Jerry Held

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(No Transcript)
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Jeff HenleyExecutive Vice President Chief
Financial Officer Oracle Corporation
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Increasing ShareholderValue Through E-Business
Strategic Finance in the Internet Age
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Oracle Corporation Key Financial Facts

• 9.7 Billion Annual Revenue17 Revenue Growth
• 25.8 vs 20.2 Operating
  Margin
• Approximately 2.9 Billion Cash
• 2nd Largest SoftwareCompany in the World

All financial figures are annualized to reflect
most recent four quarters as of Oracles Q3 FY
2000.
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Oracle Corporation Other Key Facts

• Founded 1977Public 1986 at 50 Million Revenue
• 140 Countries 60 Subsidiaries
• Over 41,000 Employees
• 51 of Total RevenueGenerated Outside US

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Q3 00 Financial Performance
Recap of Q3 Fiscal 2000
Y-Y
Revenue
2,449 M 18
498 M 80
Net Income
Operating Margin
31.4 vs. 19.6
Database License
32
Application License
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Net income and margin calculation exclude
investment gains from sale of marketable
securities in Q3 FY 2000.
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7 Quarters of Margin Improvement
Y-Y Percentage Point Operating Margin Change
11.8
6.2
2.3
1.7
1.4
1.5
0.1
Fiscal Year 1999
Fiscal Year 2000
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Oracle CorporationTwo Software Businesses

• Internet Platform
• Most scalable database offering the lowest cost
  of ownership with Internet computing
• E-Business Suite
• A comprehensive, integrated e-business suite of
  ERP/Supply Chain and CRM applications

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The Oracle E-Business Solution
Consulting, Support, and Education
Services
Internet Applications
E-Business Suite, Business Intelligence
Partners
Internet Platform
Database, Application Server, Data Warehouse,
and Tools
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Oracle8i - Bigger and Better

• First Internet Database
• Scalable for Performance
• Reliable
• Secure Deployment
• Low Cost
• Foundation for the Internet

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Better Information

• One Big ServerInstead of Lots of Little Servers
• Global Rollups
• Instant Up-to-the-Minute Informationon the State
  of the Business

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Over 50 Enterprise Applications
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Over 35 Customer Relationship Management
Applications
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How Is Oracle Goingto Achieve 2 Billion Dollars
in Savings?
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By Becoming an E-Business
Oracles 2 Billion Dollar Savings Target
Previous New Goal Mil Goal
Mil Consolidate IT 200 250 Sell Side
550 1,450 Buy Side 150
200 Inside 100 100 Total 1,000 2,
000
Note Based on Oracle estimates.
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Oracle e-business Blueprint
Customer-side
Internal
Supply-Side
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Oracle e-business Blueprint
Revenue Growth
Traditional Expense Growth
S A L E S / E X P E N S E S
e-business Expense Growth
T I M E
Grow Revenues vs. Expenses
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The Internet Drives New Business Practices
E-business Transformations
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Competeor Get Beat
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TechnologyChange
ProcessChange
Oraclee-businessBlueprint
StructureChange
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Technology Change
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Adopt Internet Technology Everywhere
Customer-side
Internal
Supply-Side
100 Pure Internet
Internet
Intranet
Extranet
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Avoid Point Solutions
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Move Data and Applications to the Data Center
Oracle Savings 200M
Application
Application
Data Center
Result Lower Cost Administration and Management
Application and Data
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Consolidate Your Data

• Fewer Computers
• Less Software
• Less People to manage it
• BetterInformation at lower cost

100 Sales Databases
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Adopt New Technologies Rapidly
Application
Application
Data Center
Result Greater ability to compete
Application and Data
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Consolidate IT Operations Oracle Corporation

• Three regional data centers into one global data
  center
• 60 country instances into a single global
  instance
• For example
• From 100 e-mail servers to two
• ERP / CRM move to single instance by CY00

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Consolidate Business Operations
Move to Shared Service Centers

• Exploit economies of scale
• Reduce complexity
• Enforce consistent business practices

Examples
Accounts Payable Human Resources Purchasing Treasu
ry General Accounting Order Management
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Consolidate Business Operations Oracle
Corporation
Y-Y
Ireland
EMEA (31 Countries)
Asia Pacific (14 Countries)
Australia
California
Americas (13 Countries)
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ProcessChange
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Provide Customerswith Self-Service Sell Side
Oracle Savings 1,250M
Information
Sales
Service
Result Improved Customer Satisfaction
and Loyalty at Lower Cost
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Provide Customers with Self-ServiceSell Side
Examples
Self-Service Support Calls
250M
Sales Leverage
300M
Sales Force Productivity
10 - 20
Global Savings (est.)
550M
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Provide Suppliers with Self-Service Buy Side

• Purchasing Department
• Purchase via reverse auctions
• Create and distribute RFQs bids
• Prevent contract leakage
• Purchasing intelligence
• Suppliers
• Electronic catalogs
• Supplier scheduling
• Quality and performance metrics
• Electronic documents and payments

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Provide Suppliers with Self-Service Buy Side
Example iProcurement
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Make Suppliers Compete for your Business
Oracle Savings 100M
Supplier
Supplier
Buyer
Supplier
Supplier
Supplier
Supplier
Result Buy goods more competitively at lower cost
Reverse-Auction
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Provide Employees With Self-Service Inside
Oracle Savings 150M
Action
Approve

• Expenses
• Orders
• Hiring
• Travel bookings
• Benefits
• Holiday approvals

Submit
Manager
Result Faster, More Accurate Transactions
at Lower Cost
Employee
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Self-Service EverywhereInside Example eTravel
Ticket Fulfillment Cost
-75
Average Fare
-10
Global Savings (est.)
50M
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Self-Service EverywhereInside Example Expense
Reporting
AP Employee Productivity
25
Processing Cost
- 60
Global Savings (est.)
10M
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D E M O N S T R A T I O N
Oracle ExchangeandPurchasing Intelligence
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StructureChange
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Restructure for global efficiency
Oracle Savings 50M

• Restructure country infrastructure
• Sales
• Support
• Restructure administrative functions
• Human Resources
• Legal
• Marketing

Result More efficient way of doing business at
Lower Cost
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Think Global
www.ltyour companygt.com
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Think Web First
Marketing, Sales, Service, Purchasing,
Manufacturing, Human Resources, Financial
Management, etc.
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Think Internet Time
Now
Now
Now
Now
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TechnologyChange
ProcessChange
Oraclee-businessBlueprint
StructureChange
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Conclusion

• Internet is Changing Everything

Enabling Technologies Now Exist
Highly Competitive Environments
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Lessons Learned

• Need top management commitment and active
  involvement
• E-Business implies simplification of your
  business
• Set a 3-5 year e-business vision
• Create an implementation plan
• Ensure measurable benefits with each step
• Hardest part Management change

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Strategy

• Determine the best approach for your company
• Type of consolidation
• Data Center
• Instance
• Global or Regional
• Business Processes
• Shared Services
• Our Recommendationthe end goal should be all of
  the above!

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In SummaryStay Competitive-Go Global

• Leverage Your Business Community
• Set Priorities
• Establish a Global Team
• Achieve Great Results
• Better Information
• Reduce Costs
• Improved Processes
• Better Service

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For more information on how to transform into an
e-business http//www.oracle.com/go/?FEIconf1
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