Release 12– Procurement Marketing Overview David Hope-Ross

© 2006 Oracle Corporation – Proprietary and Confidential Agenda Market Overview & i10 Results Messaging Design Release 12 Primer, Messages, and Overview Summary

© 2006 Oracle Corporation – Proprietary and Confidential Number of Key Suppliers Fall New Skills Needed to Operate In Globally Complex and Uncertain World Performance Metrics Better Aligned With Company Objectives IT Sales Suppliers Buyer Program Manager Sourcing Mngr v.2 v.1 Senior Management’s Expectations For Purchasing Grow Requirements for increased global and regional capabilities The Future Of Purchasing & Supply Regional & global sourcing strategies will become a critically important source of competitive advantage CPO Technology key to globalization and sourcing strategies enterprise wide. More flexibility & external customer focus required to maximize supplier contributions Source: Center For Advanced Purchasing Studies, THE FUTURE OF PURCHASING AND SUPPLY: A FIVE- AND TEN-YEAR FORECAST

© 2006 Oracle Corporation – Proprietary and Confidential 34% 3, % 54 World Class Purchasing Organization 36% Increase25% % time spent on Risk Management and Decision Support Activities More Buying Power 7,805 Suppliers Per $Billion of Spend 27% Lower Costs 1.01% Total Cost of Procurement (as % of Spend) 48% Less Staff104 FTE per $Billion of Spend Comparison Summary Typical Purchasing Organization Performance Indicator Shift investment in procurement to higher-value activities Reduce staff by swapping labor for technology Goal: Achieve World Class Procurement Source: Hackett Group & Oracle

© 2006 Oracle Corporation – Proprietary and Confidential Procurement Market Overview A modest 6% CAGR doesn ’ t reflect key growth areas in specific deployment modes, sub-segments, and geographies. AMR forecasts revised upwards, and then upwards again! 100%+ growth in SaaS but from a small base (12% of the market) Sourcing is a key growth engine (15% growth on 34% of the market) EMEA’s share is increasing (19% growth on 29% of the market). The market is evenly split between manufacturing & non manufacturing industries

© 2006 Oracle Corporation – Proprietary and Confidential How Is The Competition Doing... Mergers, Acquisitions, & Divestitures Procuri acquired TrueSource Inc SAP acquired Frictionless Commerce D&B acquired OpenRatings iMany’s on-again-off-again restructuring Empotris acquired Mindflow, Entigma, Valuedge PerfectCommerce acquired the remains of CommerceOne VerticalNet acquired B2eMarkets ClickCommerce acquired eLance Service & Contractor Management Business Others… Will SAP Ever Catch Up? Next Release in 2010 Calls Frictionless- a “Quick Win” According to Forrester leaves holes: Contract Management Spend Analysis Sourcing Bid Optimization Supplier Enablement BPO, Software, SaaS, Hosting, Consulting, Prospecting & Bidding??? Would you bet your career on this company’s software?

© 2006 Oracle Corporation – Proprietary and Confidential What About Oracle?

© 2006 Oracle Corporation – Proprietary and Confidential Since 11i10 Was Launched Unanimous Praise From Forrester, Aberdeen, AMR, & Gartner eProcurement eSourcing Contracts “The Oracle supply management applications are now competitive enough to be short-listed in non-Oracle IT environments.” AMR Research

© 2006 Oracle Corporation – Proprietary and Confidential What Did Customers Think? 11i10 Drove Record Results 24% Growth Since 11i10… #’s Excludes Contracts! Record Setting Quarters #1 Marketshare in 05* * Oracle Analyst Relations Currently In Discussions with AMR re. ‘06

© 2006 Oracle Corporation – Proprietary and Confidential Agenda Market Overview & i10 Results Messaging Design Release 12 Primer, Messages, and Overview Summary

© 2006 Oracle Corporation – Proprietary and Confidential The CPO Asks “What’s New In R12?” How many floors will you need? Hundreds of new features Over 300 man-years of development effort New integrations to Payables, Projects, AME, iSurvey New UI’s New methods for tackling critical categories

© 2006 Oracle Corporation – Proprietary and Confidential Solution: Message Matrix The Message Matrix is a structure and methodology for developing clear, assimilable and durable key messages for products, suites... and releases. It exists as: A Positioning Statement 3 Key Messages And substantiating sub-messages

© 2006 Oracle Corporation – Proprietary and Confidential Positioning Statement Your Elevator Pitch A one-sentence existential statement for your offering that: Names it Categorizes it States its benefit – or says what it does Template: “Product Name is the product category that delivers product benefit” Example: “Oracle Advanced Procurement is the integrated suite that dramatically cuts all supply management costs.”

© 2006 Oracle Corporation – Proprietary and Confidential Key Messages Supports for the Positioning Statement Three benefit statements (no features) that support your positioning statement’s claim Key Message Template: “Receive this benefit” Key Message Example: Enforce Policy Compliance Key messages are the three “value buckets” into which you will place all of the value-propositions of your offering. No matter how many value props and features you have, they can and should be divided into three buckets—no more, no less Sub messages substantiate your key messages at ‘next level down’, This is the right place for features.

© 2006 Oracle Corporation – Proprietary and Confidential Product Key Message Design Goals Simple Salesperson can say them at 3am after 3 beers Stable Should not change with each release New releases get their own “delta” messages Specific Distinct from your other product families, individual products, and (when appropriate) competitors

© 2006 Oracle Corporation – Proprietary and Confidential Why Three? Three seems to be a hard-wired natural number Natural Digestible Leaves room on the ‘mental truck’ Examples Larry, Moe, and Curly hazy, hot, and humid blood, sweat, and tears tic, tac, toe executive, judicial, and legislative gold, silver, bronze win, place, show over paid, over sexed, and over here planes, trains and automobiles see no evil, hear no evil, speak no evil

© 2006 Oracle Corporation – Proprietary and Confidential Equal Weight RightWrong Messages at the same level should have similar “heft” and value

© 2006 Oracle Corporation – Proprietary and Confidential Structure of Release Messages Release Positioning Does not replace family or product messaging Says what is different about this version of this product or family Condenses 1486 TOI slides and 17lbs of documentation Takes the form of ‘goodness’ tagline The BLANK release, e.g., The Compliance Release, The Global Release You generally don’t know what it is, but you’re pretty sure you want one. Self-Defending Networks Professional Grade Trail Rated Key messages are required to substantiate (and define) goodness 3 is still the number The ‘next level down’ in the hierarchy need not be constrained to 3 This creates a stable home in which any number of features can live.

© 2006 Oracle Corporation – Proprietary and Confidential Analyst Relations Key Message 1 Places Where Messaging & Positioning Live Consistency and Repetition Are Key Key Message2 Key Message 3 Release Positioning Customer Presentations Online Public Relations

© 2006 Oracle Corporation – Proprietary and Confidential Agenda Market Overview & i10 Results Messaging Design Release 12 Primer, Messages, and Overview Summary

© 2006 Oracle Corporation – Proprietary and Confidential Oracle Procurement Circa 1996 Focus On Transaction Processing Automation Receive & Reconcile Create & Route PO Pay Accrue/Relieve Tax Encumbrance

© 2006 Oracle Corporation – Proprietary and Confidential Oracle Procurement Suite in 2006 Improving All Aspects Of Supply Management Content Management Receive & Reconcile Approval Policies Review / Approve Create & Route PO Pay Supplier Matching Rules Accrue/Relieve Tax Encumbrance RequisitionAnalyze Spend & Performance Award Optimization SourceContract Supplier Enablement Lifecycle Management Collaboration

© 2006 Oracle Corporation – Proprietary and Confidential A Decade Of Procurement Innovation What’s Wrong With This Picture? 2006 eProcurement Sourcing Supplier Enablement Contract Management eInvoicingAnalytics Spend Data Management Employees & Business Managers Suppliers & IT Departments Accounts Payable Sourcing Managers & Budget Holders Data Analysts & Category Managers Legal and Contracts Managers Data Analysts & Project Managers Niche Vendors Drove Innovation “At The Edges”, Neglecting the Needs Of Procurement Professionals- especially with respect to managing their daily work-loads. HR & IT Services Procurement

© 2006 Oracle Corporation – Proprietary and Confidential What’s Wrong With This Picture?

© 2006 Oracle Corporation – Proprietary and Confidential What’s Wrong With This Picture? (If You’re Trying to Sell Licenses?) Vendor Tool Examples: Addeco- WorkCard BeeLine.com- Modis Professional Group Directsource- Manpower Associates

© 2006 Oracle Corporation – Proprietary and Confidential Services Procurement Must Transcend Contingent Labor To Become Viable Service spend averages $1.8B for the typical Fortune 1000 company (11% of revenue or 31% of spend) This means tackling the hardest problems, including those that transcend arbitrary product or department boundaries

© 2006 Oracle Corporation – Proprietary and Confidential Where is the focus today? Source: September, 2006 Pressures for Procurement Technology Adoption

© 2006 Oracle Corporation – Proprietary and Confidential Where is the focus going to be? Solution Area% Selected Contract compliance21% Supplier performance management21% E-Sourcing18% Invoice reconciliation & payment applications/services/network16% Travel & entertainment expense management15% Catalog management tools/services14% Contract repository/authoring solution14% Extending Procurement Solutions – Planned Investment over Next Months Source: September, 2006

© 2006 Oracle Corporation – Proprietary and Confidential Advanced Procurement R12 The Procurement Professional’s Release Unified work-center for all procurement responsibilities Improved support for complex goods-and- services Expanded supplier management & enablement

© 2006 Oracle Corporation – Proprietary and Confidential Advanced Procurement R12 The Procurement Professional’s Release Unified work-center for all procurement responsibilities Improved support for complex goods-and- services Expanded supplier management & enablement Professional Buyer’s Workcenter Unified Catalog Two way Word Synchronization

© 2006 Oracle Corporation – Proprietary and Confidential Professional Buyer’s Work Center Command and control for the procurement professional Multi-Org Access Reduced pop-ups and duplicate screens Re-designed and streamlined entire workflows Reduced the number of steps to complete key tasks Improved overall look & feel and visual style Increased personalization capabilities

© 2006 Oracle Corporation – Proprietary and Confidential Unified Supplier Catalog A Single Catalog for all Procurement Uses Unified Catalog Approve iSP Supplier Sourcing Professional Award PBWC Buyer Bulkload / Online author iP Admin Catalog Admin PO Buyer iP Requester External Supplier Sites

© 2006 Oracle Corporation – Proprietary and Confidential Microsoft Word Synchronization Maintain structured contracts with Word Create Contract Apply Template Download in.rtf format Modify Offline Upload as attachment CU1 Create Contract Apply Template Download in.rtf or MS Word.xml format Modify Offline Upload as attachment or synchronize Release 12.0 New in Release 12.0

© 2006 Oracle Corporation – Proprietary and Confidential Advanced Procurement R12 The Procurement Professional’s Release Unified work-center for all procurement responsibilities Improved support for complex goods-and- services Expanded supplier management & enablement Complex Requisition Approvals Complex Sourcing Awards Complex Work Procurement Requestor Driven Procurement

© 2006 Oracle Corporation – Proprietary and Confidential What’s New in Approvals? Parallel Approvals Several approvers can be simultaneously notified for a given requisition, thus speeding up the requisition approval process Support for Viewers Allows flexibility in keeping a person/role informed of business purchases and decisions, without requiring a response Position Hierarchy Support Allows customers to define approval routing structures that remain stable even if individual employees leave their organization or transfer within it Graphical Approval Path UI Display Provides preparers and approvers a simple and intuitive graphical view of the approval chain and requisition status for a given requisition

© 2006 Oracle Corporation – Proprietary and Confidential Advanced Approvals Enhancements  The Approval Graphical View shows the following: ― Jon Alba has approved the requisition as indicated by the green checkmark icon ― The requisition is currently pending approvals from the Facilities Management Group and Jessie Bauer as indicated by the clock icon

© 2006 Oracle Corporation – Proprietary and Confidential Procurement for Complex Services Define Progress Payment Schedule Capture Progress Payment Schedule Flexible Progress Payments - Rate, Lumpsum & Milestone Pay Items Pay Item Owner Project Details, Attachments

© 2006 Oracle Corporation – Proprietary and Confidential Team Scoring of Requirements Each Team Member scores each response Each Team Member scores the assigned Section Oracle Sourcing calculates average of individual score sheets to determine Section score Sum of Team scores determines overall response score (as input to Optimization) Quality Control Team Technical Team Technical Capabilities (40% weight) Commercial Team Price (40% weight) Past Performance (20% weight) Quote 988 John = 90 Mary = 85 Sue = 80 Sue = 75 Doug = 80 Tina = 85 Alan = 90 Mark = 80 Technical Capabilities = 34 Price = 32 Past Performance = 17 TOTAL SCORE FOR QUOTE: 83

© 2006 Oracle Corporation – Proprietary and Confidential Advanced Procurement R12 The Procurement Professional’s Release Unified work-center for all procurement responsibilities Improved support for complex goods-and- services Expanded supplier management & enablement Supplier Catalog Authoring Supplier Scorecarding Supplier Registration

© 2006 Oracle Corporation – Proprietary and Confidential Supplier Request Process Reduce Overhead with Self-Service RegistrationSupplierSupplier Buyer Configurable Registration Form Review & Approval -Configurable approval flow (AME) -Approver has option to update details Upon approval, supplier record automatically created Supplier Self- Service Registration Supplier Requests    

© 2006 Oracle Corporation – Proprietary and Confidential Supplier Management User-Interface Streamlined supplier profile management Create supplier Search, or drill down to supplier details To Do List for requests

© 2006 Oracle Corporation – Proprietary and Confidential Supplier Catalog Management Suppliers can upload and create on-line catalogs Supplier edits blanket agreement to add items Difference summaries to buyer Buyers only need to approve the uploaded or modified catalog

© 2006 Oracle Corporation – Proprietary and Confidential System assess changes… Tolerances for auto-approval Percentage Absolute Determine if requester should review Quantity, Promise Date, Price Route up approval hierarchy Based on user authorization limits Supplier Change Orders New capabilities for process automation + - %,x Supplier can create single change request across multiple POs

© 2006 Oracle Corporation – Proprietary and Confidential Supplier Management KPIs Spend Analysis Trend Supplier Scorecard Self-service supplier performance management

© 2006 Oracle Corporation – Proprietary and Confidential Agenda Market Overview & i10 Results Messaging Design Release 12 Primer, Messages, and Overview Summary

© 2006 Oracle Corporation – Proprietary and Confidential New in 11i.10…Base Differentiators… Self-service enterprise requisitioning from suppliers or internal stock Integrated asset and production planning Supplier Self-Service Flexible invoice matching including match to receipt Automatic invoice and debit memo generation Project- and budgetary- based purchasing Multi-attribute scoring for reverse auctions and RFQs Packaged spend, supplier, and commodity intelligence Advanced pricing capabilities Transparent Punchout Global Agreements New in R12… Services procurement – contingent labor & bus services, negotiation through payment Procurement contracts – global T&Cs standards, negotiation, doc & change mgmt, compliance Formula-based pricing & tiered discounts (Advanced Pricing) Retroactive pricing including automated invoice adjustments Negotiate with subjective scoring and what-if analyses Automatic bid scoring and award (Sourcing Optimization) Shared services procurement Requisition “SmartForms” LPN & lot/serial receiving Supplier managed banking XML publisher for.pdf printing Evolution of Oracle Advanced Procurement Release 12, The Procurement Professional’s Release Professional Buyer’s Workcenter 2-Way Word Integration Unified Catalog Architecture Shared Services Support Requestor Directed Procurement Prospective Supplier Registration using iSurvey Supplier Catalog Authoring Tolerance Based Order Change Auto-approval Supplier Scorecarding Prospective Supplier Registration Advanced Pricing Integration Team Scoring of Sourcing Requirements Parallel Approvals Position Hierarchy Approvals Complex Work Procurement eTax Integration

© 2006 Oracle Corporation – Proprietary and Confidential Oracle Advanced Procurement 12.0 The Procurement Professional’s Release Unified work-center for all procurement responsibilities Improved support for complex goods and services Expanded supplier management and enablement

© 2006 Oracle Corporation – Proprietary and Confidential If You Remember Nothing Else… 11i10 was and is a strong release and with strong up- sell opportunities R12 further strengthens our capabilities Over 3 man-centuries of development work invested 100’s of new features Aimed squarely at the Procurement professional Improvements in core transaction processing as well as strategic competitive functionality