Copyright © 2005 Oracle. All rights reserved. Confidential: For Internal Use Only ORACLE GCR...

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Copyright © 2005 Oracle. All rights reserved.Confidential: For Internal Use Only

ORACLE GCR Supplier Relationship Management

ORACLE GCR Supplier Relationship Management

Keith IpDaniel Gao30th Jan 2007

Keith IpDaniel Gao30th Jan 2007

Market PotentialMarket Potential Market PotentialMarket Potential

Copyright © 2005 Oracle. All rights reserved.

Market Potential: Gartner

Supply Chain Sourcing

Supply chain sourcing (SCS) and procurement applications are used to help companies understand and improve the terms and conditions of trade to understand enterprise spending. It aids in creating an optimal set of suppliers, establishing the terms of trade to balance cost, quality and risk. Sourcing applications have interface with procurement systems — for example, in spot-buying/spot-sourcing environments. Typical modules and applications include:

• E-procurement — Supplier performance analysis

• Strategic sourcing — Contract management (life cycle)

• Marketplace/hubs/portals — Content management (product content and data management)


Market Potential: CCW

Historical PerformanceHistorical Performance Historical PerformanceHistorical Performance


Historical Performance of GC SCM

1. Procurement rev had increased 234% in FY06

2. Rev mainly comes from ERP deal and maintenance deal

3. Start seeing Procurement + 1 solution selling (iSupplier Portal and Contracts)

4. Still see demand for Exchange in China

5. Pure SRM deals are happening (Vanke, GuoHua Power)


Some Key Wins Against SAP 2006(With Oracle Exchange Marketplace)

• China FAW Group Corp.• The largest Automotive group in China;• Many affiliates of FAW group and some of their major joint venture are SAP’s install

base;• Shanghai electric group;

• One of the largest electro mechanical equipment manufacturer in China; Shanghai electric is SAP’s reference customer,all the major affiliates of ShangHai electric have been SAP’s install base;

• Golden Concord Holding Ltd.• Oracle win against SAP with Oracle EBS together with Oracle Exchange;Exchange has

been a key differentiator during the solution evaluation;• ZheJiang Provincial Energy Group;

• One large regional power producer group,some of the power plants under group use Oracle EBS, others use Maximo eAM;

• HuaNeng Power International inc.• The largest power producer of China; HPIC will select ERP between Oracle and SAP in

2007; the win of Oracle exchange make us take a good position in the serious competition with SAP in the future.


Some Key Wins Against SAP 2006(With Oracle SRM Solution)

• HuaBei Power Grid:• Solution: Oracle Purchasing, Sourcing, eAM, Project Costing, Project Management,

Financials); • HuaBei One of the largest Power Grid Group of China;• SAP has been very strong in Power Grid, HuaBei has been Oracle’s first major win in

this sector; • Nice:

• Solution: Oracle Purchasing, Sourcing ,isupplier Portal, OPM,OM,Financials, Ebusiness Intelligence;

• Nice is the largest soap and washing powder producer of China; • Oracle has win against SAP through very serious competition, and by now, Nice is the

most important win against in Eastern China in 2006;• ShenZhen Vanke:

• Solution:Purchasing,Sourcing,iSupplier Portal, iProcurement,Purchasing Intelligence;

• Vanke is the largest property company of China； One of the most famous local brand；

• Vanke is SAP’s HR install base and one of the most important reference customer of SAP China;


Some Key SRM Project on Install base (More and More partners get familiar with Oracle SRM Solution)

• BGP CNPC ：• Oracle Sourcing; Implement by Bearing Point;

• CPIC ：• Oracle iProcurement; Implement by Bearing Point;

• UT Starcom UT：• Oracle iSupplier Portal； Implement by OCS;

• Panasonic ：• Oracle iSupplier Portal; Implement by Panasonic IT ；

• Midea ：• Oracle iSupplier Portal; Implement by IBM;

• HuaDian International Power：• Oracle Procurement Contract; Implement by TaiJi;

• GuoHua Electric Power:• Oracle Financials and HR install base;

• Would Upgrade to R12 and Implement Oracle Sourcing, Purchasing, iSupplier Portal, iProcurement, Purchase Intelligence;

• Target to close in Q4, with net license >180K


Summary

• Oracle Exchange Marketplace has been an important weapon when

penetrate into SAP’s install base;

• Oracle Exchange and SRM solution has been a key solution differentiator

when we compete directly with SAP (like in Nice,Golden Concold, HuaNeng

and etc.);

• Pure SRM deals are happening and we do have the capability to position

Oracle as the best class solution, like in Vanke;

Competitive SituationCompetitive Situation Competitive SituationCompetitive Situation


Competitive Analysis

Beautiful solutionGood ReferenceBig ERP install baseInternal and Partner Readiness

Beautiful solutionGood ReferenceBig ERP install baseInternal and Partner Readiness

Pricing Model, facing customer’s challenge when want to promote procurement contract and service procurement

Pricing Model, facing customer’s challenge when want to promote procurement contract and service procurement

Strength

Challenge

Bid ERP Install base;Aggressive pricing policy to protect its install baseBid brand in traditional ERP area

Bid ERP Install base;Aggressive pricing policy to protect its install baseBid brand in traditional ERP area

Few referenable customer;Lack internal and partner readiness

Few referenable customer;Lack internal and partner readiness

Oracle SAP

Impress of best class and independent solution;Package software with professional procurement service

Impress of best class and independent solution;Package software with professional procurement service

Financial instability;Low opportunity coverage; Lack local consulting service;

Financial instability;Low opportunity coverage; Lack local consulting service;

Ariba

Very cheap solution;Customized local solution specially in Sourcing;

Very cheap solution;Customized local solution specially in Sourcing;

Poor functionality;Lack end to end solution;Lack competency in large account;

Poor functionality;Lack end to end solution;Lack competency in large account;

Local and customized solution

Selling Exchange vs. EBSSelling Exchange vs. EBSSelling Exchange vs. EBSSelling Exchange vs. EBS


Key Deal of Exchange in 2006

• China FAW Group Corp.• The largest Automotive group in China;• Many affiliates of FAW group and some of their major joint venture are SAP’s install base;

• Shanghai electric group;• One of the largest electro mechanical equipment manufacturer in China; Shanghai

electric is SAP’s reference customer,all the major affiliates of ShangHai electric have been SAP’s install base;

• Golden Concord Holding Ltd.• Oracle win against SAP with Oracle EBS together with Oracle Exchange;Exchange has

been a key differentiator during the solution evaluation;• ZheJiang Provincial Energy Group;

• One large regional power producer group,some of the power plants under group use Oracle EBS, others use Maximo eAM;

• HuaNeng Power International inc.• The largest power producer of China; HPIC will select ERP between Oracle and SAP in

2007; the win of Oracle exchange make us take a good position in the serious competition with SAP in the future.


Key deal with Oracle Sourcing and iSP in 2006

• North China Electricity Network Co. Ltd:• One of the largest power grid company in China,Win against SAP with Oracle

EBS(include Oracle sourcing);• Nice Group:

• The largest soap and washing powder manufacturer of China; Win against SAP with Oracle EBS (including Oracle Sourcing)

• UTStarcom Telecom Company Ltd:• Oracle ERP install base,upsell Oracle isupplier portal;

• Panasonic Electronic (China) Co., Ltd:• Oracle ERP install base,upsell Oracle isupplier portal;


Why we sell both Exchange and Sourcing

Customer of Oracle Exchange Customer of Oracle

Sourcing and iSupplier Portal

Customer style

The HQ of many large Chinese SOE corp.lack directly control to the business of affiliates,so they think it more easier to be accepted by the affiliates to position Exchange as a shared service platform for potential supplier management,sourcing and data exchange;

The HQ of the customer have strong control to the affiliate and have the direction to standardize the IT system into a single platform

IT footprintVery scattered,very often install base of oracle’s competitor,if we position sourcing and iSP, have to face the competition of SAP SRM,lack advantage in the point of integration

Most are Oracle’s ERP install base

System owner/spons

or

In most Exchange cases,there is one internal company under the group,they would invest and operate the Exchange platform to provide service to both internal and external customer

The owner of the system is the procurement department.

Function requirement

Customer need more comprehensive solution,both sourcing,catalogue management,order management,sometimes even sell side solution

Focus purely on negotiation

Vision/ source of funding

In the past year,China government has initiated some program with funding to help SOE to improve their capability of ecommerce,it is relatively easier to get the funding with the positioning of Exchange (FAW is the typical case); and there are also some company to build B2B business based on Exchange platform

Simply want to improve the sourcing and collaboration capability with their supplier community


Exchange Pipeline in FY07

Exchange Pipeline in next 2Q Customer background

ChemChina One of the largest chemical group of China, would build B2B platform as the industry marketplace.

Would select ERP in 2007, as top two company(petrol china, and sinochem are all SAP’s install base),and we have very few referenable customer in Chemical industry of China, so the team would like to use Oracle exchange to penetrate this Account first before their formal ERP selection

Baosteel Group Largest Steel group of China, core system are in house developed, have used i2 for purchase order execution, no plan to replace their legacy system with package software;

many affiliates under the group with different system (some oracle,self developed, SAP);

Have invested and are operating www.baosteel.net as the sell side platform, and are evaluating solution to build many to many buy side platform. May face the competition from Ariba and GXS

China Yangtze power Corp.ltd

Large power producer of China. Install base of IFS (ERP).


Summary

• Considering the specialty of China(various group style and potential

requirement for B2B ecommerce),we still can see the potential of Oracle

Exchange in China;

• Oracle Exchange could be an spearhead to penetrate in the install base of

Oracle’s competitor;

• Don’t think it is easier to replace Exchange with Oracle sourcing and

isupplier portal;

QuestionsQuestions QuestionsQuestions


Questions

• More information about Applications Unlimited (support) of Exchange, considering there are still business potential and strategic install base;

• How to explain the pricing model of Oracle SRM Solution;

• MTR Corporation ERs related to PO

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