R12 --- A Big Step Forward

Prepared for NorCalOAUG January 17, 2008

October 12, 2007

Partnership for Success

 About Xsigo About NaviSite Xsigo Project Objectives & Decision Process Scope of the Project Implementation Approach R12 Features What Worked Well What Did Not Work So Well Upgrade Considerations Summary

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About Xsigo
Founded 2004 Location:
Sunnyvale, CA
Xsigo offers a compelling solution that delivers I/O virtualization. Solutions like this will enable greater flexibility and change the way organizations deliver IT services. - John Humphreys, IDC

Funding
Kleiner Perkins, Greylock Partners,

Khosla Ventures
Juniper Networks

Board members include:

Ray Lane: Former President, Oracle

Mark Leslie: Co-Founder, VERITAS

Vinod Khosla: Co-Founder, Sun Ashok Krishnamurthi: Founding team at Juniper
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VP780 I/O Director

Hardware-based architecture Fully non-blocking fabric
780 Gb/s aggregate bandwidth

24 Server ports
Expansion switch available for connection to hundreds of servers

4U height

Custom silicon
Line rate throughput
Redundant hot swappable fans and power supplies.

15 I/O module slots

4 X 1Gb Ethernet 1 x 10Gb Ethernet 2 x 4Gb Fibre Channel SSL offload module

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How Xsigo Helps

Without Xsigo With Xsigo

70% fewer cables, cards. No edge switches.

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About NaviSite

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NaviSite Fast Facts

Founded in 1997 Employees: ~700 Customers: ~ 1400 Bay Area Office: San Jose Other major offices Key Offices: Andover, Houston, Atlanta, Chicago, New York, London West Coverage: San Jose, Portland/Seattle, Los Angeles, Denver Offshore Operations: India - New Delhi Data Centers 16 facilities around the globe (including Las Vegas, LA, San Jose, San Francisco) N+1 Redundancy in All Critical Systems SAS 70 Type II Certified

Visit us at: http://www.navisite.com/

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Services Overview
Hosting Services
Application Management (Oracle, 3rd Party, Custom Apps) Managed Messaging Managed Services for IT Infrastructure Content Distribution Dedicated Web Hosting Co-location Services

Professional Services
Planning, Implementation, Upgrades, Maintenance, Optimization, Compliance/Governance Technology: Architecture, Infrastructure, BI, DWH and Security Applications: Oracle Application Products

Outsourcing Services
IT Planning Services Custom Application Development & Management Services Software QA and Testing
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Hosting Services at a Glance

Hosting & Application Management Delivery Team
Managed Applications
Demantra/ Agile/ Hyperion

Oracle

Siebel

PeopleSoft

JDE

Capabilities
System Enhancements/ Customizations

Client/Account Management

Support (Level I III)

Application Management

Upgrades

Patching

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Professional Services Offerings at a Glance

Program & Project Management

PEOPLE

Industry Based Solutions

Right blend of product knowledge, business / Industry experience and consulting skills Global Presence

Business Consulting System Selection Process

Enterprise Technical Architecture

ERP and CRM System Implementation and Transformation Applied Technology Services (Custom Development, Conversions, Interfaces) Core Technology Services (Database, Middleware, Messaging, Security, Enterprise Management) Enterprise Business Process Execution Data Hubs / Data Consolidations Business Continuity High Availability / Disaster Recovery

Managed Services

PROCESS
Use Oracles AIM Methodology Establish a Global Business Model Facilitated Workshops Approach

Adoption & Learning Optimization Services Enterprise Business Intelligence Health check & Assessment SOX - Compliance & Governance Change Management Global Delivery Global Roll Out Consolidation M&A Spin- Off

Upgrade

TOOLS
Utilize Process Flows Approach Use tools and templates for rapid deployment

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Xsigo Project Objectives & Decision Process

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Prior State of ERP: August, 2006

Development stage company Running 3rd tier ERP
Order Entry, MRP, Financials

3rd party products specd for CRM, configurator, etc..

Integrated via middleware No solution for installed base, fixed assets Limited global capabilities

Desire to build Best in class IT infrastructure

Significant functional expectations across the business

Rapid global growth expected

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ERP Decision Drivers

Strong functionality End to end enterprise management and reporting Jump-start best in class business processes Build foundation for global growth Lowest total cost of ownership Partnership with ERP vendor and Integrator

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ERP Alternatives Considered

Plan of record: Tier3 ERP + other 3rd parties + middleware
Requires upgrade to Tier1 in 12-18 mo.

Tier 2 applications
Requires upgrade to Tier1 in 24 mo.

Tier 1 applications
Higher cost in near-term

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Initial Decision: Oracle 11.5.10 + Navisite

Lowest total COO:
NPV of Oracle/Navisite solution 5% -25% lower than other alternatives Far less business disruption implementing now vs. upgrading later

Best in Class business templates

Lower implementation cost Quantum Leap in process & controls Shortens path to SOX 404 compliance

Hosted by Navisite After first month (coinciding with the Oracle R12 release), decision changed to deploy R12 based on new functionality and Xsigo's commitment to stay with state of art technology.
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Decision to move to R12

Nov 06: Decision finalized on Oracle Jan 07: Project started with 11.5.10
R12 not available until late January Original go-live planned for April 1, 2007

Course change in Feb 07: implement R12

Key new/improved functionality:
Greatly improved UI (esp. in CRM Modules) Pre-delivered report templates Other technology enhancements (HTML, etc.)

Avoid costly and time-consuming upgrade in 12-15 mo.

Added 1 month to schedule: went live on schedule May 4, 2007

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Scope of the Project

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Major Implementation
20 business applications 36 business workflows First R12 deployment in North America
2nd worldwide (Like Avis: We try Harder!)

3 months from kickoff to go-live

5 months from contract signing

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Scope Summary
36 Oracle Business Flows:
Manufacturing: 13 Sales and Service: 12 Accounting: 9 HR: 1
Oracle Business Flow Oracle Applications

Business Area

Accounting

Accounting to Financial Reports Procure to Pay Design to Release

GL, AP, FA, AR, CM PO, AP, iExpense, iProcurement, iSupplier ENG, INV

Manufacturing Sales

Service Human Resources

Forecast to Plan Click to Order Order to Cash Opportunity to Forecast Service Contract to Renewal Click to Resolution
Hire to Retire

MRP, OM iStore, OM, INV OM, BOM, INV, AR, PO Sales, Quoting Service Contracts, OM iSupport, Service Contracts, Teleservice
Core HR

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Business Transactions
The key Oracle data objects & transactions:

Design

Plan

Buy

Sell

Ship

Service

Returns

Item BOM ECO Design Graphics

Mfg Forecast MDS MPS Planned Order

Req PO Receipt Asset Payment

Lead Oppty Sales Forecast Quote Contract Order

Pick Pack Ship Invoice

Service Request Contract Renewal

RMA AE

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Oracle Solution Footprint

Distributors/ Customers Sales
Distributor SalesRep Orders, iStore, Partner Mgmt, iSupport, Returns Leads, Oppty, Quotes, Service Contracts, Order, Marketing, Proposals
ship

Oracle Applications
Vendors

Order Management
Pick/Ship, Returns

Manufacturing Design, Plan, Manage & Value Inventory, Procurement

Supply Chain
Make to Specificati on

Service
Service Requests, Returns

A/R
End Customer

Purchasing, A/P, FA General Ledger

Human Resources
Resellers Reseller
April 1: for all Oracle products but iStore, Marketing, Proposals, Partner Mtgmt, Ebusiness for Financials = Future

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Architecture: Hardware
Database Tier Single Node HP Linux server 12 GB RAM 4 CPUs @ 2.2Ghz Middle Tier 3 SUN V240 Servers 2 x 3 CPUs @ 1.2 GHz 8GB RAM N + 1 Load Balance Architecture

Storage Tier EMC Clarion CX300 500GB Storage Raid 1+0 for production 1 Hot spare N+1 Power Supply

i-application Tier

iSupport, iExpenses iStore, IProcurement

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Architecture: Technology Stack

Tech Stack Component
Database Oracle Applications Application Server J-Initiator Portal OID

Version
10.0.0.2 12.0 1.0.2.2.2 1.3.1.25 10.1.2 10.1.2

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Implementation Approach

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We employed a proven implementation approach to accelerate implementation and mitigate project risk
P E O P L E P R O C E S S T O O L S NaviSite provided the right blend of product knowledge, business experience and consulting skills. The project organization model optimized Xsigo / NaviSite resource mix. The Project Management Methodology has an integral component for risk identification, tracking and mitigation We established a Business Model
Facilitated Workshops for key decisions Established a common understanding of Xsigo Systems Achieving a balance business model and process flows

Leveraged Business Flows to:

Stimulate discussion of business requirements Review leading practices and best use of Oracle applications Establish an initial Conference Room Pilot

between time, quality, and cost Time

Use of Accelerators with AIM for Business Flows tools, templates

Quality

Cost

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Utilize Standard Templates

Definition
Project Planning

Elaboration
Determine Exception Dispositions

Build
Determine Exception Dispositions

Transition
Prepare Production Environment

Production

Update Flows

Update Flows

Update Procedures
Conduct CRP 1.1 (Familiarization) Update Setups Update Test Script Prepare CRP 2.0 Environment Conduct CRP 2.0 Identify Exceptions

Update Procedures
Update Setups Update Test Script Prepare CRP 3.0 Environment Conduct CRP 3.0 Identify Exceptions Convert and Verify Data

Conduct CRP 1.2 (Mapping)

Perform Acceptance Test

Identify Exceptions

Design Extensions

Perform Systems Integration Test Create and test Custom Extensions

Begin Production

Maintain System

Conduct Business Architecture Workshops

Prepare Custom Test Scripts

Propose Future Direction

Using standard templates as baseline and minimizing exceptions allowed for a 3 month implementation
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Project Team
Executive/Board Buy-in Steering Committee:
VP Operations, VP Finance, VP Support

Implementation Team:
Functional Power Users - 8
Operations Accounting/Finance Sales

IT: Director & Progr/Analyst Navisite:

Project Lead Consultants 6-7

Total 18 people

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R12 Features

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R12 Features used at Xsigo

Costing
Deferred COGS - defer COGS and recognize at time of Revenue Recognition

Sales
Create leads and opportunities directly from the customer record Email Interactions: Oracle Sales for Handheld, e-mails sent or received using Outlook are logged in Interaction History for Contacts and Customers

Sales Offline
Mobile users can create/update leads, opportunities and quotes while out in the field and synchronize the new lead information back to the database.

Sales for Handheld

Create and manage appointments and contacts via MS Outlook for synchronization up to the database Create and manage appointments and contacts via the database for synchronization to the database MS Outlook.

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R12 Features used at Xsigo

Purchasing
Professional Buyers workcenter easier user interface with all a buyer needs in one html form - Autocreate PO, create and query POs and blankets Professional Buyers workcenter shares the catalog with iProcurement

Payables
XML for AP checks Payment workbench easy to see status of job, next step and payment statistics

iSupplier Portal
New supplier onboarding process as well as supplier managed user maintenance

Teleservice
New HTML Customer Support Dashboard with work list
Xsigo preferred over Universal Work Queue because of its ease of use and ability to pick SRs and Tasks from Group Queue

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R12 Features used at Xsigo

Service Contracts
Approvals Management pulled out of Service Contracts and now contained in "Common" location and shared across modules
Helped consolidate approvals management process, provided greater flexibility in assigning appropriate approver

HTML Renewals Dashboard allowing users easy access and viewing of contracts available for renewal
Light use currently, but in the future will give Contract Renewals manager central dashboard to view contracts up for renewal, which assists the automatic notifications that are generated from Service Contracts up for renewal

iSupport
Enhanced Self Service Registration to leverage shared iStore user interface
Very helpful in getting Xsigo the user registration they desired, and it is fully compatible with future iStore needs

Ability to group Case/Request Types into Case/Request Type Categories for Logical display in iSupport
Allowed Xsigo to categorize the Service Request types which greatly enhanced the usability for customers

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R12 Features used at Xsigo

Install Base
Entirely new HTML user interface...dramatically improved functionality
This was critical at Xsigo, they found 11.5.10 to be virtually unusable in its former state. New functionality provides; breadcrumbs to return to higher level information, significant increase in instance data organization, which allowed for easier user understanding and training, easier to build and display Item configurations (think ATO)

Increased integration across Service Contracts, Teleservice, OM and Field Service allowing easy instance creation, update and transfer
This was used across the spectrum for Xsigo to view Install Base properties, and will be utilized in the future as their Install Base matures and requires greater product maintenance

Knowledge Management
Allows users to search for unstructured content stored in external locations such as files servers.
Xsigo planned to take advantage of this in the future when they load specs and documents on Chassis

Extended Search capabilities to utilize the commonly used double-quotes "Search"

Xsigo really needed this enhanced search capability to locate relevant solutions stored in the Knowledge Repository

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What Worked Well

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What Worked Well

Solid Partnership between Oracle, Navisite and Xsigo NaviSite Consulting Services
Excellent team of consulting resources Very knowledgeable about the Oracle modules/flows

NaviSite Hosting Services

Effective 24x7 support; Xsigo did not need to employ a DBA One neck to choke with Navisite providing both hosting & consulting

Resources & Support from Oracle

Due to R12, Oracle assigned a critical account manager CAM helped facilitate direct communication with development

Xsigo
Strong executive support Strong commitment to go vanilla Dedicated resources

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What Worked Well contd Benefits from Oracle ERP

Integration across the enterprise Sales force and support automation Highly functional customer portal Global capabilities Common skillset Consistent, accurate and timely reporting Automated Workflow

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What Did Not Work So Well

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Lessons Learned
User Uptake of Oracle
First Time Users Understanding Oracle terminology

User Acceptance Testing

User testing should have incorporated additional time for training and testing

Super User Staffing

Small company, big Oracle footprint User churn

Sequence of implementation
Should not have deferred tax to late in the project

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Limited to Zero Sev 1 issues in Production

30 25 20 15 10 5 0 Reported Open Sev1 Sev2 Sev3

As expected, we experienced issues

It

felt like we were the 1st company to go live on R12!

Strong support from Oracle & Navisite Issues in post production were resolved quickly
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Upgrade Considerations

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R12 Upgrade Paths

Refer: Oracle Applications Upgrade Guide: Release 11i to Release 12, Part No. B31566-01

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Upgrade Considerations
Are you at version 11.5.7 or higher?
If yes, you may upgrade directly to R12 based on your business situation If no, since you have to first upgrade to 11.5.10.2 before upgrading to R12, you may want to consider re-implementation as well, particularly if you have lots of extensions / customizations

Consider implementing significant technical advances available in R12 for business benefits you may need
100% Active-active High-Availability and Scalability using Oracle Database Cluster (10gRAC) and Oracle Applications Cluster with Load-balancing Complete Business Continuity and Disaster Recovery using Oracle Database Physical DataGuard across remote data-centers Support for Oracle Automated Storage Management (ASM) for a variety of storage solutions Support for Advanced Security for External Users (e.g. for iSupport Portal)

At least 2 complete cycles of successful test upgrades suggested before production cutover for upgrade If you need to change Operating System (e.g. Unix to Linux, or Windows to Unix/Linux), add another successful test cycle

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Summary

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In Summary
R12 is the right direction. Richer functionality in Financials and Procurement Technical Installation Is Much Quicker

XML is Great
Tax Engine is Much Different TCA Is Here To Stay

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Contact Information

Pete Wolffe
Senior Director pwolffe@navisite.com

Navisite, Inc 2720 Zanker Rd. San Jose, Ca. 95134 650.823.0929 (Cell) www.navisite.com

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