1. How ERP enables Finance Department Transformation Richard Byrom Oracle Applications Consultant March 2007

2. Agenda What is an ERP System? Why implement an ERP system? Value Creation with the Finance Department Oracle Solutions for today Conclusion Questions and Answers

3. What is an ERP system - definitions Simplistic Definition ERP - Enterprise Resource Planning Detailed Definition “a business strategy and set of industry-domain- specific applications that build customer and shareholder communities value network system by enabling and optimising enterprise and inter- enterprise collaborative operational and financial processes” (Source: Gartner’s Research Note SPA-12-0420)

4. Historical system architectures Historically, companies created “islands of automation”. A hodge-podge of various systems that operated or managed various divergent business processes. Sometimes these systems were integrated with each other and sometimes they weren’t. Sometimes they were loosely interfaced and sometimes they were more tightly interfaced.

5. What is an ERP – Key Characteristics Integration seamless integration of all the information flowing through a company – financial and accounting, human resource information, supply chain information, and customer information.

6. Packages Enterprise systems are not developed in-house IS life cycle is different 1.Mapping organisational requirements to the processes and terminology employed by the vendor and 2.Making informed choices about the parameter setting. Organisations that purchase enterprise systems enter into long-term relationships with vendors. Organisations no longer control their own destiny. What is an ERP – Key Characteristics

7. Best Practices ERP vendors talk to many different businesses within a given industry as well as academics to determine the best and most efficient way of accounting for various transactions and managing different processes. The result is claimed to be “industry best practices”. The general consensus is that business process change adds considerably to the expense and risk of an enterprise systems implementation. Some organisations rebel against the inflexibility of these imposed business practices. What is an ERP – Key Characteristics

8. Some Assembly Required Only the software is integrated, not the computing platform on which it runs. Most companies have great difficulty integrating their enterprise software with a package of hardware, operating systems, database management systems software, and telecommunications suited to their specific needs. Interfaces to legacy systems Third-party bolt-on applications Best of Breed Strategy What is an ERP – Key Characteristics

9. Evolving Enterprise Systems are changing rapidly Architecturally: Mainframe, Client/Server, Web- enabled, Object-oriented, Componentisation, Service Oriented Architecture (SOA) Functionally: front-office (i.e. sales management), supply chain (advanced planning and scheduling), data warehousing, specialised vertical industry solutions, etc. What is an ERP – Key Characteristics

10. Forces Driving the ERP Decision Current business needs not met Aging and inflexible administrative systems  inhibit the production of consistent and accurate reports  prevent the performance of complete electronic processes  result in sub-optimized, inefficient business processes Systems difficult to use Inflexible and difficult to use systems Disparate, disjointed systems resulting in duplication of effort and data entry, as well as extensive interfacing. Manual, paper intensive processes Rigid inflexible reporting capabilities result in limited access to timely information Costly Data duplication in shadow systems adds unnecessary costs Aging systems are costly to support and maintain Widespread use of off-line spreadsheets for reporting and analysis Data inaccuracy resulting in numerous reconciliation efforts Delays in gathering accurate data have negative impact on decision-making timelines Lack of analytical application prevents strategic decision support and hinders identifying areas of improvement Can’t support future growth Lack of integrated enterprise master data strategy Automation of cross-organizational/cross-functional transactions is near impossible

11. [ref]/[Dept- SBL]/[date]/©Thales 2007 Strategic Business Benefits An enterprise systems solution must address people, process and technology to support an organization’s mission, vision and strategy. Change Management focuses on supporting the people component of a change initiative.

12. Strategic Business Benefits Enterprise Transformation – A framework will be provided to enable enterprise transformation. Infrastructure - An infrastructure will support future growth. Integration - End-users will be on one integrated system. Information will be entered once and authorized users will have access to real-time, accurate data. Current systems that continue to be used will be interfaced for passing information between systems. Standardisation - One integrated system will ensure standardized data elements for materials management records, standardised reporting, and standardised business process flows across organisations. Improved Reporting - The reporting structures will enable accurate, accessible, and timely reporting to end-users at all levels. End-users will have the tools to create their own queries to capture the data that is pertinent to them.

13. Strategic Business Benefits High-Value Activities - Efficiencies will enable personnel to devote more time to higher value activities like recruitment, strategic sourcing, contract procurement compliance, financial analysis, and benefits programs analysis. Scalability - The system will enable organisations to adapt and be flexible to change. Internet Capabilities - Web-enabled processes will systems are used productively with minimal training requirements. These processes will also provide greater information dissemination across a business. Information Flow and Workflow - A single data repository will ensure that accurate information is routed to the end-users to initiate actions, approvals, and decisions. A clear and effective transactional audit trail will enhance data integrity. Automated workflow will enhance process efficiencies and the transmission of relevant data.

14. Value Creation within the Finance Department Ask any CFO what's at the top of his or her agenda, and the likely answer will be value creation. According to the CFO Executive Board, a Washington DC-based research organization representing CFOs from the world's top 500 corporations, more than two-thirds of global CFOs are now engaged in finance transformation strategies to move their teams away from mundane tasks like account analysis and transactional processing, toward more value-creating activities that can influence corporate strategy and impact enterprise performance.

15. Strategies to Transform Finance Providing expertise and assurance at the corporate centre in tax, treasury, accounting, and other compliance-related processes Embed finance managers in lines of business to influence outcomes and help drive value creation Move towards a shared services or outsourced environment to drive costs out of finance and free up managers to focus on more value-creating activities Adopt a single instance of financial applications, coupled with performance management applications to improve decision support and align finance to corporate strategy.

16. The Oracle Information Architecture Unified data model Accessible by anyone, with any device Global Configurable Open

17. Efforts to meet new regulatory requirements The Oracle Solution to Sarbanes-Oxley Act of 2002: Source: oracle.com

18. The Oracle Corporate Governance Solution Set

19. Conclusion ERP systems provide a mechanism for implementing systems where a high degree of integration between applications and stakeholders is required The effective implementation of ERP systems allows Finance Departments to create value within an organisation. The Oracle Information Architecture and E- Business Suite Application provides organisations with the ability to meet their strategic objectives at all levels.

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21. Speaker Information Name : Richard Byrom. e-mail : richard@richardbyrom.com. Company : Richard Byrom Consulting. Web Site : http://www.richardbyrom.comhttp://www.richardbyrom.com Mobile : +44-7800753532.