Raising the bar Shared services, value creation

& business finance optimisation

Mark Pickett

VP Finance – EMEA Hardware, Oracle

Today’s Crisis Can Drive Tomorrow’s Transformation

“Sometimes a crisis can provide you with

an opportunity to transform your

organization in ways that wouldn’t be

possible during good times. In the late

1990s, when Oracle’s operating margins

were under pressure, we embarked on an

initiative to consolidate and standardize

our IT infrastructure. By the time Oracle

had emerged from the dot.com bust in

2003, we had more than doubled our

operating margins, and created a strong,

integrated platform to support our M&A

and organic growth strategies.” Jeff Henley, Chairman of the Board Oracle Corporation

Oracle Corporation

• 32,000 developers and

engineers

• 18,000 customer support

specialists, speaking 27

languages

• 17,000 implementation

consultants

• 2 million students supported

annually

• 850 independent Oracle user

groups with 800,000 members

INNOVATION SCALE

• $37.2B in revenue in FY13*

• #1 in 50 product/industry

categories

• 380,000 customers in 145

countries

• 20,000 partners

• 120,000 employees

• 15 million developers in

Oracle online communities

* GAAP revenue reported in USD as of May 31, 2012

Oracle’s Shared Services Journey Phase I : 1998-2003

• Get Oracle’s internal operations in order

• Simplify. Standardize. Centralize. Automate.

• Implement plain-vanilla Oracle software to run our business

• Enhance decision-making and accountability

• Increase margins

Simplify. Standardize. Centralize. Automate.

1998 2003 & Beyond

• 65+ financial apps instances • Global Single Instance (ERP)

• Fragmented Data: tens of

thousands of Excel

spreadsheets

• Global Data Warehouse

• Inconsistent Processes • Global Processes

• Local Support • Shared Service Centers

• Local Decision Making • Centralized Decision Making

• Autonomous Countries • Multi National Corporation

• Geographic Functions • Global Functions

• Country Infrastructure • Simplified Global Infrastructure

EMEA Finance SSC – Phase I scope 1999-2003

• 42 countries

• 15 processes

• Dublin

Value Creation (1) in Shared Service Centers

• Allowed to doing things right: Operational Excellence

• Reducing Cost of business processes

• Improving Quality of products and services

• Increasing Speed of operations.

• …and doing the right things: Management Excellence

Importance of GPO role Linchpin of Standardization Program

GLOBAL

APPLICATION

OWNER...In IT

Partner with the Global Process Owner – Global process definition

– Best use of technology

Support Single Instance and Shared

Services Strategy

– Application support & implementation services

GLOBAL PROCESS

OWNER…In Business

Evaluate Shared Service Center Process

– Use of technology

– Responsibility profiles and organizational structure

– Efficiency, effectiveness, relevance, best practices

– Global headcount requirements

Act as Champion of Global Process & Articulate

– Strategic direction

– Understanding of global requirements

– Business needs and service level standards

Oracle’s Business Transformation

• Undertake an aggressive acquisition strategy to

expand our portfolio

• Add a new line of business – hardware

• Utilize proven best practices from Phase I to

accelerate operational savings

• Scale business profitably

PHASE II (2004 - 2011)

Business Objectives:

Oracle Acquisitions – over 85 Acqns since 2005

Identity & Access

Management

Performance

Management

Enterprise Content

Management

Business Intelligence Middleware Platform

and Management

Virtual Machines Systems Management Operating Systems

APPLICATIONS

DATABASES

OPERATING SYSTEMS & VIRTUAL MACHINES

SERVERS, STORAGE AND NETWORKING

Data Integration

(pending)

MIDDLEWARE

Oracle’s Shared Services Journey : Phase II • Utilize proven best practices from Phase I to accelerate operational

savings – Simplify, Standardize, Centralize, Automate

• Transform Dublin SSC to Global Controllers Organization – new focus

on Control & Acquisitions

• Establish new Global Centers (Romania, Bangalore) for a number of

new centralized processes (Finance/non Finance) / FP&A

• Value Creation (2) in Shared Service Centres

• Provides Control

• Agility & Flexibility

• Scaleability

• Controllers

• Revenue

Recognition

• Procurement

• Comp Admin

• Exp Reporting

11 Countries

• Customer

Contracts

• Credit &

Collections

50 Countries

• Controllers

• Revenue

Recognition

• Customer

Contracts

• Credit &

Collections

• Exp Reporting

• Procurement

• Comp Admin

113 Countries

113 Countries

• Controllers

• Order Entry

• AR / Cash Apps

• Exp Reporting

• Purchasing

• Fixed Assets

• Project Acct

• Credit &

Collections

• Customer Data

• AP

• Comp Admin

197 Countries

Shared Service Centre Structure - 2012 5 SSCs,197 Countries, 22 Languages

Breaking out of the Country FD Structure

President Safra Catz

Finance

Operations /

Quote-to-Order

Controllership /

Order-to-Cash /

Source-to-Settle

Global

Business

Finance

Corporate :

Tax,

Treasury,

Internal

Audit, Risk

Traditional FD responsibilities prior to any centralization

Overall Fiduciary responsibility

Controlling / Strategic Finance

Accounting

Tax

C&C

Purchasing

Travel

IT

Payroll

Compensation (Planning / Admin)

Facilities

Labor law

Customer visits / disputes

Very procedural,

inward-looking position,

Stewardship,

Diligent Administrator

TRANSACTION

Manager

Managing Change & the Changing Culture

“Sociology, not Technology”…it’s a People thing…

Don’t Over ExIT…just do it…!

Engage your Top Talent & find your “Poachers Turned Gamekeepers”

Talk the language of change: “Making the Impossible Possible”

Reinforce shared values and norms

…and keep doing it…move from a reactive measure into a core agent

of innovation and success

Manage Organizational Inertia through a Culture of Change

Raising the Bar: Value Creation (3) From 2012

• GBF provide Strategic Leadership to across all Business

• Scale up Global Business Finance with GPOs

• GBF Global Process Owners / Build communities

• Standardisation around Best Practices & Measurement

• Move Shared Service Centers up Value Chain

• More Automation, More Business Support, at Less Cost

• Refine Engagement Model / Integrate with In-Country teams

• Establish Global, Best-in-Class Management Systems

• Provide committed support to Career Development

Raising the Bar: Value Creation: Field

Transaction

Manager

Business Partner Support

Value Add Business Partner

Provides reactive decision support

as challenger

Focus on internal tasks

Improves performance in

co-operation with business

Driving Change

Phase 1 Phase II

Raising the Bar: Value Creation: SSCs

Transactions

Automated

Business Partner Support

Value Add Business Partner

GFIC / SSCs start to move up Value Chain,

taking Business Partnering Support

roles

Field Business Partners develop

Strategic Leadership role

Phase III

Marketing Sales Support Partners Finance Ordering and

Contracts

• Event Intelligence

• Marketing Contribution Analysis

• Segmentation

• Campaign Intelligence

• Data Quality Monitoring

• Pipeline Intelligence

• Forecasting

• Account Analysis

• White Space Analysis

• Up-Sell / Cross-Sell Opportunities

• Executive Dashboards

• Operational Dashboards

• Contract Renewal Management

• Install Base Intelligence

• Partner Ordering Analysis

• Partner Enrollment

• Partner Analytics

• Revenue

• T&E Analysis

• Expense Actual vs. Budget

• Expense by Manager

• Headcount

• Ordering Analysis

• Ordering Queue Monitoring

• Quote-to-Order Flow & Analysis

• License Contract Intelligence

Business Intelligence at Oracle Today

Business Intelligence at Oracle Today Supply Chain

Procurement & Spend

Field Service Manufacturing Value Chain

Planning Product Quality

• Revenue & Backlog

• Inventory Analysis

• Fulfillment Status

• Customer Status

• Order Cycle Time

• BOM Analysis

• Direct & Indirect Spend

• Buyer Productivity

• Contract Compliance

• Supplier Performance

• Purchase Cycle Time

• Task & Labor Analysis

• Resource Utilization Analysis

• Order & Shipment Analysis

• Inventory Ageing & Level of Service Analysis

• Cycle Time Analysis

• Inventory Turns Analysis

• Resource Usage

• Transaction and Inventory Analysis

• Tactical Plan Analysis

• S&OP Scenarios Analysis

• Risk Analysis

• Inventory Analysis and Excess & Obsolete

• Service Plan Analysis

• Hardware System and Part Reliability Analysis

• Annual Failure Rate against Goals Analysis

• Early Warning System Analysis

Increasing Volume

and Processing Time

Before BI Contract Turnaround = 14 days

Business Intelligence in Finance License Contracts Example

Contract Turnaround = 4 days After BI

• Analyzed root cause

• Decision based on fact vs.

conjecture

• Implemented process to reduce

by 66%

• Business benefit estimated to be

worth $7 million

Issue:

• Unable to efficiently report on T&E expenses, identify top spenders

• No T&E view for People Managers, as they do not own cost centers

Solution:

• Give people managers transparency into their actual T&E spend vs. plan

• Enable proactive cost control

Oracle Products Implemented:

• Oracle Business Intelligence Enterprise Edition

• Travel & Expense Analytics

Travel expenses per employee

Q3FY08

Before

Q3FY09

After

T&E Analytics Help Manage Spend

Globalising Business Intelligence…the learnings

• Clear and complete definitions and standards for data

• Master Data Repository for consistent numbers

• Global Steering Committee with Executive Sponsorship

• Need cross-LoB support, particularly from Apps IT

• Create GPOs responsible for Reporting Dashboards, with clear

understanding of business and business needs

• Dashboard must be accurate, reflect the requirements of the users,

and in step with the process in which it is used

• Share Usage metrics with the Users

• Business Intelligence for Finance has been hardest…!

• Lower costs

• Better information

• Better customer service

• Strong internal controls &

easier compliance efforts

• Fast integration of new acquisitions

Outcome: Better Performance

“Life isn't about waiting for the storm to pass...it's about learning to dance in the rain”