2. 김 훈 Director E-business suite Business Development Oracle Korea hoon.kim@oracle.com

3. E-Business for Next Generation 1. Big Opportunities, Big Challenges 2. The Oracle Impact Story 3. Integration Issue

4. 1.Big Opportunities, Big Challenges

5. eBusiness 기회들 Retain Customers Increase Efficiency Expand Markets 비즈니스의 목적은 변하지 않는다 그러나 비즈니스는 변해야만 한다

6. Administrative Processes Self-Service Internal Focus External Focus (Customers,Suppliers) Transactions Business Intelligence Local, RegionalGlobal eBusiness 를 하기 위해서는..

7. 점진적이 아닌 혁신적 Solutions Value Current NextGen Growth Current NextGen Costs Current NextGen Retain Customers Expand Markets Increase Efficiency

8. 기회와 도전들 Increase Efficiency Automate the supply chain Improve buying Improve operation cost Create a self-service environment Enhance financial management Improve selling processes Expand Markets Reach global markets Create / manage multiple channels to market Create new revenue streams Collaborate new product development Retain Customers Know my customers Improve customer care Create 1-to-1 relationships Develop loyalty programs Improve promotion effectiveness Knowledge exchange

9. 인터넷 시대에서의 비지니스 Enabled by … Internet-Architected Applications Enhanced Services Channel-Independent Customer Interaction Zero-Touch Automation Data and Workflow Integration Strategic Imperatives: Know and Empower your Customers Deliver High Value on Demand Enable Self Service Claim your Share of e-Commerce Flow Exploit the Internet, Don’t just Accommodate It!

10. E-Business for Next Generation 공급업체공급업체 고객고객 인사관리 재무관리 R & D 조달관리 SCM CRM ERP SEM Enterprise e -business Buy Sell & Service Add Value Supply Chain ERP/CRM Integration Demand Chain Business Intelligence Market Place 공급자 와 구매 업무 프 로세스를 통합하여 재 고절감 및 구매 효율성 극대화 기업 내부 프로세스 혁 신을 통하여 업무효율 화 및 운영 코스트 절감 1:1 마케팅 전략으로 고객과 지속적인 관계를 구축하고 서 비스 차별화를 통한 경쟁우위

11. CustomerService Call Center Direct Sales Web Store Indirect Sales Channel EnterpriseApplications Self Service Applications BusinessIntelligenceApplications SuppliersSuppliers ServiceProvidersServiceProviders 새로운 “Rule” 의 적용 30% Cost Reduction in Customer Interaction withIncreased Sales Effectiveness and Customer Satisfaction 30% Reduction in Operating Costs withIncreasedEfficiencyandProduct/ServiceQuality30% Reduction in Supply Costs withIncreased Efficiency and Lower Inventory Customer-sideInternalSupply-Side

12. 2.The Oracle Impact Story Our E-Business Transformation

13. The Headlines  Oracle Saved $1Billion !!  $1 Billion = 10% of Revenue  Operating Margin up 43% - Grew to 30% from 22%.  Set new target to $2 Billion

14. * All financial figures are annualized to reflect most recent four quarters as of Oracle’s Fiscal Year end 2000. Oracle Corporation Profile  2nd Largest Software Company in the World  Founded 1977; Public 1986 at $50 Million Revenue  140+ Countries; 60+ Subsidiaries  Over 41,000 Employees  51% of Total Revenue Generated Outside US  $10.1B Annual Revenue; 15% Revenue Growth

15. Oracle Corporation Two Software Businesses Internet Platform Most scalable database offering the lowest cost of ownership with Internet computing E-Business Suite A comprehensive, integrated e-business suite of ERP/Supply Chain and CRM applications #1#1 #1#1 #2#2 #2#2

16. FY to FY Revenue vs. Operating Expenses $10,000 9,000 8,000 7,000 6,000 5,000 4,000 FY 97FY 98FY 99FY 00 $ Millions Operating Expenses Revenue $ 1Billion

17. Quarterly Revenue per Employee Q1 40 50 60 70 80 90 ($ Thousands) Q2Q4Q3 $45 $54 $58 $81 FY 2000 $54 $63 Q1Q2 FY 2001

18. Q1Q2Q3Q4Q1Q2Q3Q4Q1 Year-to-Year Change in Operating Margin 16.00 12.00 8.00 4.00 0.00 Fiscal Year 1999Fiscal Year 2000 0.1 1.7 1.4 2.3 1.5 6.2 11.8 13.8 % Change in Operating Margin 11.7 Oracle Started the E-Business Transformation During Q1 FY 2000 10.8 Q2

19. Oracle Market Capitalization FY94FY95FY96FY97FY98FY99FY00 $250 225 200 175 150 125 100 75 50 25 0 $201 B Mkt Cap for FY’00 $201 B Mkt Cap for FY’00 ($ Billions) Note: $221B as of 10/1/2000

20. Agenda  What Did Oracle Do?  How Did We Do It?  What’s Next for Oracle?  What’s Next for You?

21. Agenda  What Did Oracle Do?  How Did We Do It?  What’s Next for Oracle?  What’s Next for You?

22. Oracle’s Business Model Technology Process Organization Operations Products & Services Strategic Objectives Vision

23. What Was Effected? Technology Process Organization Operations Products & Services Strategic Objectives Vision

24. Overriding Transition Strategies Transactions Business Intelligence AdministrativeSelf-Service Internal Focus Customers, Suppliers LocalGlobalLocalGlobal Internal Focus Collaboration AdministrativeSelf-Service Transactions Business Intelligence

25. What is the IMPACT of $1Billion? CustomerManagement$550M Supply Chain/ Procurement$150M Technology $200M EnterpriseManagement$100M

26. Customer Management CustomerManagement$550M Supply Chain/ Procurement $150M Technology $200M Enterprise Management $100M

27. Oracle’s Customer Enablers  Self Service  Business Simplification  Single, Integrated, Web-enabled Global Customer Systems Results… Streamlined Sales Operations Simplified Sales Practices (Pricing, Discounts etc…) Shortened, Less Complex Sales Cycle Opened New Channels Improved Marketing Effectiveness Improved Support / Responsiveness Better Information Gathering & Use

28. Customer Self-Service Result: Improved Customer Satisfaction & Loyalty at Lower Cost Sales Marketing Service

29. 100% Integrated Solution Worldwide Web Call center Customer Field sales Rep Finance SupplyChain Customer Information Database Data Warehouse Data Mining Logistics MFG H.R. Marketing CRM Applications Sale Service Business Intelligence –Marketing Intelligence –Sales Intelligence –Service Intelligence CRM Foundation –Interaction History –Territory Management –Work Flow Management Oracle is becoming faster and more adept at meeting changing customer demands and penetrating new markets - without software complexity standing in the way ERP

30. Quota/Comp efficiencies Sales Person Productivity Orders via web Cost of entering order Forecast efficiencies +10-20%$100m/qtr-80% 1 hr/mo 1 wk/year $2m/qtr 12 hr/mo 12 wk Customer Management - Sales

31. Issues Resolved Online (without human intervention) Issues resolved 1st call Average calls to resolve Cost of resolving 35%70%<1$5 20%5$300 Customer Management - Service / Support

32. Direct mail v. Email Response rates On-site v. Web-seminars Response rates $0.0120%$21000’s Customer Management - Marketing $3.002%$1000100’s

33. Technology Customer Management $550M Supply Chain/ Procurement $150M Technology $200M Enterprise Management $100M

34. Oracle’s Technology Enablers  Globalization / Consolidation  Internet Technologies  Single, Integrated Software Infrastructure Results… Centralized, professionally managed information Reduced Desktop Maintenance Deploy and Maintain at a Lower Cost Accessibility, Availability, Scalability, Security Foundation for E-Business Transformation

35. Consolidated Data Centers, Data and Applications Multiple Data Centers Global Data Center WWW or WAN Fragmented Data Diverse Applications Global Applications Global Data

36. Consolidated Data Allows...  Fewer Computers  Less Software  Less people to manage it  Better, faster information at lower cost 100’s of Small Databases Single, Integrated Database

37. Global (58 Countries) Colorado (w/ backup in California) By End of Year: Example - Data Center Consolidation Currently: EMEA (31 Countries) Asia Pacific (14 Countries) Americas (13 Countries) IrelandSingaporeCalifornia

38. Email databases Forecasting systems ERP systems Customer websites Employee databases Customer databases Support databases 111245110083 62 62721202760 Example - Applications and Databases

39. Globalization: E-Mail Example Mid-1997 End-1998 End-1999 July-2000 Server Count DB Instances EmployeesMailkeepers9712031,00060378041,00030258043,0003024>4500013 The transition to Internet Messaging saves more than $13 Million per year.

40. Global I.T. Expense Reduction I.T. Expense People $340M <800 $340M <800 $400M 1000 $400M 1000 $500M 1200 $500M 1200 $600M 1500 $600M 1500 $260M reduction in operating expense over 2 years. May ‘99 ‘01 May ‘99 ‘01 May ‘00 Dec. ‘00 May

41. Desktop Simplification Applications Consolidation IT Operating Costs Technology Total = $200M -$60M-40M-$100M

42. Schedule and Time to Benefits 45 40 35 30 25 20 15 10 5 0 Q1Q2Q3Q4 FY99 FY00 E-Business Initiatives Implemented in FY00 $45M $186M $354M $415M Operating Margin % Data Center/ eMail Consolidatio n Self Service Purchasing/ Benefits/ Expenses Data Center/ eMail Consolidatio n Self Service Purchasing/ Benefits/ Expenses Desktop Support Consolidated Procurement/ Applications Web-Based Training Desktop Support Consolidated Procurement/ Applications Web-Based Training Online Travel Booking Consolidated Pricing Compensatio n Tracking Online Travel Booking Consolidated Pricing Compensatio n Tracking Self Service Support Web Orders Self Service Support Web Orders

43. Agenda  What Did Oracle Do?  How Did We Do It?  What’s Next for Oracle?  What’s Next for You?

44. The Keys to Success... Vision Technology Simplification

45.  Global network: – Use the Internet to connect everyone  Global database: – Integrate the information in one place  Global applications: – Simplify how systems work together  Global unification: – Organize and manage globally The Bottom Line

46. Again, Overriding Transition Strategies Transactions Business Intelligence AdministrativeSelf-Service Internal Focus Customers, Suppliers LocalGlobalLocalGlobal Internal Focus Collaboration AdministrativeSelf-Service Transactions Business Intelligence

47. Lessons Learned  This will not work without Top management commitment and active involvement – Hardest part: Management change  Consolidation/Globalization will not work without Simplifying your business  Set a practical e-business vision – Don’t spend months on strategy - Focus on Speed – Focus on Quick Hits at First – Create an implementation plan – Ensure measurable benefits with each step

48. Business Impact We Prioritized & Selected Quick Wins Ease of Implementation Low (Hard)High (Easy) High Low Employee details maintenance Employee details maintenance Online sales tracking Online sales tracking Online travel booking Online travel booking Internet Procurement Internet Procurement Customer self-service Customer self-service Benefits & expenses processing Benefits & expenses processing Centralize technology Centralize technology Web-based training Web-based training

51. Agenda  What Did Oracle Do?  How Did We Do It?  What’s Next for Oracle?  What’s Next for You?

52. How Is Oracle Going to Achieve $2 Billion in Savings?

53. Oracle’s 2 Billion Dollar Savings Target Technology Customer Proc/Value Enterprise TOTAL Technology Customer Proc/Value Enterprise TOTAL $ 200 550 150 100 $1,000 $ 250 1,450 200 100 $2,000 New, Cumulative Goal (Millions) Previous Goal (Millions)

54. Continue to Do What We’re Doing... CustomerService Call Center Direct Sales Web Store Indirect Sales Channel EnterpriseApplications Self Service Applications BusinessIntelligenceApplications SuppliersSuppliers ServiceProvidersServiceProviders Customer Management Enterprise Management Procurement/ Supply Chain

55. Focus on Increasing Revenues While Controlling Cost of Sales CustomerService Call Center Direct Sales Web Store Indirect Sales Channel EnterpriseApplications Self Service Applications BusinessIntelligenceApplications SuppliersSuppliers ServiceProvidersServiceProviders Customer Management Enterprise Management Procurement/ Supply Chain

56. Agenda  What Did Oracle Do?  How Did We Do It?  What’s Next for Oracle?  What’s Next for You?

57. Discussion  Do You Have the Same Opportunities?  What is Your Industry Doing?  New Opportunities Not Discussed Here?