Finance it the cornerstone behind oracle it transformation

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Finance Matters

Wade BartoloDirector End User Services Oracle CorporationJanuary 2016


Agenda Walk though financial transition of our

business to “Run IT Like a Business”

Take-a-way use parts or portions to help get funded or increase execution


Translated Into…

Typical Budget Planning Meeting

I Need $1M Dollars! I.E. - If we consolidate 300 phones lines into 3 SIP trunks, we will be able to save $3M next year!


The Journey – Phase One

• Didn’t Implement All Processes

• Lots of Heavy Lifting to Get Established

- Created Service Catalogue - Align Headcount to the Services - Implemented New Procedures - Aligned Technical Roadmaps with Service

Roadmaps - Started to Increase Financial Accountability

Sometimes Each Service Had VP Co-Ownership | Not Always in Agreement on Direction

SUCCEEDED IN ALIGNING TO A SERVICES BASED MODEL


The Journey – Phase Two

• ITIL Model Was Good Start

• Didn’t Account For All Areas of Our Business (i.e. Risk Management)

• Agile Delivery was Hampered

• Clear Ownership on Strategic Direction Not Always Clear Between Service Owners

Slight Change in Direction

Aligned To A Services Model That Made Sense To Our Business

• Clear Ownership / Accountability• Improved Financial Accountability / Reporting• Time-to-Delivery Improved


Business Problems We Faced

Each service had a pretty good sense of what they

wanted to deliver

Needed to have more consistency across the services

• Each service not 100% always in agreement to Global IT priorities (i.e. its all about “me”)

• Lots of good ideas being discussed and sent up for approval (waste of time and $$)

• Reporting of purchase requests in progress, approved etc. (very manual)

• Budgeting process took months(and a lot of spreadsheet time)

- Established a financial management team to oversee the financial side of the business

- Created a Business Office lead for each service to be the liaison with Fin Mgmt team

- Aligned GIT priorities with service priorities

- Implemented tooling and automation changes to remove manual processes

RESULTING ACTIONS


Define Business / Financial Calendar*

* Oracle Fiscal Year June 1 – May 31

Milestone Sept Oct Nov Dec Jan Feb Mar April

Define 2-3 Year Technical Roadmap

Define Tech Refresh Needs

Define 2-3 Year Service Strategy

Consolidate and Submit Pass 1

Review with Leadership Team

Consolidate and Submit Pass 2

Review Pass 2 Changes with Leadership Team

Secure Budget Approval


Technology Roadmaps

– Business Drivers

– Technology Drivers

– Productivity Drivers

– Cost Savings Opportunities Driven by TechnologyEnterprise Architects

& Product Managers

Feeds into creating a potential Service Roadmap

Technical Teams produce technical roadmaps tied to industry, business trends:


Drivers & Assumptions / Bold Statements

Each Service Establish DRIVERS & ASSUMPTIONS for Next Calendar / Fiscal Year

– Employee Headcount Assumptions

– Business Drivers

– Technology Roadmap Feedback

Drives SolidBUSINESS VALUE & USE CASES That Define:

– How the investment is going to impact the business

– Value that will be measured if implemented

Outcome = CLEAR STRATEGY Signed Off by Leadership Team


Preparing for Budget Approval

1) ACCOUNTING PRINCIPALS THAT NEED TO BE FOLLOWED:

• What Defines Capital Purchases vs Expense

• What Defines and Asset

- Understand your companies fixed asset policy

• Understanding Useful Lives of Assets in Service*

- Network devices (5), Servers (3), Storage (4), Software licenses (3) laptops (2)

• Capitalization Thresholds*

- Bulk purchase policy >$500K per unit cost of $3K otherwise expensed

3 Things to Look Out For…

2) STRAIGHT LINE DEPRECIATION OF ASSETS

• Buy a $10K network device

• The date put in service 1/60 of the cost per month = $10K/60 = $166 per month

3) DON’T COMBINE OPEX AND CAPEX THEY ARE NOT INTERCHANGEABLE

1 2

3

* Policy may be different with your company


Now I have Budget - So What?

Typically Project Teams Just Run Off-to-the-Races!

Financially Need a Single Source of Truth

- Purchase Requests Raised By Quarter

- Ability to Accurately Forecast Monthly & Quarterly

- Accurate Reporting of Assets (depreciation schedule)

- Manual Process

- Don’t understand financial impact by having project delays

- Don’t understand the financial lifecycle (i.e. I am done when I raise a purchase request)

- Don’t always understand financial impact of putting assets into service


Budget & Justification Template Automation

Increased Pressure For Better ReportingDisparate Systems | Multiple Inputs | Constant Change

Automated Spreadsheets for Justification Templates & Annual Budget Reviews- Single source of truth for all aspects of a

purchase request being raised from budget to raising purchase requests

- Improved reporting

- Improved approvals


Realize Business Value

– Show Metrics That Back-Up Initial Investment

–We Funded X Project to Get Y in Return • Cost per end user

• Cost per usage metric

• Cost as % of revenue

• Customer survey results post implementation

–More Impactful to Show How Achieved a Target Set in Advance (improve Brand) Than Just Making it Up After Go Live

Establish Quarterly Operation Reviews!


Today’s IT needs to be able to define business value in terms of FINANCIAL ACCOUNTABILITY & STRATEGY

PLANNING

• Come up with clear bold statements and assumptions

• Understanding customer requirements

• Understanding technology trends that derive value

• Define clear success criteria that is measurable

EXECUTION

• Once budget approved manage project teams to deliver on time

• Produce quarterly operational reviews that tie key performance indicators to financial outcomes

• Produce financial quarterly position file with updated forecast based on all purchase requests entered into system


Safe Harbor Statement

The preceding 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.


Define Business / Financial Calendar

Business Objectives

Technical Roadmaps

Service Roadmaps

Bold Statements / Capabilities

Budget Approval

Execution –Funding / Tracking

Demonstrate Realized

Value

Task 1

Finance it the cornerstone behind oracle it transformation

Leadership & Management

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