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E-Business Suite In-Memory Cost Management

Enabling a Bottom-up Approach to Maximizing Profit Margins through Near Real-time Insight into All Aspects of Cost Management

Ashish Pathak Venkat Chukkapalli Director, Product Director, Process Management Manufacturing Development

The Safe Harbor

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.

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 Business Challenges

Agenda
Solution Overview
Introduction to Engineered Systems Why Cost Management on Engineered Systems? Why In-Memory Applications?

Oracle In-Memory Cost Management

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Business Challenges
How Do We
Drive Business Strategic Objectives

Meet Corporate Fiscal Objectives

Maximize revenue, margins, profits, working capital? Meet competitive challenges? Make timely decisions for global operations with

Optimize product design through tight cost controls? Leverage insight into existing product life cycles? Drive product innovation and design? Increase market share in existing markets? Penetrate new markets and geographies?

rapidly changing economics?

Cost Management & Financial Accounting Organizations

Handle Exploding Volumes of Data
Process the numbers from global operations

Isolate Actionable Information

Analyze existing product performance? Complete multidimensional analyses and what-if

managing high volumes of daily transactions? Assess alternatives from multiple over-lapping supply chains? Get the needed information in time to be useful?

cost simulations on big data? View the impact of potential cost changes on margins?

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Cost Management At-a-Glance

Absorb Acquisition Costs Optimize Manufacturing Costs Maximize Margins

Plan, Forecast and Setup Costs

Maintain Costs

Manage Margins and Gross Profits

Allocate expenses Setup accurate cost

Perform what-if analyses

Track, maintain, optimize

through simulations
Optimize assembly cost

margins
Feedback into cost planning

components

structures

and pricing

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Why is Cost Management Hard to Achieve?

Routine Tasks Hinder Strategic Activities

Strategic

Reduce Costs Increase Margins

High

Value

Reconcile GL Balances

Perform Margin Analyses

Medium

Check Liabilities Create Invoices

Perform Accounting Analyze Shopfloor & GL Transfer Activities Variances

Low

Create Create Create / Maintain Maintain Orders Transactions Cost Setups Account Periods

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Cost Management Transformation

Strategic Value

Strategic Cost Management

Optimize product cost structures by

Analytical Cost Management Cost Maintenance

Setup costs, accounts

Perform reconciliations

& identify deviations

Identify cost drivers Analyze margins,

& cost controls

Develop & simulate

minimizing ingredient costs Create profitable product mixes across global operations Maximize gross margins & profits Increase penetration in existing markets & enter new markets

product costs Manage transaction accounting

measure profitability

Maturity
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E-Business Suite In-Memory Cost Management

The Transformational Power of In-Memory Cost Management

Demonstration

How Did We Do That ?

Hardware ...and...
Powered by Oracles Engineered Systems Speed and performance from Oracle's In-Memory architecture

Software ...

New spreadsheet-based UI OBIEE-based analytics for near real-time analyses Unified information architecture of Oracles E-Business Suite New applications added to the strong legacy of Process Cost Management within Oracle's E-Business Suite Disc-to-App integration Transformative business value Higher, faster ROI Lower risk and TCO

Engineered to work together ...

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Introduction to Engineered Systems

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Foundation #1: Oracle Engineered Systems

Purpose Built
Extreme performance

Faster time to value

Lower total cost of ownership

Reduced risk
Exalogic Elastic Cloud Exadata Database Machine M6 SuperCluster Oracle Exalytics

Easier to scale, easier to

manage

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Foundation #2: Unified Information Architecture

Develop Contracts Projects HR Finance Maintain Procure Service Fulfill
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Market Sell
Customers, Suppliers, Products,

Common data model enables

a single source of truth

Comprehensive suite of apps

designed to work together

Order
Robust set of integration

Plan

services based on open standards

Modular deployment

by business flow
Single global instance

implementations
Make

Result: Engineered to Work Together

A P P L I C A T I O N

Hardware & Software Engineered to Work Together

Applications Middleware OS and Virtualization Database Servers Storage

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Why Cost Management on Engineered Systems

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Cost Management on Engineered Systems

Need a Step Change to Tackle the Complexity of the Task
Supply Chain Management has Changed Requirement to meet rapidly changing market conditions quickly More what-if scenarios across increasingly complex supply infrastructures Targeted product reconfigurations for separate markets Multiple supply chains running in parallel for different regions yet also feeding each other Exploding Data Volumes Global operations with micro-targeted location-specific data Rapidly increasing number of daily transactions Increasingly complex, large bills-of-materials structures to accommodate Pressure for Quick Financial Decision-Making Optimize product cost structures by minimizing ingredient costs Create profitable product mixes across global operations Maximize gross margins & profits Increase penetration in existing markets & enter new markets

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Cost Management on Engineered Systems

Reduce Waiting, Increase Productivity, Distill Actionable Information
Today
Define & Rollup Costs Perform What-if Analyses

What We Need....

Refine Product Costs

Cost Transactions

Long Wait Times for Completion of Batch Processes

Less Time Waiting

Process Revenue, Margins, Value Summarizations Analyze Accounts, Margins and Variances Channel Analytical Insights Improve Cost Controls and Product Mixes

More Time Working Near real-time interactive simulations and analyses Not just large global businesses with multiple BUs

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Why In-Memory Applications

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Oracle's Family of In-Memory Apps

Product

In-Memory Applications
Cost Management Policy Analytics Next Best Action Project Discovery Financial Position Analyzer Financial Allocations Analyzer Labor Rules and Monitoring Sales Advisor Project Portfolio Management Virtual Close Consumption-Driven Planning Performance-Driven Planning

Transform Business Process In Ways Never Before Possible

Changes business dynamics Quickly discover growth opportunities Make smarter decisions Reduce corporate costs Accelerate time-consuming workflows Business-critical applications and workflows

often take hours or days to execute

Financial Close Cost Management Projections Planning

Oracle In-Memory applications leverage

Logistics Command Center

DRAM and Flash memories to run 10~20 times faster

Transforms batch processes to real time

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Oracle In-Memory Cost Mgmt Applications

Providing the Performance to Transform Business Processes

Transformational Change
Fundamental limitations of current solutions

High Performance In-Memory Cost Management Applications

No pre-built integrations between cost simulations and margin analysis Linear and textual analytics

Solution A single business process flow from cost configuration and simulation through profit & margin analysis One system, optimized for high-performance and delivered via Oracle's pre-configured Verification Methodology Specifically engineered to exploit unique capabilities of Oracle Engineered Systems and deliver performance and functionality not possible on other platforms

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Oracle In-Memory Cost Management

Scalability, Functionality, and Speed for a Transformation in Processes

Solution Overview
Cost Impact Simulator and Gross Profit Analyzer

High Performance In-Memory Cost Management Applications

Obtain the Most Profitable Product Mix View the Impact of Cost Changes Identify Optimal Pricing for Finished Goods Accurately Simulate Future Costs

Cost Comparison Tool

Process and Visualize Large Volumes of Data in Near Real-Time Identify the Most Profitable Cost Structures Propagate Savings Across the Enterprise Simulate Enterprise-wide Impact of Cost Changes

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Oracle In-Memory Cost Management

New Applications on a Strong Foundation with a Long Legacy
New Applications
Cost Impact Simulator Gross Profit Analyzer Cost Comparison Tool

Existing EBS Functionality

Automatic costing of all inventory, process execution, and

Related Products & Modules:

Oracle Process Manufacturing Oracle Process New Product

Development (GMD) Oracle Inventory Management Oracle Warehouse Management Oracle Order Management Oracle Shipping Oracle Receiving

Oracle Procurement Oracle Landed Cost Management Oracle Accounts Payables Oracle Accounts Receivables Oracle General Ledger Oracle SubLedger Accounting Oracle Advanced Supply Chain Planning Oracle Production Scheduling

purchasing transactions Flexible cost and account setup features Support for various perpetual (Lot based) and periodic (Standard and Average [PMAC, PWAC, PPAC]) cost methods Unlimited cost types, formulae, recipes and routings that enable extensive cost simulation, copying, and editing capabilities Powerful cost rollup capabilities across organizations and costing methods that leverage sourcing rules; used for simulation as well as primary cost setup Full support for Oracle Process Execution Comprehensive valuation and variance reporting Revenue and deferred COGS and COGS recognition Support for Product Line Accounting and Intercompany Inventory Capability to configure out-of-box accounting through integration with Oracle sub-ledger accounting

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Oracle In-Memory Cost Management

Enables You To

2 Optimize Operational Costs and Working Capital

Maximize Revenue and Increase Profits

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Oracle's Cost Impact Simulator and Gross Profit Analyzer ( page 1 of 2 )

Make Decisions in Time to Capture Highest Possible Profits
Obtain the Most Profitable Product Mix
Near real-time results from big data across Supply

Chain, Process Manufacturing, Financials Complex multidimensional analyses and detailed what-if cost simulations Timely analyses of cost variations, inventory valuations, and the impact to margins and profits

View the Impact of Cost Changes

Assess the impact to margins now and downstream

on unshipped orders and forecasted demand Investigate the impact of granular cost changes and visualize the impact of the change

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Oracle's Cost Impact Simulator and Gross Profit Analyzer ( page 2 of 2 )

Make Decisions in Time to Capture Highest Possible Profits
Identify Optimal Pricing for Finished Goods
Comprehensive what-if analyses on complex multi-

level ingredients, intermediate, finished products and routing data Assess even targeted changes to supplier costs on

Purchased ingredients Landed costs from transportation Delivery-related expenses Customs & Duty Manufacturing costs on the shop floor

Accurately Simulate Future Costs

Plan target costs and predict margins based on

historical data and the influence of outside parameters Run scenarios including the influence of inflation, competitive pricing, discounts, potential tax increases
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Oracle In-Memory Cost Management

Enables You To

2 Optimize Operational Costs and Working Capital

Maximize Revenue and Increase Profits

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Oracle's Cost Comparison Tool

( page 1 of 2 )

Discover Hidden Opportunities to Further Shrink Operations Costs

Process and Visualize Large Volumes of Data In Near Real-Time
Identify, view, analyze details of complex cost

structures across organizations or simulations to drive timely corrective decisions

Fast data retrieval and processing driven by

Exadatas hierarchical data storage with Smart Scan, Smart Flash Cache, and Flash Write-Back
Visualization and near real-time data analyses

driven by Exalyticss in-memory solution optimized specifically to leverage components networked via a high-bandwidth, low-latency InfiniBand network

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Oracle's Cost Comparison Tool

( page 2 of 2 )

Discover Hidden Opportunities to Further Shrink Operations Costs

Identify the Most Profitable Cost Structures
Aggregate complete cost structure information from

across extended business operations Easily compare complex cost structures from multiple operating units

Propagate Savings Across the Enterprise

Easily identify best-profit options to drive cost

efficiencies out to all operating units

Simulate Enterprise-wide Impact of Cost Changes

Simulate the business-wide impact of a cost change

and its impact across all product lines

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Deployment Options

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Oracle In-Memory Cost Management

Deployment Models
1.

EBS customers using, migrating to or standardizing on Exadata X3-2 or SuperCluster

EBS customers deployed on non-Oracle hardware (deploy as an edge solution, using pre-built ETLs from Oracle)

2.

3.

Non-Oracle ERPs (SAP, Infor, Microsoft Dynamics, etc., using Partner services to build custom ETLs)

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For more information

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Who Do You Call?

EBS MFG Product Management
ashish.pathak@oracle.com srikant.bevara@oracle.com manasi.puranik@oracle.com

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Oracle In-Memory Cost Management

Summary

Three new products: Cost Impact Simulator Gross Profit Analyzer Cost Comparison What-if simulation and real-time cost analysis in excel

Designed and built for engineered systems

Leverage existing data from EBS

Pre-integrated with EBS release 12

Multiple deployment options
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