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Never before-disclosed oracle planning techniques by Jeff Walker
 

Never before-disclosed oracle planning techniques by Jeff Walker

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Jeff Walker, former Oracle CFO, presnted "Never-before-disclosed Oracle planning techniques" These slides were presented at the Alight/IE Group FP&A High Tech Summit in Palo Alto June 15, 2011. Jeff ...

Jeff Walker, former Oracle CFO, presnted "Never-before-disclosed Oracle planning techniques" These slides were presented at the Alight/IE Group FP&A High Tech Summit in Palo Alto June 15, 2011. Jeff discussed key planning and reporting practices that supported Oracle’s rapid growth as it more than doubled annually from $20M to $1.2B while he was CFO.

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    Never before-disclosed oracle planning techniques by Jeff Walker Never before-disclosed oracle planning techniques by Jeff Walker Presentation Transcript

    • Never-before-disclosed Oracle planning techniques
    • Oracle background
      • Jeff was CFO from 1986-1991
        • Staff grew from ~200 to ~ 12,000
      • Jeff founded, designed products, Applications GM from 1985-91
    • Consequences of doubling
      • Next year revenues > total revenues all prior years
      • Spending 75% > biggest revenue year
      • Headcount doubles each year
        • Over ½ staff < 1 year with company
        • Over ¾ staff < 2 years with company
        • Hiring 1,000 staff means roughly 5 per day
        • Special processes for recruiting, hiring, training, new employee introduction, management processes
    • MOKRs (Top down planning)
      • Mission
        • Describe purpose of this organization
      • Objectives
        • Name 5 or 6 major objectives this year
      • Key Results
        • Identify 20 or so measurable results to demonstrate achieving each objective
    • MOKRs (Mission, Objectives, Key Results)
      • Larry’s mission
      • Become the largest database company
      • Objectives
      • Double revenues
        • Gain market share on each competitor (KR)
      • 20% margins
        • Reduce G&A to 5% of revenues (KR)
      • Hire only the best and brightest
        • #1 recruiter at MIT, Cal Tech, Sloan …
    • MOKRs (Mission, Objectives, Key Results)
      • Accounts Payable mission
      • Pay vendors and keep them happy
      • Objectives
      • Return all vendor calls within 24 hours
      • Significantly improve staff productivity
        • Introduce key indicators
        • Measure staff productivity (invoices/staff)
        • Improve productivity quarterly
      • Slow growth in number of invoices
        • Count invoices per month
        • Eliminate major-supplier invoices by paying on receipt
    • Key indicators (Drivers)
      • In each cost center
        • Identify “drivers” to predict costs (and revenues)
          • # of invoices
          • # of applications products
          • # of sales staff
          • Average price per sale
        • Measure “drivers”
          • Plan to drive key indicators in desired direction
          • Plan objectives around influencing key indicators
        • Use key indicators in budgeting
    • Budgeting (Bottom up planning + buy-in)
      • In each cost center (May 31 fiscal)
        • Draft detailed monthly budget in March for next year
          • Divisional controllers lead process
          • Budget only what you control
        • Roll-up and review budgets at responsibility levels
          • Divisional controllers supply corporate finance
        • Finalize budgets in April
        • Finance loads spreadsheets to Oracle GL
        • Budgeting ensures that managers “buy-into” MOKRs for their organization (or super-organization)
    • Over-assign (set bar high; overachieve)
      • Typical goal is everyone meets plan
        • Better is opportunity to blow-out plan
      • Key indicators determine revenue plan
        • # of sales staff * average sales per person
      • Over-assign means hire > you need
        • Wall street revenues = 90% of budgeted plan
        • Sales EVP quota = 100% of budgeted plan
        • Sales VPs quota = 110% of budgeted plan
        • District’s quota = 120% of budgeted plan
        • Total sales quota = 130% of budgeted plan
    • Responsibility reporting (accountability)
      • Monthly, Oracle GL produces
        • Budget versus Actual report matching budget detail
        • Managers review of subordinate performance
          • Culture of under-promise, over-achieve
          • Keep expenses under budget
          • Drive revenues over budget
          • Move key-indicators beyond planned key results
    • Weekly forecast (world-wide Monday)
      • Larry Ellison led 3PM Monday meeting
        • Every Monday (7 people including note-taker)
          • Sales (Gary Kennedy)
          • Europe (Geoff Squires)
          • International (John Luongo)
          • Marketing (Peter Tierney)
          • Development (Bob Miner)
          • Finance & Applications (Jeff Walker)
        • Roll-up meetings start early Monday AM
        • Final spreadsheets to corporate finance by Noon
        • Consolidated by 2PM; handed out at meeting
          • Jeff reviewed before 3PM meeting
        • Executives report activities and current-quarter cost-and revenue projections
    • Quarterly re-budgeting (raise bar)
      • Before each quarter:
        • Update rest-of-year budget
        • Attend off-site planning meeting
          • Update executive team on MOKR progress
          • Agree on new rest-of-year budget
          • Name the budget (Coronado, London, Sonoma, Monaco, Kaui, ….)
        • During my tenure as CFO, each quarter we:
          • Raised our revenue goals
          • Built infrastructure for following year
          • Increased our capacity investments
    • Oracle planning techniques
      • MOKRs (Top down planning)
      • Key indicators (Drivers)
      • Budgeting (Bottom up planning + buy-in)
      • Over-assign (set bar high; overachieve)
      • Monthly responsibility reporting (accountability)
      • Weekly forecasts (world-wide Monday)
      • Quarterly re-budgeting (raise bar)
    • Future of planning
      • Moore’s law guarantees software innovation
        • Improved user interfaces
        • Instantaneous computational speeds
        • Prosumerism
        • Technology becomes a competitive advantage
      • Planning Maturity Curve predicts
        • Interactive top-down planning
        • Buy-in integrated with planning processes
        • Budgets as an output not an input
        • Planning making drivers part of your culture
        • Contingency planning part of your culture