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2010 open world r12 service contracts

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  • 1. 1
  • 2. <Insert Picture Here>EBS Oracle Service Contracts: Strategies to Increase Service RevenueSusan Flierl Martyn LangleyProduct Strategy Director GPO & Senior Director Business Operations
  • 3. The following is intended to outline our generalproduct direction. It is intended for informationpurposes only, and may not be incorporated into anycontract. It is not a commitment to deliver anymaterial, code, or functionality, and should not berelied upon in making purchasing decisions.The development, release, and timing of anyfeatures or functionality described for Oracle’sproducts remains at the sole discretion of Oracle. 3
  • 4. Program Agenda• Strategies to increase service revenue <Insert Picture Here>• Oracle solutions• Oracle Service Contracts @ Oracle 4
  • 5. Business Environment A Time of Change 5
  • 6. Service contracts as an annuityLess volatile revenue stream High Margin Repeatable Differentiating Service Contracts 6
  • 7. Contract base segmentationQuote by Sales Rep 500k On-line renewal 100k Many companies neglect their smaller accounts Evergreen 50k 7
  • 8. Contract Leakage Example STRATEGIC NON-STRATEGICCustomer Base Allocation 28.5% 71.5%Support Revenue $85,500,000 $21,450,000Support Revenue 80.0% 20.0% AllocationCurrent Renewal Rate 92.0% 53.0%Percent of Revenue Lost 8.0% 47.0%Targeted Renewal Rate 92.0% 92.0%Net Increase in Revenue $8,365,500 7% 8
  • 9. Oracle ServiceContracts 9
  • 10. Oracle Service Contracts Solution Service Provider / Product Manufacturer 1 Proposals, Quotes Define 2 Products & Warranties Sales Coverage Service / Usage Agmts Create Service Contract 3 Bill & Invoice Contracts T&Cs Verify Repository Entitlement R Contract Mgr e 4 Service Requests Provide n Service e w 5 Renewal Notifications Bill & CollectCustomer Service Returns, RMAs Integration Other • AR, Invoicing • Service Application Components • OM, Quoting • Install Base 10
  • 11. Oracle Service Contracts R12 & R12.1 Release OverviewUplift renewal rates – Improved customer experience with Flexible Assignment Rules for Customer Communication Templates and Online Acceptance Portal Enhancements – Faster renewal cycle times with Service Contracts Administration Workbench – Improved renewal rate analysis with Service Line and Covered Level CancellationReduce financial risk – Standardize customer coverage with Standard Coverage Definition – Improve revenue recognition compliance with Partial Period Revenue Recognition and Defer Revenue for Customer Acceptance Contingencies – Secure customer payment information with Credit Card SecurityStreamline contract administration – Provide global contract administration tools with Multi-Org Access Control – Improved service contract visibility when managing customer’s assets 11 11
  • 12. Evergreen renewals• Automatically renew contracts based on pre-defined rules to maximize retention rates and ensure service continuity• Zero-touch web based process automatically renews low value contracts upon expiration Renewal Rule Renew Contract • Credit Status = OK • Update Contract • Contract > Threshold • Notify Sales / Service Rep Value Value • Notify Customer 500k • Expire days < 30 100k 50k 12
  • 13. On-line renewals Notify • Quote layout determined by BI customer publisher templates • On-line portal for customer to accept or request assistance • Customer can modify payment methods on-line • Service contract approval optionalApprove & Activate Customer acceptance 500k 100k 50k 13
  • 14. Online Acceptance PortalR12 Enhancements Accept, reject or request assistance View quote in pdf format 14
  • 15. Online Acceptance PortalR12 Enhancements Attach image of Comprehensive PO or check payment formats 15
  • 16. High value renewals Sales rep Expiration • Receives automated expiration alert AlertApprove / Create • Converts expiring contractsActivate Opportunity into sales opportunities • Evaluate complementary products / services for cross-sell & up-sell opportunities • View transaction and Customer Quote / interaction history Acceptance Negotiate • Customer acceptance: manual or on-line 500k 100k 50k 16
  • 17. R12 Service Contracts Workbench Quick search for your new and renewal contracts Displays your open contracts 17
  • 18. What ProQuest Is Saying“We have realized significant savings with the upgrade to Oracle E-Business Suite Release 12. In particular, we streamlined our renewal process, which has increased customer satisfaction and retention. And, we minimized costs with an out-of-the-box deployment strategy for Oracle Service Contracts.”– Timothy Hall, Senior Technology Manager, Global Management Systems, ProQuest 18
  • 19. Service Contracts@ Oracle 19
  • 20. Program Agenda• Strategies to increase service revenue <Insert Picture Here>• Oracle solutions• Oracle Service Contracts @ Oracle – Global Single Instance – The story so far – Scaling Efficiently via renewal automation – R12 – Transactional to Sales tool 20
  • 21. Service Contracts @ OracleIntroductionsMartyn Langley – Senior Director & Global Process Owner Support• Manage system footprint and roadmap for Customer Services• System & Process requirements • Solution review/sign off • Release process• Partnering with IT• Integrating acquisitions 21
  • 22. Global Single Instance –Overview 22
  • 23. Global Single InstanceThen and Now1998 NOW• 65+ ERP instances • 1 E-Business Suite instance• 40 Data Centres • 2 data centres (including backup)• Inconsistent business processes • Global standard processes• Fragmented data • Consistent data and global• Decentralized decision making business intelligence • Consistent decision making – Geography – Global Process Owner – Line of business – Global Application Owner • Key enabler for acquisitions 23
  • 24. Applications Supported by AITE-Business Suite Products ImplementedProcurement Human Resources & Payroll Financials iProcurement Advanced Benefits General Ledger Purchasing Human Resources Fixed Assets Accounts Payable Human Resources Intelligence Treasury Internet Expenses Payroll Cash Management Payments Time and Labor Subledger Accounting Property Manager Global Payroll Interface iAssets Appraisals E Business TaxProjects Talent Management Response Capture Projects Compensation Workbench Project Resource Management iRecruitment Project Management Ordering Self Service Human Resources Quoting Learning Management Order ManagementSupport Sales Systems Contracts Core Service Contracts Manufacturing & Distribution, XML Gateway Contracts Intelligence Advanced Product Catalog and iStore Installed Base Pricing Incentive Compensation Materials Requirement PlanningInternal Support Systems Bill of Materials Teleservice Inventory Management Knowledge Management Warehouse Management System iSupport Work in Progress Customer Support Engineering Shipping Delivery Based Advanced Pricing 24
  • 25. Service Contracts@OracleImplementation at September 2010 Global Installed Contracts Single Base Intelligence Instance Order Service Accounts Management Contracts Receivable Siebel My Oracle Territories Support 25
  • 26. Service Contracts@Oracle Timeline GSI to 11.5.6US to E. Europe/ Online R12 Upgrade, 12.1.3OKS 11i APAC to GSI Renewals Siebel CRM upgrade(GSI) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E. Europe/ 11.5.8 11.5.10 12.1.1 and 11gAPAC to upgrades upgrade upgradeOKS 11iW. Europe to W. Europe toOKS 11i GSI 26
  • 27. Scaling Efficiency viaRenewal Automation 27
  • 28. Service Contracts @ Oracle Contract base managementService contracts is the single application Oracle utilizes to manage it’s annuity based services businessJune 2010 Oracle contract base• > 500k contracts• $16BNChallenge is how to efficiently manage an ever increasing contract base? 28
  • 29. Contract base segmentation Contract base management Business Applicationsegmentation features R12 sales features $782 M ORACLE Auto Reminder 11,000 Customers (Includes Canada) 17,522 contracts Micro Renewals $138 M 29
  • 30. Renewals automation @ Oracle -120 days renewal Sales rep assigned event fires Automated feed from territory to delivery system-90 days Reminder 1 +15 days Contract Cancelled Contract Quote Sent renewed 400 + XML Renewal FTP - Service quotes letters Workflow Suspended Customer Customer accepts Invoiced -60 days Reminder 2 Start date – Final reminder and notice to cancel -30 days Reminder 3 30
  • 31. Renewals Automation at Oracle Leveraging and extending standard functionalityMicro Renewals – ‘Low touch’ processing• Identify MR upon renewal – Qualifying service – Not in Customer exclusion list – < $5k global threshold• Contract renews and publishes online• Customer directed to online site via email• Customer can Accept / Decline / Request assistance• Upon acceptance contract automatically approvedFail to Pay – Suspending Service for non payment• < $k global threshold• Customer invoice > 90 days overdue• FTP program suspends service in Service contracts 31
  • 32. Renewals Automation at Oracle Leveraging and extending standard functionalityContract Approvals utilizing AME• Contract approvals ensure compliance to specified business rules• Global team of 35 verifying submitted contracts prior to booking• 11510: approvals assigned to country leader• Acquisitions increasing volume of approvals – 1600+ per 24 hours• R12: use AME to route to the best approver – Value – Region – Service – Approver Workload and availability• Increased QA custom checks to 50+ assisting automation and controlling headcount costs 32
  • 33. R12 - Contract Approvals via AMER12 Solution • Approvers log their start/end times – Approver User Ids and group membership in custom lookups • AME assigns approvers to contracts: – Contract Attributes determine which AME Rule is True – Region, Value (dollars), Service Level: e.g. EMEA 100K - 500K – AME assigns approver from approval group tied to Rule – Availability and Workload determine approver – Dynamic group winner defined by sql statement 33
  • 34. Sun to Oracle Installed Base Service ContractsIntegrationR12 Solution • June 2010 Sun IB & Service Contracts migrated into GSI Description Service IB instances IB instances off Contracts on Contract ContractSun Volumes 138,008 4.1M 12M • Utilized IB & Service Contracts 12.1.1 open APIs to load data • 10 days to load & reconcile all data including • IB instances • Service Contracts • IB configurations 34
  • 35. Service Contracts -Transition to a Sales Tool 35
  • 36. R12 Service contracts - Sales Tool Capabilities Administrator Workbench HTML UI displaying consolidated view of a sales rep’s contracts – Entry point for day to day management with personalized views to support individual territory profiles• Manage •Mass updaterenewals capabilitiespipeline •Email/print• Update quotestatus and • Enable/Disableforecast data Reminders• Launch • Run QA Checkcontracts toOnline portal • Submit for Approval 36
  • 37. R12 Service contracts - Forecasting Mass update functionality has enabled Oracle to transition to automated renewals forecasting Bookings Forecast = >50% Forecast Full Value At-Risk Forecast = 1 - 50% Forecast Full Value Cancellation Forecast = 0% Forecast Full Value 37
  • 38. 38
  • 39. Oracle OpenWorldLatin America 2010December 7–9, 2010 39
  • 40. Oracle OpenWorldBeijing 2010December 13–16, 2010 40
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