With great power comes great responsibility
Like its comic books, Marvel Enterprises has a storied past,
complete with heroes, villains and action packed turning
points.
From the first characters in 1939, through the Stan Lee era in
the 1960s, to the present age of silver screen superheroes, Marvel
has consistently been a fountain of creative talent, producing
characters that have become icons worldwide.
It is only in the past decade or so that Marvel has also become
an entertainment powerhouse, now a public company with an archive
of valuable IP assets.
Bankrupt in the mid 90s, Marvel was able to utilizing these
assets and rebuild itself by mitigating risk of production,
focusing on the licensing business and building upon the
cornerstones of the company: great characters and great
stories.Marvels archive of assets now numbers over 5000 characters,
and that number increases with every new book.
In 2004, Marvels annual sales topped half a billion and the
market cap for the company was nearly two and half billion.
But for a high profile company with skyrocketing revenues and
share prices, Marvel remains small at heart. Under 250 employees
manage the daily affairs of characters like Spider-Man and the
Hulk.
Poised for further growth, Marvel is now looking at ways to
standardize data and operations across the enterprise wherever
possible.
Marvels business can be broken down into four categories:
The Publishing business, which encompasses comic books and trade
paperbacks, accounts for roughly 17% of net sales. In some
respects, Marvels publishing arm acts as R&D in terms of
intellectual property. Potential agreements with 7-11 and Walgreens
aim to put comic books back on the check-out line shelves.
Toy production, which currently makes up roughly 42% of sales,
is facilitated through a master toy license with Toy Biz Worldwide,
a structure which allows for maximum profit with minimal risk in
regards to production and inventory concerns.
Toy manufacturing is outsourced via overseas production, but
Marvel retains full control of the production process. The process
is managed utilizing Oracles Order Management capabilities.
While Marvel is not a toy manufacturer, our toy business
continues to expand. As an example, Marvel recently in-licensed
from Universal the rights to produce toys based on Curious George,
which will be a major motion picture in 2006.
Marvel Studios, our west coast based film division, helps drive
our publishing, licensing and toys businesses. In many respects,
Marvels movies and television products are the primary marketing
program for our toys and licensed articles.
Currently, Marvel produces movies and other programs via joint
ventures and licensing agreements with large studios (e.g. Sony,
Universal, Fox etc.).
However, Marvel is entering into a non-recourse financing
agreement with Merrill Lynch that provides limited risk by
utilizing characters as collateral against the loans. This
agreement will enable Marvel Studios to begin producing its own
movies in-house, providing more creative control and a larger share
of box office receipts. The first movies on the Marvel Studios
slate are Captain America and Nick Fury, Agent of Shield.
The Licensing Division, responsible for nearly 42% of sales, is
the segment of our business experiencing the greatest growth, and a
major contributor to the companys turnaround and continued
successes.
We have more than 500 active licensees who represent best in
class partners in all major product categories, resulting in over
3.5 billion in licensing sales during 2004.
The Licensing division continues to grow and each day brings new
and exciting licensing partners. As an example, Marvel recently
announced an exclusive agreement with Microsoft to produce an
online multiplayer video game for the X-Box.
With the company growing in leaps and bounds, Marvels IT
department is now looking for opportunities to standardize
operations across Enterprise Systems.
Since the Licensing Division is experiencing Hulk-like growth,
Marvel is focusing on a broad enterprise solution to manage Rights
& Royalties. With the company financials operating on an Oracle
platform, it made sense to consider Oracle as a possible partner
for the solution.
After thorough internal discovery and an RFP generation and
response process, Marvel decided to utilize a hybrid solution of
out of the box Oracle modules and custom development to manage the
licensing business process from initial deal negotiation through
contract execution to royalty tracking and automated financial
integration.
Marvel selected Fadel Partners, an Oracle Certified Partner with
?? years of experience in Oracle E-Business Applications, as an
implementation partner. Gregg Guest, Director of Special Projects
at Marvel and Tarek Fadel, Managing Partner of Fadel Partners, are
heading up the project.The Licensing Business at Marvel is complex,
and like a superhero with a secret identity, it has a constantly
changing persona. The challenge is to design a system that is both
structured and flexible.
On the front end of a deal, all these terms need to be signed
off on by a variable chain of approvers. On the back end, royalties
and payments need to be tracked against guarantees.
Rights structures at Marvel are highly complicated, utilizing a
matrix of four main parameters for rights: Character (e.g.
Spider-Man), Article (e.g. T-Shirt), Territory (e.g. US) and
Channel of Distribution (e.g. Mass Market).
In addition, rights carry with them an assortment of conditions
and variables: Minimum guarantees, variable royalty rates, event
driven term dates, and other exclusions based on any of the main
parameters.
The possible combinations are countless. And, of course,
executive management wants reporting on all of it.Currently, the
process is managed through a series of spreadsheets, Access
databases and isolated Oracle functionality.
Workflows are mainly handled offline, via emails, phone
conversations and paper processes, with little or no
automation.
Without a central repository of rights information and
structured data, it is nearly impossible to track the rights which
are being granted. Collision checking, which is the process of
insuring rights being granted are not already licensed, is a manual
and lengthy process.
Without Financials integration, measuring royalties earned and
tracking payments against minimum guarantees is a challenge.
Royalty reports are processed in a near manual fashion,
resulting in redundancies, additional workloads and an arduous
process of identifying where to apply royalties via manual
investigation.
Finally, reporting is highly difficult. Non-relational data
results in an inability to aggregate or analyze data in meaningful
ways or access data on a rapid, real-time basis.The solution
combines existing Oracle Modules with extensions and customizations
to create a comprehensive yet flexible Rights & Royalties
management system.
Approval workflow will be facilitated by Oracles Quoting Module,
allowing us to apply an overall sales process to the configuration
of a deal and to add additional sales supplement material, generate
documents such as deal memos and contracts via Proposals, as well
as integrate with modules like Customers Online to leverage
existing CRM functionality.
In order to accommodate the complexity of the rights structure
in play, we decided to utilize the Oracle Configurator Module,
allowing us to configure complex variations of rights across the
different parameters of a deal (e.g. Spider-Man T-Shirts in All
Territories via Mass Market). In addition Configurator will allow
us to further define the configuration of these rights to include
rate information, guarantees, payment schedules, etc. Finally, it
allows us to configure exclusions to the rights based on specific
parameters (e.g. no selling of Spider-Man T-Shirts in Canada).
To facilitate automated billing and guarantee tracking, we chose
to implement the Service Contracts Module, which will be integrated
to generate service contracts based on the terms of a deal.
Royalties will be imported and processed via a custom solution, and
tracked against counters on the Service Contract. The Service
Contract will dictate the opening of receivables based on payment
schedules and royalty overages.
Finally, Marvel chose to implement Oracle Discover as a
reporting tool, providing a mix of canned reports and super user
access for real time querying of data.Tarek will provide notes here
on a more technical description of the process and the
solution.
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Make bullet points above talking points in notes
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Add financials, discovererWith a foundation in place, Marvel is
taking every opportunity to leverage the Oracle platform and
investment in the software wherever possible.
Besides Licensing, projects are currently underway in other
divisions of the company as well, including Publishing and Human
Resources.
Marvel is also evaluating Enterprise Content Management
solutions and looking to Oracle as a potential platform.In the
Publishing division, we are currently leveraging the Oracle
framework to automate Publishing workflows around Marvels
interactions with outside contractors (e.g. writers and
artists).
The process is being integrated with Oracle Financials in order
to trigger the proper financial procedures when new books are
approved and talent is assigned. This integration will allow for
automation of payables to contractors and tracking financial
aspects of the production process.
In addition, efforts are underway to standardize and centralize
Marvels publishing data in the Oracle database.
[probably need this slide to be developed more or get more info
from Kingshuk]In the Publishing division, we are currently
leveraging the Oracle framework to automate Publishing workflows
around Marvels interactions with outside contractors (e.g. writers
and artists).
The process is being integrated with Oracle Financials in order
to trigger the proper financial procedures when new books are
approved and talent is assigned. This integration will allow for
automation of payables to contractors and tracking financial
aspects of the production process.
In addition, efforts are underway to standardize and centralize
Marvels publishing data in the Oracle database.
[probably need this slide to be developed more or get more info
from Kingshuk]In Human Resources, Marvel is also implementing an
Oracle solution. The project is essentially a standard Oracle HR
offering, utilizing integration with ADP for payroll.
Implementation of Oracle HR will also help facilitate
centralized user management, which will integrate down the line
with other systems in the enterprise, to drive access and
permissions based on user roles and groups.
In addition, this implementation will allow for future rollouts
of web based access points that provide employees with instant
access to important HR information and allow them to maintain their
own HR profiles.
[again, we may need fleshing out here from someone]Marvel is a
company based on IP assets and content, and as such, the needs for
Enterprise Content Management solution are great. We are in the
early phases of discovery on a broad solution and preparing an RFP
for release to vendors in early September.
While we are looking at the standard players in the Content
Management space, we are also asking Oracle to provide a viable
solution if possible.
Because the ECM system must have tight integration with other
Oracle systems in place at Marvel, it follows that a solution built
on the Oracle platform makes sense.
In addition, many of the criteria we are looking at (e.g.
handling workflows, automating archiving, providing portal access
and reporting on content usage) are areas which Oracle has
offerings in.
It remains to be seen if Oracle will fit the bill for Marvels
Content Management needs, but we are eager to work with the Oracle
team to explore the possibilities.Marvels IT Department takes a
responsible approach to the enterprise:
Leveraging existing technology investments in Oracle - Seeing
the long term vision and laying the groundwork now Partnering with
First Class technology providers like Oracle and Fadel Partners
- Building upon 60 years of imagination, fortitude and
originality to create the Marvel Enterprises of the future.
