Oracle Enterprise Data Management Cloud Service Blue Cross Blue Shield of Michigan October 25, 2018

Tom Borgula – Director - IT Corporate Services Oracle EDMCS Tom Borgula – Director - IT Corporate Services Blue Cross Blue Shield of Michigan A nonprofit mutual insurance company founded in 1939 The largest health insurer in Michigan, serving 4.5 million people here and 1.6 million more in other states The largest network of doctors and hospitals in Michigan: 152 hospitals, and more than 33,000 doctors An independent licensee of the Blue Cross Blue Shield Association Number of employees: more than 8,100 10/25/2018

Oracle EDMCS ERP Background at BCBSM The background BCBSM ERP is essential to understand the strategy and success of the ERP transition to the cloud. We have had alignment at the Executive level for ERP strategy since 2009 when the ERP Steering Committee was formed: Executives from Finance / Procurement / HR / IT - Chaired by IT Charter – Oversee Corporate strategy for ERP Guiding Principles - Upgrade every year / No customizations / Single ERP software platform – Oracle / PeopleSoft (Finance/Procurement/HCM) Alignment across the four pillars has allowed us to eliminate customizations each year / upgrade each year / implement out of the box functionality each year / reduce the annual cost to maintain ERP. The ERP Steering Committee meeting cadence (every two months) allowed us to continually update the executives on the progress of Oracle Cloud functionality / maturity. In 2015 Oracle Fusion reached an acceptable maturity level for us to propose an ERP strategy of moving to Cloud ERP. Putting together a strategy and business case was easier because of the relationship with the executives and their knowledge of ERP gained through the Steering Committee. 10/25/2018

Why an ERP Cloud Strategy? Oracle EDMCS Why an ERP Cloud Strategy? Business drivers Enterprise’s Finance organization utilizing multiple core systems to handle accounting, budgeting/forecasting and financial reporting More than 15 core Financial systems (including 4 General Ledgers) exist across the Enterprise using 5 separate Chart of Accounts. 79 Interfaces to upstream admin systems that limit flexibility and require significant cost to alter Hundreds of single-purpose applications and databases (Excel spreadsheets, Access Databases, etc.) create control and accuracy risks Companies of similar size and complexity utilize 3 core systems for these functions (one ERP with one Chart of Accounts, one consolidation and one budgeting/forecasting system) 10/25/2018

Why an ERP Cloud Strategy? Technology drivers Oracle EDMCS Why an ERP Cloud Strategy? Technology drivers On-premise PeopleSoft ERP platform new functionality being released was slowing down Oracle Cloud ERP platform functionality increasing BCBSM Corporate strategy moving towards managed services Cloud facilitates shorter time-to-market of business activities, M&A and divestitures, changes in business structure happen seamlessly 10/25/2018

Oracle EDMCS Why EDMCS? EDMCS is one component of the BCBSM strategy / transition to the Oracle cloud BCBSM is moving from multiple - ERP platforms / multiple chart of accounts / multiple general ledgers To one - Enterprise ERP cloud platform / one chart of accounts / one general ledger Need a tool to aid in the transition from multiple chart of accounts to one chart of accounts While maintaining the existing multiple chart of accounts While planning future business strategies / planning and their impact to the current multiple chart of accounts and the future single chart of accounts 10/25/2018

Oracle EDMCS Why EDMCS? Immediate Need – Enterprise Consolidation FCCS implemented with new Enterprise COA Need to consolidate multiple Entities that have different COAs Need one place to manage account mappings Future Need – Enterprise Migration to one instance of Oracle Fusion ERP Need to manage transitioning from multiple ERP systems with each having a unique COA to the new COA Need to manage alternate hierarchies for the different lines of business after the migration is complete Need to support future acquisitions migrating to the one Enterprise instance of Oracle Fusion ERP Govern COA changes Model potential COA changes 10/25/2018

Oracle EDMCS EDMCS Journey 2016 New COA designed Decision made to migrate from on-premise Hyperion Planning and Budgeting/Strategic Finance to Oracle Enterprise Planning and Budgeting Cloud Service Decision made to implement Oracle FCCS 2017 Enterprise ERP Cloud Strategy Developed in partnership with Oracle EPBCS implemented Decision made to implement Oracle EDMCS 2018 FCCS implemented EDMCS implemented Fusion ERP implementation started 10/25/2018

Oracle EDMCS EDMCS Benefits Who benefits? Planning now has the ability to quickly rollup the multiple enterprise chart of accounts into one chart of accounts Strategy now has the ability to what if different scenarios and their impact on the enterprise / individual entities easily without spreadsheets or multiple databases Accounting now has the ability to see the impact to the general ledger based on future strategic models Finance Management Reporting now has the ability to define alternate hierarchies for each business area Business areas are now able to receive the reporting and analytics that they use to make decisions quicker from their Finance support teams IT no longer has to make programming changes to accommodate future hierarchies 10/25/2018

ERP Architecture Prior to 2018 Source Applications & Integration Enterprise Performance Mgmt Analytics & Reporting Oracle Cloud Enterprise Performance Management Enterprise Planning & Budgeting Talent Management Taleo Oracle On-Premise Oracle BI Applications, HCM & sPro on Oracle DB Oracle Business Intelligence PeopleSoft Financials Supply Chain HCM External External Systems/Integrations Claims, Acquisitions, etc. Entities Multiple General Ledgers Multiple COAs 10/25/2018

Enterprise ERP Complete Enterprise ERP Transition to Cloud Completed Enterprise ERP Complete Source Applications & Integration Enterprise Performance Mgmt Analytics & Reporting Oracle Cloud Enterprise Performance Management Enterprise Planning & Budgeting Strategic Finance Financial Close and Consolidation Profitability and Cost Management Enterprise Data Management Account Reconciliation Oracle ERP/SCM/HCM/Talent Mgmt Financials Procurement HCM Talent Management Accounting Hub Accounting Engine & Rules PaaS SOA & Data Relationship Mgmt Services Procurement Extension (i.e., Java SaaS Extension) Informatics Financial HCM Procurement External Data External External Systems/Integrations Claims, Acquisitions, etc. 10/25/2018

Oracle EDMCS - BCBSM Appendix 10/25/2018

EDMCS Milestones in our Journey Planning and execution 2016 New COA designed Decision made to migrate from on-premise Hyperion Planning and Budgeting/Strategic Finance to Oracle Enterprise Planning and Budgeting Cloud Service Decision made to implement Oracle FCCS 2017 Enterprise ERP Cloud Strategy Developed in partnership with Oracle EPBCS implemented Decision made to implement Oracle EDMCS 2018 FCCS implemented EDMCS implemented Fusion ERP implementation started 10/25/2018