<Insert Picture Here, See slide 38> Engineering & Construction Demand Generation Training

Transcription

1 <Insert Picture Here, See slide 38> Engineering & Construction Demand Generation Training

2 Market Description Construction Industry Statistics & Facts Approx $4.0 Trillion per annum spent on Construction Employs 15% of the worlds population (7% of population in Europe) Represents 10% of world GDP 96% of Construction enterprises are midsize companies Market is cyclical, depressions in one sector being balanced by gains in other sectors, such as public, government/pfi spending The following trends set the stage for further uptake of IT in the sector: Increasing pressure for consolidation Industrialisation based on new concepts, e.g. prefabricated houses Outsourcing and specialization Internationalisation including new market opportunities and increased competition from foreign players Market Growth validation Associated General Contractors of America Economic report Nov 2006 Major private-sector growth categories on a year-to-date basis included lodging (hotels and resorts), up 48 percent compared to January- September 2005; multi-retail (general merchandise stores, shopping centers and malls), up 37 percent; hospitals, up 25 percent; and manufacturing, up 23 percent, Simonson added. Multi-family construction was up 18 percent year-to-date, as an upsurge in rental construction has helped offset a recent decline in condo-building. Sources; ENR, AGC report, European Economic Report

3 Key E&C Industry Sub-Industry Segments GENERAL AND SPECIALTY CONTRACTORS Project design, planning, and execution. Firms may offer only niche construction services or complete construction management HOME BUILDERS Project development, design, construction and service of residential construction for sale on completion. DESIGN AND ENGINEERING FIRMS... Provision of engineering and architectural services including provision of CAD generated digital Building Information Models COMMERCIAL REAL ESTATE Companies engaged in construction and management of Real Estate, including Offices, Airports, shops, Malls, Restaurants, Banks, etc

4 Key Value Propositions for E&C Complete End-to-End Solutions, Integrated solutions, not interfaced problems. Deep, Industry specific functionality, not one solution for E&C Market Leadership position drives future enhancements Oracle s Portfolio of solutions create additional value, Stellant, Siebel, Agile, Hyperion, etc Strategic Corp Admin functions supported by best in class solutions (i.e.. HCM)

5 <Insert Picture Here, See slide 38> Market Description General, Civil, & Specialty Contractors

6 Key Industry Drivers & Trends Construction PROJECT PERFORMANCE The E&C Industry is a project data intensive industry that needs to operate as a real time enterprise. Project Performance and monitoring are key capabilities are therefore vital parts of their world OPERATIONAL EXCELLENCE The ability to effectively and efficiently manage all aspects of the business is vital. Integration of Project, Procurement, Financial, Workforce/HR is a core need. Further emphasis is now being placed on the integration of the construction supply chain/erp to lower costs and drive efficiencies BUILDING INFORMATION MODELLING & INTEROPERABILITY Modern Construction companies are moving to Building Information Modelling and to rich information which supports of the full Construction lifecycle. The ability to integrate front office and back office systems is seen as crucial to future success. REPORTING EXCELLENCE Construction companies operate on very fine margins and errors can mean success or failure of a business. New financing initiatives have created new ownership structures and financial reporting requirements. They must be able quickly and easily assess the financial status of their construction projects and to accurately and timely report on them.

7 Key Industry Attributes Made up of three separate types of Contractors General Contractors Civil Contractors Specialty Contractors GC s are concerned about: Managing Subcontractors Managing Change Billing Owners Civil & Specialty Contractors are concerned about: Labor Equipment Billing GC s and Owners

8 Oracle in E&C Market Leadership Overall 4 of the top 5 Fortune s Global 500 engineering & construction companies run Oracle Applications 9 of the top 10 Fortune s America s Most Admired engineering & construction companies run Oracle Applications Construction Mgmt 10 of the 10 ENR Top 100 Construction Managers-for-Fee Firms run Oracle Applications 5 of the 5 ENR Top 100 Construction Managers-at-Risk Firms run Oracle Applications Contractors 19 of the 25 ENR Top 400 Contractors run Oracle Applications 4 of the 5 ENR Top 600 Specialty Contractors run Oracle Apps 5 of the 5 ENR Top 225 International Contractors run Oracle Apps Design Firms 9 of the 10 ENR Top 100 Global Design Firms run Oracle Apps 13 of the 15 ENR Top 100 Design-Build Firms run Oracle Apps

9 Construction Solution Map Business Development Plan and Design Source And Procure Construct Asset Financial Business Support Manage Performance Operate, Maintain and Service Marketing Capital Planning & Budgeting Supplier Relationship Project Costing Capital Planning & Budgeting Fixed Assets Human Capital Enterprise Performance Field Service Sales Force Automation Design / Engineering Strategic Sourcing Change Equipment Legal & Regulatory Reporting Training Enterprise Reporting Warranty Lead Tracking Scheduling Subcontract Contract Billing Maintenance Accts Rec, Accts Pay General Ledger Time & Expense Project Reporting Customer Support Estimating Project Budget Material Purchasing Risk Decommission And Disposal Managerial Accounting Employee Self Service Sarbanes Oxley Invoicing & Collections Capital Budgeting and Planning Project Forecasting & Performance Asset Performance Budgeting & Forecasting Payroll Maintenance Planning Project Tools Sarbanes Oxley

10 Swinerton Improves Customer Service and Positions for Continued Growth COMPANY OVERVIEW Swinerton, Inc. provides the full range of pre-construction and construction services, including commercial construction, tenant improvements, renovations, designbuild services and value management as well as construction management and civil construction work CHALLENGES/OPPORTUNITIES Improved information access for employees and customers Replace in-house developed, heavily customized applications Lower TCO Solution, very expensive to maintain Lack of flexibility in current system to grow with the business Increase cost and resource efficiency SOLUTIONS Oracle s JD Edwards EnterpriseOne CUSTOMER PERSPECTIVE Without customization, JD Edwards offers the key functions we need in the construction industry. Plus it provides a foundation for web access that supports our goals for employee and client selfservice. - Luci Tyndall, CIO RESULTS Provided Operations and Financial with consistent information to improve the decision-making process Integrated internally developed change control system with construction accounting solution to deliver comprehensive project status Faster, more efficient employee training - online

11 <Insert Picture Here, See slide 38> Market Description Real Estate

12 Key Industry Trends Real Estate MANAGE GROWTH Modern Property are continually adding to and disposing of Properties in their Portfolio. The ability of back office systems to reflect these changes in increased rental and cash positions is fundamental to their success. PORTFOLIO PERFORMANCE Real Estate Industry is a data intensive industry that needs to operate as a real time enterprise. Performance monitoring and trending capabilities are therefore vital parts of their world OPERATIONAL EXCELLENCE the ability to effectively and efficiently manage legal, financial aspects of large numbers of sophisticated leases is a key trend. This involves increasing tenant occupancy rates,reducing admin costs and optimizing tenant services REPORTING EXCELLENECE Real estate companies are continually adding and subtracting properties impacting ownership structures and financial reporting requirements. They must be able to accurately absorb these changes into existing financial structures and accurately and timely report on them.

13 Key Industry Attributes Made up of owners & operators REIT s are owners Property Managers are operators Make $ by : Billing Tenets for use of Asset Asset Appreciation Industry specific use of systems: Deal Flow - CRM AREF Real Estate Forecasting & Budgeting Partnership Accounting Asset & Maintenance

14 Oracle s Position in the Real Estate Market 50% of Top 75 REIT s use Oracle Applications 9 of the top 10 Fortune most Admired Commercial Real Estate Companies run Oracle applications 60% of the Top 25 Retail Owners run Oracle applications Over 10,000,000 Leases Managed monthly with Oracle

15 REIT Customers

16 Real Estate Customers

17 Real Estate Solution Map Leasing Plan and Design Source And Procure Budgeting & Forecasting Billing Financial Business Support Manage Performance Operate, Maintain and Service Marketing Capital Planning & Budgeting Supplier Relationship Lease - Level Lease Administration Fixed Assets Human Capital Enterprise Performance Field Service Sales Force Automation Design / Engineering Strategic Sourcing 15 Year Forecast Expense Participation Legal & Regulatory Reporting Training Enterprise Reporting Warranty Lead Tracking Scheduling Subcontract Net Present Value Percent Rent Accts Rec, Accts Pay General Ledger Time & Expense Real Estate KPI s Customer Support Deal Flow Project Budget Material Purchasing Internal Rate Of Return Late Fees Managerial Accounting Employee Self Service Sarbanes Oxley Maintenance Capital Budgeting and Planning Expense Budgeting Security Deposits Partnership Accounting Payroll Maintenance Planning Corporate Planning Sarbanes Oxley

18 Boston Properties As of September 30, 2003, the company's portfolio consisted of 139 properties comprising more than 50 million square feet, including 3 properties under development totaling 2.0 million square feet. The overall occupancy rate for the properties in service as of September 30, 2003 was 92.2% Business Challenges: Keeping up with the volume of transactions Centralized, easily accessible information Flexible data model to facilitate reporting and transaction flow Boston Properties continues to add E1 functionality on a quarterly basis. Benefits Increased productivity and efficiency Cut the time to close each financial quarter Improved cash flow by reducing the time required to collect and record receivables Reduced process times form hours to minutes

19 <Insert Picture Here, See slide 38> Market Description Homebuilding

20 Key Industry Trends Homebuilder LAND ACQUISITION A highly competitive with reduced asset pool of land means that how well a Builder acquires land is becoming more and more a key component of their success and long term viability. STREAMLINE SUPPY CHAIN A Builder is faced with how to leverage multi-divisional procurement to achieve best spend with different procurement methods.then to manage data to keep construction, procurement and sub contractors in synch as things change across time OPERTATIONAL EXCELLENCE A Builders ability to flawlessly execute sales process in such a way as to maximize revenues while delivering these sales agreements in a repetitive process that maintains customer buying experience is proving a key differentiator. CUSTOMER SATISFACTION A builder is always trying to align service with corporate branding while keeping control over construction process by demanding highest quality products. In addition he needs to streamline Service execution process to maintain customer satisfaction.

21 Key Industry Attributes Builders of single family or multifamily residential units Only Industry segment which is B to C Industry specific use of systems: Sales Office & Home Configuration - CRM Service Community Project & procurement Industry experienced tremendous growth from , now experiencing a tremendous downturn

22 Current Top 20 Market Share 2006 rank Builder Status Starts Total Rev 1 D.R. Horton Inc. Customer 53,410 $15,016,000,000 2 Lennar Corp. Customer 49,568 $16,267,000,000 3 Pulte Homes Inc. Customer 41,487 $14,274,000,000 4 Centex Corp. 37,539 $14,400,000,000 5 KB Home Customer 32,124 $11,004,000,000 6 Hovnanian Enterprises Inc. Customer 20,201 $7,016,000,000 7 Beazer Homes USA Inc. Customer 17,500 $5,159,000,000 8 Ryland Homes Customer 15,392 $4,757,000,000 9 NVR 15,139 $6,134,000, M.D.C. Holdings Inc. 13,123 $4,802,000, Standard Pacific Corp. Customer 10,763 $4,145,000, Meritage Corp. Customer 10,487 $3,461,000, Technical Olympic USA Inc. 9,602 $2,640,000, Toll Brothers Customer 8,601 $6,123,000, Weyerhaeuser Real Estate Co. Customer 5,836 $3,335,000, Habitat for Humanity 5,820 $374,000, Shea Homes Customer 5,755 $3,045,000, David Weekley Homes Customer 5,360 $1,544,000, Morrison Homes 4,347 $1,390,000, Mercedes Homes 4,264 $1,300,000,000 GIANT of the top 20 builders on the Giant 400 run Oracle!

23 Oracle s Commitment Our Homebuilding Customers 45 of the top 100 America s smaller Homebuilder s run Oracle applications as well.

24 Homebuilder Solution Map Business Development Land Acquisition Front Office Source And Procure Production Financial Business Support Manage Performance Operate, Maintain and Service Marketing Contracting Capital Planning & Budgeting Costing & Pricing Setup House Start Fixed Assets Human Capital Enterprise Performance Field Service Sales Force Automation Development Budgeting Structural Option Selection Strategic Sourcing House Budget Legal & Regulatory Reporting Training Enterprise Reporting Warranty Lead Tracking Lot Inventory Interior Option Selection Subcontract Permit Tracking Accts Rec, Accts Pay General Ledger Time & Expense Project Reporting Customer Support Estimating Development Payment Community Option Selection Material Purchasing Task Completion Managerial Accounting Employee Self Service Sarbanes Oxley Call Center Reporting Change Order Processing Materials Budgeting & Forecasting Payroll Escrow Tracking House Close Sarbanes Oxley

25 The Miller Group COMPANY OVERVIEW 10 th largest UK homebuilder (3,000 annual home starts) Revenues: 1.1 Billion CHALLENGES/OPPORTUNITIES Government compliance Actual to budget cost comparison at plot level Disparate systems SOLUTIONS Oracle JD Edwards JD Edwards Financial JD Edwards Homebuilder JD Edwards Project Costing JD Edwards Procurement & Subcontract CUSTOMER PERSPECTIVE The Miller Group has enjoyed increased cost transparency across both its Construction and Homebuilding Operations due to JD Edwards Enterprise One We are confident of our investment both in the short term in addition to the long term goals of Fusion which we see as one of the most exciting events to hit the ERP market in over a decade. -- Graeme Sterling, Chief Information Officer RESULTS Real-time profitability assessment at plot level Improved ability to strategically analyze house margins Saved over 3M annually utilizing supplier recovery

26 <Insert Picture Here, See slide 38> Market Description Engineer To Order

27 Key Industry Trends Engineer To Order INCREASED DESIGN COLLABORATION The costs and inefficiencies of disconnected design and manufacturing systems are becoming untenable in today s competitive market.closer collaboration of these systems is seen as key to improvement across project lifecycle LEAN INITATIVES Adoption of Lean initiates to address poor cycle times and waste are becoming more and more mainstream in Engineer to Order companies. Cycle times such design to estimate and ECO approvals are just two examples of where Lean initiatives can be applied to bring significant benefits IMPROVE EFFICIENCY V IA STANDARDISATION..Standardization was once considered not possible in ETO environments. More and more this is being successfully challenged as people adopt standard WBS structures for improved estimation,standard master data etc MULTI-PROJECT SCHEDULING Complex scheduling is particularly crucial in Project centric manufacturing environments such as ETO. Comprehensive solutions are required across all levels of Planning from High Level to erection planning, MRP& work order planning etc etc

28 Key Industry Attributes Professional Services firms for the Construction Industry Business is to have Engineers (Consultants) work on Projects, very similar to OCS Industry specific use of systems: Opportunity Project Payroll & HCM

29 Oracle s Commitment Design Firms 9 of the 10 ENR Top Global Design firms run one of Oracle s family of applications

30 Michael Baker Corp. Enhances Project with Single View of Business Data COMPANY OVERVIEW Michael Baker Corporation provides engineering, operations, and maintenance services for its clients most complex challenges worldwide. Industry: Engineering & Construction Employees: Above 5,000 Revenues: $550.8 million 40 offices across the U.S. and internationally. CHALLENGES/OPPORTUNITIES Provide diverse, widespread workforce with access to up-to-date information from anywhere in the world Replace numerous legacy systems with one integrated platform Ensure employees follow standard business processes SOLUTIONS Oracle s E-Business Suite Human Resources Financial Mgt, Expenses, Procurement Project Enterprise Asset Sales CUSTOMER PERSPECTIVE Oracle has allowed us to manage very complex programs across our enterprise, and as an Oracle On Demand customer, we have access to the best resources. Andy Verone, CIO and EVP RESULTS Deployed a single global instance of Oracle applications to support strategic growth initiatives, joint ventures, and new contracts Achieved standardization in business practices to drive Sarbanes-Oxley compliance and provide a foundation for shared services Improved cash flow and financial management through streamlined revenue recognition and billing practices

31

32