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Bret FullerSenior Vice PresidentApplications ITOracle Corporation
Global Operations:Oracle Case Study
Agenda What is Oracle Applications IT Why Go Global Consolidate & Simplify IT Automate & Globalize Processes Move to Shared Services Adopt Self Service Keys to Success Q & A
Implement and support application solutions which allow Oracle to run it’s business
– eBusiness Suite– Extensions/Bespoke Applications (Metalink)– Limited 3rd party software (US tax, denied party screening, etc.)
LOB’s/Groups supported– Finance (including Payroll)– Sales & Marketing– Support Services (customers)– Consulting– Education– HR/Employee’s– Development– Applications and Global IT
Application IT Responsibilities
Applications IT Top Priorities Ongoing Business and Production Support QA/Feedback Extension for Development – Early Adopters
– Database Releases (9i, 10G)– Applications Releases and Family Packs (11.5.8, 11.5.9)– Tools, Portal, etc.
Consolidate to a Global Single Instance eBusiness Initiatives
– Standardized Business Processes– Support Move to Shared Services– DBI and other ‘Information Out’ projects– Project Initiatives
Linux Implementation of new eBusiness Suite functionality LOB specific projects
Applications IT Organization IT organization
– Business solutions/support by LOB (Sales and Marketing, Finance, Support, Education, Consulting, HR)
Process Definition Functional Support Implementations
– Systems Environments Performance tuning Technical Support Data Migrations Patching
– Strategy, Planning and Operations– Applications Integration and Architecture
Cross LOB Products and functions (workflow, imaging, etc.)
Why Go Global?
It’s all about information– Quality – Availability/Access
Improving Service Reducing costs
– Hardware– Facilities– Headcount
How?How?
E-BusinessE-BusinessChallengeChallenge
Previous New
Goal $ Mil Goal $ Mil
Consolidate IT $200 $250
Sell Side $550 $1,450
Buy Side $150 $200
Inside $100 $100
Total $1,000 $2,000
Previous New
Goal $ Mil Goal $ Mil
Consolidate IT $200 $250
Sell Side $550 $1,450
Buy Side $150 $200
Inside $100 $100
Total $1,000 $2,000
Note: Based on Oracle estimates.
Oracle’s $2 Billion Dollar Savings Target
Becoming an E-Business
Consolidate & Simplify IT
Issues Before Consolidation
Multiple Data Centers Multiple Databases Multiple Environments Variety of Applications Deployed Variety of platforms and Operating Systems Inconsistent Usage of Applications Multiple Support Groups Inconsistent Business Practices within each
LOB, Division, Country
Types of Consolidation
Different levels of consolidation provide different levels of return– Hardware/System Services – Software/Database – Business Processes – Shared Services/Process Administration
Advantages of Data Center Consolidation
Costly to maintain
Lower level of service
Fragmented data
Multiple Data CentersMultiple Data Centers Single Data CenterSingle Data Center
Lowers some costs
High level of service
Fragmented data
Advantages of Instance Consolidation
Fragmented data
Higher Hardware Costs
Multiple Data InstancesMultiple Data Instances Global InstanceGlobal Instance
WWW or WANWWW or WAN
Improved information flow
Lower overall costs
IT ConsolidationThe Oracle Email Story
0
20
40
60
80
100
120
EMAIL SVR EMAIL DB ERP SVR ERP DB
Pre-EBS
After-EBS
Eliminate complexity Improve efficiency
9797
120120
11 443232
22
7070
22
Global Messaging Environment
E-mail consolidation saves Oracle $11 Million/year
Mid-1997Mid-1997 End-1998End-1998 End-1999End-1999 CurrentCurrent
9797
120120
31,00031,000
6060
3737
8080
41,00041,000
3030
2525
8080
>41,000>41,000
3030
1*1*
44
>41,000>41,000
1313
Server CountServer Count
DB InstancesDB Instances
EmployeesEmployees
MailkeepersMailkeepers
* Cluster of three servers
Started with . . . . . . . . . . . . . . . . . . . 65+ (70+) instances
January 2001 . . . . . . . . . . . . . . . . . 20 instances
January 2002 . . . . . . . . . . . . . . . . . 10 instances
January 2003 . . . . . . . . . . . . . . . . . . 3 instances
July 2003 . . . . . . . . . . . . . . . . . . . . . 2 instances
January 2004 . . . . . . . . . . . . . . . . . . 1 instance
Calendar 2004 . . . . . . . . . . . . . . . . . 1 CRM/ERP instance
Oracle’s ERP Global Consolidation
Oracle Information Technologies:Consolidation Results
OrganizationOrganizationFinancesFinances
Systems &Systems &ApplicationsApplicationsPracticesPractices
• Spend: >$500M $276M• View: Fragmented Global• Decisions: Not Coordinated Centralized
• IT Staff: >2300 1600• Country/Regional Global
• Systems: Mixed eB Suite• Apps: >1000 <100
Custom Bespoke• Support: $$$ $• De-centralized Centralized
• Standards: some high• Common practices: few high• Knowledge sharing: some high
The Oracle Experience
$12M in ERP annual savings$18M in CRM annual savings$11M in E-mail annual savings$60M in Desktop Simplification annual
savings$13M in annual Maintenance Reductions$200M in Operating Expense in 2 years
Linux in Production
Middle Tier 1 Year Ago Today
Hardware Sun Dell
# of Machines 5 25*
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 1 Year Ago Today
Hardware Sun Dell
# of Machines 5 25*
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
GSI: Current Tech Stack/Versions
Database: 9.2.0.2 9.2.0.4– 3 Node RAC
Applications: 11.5.8 11.5.9 Application Server: 1.0.2.2 Jinitiator: 1.3.1.9 JRE: 1.1.8 (AOL J) JDK: 1.3.1_08 D2K: 6.0.8.20 Portal: 3.0.9.8.4 Framework: 5.7H
Current October
AutomateAutomateand Globalize and Globalize
ProcessesProcesses
Automate & Globalize Processes
Procure
ManufactureFulfill
Service
DevelopDevelop
Plan
Market
Sell
SupplyChain
Management
CustomerRelationshipManagement
Enterprise Management
Finance HR Projects
Maintenance
Enterprise Management
Finance HR Projects
Maintenance
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
Start With Information
Information
Central access to timely & accurate enterprise information
- Transactional- Business intelligence- Portal/web content
InformationInformation
InformationInformation
ProcessesProcesses
Automate Business Processes
Processes
Drive costs down
- Enterprise flow of information
- Streamline processes
- Build-in agility
InformationInformation
ProcessesProcesses
AccessAccess
Access From Everywhere
Access
Secure and simple global interaction
- Browser- Phone- Pager
Working With Our Customers
Approach for Establishing Global Processes (the hard part!)– Business
Process owners Identify process flows working with IT Global owner (GPO) Divisional (regional) owners (DPO) Prioritization within Area
– Applications IT LOB GroupsMirror Business Process Organization (GSO/DSO)
Move ToShared Services
Shared Services Benefits
Efficiency,Efficiency,Control,Control,
andandQualityQuality
• Blend of centralization and decentralization (local vs. central split)
• Standardization on best business practices
• Economies of scale• Better Support• Better (Smarter) Information
Shared Services Benefits
CostCost
• Elimination of redundant structures
• Standardization on best business practices
• Move to low-cost countries
Oracle’s Global SSC Network
EMEA SSCDublin, Ireland
Serving 31 countries
AsiaPac SSCSydney, Australia
Serving 13 countries
Americas SSCRocklin, CA
Serving 13 countries
India SSCBangalore, India
Selected Global Functions
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
Accountability
To shareholders To CEO and Board of Directors To employees To the SEC or other regulatory agencies
Standard Processes and Shared Services Increase Visibility of Operations
AdoptSelf-Service
HR StaffingThe Oracle Story
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
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 The Oracle Story (3 years ago - present)
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%
Marketing - Campaign To Lead
The Oracle StoryDirect Mail vs. E-mail $3.00 $0.01
Response Rates 2% 20%
On Site vs. Web Seminars $2$1000
Remote Demos vs. On Site 100s1000s
Sales - Opportunity To Order The Oracle Story
Sales Person Productivity (Content) + 10-20%
Orders via Web $2M/Qtr $100M/Qtr
Cost of Entering Order - 80%
Forecasting Efficiencies 12 Hr 2 Hr/Month
Quota/Comp Efficiencies 12 Wk 1 Wk/ Year
Cost Reduction SummaryThe Oracle Story
Expenses & Procurement $115M
Self-Service Support Calls $250M
Sales/Marketing Leverage $300M
Sales Force Productivity + 10-20%
Global Savings $665M
Keys to Success
Obtain & leverage executive management commitment Build a realistic eBusiness plan-and execute it! Organize globally 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 Remember hardest part-Managing change
QA&
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
