The Evolving CIO

What the Executive Suite Needs From the CIO

Jeff HenleyChief Financial OfficerOracle Corporation

IT is Changing…

From Information Technology

To Information Technology

The CIO Must Evolve

The New Reality Facing CIOs

Hyper-Cost-Consciousness Need for Real-Time Intelligence The IT Service Economy

– In-house or Outsource Corporate Governance

It’s No Longer Just About Data Centers

The Future CIO…

“Tech-savvy CIOs who are increasingly used by their companies not just to make the computers work, but to save money and improve profits. CIOs are getting broader responsibility and authority…”

Wall Street JournalMarch, 2003

All Primary Functions Are Evolving

Purchasing– From “Which Server?” to “Which Service?”

Operational Intelligence and Reporting– From “What is the data?” to “What are the trends?”

Increased LOB Interaction– From Reactive to Proactive

Oracle Macro Trends

The Commodity Data Center– Linux/Intel

Remove Complexity– Server Consolidation, Simplified Middleware and

Apps Built-in Business Intelligence and Collaboration Increased Outsourced Offerings E-Business (ie self-service)

Linux Pervading Key IT Areas

106.5

119.4298

246.4

722.3

515

195.8

0 100 200 300 400 500 600 700 800

Business Processing

Decision Support

Collaborative

Appl. Development

IT Infrastructure

Web Infrastructure

Technical

Source: IDC 2003

$ millions

The Thirst for Business Intelligence

Business Intelligence Growth – CRM Analytics - 12.5% CAGR to $829M – DW tools - 12% CAGR of to $11.5B– Financial/Analytics - 10.8% CAGR to $1.5B – Operations Analytics - 13.1% CAGR to $2.4B

Source: IDC June, 2002 forecast reports

IT Economics

Source: IDC

48%

28%

15%9%

LaborSoftware

Development

Hardware

Labor Costs Remain the Largest Savings Target

IT Productivity The Best Hope for Cost Savings

- Summit Strategies, 2002

“Companies spend 72% of IT on Non-Strategic Tasks”

Current IT budgets:

39% on infrastructure

33% on maintenance and administration 72%

“These functions entail great costs and impose plenty of operational risks, but are not likely to produce strategic advantage.”

Outsourcing: Convergence of Software & Service

Currently software seen as separate from support and service

Outsourcing treats software and services as the same thing

The Enabler Continuous connection between vendor and customer

The Result Better, faster and cheaper than traditional software management

Corporate GovernanceA Crisis Of Confidence

NASDAQNASDAQ

5000

4000

3000

2000

1000

Dec-00 Dec-01 Dec-02

Enron

Tyco

WorldComGlobal Crossing

Health South

Inside Sarbanes-Oxley Section 404

Sarbanes-Oxley Section 404:Executives Are Accountable

• Tighter Reporting Deadlines• Personal Accountability• Stricter Penalties• Audited Internal Controls

Guess Who This Affects?

COSO: The De Facto Control Framework

3 Broad Objectives– Effectiveness/Efficiency of Operations– Reliability of Financial Reporting– Compliance with Applicable Laws and Regulations

Sarbanes-Oxley sec. 404– Focuses on Financial Reporting

Steps Towards Sec. 404 Compliance

1. Document the Process2. Source the Risks3. Document the Controls4. Validate Operation of Controls5. Certify Financial Statements

Sarbanes-Oxley Relief from Oracle

Compliance Challenge Oracle Strategy

Tighter Reporting Deadlines Data center and information consolidation

Real-time Reporting of Material Changes Daily business intelligence

Global Regulation Global reporting in local language and currency

CEO/CFO Accountability

Business process automation, view-from-the-top consoles

Project ManagementTools

Workflow Management

Tools

System Configuration

Tools

SurveyTools

Sampling and Statistical

Tools Process Control

Limits

Procedures Documentation

Tools

Risk and ControlsLibrary

Audit UniverseDocument

ManagementTools Oracle Workflow

Oracle Project Collaboration

Oracle Files

Oracle iSetup

Oracle iSurvey

Oracle Tutor

Oracle PerformanceManagement Framework

Audit Manager Reports

Oracle Audit Manager

Current

To BeEnhanced

Future

Verification: Oracle Audit Manager

Evolve to…

Reinvent Yourself– Up-level skills– Become the Information CEO

Know your customers and their LOBs Find the correct services balance Look critically at your technology investment

– Are your innovations making you money? Commit to good governance