Celebrating the Past, LOOKING to the FUTURE Oracle Celebrates 30 Years of History—And Looks to a 20 Future of Innovation and Customer Focus

may 2007 VOLU M E 1 2 N U M B E R 2

FEATURE STORY Celebrating the Past, LOOKING TO THE FUTURE Oracle celebrates 30 years of history—and looks to a 20 future of innovation and customer focus. In honor of the company’s anniversary, Profit spoke with a range of executives at Oracle’s top ranks to get a snapshot of the company’s culture and plans. —By Aaron Lazenby and Margaret Terry Lindquist; Cover: Bob Adler additional editing by Marta Bright

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Oracle Executive Perspectives Product Line Perspectives 22 Why Oracle will lead the next charge 36 Siebel and why transformation will be critical for every —Charles Phillips, President company —Ed Abbo, Senior Vice President, Applications Development 23 Why customers are king 38 Oracle E-Business Suite and what really matters for —Safra Catz, President global business success —Steve Miranda, Senior Vice President, Applications Oracle timeline Development, and Murali Subramanian, Vice President, Applications Development 26 Highlighting the most important moments in 39 JD Edwards EnterpriseOne and the importance of giving Oracle’s history, with commentary from the customers choices —Lenley Hensarling, Vice President and General Manager people who made it happen 40 JD Edwards World and Oracle’s commitment to its Oracle from the outside customers —John Schiff, Vice President and General Manager 34 Technology’s impact and the early days at Oracle 42 PeopleSoft and what best-in-class business processes —Joshua Greenbaum, Founder, Enterprise Applications Consulting really mean —Doris Wong, Vice President and General Manager 43 How Oracle Fusion will leverage the best of all product lines —Jesper Andersen, Senior Vice President of Applications Strategy

EDITOR’S NOTE LIFE SCIENCES 8 Looking Backward, Looking Forward 53 FOUND IN TRANSLATION —By Margaret Terry Lindquist Windber Research Institute transforms translational medicine with an innovative use of software from InforSense VIEWPOINT 10 UPGRADE-A-PALOOZA and Oracle Database 10g. —By Jeff Erickson —By John Matelski MANUFACTURING 57 STAMP OF APPROVAL 15 FORWARD THINKING Pitney Bowes is gaining real business intelligence benefits ON DEMAND COMPUTiNG from Oracle’s Siebel software. —By Carol Hildebrand

47 INTERNAL STRATEGY, OUTSOURCED IT strategic thinking Adoption of on-demand computing is spurring innova- 64 core competency tion and growth. Find out how three financial services Successful ideas share a few basic characteristics. Find companies are profiting. —By Ann C. Logue out why some ideas fade away—and others change the world. —By Kate Pavao

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications

editorial editor in chief Margaret Lindquist [email protected] senior managing editor Caroline Kvitka features editor Aaron Lazenby contributing editor Blair Campbell

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Copyright © 2007, Oracle. All rights reserved. No part of this publication may be reprinted or otherwise reproduced without permission from the editors. Oracle does not provide any warranty as to the accuracy of any information provided through Profit: The Executive’s Guide to Oracle Applications. PROFIT: The Executive’s guide to oracle applications IS PROVIDED ON AN “AS IS” BASIS. ORACLE EXPRESSLY DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED. IN NO EVENT SHALL ORACLE BE LIABLE FOR ANY DAMAGES OF ANY KIND ARISING FROM YOUR USE OF OR RELIANCE ON ANY INFORMATION PROVIDED HEREIN. This publication is for informational purposes only and may not be incorporated into a contract. Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other product and service names mentioned may be trademarks of their respective owners.

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LOOKING BACKWARD, LOOKING FORWARD

More than half of this issue of Profit is taken up with a celebration of Oracle’s 30 years of software success and a look ahead at our future. In the course of developing the 30th-anniversary story, I spent much more time talking to executives at my own company than to the customers and experts who agree to speak with us

for the usual Profit article. And although I’ll be happy to turn my attention back to customers for the next issue, it was an eye-opening experience to spend time talking with people such as Safra Catz, Charles Phillips, Jesper Andersen, and all the general managers of our applications product lines. What struck me as a common theme was their passion and their patience. They love the products, the company, and especially the customers that they come into contact with every day of their working lives (which seems to be the same as every day of their lives—it’s not a path for the faint of heart). This customer-centric view is summed up by John Schiff, vice president and general manager for Oracle’s JD Edwards World. He told me, “My joke with my wife is that when we drive down the road, when we go to the grocery store, I always say, ‘That’s my customer, and that’s my customer.’ We get to know how all of it works.” And it’s that sense of engagement and interest, and that sense that what we do is important, that it affects the lives of so many people—businesspeople and consumers—that I find so interesting, and even a little inspiring. It was a fitting coincidence that the 30th anniversary of the company coincided with the announcement of major upgrades to all of our applications product lines—proof, if it was needed, that, as Charles Phillips said during

his conversation with Profit, Oracle will always find a way to stay on the edge and lead the next charge. And the fascinating insights from Oracle executives weren’t the only great part about putting together this issue. My interview with industry analyst and former technology journalist Joshua Greenbaum, who covered Oracle in the early days, contains fascinating insights about the impact of technology and about Oracle’s past and future, and a great deal of work went into the Oracle timeline, which sheds multiple spotlights on the high moments in the company’s history, with quotes from the people who were there when it all happened—no, who adler

made it all happen! bob

Margaret Terry Lindquist [email protected]

m a y 2 0 0 7 < USER GROUP BY John Matelski

Upgrade-a-palooza multiple product line upgrades confirm Oracle’s commitment to customers.

CIOs are used to vaporware—it is, of stantial. When Applications Unlimited was first announced, course, an occupational hazard when many customers thought Oracle would throw in a little dealing with the folks who bring us soft- of this and a little of that and put out a lipstick upgrade. ware. But some vaporware provokes a Instead we’ve been given significant upgrades and function- queasier feeling than others. It’s one thing ality. What this offers me as a CIO is the gift of time and to wait for a tardy upgrade or software the freedom of choice. I am a JD Edwards EnterpriseOne release. It’s another thing altogether to wait 8.10 customer, and, looking at 8.12, I see some wonderful and wonder when the outcome affects the future of an entire enhanced reporting capabilities and some Oracle Fusion software platform. Middleware built into the application that might provide me All this brings me to Oracle’s announcement at its with some benefits. If we tie the functionality to business Applications Unlimited event, on January 31, of upgrades value, it’s a realistic option for us. It gives me the freedom to the multiple software platforms that will ultimately to watch the progress on Oracle Fusion, and perhaps wait merge into Oracle Fusion. When Oracle first announced a release or two to migrate, without having to worry about Applications Unlimited a year ago, it was terrific news to the being frog-marched over to the new platform or having to users of Oracle’s JD Edwards, Oracle’s PeopleSoft, Oracle’s survive with inadequate technology. Siebel, and Oracle E-Business Suite, who were wondering To be fair, Oracle is getting its share of benefits from about the future of their software. But while the original delivering on Applications Unlimited. They preserve a much announcement was great, it was still vaporware until we broader customer base to which they can deliver Oracle actually got a product. (I’m a JD Edwards customer who Fusion, since there’s a good chance that a fair chunk of the has gone through the tumult of the company’s acquisition “legacy” platform clients might pursue other vendors if the history, so I was a little wary, and I watched and waited.) wait for functionality were to last until Fusion appeared. Now, a year later, Oracle has honored its commitments There’s no question that Oracle wants to eventually move and met its timelines—and that says a lot about Oracle’s to a complete red-stack solution, which would be Oracle commitment to its customer base. Quite frankly, it’s allevi- Fusion. At some point, when the majority of customers ated a lot of the trepidation that I had, and it’s enhanced have migrated to the new platform, they are going to have the level of trust. There are always the cynics who look to pull the plug on these existing applications, as they obvi- at Applications Unlimited with suspicion—the skeptics’ ously can’t support them forever if they are experiencing a party line is that putting such an effort into Applications financial loss. But the bottom line here is that any software Unlimited means that Oracle is not sincere in its commit- company has to maintain customers in the short term while ment to Oracle Fusion and that the company is diluting implementing the long-term vision of its product, and to my development resources by committing to both initiatives. mind, Oracle is doing just that. By coming to the table with But most of the Oracle customers I’ve spoken with see Applications Unlimited, Oracle can say, “This no longer just this as a no-brainer—in order to keep customers happy sounds great. It’s here, and it is great.” And despite the short- and current on its platforms, Oracle had to do this. The term hit Oracle will take on development costs, it’ll pay off International Oracle User Council, consisting of the eight in customer loyalty. In the long run, that helps everybody. <> recognized umbrella groups, met the week before the Applications Unlimited product releases, and it’s clear that there’s a great deal of excitement in the global user commu- JOHN MATELSKI is chairman of the International Oracle User Council (IOUC) and nity. (The JD Edwards World community in particular is in immediate past president and member of the board of directors of the Quest demeer seventh heaven—they’ve had a long wait.) International Users Group. He has been chief security officer and deputy CIO for

What’s even more satisfying is that the upgrades are sub- the City of Orlando, Florida, for the past nine years. charity

1 0 M A y 2 0 0 7 FORWARDTHINKING n e ws an d i nf o r ma t i o n f r o m a r o u n d t h e g l o b e

By Bobbie Hartman, Monica Mehta, Christopher Null, Kate Pavao, Fred Sandsmark, and Alison Weiss Cool Coats Coddle iPods and Their Owners

Apple’s iPod may be a must-have twenty-first-century fashion four versions: BlackCoat Sport (US$299) is a hybrid sport coat/ accessory, but it can be a hassle to carry around. The number overcoat made of NexTec Flathead nylon with Epic waterproof- and variety of iPod cases and holders on the ing. BlackCoat Work Premiere Edition (US$275) is made of market attest to this. the same fabric, but its style is somewhere between a sport Koyono, a Cincinnati, Ohio–based maker coat and a jean jacket. BlackCoat Work (US$245) of apparel and accessories, thought has the same design as the Premiere Edition but differently about the problem. It is made of lightweight stretch cotton with Nano designed a coat with a spe- water-repellent technology. And the BlackCoat cial pocket for the iPod. Surf Edition (US$199) is a casual short- It then used washable sleeved stretch cotton shirt. “smart fabric” technol- Koyono Chief Experience Officer ogy from London’s Eleksen Jim Haviland says that Koyono’s Group to build iPod controls popularity among Apple employees into the lapel of the jacket, so probably helped the coats earn adjusting the volume, select- the coveted “Built for iPod” ing a track, and other operations can designation. “We have a o

n happen without fishing the iPod out of lot of fans in Cupertino,” a pocket. Haviland says. y Koyo s The result is Koyono’s “Built for For more information, visit ourte

c iPod” BlackCoat. The company makes www.koyono.com.

Book Review Along the way you find out what Warren Buffett and Tiger Angle of Approach Woods have in common (it has more to do with their attitudes Deals on the Green, by David Rynecki than their swings) and why GE’s Jack Welch is the patron saint David Rynecki, a former financial journalist, realized that he of business and golf. There are even tips for getting into Augusta got the best interviews from business leaders when he met National Golf Club and other great golf courses. The book’s most them at the golf course. “Golf became this great way to con- memorable moments may be Rynecki’s personal revelations, nect with people,” says Rynecki, formerly a senior writer such as how he spent an afternoon golfing with Merrill for Fortune magazine. “For five or six hours Lynch’s Chairman and CEO Stan O’Neal—and learned you’re out there getting to know them. You get a to see past O’Neal’s public “bean counter” persona to sense of who they are.” find a truly inspirational leader. He compiled his most satisfying golf adven- And here’s one lesson that didn’t make it into the tures into a book: Deals on the Green: Lessons on book but that Profit readers may want to take to Business and Golf from America’s Top Executives. heart: “If a person is a really good golfer, they’re Each chapter includes a lesson that’s applicable to probably not a very good businessperson,” Rynecki golf and business, such as “Don’t listen to the gal- says, “because they’re not spending enough time lery” or “Look for opportunities others can’t see.” in the office.”

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 1 5 FORWARDTHINKING

New Marketplace Getaway Places for Developers Six Magnificent Want to be able to play Tetris on your new cell phone? Or use your PDA to Beaches display train schedules? Then check Banzai Pipeline at out www.ipswap.com, a new online Ehukai Beach Park marketplace that connects software Hawaii, U.S. developers with buyers who want to This beach on Oahu is arguably the best place in the world for big-wave create new enhancements for their dig- surfing. Gnarly, brah. ital devices (PDAs, BlackBerrys, digital www.aloha.com/~lifeguards/ music players, GPS systems, etc.). ehukai.html “The notion behind IPswap is to provide a market for the participation age,” explains Hart Rossman, IPswap techni- Bora Bora Island cal advisor. The Pleasanton, California–based company developed the site to offer a Tahiti, French Polynesia Overwater glass-floored bungalows— new approach to the way that software is created and sold, particularly for the tools need we say more? that consumers want that involve only small bits of code. www.boraboraisland.com Once the two parties agree on payment and royalty terms, they can sell their product as business partners on IPswap. The site also lets members share and collabo- Heron Island rate on ideas and gauge interest in proposed products. “Odds are,” says Rossman, “if Australia the idea is exciting to me, there’s probably a broader market out there.” If you’ve got Some of the best marine life in the world can be spotted at this stop an idea you’d like to buy or sell, go to www.ipswap.com to get started. ENRIQUE FAJARDO along the Great Barrier Reef, making it a top destination for snorkelers and scuba divers. www.heronisland.com

Home Brew Petit St. Vincent If you are passionate about whiskey and look- The Grenadines, Caribbean ing to take that love to a new level, the Ladybank This private island resort offers Company of Distillers Club is a new single-malt the true romantic getaway: Twenty- two secluded cottages with no whiskey venture that could be your answer. Located phones or TV. in Scotland, Ladybank is the first members-only www.psvresort.com distillery club. Members pay a one-time fee to take part in the entire whiskey-making process. Tenerife Island The club allows members to be fully involved in Canary Islands the development process—from helping to determine With its superb dining and nightlife, the emphasis along the beaches of optimal production methods to eventually sampling this island is on sophisticated fun. whiskies from different casks as they mature over the years. Production is expected to www.etenerife.com reach approximately 35,000 liters annually, compared with the more common capacity of one million liters for large distilleries. Ladybank emphasizes collaboration among Veligandu Island members with a members-only internal blog and two public blogs. Maldives Members pay US$4,950 and will receive an allocation of 300 bottles of spirits over Stunningly beautiful coral reefs and year-round sunshine await you on a 50-year membership period—the equivalent of six bottles per year. And a Ladybank this isolated island paradise off the whiskey allocation can be passed down to heirs, as well. Ladybank plans to begin dis- coast of Sri Lanka.

tillation in late 2007. For more information, visit www.whisky.co.uk. MICKWIGGINS www.veliganduisland.com

1 6 m a y 2 0 0 7

Getaway Places Taming the Ferocious Six Magnificent tech PowerPoint Beaches Events PowerPoint has revolutionized the sales pitch, with video, sound bites, and eye-catching Gartner IT Security Summit graphics. But these show-stopping effects June 4–6, Washington DC have created huge files that clog e-mails www.gartner.com and take forever to download. Security remains a top concern for senior Ontra Presentations, a company that management, and with good reason: develops presentation management security issues cut across every aspect of solutions, recently launched PPTshare your business. This educational summit File Compressor, a desktop application will help you build on-target strategies, develop the case for IT security invest- that compresses PowerPoint files, making them ments, and implement successful solu- easier to e-mail, download, and edit. The company says that its product can reduce tions to protect your organization. Topics the size of PowerPoint files by up to 95 percent without sacrificing image quality. include critical infrastructure protection, While reducing the size of digital files certainly helps, it solves only part of the prob- enterprise risk management, and security lem, according to CEO James Ontra. “Organizations have huge amounts of knowledge software and strategies. stored in PowerPoint files and other digital assets,” he explains. “Yet they have no means of keeping track of the most up-to-date information and getting it out to the ODTUG Kaleidoscope 2007 people who need it the most: their sales force.” June 18–21, Daytona Beach, Florida Ontra Presentations has got that covered as well, with products that ensure www.odtugkaleidoscope.com employees have the most-accurate presentation information, combine presentation More than just a showcase of new tech- data directly with customer data, and manage a library of hundreds of video, graphic, nologies, the annual conference of the

WENDYWAHMAN and animation files. For more information, visit www.ontrapresentations.com. Oracle Development Tools User Group (ODTUG) offers developers and DBAs expert insight into how to use these TV on your Laptop, technologies to enhance, expand, and empower older applications. Look for Anywhere in the World the latest information on service-oriented Internet television has come a long way in recent months (you can download architecture, development tools, data episodes of Lost for free, for example), but it warehousing, and development data- hasn’t gotten to the point where it can replace base administration. the good old boob tube. Now there’s good news for TV junkies: The Forrester’s Technology Leadership deceptively simple Slingbox Pro. Forum 2007 The idea is simple: Connect the Slingbox September 25–26, Carlsbad, California to your TV and you can www.forrester.com “Dynamic applications” is the theme of rebroadcast any station this year’s conference, which offers one- you get at home to your computer, no matter where you are. With the new on-one meetings with Forrester analysts, Slingbox Pro, you can control your TiVo, watch DVDs, and even stream high- in-depth knowledge from expert speakers, definition programming over the internet. And you don’t need to be a com- and winning strategies to add more visibil- puter expert to set it up. Sling Media offers extensive support to help out. The ity and collaboration to today’s business Slingbox Pro can handle up to four separate audio/video sources. processes, while adapting quickly and The Slingbox Pro retails for about $220. For more information, visit cost-effectively to marketplace changes. www.slingmedia.com. BASEBALL IMAGE BY RON SELLERS

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 1 7 FORWARDTHINKING

Oracle Update

PECO Chooses Oracle E-Business Suite million users in a wide range of different When IT staff at Perry Equipment industries, including communications, Corporation (PECO) sought new utilities, healthcare, manufacturing, and business applications, they really financial services. wanted one thing: “We wanted all company data in one central- day. “We Get Targeted Support Expertise with ized, integrated database,” says Brian trust that Oracle Advanced Customer Services Czajkowsky, PECO’s CIO and vice pres- integrated best business Oracle Advanced Customer Services, a ident of administration. “We wanted practices into their software,” Czajkowsky set of enhancements to Oracle Premier that single source of truth.” states, “and that’s another reason PECO Support, offers flexible support choices But this was no small task for family- selected Oracle as the cornerstone to that help customers align their technol- owned 70-year-old PECO, with 450 build our business processes on.” ogy strategy with business priorities, employees on three continents designing improve IT efficiency, and better manage and building high-quality engineered Oracle Updates Siebel cost risks and upgrades. Depending on filtration systems for the petroleum indus- Self-Service Components the level of support needed, there are try. Data integration and maintenance on Oracle has released Siebel five programs: PECO’s multiple, aging SyteLine and Sage Communications Billing Manager 5.1.1 ■ Oracle Priority Service provides front- enterprise resource planning installations and Siebel Billing Analytics 5.1.1, two of-the-line, prioritized assistance from had become onerous, so management key components of Oracle’s Siebel Self- support engineers, providing faster decreed that the new solution would Service. The two applications enable problem resolution and expert guidance work without customized code. online bill payment and presentment and from a priority service manager and low- PECO evaluated several vendors in detailed analysis of billing data, which ering IT risks and cost. detail, including SAP, Epicor, and Infor, can result in better customer service at ■ Oracle Advanced Support Assistance before selecting Oracle E-Business Suite; reduced cost; lower printing, postage, and provides improved management of the company is now in an aggressive payment processing expenses; accelerated Oracle systems through proactive assess- enterprisewide rollout. The headquarters collections; and better understanding of ments or knowledge transfers and in Mineral Wells, Texas, and a facility customer spending patterns. personalized assistance from a service in Queretaro, Mexico, will go live by Siebel Communications Billing delivery manager. September 1, 2007; deployment to the Manager can now link bills for multiple ■ Oracle Business Critical Assistance entire company should be complete by services within a single self-service provides the benefits of Oracle Advanced May 2008. experience and features improved scal- Support Assistance, plus additional proac- Oracle was chosen after a detailed ability, performance, and security. The tive advice and assistance from service study matched product features to PECO’s updated Billing Analytics application delivery engineers. special needs. PECO’s engineered-to-order now creates historical and trend reports ■ Oracle Solution Support Center product lines made powerful project man- that cross billing periods, with versioned provides the most comprehensive agement, product lifecycle management, hierarchy capabilities. Hierarchical access support by building on Oracle Business and quoting modules essential. Price, to billing data—as opposed to role-based Critical Assistance with a high-touch, return on investment (ROI) potential, and access—lets organizations assign data- designated team of senior Oracle service ease of implementation and use were in access permissions based on the structure delivery engineers. Oracle’s favor. A reputable, experienced of the business. And because snapshot ■ Oracle Assisted Services offers the implementer, Lucidity Consulting Group, versions are kept for each billing period, expertise of Oracle service delivery engi- of Dallas, Texas, eased concerns. Oracle’s historical data remains accurate as busi- neers through a variety of services, such

open source nature and Oracle E-Business ness structures change. as performance assessments and tuning, enson v le Suite’s ability to support PECO’s opera- Oracle’s Siebel Self-Service and eBill- disaster planning and recovery, and

tions without customization carried the ing solutions support more than 125 problem-avoidance HealthChecks. allison

1 8 m a y 2 0 0 7 >> PARTNER NEWS

Partner Innovations

Accenture on Health and provide increased visibility into the costs, including infrastructure. Oracle partner Accenture, a global man- service network. “Using Oracle Fusion Middleware, we agement consulting, technology services, Servigistics offers service parts man- quickly and easily migrated our exist- and outsourcing company that has agement, workforce management, and ing application to an SOA,” says Hari worked with Oracle to deliver Oracle- pricing solutions that work together on a Padmanabhan, deputy managing direc- based enterprise solutions since 1991, single data model to enable companies to tor, 3i Infotech. “The platform’s com- has created a new prototype solution transform their global service operations, prehensive SOA and business process for a fully integrated health information as well as real-time business intelligence management capabilities enabled us to system with critical collaboration with to monitor the entire service network. seamlessly integrate our industry-leading Oracle. The prototype introduces both “Integrating Servigistics Strategic PREMIA software with Oracle E-Business common language and data standards Service Management to the Oracle Suite and Siebel CRM to create a com- and integrates information across the E-Business Suite using Oracle Fusion prehensive insurance solution.” entire healthcare system at the national, Middleware enables companies to lever- regional, and provider levels. It enables a age available data to seamlessly plan, BTRG Joins the Fold single view of a patient’s medical informa- monitor, and optimize service opera- Newly appointed Oracle Certified tion, drawn from multiple databases, as tions, leading to improved service levels, Advantage Partner BTRG specializes in one combined electronic record. increased revenues, lower inventory and implementing Oracle’s PeopleSoft solu- Oracle collaborated with Accenture reduced costs,” says Servigistics founder tions for Fortune 500 firms, including to support the exchange of clinical data and CTO Mike Landry. Lockheed Martin and Partners Healthcare. among three separate geographic markets The company is creating government con- and to enable data analysis and report- Insuring the Future With 3i Infotech tracting and healthcare solutions around ing. Oracle products deployed in the 3i Infotech, a global provider of IT solu- business flows, including procure-to-pay, prototype include Oracle Healthcare tions and services and an Oracle partner, contracts-to-cash, and recruit-to-retain. Transaction Base, Oracle Business has integrated its PREMIA insurance busi- “We made the decision several years ago Intelligence, Oracle Database, Oracle ness solution to the Oracle E-Business to align ourselves with the way Oracle Application Server, and Oracle BPEL Suite and Oracle’s Siebel Customer conducts business to better serve our Process Manager. “This prototype repre- Relationship Management (Siebel CRM) customers. Traditional systems integra- sents a flexible, pragmatic approach to for analytics and customer-facing require- tors tend to focus on the transactions that facilitating data sharing among the wide ments using Oracle Fusion Middleware as drive ERP [enterprise resource planning]. variety of IT systems used by healthcare the integration technology. This integra- We focus on linking business processes organizations across the nation,” says tion will enable rapid and seamless inte- and enabling collaboration,” says Tony Brian Kelly, M.D., a partner in Accenture’s gration of 3i Infotech’s PREMIA. Funelli, managing director, BTRG. “We Health & Life Sciences practice. PREMIA is a robust, flexible, and offer industry expertise and solution scalable end-to-end insurance solution knowledge in our five vertical markets: Servigistics Fuses with offering self-service benefits particu- financial services, insurance, healthcare, Oracle E-Business Suite larly useful to those who plan a phased aerospace and defense, and retail.” To that Servigistics, a leading strategic service migration away from legacy solutions. end, BTRG offers a depth of technical and management solution provider and Oracle PREMIA, together with Oracle Fusion industry-specific knowledge. <> partner, has integrated its Strategic Service Middleware’s Oracle BPEL Process Management solutions with Oracle Manager and Oracle Business Activity >> Partner/Program Locator E-Business Suite using Oracle Fusion Monitoring, empowers the customer to FOR MORE INFORMATION, VISIT Middleware. This combined solution will migrate to a service-oriented architec- www.accenture.com enable companies across diverse indus- ture (SOA) platform in an incremental www.servigistics.com tries to significantly enhance the perfor- manner, bringing with it additional ben- www.3i-infotech.com www.btrgroup.com mance of after-sales service operations efits such as helping to reduce operating

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INNOVATIVE FROM THE START, ORACLE LOOKS TO THE FUTURE

By Aaron Lazenby and Margaret Terry Lindquist; additional editing by Marta Bright

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Inside 30 years 22 Q&A with Charles Phillips 23 Q&A with Safra Catz 26 1970s 28 1980s 30 1990s 32 2000s 34 Looking at Oracle from the outside 36 Oracle Applications general managers on the latest product releases The Oracle towers under construction; Oracle executives Safra Catz, Larry Ellison, and Charles Phillips; an Oracle tower; Austin data center; BMW ORACLE Racing; celebration of 20 years on the NASDAQ; the Oracle biplane flies over the Oracle campus 43 Jesper Andersen on Oracle Fusion

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INNOVATIVE FROM THE START, ORACLE LOOKS TO THE FUTURE s celebrating longevity a little dation of years of innovation, intimate unusual in an industry that seems knowledge of its customers’ challenges dedicated to the next hot new and successes, and the best technical I thing? Not when you’re a company and business minds in the world. In this that has shown both the ability to lever- story, we celebrate Oracle, its employ- age its immense size and strength to ees through the years, and the history of serve its customers as well as the capac- innovation that has been at the core of ity to make decisions that upend con- the company since its inception. We also ventional wisdom and take its products look toward the future, with an update and services in new directions. With the on Oracle Fusion and interviews with the agility of a much smaller company, Oracle general managers for all of Oracle’s major has proved throughout its history that applications product lines, discussing the it can build for the future on the foun- releases that were announced this year.

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 PHOTOGRAPHY: BOBADLER, THE FRANK PHOTO CURRY, GROUP

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 2 1 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Connecting to the Future An Interview with President Charles Phillips

Charles Phillips was a familiar face around Fusion in the relatively near future and Oracle long before he became the company’s five applications launches happening this president. At Morgan Stanley, Phillips was one spring, you must be getting a sense of of the first to recognize the critical role that how functionality is starting to converge. Oracle’s technology would play in global busi- PHILLIPS: I think the integration that we ness enterprises. Since joining the company are starting to deliver between existing and becoming president in 2004, he has products using Oracle Fusion Middleware taken on responsibility for global field opera- will add significant value for customers and tions and corporate strategy. He spoke with make good on our promise of delivering a Profit about the explosion of innovation in the virtual suite across all of our applications. product areas and how Oracle will surpass Customers expect us to take over the task expectations during the next 30 years. of integration, and we are just now starting PROFIT: Oracle has experienced great to deliver prepackaged business flows built success over the past 30 years—why do entirely on standards in a canonical model you think that is? that will simplify the integration process. PHILLIPS: Oracle is focused on simple Customers only have to integrate an appli- goals: innovation and results. We’re not afraid to make a cation into the platform once. Once they’ve tapped that dial change and not wedded to the way we did it last year. We’re in tone, they are integrated into all other applications that have a dynamic market, and that suits us well since our competitors been previously connected—a one-to-many model. can’t change as fast. PROFIT: A recent survey showed that although some cus- PROFIT: How would you describe Oracle’s culture? tomers are still confused about Oracle Fusion, those people PHILLIPS: It’s a meritocracy. People are impressed by results who do say that their companies “get” it are also most likely and respect performance. That’s healthy for any organization. It to say that they’re comfortable with the basic premise of attracts high performers and keeps great leaders. Oracle Fusion. What’s the most common question that you’re PROFIT: How would you characterize trends in IT spending, hearing about Oracle Fusion, and what’s your response? and how is Oracle adjusting to that climate? PHILLIPS: I get fewer questions on Oracle Fusion since the PHILLIPS: The economy is not getting stronger, that’s for sure. announcement of Applications Unlimited. People are comfort- But we are taking share. The environment could be healthier able with what they have. When Oracle Fusion is available, but with the wealth of products we have, we should continue they’ll review it, but there is less of a burning need to upgrade. to outgrow the industry. To the extent that they are still asking questions, they’re usually PROFIT: What’s the most exciting thing happening with about the upgrade process and how difficult it may be. But they products right now—first on the technology side? are much less concerned with the Oracle Fusion migration issue PHILLIPS: I’m excited that so many of our applications are since they have the option of staying on existing platforms. uptaking our Oracle Fusion Middleware products. We are PROFIT: How does Oracle respond to predictions that the just beginning to show the power of having an applications database is becoming a commodity? company inside a technology company. We are advancing man- PHILLIPS: The database is getting more complex and more ageability, performance, and security like no other company powerful. Only people who don’t have to manage data say it’s a can because of our unique business mix. I also think the secu- commodity. If that were true, there are plenty of free databases rity and content management products are compelling. Every out there and people would quickly move into the free house customer that I’ve told about Oracle Database Vault [an option instead of paying us rent. to Oracle Database 10g Release 2 Enterprise Edition] and PROFIT: Can you talk about Oracle’s approach to open Oracle Audit Vault [a standalone product] immediately leans source, and how it differs from the competition? forward and wants to know more. PHILLIPS: We’ll leverage open source where it makes sense.

PROFIT: And for the applications products? With Oracle We’ve been long-time supporters of open source products and BOBADLER Continued on page 24

2 2 m a y 2 0 0 7 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Connecting with Customers An Interview with President Safra Catz

Safra Catz’ devotion to Oracle and its custom- the time to understand their needs, we ers has been readily apparent during the years were able to develop for them a very since she joined the company. Although her special and revolutionary program that responsibilities at Oracle are broad, included is allows different government entities an executive sponsorship role that puts her in throughout the U.K. to acquire products daily contact with customers all over the world. from us and to benefit from our best Catz joined Oracle in 1999, has been president practices in streamlining and transform- since 2004, and has served as CFO since 2005. ing all these different groups. That’s one She spoke with Profit about Oracle’s relation- of the most unusual executive sponsor- ships with its customers and how companies ships, because it actually covers many, have to work with customers if they expect to many groups. I work personally with the succeed in a competitive environment. Department for Work and Pensions and PROFIT: Thirty years for a tech company the Foreign Office and a number of other is quite an accomplishment. Why do you groups that are using our technology to think Oracle has prospered through the transform their organizations. I get person- boom and bust? ally involved in their implementations and CATZ: Oracle never rests on its laurels—never. It is always I’m updated on the state of affairs. And to the extent that devel- looking forward and trying to build better products for custom- opment needs to participate in something, I watch to make ers. It never takes anything for granted and it keeps improving. sure that it’s going according to plan. PROFIT: Oracle has changed a lot in the past few years. How PROFIT: How often do you talk to any single customer? do you see Oracle’s current position within the technology CATZ: It all depends on what the customer needs and industry, both the way it’s perceived and how it compares to wants. It’s not me calling every week or anything like that. other software companies? It’s really the idea that I’m always available, checking in once CATZ: As the industry matures, and it’s become clear that cus- in a while, but available if they need something, whether tomers need better products, it has meant that customers have it’s looking into a support matter or making sure the right needed companies that can afford to invest wisely in R&D. Our resources are in place for them when they need something No. 1 mission is to invest in development and products. unusual or special. It’s entirely customer driven. They’re all PROFIT: What’s your philosophy about how a company like very busy themselves and it’s a matter of being available when Oracle needs to interact with its customers? they need help or guidance. CATZ: When people buy our products, they’re not buying PROFIT: How can executives train themselves to think this something that is disposable. It’s really a commitment to the way about their customers? future. Buying our products is the beginning, not the end, of CATZ: There’s an expectation that when you become a senior the relationship. A lot of companies look at their customers executive that you got there in part because you’re really lis- and say, “Once you pay me, the work is done.” The view we tening. It’s very, very important to listen to your customers. take is that once you purchase a product from us, our respon- They’re it. They’re doing you a favor by telling you what they sibility increases dramatically and it is really our job to make think and you can’t get to this position without listening to the you successful, because we can’t be successful unless that issues and engaging in creative problem solving, because that’s happens. Maybe it’s a cliché, but we shine in reflected glory what this is really about. only. Whatever it is that our customers need to be successful, PROFIT: Is there a flip side to this kind of relationship? What we’re going to try to make available to them. happens when the customer asks for something that doesn’t PROFIT: Can you tell us a little about a customer that you’re make sense for Oracle? working with now? CATZ: I think it’s very important that customers do share their CATZ: I am the executive sponsor for the U.K. government, issues—their concerns—but it’s also important to understand and because I’ve been very involved with them and have taken that sometimes being a good partner does mean saying no. Continued on page 25

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Continued from page 22 own quite a few ourselves. We see it as an important resource PHILLIPS: The results speak for themselves. Against all among many resources we will leverage to solve customer expectations and odds, the acquisitions have gone quite well. problems. You won’t see us going out and disparaging the open They’ve made us significantly more important to our customers source community the way Microsoft does or ignoring it the and feared by our competitors. I need another [US]$50 billion way SAP does. to spend. PROFIT: Oracle has changed a lot in the past few years, and PROFIT: You came to Oracle after a successful career on Wall you’ve had an opportunity to observe it from the outside Street, rather than as a technology guy. How has that affected and the inside. How do you see Oracle’s position within the the way you’ve done your job at Oracle? How do you think technology industry, both the way it’s perceived and how it you’ve changed since you started at Oracle? compares to other software companies? PHILLIPS: It’s hard to say how my background affected my PHILLIPS: Oracle always finds a way to stay on the edge and approach relative to others since I only have my perspective. lead the next charge. We are simply doing what we always do. But it felt very familiar given all my years in the military, which We have an addiction to innovation and is the one place where people get formal that lies at the heart of the company. “The database is get- leadership training and manage large orga- PROFIT: In 2003, Oracle started market- nizations at an early age. ing aggressively to small and medium ting more complex PROFIT: Speaking of success, you were businesses [SMBs]. What was the reason and more powerful. rejected 125 times before you got your behind this move, and what special first job on Wall Street. What kept you product and service offerings were Only people who don’t going? How do you think you finally created for SMBs? have to manage data got the offer you were looking for? PHILLIPS: We have more than 180,000 PHILLIPS: Well I only needed one small business customers, so I can’t say say [the database] is person to say yes. The rest were it’s a new idea. But now that we have irrelevant in my mind. <> products that are better packaged and a commodity.” more-appropriately priced for the SMB market, it makes sense to add more distribution and marketing to take advantage of the opportunity. Small companies like integrated suites with fewer moving parts. That would be us. PROFIT: What will Oracle’s role be in the growing on-demand and software-as-a-service markets? PHILLIPS: Oracle has been a key supporter of on- demand computing since 1999. Unlike many other software companies, we understand this growing market’s importance and believe that it’s now at an important inflection point in its development and direction. Oracle’s technology and applications products are very well positioned to influence and drive this growing market. Our success with on-demand products like Siebel CRM On Demand and Oracle E-Business Suite On Demand speak to our commitment and leadership in on-demand computing. PROFIT: What about the company’s acquisition strategy? After years of homegrown software and few acquisitions, Oracle has acquired 28 companies in the past three years. How is the integration process going, and what can we expect to see in the future?

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Continued from page 23 But what that really means is getting into the reasons behind a selves aren’t unreasonable, because they’re all businesspeople request, and understanding why the customer needs some par- and their expectations are set totally correctly. In fact, some- ticular thing. One of the most valuable pieces of information times I’m upset that there’s an issue I don’t know about and the we can give our customers is that their request is completely customer hasn’t called me. unique. And so it’s very likely that their request is going to end PROFIT: What kind of advice would you give to another up being very expensive for them to maintain, and though we executive who is dealing with a relationship that’s about are willing to help them build it, they might want to benefit to go sour, a customer that’s about to say, “Thanks but no from the experience of others. So we tell them that, honestly, thanks, I’m going to your competitor?” there are issues or processes in your organization that you may CATZ: The first thing that’s important is taking a step back, want to reconsider because others are doing the same basic because often there’s some dispute about 10 percent of the accounting and aren’t spending as much. Sometimes being a business, something perhaps not that important but it’s being good partner is being honest even when it’s not that pleasant. escalated because everybody got locked into positions that PROFIT: Obviously this degree of involvement at your level is are literally intractable. You have to step back and look at the a huge benefit to the customer. Can you relationship as a whole, because what you talk about what Oracle gains as well? “Once you purchase a often find is that there’s actually a lot of CATZ: Well, first of all, since our prod- good locked in there somewhere and it ucts are aimed at solving customer product from us, our got lost. Often having that initial goodwill problems, it’s very, very important to responsibility increas- and having experience in the relationship understand what those problems are. The and building trust over time on other more we know about what’s going on es dramatically and issues will help you get over some of with our customers, the better off we are it is really our job to these small things. as partners and as vendors. It ultimately Oftentimes, there can be a breakdown translates into having better products, make you successful.” as a result of a negotiation on a contract. better consulting, and better service. A contract is all about your rights if

RON SELLERS For me, it brings a level of realism into the abstract world of things go wrong. When that happens, you have to step back just building products and sending them and say, “We’ve been together for X number of years” or “This over the wall. So it’s a real virtuous cycle, is what I’m bringing to the party.” because the more you know about what Sometimes you actually have to go ahead and take some your customers need, the better you are risks on some of the issues, but have a very thorough discus- able to serve them. sion about what a particular issue means to you and what PROFIT: As president of the company, it means to the customer. They’ll share their concerns with people must love talking to you and you—“This is what I’m afraid of.” “Oh, is that what you are getting face time with you, but how often afraid of? We can fix that.” But everyone has to be willing to do you need to escalate or divert ques- have an honest dialogue about the issues. Sometimes you have tions and problems? to take some blame for something that’s happened in the past CATZ: Most customers really just want to and say, “I was wrong. That was a mistake.” And maybe it’s not know that you’re watching what’s going you, but it’s your company, which means you’re responsible. I’ll on for them. In fact, many don’t actually say, “Okay, if that’s what we did, I’m sorry about that. Let me even want to talk. They want to send you a see how to make that right.” quick note. Let’s say there’s some issue with The most important thing is to understand the goals and a product and there’s a bug. They know issues of the customers and work through them. Often hard when they send a note to me that I’m not work can solve most problems as well as some real willing- actually going to fix the bug. They don’t ness to try. After all, something brought you together in the want me to—I haven’t programmed for 25 first place. For those of us who are charged with working years. They want me to know there’s an with customers, it’s a real win for us. It’s a great experience to issue because they now have faith that if I watch a customer benefit from our products, because we do know there’s an issue, I’ll check into it and believe that we can help them. And when they reap the ben- find out how serious it is. Customers them- efits of the relationship, it’s very satisfying. <>

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 2 5 1970s1977 1978 1979 1977 1978 1979 1977 1978 1979 1977 1978 1979 1977 1978 1979 1977 1978 1979 1977 1978 1979 1977 1978 1979 1977 1978 1979 1977 1978 1979 Defying Conventional Wisdom

hree decades ago, Larry Ellison, while rou- tinely scanning the IBM Journal of Research and Development, discovered a research paper that described a working prototype for a relational database management system (RDBMS). TShowing it to coworkers Bob Miner and Ed Oates at Ampex, he soon learned that no company had committed to com- mercializing the technology. The trio realized there was tremendous business potential in the relational database, but they may not have realized that they would change the face of business computing forever. Together they founded the company that would become Oracle and developed the Oracle database, named after the CIA project the trio had worked on at the beginning of their association. Although most large enterprises were using computers in 1977, the systems were enormous and powered arcane and inefficient software. Only highly trained professionals could use the complex machines and manage data input and output. Software developers, meanwhile, sat—computerless—writing code on pads of paper at their desks. Oracle’s first commercially available database software defied prevailing conventional wisdom that technology would never scale to large amounts of data or extensive numbers of users. The vision, drive, and optimism of Oracle’s founders led to a revolution in enterprise computing. Thirty years later, Milestones Oracle is the gold standard for data- 1977 Software Development base technology and Laboratories, the precursor to applications in enter- Oracle, is founded by Larry prises throughout The first stock certificate for Software Development Laboratories—the company’s Ellison, Bob Miner, and Ed the world, from the name before it was called Oracle—issued Oates. 1978 Oracle Version 1, largest multinational to Larry Ellison from President Bob Miner. written in assembly language, corporations to the runs on PDP-11 under RSX, in corner coffee shop. 128K of memory. Implementa- tion separates Oracle code and user code. Oracle V1 is never officially released. 1979 Oracle Version 2, the first commercial SQL relational database management system, is released. The company changes its name to Relational Software Inc. (RSI).

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Defying Conventional Wisdom Oracle’s founders spark AN enterprise computing revolution.

The power behind the vision “I’ve thought a lot about why Oracle was successful. I really think that it was Larry Ellison. There were a lot of other databases out there that we beat. It was really Larry’s charisma, vision, and his determination to make this thing work no matter what. It’s just the way Larry thinks. I can give you an example of his thought processes: We had space allocated to us, and we needed to get our terminals strung to the computer room next door. We didn’t have anywhere to really string the wiring. Larry picks up a hammer, crashes a hole in the middle of the wall, and says, ‘There you go.’ It’s just the way he thinks—make a hole, make it happen somehow.” —Bruce Scott, Coarchitect and Coauthor of the first three versions of Oracle Database

Left to right: Ed Oates, Bruce Scott, Bob Miner, and Larry Ellison celebrate the company’s first anniversary.

“When you innovate, you’ve got to be prepared for everyone telling you you’re nuts.” —Larry Ellison, Founder and CEO

“Back in the old days, databases came from the hardware vendor. Oracle was among the first to offer a DBMS that would run on different hardware and operating systems.” —Ken Jacobs, Vice President, Product Strategy

“Larry had the energy, he had the vision, he had the personality to push this company forward. He was just really good at making the fog clear.” —Ed Oates, Founder

“A lot of Oracle innovation comes from the initial The Project Oracle user guide. culture of the company, from Larry and Bob.” This manual had a limited but —Edward Miner, Principal Member of the Technical Staff, and highly important audience— nephew of founder Bob Miner computer users at the CIA.

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 2 7 1980s1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989

Ready for the ’80s Innovation, expansion, and success define Oracle’s second-Decade growth.

racle’s founders spent the 1970s immersed in the wild innovation of the early software industry. But as the Information Age dawned, demand for secure data management forced the young company, then called Twenty years on the Nasdaq Relational Software Inc. (RSI), to expand and mature. On March 15, 1986—nearly a decade after the Customers wanted innovation and security, coupled with a founding of the company—Oracle made an initial reliable partner to handle their critical business data. public stock offering of 2.1 million shares on the The newly christened Oracle (named for RSI’s flagship NASDAQ exchange. At the time, the company had product) had key strategies for meeting this demand: sim- 450 employees and annual revenue of US$55 mil- plify data management, build solutions for emerging com- lion. Twenty years later, Oracle has a global work- puting platforms, and increase system interoperability so force of 65,000 and annual revenue topping US$15 that data could be synchronized or migrated. By the mid- billion. In October 2006, CEO Larry Ellison and 1980s, these advances made Oracle the leading RDBMS Presidents Charles Phillips and Safra Catz joined vendor and propelled the company into new markets for senior NASDAQ executives in San Francisco to development tools, business applications, and services. celebrate a 20-year partnership on the exchange— This success led Inc. magazine to name Oracle one of the fastest-growing companies in the United States. a partnership that has paid off well for both Oracle In 1986, Oracle went public in a technology boom and investors. “A $10,000 investment in the initial that also included IPOs from some of the industry’s major public offering of Oracle back in 1986 would now players: Microsoft, Sun Microsystems, and Adobe Systems. be worth $4,082,280,” says Ellison, referring to the Indeed, by the end of the decade, Oracle’s sound busi- stock’s closing price that day.

ness strategy and bold ideas transformed a company of 35 On October 25, 2006, Oracle and NASDAQ employees into a global, publicly traded powerhouse with executives celebrate Oracle’s 20th anniversary on more than US$500 million in revenue and a signature cor- the exchange. porate campus in Redwood Shores, California.

“In 1986, the culture of Oracle was—if I were being generous, I would say confident. If I were being honest, I would say brash. Oracle was infused with a sense of impending victory.” —Ed Screven, Chief Corporate Architect

“Version 3 of Oracle was the portable Oracle. It was written in C, ran on hundreds of operating systems and hardware platforms, and it really allowed us to expand our marketplace dramatically.” —Ken Jacobs, Vice President, Product Strategy

“We went public in 1986. It was definitely a heady and exciting time around Oracle, all of a sudden, even for those of us who never looked at the Wall Street Journal. A lot of us became much more interested in the business side of Oracle.” —Ed Oates, Founder

“At Oracle we did things differently. We had one version of the code that was portable everywhere. Beyond that, we were unconventional. We built things that were very different from what everyone else was doing.” —Andy Mendelsohn, Senior Vice President

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Ready for the ’80s Innovation, expansion, and success define Oracle’s second-Decade growth.

Milestones 1982 Relational Software Inc. (RSI) gets a new name—Oracle Systems—and hosts its first user conference, in San Francisco. 1983 Oracle Version 3, built on the C programming language, is the first RDBMS to run on mainframes, minicomputers, and PCs—giving customers the ability to use the software in almost any enterprise computing environment. 1984 Larry Ellison tells Computerworld magazine, “I’ve said that by 1985 everybody will be buying relational DBMS. It looks like that’s coming true.” 1985 Oracle keeps pace with emerging computing models with the release of Oracle Version 5, one of the first relational database systems to operate in client/server environments. 1986 Oracle goes public on the NASDAQ exchange. 1987 Already the world’s largest database company, Oracle launches a new effort to build enterprise applications that take advantage of the powerful Oracle Database. 1988 Oracle Version 6 debuts with several major advances: Oracle’s headquarters in California are a landmark set of reflective green Row-level locking allows multiple users towers not far from the San Francisco Bay. Half-circled around a body of water to work in the same table by processing affectionately called “Larry’s Lagoon,” the buildings were constructed on the former site of the Marine World Africa USA amusement park. only the specific data used in a transaction. Hot backup reduces system maintenance overhead by allowing employees to continue working in the system while administrators duplicate and archive data. PL/SQL allows users to process data while it remains in the database. 1989 Oracle prepares for the internet boom—a decade before it happens— with database support of online transaction processing (OLTP). Oracle moves its headquarters to its signature Redwood Shores, California, campus.

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Nothing but Net Oracle’s internet bet is behind third- decade expansion.

fter a decade of explosive growth and wild success, Oracle management was in a position to invest heavily in innovation. Those investments began to pay dividends in the 1990s, as Oracle revealed significant technological advances in every new product version. Oracle cham- pioned client/server computing at the beginning of the decade, as customer requirements began to outpace the limits of terminal computing. Oracle’s flagship database expanded to include unprecedented levels of calculation power (with the introduction of PL/SQL), manageability (with Universal Server), and performance (with cooperative-server technology). But it was Oracle’s prescient internet strategy that drove another era of fierce growth. By building internet-ready products in advance of customer demand, Oracle was able to lead the market when fully functional internet-powered offerings became the standard for enterprise computing. With the dot-com boom (and bust) just around the corner, Oracle’s size, experience, and stability gave the company a unique position for the new millennium—an innovative, entrepreneurial company with thousands of developers and billions of dollars at its disposal.

Milestones 1990 Only three years after creating an applications division, the company launches Oracle Applications Release 8, which includes accounting programs designed for the emerging client/server computing environment. 1992 Oracle7 wins industry acclaim and customer support as a database with groundbreak- In the 1990s, Oracle CEO Larry Ellison’s ing functionality and several architectural changes. 1993 Oracle is the first success in sailing led him to found Oracle software company to rewrite business applications for client/server environ- Racing (now BMW ORACLE Racing). ments, automating business processes from a centralized data center. 1994 Oracle earns the industry’s first independent security evaluations, adding third- party assurance of the strength of Oracle’s products. 1995 Oracle becomes the first major software company to announce a comprehensive internet strategy. 1996 With Oracle7 Release 7.3, Oracle delivers Universal Server, allowing customers to use Oracle to manage any type of data—text, video, maps, sound, or images. 1998 With Oracle8 Database and Oracle Applications 10.7, Oracle is the first enterprise computing company to embrace the Java programming language. 1999 Only four years after Oracle announced a Web strategy, internet capabilities saturate every Oracle offering, from support for open standard technologies such as XML and Linux to the latest versions of Oracle product lines, such as Oracle Applications 11i and Oracle8i Database.

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Nothing but Net Oracle’s internet bet is behind third- decade expansion.

ORACLE7: TECHNICAL SUPERIORITY, MARKET DOMINANCE After four years of intense research and development and two years of customer testing, Oracle released Oracle7 and fundamentally changed everyone’s perceptions about what a database can accomplish. Oracle7 added a vast array of new performance features, administration enhancements, tools for application development, and security methods that extended the database from the data center directly into the lines of business. Oracle7 also included technical capabilities such as stored procedures, triggers, and declarative referential integrity that made the database programmable and able to enforce business rules. These technical advances—matched with By the 1990s, Oracle was overwhelming support from customers—made Oracle7 a triumph and the leader of a turning point for the company, garnering industry acclaim for its the RDBMS indisputable superiority to other databases on the market. According to market. Oracle Consulting Architect Dirk Kabcenell, “Oracle7 was the release where we really put it all together.”

“If the internet turns out not to be the future of computing, we’re toast. But if it is, we’re golden.” —Larry Ellison, Founder and CEO, in 1998

“When we introduced Oracle8i, we really recognized that the internet would change everything.” —Ken Jacobs, Vice President, Product Strategy

“By making that change—calling the database 8i instead of 8.1—it changed everybody’s outlook on what 8i was. We became the database for the internet.” —Andy Mendelsohn, Senior Vice President

In 1997, Larry Ellison and General “Over the years, we’ve matured as an organization. Colin Powell announce Oracle’s We have good controls. We have a lot of discipline about US$100 million donation to America’s Promise—a nonprofit the way we do things.” dedicated to providing education —Ed Screven, Chief Corporate Architect for disadvantaged youth. “We are not just a really good commercial database but also a very secure commercial database.” —Mary Ann Davidson, Chief Security Officer

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 3 1 2000s2000 2001 2002 2003 2004 2005 2006 2007 2000 2001 2002 2003 2004 2005 2006 2007 2000 2001 2002 2003 2004 2005 2006 2007 2000 2001 2002 2003 2004 2005

Innovation and Results Oracle PREPARES for the Future WITH NEW PRODUCTS, NEW TECHNOLOGIES.

n the first years of the new millennium, Oracle’s embrace of internet technology gained traction even as the so-called “internet economy” retrenched. And despite a downturn in enterprise IT investment during the period, Oracle continued to deliver innovation and results. The John Wookey, era has been marked with major technical Senior Vice President, breakthroughs for Oracle—some, the result Applications Development, talks to customers about of millions of dollars and years of research Oracle Applications and and development—that would set the com- the road ahead. pany’s future course. Oracle Real Application Clusters, Oracle E-Business Suite, Oracle Grid Computing, support for enterprise Linux, and Oracle Fusion all fuel a commitment to innovation and leadership that has defined Oracle for 30 years.

“Our whole goal, just as we’ve done in database, is to continue to gain share and be No. 1 in middleware and No. 1 in applications.” —Jeff Henley, Chairman

“When people buy our products, they’re not buying A team of Oracle executives something disposable. It’s a commitment to the future. with responsibility for every It’s the beginning, not the end, of the relationship.” aspect of operations and —Safra Catz, President performance supports Larry Ellison, Founder and CEO, in his goal to make Oracle the “Customer needs have to be the focal point of a successful most influential and innovative company. The degree to which Oracle listens to our customers is enterprise software company something that differentiates Oracle from other software vendors.” of the next 30 years. —Judy Sim, Senior Vice President and Chief Marketing Officer

“In 2000, we formed a team called the Linux Engineering Team. And the job of the Linux Engineering Team was to make sure that Linux became an operating system that was suitable for our customers in the data center.” —Ed Screven, Chief Corporate Architect

“We’ve allowed people to try new ideas and break barriers, do things that no other company in the world has done.” —Ken Jacobs, Vice President, Product Strategy

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Innovation and Results Oracle PREPARES for the Future WITH NEW PRODUCTS, NEW TECHNOLOGIES.

Oracle Unveils APPLICATIONS Strategy The beginning of the first decade of the new millennium saw many major developments in Oracle’s business: the launch of Milestones Oracle E-Business Suite 11i, the acquisitions of PeopleSoft and 2000 Oracle ships Oracle E-Business Siebel, the release of Oracle Database 10g, and the rollout of Suite Release 11i, the industry’s first the industry’s first lifetime support policy. But one innovation integrated suite of enterprise applica- from the 2000s signaled a fundamental shift in the economics of tions. 2001 Oracle9i Database adds enterprise computing: Oracle Applications Unlimited. Announced Oracle Real Application Clusters, giving in 2006, its promise was reinforced by the unveiling, earlier this customers the option to run their IT on year, of major upgrades to all of Oracle’s applications lines. connected, low-cost servers—expanding Simply put, Applications Unlimited assures customers of con- performance, scalability, and availability tinued enhancements to Oracle E-Business Suite and Oracle’s of the database. 2002 Oracle launches JD Edwards, PeopleSoft, and Siebel product lines, beyond the the “Unbreakable” campaign to mark the delivery of Oracle Fusion. “Applications Unlimited is not just unprecedented 15 independent security about giving customers great support—it’s about continuing to evaluations earned by Oracle Database. enhance the products in a way that will make them more benefi- 2003 Oracle debuts Oracle Database cial,” says Oracle Senior Vice President John Wookey. 10g, the first grid computing product available for the enterprise. Oracle Grid Computing serves computing power across the enterprise as a utility, automatically shifting processing loads based on demand. 2004 Executives declare Oracle “the Information Company” and make bold moves to secure the company’s position as the only software vendor capable of addressing growing In 2007, Oracle will announce the release of demands for data-intense business prac- the next version of the company’s flagship tices. 2005 Oracle completes the acqui- product: Oracle Database 11g. sition of applications rival PeopleSoft and Larry Ellison shares announces its intention to acquire Siebel the stage with the Linux mascot at Oracle Systems. The deals—just two among the OpenWorld 2006. dozens of companies Oracle purchased in the mid-2000s—signal the beginning of an era of consolidation in the software industry. 2006 Oracle deepens a 30-year commitment to open standards computing with Unbreakable Linux—giving customers the same level of support for Linux as they expect for other Oracle products. The move in effect certifies the operating Back row: Keith Block, Derek Williams, Jeff Henley, Safra Catz, Larry system for enterprise computing. Ellison, Charles Phillips, Brian Mitchell, Sergio Giacoletto. Front row: Chuck Rozwat, Luiz Meisler, John Wookey, Juergen Rottler.

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 3 3 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Inside the Technology Revolution Joshua Greenbaum has 20 years of experience in the technology industry as a computer programmer, systems analyst, author, and consultant. Prior to starting his own firm, Enterprise Applications Consulting, he was one of the first industry analysts to focus exclusively on the enterprise software space, and he has followed Oracle since the mid-1980s. Profit spoke with him to get his insight into how technology has affected all businesses.

Profit: What has surprised for the individual to act in ways you about the state of tech- that are impossible today. nology today? Profit: What’s the biggest Greenbaum: I’m surprised benefit that technology has at how infused business has given to society so far? And become with technology and what’s the worst effect? also how much more head- Greenbaum: Regarding room there is for innovation a benefit, if I had to pick one and technology in business word, I would say commu- communications and business nications. Communications relations. Every frontier that in terms of what we need as gets conquered only exposes a buyers and sellers, as provid- new frontier. ers of services, as consum- Profit: If someone from 30 ers of services, as managers years ago was transported to and workers. Being able to today, what would be the big- communicate requirements, gest surprise to that person communicate when there are about how technology has exceptions, and communicate impacted our business lives? the solutions to these excep- Greenbaum: Somebody tions will tie us all together jumping 30 years into the fu- into a hopefully efficient and at ture would be both impressed times, unfortunately, complex and underwhelmed. I remem- web of interactions. ber as a kid watching The I think the worst effect is Jetsons—we figured we would that this increased level of all have our own jet packs and Joshua Greenbaum takes a clear look at the future of society and the communications left us with rocket ships, and that didn’t tech industry—and shares his insights about the early days of Oracle. much more complicated lives happen. I also think we tend to regard technology as a panacea, than we ever imagined. We now have the ability to work 24/7 but the world has only gotten more complicated, despite all this in a global office, communicating as much as we possibly can, new technology. That said, I believe that the empowerment of the and that doesn’t necessarily make our lives easier or better. It individual—and, therefore, the corporation or the enterprise—that certainly makes them richer, but that’s a trade-off that isn’t neces- technology has enabled is just tremendously impressive. sarily all positive. Profit: What might surprise somebody from today who gets Profit: In your experience, do most businesses actively seek bumped into the future by 30 years? out new innovation and new technologies, or do you find that Greenbaum: When I see where we’re going with the blending they’re having a hard enough time taking advantage of what’s of personal communications, personal productivity, and business available now?

productivity, I think there is going to be a very impressive capacity Greenbaum: It’s absolutely both. The fundamental dilemma PETER STEMBER

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at the core of the uptake of technology into the business world best job that I can. But if I don’t do it, I will be able to come back is trying to juxtapose the requirements for getting the job done again and have a second, third, fourth, and fifth act.” I think that today—better, faster, and cheaper—with trying to anticipate the is a unique part of our culture and one that, frankly, is what really job that is going to come tomorrow and being ready for it with makes Silicon Valley what it is today. something innovative and exciting. It’s a dilemma that translates Profit: How is innovation changing as the technology infra- into very simple questions around the fact that in a world of finite structure changes? resources, what do you try to do? Stay put as much as possible, Greenbaum: What I find most interesting about innovation in or jump ahead and perhaps sacrifice your core, your foundation, general and in the software industry in particular is that innovation in order to be innovative? is always chasing commoditization. To be innovative, you have to Profit: Larry Ellison said that when he founded Oracle, keep moving up the food chain. Today’s innovation is tomorrow’s conventional wisdom was that relational databases would commodity. When I look at what has been really innovative in the never be commercially viable. There are many other examples last 30 years, these are innovations at a basic level of technology of companies that missed big opportunities or overestimated that are working pretty well now. When I look at innovation today, the potential of a new technology. But the technology industry I am looking for innovation at a higher level than what we thought seems to be able to overcome these problems fairly quickly. Do of 30, 20, 10, even 5 years ago: innovation at the business pro- you think that is specific to that industry? cess level, innovation that concerns itself with how we actually Greenbaum: I would say that the technology industry at- work together, as humans and as enterprises, and what we can tracts not just some of the brightest minds in the world but also do to make that process faster, better, and cheaper. That innova- some of the most nimble and self-critical. Having followed Larry tion has to start now, from a higher base level of technology. Ellison’s career for 20-plus years, one of the things that impresses Profit: Can you give us an example of genuine business pro- me most is not just how many successes he’s had, but how he cess innovation? deals with failure. One thing about Oracle is that there is no rut Greenbaum: I think that internet commerce was that kind of too deep to get out of and get moving forward. That is why this innovation. Just the kinds of simple things that we do today on company, 30 years after its founding, is still a major force in the Amazon.com or eBay represent true innovation in how businesses industry. I think this ability for self-criticism distinguishes long- interact with one another and how they interact with consumers. term success from long-term failure. Profit: You’ve been watching Oracle for some time. What’s Profit: Do you think that’s a characteristic of particular your perspective on the 30th anniversary? What does it say people? What really encourages that kind of behavior? about Oracle that the company is that old? Greenbaum: One of the nice things about our version of Greenbaum: It says a lot about Oracle and a lot about Larry capitalism in this society is that we are very forgiving. Bankruptcy Ellison, that his success was not a fluke. This is not a fly-by-night laws are unique in the United States in allowing someone who dot-com boom-and-bust kind of company. This is a company has failed in one endeavor to come back and succeed in another. that has actually been providing long-term value for 30 years. It For those of us who grew up in this culture that emphasizes not says a lot about the pervasiveness of the core relational database just success but redemption from failure, it is a freeing kind of technology that Oracle pioneered and how this has become an mentality that says, “I obviously want to go out and do the very essential infrastructure for society and business. <>

The Oracle Path almost 20 years, Oracle made the technology. Products like Oracle Joshua Greenbaum Talks about move to reclaim, quite frankly, its Forms, the client software for the Oracle turning points. birthright as a powerhouse in enter- tools, and a lot of other products really One [turning point] was the advent prise software, and it did that in a very enabled the building of this social of Oracle Financials. Before Oracle paradigm-shattering moment. Nobody business infrastructure out of software Financials showed up, financial believed that you could do this in the that couldn’t have happened any other management, accounts payable and software market and be successful, way. That, in turn, set the stage for the receivable—all those things—were both in terms of the acquisition and packaged enterprise software market, being done on big mainframes. Oracle in terms of the aftermath. It changed where Oracle is really making a very took the first step to simplify that and everybody’s perception about what the strong play. The database begat the launch the modern application market. software market really is, how it works, tools begat the packaged software. Another great watershed moment how customers and vendors relate to At each one of those key inflection was the acquisition of PeopleSoft one another. points, Oracle was there making an and JD Edwards. Fast-forwarding Oracle is also a pioneer in tools enormous impact on the market.

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A Winning Look APPLICATIONS UNLIMITED FULFILLS ITS PROMISE.

On January 31, in New York City, Oracle made a breakthrough announcement of upgrades to all five of its major product lines. Participating at the event were the product line leaders for each application set: Oracle E-Business Suite, Siebel, PeopleSoft Enterprise, JD Edwards World, and JD Edwards EnterpriseOne. These are the leaders who, with the help of their teams and their loyal customers, have created a gold mine of applications functionality that crosses all industries Oracle Applications product and all lines of business. The major theme of the releases is innovation, but the line leaders, from left to right: Doris Wong, John Schiff, foundation for all of the product lines is customer participation in the process, Ed Abbo, Steve Miranda, through advisory boards, customer visits, and the determination of each of the and Lenley Hensarling. Not

pictured: Murali Subramanian. general managers to make future product road maps truly customer driven. Catherine Gibbons

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Ed Abbo_Siebel the deposit or opening an account, the system will step through the minimum amount of information needed to do that. After beginning his career at Oracle, Ed From an IT perspective, there are two categories of benefits Abbo joined Siebel to become a part of around Siebel 8. The first is service-enabling the platform. The the development team creating Siebel’s benefit of doing that is to allow the information technology group

Currently: Senior vice world-class customer relationship manage- to more easily integrate the Siebel CRM product with the infra- president, Oracle Applica- ment (CRM) software. Now back at Oracle, structure that they have—or new applications and technologies tions Development Prior to Oracle: Abbo has assumed leadership for Applica- that they want to introduce into their environment. The second Siebel Systems tions Unlimited. After the announcement of is around performance scalability. We have already proved that Education: Bachelor’s degree in mechanical upgrades to all five of Oracle’s application Siebel can scale to tens of thousands of users, but Siebel 8 sets and aerospace engineering lines, Profit spoke with Abbo about the new new benchmarks that improve performance for the largest enter- from Princeton University; master’s degree in com- release of Oracle’s Siebel software and cus- prises in the world. puter control systems from tomer reactions to Applications Unlimited. Profit: The service-enabling piece, was that done to enable the Massachusetts Institute of Technology Profit: The latest release of Siebel the software to work better with Oracle Fusion Middleware? Customer Relationship Management Abbo: Good question. The other thing we’ve done with the is described as transformational CRM. What does that mean? Siebel products in general, starting with 7.8 and extending it Abbo: According to the Economist’s business intelligence sur- in 8, is certifying Siebel with Oracle Fusion Middleware. Siebel vey of CEOs, companies are trying to grow their businesses. For supports Oracle Database; that’s a fundamental level. But at a the first time in many years, growth is a higher priority than cost level above that, you can now start to use Oracle’s enterprise reduction. That’s the backdrop to transformational CRM. The key management tools to manage Siebel as part of your environment. to growth is pretty easy. Sell more products to existing customers Profit: How does this set us apart from other CRM vendors? and then acquire additional customers. In order to grow, you have Abbo: One difference is the industry breadth and depth that to make your customers a lot more satisfied with your product so Siebel brings to the marketplace. In Siebel 8, we’ve continued they buy more products from you and recommend your products to invest in our industry functionality, including integrating Siebel to others. So transformational CRM is really about transforming with Oracle back-office assets, and these are industry specific. your company from being very product oriented in terms of going So, for example, we integrated Siebel with the core banking sys- to market, to becoming customer centric. It’s about putting the tems from i-flex. In the communications industry, we’re integrating customers’ needs at the focal point, and then reorienting your Siebel front office with the portal billing and then activation and entire company to satisfy those particular needs. provisioning systems. We’re delivering more value to each of the Profit: What new Siebel features support that goal? industry customers by providing an end-to-end process support Abbo: There are several exciting new capabilities that we’ve in the application. The other area is the flexibility of deployment built into the product so that companies can deliver a superior options for the CRM products. You hear two philosophies in the customer experience. One of the most significant is enabling the market. One is taking the CRM system and implementing it as an systems to support every customer interaction so that employees on-premise deployment at a company location. The other is to can have intelligent conversations with customers. To support have it hosted by a provider, in an on-demand or software-as-a- this, we’ve embedded real-time decisioning capabilities. For service basis. We are providing ultimate flexibility for our custom- example, if I’m a banking customer, I walk into a branch, I deposit ers, because they can choose CRM as an on-demand offering or some money, and then I leave. That’s the traditional experience. choose it as an on-premise offering. And many of our customers In the superior customer experience, as you’re depositing that are starting to mix and match, using the software in a hybrid money, the system automatically informs the agent about your manner, meaning that some divisions or geographies within a overall financial picture and makes a recommendation about what company get started on demand—maybe for remote locations you should do with that money. That transforms the conversation or smaller offices—while other parts of the company have an on- and makes it a lot more intelligent than simply servicing the re- premise implementation. But all users can still share information quest of the customer. Embedding real-time decisioning analytics as they would in a single-premise deployment. Oracle is unique in is one of the key capabilities in Siebel 8. Another great new capa- offering that flexibility. bility is the task-based user interface. Essentially, what it does is Profit: Where do you see innovation in CRM heading? create a directed work process for users. This helps the em- Abbo: I believe that in order for companies to move forward, ployee or the customer interact with the system through a guided they must mandate a superior customer experience. We are work process. And in a similar fashion, if the agent is processing doing this at Oracle by committing to a superior ownership

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 3 7 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 experience, which will ensure that everything we do—from build- ent kinds of businesses, but the important Murali ing products to delivering services—will improve our customers’ theme here is that if you’re a global compa- Subramanian overall experience with Oracle. The approach that businesses ny, your customers, partners, and suppliers Currently: Vice president, need to follow is twofold. The first requirement is the application are becoming more and more demanding. Applications Development Prior to Oracle: Joined of information technology to the problem, which essentially is To meet these demands and continue to be Oracle directly after college CRM. The second is business transformation. And one without competitive, businesses of all sizes need to Education: Master’s degree in statistics from the other won’t cut it. The business transformation aspect is have technology in place that supports glo- Madras Christian College about motivating employees to prioritize customer needs over balization of their business, from suppliers and University of Texas, El Paso; master’s degree in selling individual products in a relatively haphazard fashion. The to employees, customers, and partners. computer science information technology is one half; the business transformation Profit: What are you hearing from cus- from University of Texas, El Paso is the second half of the equation. With the application of real- tomers about the new release? time decisioning, we’re providing customers with the software Subramanian: I recently attended a they need to transform these systems from passive systems, user group event in the United Kingdom, and it was very clear where data is entered, to active and proactive systems that to me that there is a lot of excitement about Oracle E-Business assist the application user—whether that is an employee or a Suite 12. This is the first major Oracle E-Business Suite release customer—to provide meaningful product recommendations since the PeopleSoft acquisition, so there are a lot of expecta- much as you would through, say, Amazon.com, where if you tions and participants were asking a lot about what’s available in express interest in one book, they’ll recommend other books the release. that other customers have been interested in. And the result of Profit: What does the Applications Unlimited announcement that, in addition to all the other things that I’ve talked about, will mean for Oracle E-Business Suite customers? result in a superior customer experience that will drive customer Subramanian: Applications Unlimited is about being loyalty and revenue growth. customer-centric and listening to our customers to help make them successful. It brings a lot more clarity to the customer base. Steve Miranda and To current Oracle E-Business Suite 11i customers, Applications Murali Subramanian Unlimited means that they can look at what is available in Oracle _Oracle E-Business Suite E-Business Suite 12 and move ahead, knowing that there will be integration among the versions. It shows them that they have Oracle E-Business Suite is the foundation of a path forward and assures them that we will not have a forced Oracle’s history in the business applications migration to Oracle Fusion. When Oracle Fusion is available, Steve Miranda market. Oracle recently announced the Applications Unlimited will provide assurance that all of our cus- Currently: Senior vice president, Applications newest version: Oracle E-Business Suite tomers can migrate at a pace that makes business sense for them. Development 12. Referred to as the Global Business Profit: In late 2008, customers will be looking for Oracle Prior to Oracle: Release, Oracle E-Business Suite 12 Fusion. Can you share some specifics about Oracle E-Business GE Aerospace Education: Bachelor’s enables businesses to think globally to Suite 12 that represent the beginning of what Oracle is going to degree in mathematics make better decisions, work globally to be be offering in Oracle Fusion? and computational science from Stanford University more competitive, and manage globally Miranda: One of the key principles we follow in developing to lower costs and increase performance. all of our application products is to leverage next-generation Steve Miranda, senior vice president of Applications Develop- technology. In Oracle E-Business Suite 12, we leverage the latest ment at Oracle, and Murali Subramanian, vice president, Oracle Oracle Fusion Middleware capabilities, including BPEL [Busi- E-Business Suite Development, have more than 25 years of ness Process Execution Language] and Oracle BI Publisher for combined experience in Oracle’s development organization. desktop integration. With these features, not only are customers Profit spoke with them together. going to be able to execute financial consolidations and complex Profit: Oracle E-Business Suite 12 is called the Global calculations, but they will also be able to integrate them directly Business Release. What does that mean for Oracle E-Business with the desktop. Once customers complete financial consolida- Suite customers, and why should they be considering upgrad- tions, they typically want board-ready reports that are drawn from ing to the new release? their consolidated results. With Oracle BI Publisher for desktop Miranda: I believe that there is a growing trend toward shared integration, we’ve integrated Adobe Acrobat into the desktop so services and globalization. Oracle E-Business Suite 12 is the best customers can create polished, PDF-formatted results. offering on the market for customers that want the benefits of Profit: What are you are hoping customers will take away instance and IT consolidation toward the shared-services model, from the recent announcement of Oracle E-Business Suite 12? much like what Oracle has done over the past several years. Subramanian: We have a unique strategy at Oracle, in that Subramanian: Ultimately it means different things to differ- we have multiple product lines and are continuing to integrate

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those products while working on the next generation of applica- point, and how customers have reacted—and benefited—from tions. For Oracle E-Business Suite customers, the key takeaway the changes that have taken place. message is that we’re working hard to deliver more and more PROFIT: Can you tell us about the thinking behind the merger value in our current product lines while simultaneously building with PeopleSoft? our next-generation applications, and when they’re ready for HENSARLING: Before the merger, we looked at what was hap- Oracle Fusion, there will be a definitive path for them. Everything pening in the marketplace and what would be in the best interest they do today—from adopting Oracle XML Publisher to leveraging of both our shareholders and our customers, and we decided that our new integration architecture—will help them on that path. being a first mover in the consolidation of the enterprise soft- Miranda: I completely agree. I’d like to see Oracle E-Business ware industry was the way to go. [Oracle CEO] Larry Ellison and Suite customers take away a full understanding that, through [Oracle President] Charles Phillips were set on this course as well, Oracle E-Business Suite 12, they will be able to adopt technology seeing the value in aggregating the enterprise software market. at a pace that is right for their business. The aim for us was to achieve critical mass by merging with a larger company such as PeopleSoft—so we did that. But the Lenley Hensarling criteria for critical mass was scaling up at the same time. Oracle _JD Edwards EnterpriseOne started pursuing PeopleSoft to the same end, and now with the combination of PeopleSoft, JD Edwards, Siebel, and others, It’s been a busy three years for employees Oracle really represents that critical mass we felt was necessary and customers of JD Edwards: first came its in order to provide value on an ongoing basis to our customers merger with PeopleSoft, and then, shortly and shareholders. Currently: Vice president and general manager, after that, with the coming together of PROFIT: How has the reaction been from JD Edwards custom- Oracle’s JD Edwards PeopleSoft and Oracle, JD Edwards joined ers and employees during this time of change? EnterpriseOne Prior to Oracle: Senior the Oracle family of applications product HENSARLING: What’s been interesting for customers and vice president of marketing lines. But JD Edwards EnterpriseOne employees is the increased opportunity at each of these points for Enterworks; vice president of engineering for the General Manager and Vice President Lenley of acquisition or merger. If you look at the R&D spend and the NetWare group at Novell Hensarling is energized by change. With the resources that Oracle brings to enterprise software, this is some- Education: Bachelor’s degree in economics from latest release of his product line, Oracle’s thing that all of the JD Edwards installed bases benefit from. And the University of Texas JD Edwards EnterpriseOne 8.12, Hensarling it’s been good for employees, particularly on the development at Austin notes that continuous innovation has been side, because we now have direct access to all of the Oracle the defining characteristic for the product technology—database technology and Oracle Fusion Middleware. suite over the past decade, and the latest release continues this PROFIT: What’s really turned the corner for customers as far trend with innovations across most modules for every industry. as moving ahead with their technology decisions? But more than just specific functionality, Hensarling really came HENSARLING: One customer of ours used both JD Edwards to talk about the path the companies have taken to get to this and Oracle and they were thinking about automating another part

On Oracle Fusion . . . points for Oracle Fusion and saying, Oracle XML Publisher and Oracle BI ■ Doris Wong “Where can we learn from what they’re Publisher capabilities for desktop There are some great things about doing, and where can we leverage integration. With these features, not PeopleSoft that will influence Oracle some of the ideas?” An example of only are customers going to be able to Fusion. Our human capital manage- that is our service-oriented architec- execute financial consolidations and ment [HCM] suite of applications is the ture that we’re adding in as a layer on complex calculations, but they will best of breed, the strongest product in top of our JD Edwards World applica- also be able to integrate them directly the market. The capabilities we have, tions. It gives our customers a taste of with the desktop. the breadth, the functionality, the busi- what’s to come but also allows them ■ Murali Subramanian ness processes, all of that we can to use that as a bridge to other Oracle As we move forward and continue to bring to Oracle Fusion and make sure Fusion applications. innovate, one of our primary focuses that it offers the best HCM product. ■ Steve Miranda will be to bring the right aspects of ■ John Schiff In Oracle E-Business Suite 12, we Oracle Fusion technology into the We’re looking at some of the design leverage Oracle Fusion Middleware’s Oracle E-Business Suite product line.

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 3 9 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 of their business. They wanted to go with JD Edwards but they tell them what we have delivered. So we’ll talk about the releases weren’t sure we were going to continue to make investments we’ve done since the Oracle acquisition, which are very visible in- there and they weren’t sure about the Oracle Fusion future. But vestments, and talk about the investments we’re currently making we talked with them and one of the things that really drove them and the next releases that are in process so that our customers to decide to make the investment on the next big area of their can really see the value we continue to add to each of the prod- company and roll out JD Edwards (which they’re in the process of uct lines. We’ll also talk about how the acquisitions that are being doing) was the fact that we had bought G-Log. This gave them a made, like the purchase of Demantra for demand management, solution to something that was staring them in the face in terms demand planning, and trade promotions, and G-Log for transpor- of increased transportation costs due to energy prices fluctuat- tation management, are not just for Oracle Fusion and not just for ing, primarily upward, and they saw a lot of value in the overall Oracle E-Business Suite, but rather bring value to all the different strategy that Oracle has. The Oracle strategy is a combination of product lines and customers. organic growth through our R&D investment, combined with an approach of looking out into the market, seeing where innovation John Schiff_JD Edwards World is happening, doing acquisitions, and providing integrations to the existing product lines, as well as clearly defining a next-generation Integration is the cornerstone of Oracle’s JD future where that functionality will all be under one architecture Edwards World A9.1, announced on January with Oracle Fusion. And when customers really started to under- 31 in New York. Dubbed the Renaissance stand that, they became very positive about Oracle and about Currently: Vice president Release, this major upgrade of JD Edwards and general manager, how they could move forward. World delivers on Oracle’s Applications Oracle’s JD Edwards World PROFIT: How is Oracle investing in this product line? Applications Unlimited commitment to continuously pro- HENSARLING: There are two real vectors of change in the Prior to Oracle: IBM in vide customers with new functionality while South Africa and Rochester, way we’re making these investments. One is focused around the Minnesota at the same time enhancing their ability to architecture and technology, and Oracle Fusion addresses that; Education: Bachelor of seamlessly integrate the product into dispa- Commerce degree at the so there’s a next generation of enterprise software that Oracle University of Pretoria; years rate IT environments. Oracle’s Vice President is working on based upon a service-oriented architecture that is of on-the-job training, and and General Manager of JD Edwards World the school of hard knocks allowing us to build new product capabilities. John Schiff, who has been a part of JD Ed- The other vector is what I call business process innovation, wards for much of its 30-year history, talked or evolution. That’s something that goes on continuously and about JD Edwards World’s continued commitment to providing it’s really driven by changes in business practice. It’s innovation customers with the same enterprise-level functionality available to by our customers and by leaders in the industry. Our customers the largest companies. have to adapt and take advantage of those changes and we’re PROFIT: Why has this release of JD Edwards World been putting those things into all the different product lines based upon called the Renaissance Release? where the vertical strength is for each product line. If you look SCHIFF: The term was really chosen by our customers. When at JD Edwards EnterpriseOne 8.12, we made a big investment they saw what we were doing, that was the name that they came around the agricultural and business aspects of food and bever- up with. Customers told me that they felt the release was a real age production. We had a lot of customers in that space, and we recommitment to the product line by Oracle. This is the first new saw that they did not have a strong integrated solution for some release in 10 years—the first full-blown new release where we of the business processes that were key to their business. They actually have added significant functionality in all areas. We were were using old homebuilt legacy systems to support areas such doing small, incremental enhancements via service packs or as crop production management. We saw an unmet need in this cumulative upgrades, but nothing of the scale that we’ve commit- market, and working closely with customers, we put together an ted to under Oracle. Customers viewed this as the renaissance of integrated and comprehensive solution for grower management, the product, a commitment to providing additional value, helping contracts around purchasing of crops, and wine production. customers move forward with a product. PROFIT: As you’ve talked to customers about the upcoming PROFIT: JD Edwards is known for its focus on the small and release, what’s the most common question you hear and how medium business [SMB] sector, but the company’s original are you responding to it? focus was on the oil and gas industry, correct? HENSARLING: What’s interesting is that we did a survey and SCHIFF: We still have a lot of oil and gas customers using the found that less than 50 percent of our installed base knows what product, but that’s far from our sole focus. We have customers Applications Unlimited is. We’re hearing a lot of questions about from every industry—manufacturing, engineering, real estate, and that. The ones who have heard about it are very happy about more. But if you think about the oil and gas industry in particular, it, but the ones who haven’t remain unsettled and doubtful, so there are many smaller exploration companies, and there are we’re making a concerted effort to get that message out and to service companies around the larger companies, and then of

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course there are some very large companies that are still using customers on this release? the JD Edwards World software, alongside other products in SCHIFF: We have a very active JD Edwards World product far-flung parts of the world. It shows that JD Edwards World is user group. Quest is the overarching JD Edwards/PeopleSoft being used both by SMBs and also by huge multinationals in the user group community and within that, we have the JD Edwards energy sector. World product user group. They have been very loyal customers, PROFIT: And of course the relationship with IBM is another key first of all, but also very vocal about what they’d like to see in the focus for the JD Edwards World product. product. We also have a nominated group called the JD Edwards SCHIFF: Yes, that’s a very unique part of our product line World Strategy Council. That group has taken each of the priority because we have only one hardware platform that we partner lists and helped us identify the key factors that we want to put in, with. We have a very close alliance. I have a very good personal so that gave us an overall strategy. Then we took each of the indi- relationship with Mark Shearer, IBM’s System i general manager. vidual areas and broke them down so that we could do something We’ll sit down every six weeks and talk about what his objectives very similar at that level. Our customers came to us with their are and what we’re doing. And we work together on custom- major business needs—product issues, but also interactions with ers—normally, if we’re talking about customer issues, a customer Oracle from a service and sales contact point of view. It’s impor- may be thinking of an upgrade, needing reassurance that we’re tant to them that we continue to highlight our commitment to the both committed to its future. So a customer might be saying, “I JD Edwards World customers. want to move forward on a particular hardware platform,” or “I PROFIT: As you’ve talked to customers about the upcoming want to upgrade my JD Edwards software. Are you really seri- release, what’s the most common question you hear and how ous about working with IBM?” We’ve done town hall meetings are you responding to it? together, attended joint conference calls and analyst briefings SCHIFF: Our most frequently asked question is usually, “Is this together. This is a good example of that relationship: I got on the last release?” and “How committed are you to Applications a conference call with Mark and an analyst, and one of our Unlimited? Is this for real?” And the answer is yes, we are commit- customers got on—and of course 100 percent of our customers ted to the product. Yes, we’re putting out a release. Yes, we are are on the IBM platform—and he was talking about how his cost continuing to gather requirements for the next release. of IT was .38 percent of his company’s revenue. And the analyst PROFIT: What’s been the biggest influence on your job? said, “You mean 3.8 percent?” And he said, “No, 0.38 percent.” SCHIFF: Well, I get out to Oracle headquarters once a quarter But that’s completely attributable to the combination of the low- for a GM [general managers] meeting. I’m out there probably once cost IBM iSeries and the JD Edwards World line. or twice a month to meet with other people. And the interesting PROFIT: Can you talk more about how you’ve worked with part is seeing how different our product lines are, but how similar

I Love My Job . . . focused on the product development make their businesses profitable, we ■ Ed Abbo side, I’m focused on a broader level understand how the tomatoes get there One of the most fulfilling things is to now, covering all aspects of the busi- and who’s involved, and we under- go out and interact with customers ness, whether it’s working with our stand the needs and the problems and and really understand the front-office salespeople, our customers, our the opportunities that the grocery store requirements across industries. Then partners—with every part of our eco- owner faces. coming back and engaging a team in system for PeopleSoft. ■ Steve Miranda defining a product, delivering the prod- ■ Lenley Hensarling I love the people I work with. We have uct in the marketplace, and seeing the We’re privileged to get to see inside talented, motivated, and enthusiastic results, which started as an interaction so many companies and see how so people who like to take on challenging with the customer. It’s a very fulfilling many things work. My joke with my problems and work hard as a team to cycle, from idea, to delivery, to see- wife is that when we drive down the bring value to the customer base. We ing the business change as a result of road, when we go to the grocery store, have fairly demanding customers— delivering that product in production. I always say, “That’s my customer and which is another thing I like about my ■ Doris Wong that’s my customer.” We get to know job—that push our teams to deliver I love the challenge of taking somehow all of it works. When we see toma- better quality and flexibility, and make thing and making it successful. toes in a grocery store, we know the the product simpler, easier to config- Whereas before I might have just concerns of the farmers and how they ure, and easier to install.

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 4 1 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 our issues are around business. And the level of cooperation that even know that, in release 9.0 and our PeopleTools 8.48, we we have between the various general managers is extraordinary, have the capability to have a service-oriented architecture and so that’s really an inspiration. Just listening to somebody else’s deliver out-of-the-box Web services. He said, “Wow, that is really problems gives me a heads-up that these same problems are a compelling reason for me to move forward to that release.” He probably coming my way, and I’m sure they feel the same way needs this architecture in his environment and he can do that on about some of the things that I have to deal with, so there’s a the PeopleSoft products, he doesn’t need to move forward to a tremendous spirit of cooperation between the GMs. And the man next-generation product to have that capability. who heads up the applications development organization, [Senior Profit: What’s the second theme? Vice President of Applications Development] John Wookey, really Wong: Best-in-class business processes. For every single one communicates well with me and with all of our teams. This is im- of our product areas, we reviewed the business processes and portant to our customers—they want to know how we connect at reviewed feedback from our customers, so we could continue to the higher level because so many of them have multiple products, focus on enriching and enhancing the business processes. For and they’re interested in their individual products as well as the example, in the area of workforce management, or talent manage- overall vision and strategy. ment, we’ve looked at the business process around that entire lifecycle of applications and identified the features and functionality that we can add to continue to enhance and provide a tightly Doris Wong integrated business process for our customers. We did it for work- _PeopleSoft Enterprise force management, and we’re doing it for our business processes in all areas of PeopleSoft. The combination of PeopleSoft and Oracle Profit: And the third theme? brought together some of the best technol- Wong: Superior ownership experience. This is an initiative that Currently: Vice president ogy people in the world, and it transformed started with our PeopleSoft applications two years before the ac- and general manager, Oracle’s PeopleSoft Enter- Oracle into a software company with more quisition, where we really were focused around the total ownership prise Applications applications and technology customers than experience. It was a program designed around lowering the total Prior to Oracle: ASK Computer Systems any other company in the world. Doris Wong cost of ownership and improving our products for our customers. Education: Bachelor’s is honest about the challenges she’s faced We wanted our customers to be able to upgrade the applications degree in business administration with an emphasis as vice president and general manager of in a seamless, low-cost manner. We supplied them with tools in business information Oracle’s PeopleSoft Enterprise applications. that would allow an easier implementation and architecture that systems, San Francisco State University She was also upbeat as she spoke about allowed them to easily integrate disparate systems. PeopleSoft Enterprise 9.0. As she noted Profit: How have you used the feedback from customers? in her interview with Profit, this release of PeopleSoft Enterprise, Wong: A lot of the product enhancements, especially around su- called the Extended Value Release, offers customers major perior ownership experience and best-in-class business process- upgrades in every single area—from human capital management es, are customer driven. Release 9.0 is focused on the customer, and enterprise learning management to enterprise performance and whenever I talk about this with customers, they can totally management, and more. relate to what we’re doing because they know what the pain Profit: What’s been your biggest challenge at Oracle? points were in previous products. But knowing that we continue to Wong: This release has been huge—it’s the culmination of a focus on these issues and work on enhancements—well, they’re more-than-year-long project to deliver the enhancements our excited about it. They want to know how they can make us aware customers are asking for and integrate core components of Oracle of the challenges that they have today. To that end, we’ve created Fusion Middleware with PeopleSoft applications. There are three a PeopleSoft customer advisory board that has allowed us to work themes around this release—No. 1 is around technology, where more closely with our customers. Our goal is to have our future we’re continuing to extend the value of the release by bringing road maps customer driven. next-generation technology into the PeopleSoft platform. This Profit: What’s the most common question you’re hearing means that our customers don’t have to go to Oracle Fusion to from customers, and how do you answer it? be able to take advantage of that; we’re bringing that technology Wong: The most interesting questions are focused on technol- into our current release and our current platform—for example, ogy. PeopleSoft supports multiple databases—not only Oracle, we now have a service-oriented architecture and Web services but also IBM, Microsoft, Sybase, and Informix. Customers want enablement. We also brought in XML reporting. Again, this is our to know that, as part of Applications Unlimited, we are continu- next-generation technology with Oracle Fusion, but we brought ing to support those databases. It’s interesting that people think that into our PeopleSoft products today. that when we’re talking about bringing in new technology to the Profit: What’s been the reaction from customers? PeopleSoft platform, that we’re really talking about replacing what Wong: It’s been fantastic. I spoke with one customer who didn’t they have, and we’re not doing that. We’re providing a choice. <>

4 2 m a y 2 0 0 7 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Oracle Fusion Forecast

With the announcement, earlier this year, of major upgrades to all five of Oracle’s applications product lines, some customers might be wondering if Oracle still has a strong commitment to Oracle Fusion. But any doubting customers haven’t listened to Jesper Andersen lately. Tasked with plotting strategy for Oracle Fusion, the senior vice president is adamant that the level of focus, effort, and intelligence being exerted on Oracle Fusion has, if anything, redoubled as the company moves toward the product’s release.

PROFIT: Can you define we are doing Oracle Fusion, to Oracle Fusion and update us make sure we take advantage on what’s been happening dur- of all of those things and offer ing the past six months? our customers the productivity ANDERSEN: Oracle Fusion is and business process gains the next generation of Oracle’s that that new technology base business applications. We are can help deliver. We want to committed to delivering an ensure that we get a service- industry-leading next-generation oriented architecture–based applications suite and we’re application suite. Architecting re-emphasizing why we think specifically with that in mind is there is a need for a natively a key concept and a key focus built next-generation suite and point in Oracle Fusion. educating the market on the PROFIT: What role are stan- key concepts behind it. We are dards playing in the develop- showing customers tangible ment planning? aspects of the product, such ANDERSEN: When we think as the user interface experi- of Oracle Fusion, we think ence. We’re in the functional of what we call the superior design stage, we’ve rolled out ownership experience. The the standardized development superior ownership experi- environment—we’re executing ence includes user experience, well against our plans. partner experience, application Oracle’s Jesper Andersen emphasizes that Oracle Fusion will PROFIT: How will Web 2.0 leverage the best of all Oracle Applications product lines. management, and total cost impact Oracle’s applications? of ownership. We believe that ANDERSEN: Web 2.0 emphasizes collaboration—it really takes a standards are a requirement to providing a superior ownership lot of concepts from Web sites like Google and MySpace, and from experience because standards reduce the cost of ownership by instant messaging and things like that, and incorporates those into providing access to greater resources and ensuring commonali- applications. It’s more of a consumer phenomenon today, but we ties that facilitate integration and extensions. believe it will have a significant impact on the enterprise. Oracle PROFIT: Can you define the “superior ownership experience”? Fusion Middleware and Oracle technology provide a lot of those ANDERSEN: The superior ownership experience is core to capabilities for our existing applications, and Oracle Fusion appli- what Oracle strives to deliver to its customers. We need to put cations will go further to natively incorporate Web 2.0 concepts. better decision tools in the hands of the end users. We have done We have a great search engine. We have good collaboration a great job of automating business processes in the past, but technology. We have everything we need around those things. we—the application industry in general, not just Oracle—haven’t And some of that we can bring to the applications incrementally, necessarily done a great job embedding business intelligence, so but other things require more of a fresh approach. That’s why that people have all of that information right at their fingertips in

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the context of a transaction when they’re using the application. that can save lots of hours over a year for the end users. That’s one example of what we think of as the best user experi- Also, there are a lot of customers, particularly in industries ence from a usability perspective. Obviously, we intend to lever- like financial services and telecommunications, who are very, age Oracle Fusion Middleware to its fullest and to use the great very keen on service-oriented architectures and who already extensibility that Oracle Fusion Middleware gives us. That is very are investing very significantly in that area. They will adopt the important for partners and for customers. components and applications that are part of Oracle Fusion that PROFIT: Once a customer is sold on Oracle Fusion, what they feel are most important to their business. Oracle Fusion will, should they be thinking about in terms of a migration strategy? like any other new set of products, follow a normal, bell-shaped ANDERSEN: We are gearing up investments significantly adoption curve. There will be early adopters and there will be in what we call the Oracle Fusion upgrade strategy. I want to laggards. There will be early adopters from a technology per- emphasize that it’s not a big bang. It’s not a question of, “Oh, spective, from a functionality perspective, and from a usability Oracle Fusion covers all of these different business processes, so perspective. And then there will be laggards, customers who are you must retire any and all systems that you have today in those happy with what they have. areas.” That was never the intent. We intend to support what you PROFIT: What would you say is the biggest difference be- could call the PeopleSoft pillar strategy of having financials and tween what Oracle offers and what our competitors offer? HR in different systems, or different instances, if you like. ANDERSEN: I would say the biggest difference is that no other Yet at the same time, we don’t want to lose the Oracle company is committed, the way we are, to building a 100 percent E-Business Suite advantage, which allows our customers to standard set of applications such as we will with Oracle Fusion. consolidate their systems into a single instance. We are going to So if standards matter to you as a company, and if you believe allow customers to choose between these deployment strategies. in our vision around a superior ownership experience, then stan- We know that some people will adopt Oracle Fusion across a dards are very important. wide range of applications and use it as an opportunity to retire a With respect to SAP, their strategy is different. It’s actually number of legacy systems. Others will use Oracle Fusion more as a little confusing, I would say, for many customers. They have a point solution in select areas. their existing applications, what they call MySAP, and they’ve PROFIT: To what degree would you say that Oracle Fusion said, “Look, we just released MySAP 2005. That will be a stable will be a new thing and to what degree will it pull in the best platform, at least until 2010, and we really don’t intend to do a features and processes and functions from the other lines? lot to that.” So customers know they’re not going to get a lot ANDERSEN: It is absolutely leveraging the best thinking and of new functionality in that area. SAP really hasn’t talked a lot experience of all lines. We’re starting with the Oracle E-Business about their vision of the future. There have been various secret Suite as the basis, because, frankly, it’s the best foundation. projects, like Project Vienna. They just rolled out something new It’s not because Oracle is the origin. Oracle E-Business Suite is called A1S, which supposedly is software as a service for the built on a more-complete data model and it’s the system that is midmarket. Although they announced A1S toward the end of last closest to being developed using standards—it’s predominantly year and planned release for first quarter of 2007, they have since coded in Java, for example. delayed that release and changed their launch plans. They also PeopleSoft and Siebel are great products, but with proprietary haven’t done a satisfactory job of explaining what to do if you’re toolsets. Despite that, the CRM [customer relationship manage- an All-in-One customer, which is their current midmarket product. ment] starting point for Oracle Fusion, from a data model and They’ve said nothing about upgrades. They’ve said nothing about business logic and functional behavior perspective, is more like whether they would even support a license-to-license move over Siebel than Oracle E-Business Suite. That’s what we mean when to A1S. So I am hearing a lot of SAP customers say that they are we say we’re using the best of the best. Siebel 8, which we just very confused at the moment. They really don’t know how to look released, introduced a task-oriented user interface where you at the future. can follow a flow of tasks through the application. JD Edwards is That’s a big difference between SAP and Oracle. We are very another great example—it’s the world’s leading SMB [small and clear with our customers about what we are doing and how we medium business] suite of products. And the JD Edwards team will support whatever technology strategy is right for our custom- has done a fabulous job over the years of lowering the cost ers’ business. We have Applications Unlimited today and we are of ownership. building Oracle Fusion for the next generation. You can stay on PROFIT: What do you think is going to be the big motivator to your existing applications and continue to get new releases that make customers move to Oracle Fusion? are loaded with customer-driven innovation and leverage next- ANDERSEN: That will differ for different customers. A lot of cus- generation technology, or, when it makes business sense for you, tomers will like the user experience and benefits such as business we will provide an upgrade path to Oracle Fusion applications. intelligence in the UI [user interface]. The UI drives a lot of deci- You can’t be more clear than that. That’s what we’ve told our sions around upgrades. If customers feel that tasks are easier, customers and that’s why customers like our strategy. <>

4 4 may 2 0 0 7 By Ann C. Logue

Financial Firms gain ROI Through Oracle On Demand.

usinesses of all types get ahead by refining, testing, and experimenting with core competencies. Market-leading companies pursue innovation through robust information technology—but that doesn’t mean they always handle the IT infrastructure themselves. Many companies form partnerships with their primary software vendor to provide software and software management services, saving the creativity of the in-house IT staff for developing resources that the operating units can apply for growth. According to Marc Schwarz, Oracle senior vice president for On Demand, “Increasingly, large enterprises are asking Oracle to Internal assist them in increasing the value of their software assets by providing more business and industry insight. Having Oracle manage Oracle applications and technology offers compelling advantages nobody else can provide.” Cynthia Beath, professor emerita at the McCombs School of Strategy, Business at the University of Texas at Austin, says that outsourcing can improve how the IT staff supports the operating business. “It lets them focus on IT use throughout the firm, and it requires lots of Outsourced relationships within the firm,” she says. If anything, it enhances the ability of IT to improve operations. “You can’t outsource strategy or governance,” she says.

The on demand advantage Oracle On Demand is Oracle’s fastest-growing business, supporting 1.7 million users working for some 2,200 global customers. For information-intensive financial services companies, Oracle On Demand provides an alternative to traditional outsourcing that lets the customer concentrate on the strategy while Oracle handles the infrastructure and applications management at one price per user per month. Customers have variable-cost access to Oracle’s software, automatic upgrades, embassy-level security, and ongoing systems maintenance. “One of the issues organizations have had in the past when they deploy technology is that they don’t really know what it costs them,” says Anthony Lye, senior vice president of CRM On Demand at Oracle. “On Demand helps them lock in the budget and avoid overruns. They can roll it out very rapidly so they can keep up with the speed of business,” he adds, generating productivity gains from the start. Schwarz also notes, “We’re in this business to help customers establish end-to-end business processes and industry-specific capabilities, to capture the business benefits of service-oriented architectures, to maximize the value of our customers’ investments in Oracle software. We are changing the game, increasing customers’

Equifax CIO Tripp Partain return on investment while lowering their total cost of ownership looked to Oracle’s Siebel by making it easier for them to align their business transformation CRM On Demand for present initiatives so that they achieve results faster, with less risk.” functionality—and future flexibility. Equifax: Sowing Seeds for Growth In the summer of 2005, Equifax, a global provider of data, analytics, adler

bill and technology solutions, decided to invest in a sales force automa-

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 4 7 tion system for its Latin American businesses. They would have been happy with a single, regionally focused tool to replace its existing systems, but Tripp Partain, CIO of global corporate platforms for the Atlanta, Georgia–based company, was thinking about future applications. “I worked with our business leaders in Latin America to help tick up their valuation process, to make it more of an enterprise evaluation process,” Partain says. He adds that Equifax started looking at Oracle’s Siebel CRM On Demand for sales force automation in part because Oracle’s solution could support Equifax for years. As much as he wanted the system to grow with Equifax, Partain didn’t want too much too soon. He was concerned that managers’ requests for features could choke out the benefits of sales force automation. “It is a very robust tool set, but it doesn’t have the kitchen sink in it so that it can be rapidly deployed, adopted quickly by users, and quickly leveraged,” he says. “From an IT standpoint, that’s a good thing. There’s only so much creep that can occur. You understand what you’re going to get, and that can make a project implementation more successful.”

But at the same time, Oracle offered future flexibility. Should The Warranty Group’s detailed service-level agreement with Oracle was Equifax need a custom solution in the future, or if it eventually key to his company’s transition to hosted services, says Larry Miklusak. makes sense for the company to move the system in-house, the Siebel system can do that. “From an enterprise IT standpoint, I better for the move we’ll make two or three years from now.” didn’t want this to be a point solution,” Partain says. “At some In Latin America, the Siebel CRM On Demand system point, we’re going to have a total, end-to-end CRM [customer replaced a variety of sales-tracking tools. Some country offices relationship management] system. It won’t be just sales force used Siebel already; some used Lotus Notes or spreadsheet-based automation but also service and call center and contract admin- systems; and a few still had paper files. The regional business istration with analytics around all of that data and the full cus- leader wanted to achieve a consistent collection of the data that tomer 360-degree view. With Siebel CRM On Demand, the CRM would determine how Equifax would grow there. solution was built and based on the exact same database struc- “One of the benefits of outsourcing was speed, so of course ture and schema as the on-premise application from Siebel, so we decided right out of the box to put that in test,” Partain says. we have the ability to more easily convert,” Partain says. The goal: 500 users in 50 days. “We made the decision in the “It’s positioned to take the next step whenever we’re ready. summer; by Labor Day, we were live in four countries with 500 That’s No. 1,” says Partain. “No. 2, Oracle is already working on users,” he says. “Between Labor Day and February 2006, we hybrid solutions. You can have a blended environment where completed the final two countries—the last intentionally going some pieces are still in the on-demand world, while some pieces later because it was the one coming from an existing Siebel are internal in your world. There are prebuilt Web services installation that had the most data for us to convert.” with the ability to export and import the data back and forth. To save time, Equifax used the turnkey services provided by

From my standpoint, I was able to solve my immediate business Siebel CRM On Demand. “The only extra thing we added, and deal problem and make a sound decision that will position us even paid for, was translation of all of their training materials into david

How Outsourcing capability enhancement,” especially in divisions or new branch offices can Changes Companies terms of helping companies get IT and come online, with full support, with little “There are three reasons that larger transactional business processing sup- pain to the organization’s infrastructure. companies consider outsourcing and port with the skills that are needed to do For many companies, Allen says, out- offshoring,” says Peter Allen, partner and the work more productively. sourcing is a way to bring major change managing director of market develop- The third reason? Market endeavors— to an organization. “This is largely a polit- ment at consulting firm TPI, in Houston, which, Allen says, include “strategies to ical decision within many companies, a Texas. “The first is cost, but it’s more be acquisitive or pursue divestitures, or decision about introducing change when than just the cost of an hour of labor. It’s even penetrate emerging markets.” Out- other avenues for change have been transforming what is otherwise a fixed sourcing makes it easier to handle cor- exhausted,” he says. “It sends the mes- cost into a variable one that is more pro- porate changes because back-office IT sage that we need to do something fun- ductive.” In addition, Allen says, “There’s and support functions can be separated damentally different—to break the status a whole category of reasons around from core operations. Newly acquired quo regarding the organizational and

4 8 m a y 2 0 0 7 trendwatch

“One of the benefits of outsourcing was speed, so of course we decided right out of the box to put that in test.” —Tripp Partain, CIO, Equifax

Spanish and Portuguese. We felt that the training would be key,” Partain says. Oracle’s On Demand Portfolio With the system a proven success in Latin America, Equifax The Oracle On Demand portfolio includes managed appli- will soon migrate other regions. “We already have our team cations, which offer virtually all of Oracle’s products on working to migrate our Spain and Portugal operations onto our demand; subscription applications; and software manage- existing Latin America implementation,” Partain says. ment services to focus all of Oracle’s capabilities on giving customers what they need to get the most value from The Warranty Group: Independence Through Outsourcing their investment. And all of these offerings are built on an The Warranty Group, based in Chicago, provides extended war- unbreakable Oracle Technology stack, highly reliable hard- ranty programs offered by manufacturers, retailers, and distribu- ware, and world-class facilities based in Austin, Texas. tors. Until November 2006, it was part of Aon, a consulting, Subscription Applications insurance, and risk management firm; it is now owned by Onex ■ Siebel CRM On Demand Corporation, an investment company, and by senior manage- ■ Siebel CRM Call Center On Demand ment. A key part of the sale was figuring out what to do with the ■ Oracle iLearning company’s IT systems, which had been handled through Aon. ■ Oracle Retail.com As a holding company, Onex couldn’t accommodate the needs Managed Applications of The Warranty Group’s 2,150 employees in 20 countries. The ■ Oracle E-Business Suite On Demand sale was negotiated in August 2006 and closed on November 30. ■ Oracle On Demand for PeopleSoft Enterprise “We had to purchase the software licenses. We had to acquire ■ Oracle On Demand for Siebel CRM consulting services, and then we needed hosting services as ■ Oracle On Demand for JD Edwards EnterpriseOne well,” says Larry Miklusak, director of corporate systems at The ■ Oracle On Demand for JD Edwards World Warranty Group. “Oracle provided all three services.” ■ Oracle Collaboration Suite On Demand Miklusak’s goal was to have Oracle’s PeopleSoft Enterprise ■ Oracle Transportation Management applications up and running on January 1, 2007. He missed ■ Oracle Retail Price Optimization the target by only a day, flipping the switch on January 2. “It’s Management Services an outstanding accomplishment,” says Miklusak. “The team ■ Oracle Consulting Services from Oracle and the team from The Warranty Group all pulled ■ Oracle Advanced Customer Services together to make this happen. I had concerns from Day One ■ Business process outsourcing on the timing and was constantly thinking of contingencies but didn’t have to execute any of them. So I guess the biggest surprise was that there were no surprises.” periods, making it easier for them to move on to projects to One key to the transition, Miklusak thinks, was a detailed support the independent company’s strategy. service-level agreement with Oracle. That gave his staff the assur- “There was some training for these new employees to under- ance that problems would be taken care of within known time stand the process that Oracle On Demand requires to put in operational direction of the enterprise.” to really be conversant on the latest in ment, contractual management, and When a company has a problem getting technology features and functionality to socializing roles and responsibilities, and people to follow standard processes or a period in which functional executives doing it in a fashion that insulates all of conform to corporate policies, which in IT, finance, or HR have to be much that integration from the business con- can affect management’s ability to make more business aligned,” Allen says. “I sumer of the services.” decisions or deploy resources into new think we’re on the third era. Executives One part of the executive’s job will markets, the solution may be outsourcing responsible for corporate functions need not change: the accountability for the the back-office services so that the front to be much more sourcing proficient functionality of the services lifecycle. office can do the work of the business. and need to understand that they’re, in “Accountability never gets outsourced,” Outsourcing also changes how essence, an integrator of various internal Allen says. “Sometimes companies think C-level executives do their jobs. The job and external delivery organizations. It they’re doing that contractually, but this has “gone from being purely technology requires a whole new skill set of perfor- is competency that needs to be retained oriented or process oriented to having mance management, financial manage- within the company.”

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 4 9 service requests and get the communication going effectively, but that was minimal,” Miklusak says. “The Oracle On Demand process is pretty straightforward. I attribute a lot of that to the experience of the individuals involved and their communication skills in driving to resolution.”

Genworth: State-of-the-Art Flexibility Like The Warranty Group, Genworth Financial switched to Oracle On Demand during a transition to organizational independence. The company, once known as GE Financial, was spun out of General Electric in a May 2004 initial public offering. “We had a rare opportunity to decide whether we were going to build our Oracle Financial and Oracle HR infrastructure,” says Quentin Davis, CIO for corporate business systems. “We’re a global company. There isn’t an hour of the day where there isn’t someone somewhere in the world working on Oracle on behalf of Genworth. We needed an infrastructure capability and a solution that would support a global operation. We wanted to make sure that we had a solution we could live with for a long time, and we wanted to have flexibility in our cost structure and not take on a lot of fixed costs to provide this capability.” Davis considered building an in-house infrastructure as well as several outsourcing providers, then settled on Oracle On Demand for the combination of global capabilities, deep Genworth CIO Quentin Davis says that the relationship his team has knowledge of the applications that Genworth’s staff already with the Oracle On Demand team is strategic and long-term focused. used, and flexible pricing. platform, that’s with my team,” he says. “My team can focus Pre-IPO, GE owned the infrastructure and supported the on value-added work like project management and customer company’s IT needs. Davis felt that Genworth employees needed engagement.” When occasional problems crop up, Davis doesn’t more control if the company was going to be independent, but have to pull people off a project to find a fix. “That’s all in the he was leery about making too many resource commitments. hands of the team at Oracle On Demand,” he says. “The infrastructure and software management is at Oracle On “The transition has been going on effectively since 2004,” Demand, but as far as the responsibilities for supporting the Davis says. “One of the things that I think surprised most of

On Demand Glossary the provider assumes responsibility for of high-quality information technology the day-to-day supervision and manage- services. ITIL outlines an exhaustive set Applications outsourcing (AO): Con- ment of the resources required to deliver of management procedures to support tracting with outside providers to deploy, services in support of the IT strategy. organizations in achieving both value and upgrade, and manage customized or Infrastructure outsourcing: Contracting quality in IT operations. packaged software. with outside providers to plan, maintain, Offshore outsourcing: Hiring an external Applications service provider (ASP): and support an organization’s technol- organization to perform business func- An outside provider of infrastructure and ogy infrastructure needs. IT infrastructure tions in a country other than the one services that hosts primarily packaged outsourcing services can include manag- where the service or product will be con- applications. ing local area networks (LANs) and wide sumed or sold. Business process outsourcing (BPO): area networks (WANs); enabling internet On demand: An enterprise infrastructure, Leveraging technology or specialized access and internet services (e-mail, software, and services delivery model in process vendors to manage and supply Web sites, etc.); providing hardware and which a variety of IT resources are made an organization’s critical and noncriti- software such as servers, workstations, available to the user as needed. The cal enterprise applications and business productivity software, and specialized resources may be maintained within the processes. Common examples of BPO software; and providing user services. user’s enterprise or made available by a are call centers, payroll outsourcing, and In-house: Producing a service or com- service provider. human resources outsourcing. modity, such as IT management, by using Software as a service (SaaS): A soft- Information technology outsourcing an organization’s own staff or resources. ware delivery model in which a software

(ITO): Contracting with outside providers N Information technology infrastructure firm provides daily technical operation, A M

to supply IT services. The client typically B library (ITIL): A framework of best prac- maintenance, and support for the soft- U

retains ownership of the IT strategy while tice techniques to facilitate the delivery ware provided to their client. G EVE ST

5 0 m a y 2 0 0 7 us, at both Genworth and Oracle On Insourcing the Competitive Advantage Demand, is the complexity. We knew “I would say the big lesson here is don’t there would be a lot of moving parts, >>SNAPSHOT underestimate complexity,” says Davis. but there were even more moving parts Equifax Oracle On Demand gave Genworth the and more details than we had thought.” www.equifax.com systems it needed on a flexible basis, but Annual revenue: US$1.6 billion Realizing how complex the situation was, Employees: 4,600 it didn’t eliminate the ongoing challenges Davis felt more comfortable with the Oracle products and services: of strategy and governance. Instead, it decision to go with Oracle On Demand, Oracle On Demand for Siebel CRM allowed Davis and his team to work on and he formed a strong relationship with The Warranty Group projects that support the rapidly changing Michael Beck, Oracle On Demand’s global www.thewarrantygroup.com financial services markets. operations leader. “Likewise, we required Annual revenue: US$1.4 billion The University of Texas’ Beath believes that our teams form strong working Employees: 2,150 that the biggest mistake companies make relationships, so we were able to work Oracle products and services: when outsourcing is that they confuse through problems and work together to Oracle On Demand for PeopleSoft the commodity part of technology with get this done,” Davis adds. “And so now, Enterprise the value-added information. “Assuming it’s almost seamless.” Genworth Financial that because mainframes or servers are “We really don’t have the typical www.genworth.com commodities means that managing a vendor-client relationship. It’s very strate- Annual revenue: US$10.5 billion data center or server farm is a commod- Employees: 7,000 gic, very long-term focused. It’s very easy Oracle products and services: ity is wrong. It’s a mistake to think that for us to exchange ideas and information Oracle On Demand for Oracle HR because the inputs are a commodity, that and solve problems going forward,” Davis and Oracle Financials the processes should be outsourced. That’s says. He had weekly meetings with his a logical error,” she says. “The reason you Oracle counterpart to work through strate- outsource is that the service you want is an gic and tactical problems. “That line of communication allowed industry standard. That doesn’t mean it’s a commodity, but that us to quickly surface and resolve problems so that our teams other people want the same service.” weren’t bogged down trying to solve things they really couldn’t At The Warranty Group, the high levels of service available solve,” he says. “Things were quickly elevated to us and taken from outsourcing made the company’s sale possible. “There’s care of.” Davis adds that team members were required to work definitely a fast pace over here,” Miklusak says. “I think it’s with each other. “We didn’t let people hide behind e-mails and been one of the biggest challenges I’ve faced and one of the phone calls and things like that.” most satisfying ones too.” Genworth employees who used the new system saw the con- For Equifax, the reliability of the outsourced system meant version as an improvement. They received enhanced capabilities that managers were willing to take important risks. “Our leader for their work, and system support is now more readily available. in Latin America said, ‘If I don’t get the deal off the Siebel report, “They get to talk to people who know our business and what the it doesn’t count—you don’t get paid for it,’” Equifax’s Partain needs are for this business,” Davis says. says. He was able to support that requirement, he emphasizes, Oracle’s Lye emphasizes that keeping in-house staff free from because he knew the system worked. And that level of commit- distraction is a key advantage of Oracle On Demand. “The inter- ment paid off for the company. “Our business that has had the nal resources are already deployed on other projects,” he says. highest sales consistently has been our Latin America business. “If a company wants to add applications and do it internally, it They’re beating their forecast consistently. Having a much more either has to wait or it has to hire more people.” The outsourcing automated process around their efforts and the fact that they strategy, by contrast, makes big IT changes possible. were the leaders in growth in our company, I don’t think it’s a “We see outsourcing as a strategic and competitive advan- coincidence,” he says. “That leader is now not just responsible tage,” Davis says. “We don’t have to allocate human resources for Latin America but for all of our international businesses.” <> or technology resources to running an infrastructure for Oracle HR and Oracle Financials, so we have the flexibility to redirect ANN C. LOGUE is based in Chicago and has written for Barron’s, the New York these resources to more value-added work, and we can scale that Times, and Compliance Week, among other publications. capability up and down as needs require. So it’s a huge competitive advantage for us.” Oracle’s Schwarz concurs, noting, “Our customers are looking to us as their trusted technology advisor. >> For more information Logically, we know about Oracle software best, how it’s built, the product direction, and the best way to run it, and customers Oracle On Demand know their business. By partnering with Oracle to put the busi- oracle.com/ondemand ness imperatives together with the technology, customers can Oracle Financial Services Applications achieve a competitive edge, operating efficiencies, and scale at oracle.com/industries/financial_services the pace they need to win.”

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found in translation Windber research pioneers the next generation in translational medicine.

BY Jeff Erickson A Range of Datasources The quality and quantity of WRI’s patient data sets it apart from hen patients diagnosed with cancer or heart most other research institutes. WRI benefits from close ties with disease walk into the Windber, Pennsylvania– Walter Reed Army Medical Center, which collects a high volume based Windber Medical Center, they ask questions of information about patients such as details about a patient’s about choice of therapies and associated risks. Now, exposure to chemicals and whether the patient smokes or armed with a new take on translational medicine and powerful drinks alcohol. These researchers also have access to a huge set software built on Oracle Database 10g, Windber clinicians can of clinical data, including tissue samples, genomics, proteomics, provide better answers—and more-effective care. and imaging data from mammographies and ultrasound, PET, Translational medicine has been defined as the process CT, and MRI scans, as well as pathology images. “We’ve built of taking results from a laboratory experiment and convert- a patient-centric data model that integrates all of that data and ing them into information that can be used for patient care. makes it available to our researchers,” says Liebman. Windber Research Institute (WRI), a partner of the Windber “We have a lot of different disciplines looking at any given Medical Center and a pioneer problem,” says Liebman. “At the in data-intensive biomedical same time, we’re looking at the research, is now turning this clinical data. We’re looking at system on its head. the socioeconomic data. We’re “We focus on working with looking at the psychological clinicians to identify the prob- information. We’re looking lems they see on a day-to-day at how patients respond to basis, when the patient is sitting a range of treatments. We’re in the room with them, and then even looking at things like how move the problem back to the patients respond to being told research bench,” says Michael that they’re high-risk or low- Liebman, executive director of risk,” he adds. WRI. “Now, when a researcher WRI then takes this data set brings all his or her expertise and and adds one more dimension. technology to bear on a research “We treat patients as a collection problem, the solution has an of longitudinal information,” immediate use in the clinic.” The say Liebman. “A disease is a benefits of WRI’s approach are process that takes place over enormous: patients benefit faster time. Our patients are changing ndt

ra from cutting-edge research, and while they have the disease. It’s

on B researchers get invaluable clini- an important aspect to look at, s cal data to support, clarify, and but very few places are doing

KimWil refine further research. it. We need to understand how

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trendwatch Q&A Understanding Patient-Driven Translational Research

Profit spoke to Patrick F. Terry, an entre- fundamentally about integration of a equates to a tremendously powerful data preneur and pioneer in patient-driven results-focused delivery system into a set and potential insights into disease translational research. In 2000, Terry single bidirectional pathway—a meaning- pathology, mechanisms of action, rational and a group of leaders in the fields of ful and clinically significant results-driven interventions, and clear capture of cause- genomics, bioinformatics, and bio- enterprise that impacts real-world patient and-effect influences like never before in technology founded a pioneering clini- care. It can be oriented quite easily as an our history. As a result, the opportunities cal genomics company. Terry has also information system, because ultimately for improving the effectiveness of inter- founded a series of international non- our genetic code is an elegant informa- ventions—diagnostics, drugs, therapeu- profit life science research organizations. tional storage, retrieval, and adaptive tic regimes, and clinical trials—that will His perspective is forged from personal export system. All of the analogies deliver actionable information to patients and family experiences with genetic and fundamental laws of information at a faster pace are enormous. disease and cancer and extensive work systems can apply to this patient-centric Profit: What’s the importance of get- in the patient advocacy community. biomedical concept. ting patient information to researchers, Profit: What is patient-driven transla- Quantification of biological measure- rather than just having researchers think tional research? ments across the dynamic range of biol- up an experiment, do it, and then get the Terry: Translational research is ogy with an entirely new level of precision results back into the clinical setting? patients’ aging processes will impact their ronment. “With InforSense on Oracle, the back to the clinician at the center in the responses to a therapy or their suscepti- researcher can integrate these different form of risk analysis algorithms. bility to other diseases.” types of data and do that in a very ad hoc, “To make the information usable to flexible way,” says Sheldon. “He or she the clinician, the InforSense solution for A Single Integrated View can bring in the clinical data, merge that WRI takes complex analytical workflows, The challenge has been to build an IT with the genome-expression data, and wraps them up, and deploys them as a support infrastructure that provides a carry out various analytics or modeling to Web portal that hides all the complex- “plug-and-play” environment for research- look for combinations that have a clinical ity,” says Sheldon. In the Web portal, ers, with workflow that can continually significance and utility,” he says. researchers and clinicians can browse and change and evolve as researchers work Once a researcher has identified a gene drill down into data, choosing from hun- with a mix of clinical science, molecular that, for example, suggests whether a dreds of dimensions, to identify patient science, and clinical practice. patient will respond to a particular treat- populations for further exploration. The “How do you combine data with high- ment, the system delivers that information populations can then be used as a start- throughput experimental techniques like ing point for Web-deployed workflows genomics, genetics, and proteomics?” asks that enable complex analysis of experi- Jonathan Sheldon, chief scientific officer mental data. As data and analysis tech- at InforSense, a pioneer in integrative ana- >>SNAPSHOT niques change, new workflows can easily lytics technology and WRI’s key partner in Windber Research Institute be published into the portal, enabling its translational medicine initiative. “How www.wriwindber.org informatics staff to support a broad, do you bring those technologies together Employees: 55 disparate, and evolving user community Year started: 2001 with the clinical data and make the results within a single technology framework. Oracle products: Oracle mean something to researchers?” Database 10g “Even though the researcher may have Working with InforSense, WRI has Other products: built the most-complex workflows that adopted an approach that provides a InforSense informatics technologies, use many different kinds of data sets, the single integrated view of its various data Concentia Image repository clinician can hit a few buttons and the resources, combined with analytical tools, InforSense system runs the analytics in the back- so that the clinician and the molecular www.inforsense.com ground,” says Sheldon. “The results are scientist or the epidemiologist can col- Year started: 1999 returned back into a portal that has a very laborate within a single informatics envi- intuitive interface for the clinician.”

5 4 m a y 2 0 0 7 Terry: There’s the power of having do these real-time translations and you community wherein the patients consent longitudinal information and data capture can deliver this valuable information to to a research protocol and also consent on patients and disease—patients that research participants, but you have to to be recontacted. So if a third-party are traversing the treatment paradigm. counterbalance that against some serious researcher discovers something or wants Capturing that data over time is extremely questions—is the result reproducible, is new information or has a new hypothesis, important because there is valuable the finding real, is it generalizable, how we operate as kind of a contract research information embedded in both space do you test this hypothesis? There are organization. We can recontact the patient and time. What often happens, especially new systems for dealing with the data and manage all of the consenting and in the rare-disease community where a generation that can happen in real time collection of information or biological data lot of my work happens, is that disease and impact the patient sitting right in front and deliver that to the research commu- gets mischaracterized. A disease is usu- of the physician or researcher. nity. This allows for the dynamic linkage ally characterized in the literature from Profit: What are some of the process- of longitudinal, environmental, molecular, a few case studies, and they’re usually es that can overcome those challenges? and personal medical information to extreme case studies. So the valuable Terry: There’s a federal law called be captured and monitored over long components of longitudinal and rigorously HIPAA, which is a set of rules that pro- periods of time. collected natural history across diverse tects personalized, identifiable health in- Profit: What are the key benefits to patient populations is the data that the formation. Covered entities that are either patients and researchers? entire research community and the policy healthcare deliverers or receive federal Terry: Collaboration. The power of the community will be struggling with over the dollars must comply with HIPAA. But as a collective pulling in unison could be the next decade, because we’ve built systems patient group and a patient research foun- most powerful benefit. For Big Science to disconnect patients from their data or dation, we’re a noncovered entity, so we to deliver big results, we all need to work patients from their sample. don’t have to play by the HIPAA rules, and together to make translational research And the challenges will be that you can we’ve built a trust model with the patient medicine a reality in our lifetime.

Choosing Oracle you want, which can take hundreds of laboration between InforSense and WRI WRI and InforSense selected Oracle days of coding for a single study, you has been such a success, and why other Database 10g as the engine that is pow- can install the latest software and get the medical centers are taking notice.” ering their next-generation solution for same capability in as little as a couple “InforSense workflow technology several reasons. First, WRI has to seam- of weeks,” says Sheldon. And unlike using Oracle Database enables us to lessly integrate data from diverse sources, custom scripts, enterprise software is build solutions that are flexible enough including research institutes, hospitals, reusable. “Use the software to analyze a to support the dynamic and iterative government agencies, pharmaceutical study on, say, lymphoma; then simply thought processes of our scientists and companies, and healthcare providers—all drop in a different disease area and the our clinicians,” says Liebman. “Combined with disparate IT systems. workflow would run on that data and with the ability to then deploy these Just as important, WRI and InforSense return relevant results,” he adds. findings throughout our research teams, needed a solution that helped ensure the this technology enables our scientists to security of medical data. By enabling in- moving forward translate their research into real decisions database analytics, Oracle Database 10g With the help of InforSense informatics that can impact patient care. We see this minimizes movement of data in and out technologies and Oracle Database, WRI solution as the ‘command-and-control of the database, significantly reducing has built an IT backbone for a new kind center’ for our clinicians to give patients security risks. “For security and compli- of physician/patient decision support the best possible answers and the best ance reasons, that was a key issue for system. Now WRI, a nonprofit, is start- possible care.” <> WRI,” says Sheldon. ing a for-profit venture to assist other medical centers in doing the same. It has JEFF ERICKSON is a senior technology editor for ROI for the Research Center already begun commercial ventures in Oracle Publishing. As biomedical information grows expo- the U.S. and the Netherlands. nentially more complex, translational “Translational research is a very hot >> For more information research is testing the limits of IT solu- area,” says Sheldon. “Everybody’s talking tions. Sheldon believes enterprise soft- about it, but there is very little out there Oracle for Life Sciences ware that incorporates IT best practices that really does accomplish it. WRI and oracle.com/industries/life_sciences with research institute best practices InforSense have designed the system Oracle Database 10g will become a must. “Instead of writing with clinicians’ needs in mind,” he oracle.com/database custom Perl scripts to get the analysis emphasizes. “That’s really why the col-

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Stamp of Approval for Business Intelligence Pitney Bowes organized its sales group around Siebel Analytics—and it paid off.

By Carol Hildebrand bi gets around usiness intelligence (BI) has been viewed as a special- One such company is Pitney Bowes, where Data Warehouse ized skill, the province of business analysts and data Project Manager William Duffy has been preaching the benefits miners. But companies that continue to use that of analytics for six years—and successfully integrating BI into narrow definition of the role of BI will find themselves an entire business function. “Business analytics is 10,000 times lagging behind their competitors when it comes to getting real more important than it was a few years ago,” says Duffy. business value from the information that is collected every day, Pitney Bowes, a US$5.5 billion company with 25,000 in every transaction with customers. employees in the U.S. and 2 million customers worldwide, “Business intelligence has traditionally been positioned as wanted to end its overreliance on IT as the provider of BI data. an IT initiative that limits the use of information to reports Instead, by giving one view of customer data to employees and ad hoc querying,” says Nancy Williams, vice president of working on the front line, the office and mailing technology business intelligence and data warehousing at DecisionPath and services company hoped to improve the overall customer Consulting in Gaithersburg, experience—creating one Maryland, and coauthor, with version of the truth for data Steve Williams, of The Profit analysis and reporting. Impact of Business Intelligence. “It’s Duffy has led a six-year- not being thought of as a stra- long analytics initiative at tegic tool to improve business Pitney Bowes that started with performance,” she adds. Oracle’s Siebel Marketing and But that view is gradually has since spread through sales, changing. More and more, marketing, field service, and forward-thinking companies call centers. Since 2002, Pitney see BI as more than a tool to Bowes has deployed Siebel analyze historical decisions. Marketing, two Siebel Sales Instead, BI that is deployed modules, Siebel Call Center, more pervasively in the enter- Siebel Analytics, and four Siebel prise can deliver up-to-the- Field Service deployments for minute, actionable data that can its 1,500 field service agents. be used to inform on-the-fly “We are very heavy users of decisions. Companies that suc- business analytics,” says Duffy. cessfully embed BI tools into “The ability to marry all these their business processes can systems together lets us speak reap significant rewards in terms intelligently about how we’re

hibig of time and money saved and interacting with customers, as

dan business generated. well as why and where.”

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HOW IT BEGAN manager dashboard. Analytics are now From there, the company added call Pitney Bowes started down the business the sole source for field service metrics, center analytics in October 2005, as analytics path in 2002. Company execu- giving Pitney Bowes one informational well as an upgrade to Siebel Analytics tives wanted to address the business source. The 1,500 service workers have 7.8.4 in early 2006. The upgrade helped challenges that prevented them from cre- now gone wireless, extending the reach Duffy streamline IT chores. For example, ating “one voice of the customer.” “When of analytics still further. before the upgrade, the extract, trans- a call center person takes a call, they form, and load (ETL) process took 10 should see sales, service, and customer empowering the sales force hours each night, leaving no time to history data integrated into one screen,” Duffy next turned his attention to produce user-requested reports over- says Duffy. “But we couldn’t do that in the sales force, implementing the first night. Now, ETL runs in under 3 hours, our existing environment.” phase of Oracle’s Siebel Sales Force and reports are ready for users by 6 a.m. Having numerous business units pre- Automation software in January 2005. sented too many faces to the customer. “That was huge,” says Duffy. “It auto- THE LONG VIEW For example, Pitney Bowes ran separate mates the sales prospecting process. The Duffy has some challenges to conquer, call centers for service, billing, inquiry, sales folks have laptops. We tell them however. One is the ongoing data own- and sales, with two more centers over- what customers to hit, who is coming ership struggle between the BI data seas. There was limited connectivity to to an end of a lease, things like that. warehouse group and the conventional the company’s legacy systems, which Through analytics we can record that transactional development teams. The made it difficult to execute a sales plan information, and all of a sudden we can latter may resist BI involvement or lack based on retention loyalty and cross- see what we are working on.” confidence in the BI data, or they may selling—all tactics that are more suc- The company also deployed manage- simply not understand how data integra- cessful if the sales reps can draw from a ment dashboards for executives that tion might work. For example, Duffy wealth of customer data. Moreover, the allow them to view sales numbers at the would like to be able to combine the 10 company found it difficult to manage district, regional, and individual level. to 15 legacy application screens that cur- segmented sales campaigns effectively, as “It empowers management to better rently populate desktops at call centers they had to depend on manual lists to direct their people, because it gives with one integrated analytics screen that develop and target the campaign. insight on opportunities with existing connects to each separate warehouse. “It’s Duffy committed to using Siebel customers,” says Duffy. As of late 2006, a long-term goal,” he says. “We are actu- Marketing in 2002 to automate cam- Duffy had extended the Siebel Sales ally able to do this now, but there’s some paign development but planned to use Force Automation module to more than paranoia on the part of the CRM [cus- a competitive product for reporting. 1,500 sales force workers, with dash- tomer relationship management] people However, when Siebel acquired nQuire boards being used by 300 sales execu- not to do it. They want to keep the data in July of 2002, Pitney Bowes took a risk tives. “Suddenly, executives can clearly in their database, but my attitude is, on the new technology and launched measure productivity, and they can’t get ‘Why bother? It’s sitting here ready for Siebel Marketing reporting in May 2003. enough of it,” says Duffy. them now.’” He hopes in the long term The move paid off—the group Has it been successful? Judging from to forge an alliance with the CRM team, could access data to successfully create user demand, yes. “We went in with providing users with one technical point telemarketing campaigns on retention 300 management licenses and have been of contact. In the end, doing so will help and loyalty, and increased sales drove authorized to buy 300 more for different further the Pitney Bowes vision of busi- a doubling of the staff by 2005. Next levels of management,” says Duffy. “We ness intelligence as a process that should the group implemented Siebel Analytics need this information in the hands of a be almost invisible to users. “It’s more applications for field service workers, lot more people.” action oriented—analytics can drive how phasing them in over the course of four a business responds to a particular thing deployments from October 2003 to May in the market,” says Duffy. 2006. “Five hundred service center reps Duffy also points to several impor- went online in November of 2003, with >>SNAPSHOT tant lessons learned in his long analytics reporting dashboards rolled out to 50 Pitney Bowes odyssey. The first is to engage strong and service managers,” says Duffy. The group www.pb.com committed project sponsors. “Continued was able to replace 200 legacy reports Employees: 25,000 in the U.S. executive sponsorship is really critical,” with Siebel Analytics, and the metrics Annual revenue: US$5.5 billion he says, something that DecisionPath became critical for service-level key per- Products and services: Oracle’s Consulting’s Williams agrees with whole- formance indicators. Issues such as how Siebel Marketing, Siebel Sales Force heartedly. “In my experience, the odds fast service tickets are closed, average Automation, Siebel Call Center, Siebel of success go up dramatically when response time, and average days a service Analytics, Siebel Field Service companies have senior-level business request is open can all be tracked on the management sponsoring the project,”

5 8 m a y 2 0 0 7 trendwatch Q&A getting ready for business intelligence

Nancy Williams, vice president at ganizations won’t get good ROI unless Profit: How can companies assess DecisionPath Consulting and author of BI is focused on the right place—that is, where they are on the readiness scale? The Profit Impact of Business Intel- business opportunities. That part has Williams: We use a tool that mea- ligence, specializes in business intel- to be business oriented. Once those sures readiness using seven criteria ligence and data warehousing issues. opportunities are identified, you need from the business, technical, and She firmly believes that one of the big- the technology to build the databases organizational aspects of readiness. gest mistakes that companies make is that will hold high volumes of data and Everything has to come together for this failing to align BI strategy to business transform and integrate the data so that to work, and the ratings indicate risks in strategy. Profit asked her what compa- information can be accessed in new specific areas that the companies can nies need to do to become BI ready. and different ways. then address. Profit: BI has been around for a Once the technology is in place, Profit: What role does a lack of inte- while, but it hasn’t achieved mainstream change management is necessary. You grated IT infrastructure play in getting success. Why do you think that is? can put the information out there, but good information for BI? Williams: There are major problems unless you think about how it will be Williams: It plays a big role. Com- in how organizations position BI initia- used, you won’t get results. panies need to coordinate BI projects tives. BI is often positioned as individ- Profit: Who should be the leader of a within a broader program, and they ual IT projects that make limited use of BI effort within a company? also need a broader perspective of information through reports generated Williams: Ideally, it’s a senior-level what’s going to be built over a series from the IT group. It’s a very arm’s- business executive—the CFO is a great of projects, and to make sure that each length method of using information. candidate. My experience is that the project does not spawn its own version In contrast, the companies that have odds of success go up dramatically of reality. It’s a technical paradigm shift been successful with BI have radically when companies have senior-level for companies that are used to imple- changed how they think about and use business management sponsoring menting individual IT applications within information. For example, casinos have the project, and not so significantly informational stovepipes. used BI to completely transform the when sponsorship comes from the Profit: In your experience, what sort way they do business—they can evalu- technology side. of business benefits do companies see? ate and identify the high-value custom- Profit: How should companies get Williams: This is the final payoff, be- ers while they are in the casino. BI has started on a BI project? cause when it’s done right, businesses great potential to allow a company to Williams: Companies first need to can realize very tangible bottom-line do new things, but most companies assess their capabilities to see what benefits from BI. We have seen compa- don’t know how to capitalize on it. they need to do to succeed both short- nies do amazing things, but it requires Profit: Most people see BI as a and long-term. They need to know the work. Management has to be willing technology-driven discipline. How do requirements of the business side and to take a look at how information can the business and technology aspects the necessary technical capabilities. It’s best be leveraged to enhance business of BI work together? important to step back and look at this performance. They have to be willing to Williams: Both points of view are from the big-picture basis, not applica- change. This is not a simple thing, but it needed. My experience shows that or- tion by application. can yield significant rewards. she says. Next, implement with as little with CRM in the future, as well as CAROL HILDEBRAND is a freelance business and customization as possible. “Vanilla really working to extend the reach of the technology writer based in Massachusetts. works, and it makes life simpler when it Siebel analytics tools to a much wider comes to upgrades or integration,” says user base. Further proof of the effective- Duffy. He also recommends making sure ness of the Pitney Bowes implementa- >> For more information users have realistic expectations as to tion? Duffy needs a single support what BI can and cannot do, integrating person to cover the entire analytics Oracle for Industrial Manufacturing with legacy systems whenever possible deployment. “At one point, we delivered oracle.com/industries/indus_manu and understanding that analytics support more than 400 reports to a large cus- Oracle’s Siebel is an ongoing process. tomer base with only one person,” he oracle.com/applications/crm/siebel Duffy is eying further integration states. “That’s cost-effective.” <>

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 5 9 < < certified advantage partner index

Oracle PartnerNetwork Certified Advantage Partner Index In this edition we feature Certified Advantage Partners with a primary focus in the Oracle PartnerNetwork (OPN) as System Integrator. Partners able to demonstrate superior product knowledge, technical expertise, and a commitment to doing business with Oracle qualify for the OPN Certified Advantage Partner level. These partners receive a higher level of service, training, benefits, and resources from Oracle. For more information on partners, please visit the OPN Solutions Catalog at solutions.oracle.com.

Company name URL Company name url

Global LogicaCMG www.Logicacmg.com Accenture www.accenture.com Mdtvision www.mdtvision.com BearingPoint www.bearingpoint.com Msg Systems ag www.msg-systems.com Capgemini www.capgemini.com Open Technologies www.ot.ru Computer Sciences Corporation www.csc.com Opitz Consulting GmbH www.opitz-consulting.de Deloitte www.deloitte.com Patech Solutions Limited www.patech-solutions.com EDS www.eds.com PC-Ware Information Technologies AG www.pc-ware.de IBM Global Business Services www.ibm.com Rila Solutions www.rila.com Infosys www.infosys.com S.C. RomSoft S.R.L. www.romsoft.info Satyam www.satyam.com Sogeti Espana www.sogeti.biz Tata Consultancy Services www.tcs.com Symatrix Limited www.symatrix.co.uk Unisys www.unisys.com TEAM GmbH www.team-pb.de Wipro www.wipro.com Technology Reply Srl www.reply.it Africa TietoEnator Corporation www.tetioenator.com Implementation Factory (Pty) Ltd. www.ifactory.co.za TimeStamp - Sistema de Informação www.timestamp.pt New Dawn Technologies www.ndt.co.za T-Systems International GmbH www.t-systems.com Waymark Infotech (Pty) Ltd. www.waymark.co.za Vector Software SRL www.vectorsoftware.ro Asia Pacific Whitehouse Consultants Ltd. www.whitehouse-consult.com Acumen Alliance Investments www.acumen.com.au WM-data Danmark A/S www.wmdata.com ASG (Asia Pacific) Pty Ltd. www.asggroup.com.au Latin America Automated Systems (HK) Ltd. www.asl.com.hk Advanced Database & IT Sistemas de Informação S.A. www.advancedit.com.br DMS Software Technologies (Pvt.) Ltd. www.dmsswt.com Asi Consultants www.asiconsutants.com Fujian Fujitsu Communication Software Co.,Ltd. www.ffcs.cn Aporte Gestao Empresarial e Tecnologia da Informacao Ltda. www.aporte.com Fusion5 Limited www.fusion5.co.nz B2BR Business to Business Informatica do Brasil www.b2br.com.br GTL Limited www.gtllimited.com Bertini Consultoria em informatica www.bertini.com.br FPT Information System www.fis.com.vn BGH, S.A. www.bgh.com.ar HAND Enterprise Solutions Co., Ltd. www.hand-china.com Casa de Software S/A www.casasoft.com.br HPT Vietnam Corporation www.hptvietnam.com CFP3 Consultoria e Tecnologia www.commitconsultores.com.br IBCS Primax Software (Bangladesh) Ltd. www.ibcs-primax.com E-Partner Comercial e Serviços de Informática Ltda. www.epartnerbr.com.br iCE Consulting Co Ltd. www.iceconsulting.co.th Excelsis S.A.C.I.G www.excelsis.com.py LG CNS Co., Ltd. www.lgcns.com Grupo Quanam www.quanam.com KPMG Consulting Co Ltd. www.kpmg.com.tw Illuminat www.illuminatnm.com NCS Pte. Ltd. www.ncs.com.sg JFM Informática Ltda. www.jfm.com.br Red Rock Consulting www.redrock.net.au Politec Ltda. www.politec.com.br Sierra Atlantic Pte Ltd. www. sierraatlantic.com Procwork CRM www.procwork.com.br Recours Informatica Consultoria e Assessoria Ltda. www. www.recours.com.br Sun Microsystems (Thailand) Ltd. www.sun.com Servicios, Tecnologia y Organizacion S.A. de C.V. (STO) www.stoconsulting.com Taiji Computer Corporation www.taiji.com.cn Canada Soft Bolivar S.A. www.softbolivar.com Allstream Inc. www.allstream.com SQL Technology S.A. www.sqltech.cl Oto Global Solutions Inc. www.oto.com Sunrising Desenvolvimento de Sistemas www.sunrising.com.br Europe Sysdesign Consultoria Em Informatica Limitada www.sysdesign.com.br Anelia SAS www.anelia.fr Unimix Tecnologia Ltda. www.unimix.com.br Atos Origin IT Services UK www.atosorigin.com YKP Consultoria e Sistemas Ltda. www.ykp.com.br Atos Origin Nederland BV www.atosorigin.com Middle East B3iT Management AB www.b3it.se Bahwan Cybertek LLC www.bahwancybertek.com Borlas IBC www.borlas.ru Computer Information Systems www.cis.com.lb Districom www.cis.com.lb CapGemini Telecom Media und Networks GmbH www.de.capgemini.com Emirates Computers Est www.emiratescomputers.co.ae Cedar Consulting Ltd. www.cedarconsulting.co.uk Global Technology Services LLC www.gtsuae.com Cnsys www.cnsys.bg Hyperlink www.hyperlink-me.com CompIT Technologies www.compit-t.com.by Mercator www.mercator.co.ae Computacenter AG & Co. OHG www.computacenter.de Macro Software Systems LLC www.macro-soft.com Consit A/S www.consit.dk Mindscape www.mindscapeit.com Cozum Bilgisayar www.cozumbil.com.tr Raya Gulf LLC www.rayaholding.com CSC France www.csc.com United States CROC Incorporated www.croc.ru Abaris, Inc. www.abaris-inc.com Cronos NV www.cronos.be Applications Software Technology Corp. www.astcorporation.com Cronos Ibérica, S.A. www.cronosiberica.es Business & Technology Resource Group Inc. www.btrgroup.com CSC Portugal www.csc.pt CedarCrestone www.cedarcrestone.com Deutsche Post ITSolutions GmbH www.dp-itsolutions.de CherryRoad Technologies www.cherryroad.com Developing World Systems Ltd. www.dwsonline.co.uk CIBER www.ciber.com/ces/oracle DBConcepts Daten - und Informationsverarbeitungsges.m.b.H. www.dbconcepts.at Cognizant Technology Solutions www.cognizant.com Edenbrook Limited www.edenbrook.co.uk CSS International www.cssus.com Engineering Ingegneria Informatica S.p.A. www.eng.it DAZ Systems www.dazsi.com Experteam Consulting www.experteam.com.tr Emerging Solutions www.emergenow.com Fadata www.fadata.bg IMPAC Services www.impacservices.com Fujitsu Services Limited www.uk.fujitsu.com KBACE Technologies, Inc. www.kbace.com Fujitsu Siemens Computers Ltd. www.fujitsu-siemens.com Lucidity Consulting Group LP www.luciditycg.com Getronics PinkRoccade www.getronicspinkroccade.nl MAXIMUS Inc. www.maximus.com Global Services Aarhus & Copenhagen A/S www.maerskdata.dk NaviSite, Inc. www.navisite.com Groupe LGS France www.lgsrecrut.com Optimum Solutions Group, LLC www.optimumsolutions.com Hunkler GmbH & Co. KG www.hunkler.biz OSI Consulting, Inc www.osius.com I-Teco www.i-teco.ru Perot Systems Corporation www.perotsystems.com Inatech Solutions Ltd. www.inatech.com Protege Software Services, Inc. www.protege.com Ineum Consulting www.ineum.fr RCM Technologies www.rcmt.com Informacines Technologijos www.it.lt Solbourne Computer Inc. www.solbourne.com Informatica El Cortes Ingles www.ieci.es TITAN Technology Partners www.ttpartners.com Inter Access B.V. www.interaccess.nl TUSC www.tusc.com IT Alise www.it-alise.com USinternetworking, Inc. www.usi.net KPMG Consulting www.kpmg.be Wave Consulting Group www.wavecg.com Kurt Salmon Associates www.kurtsalmon.com Whitbread Technology Partners, Inc. www.whitbreadtech.com Leaves www.leaves.ru Xcelicor, Inc. www.xcelicor.com

6 0 m a y 2 0 0 7 < advertisers’ index Advertiser Web Site Page BearingPoint www.bearingpoint.com 11–14

Citrix www.citrix.com 2,3

DBA Solutions www.dbasolutionsinc.com 56

EMC www.emc.com OBC

Fujitsu Group www.fujitsu.com IFC-1

GNC www.gnc-consulting.com 61

HP www.hp.com 4

Image Now by Perceptive Software www.imagenow.com 45

Microsoft www.microsoft.com 9

NaviSite www.navisite.com 56

Oracle www.oracle.com 52

Taxware www.taxware.com IBC

USi www.USi.com 7

Vertex www.vertex.com 46, 62

WEB ADDRESSES ARE PROVIDED BY COMPANIES AS A SERVICE. PROFIT IS NOT RESPONSIBLE FOR ERRORS OR WEB ADDRESS CHANGES.

Advertising close dates for 2007 issues Issue close date Issue close date August 2007 June 11, 2007 november 2007 September 3, 2007

Marketing Resources For information about advertising in the executive’s best resource for the impact of technology on business, go to oracle.com/profitmagazine.

Ireland...... 1850.672253 Italy ...... 800.872.934720 Japan...... 0120.155.096 For Oracle product information, call the number for your region: Malaysia...... 1800.80.1837 Mexico...... 01800.221.7321 Country Phone Number The Netherlands...... 0800.0827 U.S. and Canada...... 1.800.367.8674 New Zealand ...... 0508.555.215 Australia...... 1800.735.467 Norway...... 800.14411 Austria...... 0800.1.81.01.11 Philippines...... 811.5831 Belgium...... 0800.73280 Portugal...... 800.85.33.22 Brazil...... 0800.9701985 Singapore...... 1800.672.2531 China...... 800.810.0161 South Africa...... 0800.994.225 Denmark...... 8088.1068 South Korea...... 080.2194.114 Finland...... 0800.113.573 Spain...... 900.952900 France ...... 0800.905.805 Sweden ...... 020.798798 Germany...... 0800.1.810.111 Switzerland...... 0800.55.2574 Greece...... 00800.353.12020 Taiwan...... 0800.672.253 Hong Kong...... 800.901039 Thailand...... 001800.441.0545 India...... 1800.425.6725 Turkey ...... 0800.211.0444 Indonesia...... 0800.1.672.253 U.K...... 0870.5.332200 profit: The Executive’s Guide to Oracle Applications is published four times a year, in February, May, August, and November, by Oracle Corporation at 500 Oracle Parkway, MS OPL C3, Redwood Shores, CA 94065. CPC Sales Agreement #1519042. Postmaster: Send address changes to Profit: The Executive’s Guide to Oracle Applications, P.O. Box 1263, Skokie, IL 60076-8263.

p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e applications 6 3 < FOCUS ONmessaging

Core Competency Simplicity and concreteness are at the heart of successful ideas.

BY Kate Pavao Heath: The Curse of Knowledge happens to experts of all kinds because n Made to Stick: Why Some Ideas experts know too much and they try Survive and Others Die, brothers Chip to get it all across. Expertise is a great and Dan Heath explore many of the thing. It allows you to solve really tricky most memorable ideas—from urban problems. But, when presenting an idea, legends to ad campaigns—to find the you need to ask yourself what the single common denominator. Profit talked to most important thing is that you need Chip Heath, a professor of organizational to get across. <> behavior at Stanford University’s Graduate School of Business. KATE PAVAO is a California-based freelance writer. Profit: You say that you were inspired by Malcolm Gladwell’s book The Tipping Point. How is your book different? According to Chip Heath, a good business Recipe for Success Heath: Gladwell was talking about plan is absolutely essential but also The Heath brothers provide a mem- absolutely irrelevant. things that are a bit more tangible, like orable acronym to test the sticki- the revival of Hush Puppies shoes. We’re port on it,” he’d hold up the block of ness of an idea: SUCCES. The best most interested in how you take an intan- wood and say, “Where’s it going to go?” ideas, they say, are driven by sim- gible idea and pitch it to other people in a Profit: Talk to us about Commander’s plicity, unexpectedness, concrete- way that makes them say, “Wow, that’s an Intent, which is a concept the U.S. Army important idea; we ought to devote time uses to “specify the plan’s goal, the desired ness, credibility, emotional impact, and attention and resources to it.” end state of an operation.” What does this and stories that inspire people to Profit: How should business leaders mean for businesses? act. Profit asked Chip Heath which use your book? Heath: Sometimes organizations fall too of these qualities is most important. Heath: The principles are the same much in love with their plans. I’ve talked “Concreteness is the single most whether you’re a business leader or a to venture capitalists in Silicon Valley effective way for us to make sure teacher. Part of being a great leader is about entrepreneurs, and they say that that our message doesn’t stop at teaching people enough about the busi- having a good business plan with lots the boundaries of our group, where ness that they can make the right decision of numbers in it is absolutely essential. we’re all experts and we all know on their own. Take Jeff Hawkins leading But it’s also absolutely irrelevant. Venture the same things,” says Heath. “If the Palm Pilot team. There is a pervasive capitalists use the plan to see that some- your message is important to your problem in Silicon Valley called “feature body can think through the contingen- company, it’s got to cross bound- creep.” Engineers make products more cies, but what really gets them excited and more complicated, because they’re is a very concrete image of the kind of aries between the different groups engineers and they understand how to person whose world is going to be trans- in your company—and it’s got to use complicated products. But if the Palm formed by the product the entrepreneur is cross the even more important Pilot was going to work as a PDA, it was working on. That concrete description of boundary between you and your going to have to be elegantly simple. the customer and product is the equiva- customers. SUBWAY got concrete Jeff Hawkins reinforced his goal of lent of Commander’s Intent: it keeps the about its message of ‘healthy fast

simplicity by creating a visual proverb. entrepreneur on track even when the food’ when it told the story of Jared I CK He walked around with a block of wood detailed plan becomes irrelevant. Fogel, who lost 200 pounds eating A URD carved in the shape of the Palm. When an Profit: What gets in the way? Is it what S

SUBWAY sandwiches.” Y engineer would say, “Let’s put a peripheral you call the Curse of Knowledge? AM

6 4 M A y 2 0 0 7