A CFO PlaybookA CFO Playbook
Transforming YourTransforming Your Business to ManageBusiness to Manage Disruptive Innovation:Disruptive Innovation: A CFO PlaybookA CFO Playbook DougDoug KehringKehring SVP, Corporate DevelopmentSVP, Corporate Development and Strategic Planningand Strategic Planning
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Oracle Corporation
INNOVATION
• Founded in 1977 • $37.2B USD in LTM revenue and 117,000 employees
• #1 in 50 product/industry categories • $50B+ USD on >100 acquisitions
• $24B USD invested in R&D since 2004
• 34,000 developers and engineers • 15mm Oracle community developers
• 390,000 customers in 145 countries
SCALE
$1,3 $1,5 $1,9 $2,1
$2,6 $2,6 $3,1
$4,3 $4,2 $4,5
FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13
* NonGAAP basis.
ANNUAL R&D INVESTMENT*
12,0%$6,0
R&DSpendas
LastFiscalYe
ofRevenue
rR&DSpend
Top Tech Companies by R&D Investment
12,1%
16,0%
20,0%
24,0%
$8,0
$10,0
$12,0
% of Revenue
ar R&D
Spend
R&D Spend As % of Revenue
$4,5
0,0%
4,0%
8,0%
12,0%
$0,0
$2,0
$4,0
$6,0
R&D
Spend
as
%
Last Fiscal Yea
Note: $’s in USD billions. NonGAAP basis. * Excludes impact of sale of handset business to Microsoft.
,
“Sooner or later, your company will probably need to transform itself in response to market shifts, groundbreaking technologies ortechnologies, or disruptive startups.”
HBR, December 2012
Computing Computing Computing Source SOAApplications
Technology Innovation Cycles of the Past
Mainframe ClientServer Internet Open Grid Computing, Computing Computing Computing Source SOA Applications
1970s 1980s 1990s 2000s mid2000s
Companies that Have Fallen Into the Innovation Chasm
Current Disruptive Technology Innovations Transforming How Companies Innovate and Create Value
CLOUD SERVICES
$200+ billion in cloud services revenue by 2015
MOBILE
$1+ trillion in mobile
ecommerce revenue by 2017
BIG DATA
$17+ billion in Big Data revenue by
2015
THE INTERNET OF THINGS
$290+ billion in Machineto
Machine revenue by 2017
SOCIAL BUSINESS
$29+ billion in social media
revenue by 2015
FINANCIAL
Impact of Innovations on Business Models Transforming Entire Industries
RETAIL HEALTHCARE FINANCIAL
COMMUNICATIONS MANUFACTURING RETAIL HEALTHCARE SERVICES
COMMUNICATIONS
Investments in M2M intelligent devices that are wirelessly enabled
are poised to exponentially expand the number of
computing devices
MANUFACTURING
Neelie Kroes announced EU
directive to “make it way easier to use and reuse public data with lower charges” and help stop wasting money
trying to fight diseases
New models such as peertopeer lending and payments are challenging
traditional banks to innovate their businesses
The internet now influences over 50% of retail
sales and requires entirely new approaches to
customer experience management
Manufacturing is being
revolutionized via the marriage of software and
hardware to work seamlessly and in
ways never imagined
better than traditionalrowth throu h
How Will You Manage Disruptive Innovation?
To thrive in the future, create new paths to growth through
IIIINNOVATE YOURNNOVATE YOURBUSINESSBUSINESS
NNOVATE YOURNNOVATE YOUR BUSINESSBUSINESS
2
To survive today’s challenges, identify what you can still do
STRENGTHENSTRENGTHENYOURYOUR CORECORESTRENGTHENSTRENGTHEN YOURYOUR CORECORE
1
g g innovation of your products, services, business processes, or business models
better than traditional rivals and disruptive startups, and invest in it
Strengthen Your Core Rethink Your Business to Optimize Operations
SIMPLIFY Systems, business models and processes to reduce cost, increase control and accelerate revenue velocity
CENTRALIZE Data, processes and systems to speed decision making and enhance control
STANDARDIZE Global business processes and procedures to increase flexibility to adapt to changing conditions
AUTOMATE Whenever possible with selfservice, endtoend processes to maximize profitability
Innovate Your Business Leverage Disruptive Technologies, like the Cloud, to Drive Change
STRATEGIZE AND PLAN MORE EFFECTIVELY Increase productivity, lower costs, and improve controls to maximize performance and deliver financial results
CREATE WINNING PRODUCTS Leverage an informationdriven value chain to drive innovation and flawless execution
INSPIRE GREAT CUSTOMER EXPERIENCES Develop lasting, profitable relationships with a consistent customer experience
EMPOWER EMPLOYEES Boost worker productivity by 50% or more with solutions tailored to specific jobs or roles
Investing in New Paths to Growth at Oracle Strengthening Our Core, Innovating Our Business
Cloud computing
Modern CFOs Want to Innovate Mobile Technologies, IT Infrastructure, Analytics and Cloud Computing are Top Investment Priorities
Mobile Technology
IT infrastructure
Analytics and business intelligence
IT Security
Cloud computing
Enterprise resource planning
Customer relationship management
Enterprise performance management
Social business intellegence
Big data
Human capital management
42%
42%
45% 35%
28% 37%
48% 35%
13% 13% 24%
20% 21%
16% 14%
18% 18%
12% 16%
17% 13%
12% 12%
Now Three years time
Cloud computing
Modern CFOs Want to Innovate Mobile Technologies, IT Infrastructure, Analytics and Cloud Computing are Top Investment Priorities
Mobile Technology
IT infrastructure Mobile Technologies
Analytics and business intelligence
IT Infrastructure IT Security
Cloud computing Analytics and
Business Intelligence Enterprise resource planning
Customer relationship management IT Security
Enterprise performance management
Social business intellegence Cloud Computing
Big data
Human capital management
42%
42%
45% 35%
28% 37%
48% 35%
13% 13% 24%
20% 21%
16% 14%
18% 18%
12% 16%
17% 13%
12% 12%
Now Three years time
Innovating Finance & Operations at Oracle Back Office Efficiencies Drove Significant Margin Improvements
Simplify, Standardize, Centralize, Automate
NOW THEN
� Localized, Inconsistent Business Processes
� 65+ Enterprise Resource Planning
� Global Ownership of Standardized Business Processes
� Global Single Instance –� 65+ Enterprise Resource Planning (ERP) Instances
� Fragmented Data & Reporting Capabilities
� Decentralized Decision Making by Geography & Line of Business
� Expensive & Redundant Back Office Operations
� 40 Data Centers
� Global Single Instance – EBusiness Suite
� Consistent Data & Global Business Intelligence
� Centralized Decision Making Across Geography & Business
� Shared Service Centers & Global Applications Owner
� 2 Data Centers (Including Backup)
Innovating Finance & Operations at Oracle Back Office Efficiencies Drove Significant Margin Improvements
Simplify, Standardize, Centralize, Automate
NOW THEN
• 20% OPERATING MARGIN*
• 47% OPERATING MARGIN*
Annual savings have increased from USD $1.0B initially to over $2.5B today as a result of business transformation
* NonGAAP basis.
Selling Process Efficiencies $550M $1,600M+
Innovating Finance & Operations at Oracle More than USD $2.5 Billion in Annual Operational Efficiencies Realized
Operational Efficiencies
ITEM PHASE I PHASE II
Information Technology Consolidation
US $200M US $300M+
Our Strategy � Simplify: One Best Process
� Standardize: Avoid Customization
� Centralize: Selling Process Efficiencies $550M $1,600M+
Procurement & Supply Chain Efficiencies
$150M $300M+
Internal Operational Efficiencies
$100M $300M+
Total Global Savings $1.0B $2.5B+
� Centralize: Move Core Processes to Shared Services or Centers of Excellence
� Automate: Make Everything SelfService
w n u ve, mo ern user
Innovating Finance & Operations at Oracle Deploying Modern Systems is Transforming Speed of Decision Making
• Implement applications ith i t iti d
Deploy Modern Systems that Automate Best in Class Business Processes
with intuitive, modern user interfaces that are business oriented
• Deliver experiences that are rolespecific rather than transactional in nature
• Provide rapid, flexible deployment capabilities to meet the demands of a changing business
• Incorporate all data in the company, not just
Leverage Big Data Capabilities to Make Smarter Decisions
the company, not just silos of data
• Ask any question, not just preconceived queries
• Access your data anywhere, not just from your office chair
• Reduce dependency on IT by empowering the finance and operations staff
Report With Deliver Efficient, Confidence WorldClass and Insight Services
Plan for Profitable Growth
ProcessesBestinClass Business
Innovating Finance & Operations at Oracle Implementing Modern Systems Delivers AcrosstheBoard Efficiencies
System Efficiencies
SYSTEM IMPLEMENTED
SUCCESS METRICS
Hyperion Deployment 4,500% improvement in reporting process
Our Strategy
� Deploy Modern Systems that Automate BestinClass Business
Endeca Dashboards Back ordered reduced by 50%
Golden Gate Operational Data Store
221,000% fresher data, Report run performance improved by 60X
Fusion Accounting Hub 17% improvement in consolidation process
Processes
� Leverage Big Data Capabilities to Make Smarter Decisions
Innovate Your Finance & Operations
Action Items � Create Centers of Excellence for key financial processes
� Deploy modern systems with the latest social, mobile, and analytical features embedded
� Leverage the cloud to increase � Leverage the cloud to increase agility and responsiveness to the business
91%
Improving the Customer Experience is Top of Mind for CLevel Executives
93% of executives say improving their customer’s experience is one of their top three priorities in the next two years
91% of all businesses wish to be considered the CX leader in their industry
20% of annual revenue estimated to be lost for failing to deliver a positive CX
Collaborate
Innovating the Customer Experience at Oracle Deliver the Right Message at the Right Time to the Right Customer to Create a Personalized, Dynamic Customer Experience
Listen and Engage
• Connect multiple customer touch points to help sales and marketing participate, understand and measure the value and quality of engagements
• Understand customer preferences that enables you to engage them
Listen and Engage
• Manage local presence and distribute content globally while maintaining brand consistency across markets
• Create a single view of all customer touch points across marketing, sales and support
Collaborate
Measure and
Analyze
Market and Sell More Effectively
Continuously Refine the Message
that enables you to engage them when, how and where they prefer with the right content
• Create campaigns that enable you to stay top of mind
• Deliver personalized, dynamic content
• Build better relationships with qualified contacts
• Generate faster lead flow
Market and Sell More Effectively
marketing, sales and support
• Deliver a consistent experience for customers across the lifecycle
• Build a Digital Body Language for each customer or prospect based on touch points
• Create better segmentation
• Analyze to determine movement from lead qualification, to pipeline opportunity, to conversion
Measure and Analyze
Eloqua Sales touch rates 2X
Innovating the Customer Experience at Oracle Deliver the Right Message at the Right Time to the Right Customer to Create a Personalized, Dynamic Customer Experience
SYSTEM METRIC IMPROVEMENT
Eloqua Clickthrough rates 2X
Our Strategy
� Deploy Modern Systems to Market and Sell More
Eloqua Sales touch rates 2X
Eloqua Sales qualified lead conversion
2X
Eloqua Leads delivered to Sales
Reduced from 120 hrs to 3 hrs
Sell More Effectively
� Use Big Data to Deliver Insights to Deliver a Personalized, Dynamic Customer Experience
100+%
Innovating the Customer Experience at Oracle
THEN NOW IMPROVEMENT
Open Rate
Clickthrough Rate 0.23%
Email Contacts
5.30% 10.40% 95.7%
0.61% 100%
Sales Funnel
Sales Touch Rate
Sales Qualified Lead
Lead Convert to Opportunity
42.00% 88.00% 100+%
1.40% 18.00% 100+%
0.03% 0.60% 100+%
everage soc a , g a a o
Innovate Your Customer Experience
Action Items � Partner with your CMO to
understand what CX initiatives are underway at your company
� Understand how your company measures ROI on CX investments
� L i l bi d t t� Leverage social, big data to improve customer insights and CX initiatives
� Participate in CX Journey Mapping Sessions with Oracle to help accelerate efforts
Talent has the Single Biggest Impact on a Company’s Growth Trajectory
Hire the right talent
For the right position
At the right time
� Decentralized HR Model Localized � Centralized HR Model, with
Innovating Human Capital at Oracle Implement Operational Efficiencies to Optimize HR Processes
Simplify, Standardize, Centralize, Automate
NOW THEN
� 65+ HR Instances
� Decentralized HR Model, Localized,
� Single Global HCM Instance
� Centralized HR Model, with , , Inconsistent HR Processes
� Multiple HR approval matrices
� Expensive & Redundant Back Office Operations
� Manual employee processes and controls
� 40 Data Centers
Globalized, Consistent HR Processes
� Single global HR approval process
� Global Shared Service Centers & Global Process Owner
� Employee SelfService with Workflow, Automated Controls
� 2 Data Centers (Including Backup)
EFORE
rowth rate
AFTER
BBEFORE
Innovating Human Capital at Oracle Process Improvements Deliver Dramatic Operational Efficiencies
OVERALL HR PERFORMANCE BENEFITS EFFECTIVENESS STAFFING PRODUCTIVITY
Budget Growth Admin HC Ratio HR Ops Team (20012005)
50% of employee growth rate g
Budget Employees 1:800 29 people
0% growth
1:3500 9 people Budget Employees
9 people 1:3500
Innovating Human Capital at Oracle Modernize Systems to Deliver Great Employee Experiences
• Empower users with intuitive, modern user interfaces
• Increase flexibility to help meet the need of the business
Deploy Modern Systems that Enable Dynamic Employee Engagement
the need of the business
• Unlock talent potential with realtime insights
• Offer consistent and personalized solutions
• Connect experts, innovators and mentors
• Provide ongoing learning and development activities
Attract Reward and and Hire Retain Top the Best performers Talent
Improve Productivity Cultivate
and the Best Engagement Talent
Analyze and Plan Using Data and Social Insights
• Gain unique insights that allow you to plan out your employee workforce needs
• Develop critical metrics that
Utilize Big Data to Deliver Insights that Help Create and Sustain Best in Class Workforce
• Develop critical metrics that reward top performers and cull out bottom performers
• Mine data for social insights
• Proactively monitor processes to eliminate bottlenecks
• Deliver personalized view for each employee that allows them to manage their career
emp oyees ngagemen
Innovating Human Capital at Oracle System Modernization Empowers Employees and Improves Contribution
Our Strategy
� Deploy Modern Systems that Enable Dynamic Employee E t
SYSTEM METRIC IMPROVEMENT
Fusion Talent Review
Decrease top talent at risk
Significantly reduce time to identify and
proactively respond to highvalue, highrisk
lemployees
Taleo Recruiting
Improve quality of hire
Reduce new hire attrition in the first year
Taleo Learn
Determine readiness of talent for new opportunities or advancement
Reduce time to fill critical roles
Engagement
� Utilize Big Data to Deliver Insights that Help Create and Sustain BestinClass Workforce
talent lifecycle with
Innovate Your Human Capital
Action Items � Empower employees with
HR SelfService
� Centralize and modernize HR processes using Centers of Excellence
� Manage the entire talent lifecycle with Talent Management
� Exploit mobile, social and big data capabilities
Innovate Faster and Get Better Results by Managing Disruptive InnovationDisruptive Innovation
Become a Corporate Catalyst for Innovation Drive Innovation through Operational and System Transformation
� Secure executive mandate to implement transformation
� Simplify your operations as much as possible before embarking
� Develop optimized business processes and then deploy using modern systems that follow vendor best practices
� Implement a shared services model that follows these standardized processes globallyprocesses globally
� Transform your customer experience to stay ahead of the competition
� Empower your workforce with self service applications
� Move fast and stay the course