Transforming Your Business to Manage Disruptive Innovation: A CFO Playbook

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1 Transforming Your Business to Manage Disruptive Innovation: A CFO Playbook Doug Kehring Senior Vice President, Corporate Development & Strategic Planning

2 SAFE HARBOR STATEMENT 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. The development, release, and timing of any features or functionality described for Oracle s products remains at the sole discretion of Oracle.

3 Oracle Corporation SCALE Founded in 1977 $37.2B USD in LTM revenue and 117,000 employees #1 in 50 product/industry categories $50B+ USD on >100 acquisitions INNOVATION $24B USD invested in R&D since ,000 developers and engineers 15mm Oracle community developers 390,000 customers in 145 countries * Non-GAAP basis. $1.3 $1.5 ANNUAL R&D INVESTMENT* $4.3 $4.2 $4.5 $3.1 $2.6 $2.6 $1.9 $2.1 FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 FY'10 FY'11 FY'12 FY'13

4 Sooner or later, your company will probably need to transform itself in response to market shifts, groundbreaking technologies, or disruptive startups. - HBR, December

5 Technology Innovation Cycles of the Past Mainframe Computing Client-Server Computing Internet Computing Open Source Grid Computing, SOA Applications 1970s 1980s 1990s early-2000s late-2000s

6 Companies That Have Fallen Into the Innovation Chasm

7 Current Disruptive Technology Innovations Transforming How Companies Innovate and Create Value CLOUD SERVICES MOBILE BIG DATA THE INTERNET OF THINGS SOCIAL BUSINESS $200+ billion in cloud services revenue by 2015 $1+ trillion in mobile ecommerce revenue by 2017 $17+ billion in Big Data revenue by 2015 $290+ billion in Machine-to-Machine revenue by 2017 $29+ billion in social media revenue by 2015

8 Disruptive Business Models Innovations Transforming Entire Industries RETAIL Alibaba s innovative e- commerce portals together handle more in sales than competitors ebay and Amazon combined HEALTHCARE Univ. of Pittsburgh Medical Center is using Big Data to revolutionize healthcare by reducing over-diagnosis and unnecessary treatments FINANCIAL SERVICES Sino Lending s peer-to-peer lending model circumvents traditional financial intermediaries like banks COMMUNICATIONS Huawei s intelligent communications devices are poised to capitalize on the huge market potential for wireless M2M solutions MANUFACTURING Apple and Oracle are delivering breakthrough product performance by marrying software and hardware seamlessly with limited configurations

9 How Will You Manage Disruptive Innovation? #1 STRENGTHEN YOUR CORE #2 INNOVATE YOUR BUSINESS To survive today s challenges, identify what you can still do better than traditional rivals and disruptive start-ups, and invest in it To thrive in the future, create new paths to growth through innovation of your products, services, business processes, or business models

10 #1: Strengthen Your Core Rethink Your Business to Optimize Operations SIMPLIFY Systems, business models and processes to reduce cost, increase control and accelerate revenue velocity STANDARDIZE Global business processes and procedures to increase flexibility to adapt to changing conditions CENTRALIZE Data, processes and systems to speed decision making and enhance control AUTOMATE Whenever possible with selfservice, end-to-end processes to maximize profitability

11 #2: Innovate Your Business Leverage Disruptive Technologies, like Cloud, to Drive Change INSPIRE GREAT CUSTOMER EXPERIENCES Differentiate your brand by developing 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 CREATE WINNING PRODUCTS Leverage an information-driven value chain to drive innovation and flawless execution PLAN EFFECTIVELY Increase productivity, lower costs, and improve controls to maximize performance, deliver results

12 Creating New Paths to Growth at Oracle Strengthening Our Core, Innovating Our Business

13 Oracle: 30+ Years of Industry Innovation Oracle founded Oracle launches industry s first Relational Database 1985 Oracle leads the Client/Server Revolution Oracle enters the Business Applications market 1987 Oracle unveils new internet-centric computing strategy 1995 Oracle launches Business Online, industry s first Hosted Applications Oracle launches acquisition strategy, unveils Next-Gen Fusion Applications Strengthening our Core 1993 Oracle rewrites applications to run on Client/Server environments Transforming our Business 1998 Oracle champions Java, releases first mobile app 2000 Oracle launches EBS11i, Industry s first integrated applications suite 2003 Oracle releases Database 10g, industry s first Grid Computing Database 2007 Oracle debuts Oracle VM server virtualization software, paves way for Cloud Computing Oracle unveils industry s most comprehensive Cloud Portfolio Oracle moves into integrated business 2012 systems with Sun acquisition

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15 Customers Expect Great Experiences Yet Few Deliver on Expectations 80 of business execs say they re doing a Good to Excellent job of delivering a positive, consistent, and relevant experience to their customers 39 ONLY of companies earned a CX index of Good or Excellent from customers

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17 Oracle s Complete Customer Experience Strategy Strengthen Core CRM, Transform CX for the Cloud Oracle enters CRM market with Siebel, PeopleSoft acquisitions Oracle unveils first CRM SaaS offering, CRM On Demand Oracle unveils Social CRM, adds social networking and Web 2.0 technologies to enterprise CRM 2008 Oracle announces Fusion 11g, with CRM in the Cloud, acquires CRM cloud providers FatWire, RightNow InQuira 2011 Oracle buys Vitrue, Collective Intellect, Eloqua, launches Customer Experience (CX) Cloud Strengthening the Core Transforming the Category Oracle releases Siebel CRM 8.0 Oracle releases CRM On Demand 16 Oracle releases Siebel CRM 8.2 for Public Sector, acquires ATG, to strengthen online customer experience Oracle releases Siebel CRM , CRM On Demand Marketing ; InQuira Oracle releases Siebel CRM Innovation Packs, updates CRM On Demand, CRM On Demand Marketing

18 Innovating the Customer Experience at Oracle Social Engagement and Monitoring 1) Listen and Engage Single platform tracks impact of social media to identify influencers or potential buyers Social dashboard uses complex social data to better understand audiences Real-time web browsing data tracks user behavior on Oracle.com for relevant follow-up campaigns Track and respond to customer service requests on social networks Social Networking 2) Collaborate Manage local presence and distribute content while maintaining brand consistency across 35 different markets Higher-level managers can oversee global activities of all social efforts Real-time analysis of interactions across multiple social channels Modern Sales and Marketing 4) Market and Sell More Effectively Nurture campaigns allow marketers to stay top of mind with prospects, build better relationships with qualified contacts Personalization, dynamic content, and faster leads flow to sales in hours, not days Topic scoring will allow for better analysis of campaign performance Real-time Data and Insight 3) Measure and Analyze 360 Customer View Real-time data improves audience segmentation Increased click-thru rates, reduced opt-out rates Relevant messaging Higher qualified leads, pipeline, and conversion rates

19 Result: More Engaged Customers ORACLE.COM/CX 41,614 PAGE VIEWS 686 VIDEO VIEWS FACEBOOK 56M IMPRESSIONS 4,201 LIKES vs. 1,050 FOR IBM SOCIALBIZ INFLUENCERS PR AR ARTICLES,BLOGS YOUTUBE CX 3.9M IMPRESSIONS NYC EVENT IMPRESSIONS 3,314 FOLLOWERS 25 20M IMPRESSIONS 31,478 VIDEO VIEWS 411 ATTENDEES 53% DIRECTOR++ TWITTER 2.1M vs. 172 ONLINE ADS 29.3M IMPRESSIONS 10,996 VIDEO VIEWS 4,467 CHATS INITIATED

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21 DANGER LIMITED VISIBILITY of Asian CFOs cite lack of system integration as their top IT concern, followed by data quality and integrity Source: Oracle-Accenture Research, The CFO as Corporate Catalyst, June 2013.

22 Oracle s Complete Finance & Operations Strategy Strengthen Core ERP, Transform ERP and EPM for the Cloud Oracle unveils plans for next-gen Fusion Applications 2005 Oracle launches Oracle Business Intelligence applications 2007 Oracle launches industry s first integrated GRC platform 2009 Oracle releases Fusion 11g, Cloud-based Financials, Procurement, GRC 2011 Oracle unveils ERP Cloud Services, including Financials, Procurement, GRC, Planning & Budgeting 2012 Transforming the Category Strengthening the Core 2007 Oracle acquires Hyperion, the leader in Enterprise Performance Management, and LogicalApps, a leading provider of automated controls 2007 Oracle releases Hyperion EPM 9.3, acquires Interlace Systems to strengthen integrated business planning 2009 Oracle releases EBS R12.1 with support for shared services, global tax, multi GAAP requirement; BI Apps Oracle releases EBS R12.1.3, Hyperion EPM ; BI Apps Oracle releases EPM , BI Apps Extension Pack

23 Innovating Finance & Operations at Oracle 1) Standardize, Centralize to Reduce Cost, Risk Single global instance of R12, Siebel CRM, OBIEE Shared Service Centers Global Process, Application Owners 4) Modernize Systems with the Cloud Fusion Accounting Hub Pilot of Fusion FSGBU Adopt Fusion ERP and CRM Cloud Modernize Systems to Reduce Costs Manage Strategy and Risk Strategize and Plan 2) Use Big Data, Analytics to Manage Strategy and Risk OBIEE 11g, and Oracle Database 11g Golden Gate Operational data Store Powers Real-Time Query Performance 24/7 access on mobile devices 3) Strategize and Plan More Effectively with Hyperion Hyperion Planning & Budgeting

24 Result: Ongoing Annual Savings Realized from Oracle s Business Transformation $40 10% of Revenue Saved Annually through Oracle s Global Single Instance, Shared Services, etc. $3.7B Savings $35 $30 $25 $20 Billions $1.2B Savings Simplify Standardize Centralize Automate 2012 $15 $10 $5 $0

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26 Talent is the #1 Priority of CEOs Worldwide The right talent boosts innovation The right talent enables you to capitalize on new market opportunities The right talent drives strategic initiatives 26

27 Oracle s Complete HCM Strategy Strengthen Core HCM, Transform Talent for the Cloud Oracle unveils plans for nextgen Fusion Apps, including Fusion HCM 2005 Oracle releases Fusion 11g, with HCM in the Cloud 2011 Oracle acquires Taleo, SelectMinds, creates Talent Management Cloud 2012 Transforming the Category Strengthening the Core Oracle Oracle releases Oracle releases Oracle releases releases PeopleSoft EBS 12.1, with Taleo 12B PeopleSoft HCM 9.1 new HR Global Feature Pack HCM 9.0 Functionality Oracle adds PeopleSoft s market-leading HCM solutions to its portfolio PeopleSoft 9.2 scheduled for release

28 Innovating Human Capital at Oracle 1) Improve Productivity and Engagement Proactively monitor and reduce bottlenecks Personalized portal for information and forms Provide learning and development activities on Day One 2) Cultivate Talent Unlock potential with real-time insights Offer consistent and personalized solutions Connect experts, innovators and mentors Simplify Managing Your People 4) Analyze and Plan Real-time insights that drive strategy Re-focus critical metrics Mine data for social insights Accelerate Business Success 3) Hire the Best Talent Superior candidate experience Integrates with recruiting processes Compliance management Multi-faceted sourcing and social job sharing

29 Result: Improved HR Performance OVERALL HR PERFORMANCE BENEFITS EFFECTIVENESS STAFFING PRODUCTIVITY Budget Growth ( ) Admin HC Ratio HR Ops Team BEFORE 50% of employee growth rate Budget Employees 1: people AFTER 0% growth Budget Employees 1: people

30 Summary: Innovate Faster and Get Better Results by Managing Disruptive Innovation

31 Become a Corporate Catalyst Drive Innovation through Finance and Business Transformation Ø Secure executive mandate Ø Organize globally Ø Consolidate and simplify as much as possible Ø Automate and globalize business processes Ø Move to a shared services model Ø Implement self service everywhere Ø Deploy standard, out of the box products Ø Move fast and stay the course

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