice PresidentApplications ITOracle Corporation

“This presentation is for informational purposes only and may not be incorporated into a contract or agreement.”

Global Operations with Oracle E-Business Suite:

Oracle Case Study

Agenda• Market Trends & Business Challenges• Applications IT: Roles, Responsibilities and Priorities• Consolidate & Simplify IT• Standardization of Processes• Shared Services• Accountability and Security• Best Practices• Keys to Success• Q & A

Market Trends

• Consolidation of Systems• Standardization of Processes• Move to Shared Service Centers• Focus on Security• Corporate Compliance• Do More With Less…

Business Challenges

• Multiple Data Centers• Multiple Databases• Multiple Environments • Variety of Applications Deployed• Variety of platforms and Operating Systems• Inconsistent Usage of Applications and Business

Practices• Multiple Support Groups• Transactional Vs. Informational Systems

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Applications IT:

Roles, Responsibilities & Priorities

Roles

• Enable and Drive Business Process Improvement• Partner with the Business & Development• Direction from Executive Management

• Early Adopter of Oracle’s Products• Database, Applications Server & Applications

• Deliver Business Solutions• Provide Access to Global Information• Showcase for Oracle’s Products• Corporate Governance and Security

• Implement and support application solutions which allow Oracle to run it’s business

• E-Business Suite• Extensions/Bespoke Applications• Some 3rd party software (US tax, denied party screening,

etc.)• LOB’s/Groups supported

• Finance (including Payroll)• Sales & Marketing• Internal Support• Consulting• Education• HR/Employee’s• Development• Applications and Global IT

Responsibilities

Priorities

• Ongoing Business and Production Support • SOX Compliance & Audit Support• Mergers & Acquisitions • QA/Feedback/Early Adopters for Development • Standardize and Improve Business Processes• Consolidate and Simplify Operations & Instances• Project Initiatives

• DBI and other ‘Information Out’ projects• Implementation of new product functionality• LOB specific projects

Applications IT: Organization • IT organization

• Applications• Process Definition• Solution Design• Implementations• Functional Support

• Systems • Environments• Performance Tuning• Technical Support• Data Migrations• Patching

• Strategy, Planning and Operations

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Consolidate & Simplify IT

Why Consolidate & Go Global?

• It’s all about INFORMATION• "How many people work at Oracle?"• Quality • Availability/Access

• Improving Service• Reducing costs

• Hardware• Facilities• Headcount

Data Consolidation Createsa Valuable By-Product

Valu

e

Level of Consolidation

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

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

EllisonEllison’’s Law:s Law:

Types of Consolidation

• Each type of consolidation provides increasing levels of return• Hardware/System Services • Software/Databases • Business Processes • Shared Services/Process Administration

Consolidate As Much As Possible!

Started with . . . . . . . . . . . . . . . . 65+ (70+) instances (ERP)

January 2001 . . . . . . . . . . . . . . 20 instances (ERP)

January 2002 . . . . . . . . . . . . . . 10 instances (ERP)

January 2003 . . . . . . . . . . . . . . . 3 instances (ERP)

July 2003 . . . . . . . . . . . . . . . . . . 2 instances (ERP)

January 2004 . . . . . . . . . . . . . . . 1 instance (ERP)

October 2004 . . . . . . . . . . . . . . . 1 Suite instance (ERP & CRM)

June 2005 . . . . . . . . . . . . . . . . . 1 Suite instance (w/PeopleSoft)

April 2006 . . . . . . . . . . . . . . . . . 1 Suite instance (w/Siebel + M&A's)

Oracle’s Global Consolidation(Business Systems - ERP & CRM => GSI)

Oracle's Global Consolidation

• Email• Before: 97 Systems, Multiple data centers, duplicate support• Now: 2 Systems, Austin based, Linux

• Demo Services• Before: Country based, inconsistent, mixed • Now: Global, Austin based, Linux, Master driven

• Education Systems• Before: Country based, mixed platforms, unreliable• Now: Global, Austin based, Linux, Master driven

• Support Systems• Before: Region based, inconsistent, non-integrated, non-product• Now: Global, Austin based, Standard processes• Next: Siebel Product

Previous NewGoal $ Mil Goal $ Mil

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

Previous NewGoal $ Mil Goal $ Mil

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

Note: Based on Oracle estimates.

Oracle’s $2 Billion Dollar Savings Target

The Oracle Experience

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

Procure to Pay (P2P)The Oracle Story

* Cost per transaction

P2P Transaction Expense

Cost Savings per Year

Expense Processing *

$150

$20M

$30-40

$40M

< $5$25

Travel * $25

Travel (Average Ticket Price) 10%

$45

Total Savings $115M

Support - 3 Year Comparison (2001-2003) The Oracle Story

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

Online Requests (% of all requests) > 78%

Headcount 14%

Total Support Activity 200%

Cost per Request 60%

Resolution Time 41%

The HCM StoryProducts Implemented:

•Employee & Manager Self-Service

•Payroll

•iRecruitment

•Compensation Workbench

•Advanced Benefits

•Time & Labor

•Appraisals

Benefits:• Self-Service Paradigm - Reduced Costs, Better Service

• Increases timeliness of processing & quality of data

• HR staff focused on added value services, not transactions

The HCM Story (cont’d)

Employees can:•Manage personal information (address, phones, contacts, etc…)

•View and Print Payslips Online

•Maintain Tax Withholding & Direct Deposit Information

•Search and Apply for Internal Jobs

•Release Employment Information for Internal Transfers

•View Updated Information Immediately

The HCM Story (cont’d)

Managers can:•Make Employee Status Changes Such As:

Job, Manager, Cost Center, Location, Compensation &

Working Hours Changes; Initiate Involuntary Terminations

•Transfer and Re-assign Employees

•Post Job Vacancies

•Manage The Hiring Process

•Search for Job Candidates

•Manage Skills & Competencies

•Deliver High Quality, Documented Appraisals

The HCM Story (cont.)Samples of Business Improvements

• Payslips• ~94% of US employees use online payslips• Significant time and cost savings

• Appropriate Approvals

• Workflows associated with Self-Service transactions ensures proper processing

• Visibility to information

• DBI

• Product Reports & Discoverer

• Compliance with Labor laws

• Use of Time & Labor

• Workflow

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Oracle's Global Single Instance (GSI) Architecture

Global Single Instance Data Statistics

258,000 Projects9.0 Terabytes

359,000 Vendors

733,000 Customers

1.1 Million People

610 Sets of Books

104 Operating Units

18.6 Billion rows of data

Data Statistics for Global Single Instance – July 2006

539 Million GL lines

44.5 Million Sales Order lines

5.4 Million Sales Orders

13.4 Million AP Invoices

54.9 Million AR Invoice lines

8.6 Million AR Invoices

Application Code (Snap Mirror)

Oracle Home (Rsync)

Database(Dataguard)

Disaster Recovery

Network / Big IP / DNS(Manual)

Austin Data Center Colorado Springs Data Center

Linux in Production

Middle Tier 2002 Today

Hardware Sun Dell

# of Machines 5 70*

CPU’s per Machine 16-24 2

Speed of CPU’S 450 Mhz 3.06 Ghz

Approximate Total Cost $750,000 $150,000*

Performance X 2X-3X

Middle Tier 2002 Today

Hardware Sun Dell

# of Machines 5 70*

CPU’s per Machine 16-24 2

Speed of CPU’S 450 Mhz 3.06 Ghz

Approximate Total Cost $750,000 $150,000*

Performance X 2X-3X

Better Performance and Less Cost!

* Replaced Original 5 Sun’s with 18 Linux boxes

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Standardization of Processes

Advantages of Standardized Processes

• Reduced processing and per transaction costs• Ability to leverage best practices from different

groups/regions• Better (smarter) information

• Comparing like data• Better support across common processes• Simplification through standardization

Defining Standardized Processes

• Organization and Approach• Business

• Global Process Owners (GPO)• Identify process flows working with IT • Divisional (regional) owners (DPO)• Prioritization within Area

• Applications IT • Global Solution Owners (GSO)

• Mirror Business Process Organization (GSO/DSO)• Steering Committees

• Communication, Progress Review and Decision Making• Leadership & Escalation Resolution…Not Management by

Committee

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Shared Services

Benefits of Oracle Global SSC

F&A

Technology

Process

People

• Focus on the business• Incorporate new businesses faster• Facilitate operational reviews and

audits

• F&A costs lower by 30%• Payback in 28 months

• Single data model• Management dashboards

• Consolidated infrastructure• Scalable platform

• Standardized global processes• High quality management information• Greater agility to respond to change

• Increased efficiency• Improved quality through self-

service

• Higher service and skill levels• Separation of duties

• HC lower by 25%• Lower $ per head

QualitativeQuantitative

Oracle’s Shared Service Functions

• Tactical Purchasing• Accounts Payable• Order Administration• Accounts Receivable• Cash Management

• Revenue Accounting• Revenue Recognition• General Accounting• Collections• Data Librarians

• Customer Data

Oracle’s Global SSC Network

EMEA SSCDublin, Ireland

Serving 31 countries

AsiaPac SSCSydney, Australia

Serving 13 countries

Americas SSCRocklin, CA

Serving 13 countriesIndia SSC

Bangalore, IndiaSelected Global Functions

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Accountability & Security

We Are Accountable

• To Management• To Shareholders and The Public • To CEO and Board of Directors• To Employees• To the SEC or other regulatory agencies

Standard Processes and Shared Services Increase Visibility of Operations

System Security

• Consolidated System Benefits• Fewer Control Points Leads to Better Control• Less to Monitor Means More Detailed Monitoring• Fewer People to Maintain and Access• Single Set of Technology to Support & Leverage• Less Expensive and Complex for Disaster Recovery

Improved Control, Improved Monitoring, Simplified Infrastructure, Less Exposure

=Improved Security!

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Best Practices:

Project Management

Project Management

• Formal Definition• Approval Process

• Priority• Ranking• ROI

• Planning • Across All Teams• Project Manager • Project Team• Rolling 6 Month Project Schedule

• Measurement• Time/Effort Tracking with Oracle Projects• Quality Tracking Through All Change Management Environments• Formal Review

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Best Practices:

Managing System Change

'Standard' Change Management Flow

Fixes/Production Support

Business Projects(New functionality/ process changes)

Enhancements(Family Packs/New Products/

Upgrades)

HR Functional Projects(Non-scrambled Dev/Test

Environment)

Systems Tech Projects(Database Upgrades, RAC Testing,

New Tech Stack)

Non-RAC

Patch Verification

RAC

TechnicalTest

Non-RAC

Dev/Test

Non-RACBuild Test 2

Refreshed On Demand

Refreshed On Demand

Refreshed Quarterly

Refreshed Quarterly/Semi-Annually

Refreshed Quarterly/Semi-Annually

Non-RAC

Non-Scrambled Build Test Refreshed

On Demand

Non-RAC

Staging

RACRACUAT

(see note below) Refreshed

Quarterly/Semi-Annually

Note 1: There will be only 1 primary UAT environment feeding Staging on any given date. However, we will have at least 2 UAT environments that we will recycle as needed to keep the environments current

RAC

Production

Refreshed 2 times a qtr

All refreshes are sourced from production unless requested as an exception.

Non-RACBuild Test 1

Short Term Production Fixes

'Major Project' Change Management Flow

Business Projects(New Functionality/Process Change)

Enhancements(Family Packs/New Products/

Upgrades)

Systems Tech Projects(Database Upgrades, RAC Testing,

New Tech Stack)

RAC

TechnicalTest

Non-RAC

Dev/Test

Refreshed On Demand

Refreshes driven

by Project

Non-RAC

Staging

RACRACUAT

Refreshes driven by Project

Depending on project taking place, the technical environment may be used for first time run before progressing to a build/test environment.

RAC

Production

Non-RACNon-RAC

Build Test

Changes introduced via refresh after project go live

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Best Practices:

Mergers & Acquisitions

Mergers & Acquisitions

• Dedicated Team• Absorption Model• Repeatable Process

• Templates• 'Playbook' • PeopleSoft - 5 months• Siebel - 9 weeks (Employees on day 1!)

• Lifecycle Review Allows for Process Improvement

GSI and Standard Processes Allow M&A At Oracle To Move FAST!

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Keys to Success

Keys to Success

• Obtain & leverage executive/senior management commitment

• Build a realistic plan• Organize globally or centrally• Simplify and consolidate as much as possible• Automate and centralize business processes

• Always seek to improve year to year• Deploy standard, out of the box products

• Don’t customize, extend if necessary• Leverage shared services where appropriate• Implement best practices • Don’t underestimate the hardest part-MANAGING

CHANGE!

Q U E S T I O N SQ U E S T I O N SA N S W E R SA N S W E R S