Oracle Service Contracts

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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
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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11
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
13
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
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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38
Oracle OpenWorld
Latin America 2010

December 79, 2010
39
Oracle OpenWorld
Beijing 2010
December 1316, 2010
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1

<Insert Picture Here>

EBS Oracle Service Contracts:

The following is intended to outline our general

Strategies to increase service revenue

<Insert Picture Here>

Service contracts as an annuity

Contract base segmentation

Quote by Sales Rep

Contract Leakage Example

Customer Base Allocation

Current Renewal Rate

Percent of Revenue Lost

Targeted Renewal Rate

Net Increase in Revenue