ORACLE S JOURNEY TO THE CLOUD PAO LO J U VA R A T U E S DAY, O C TO B E R 2 3, 2 018

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2 ORACLE S JOURNEY TO THE CLOUD PAO LO J U VA R A T U E S DAY, O C TO B E R 2 3, 2 018

3 ORACLE APPLICATIONS LABS: WE RUN ALL BUSINESS APPLICATIONS THAT RUN ORACLE

4 Global Single Instance of E-Business Suite In early 2000s, Oracle consolidated and transformed its applications portfolio 50+ $1B E R P s R E T I R E D I N S AV I N G S A C Q U I S I T I O N S And consolidated onto Global Single Instance (GSI) From simplification and standardization Completed over 10 years

5 Shift Happens C O M P E T I T I O N DISRUPTS L I C E N S E A N D D E P L O Y M E N T M O D E L S Consumer technologies Reshape applications Workforce demographics Change user expectations Technology democratization Creates whole new market segments

6 WE NEEDED A GAME CHANGER No matter how successful in the past O N P R E M W A S N O T T H E W AY F O R W A R D To reinvent the company we had to A C C L E R AT E I N N O VAT I O N

7 The Power of the Integrated Cloud Vision for end state is 100% of our systems on the cloud O R A C L E A P P L I C A T I O N L A B S SaaS Packaged SaaS applications PaaS Integration Extensions for Oracle-specific functionality Custom UIs IaaS Hosts any legacy applications

8 Single global process Single global system Core Principles Simplification Automation

9 An Incredible Challenge D E L I V E R I M M E D I AT E VA L U E Competition mandated immediate transformation R E P L A C E C O M PA N Y I N F R A S T R U C T U R E Big bang was out of the question; replacing GSI would take time

10 Three-Phased Approach Based on Core Principles E S T A B L I S H D E L I V E R R E P L A C E THE FOUNDATION IMMEDIATE VALUE IN FUNCTIONAL INCREMENTS Accounting Hub SaaS coexists with on premises apps Marketing Cloud, Engagement Cloud CPQ Cloud Talent Management, Recruiting (Taleo) Upgrade core in logical steps HCM Cloud (2016) ERP Cloud (Jan 2018) SCM Planning Cloud (Jan 2018) SCM Cloud (Oct 2018) OM and Receivables (2019 TBD)

11 Establish the Foundation C R E A T E The technical infrastructure for F U T U R E C L O U D A D O P T I O N Accounting Hub Global chart of accounts for financial consolidation and managerial reporting Establishes the legal entity structures that supports future projects Faster period close

12 Deliver Immediate Value SaaS in coexistence with on-premises applications R E I N V E N T T H E Serve new markets Sell in new ways C U S T O M E R E X P E R I E N C E Shorter sales cycles Smaller deal sizes Without undue contracting hurdles

13 CPQ Cloud & Accelerated Buying Experience Before CPQ Cloud After CPQ Cloud Opportunity integration Weak and non contextual Two way integration Product and pricing WebQuote + EBS Quoting CPQ Terms & conditions Q CPQ Approval request DAS CPQ Approval review DAS DAS Ordering document Manual drafting Automated Customer acceptance Paper Online Order submission Manual Automated Order booking Manual Automated

14 CPQ Cloud & Accelerated Buying Experience Sept 2015 Feb 2016 Sept 2016 Mar 2017 Jun 2018 New, renewals and expansion Accelerated Buying Experience Micros On premises Hardware

15 CX CLOUD: More Connected Customer Experiences Getting closer to the customer in 1.5 billion interactions per year 100K Digital marketing activities 650% More customer touch points 99% Drop in sales lead hand-off time Accelerated Buying Experience doubled customer satisfaction 2x >9x 185% Faster deal velocity Lift in rep s quote & order accuracy Upturn in win rates

16 Replace Core Functionality in Logical Increments Business Drivers ERP A modern platform for growth Access to innovation Leverage machine learning and chatbots HCM Focus on talent, not administration Reinventing the employee experience Establish a blueprint for customers and prospects

17 Oracle Today SaaS ERP Revenue to Report (GL) Fixed Assets Accounts Payables Procurement Expenses Projects and Professional Services Accounts Receivables (OFSS) Order Management (OFSS & HW) PaaS CX HCM SCM Territory Management Marketing Campaigns Sales Campaigns Leads & Opportunities Partner Relationship Management Core HR Recruiting Workforce Compensation Talent Management Product Life Cycle Management Global Inventory Logistics Manufacturing Execution Demand Planning Supply Chain Planning IaaS/Moving from the On-Premises Deal Approval System Cloud Subscription Management Customer Lifecycle Management Cloud Data Platform (Next gen corporate warehouse) Inside Sales Customer, Partner, & Franchise Store Order Mgmt. & AR (SW and Cloud) Contract Management Service Contracts/Installed Base Incentive Compensation Spares Management Field Service Payroll Corporate Data Warehouse

18 FINANCIALS CLOUD: Cutting Complexity of Systems & Processes Always running the latest releases and best features 1 Global Chart of Accounts 2,000,000 Page views per day $240M Projected annual source-to-settle savings Focus on innovation and best practices, not upgrades One way of doing things period 122 2,000 20% Business units New BI reports Faster time to close

19 HCM CLOUD: Workforce Ready, Willing & Able to Execute Up-leveled HR s strategic impact 70% Less time for talent reviews 39% More talent ratings year/year $2.63M Lower Cost 63% More job-changes for participants Global visibility to skills, experience, career goals Candidate experience changing employee s perception and culture HR team freed up to focus on our talent strategy

20 SCM CLOUD: Accelerating Innovation & Technology Adoption World-class, end-to-end sales & operations planning 339,954 4 hrs 1.5 hrs $75M One data model driving S&OP Planned items 183,090 Bills of material Collection frequency Planning cycle Projected inventory & obsolescence savings A more agile and responsive supply chain 54 Inventory organizations $20M Revenue projected from fewer stock-outs $50M Expected savings in supplier, agreements, onboarding, etc.

21 What We Learned E S T A B L I S H E A R L Y W I N S E M B R A C E A G I L I T Y A S A T O O L I N V O L V E T H E R I G H T A U D I E N C E Surround your on premises systems with high value peripheral components Plan time-bound implementations Rebuilding your existing system is not the objective Value the new capabilities The journey is a cultural transformation Systems represent the culture that you want to communicate

22 Next Steps Developing core principles of your own A S K Y O U R S E L F WHAT Is requiring you to move to cloud? WHAT Is your vision for the end state? HOW Can you phase the project? HOW Can you deliver value in the near term?

23 Q&A

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