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How to Leverage Your Upgrade to R12.1 with

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1 How to Leverage Your Upgrade to R12.1 with
Robust Revenue Recognition Automation Presented by Patrick Glenn, Leeyo Software Leeyo Software, Inc. Confidential 1

2 Agenda Revenue recognition overview Addressing the challenges
What’s needed Opportunities with R12.1 Leeyo Software, Inc. Confidential 2

3 Revenue Recognition What It Is: Principle of accrual accounting that determines the period in which revenue is recognized Revenue recognition is an earning process There are rules and regulations on how and when you can recognize revenue Under GAAP, there are four basic criteria: Evidence of an arrangement exists (governing contract & PO) Delivery has occurred (transfer title and risk of loss) Fee is fixed or determinable (normal payment terms) Collection is probable (customer has ability to pay) Leeyo Software, Inc. Confidential 3

4 In other words – it’s HIGHLY TECHNICAL
Revenue Recognition Continuing revenue projects Modifying Multiple Element Arrangements (to include Best Estimate Selling Price) & Exclusion of Tangible Products from Software revenue Recognition Guidance – Effective 2009 FASB/IASB Joint Projects – Draft format, expect to be finalized end of this year or beginning of next year Accounting terminology you may hear – FASB and IFRS guidelines, evidence of an arrangement, delivery, fixed fees, collection, software and non-software rules, multiple element arrangements, fair value (VSOE, BESP, TPE), relative selling price, revenue allocation, linked arrangements, acceptance, release events, contingencies, future upgrades, significant discounts, extended terms, software is essential to functionality, deferred revenue release, and so on…. In other words – it’s HIGHLY TECHNICAL Leeyo Software, Inc. Confidential 4

5 Why it is Important Most critical financial statement account
Most complex financial statement account # 1 reason for public company restatements # 1 account that is closed manually (i.e. not in ERP) It’s a key component of their SOX certification: Leeyo Software, Inc. Confidential 5

6 What Options Exist Crayola Crayons Etch A Sketch Apple Enhanced IIe
Microsoft Excel Leeyo Software, Inc. Confidential 6

7 The Next Generation Tool
Fits to existing IT infrastructure Minimizes IT and maintenance requirements Is flexible, scalable, and has a low total cost of ownership Implements in a short time Improved internal controls on revenue System-based data repository Systematically integrates revenue best practices Globalizes and standardizes of revenue processes Leeyo Software, Inc. Confidential 7

8 The Next Generation Tool
Eliminates time-consuming and error-prone manual systems Accelerates period-end close and financial reporting cycles Automates all key revenue recognition requirements Handles the most complex revenue recognition issues Simplifies revenue and COGS management Enables real-time revenue monitoring Accurately forecasts revenue Stays current and in compliance with the latest revenue guidance Leeyo Software, Inc. Confidential 8

9 Quote-to-Cash Process
Here’s What It Looks Like User-defined Revenue Contingencies Fair Value Analysis Auto Accounting Rules Amortization Methods Revenue & COGS Waterfall Schedules Contingencies Applied Revenue Automation Engine Events Delivery Acceptance Cash Receipts Time-bound FV Assignment & Allocations Quoting Booking Shipping Billing Collection Deferred Revenue & DCOGS Quote-to-Cash Process Leeyo Software, Inc. Confidential 9

10 Ensuring Success Understand the business requirements
Articulate unique requirements clearly – avoid “one size fits all” Set clear expectations and coordinate closely IT and business planning with all stakeholders Revenue-speak is different than IT-speak – need a revenue ‘champion’ 100% automation is not reality on day 1 Internal project teams and management Leeyo Software, Inc. Confidential 10

11 Ensuring Success Data integrity and flow
Migrating from manual systems can be challenging Historical data may not be readily available Business process re-engineering Scalability Business growth Path to future upgrades/enhancements Training New tool requires practice Combined support from IT and revenue recognition experts People Processes Systems Leeyo Software, Inc. Confidential 11

12 Opportunity – R12 Upgrade
Technical stack software upgrade No changes to chart of accounts (COA) or organizational structure Limited configuration changes Minimal RICE components Revenue automation will be driven by business user Leeyo Software, Inc. Confidential 12

13 Opportunity – R12 Upgrade
Re-Implementation Changes to chart of accounts (COA) and organizational structure Planned business process re-engineering Large number of RICE components Introducing new modules Revenue automation is usually easy to justify Dollars may be available due to larger overall project Process improvements lessen automation customization People and project resources are available and focused New R12 module features can be leveraged Leeyo Software, Inc. Confidential 13

14 Enhancing R12 with RevPro
Leeyo’s RevPro is a complete suite of software that automates and manages every process in the revenue cycle – seamlessly integrating with the quote-to-cash processes of any ERP system. Features: Upload fair values (VSOE, TPE, ESP) Identify arrangements and link transactions Allocate revenue and post carve-outs to A/R or G/L Features: Define release events to auto-release revenue from deferred Manage contingencies Revenue waterfall with real-time forecast Features: Real-time revenue analytics with drill-down capabilities Pre-built adapters for OBIEE, SAP BW, BOBJ, Cognos Leeyo Software, Inc. Confidential 14

15 RevPro data Collection
Oracle R12 Integration Oracle ERP Inbound sources Standard Adapters Sales orders, service contracts, invoices, credit memos, RMA orders, master data (item, customer) RevPro Staging Area Adapter extracts data to RevPro staging per defined schedule RevPro Modules Revenue calculations and output RevPro data Collection Data gets collected to RevPro system RevPro Archive Processed data gets archived

16 Typical Implementation
Proof of concept (optional) Business requirements document (BRD) Design and configuration Training and conference room pilot (CRP) User acceptance testing (UAT) GoLive Post GoLive support, e.g. quarter-end close Stabilization and enhancements Leeyo Software, Inc. Confidential 16

17 Where We Find Success Customer profiles
Public or pre-IPO company – $50M to +$20B revenue Existing manual processes or custom solutions for revenue calculation U.S. GAAP reporting required or planned Concerned about upcoming accounting guidance changes Desire to improve IT controls on revenue Market – high technology and expanding Software Networking equipment Consumer equipment SaaS Leeyo Software, Inc. Confidential 17

18 Wrap-up Q&A Contacts Patrick Glenn – Vice President, Business Development (408) Leeyo Software, Inc. Confidential 18

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