2009 open world chooing the right subscription contract

<Insert Picture Here>


EBS Contracts: How Do You Pick the Right

Solution?

Susan Flierl

Product Strategy Director

The following is intended to outline our general

product direction. It is intended for information

purposes only, and may not be incorporated into any

contract. It is not a commitment to deliver any

material, code, or functionality, and should not be

relied upon in making purchasing decisions.

3


The development, release, and timing of any

features or functionality described for Oracle’s

products remains at the sole discretion of Oracle.


Agenda

• Our understanding of Contract Management

• Capabilities and value drivers

• Benefits and assessments

• Oracle solutions

• Oracle credentials

4

• Customer Case Study – ProQuest

– Subscription Management with R12 Service Contracts

Contract Management At-a-Glance

ApproveApprove

& Sign& Sign

Monitor Monitor

& Enforce& Enforce

NegotiateNegotiate

& Author& Author

CloseClose--OutOut RenewRenew

Buy

SideSell

SideInvolved Orgs

• Procurement

• Project Mgmt

• Finance

Trading Partner Trading Partner

Involved Orgs

• Sales

• Service

• Finance

5

“Managing contracts is nothing new – what is new is their complexity.

Fortune 1000 companies have [on average] 20,000 - 40,000 contracts.

Companies spend approximately 50 basis points of their revenues to

manage their contracts, which can be reduced 20-50% using contract

management software.”

-- Jamie Friedman, Global Equity Research

CloseClose--OutOut RenewRenew• Finance

• Legal

• Finance

• Legal

Business Pressures

Process Control

• How can I standardize complex

contracts & contract processes?

• How can I streamline approvals

of non-standard agreements?

Trading Partner Management

• How can I minimize lengthy post-

negotiation redlining?

• How can I avoid costly disputes?

Trading Trading

6

Time to Contract

• How will I continually reduce

contract cycle time and costs?

• How can I reduce paperwork

and improve efficiency?

Contract Compliance

• How can I comply with growing

regulatory oversight?

• How will I monitor contract

performance and execution?

Trading

Partner

Trading

Partner

Sell-SideSell-Side

Delivery /

FulfillmentSupportService

Operational Challenges

Buy-SideBuy-Side

Business owners

lack visibility to

signed contracts

Contract

Manual document

handling creates

multiple “out of

synch” versions

7

CustomersSuppliersPurchase

Contract

Sales

ContractSalesPurchasing

Legal Finance

Contract

Administration

Sequential work

processes lengthen

negotiation cycle time

Lack of contract visibility

leads to “evergreen”

contracts, overpayments

and payment errors

Operating & Processing Costs 10-30%

Contract Negotiation Cycle Time 50%

Volume of Erroneous Payments 75-90%

Contract Management Opportunity

8

Additional (New) Contract Revenue 1-2%

Renewal Revenue 30%

Compliance with Regulatory Guidelines 90-100%

Source: Goldman Sachs, Global Equity Research

VP Procurement VP Sales

CFO

Buying

process

Selling

process

General Council

General

Contracts

Contract Lifecycle Management

9

Contract ManagementCFO

CIO

GC

* Based on a model developed by Andrew Bartels. Copyright 2008, Forrester Research. Used by permission.

Oracle Contract Lifecycle ManagementNative integration to business transaction flows

Simple

contracts

Oracle

Procurement

Contracts

Oracle Sales

& Service

Contracts

Buying

process

Selling

process

General Council

General

Contracts


10

Oracle Contract ManagementCFO

CIO

GC

Complex

contracts

Oracle Federal

CLM*

Oracle

Project

Contracts

Oracle

Project

Contracts



Buying

process

Selling

process

General Council

General

Contracts

Oracle Contract ManagementStandalone solution

Oracle Quoting

/ Order

Management

Oracle

Sourcing /

Purchasing

11


CIO

GC

External

ordering

application

External

procurement

application


• WHAT – A family of contract

applications designed to author and

manage the lifecycle of all contract

types

• HOW – Deployed integrated with order-

to-cash and procure-to-pay flows or as

Project

Contracts

Service

Contracts

Sales

Contracts

Procurement

Contracts

Oracle Contract Lifecycle ManagementOverview

12

standalone application

• RESULTS - Improve visibility of all

business agreements, reduce contract

cycle time, and manage risksContract Repository

(Oracle Contract Management*)

*Standalone product coming soon

Contract

Terms

Library

• Cancellation /

Renewal RateEmail

Integrated Intelligence

Phone

• Contract

Bookings

Service

Sales

Contract Lifecycle Management

Oracle Contract Lifecycle Management Solution

• Uplift &

Reduction

SupportNegotiate

& Author

Negotiate

& Author

Approve

& Sign

Approve

& Sign

Enforce

& Entitle

Enforce

& EntitleAmendAmend

Optimize,

Renew &

Terminate

Optimize,

Renew &

Terminate

13

Contract Visibility

• Clause Library

• Contract Templates

• Selection Rules

• PoliciesContracting

Party

Contract Standardization

Internet Procurement

Legal

Finance &

Accounting

• Workflow Approvals• Change Mgmt• Collaborative Authoring

Secure AccessSecure Access

& Author& Author & Sign& Sign & Entitle& EntitleTerminate Terminate

• Contract

Workbench

• Enterprise

Contract Search

• Clause library

• Contract templates

• Clause selection rules

1. Establish

Standards

2. Author &

Negotiate

• Templates and Contract Expert

• MS Word Synchronization

• Associate with business document, if required

Oracle Contract Management Process FlowAuthor terms & conditions on separate contract document

• Flexible approval workflow

• Contract Standards and Deviations

3. Approve

and Sign

14

4. Monitor

and Track

• Contract Workbench

• Real-time deliverable tracking

• Full-text search with Enterprise Contract Search

6. Renew

& Closeout

• Expiration alerts

• Standardized closeout process

• Collaborative revision process

• Amendment approval flow

• Auditable revision history

5. Amend

* New in R12.1

2. Author &

Negotiate

• Central terms library

• Workflow

configuration


• Capture products, quantities,

pricing

• Templates & role-

based authoring


• Supplier paper

• Online collaboration


• Electronic & digital signature

• Contract Standards &

Deviations

1. Establish

Standards

Oracle Procurement Contracts Process FlowAssociate terms & conditions on purchasing documents

3. Approve

and Sign

15

4. Monitor

and Enforce

6. Renew

& Closeout

• Collaborative revision

process




• One-click renegotiation


• Supplier paper


• Terms implementation

• Real-time deliverable tracking

• Full-text search with

Enterprise Contract Search

5. Amend

* New in R12.1

2. Author &

Negotiate

• Central terms library

• Workflow

configuration


• Capture products, quantities,

pricing

• Templates & Contract Expert

• Preview contract on-line and

print with BI Publisher


• Online collaboration


• Contract Standards &

Deviations

1. Establish

Standards

3. Approve

and Sign

Oracle Sales Contracts Process FlowAssociate terms & conditions on sales documents

16

4. Monitor

and Enforce

• Collaborative revision

process




• Track ordering against sales

agreement

• Terms implementation

• Full-text search with

Enterprise Contract Search

5. Amend 6. Renew

& Closeout



* New in R12.1

Oracle Service Contracts Solution

Service Provider / Product Manufacturer

Sales

Contract Mgr

T&CsT&Cs

Service

Contracts

Repository Re

CreateContract

VerifyEntitlement

DefineCoverage

Proposals, Quotes1

Products & Warranties

Subscription /

Usage Agmts

2

Bill & Invoice3

17

CustomerCustomer Service

Contract Mgr

• AR, Invoicing

• OM, Quoting

• Service

• Install Base

Other

Application

Components

enew

ProvideService

Bill &Collect

IntegrationReturns, RMAs

Service Requests4

Renewal Notifications5

Streamline Renewals ManagementPredictably Protect and Grow Recurring Revenue

ExpirationAlert

CreateOpportunity

NegotiateQuote

Renew /Activate

High Value Renewals

• Receive automated expiration alert

• Convert expiring contracts into sales opportunities

• Evaluate complementary products / servicesfor cross-sell & up-sell opportunities

• View transaction and interaction history

18

• Credit Status = OK

• Contract > Threshold

Value Value

• Expire days < 30

Renewal Rule New Contract

• Update Contract

• Notify Sales /

Service Rep

• Notify Customer

High Volume Electronic Renewals

• Automatically renew contracts based on pre-defined rules to maximize retention rates and ensure service continuity

• Zero-touch web based process automatically renews low value contracts upon expiration

Oracle Project Contracts Solution

Project Owner / Manager

Contract Manager

Sell

Purchasing

SellSide

Solicit or Bid

Author/Execute Contract

Procure/ Subcontract

Manage Funds

Track

Secure, Central

Contract Repository

Ch

an

ge

Ma

na

ge

me

nt

Role-Based Access

Contractors &

Subcontractors Subcontracts(w/Flowdown)

Customers

Solicitations

Bid/Proposal

Contract

19

Purchasing

Buy

Track Deliverables

Bill & Collect

Ch

an

ge

Ma

na

ge

me

nt

• Standard Library:

T&Cs, Articles

• SOWs

• Deliverables

SuppliersPurchase Orders

(w/Flowdown)

Other Application Components

• Planning

• Procurement

Integration

• Manufacturing

• Shipping

• Projects

• Finance

• Contract Repository (Oracle Contract Management)

• Structured Terms Authoring

• Contract Expert

• Microsoft Word Synchronization

• Contract Deviations Report

• Enterprise Contracts Search

• Sales Contracts


Oracle Contract Lifecycle ManagementR12.1 Features

20

• Procurement Contracts


• Deliverable Payment Holds

• Service Contracts

• Service Contract Import

Roadmap: Federal Contract Lifecycle Management

• Permits contract managers to create and execute all

types of contracts in a single system

• Complies with FAR & supplemental requirements for fair

& open competition for the Civilian, DoD & Intel

communities

• Provides vastly improved Business Intelligence

• Delivers turn-key implementations through CACI Services

21

• Delivers turn-key implementations through CACI Services

Leverage Native Integration of EBS Procurement ,

Contracts & Financials with Business Intelligence

for Enterprise Resource Planning!

Built out as an enhancement to Oracle’s E-Business Suite

“Oracle E-Business Suite (EBS) has had a Service Contract

product for more than a decade and added Sales Contract and

Procurement Contract products in 2004M..Functional strengths

included support for services contracts and other sell-side

contracts (like project contracts, sales agreements), contract

optimization, contract repository, and contract process

What Forrester Is Saying

22

optimization, contract repository, and contract process

management. Existing Oracle customers would find its CLM

products to be capable ones that work well with other modules in

the suite. Oracle Service Contracts is a top choice for companies

needing renewal-based services contracts to be managed.”

Contract Lifecycle Management Wave, 2008

Oracle Contract Lifecycle Management Customers

High Tech

Industrial Mfg

Services

23

Aerospace & Defense

Public Sector

23

• Oracle Contract Management offers standalone contracts solution

• Oracle Procurement Contracts and Oracle Sales Contracts offer

contracts solution integrated with transaction flows

Key TakeawaysChoice of standalone or integrated solution approach

24

• Complete support for buy-side, sell-side and general contracts

* New in R12.1

Oracle Contract Lifecycle ManagementChoice of standalone or natively integrated contract solutions

Simple

contracts

Oracle

Procurement

Contracts

Oracle Sales

& Service

Contracts

Buying

process

Selling

process

General Council

General

Contracts


25


CIO

GC

Complex

contracts

Oracle Federal

CLM*

Oracle

Project

Contracts

Oracle

Project

Contracts


Subscription Management

with

Oracle R12 Service Contracts

Timothy Hall

Sr. Technology Manager, ProQuest, LLC.

About ProQuest

ProQuest creates indispensable research solutions that connect people and information

ProQuest creates specialized information resources and technologies that propel

successful research and lifelong learning. A global leader in serving libraries of all types,

ProQuest offers the culmination of experience from many respected brands, including

CSA™, UMI®, Chadwyck-Healey™, SIRS®, and eLibrary®. With Serials Solutions®,

Ulrich's™, RefWorks®, COS™, and Dialog® brands now in the ProQuest family, the

company continues to build on its legacy of responsive people in partnership with

librarians.

ProQuest consistently seeks new ways to support researchers and quality

research. More than a content provider or aggregator, ProQuest is an information partner,

creating indispensable research solutions that connect people and information. Through

innovative, user-centered technology, ProQuest offers a depth and breadth of global

content that includes historical newspapers, dissertations, and uniquely relevant resources

for researchers of any age and sophistication—including content not likely to be digitized

by others. Inspired by its customers and end users, ProQuest is working toward a future

that blends information accessibility with community to further enhance learning and

encourage lifelong enrichment.

Agenda

• Strategic Objectives, Program Management

– Systems – Where we wereM

– Systems Consolidation Challenges

– Systems Consolidation Benefits

– The Program / High-Level Timeline

– Systems Consolidation– Systems Consolidation

• Subscription Management – Challenges / Options / Solution

– Subscription Management, Renewals

– Product Management, Accounting, Revenue Recognition

• Subscription Management

Oracle R12 Service Contracts / Subscription Items

– Solution Design

– Processes

– Solution Benefits

– Renewals Process Redesign

Strategic Objectives

Program ManagementProgram Management

Systems-Where we wereM

• 4 Business Units across the World

– Serving North America, Latin America, EMEA, and Asia

• Customer data and information in 6 systems

• Order, Subscription, and billing data in 6 systems

• Critical Financials (General Ledger, Accounts Payable, • Critical Financials (General Ledger, Accounts Payable, Purchasing and Fixed Assets) in 3 Financial systems (with lots of spreadsheets)

• Independent Chart of Accounts in Each Financial System

• Product set up handled in 9+ systems

• Multiple e-Commerce strategies with no single strategic solution or platform



Libra

SPOC

Oracle eBS 11i

SiebelSolomon

(CSA)

Six different Order & Billing systems with Subscription Management data

Solomon

(RefWorks)

Systems Consolidation Challenges

• Underlying systems architecture vastly different

• Several conflicting differences, made it impossible to do it ‘one way’ in any legacy system

• Requirement became clear for a Global solution to reduce costs and increase efficienciesto reduce costs and increase efficiencies

• To realize full benefit, including efficiency and effectiveness, underlying architecture had to be aligned– Single Customer & Item (Product) Master

– Single Order and Billing System with a Single Financials System structured on a Common Chart of Accounts

– Single Product Setup System

• Single system – single source of truth

• Ability to key orders / subscriptions for all products in a single system regardless of customer location or currency

• All Financials in a single system (single GL) for reporting

• One (and only one) item (product) description

Systems Consolidation Benefits

• One (and only one) item (product) description

• Greatly improved data quality and consistency

• Multi-currency support

• Flexible payment terms and payment schedules

• Ability to email quote / renewal / invoice

• Consolidated invoicing and monthly statements

• Provides greater flexibility across the organization

The Program

• Started with a Proof of Concept on Oracle eBS 11i system

to determine gaps with other ProQuest product-lines

• Developed global design first, then implemented for

specific business units – US, UK, SPAIN and CAN

• Vanilla – From previous experience with customized ERP

implementation (Vanilla became theme for project)implementation (Vanilla became theme for project)

• Gain support and commitment at every level with high

visibility across entire organization

• Make it challenging – not crippling

• Agile mentality – Regular CRP’s, creative Project Mgmt

• Oracle AIM – Customized for PQ (“Agile AIM”)

High-Level Timeline

2007 2008

Systems Consolidation

LibraSPOC

Oracle eBS 11i

9/17/2008 11/10/200810/07/2008

SiebelSolomon

(CSA)

Oracle eBS

R1212/01/2008 7/06/2009

Solomon

(RefWorks)

12/15/2008


ChallengesChallenges

Options

Solution

Subscription Management - Challenges

• Intangible and Tangible Products– Heterogeneous Products

• Digital Database Products

• CD/DVD Products

• Microform Products

• Complex Customer Structure– Internal Relationships – Bill To is one and Ship to is another

– Consortia Relationships – School Districts

– Partners/Resellers – Partners/Resellers

– Parent-Child Hierarchy (Academic will have University and multiple departments)

• Variable Order Types for A Single Product– Subscription and One Time – Variable Terms and Add On Fees

– New vs. Renewal

– Subscription and Order Visibility across multiple organizations to ensure load balancing

• Quality Control of Billing Process– Inability to review and approve Subscriptions entered

– Workflow Management/Notification Process

• Renewal Cycle – Multiple Notices and Notification via multiple delivery methods (Email, Snail Mail etc.)

– Product Specific

– Customer Base Specific (Ordering Location)

Subscription Management - Challenges

• Billing– Delayed

– Deferred

– Installments

• Flexible Payment Plans

– PrePayments to be accounted for at time of Order Entry

• Credit and Rebill– Ability to Credit or Order a Line or Complete Order

– Partial Credits --- Part of a Subscription Term– Partial Credits --- Part of a Subscription Term

– Upgrade and Downsize the Subscription order (based on budgets/PO approvals)

• Immediate Invoicing and Accounting– Ensure COA Reporting and Other Segments are accounted for

– Bill a Subscription before or after term start of subscription

• Early and Late Renewals

• Revenue Recognition – Deferred

– Modify Monthly to Daily

• Multiple Currencies– Based on Organization, Customer Location

Options and Solution Selection

• ProQuest UK Operating Unit had a Custom ‘Subscription Management

Process’ and Renewals process using OM and Inventory Items from

Oracle eBS 11i (11.5.9) Implementation

• Custom solution with OM and Inventory resulted in:

– Custom Accounting for COA Reporting Segment Requirements

– Custom Revenue Recognition for Deferring and Recognition Daily

– Custom Renewal Cycle– Custom Renewal Cycle

– Manual Quality Control

– Goal of Vanilla would be unachievable with this solution

• Oracle eBS R12 Service Contracts (Subscription Items)

– Researched via Oracle Metaink

– Setup configurations on eBS R12 ‘test’ environment

– Setup a focused team to review all setups

• Reviewed all processes from Order Entry to Revenue to Renewals

• Agile Iterative process


Solution DesignSolution Design

Processes

Benefits

Subscription Process

Renewal Process Flow

Solution Benefits

• Global WorkFlow Standardization– PAL (one time) and Subscriptions for both tangible and electronic products

– Standard Currency Based Templates for each OU

– Subscription QA Process Automated

– Flexible Pricing

– Templates allowed for reduced data entry without customization

• Billing and Credits – Auto Accounting

– Sales Tax and VAT through EB Tax and Vertex

– Partial And Full Credits possible

• Automated Renewal processing– Renewals report from single source

– No Spreadsheets

• Financial Reporting Standardized– Daily Revenue Recognition

– Single Billings Report

– Single Revenue Report

LEAN Six Sigma Kaizen conducted for ProQuest Global Renewals Process

Renewals Process Redesign(eBS R12 Service Contracts made this possible)

Lean Metric Prior State Future State

Monthly Person Weeks Consumed by

Renewals 11.64 2.88

# of Value Added Steps 3 2

# of Necessary Non-Value Added Steps 44 16

# of Non-Value Added Steps 7 3

# of Review Steps 25 6

# of Hand-Offs 30 11

5

10

15

20

25

30

35

40

45

3

44

7

25

30

13

28

2

16

3

6

11

6

12

# S

tep

s

Number of Process Steps - Prior State Vs 90 Day

Future State

Renewals Process Redesign(eBS R12 Service Contracts made this possible)

# of Waiting Opportunities 13 6

# of Decisions 28 12

% Value Added Time 2.0% 7.2%

% Non-Value Added Time 2.3% 0.1%

% Necessary Non-Value Added Time 62.5% 66.8%

% Review or Approve Time 33.2% 25.9%

-

5 3 2 3

Current State Future State

0

5

10

15

Current State Future State

11.64

2.88 Pe

rso

n W

ee

ks

Prior State vs. 90 Day Future State

Prior State to 90 Day

Future State Time

Savings: 75%

Questions?

The preceding is intended to outline our general

product direction. It is intended for information

purposes only, and may not be incorporated into any

contract. It is not a commitment to deliver any

material, code, or functionality, and should not be


49


The development, release, and timing of any

features or functionality described for Oracle’s

products remains at the sole discretion of Oracle.

50