Revenue Recognition and Global Practices

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Revenue Recognition and Global Practices

• IACCM Conference
• NYC 17-March-2003

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Workshop Leaders

• Lara Deen
• Director for Global Revenue Recognition
• Ellen Eder
• Vice President for Global Business Practices

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Agenda for Today

• Frame the discussion
• The experience at Oracle
• Workshop
• Identify top issues for discussion
• Open discussion on best practices for each issue

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Focus Areas

• Internal controls compliance measures
• Creating awareness of corporate governance
• Transition from local to regional practices
• Facilitating change with Org structure

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What is driving changes?

• Global view of business
• Driven by technology ? Internet
• Reduced barriers to do business globally
• Increased access to global information
• Attention to Accounting
• Increase scrutiny on accounting and reporting
  practices
• New auditors new views
• More conservative interpretations of accounting
  literature
• Personal accountability of Sr. Management

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The Experience at Oracle
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Internal Controls Compliance Measures

• Globalization of policies and processes
• Global Financial Policies
• Global Processes
• Moving accounting and finance functions to
  Regional Shared Service Center
• Establishing global tools and training programs

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Internal Controls Compliance Measures, Cont

• Establishing Global Certification Programs
• Contracts and Business Practices
• Finance Shared Service Center Directors
• Internal Audit Revenue Recognition teams
• Changes to internal Audit
• New and more frequent audits
• Changed audit approach

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Internal Controls Compliance Measures, Cont

• Holding Mgmt and Sales Accountable
• Executive Management Quarterly Representation
• Sales force Representation
• Changes to the Corporate Controllers Office
• Global Revenue Recognition Group
• VSOE (consistency of pricing) group
• Disclosure committee

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Creating Awareness of Corporate Governance

• Corporate Accounting View
• Code of Conduct
• Mandatory on line training
• Business View
• New partner practices
• Education for the field

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Transition from Local to Regional Practices

• Pricing
• Automation Customer Facing
• Standardization globally
• Contracts Global Standardization
• Master Global Terms
• Automation requires rule based model
• Fixed options
• Local Options

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Facilitation Change with Organizational Structure

• Corporate Structure
• Globalize the key infrastructure pieces
• Focus on the Flows
• Document Processes, Assign Appropriate Ownership,
  Gain Agreement
• Business Owners
• Shared Service Centers
• Service Level Agreements
• Key Performance indicators
• GPO DPO Model Global Process Owners
• Divisional Process Owners
• Ensure there is accountability

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Implementation of Strategy
Corporate Strategy Exec. Comm.
Global Policy Global Practices Team
Global Process GPO
Integrated IT APPS GAO
Legal Financial Policies
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Lessons Learned

• Need top management commitment and active
  involvement
• Communication of rationale is critical
• Ensure you have the right representation
• Global
• Functional
• Balance input from all impacted groups with speed
  to market
• Hardest part
• LOB and Regional Management Change

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Workshop