3 Generations of Shared Services at Oracle

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3 Generations of Shared Services at Oracle

• ACCA Ireland Employer Conference, Limerick, Sept
  06

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John MartinEMEA Director of SSC Consulting
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Oracle Corporation
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• Largest enterprise database software vendor
• Founded 1977 Public 1986
• 275,000 Customers
• Head Office - Redwood Shores, California
• 140 countries 60 subsidiaries
• 55,000 employees worldwide
• Annual Revenues 12 billion
• License, Support, Consulting, Education

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Oracle in Ireland

• 12 Lines of Business
• Major Investment in Applications Team
• Oracle Business of the Year 2005
• Belfast Office open in May 05
• Consulting Nearshore Delivery Centre
• Innovation

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1st Generation - Migration to Ireland 1997 -
2001
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Oracle in 1998

• NOT a Global Corporation
• Local Decision Making
• - (Country Line of Business)
• No commonality in Processes or Systems
• No Global Chart of A/Cs or Standard reports
• Inadequate Global picture of Customers, Suppliers
  and Employees

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Key Drivers - Phase 1

• Drive to Save 1bn
• Oracle Unified Infrastructure Vision
• Consolidated Technology Global Single Instance
• eBusiness Transformation
• Economies of Scale
• Consistent Business Processes
• Economies of Scale
• Improved data integrity business intelligence
• Reduce reporting cycles

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Phase 1 - Approach

• 1997
• Feasibility Studies
• Develop Standard Processes (8 Months)
• Mapped Processes to Oracle Applications
• Integration Testing for Stability
• 1998
• Establish SSC in Dublin
• 1999
• Monaco (V.1) Complete - Mar 99
• Start Migrations - 16 week plan
• First Live country Hungary, June 99
• 2000
• Go Global
• 2001
• Migrations complete

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Scope of Phase 1 Dublin SSC
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Evolution of Shared Services at Oracle
Phase I

• Data Entry
• Account reconciliations
• Limited B/S scope
• Corporate Submission
• Accounts clerks
• Audit Support
• Focus Process Efficiency

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Phase 1 - Outcome

• Migration of 42 Countries to Dublin
• 20 Reduction in FA Headcount
• Common Application
• Standardisation of Process (Some)
• Global SSC Organisation (Not fully)
• Change in employee mindset
• Lots of Self Service

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2nd Generation - Offshore to India 2002 - 2005
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Key Drivers - Phase 2

• True Global Processes
• Fix Broken Processes - Procurement
• A Global Finance Organisation
• Control
• Visability Accountability SOX
• Economies of Scale
• Single Instance of Database

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Approach - Phase 2

• Global Process Owners
• Centralise Global Processes
• Bangalore
• SSC Country Model Organisations
• Change Employee Profile of Regionals SSCs

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Oracle SSC, Bangalore

• 2003
• License update orders (non revenue)
• Customer vendor setup
• Tactical F,PA (forecast budget by line of
  business)
• Cash application (accounts rec.)
• 2004
• Project Accounting
• Accounts Receivable
• Cash Management
• Tactical Purchasing
• Accounts Payable
• Fixed assets
• Expense Reporting

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Dublin SSC What do we do ?
Bangalore, India
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Evolution of Shared Services at Oracle
Phase I
Phase II

• Data Entry
• Account reconciliations
• Limited B/S scope
• Corporate Submission
• Accounts clerks
• Audit Support
• Focus Process Efficiency

• Business Support
• Exceptions
• Full B/S and PL
• Analysis Review
• Qualified Accountants
• Audit Lead
• Focus Control

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Local Subsidiary Organisation
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Phase 2 - Outcome

• Migration to Bangalore
• Downsize Regional SSCs
• Downsize of Country Organisation
• Creation of Control Hubs
• Full Standardisation of Process
• Global Single Instance

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3rd Generation - Nearshore to Romania 2006
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Key Drivers - Phase 3

• Integration of Acquired Entities
• Move to Low Cost Locations
• Downsize Local Finance Organisation
• Centralise Statutory Accounting
• Re Centralise Collections Process - Romania
• Centralise Expense Processing - Romania

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Dublin SSC What do we do now ?
Bucharest, Romania
Bangalore, India
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Local Subsidiary Organisation
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Local Subsidiary Organisation
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Global Team Work
SSC Bangalore Bucharest
SSC Dublin
Local Country Finance Team Strategic Analysts
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Phase 3 - Outcome

• New Focus for Regional SSCs
• Change of Focus for Local Finance
• Growth of Nearshore Operations
• Focus on World Class Finance

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Benefits

• Total FA Cost Declined 30
• Total Heads Declined 25
• Cost per head declined
• Payback was 28 months
• Biggest Savings is IT
• Key target - Finance Cost as Revenue

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The Benefits of Shared Services

• Establish global standard business processes
• Clear separation of duties
• Facilitate operational reviews and audits
• Increase operational efficiency
• Expedite incorporation of new business units
• Manage cost

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The Benefits of Shared Services

• Finance Directors - Can Concentrate on Business
• Visibility and Accountability
• Self Service Right First Time
• Agile Organisation
• Take Our Own Medicine

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Summary of achievements

• Move to shared service centers
• Consolidate information
• Automated processes and adopt self-service
• Manage internal controls
• Build a culture of compliance
• Gain better visibility, control and efficiency

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Some Critical Success Factors

• Executive Management Sponsorship
• Effective Change Management
• Outstanding Communication
• Customer Quality Focus
• Global Process Owners
• Partnering
• Customers Suppliers
• With Internal Customers
• Business Partners

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