Corporate Governance

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Corporate Governance International Accounting
StandardsUnderstanding the Impact to
YourBusiness Systems
The following is intended to outline our general
product direction and is intended for information
purposes only. The development, release and
timing of any features or functionality remains
at the sole discretion of Oracle. This
presentation is not a commitment to deliver any
material, code or functionality.
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Francis VeldemanVice PresidentBusiness
DevelopmentOracle CorporationSteven
MirandaVice PresidentApplications
DevelopmentOracle Corporation
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Corporate Governance IAS
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Enhanced Transparency ControlThe Drivers

• The Sarbanes-Oxley Act
• International Accounting Standard (IAS)

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Reporting Impact Sarbanes-Oxley ActClose Your
Books Faster Ensure Accurate Processes

• Publicly Certify
• You are in control and your numbers are
  reported fairly
• Expand External Auditors Testing to Operational
  Controls
• Apply Standards to Reporting Entities
• Parent and all subsidiaries
• Overseas and at home
• File Sooner
• After December 15, 2003phased in over 3 years
• 10-K 90 days, 75 days, 60 days
• 10-Q 45 days, 40 days, 35

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Changing The Reporting Framework

• Telefonica - 2001 Results
• 2.11 billion euro profit under Spanish rules
• 7.18 billion euro loss under US GAAP
• France Telecom 2001 Results
• 5.2 billion euros operating income under French
  rules
• 8.0 billion euro operating loss under US GAAP

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Reporting Impact IASMigrate and Unify Corporate
Reportingand More

• New Valuation Approaches
• Consistency of Data from AllLocations World Wide
• Inventory
• Financial Instruments
• Fixed Assets
• Employee Benefits
• Subsidiary Reporting
• Segment Reporting

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Enhanced TransparencyThe Consequences

• Dramatically Enhanced Reporting Framework
• IAS defines overall content and underlying rules
• Sarbanes-Oxley defines timelines and enforces
  internal control
• Local GAAPs do impose additional regulationsand
  in some cases contradictory regulations
• There is no way out !!!
• Can your IT-Systems cope with that ???

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PWC Survey Gives Us The AnswerNew Reporting
Standards Require Significant IT Changes

• PWC Survey on the Impact of an IAS Migration on
  Management Information Systems
• 569 companies have been asked BEFORE their IAS
  migration whether they do expect to change their
  system 32 said YES
• 98 companies have been asked AFTER their IAS
  migration whether they had changed their system
  52 said YES

CFO survey Impact of IAS, PWC, 2002
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What is the IT Impact?
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Impact On Information TechnologyControl As
Enforced by Sarbanes-Oxley Section 404

• Ensure Each Business Process is Documented and
  Linked to Corresponding System-Based Process
• Monitor and Maintain Each System-Based Process
• Setup and track record of changes
• Access rights and track record of changes
• Audit status
• Provide additional user documentation to
  highlight important parts
• Ensure You Are In Control (as defined above)
• Of ALL processes
• On ALL systems
• In ALL your subsidiaries around the globe
• This is not a US only issue

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Impact On Information Technology Close Your
Books Faster As Enforced by Sarbanes-Oxley

• Be Prepared to Submit Your 10Qs in 35 Days
• Consolidate data physically
• Review and adjust
• Eliminate intercos
• Create additional JEs / do the real
  consolidation
• Get your auditors sign off
• Be Prepared to Submit Your 10Ks in 60 Days

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Impact On Information TechnologyIAS

• Consistent Definitions of Items Across the Globe
• Revenue, cash flow
• New Valuation Processes
• Financial instruments
• Assets
• Inventory
• Employee benefits
• IAS Standards vs Remaining Local Legal
  Requirements
• Segment Reporting

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Oracles Best Practicesfor Corporate Governance
IAS
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With Oracle Applications E-Business Suite

• Provide Enterprise-Wide Visibility
• Enhance Internal Control
• Increase Operational Efficiency

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Provide Enterprise-Wide Visibility

• Set-up Fail-safe, Transparent, Integrated
  Processes
• Enable Relevant and Timely Management Information

Consolidate GlobalFinancial Data
Provide SingleSource of Truth
Support Real-TimeMgmt Information

• Reduce No. ofInstances

• Instill Confidencein ExecutiveDecision Making

• Drill to Any Level
• Offer BusinessAnalytics

Visibility, Control, Efficiency
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Enhance Internal Control

• Integrate and Centralize Internal Processes
  Controls
• Document Business Processes Corporate
  Communications
• Secure Internal Controls Monitor Business
  Issues w/ Easy Access
• Train Employees and Monitor Skills for Maximum
  Policy Procedure Compliance

Internal Controls
Workflow
Shared Services

• Instill Process Control
• Instill Audit Control
• Instill Skills Compliance

• Standardize Processes
• Ensure ExceptionReporting

• Centralize Enforcement
• Reduce Ad-hoc Activities
• Implement Change Rapidly

Visibility, Control, Efficiency
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Increase Operational Efficiency

• Consolidate and Reconciliation of Information
  Rapidly
• Minimize Administrative Overhead
• Implement Centralized, Low Cost, Error-Reducing
  Processes for Data Consistency and Accuracy

ProjectCollaboration
Automation
Business SystemArchitecture

• Automate BusinessProcesses

• Ensure Scalability Reliability

Visibility, Control, Efficiency
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Oracle Corporate Governance Solution Set
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Oracles SolutionThe Basics
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Run a Global Single InstanceReduce Errors,
Simplify Operations, Speed Transactions
By moving to a global single instance with
enhanced multilingual and multicurrency
functionality, we achieved consistent
methodologies and one source for our financial
data. C-COR

• Today, with a single. Global financial
  management system in place, we have a clear view
  into each regions performance.
• ViewSonic

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Centralize on a Unified Data ModelProvide a
Single Source of Truth
Finance

• Provide seamless integration between products
• Eliminate need for complex messaging
  replication
• Perform enterprise-wide transactions
• Track all customer interactions
• Accurate consistent information

Planning
HR
Project Contract Mgmt
Purchasing
All Customer, Supplier andProductInformation
AssetMaintenance
Manufacturing
Order Mgmt Warehousing
Sales Marketing
Service
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Provide Common DenominatorEliminate Boundaries

• No Language Boundaries
• Support for 30 languages
• Multi-lingual external documents
• All languages installable in same Unicode
  instance
• No Currency Boundaries
• No Legislative Boundaries
• Customers operating in 100 countries
• Support for statutory customary local
  requirements

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Benefit From Shared Service CentersLeverage Best
Practices from Different Groups/Regions
Local Division / Group
SingleInstance
Shared Service Center
Local Division / Group
Local Division / Group

• Increase Efficiencies, Reduce Costs
• Establish global processes and accessibility to
  data
• Hasten incorporation of new business units
• Eliminate redundant structures
• Standardize and automate processes with
  self-service
• Improve Operational Quality
• Establish the right balance of centralized and
  decentralized functions
• Focus on core competencies
• Deliver Better Business Intelligence
• Summarize and gain global insight with single
  source of truth

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Case Study Oracle
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Why Go Global?It is All About

• Information
• Quality
• Accessibility
• Timeliness
• Cost Reduction
• Hardware
• Facilities
• Headcount
• Service Improvement

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Issues Before Consolidation

• Multiple Data Centers, Databases, Environments
• Variety of Applications, Platforms, Operating
  Systems
• Inconsistent Usage of Applications
• Multiple Support Groups
• Inconsistent Business Practices Within LOBs,
  Divisions, and Countries

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Becoming an E-BusinessOracles 2 Billion Dollar
Savings Target
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IT Consolidation Oracles StoryEliminate
Complexity Improve Efficiency
120
97
70
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1
4
3
3
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Oracles ERP Global Consolidation

• Started with . . . . . . . . . . . . . . . . . .
  . 65 (70) instances
• January 2001 . . . . . . . . . . . . . . . . .
  20 instances
• January 2002 . . . . . . . . . . . . . . . . .
  10 instances
• January 2003 . . . . . . . . . . . . . . . . . .
  3 instances
• October 2003 . . . . . . . . . . . . . . . . . .
  1 instance
• December 2003 . . . . . . . . . . . . . . . . 1
  CRM/ERP instance

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The Oracle Experience

• 12M in ERP Annual Savings
• 18M in CRM Annual Savings
• 11M in E-mail Annual Savings
• 60M in Desktop Simplification Annual Savings
• 13M in Annual Maintenance Reductions
• 200M in Operating Expense in 2 Years

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Shared Services Benefits
Visibility, Control, Efficiency, Quality

• Balance Centralization Decentralization(Local
  vs Central split)
• Standardize on Best Business Practices
• Gain Economies of Scale
• Improve Support
• Enable Better, Smarter Information

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Shared Services Benefits

• Eliminate Redundant Structures
• Standardize on Best Business Practices
• Move to Low-Cost Countries

Cost
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Oracles Global SSC Network
EMEA SSCDublin, Ireland Serving 31 countries
Americas SSC Rocklin, CA Serving 13 countries
India SSC Bangalore, IndiaSelected Global
Functions
AsiaPac SSC Sydney, Australia Serving 13 countries
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Oracles Shared Service Functions

• Tactical Purchasing
• Accounts Payable
• Order Administration
• Accounts Receivable
• Cash Management

• Revenue Accounting
• Revenue Recognition
• General Accounting
• Collections
• Data Librarians

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AccountabilityIncrease Visibility w/ Std
Processes Shared Services

• To Shareholders
• To CEO and Board of Directors
• To Employees
• To the SEC or Other Regulatory Agencies

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More Best Practicesfor Corporate Governance IAS
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Support Real-Time Management InfoOracle Daily
Business Intelligence

• Leverage Personalized Portal
• Offer 24x7 Self-Service Management Reporting
• Provide Visibility Across All Management Levels
• Ensure Security at Every Level
• Deliver Flexible, Real-Time Reporting in Any
  Format
• Web delivered HTML
• Mobile device support
• Dynamic spreadsheetintegration
• Online queries

Visibility, Control, Efficiency
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Enable Corporate Performance ManagementStrategize
, Plan, Execute, and Measure Collaboratively
Portal
Users
Transaction Users Analysts Managers
Needs
Management Reporting
Analysis
Transaction Reporting
Planning, Budgeting
Unified Data
Summaries
Transactions
Plans
Visibility, Control, Efficiency
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Monitor Business IssuesOracle Workflow and
Approvals Management

• Manage transaction workflow and approval
  processes
• Integrate control across E-Business Suite
• Offer Extensible Business Rules
• Eliminate Need for Customized Approvals Routing

Visibility, Control, Efficiency
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Automate Exception Mgmt Notification Oracle
Alerts Notifications

• Manage Proactively and Increase Daily
  Productivity
• Improve Ability to Research and Resolve Problems
• Specify Database Exception Conditions for
  Continuousor Scheduled Monitoring of Entire
  E-Business Suite
• Define Notification and Action Rules
• Deliver Tailored Exception Reports Instantly via
  E-Mail

Email Msgs.
Concurrent Rqst.
Action Sets
Actions
SQL Scripts
AlertCheck
Data
Exception History Action History
OS Script
Visibility, Control, Efficiency
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Document Policies, Procedures, ProcessesOracle
Tutor Online Repository, Authoring, Publishing

• Edit Pre-defined Model Procedures to Reflect
  Unique Nature of Your Business
• Build Role Based Desk Reference Manuals for All
  Your Employees
• Maintain a Library of Customized Business
  Process Documentation

Visibility, Control, Efficiency
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Train on Policies, Procedures, ProcessesOracle
iLearning Provide Training Ensure Compliance
Inputs
Demand
New Laws Regulations WorkforceChanges Business
Strategy ExternalChanges
How do I document manage non-compliance? How do
I ensure training consistency? How can I reduce
time to compliance?

• Certify Employees
• Enable Compliance
• Reduce Risk of Malfeasance

Flow
Legal
Learning Delivery
Business Processes
Compliance

• Track Training Initiatives
• Measure Impact

Visibility, Control, Efficiency
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Broaden Self-Service CapabilitiesIncrease
Efficiency and Improve Accuracy
Automate ConnectInternal Processes
Extend Automationto Customers / Suppliers

• Expense Reports
• Time Cards
• Employee Information
• PO Processing
• Competency Management

• Orders
• Invoices
• Payments
• Requisitions / Auctions
• Inquiries and Disputes

Visibility, Control, Efficiency
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Project CollaborationFacilitate Project
Management Across the Enterprise

• Access Complete Internal Audit Project
  Information
• Provide Role-based Access to Multiple
  Stakeholders for Different Types of Project
  Information
• Enable Anytime, Anywhere Information Sharing
  Among Relevant Stakeholders
• Offer Common Document Repository

Provide Internal Audit Team w/ Complete
Visibility toStatus, Dependencies, Issue
Tracking, Deliverables
Visibility, Control, Efficiency
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Integrate Technology Applications
HR, Financials, Sales, Manufacturing
Operational Analytic Applications
Application Server

Database
Visibility, Control, Efficiency
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New ProductInternal Controls ManagerOracle
Internal Controls Manager is a comprehensivetool
for executives, controllers, internal audit
departments, and public accounting firms to use
to document and test internal controls and
monitor ongoing compliance.
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To Document, Test, Certify Internal Controls
Internal and External Auditors will Need

• Workflow Management Tools
• Document Management Tools
• System Configuration Tools
• Survey Tools
• Procedure Documentation Tools
• Process Control Limits
• Sampling Statistical Tools
• Project Management Tools

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To Document, Test, Certify Internal Controls
Oracle Has the Building Blocks

• Workflow
• Files
• iSetup
• iSurvey
• Tutor
• Performance Mgmt FW
• Audit Manager Repts.
• Project Collaboration

Workflow Management Tools Document Management
Tools System Configuration Tools Survey
Tools Procedure Documentation Tools Process
Control Limits Sampling Statistical
Tools Project Management Tools
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To Document, Test, Certify Internal Controls
Oracle is Introducing
New Product 11i.9 Timeframe

• Oracle Internal Controls Manager

Workflow Management Tools Document Management
Tools System Configuration Tools Survey
Tools Procedure Documentation Tools Process
Control Limits Sampling Statistical
Tools Project Management Tools
Workflow Files iSetup iSurvey Tutor Performance
Mgmt FW Audit Manager Repts. Project Collaboration
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Oracle Internal Controls ManagerBenefits

• More Efficient Internal Control Testing
• Exposing the native controls of the
  applicationsin an auditors context
• Higher Certainty in Your Risk Assessment
• Providing verification mechanisms as part of
  theapplications themselves
• Lower External Audit Verification Costs
• Allowing external audit independent
  verificationof the same controls

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Oracle Internal Controls ManagerSolution

• Expose Internal Audits to Sarbanes Oxley
  Certifiers
• Make Internal Policies Integral Part of Your
  System
• Highlight Application Control Points
• Compare Internal Policies to External Guidelines
• Compare Actual Practices to Internal Policies
• Provide Risk and Issues Library
• Validate Financial Values
• from the consolidated level
• to the transactional level at every subsidiary

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Equipped for IAS?
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Oracle E-Business SuiteBest Practices for
International Accounting Standards

• VisibilityAccess accurate, relevant information
  across organization
• ControlCentralize and secure policies,
  processes, and procedures
• EfficiencyConsolidate and reconcile data quickly

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Momentum
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What do they have in common?Centralized
Processes Systems Using Oracles EBS
First CEOs CFOs to Register Sworn Statements
Set Key Benchmarks for Corporate Reporting
Shortened closing time by up to 90
Survey Consolidation and Reporting Functions in
European Multinational Enterprises PWC, April
2002 on www.pwcglobal.com
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Best Practice LeadersControl, Efficiency,
Reliability, Visibility
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By using the Oracle business application,
business processes are integrated and steam
lined data capture is speedier and once only,
for employees, partners and suppliers We can see
transaction details right down to individual
store level. - Saeed Al Muaili, Information
Technology Manager

• Emerat is the leading Middle East petroleum
  distributor and retailer of fuel and related
  products. Mission to deliver customer value,
  maintaining national, public and government
  interests. Rolled out e-business initiative
  throughout corporate offices and distribution
  terminals. Integrated retail and Cstore
  applications with Oracle business application.

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Kingston upon Hull City Council
With Oracle E-Business Suite 11i, we have an
integrated business model that enables us to
deliver our promises to the citizens of Hull -
Graham France, Head of Service Re-engineering and
Development
Our Best Value Review identified opportunities
to improve service and control before Oracle
Financials, each department had their own system
- this had to change. Now we have everyone using
one, integrated system advantages gained include
faster reconciliation, greater expenditure
control, procurement savings, all managers
online, improved visibility therefore
accountability the flexibility of the Oracle
programme enables us to achieve One Version of
The Truth. - Paul Jackson, Head of Service
Transition Team
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We are convinced that the benefits of this
project will enable good returns for Virgin
Atlantic both in terms of cost savings and in
business process improvements that will impact
both short term results and help us build for
future growth, - Simon Fox, Chief Information
Officer for Virgin Atlantic
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What Our Customers Are Saying

• Oracle's approach to business systems
  involvingconsolidation of data and shared
  service centersassists us in meeting our
  corporate governance goals
• -- Phil Chronican, Chief Financial Officer,
  Westpac Banking Corporation
• In a highly regulated sector such as
  reinsurance, a robust corporate regime with
  effective financial system controls was a clear
  priority.The goal was to increase our control of
  finances and to speed our processes Oracle is
  playing an important role in that process.
• -- Liz Catchpole, Chief Financial Officer,
  SwissRe Life and Health Business Group
• With Oracle in place, our management now has a
  much better viewof the company. We only need to
  enter information once and canthen easily
  monitor and keep track of everything we do.--
  Roberto Albert, Treasurer, Duferco

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What Our Customers Are Saying

• The obvious benefit of Oracle across the
  organization is seeing everything going on at the
  same time. Everybody makes decisionsfrom the
  same data. The visibility allows us to optimize
  across theentire business.
• -- Stephen Printz, Chief Information Officer,
  Pella Corporation
• Now that our operational data is integrated with
  Oracle Financials,we can pull reports from
  Oracle Financials according to businessunits,
  activities, or customers. Management has greater
  confidencein the data because it comes from a
  single source.
• -- Sencer Salbas, IT Manager, Omsan Lojistik
• We selected Oracle Financials solution as it
  provides all our monthly reports from a single
  source and with the use of encumbrance accounting
  gives us the budgetary control we require.
• -- Mr. Géza Nevelos, IT Advisor, PSZAF

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The Next Few Days
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The Next Few Days

• Recommended Sessions
• Best Financial Practices and Oracle Financials
  11i Update
• Tuesday 1100 S2 Room 1
• Corporate Governance International Accounting
  Standards
• Tuesday 1430 S6 Room 3
• Corporate Performance Management Overview
• Tuesday 1600 S2 Room 2
• Oracle General Ledger Overview and 11i Update
• Wednesday 1030 S2 Room 1
• Financial Intelligence Overview
• Wednesday 1300 W23
• CPM Enterprise Planning and Budgeting
• Wednesday 1600 W7
• Oracle Spend Management Overview and 11i Update
• Wednesday 1600 S2 Room 1

?
?
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The Next Few Days

• Recommended Sessions
• Corporate Governance Internal Controls Manager
  Overview
• Wednesday 1715 W 7
• Enhance Your EBS ROI Through VAT Strategy
  Automation
• Thursday 1030 S6 - Room 3
• TCA Customers Online Overview 11i Update
• Thursday 1030 S6 - Room 1
• Oracle Revenue Receivables Mgmt. Overview and
  11i Update
• Thursday 1300 W 7
• Oracle Real Estate Management Overview and 11i
  Update
• Thursday 1430 W 9
• Oracle Lease Management Overview and 11i Update
• Thursday 1430 W 7
• Oracle Cash Management Treasury Overview and
  11i Update
• Thursday 1600 W 7

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The Next Few Days

• Related Demo Stations
• Close Your Books Faster
• General Ledger
• Global Consolidation System
• Globalizations
• Shared Services
• eTax
• Credit, Collections, Revenue Receivables
  Management
• Receivables
• Credit Management
• Collections
• Trade / Deductions Management
• iReceivables
• Bill Presentment Architecture
• iPayment

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The Next Few Days

• Related Demo Stations
• Spend Management Payables Assets
• Payables
• Assets
• Cash, Treasury, Risk Management
• Cash Management
• Treasury
• Risk Management
• Self-Service Finance
• Internet Expenses
• iReceivables
• Real Estate Lease Management
• Lease Management
• Property Manager

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Where Can I Find Out More

• Financial Management Related External Websites
• Oracle.com E-Business Suite homepage for
  Financials
• http//www.oracle.com/applications/financials
• Oracle.com E-Business Suite homepage for
  Corporate Governance
• http//www.oracle.com/solutions/corporate_governan
  ce
• Oracle.com E-Business Suite homepage for
  Customers Online/TCA
• http//www.oracle.com/applications/technology
• Oracle.com entry point for Business Intelligence
• http//www.oracle.com/solutions/business_intellige
  nce
• AppsNet entry point for Financials
• http//www.oracle.com/appsnet/products/financials
• AppsNet entry point for BI
• http//www.oracle.com/appsnet/products/bi

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