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EBS Oracle Service Contracts:

Strategies to Increase Service Revenue
Susan Flierl
Product Strategy Director

Martyn Langley
GPO & Senior Director Business Operations

The following is intended to outline our general

product direction. It is intended for information
purposes only, and may not be incorporated into any
contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
relied upon in making purchasing decisions.
The development, release, and timing of any
features or functionality described for Oracles
products remains at the sole discretion of Oracle.

Program Agenda

Strategies to increase service revenue

Oracle solutions
Oracle Service Contracts @ Oracle

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Business Environment

A Time of
Change

Service contracts as an annuity

Less volatile revenue stream

High Margin

Repeatable

Differentiating

Service
Contracts

Contract base segmentation

Quote by Sales Rep

On-line renewal
Many companies
neglect their smaller
accounts
Evergreen

500k

100k

50k

Contract Leakage Example

STRATEGIC

Customer Base Allocation

NON-STRATEGIC

28.5%

71.5%

Support Revenue

$85,500,000

$21,450,000

Support Revenue
Allocation

80.0%

20.0%

Current Renewal Rate

92.0%

53.0%

Percent of Revenue Lost

8.0%

47.0%

Targeted Renewal Rate

92.0%

92.0%

Net Increase in Revenue

$8,365,500

7%

Oracle Service
Contracts

Oracle Service Contracts Solution

Service Provider / Product Manufacturer

1 Proposals, Quotes
2 Products & Warranties
Service / Usage Agmts
3

Define
Coverage

Sales

Bill & Invoice

T&Cs
Contract Mgr

Service
Contracts
Repository

Create
Contract
Verify
Entitlement

Service Requests

Provide
Service

5 Renewal Notifications

Bill &
Collect

R
e
n
e
w

Service

Customer
Returns, RMAs

Integration
Other
Application
Components

AR, Invoicing
OM, Quoting

Service
Install Base

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Oracle Service Contracts

R12 & R12.1 Release Overview

Uplift renewal rates

Improved customer experience with Flexible Assignment Rules for
Customer Communication Templates and Online Acceptance Portal
Enhancements
Faster renewal cycle times with Service Contracts Administration
Workbench
Improved renewal rate analysis with Service Line and Covered Level
Cancellation

Reduce financial risk

Standardize customer coverage with Standard Coverage Definition
Improve revenue recognition compliance with Partial Period Revenue
Recognition and Defer Revenue for Customer Acceptance Contingencies
Secure customer payment information with Credit Card Security

Streamline contract administration

Provide global contract administration tools with Multi-Org Access Control
Improved service contract visibility when managing customers assets
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Evergreen renewals
Automatically renew contracts based on pre-defined rules
to maximize retention rates and ensure service continuity

Zero-touch web based process automatically renews low

value contracts upon expiration
Renewal Rule

Credit Status = OK
Contract > Threshold
Value

Value

Expire days < 30

Renew Contract

Update Contract
Notify Sales / Service Rep
Notify Customer

500k
100k
50k

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On-line renewals
Quote layout determined by BI

Notify

publisher templates

customer

On-line portal for customer to

accept or request assistance

Customer can modify payment

methods on-line

Service contract approval

optional
Approve &
Activate

Customer
acceptance

500k
100k
50k

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Online Acceptance Portal

R12 Enhancements

Accept, reject or
request assistance

View quote in pdf

format

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Online Acceptance Portal

R12 Enhancements

Attach image of
PO or check

Comprehensive
payment formats

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High value renewals

Sales rep

Receives automated

Expiration

expiration alert

Alert
Approve /

Create

Activate

Opportunity

Converts expiring contracts

into sales opportunities

Evaluate complementary
products / services
for cross-sell & up-sell
opportunities

View transaction and

Customer

Quote /

Acceptance

Negotiate

interaction history

Customer acceptance:
manual or on-line

500k
100k
50k

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R12 Service Contracts Workbench

Quick search for your new and renewal contracts

Displays your open contracts

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What ProQuest Is Saying

We have realized significant savings with the upgrade to

Oracle E-Business Suite Release 12. In particular, we
streamlined our renewal process, which has increased
customer satisfaction and retention. And, we minimized costs
with an out-of-the-box deployment strategy for Oracle Service
Contracts.
Timothy Hall, Senior Technology Manager, Global Management Systems, ProQuest

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Service Contracts
@ Oracle

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Program Agenda

Strategies to increase service revenue

Oracle solutions
Oracle Service Contracts @ Oracle

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Global Single Instance The story so far

Scaling Efficiently via renewal automation
R12 Transactional to Sales tool

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Service Contracts @ Oracle

Introductions

Martyn Langley Senior Director & Global Process Owner Support

Manage system footprint and roadmap for Customer Services
System & Process requirements
Solution review/sign off
Release process
Partnering with IT
Integrating acquisitions

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Global Single Instance

Overview

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Global Single Instance

Then and Now
1998

NOW

65+ ERP instances

1 E-Business Suite instance

40 Data Centres

2 data centres (including backup)

Inconsistent business processes

Global standard processes

Fragmented data

Consistent data and global

Decentralized decision making

Geography
Line of business

business intelligence
Consistent decision making
Global Process Owner
Global Application Owner
Key enabler for acquisitions

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Applications Supported by AIT

E-Business Suite Products Implemented
Procurement
iProcurement
Purchasing
Accounts Payable
Internet Expenses
Payments
Property Manager

Projects
Projects
Project Resource Management
Project Management

Human Resources & Payroll

Advanced Benefits
Human Resources
Human Resources Intelligence
Payroll
Time and Labor
Global Payroll Interface
Appraisals
Talent Management
Compensation Workbench
iRecruitment
Self Service Human Resources
Learning Management

Support Sales Systems

Service Contracts
Contracts Intelligence
Installed Base

Internal Support Systems

Teleservice
Knowledge Management
iSupport
Customer Support

Manufacturing & Distribution,

Advanced Product Catalog and
Pricing
Materials Requirement Planning
Bill of Materials
Inventory Management
Warehouse Management System
Work in Progress
Engineering
Shipping Delivery Based
Advanced Pricing

Financials
General Ledger
Fixed Assets
Treasury
Cash Management
Subledger Accounting
iAssets
E Business Tax
Response Capture

Ordering
Quoting
Order Management
Contracts Core
XML Gateway
iStore
Incentive Compensation

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Service Contracts@Oracle
Implementation at September 2010

Installed
Base

Contracts
Intelligence

Order
Management

Service
Contracts

Siebel
Territories

Global
Single
Instance

Accounts
Receivable

My Oracle
Support

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Service Contracts@Oracle
Timeline
GSI to 11.5.6
US to
OKS 11i
(GSI)

E. Europe/
APAC to GSI

Online
Renewals

R12 Upgrade,
Siebel CRM

12.1.3
upgrade

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
E. Europe/ 11.5.8
upgrades
APAC to
OKS 11i
W. Europe to
OKS 11i

11.5.10
upgrade

12.1.1 and 11g

upgrade

W. Europe to
GSI

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Scaling Efficiency via

Renewal Automation

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Service Contracts @ Oracle

Contract base management

Service contracts is the single application Oracle

utilizes to manage its annuity based services
business
June 2010 Oracle contract base
> 500k contracts
$16BN
Challenge is how to efficiently manage an ever increasing contract
base?

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Contract base segmentation

Contract base management

Business
segmentation

Application
features
R12 sales features
$782 M
ORACLE

Auto Reminder

11,000 Customers (Includes Canada)

17,522 contracts

Micro Renewals

$138 M

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Renewals automation @ Oracle

-120 days renewal

Sales rep assigned

from territory

Automated feed
to delivery system

event fires

-90 days Reminder 1

Contract
renewed

Quote Sent
Renewal
Workflow

400 + XML
quotes letters

Customer
accepts

+15 days
Contract
Cancelled

FTP - Service
Suspended

Customer
Invoiced
Start date Final
reminder and
notice to cancel

-60 days Reminder 2

-30 days Reminder 3

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Renewals Automation at Oracle

Leveraging and extending standard functionality

Micro Renewals Low touch processing

Identify MR upon renewal
Qualifying service
Not in Customer exclusion list
< $5k global threshold

Contract renews and publishes online

Customer directed to online site via email
Customer can Accept / Decline / Request assistance
Upon acceptance contract automatically approved
Fail to Pay Suspending Service for non payment
< $k global threshold
Customer invoice > 90 days overdue
FTP program suspends service in Service contracts

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Renewals Automation at Oracle

Leveraging and extending standard functionality

Contract Approvals utilizing AME

Contract approvals ensure compliance to specified business
rules
Global team of 35 verifying submitted contracts prior to booking
11510: approvals assigned to country leader
Acquisitions increasing volume of approvals
1600+ per 24 hours

R12: use AME to route to the best approver

Value
Region
Service
Approver Workload and availability

Increased QA custom checks to 50+ assisting automation and

controlling headcount costs

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R12 - Contract Approvals via AME

R12 Solution
Approvers log their start/end times
Approver User Ids and group membership in custom lookups
AME assigns approvers to contracts:
Contract Attributes determine which AME Rule is True
Region, Value (dollars), Service Level: e.g. EMEA 100K - 500K

AME assigns approver from approval group tied to Rule

Availability and Workload determine approver
Dynamic group winner defined by sql statement

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Sun to Oracle Installed Base Service Contracts

Integration
R12 Solution
June 2010 Sun IB & Service Contracts migrated into GSI
Description

Service
Contracts

Sun Volumes

138,008

IB instances IB instances off

on Contract
Contract
4.1M

12M

Utilized IB & Service Contracts 12.1.1 open APIs to load data

10 days to load & reconcile all data including
IB instances
Service Contracts
IB configurations

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Service Contracts Transition to a Sales Tool

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R12 Service contracts - Sales Tool Capabilities

Administrator Workbench
HTML UI displaying consolidated view of a sales reps contracts
Entry point for day to day management with personalized views to
support individual territory profiles

Manage
renewals
pipeline
Update
status and
forecast data
Launch
contracts to
Online portal

Mass update
capabilities
Email/print
quote
Enable/Disable
Reminders
Run QA Check
Submit for
Approval

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R12 Service contracts - Forecasting

Mass update functionality has enabled Oracle to
transition to automated renewals forecasting

Forecast = >50%

Bookings
Forecast
Full Value

Forecast = 1 - 50%

At-Risk
Forecast
Full Value

Forecast = 0%

Cancellation
Forecast
Full Value

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Oracle OpenWorld

Latin America 2010

December 79, 2010

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Oracle OpenWorld

Beijing 2010
December 1316, 2010

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