Shaun McLaurin's presentation from OTN Architect Day in Pasadena, July 9, 2009. Find an OTN Architect Day event near you: http://www.oracle.com/technology/architect/archday.html Interact with Architect Day presenters and participants on Oracle Mix: https://mix.oracle.com/groups/15511

1. <Insert Picture Here>
Rationalizing an Enterprise IT Architecture
Shaun McLaurin
Insight Program Director – North American Technology Organization

2. Business & IT Challenges
IT Environment History Resulting in
• Evolved through corporate, • Organizational and Information
organizational and technology silos
changes • Complex IT environment, multiple
• Mergers & Acquisitions skill sets, costly to operate
• Adapted to new business processes • Inflexible IT infrastructure difficult
• Adhere to layers of regulatory (and risky) to modify
requirements • Redundant application systems
• Integrate ‘best of breed’ applications and business processes
• Account for LOB IT ‘initiatives’ • Multiple versions of business data

3. It’s Expensive to Have Bad Information
Ellison’s Law
“The value of information increases exponentially as
fragmentation is reduced.”

4. Reinvent IT Economics
An architect’s dilemma
Strategic Savings
Investment
Annual
Strategic
IT Spend Investment
Infrastructure
IT Spending and Demand Survey
80% Maintenance Infrastructure
20% New Projects

5. IT Spend for World-Class Performers is
Comparable to Their Peers…
…But, they spend it differently

6. World-Class Performers Reduce Complexity
Characteristics How Do They Do It?
• They spend 18% less on IT • Better IT Vendor Management
• They require 36% fewer IT workers • 5% fewer hardware vendors
• They need 29% fewer apps • 29% less contractor services
• 65% fewer software suppliers
• They finish 91% of all projects to
spec, on time and on budget • Standardized best practices and
• 100% have their top IT exec on the good architecture
senior management committee • Simplification and standardization
• Higher levels of process discipline
• Improved overall alignment with
business objectives.
• Intelligent Outsourcing
• Empowered change agent

7. Oracle Rationalized IT Portfolio
Current State
40 Data Centers 1 Global IT & Governance Model
Business 2300+ Staff 2 Data Centers + 1600 Staff
Architecture
Few standard business Standardized core business processes
processes
63 Financial databases 1 Financial single global instance
Information
Architecture
60 IT Support databases 1 IT Support single global
instance
40 Education registration 1 Education registration
Technical Architecture
Technical Architecture
systems system
App./Services
Architecture 27 IT Support applications 1 IT Support application
<100 applications – standardized on
>1000 applications E-Business Suite
97 Email servers on 1 cluster of 2 Email servers and
120 databases 4 databases
Infrastructure 501 Education servers 296 Education servers
Architecture
32 IT Support servers, 600 2 IT Support servers, 30 test
test servers servers
Copyright ©2009 Oracle Corporation. All rights reserved. 7

8. The Transformation Payoff
The Ability to Scale Without Increasing Costs
+14
$20 acquisitions
9%
$18 G&A as % of revenue
+17 8%
$16 acquisitions
7%
$14 +4 acquisitions 6%
$12
Percentage
5%
Billions
$10
4%
$8
$6 3%
$4 2%
$2 Revenue in Billions 1%
$0 0%
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
Revenue G&A
Copyright ©2008 Oracle Corporation. All rights
reserved. 8

9. Information Technology Rationalization
Guiding Principles
• Driven by Business Strategy
• Standardizes & Simplifies the technical architecture
• Just enough for enterprise solutioning efforts
• Reuses best practice Business Models, Process
Models and Reference Architectures from industry and
commercial vendors
• Initially focused on speed-of-delivery for high
level guidance
• Matures iteratively & evolutionary for breadth & depth
• Can be enforced
Copyright ©2009 Oracle Corporation. All rights reserved. 9

10. IT Rationalization process
1 Identify the Establishes the vision for business and
Business Strategy information technology.
Establish Enterprise Involves the right mix of people for success.
2 Architecture Program
Establishes objectives, “future state” and
roadmap.
3 Define “Future State” Provides prescriptive guidance, process and
Architecture standards for Business and Information
Technology.
4 Define Rationalization Documents current state and path to future state.
Roadmap
Establish EA Promotes adherence to EA guidance and plans
5
Governance while architecting business-driven, enterprise
solutions.
Copyright ©2009 Oracle Corporation. All rights reserved. 10

11. Business Goals
1 Identify the
Business Strategy
Reduce Costs
Establish Enterprise
2 Architecture Program
Faster to Market
3 Define “Future State”
Architecture
Innovate
4 Define Rationalization
Roadmap
Globalize
Establish EA
5
Governance
Copyright ©2009 Oracle Corporation. All rights reserved. 11

12. Globalized Operational Excellence
Oracle Transformation Drivers
Lower Costs Better Information, Improve
Increase Speed Customer Service
Governance
• Fewer data centers • Global information • Streamline • Improved quality
visibility applications and service
• Self service
change
processes • Global consistency • One customer
management
of process, policy experience
• Labor & transaction & data • Fast integration
cost efficiencies
of new
• Strong internal acquisitions
• Shared service controls
centers
• Easier compliance
• Offshoring
Copyright ©2009 Oracle Corporation. All rights reserved. 12

13. The Global Transformation Payoff for Oracle
Ability to drive profitable, sustainable growth
We grow our operating cash flow 3 times faster than five years ago.
Safra Catz, CFO
Oracle Q3 Earnings Report, March 2008
(40.8% in 2007) 45%
40%
35%
30%
Percentage
Operating Margin % 25%
20%
15%
10%
(14.4% in 1993)
5%
0%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Operating Margin %
Note: Figures based on non-GAAP results. GAAP to non-GAAP reconciliations are available on the
Oracle Investor Relations website at www.oracle.com/investor.
Achieved through global processes, consolidation, simplification and shared services

14. TASKS
• Establish goals, leadership and resources
1 Identify the • Define scope and the next iteration of work
Business Strategy
product
• Gain Executive sponsorship and support
Establish Enterprise • Conduct Stakeholder analysis
2 Architecture Program • Establish plan for an EA Governance Board
• Develop a communication plan
3 Define “Future State” PEOPLE
Architecture
• Executive Sponsors
• Business Stakeholders
Define Rationalization • Chief Enterprise Architect
4
Roadmap • Program Manager
• Business Architects & Industry Experts
• Information Analysts
Establish EA • Solution Architects
5
Governance
• Strategic Vendors
Copyright ©2009 Oracle Corporation. All rights reserved. 14

15. 1 Identify the How do you…
Business Strategy
• Stay current with technology and applications,
• Implementing best practice business models,
Establish Enterprise • Yet be able to integrate these business processes
2 Architecture Program
• To improve business visibility, agility and efficiency
3 Define “Future State”
Architecture
4 Define Rationalization
Roadmap
Establish EA
5
Governance
Copyright ©2009 Oracle Corporation. All rights reserved. 15

16. Defining “Future State” Architecture
Business
Strategy
EA Inputs
EA Inputs
Business Industry
Architectural
Requirements Best Practices
Principles
& Objectives & Models
EA/Solutioning Process & Guidance
Business Architecture Business Process &
GRC Models
EA Artifacts
EA Artifacts
Application Architecture Capability & Service
EA Views
Descriptions
Information Architecture Data/Info Objects
& Models
Technology Standards
Technical Architecture & Reference Models
Leverage ‘Common Use Applications’ Architecture
Copyright ©2009 Oracle Corporation. All rights reserved. 16

17. Best Practice Industry Processes
Example Industries…
High Consumer
Communications Retail Banking
Technology Goods
Account
Integrated Trade Promotion
Order to Bill Order to Cash Origination with
Logistics Execution
Core Banking
Revenue High Tech Integrated Trade Promotion Multi-Channel
Management Distribution Financial Controls Management Customer Service
Product Lifecycle Multi Channel Demand
Customer Care Banking IRM
Management Order Management Management
Copyright ©2009 Oracle Corporation. All rights reserved. 17

18. Conceptual Business Model : Retail
Analytics Customer CRM & Marketing Loyalty Call Center Sales Field Service
Demand &
Enterprise Web Store Marketing Order Mgmt Pricing CTO
Business Operations
Supply Chain Supply Chain Merchandise Planning Merchandise Store
Planning Execution & Optimization Operations Operations
Merchandise
Replenishment Financial Planning Trade Management Point-of-Sale
Optimization PIM
Assortment Planning Store Inventory Mgmt
Advance Inventory Invoice Match
Planning Sourcing
Item Planning Returns Management
Supply Network Warehouse Category Mgmt Merchandise
Management Management Workforce Scheduling
Optimization
Price Optimization Learning Mgmt
Value Chain Transportation Price Management
Collaboration Management Promotion Planning
& Optimization Store Helpdesk
Value Chain Home Delivery Sales Audit
Allocation Demand Forecasting Workforce Comms
Corporate Administration
EPM Financials Human Resources Real Estate
Indirect Procurement Projects Compensation Helpdesk HR IT
Infrastructure
Integration and Collaboration
Enterprise Infrastructure

19. Information / Data Architecture
Decomposed
Information Architecture
ERP Data Models
Process Data Models
Data Hubs
Customer
Product
Healthcare …
Industry Data Models
Copyright ©2009 Oracle Corporation. All rights reserved. 19

20. Technical Architecture
Decomposed
Technical Architecture
SOA & Integration Architecture
Business Intelligence Architecture
Data & Information Mgmt Architecture
Security Architecture
Infrastructure Architecture
Application Development Architecture
Copyright ©2009 Oracle Corporation. All rights reserved. 20

21. IT Rationalization is an iterative journey
1 Identify the
Business Strategy
EA Transformation Focus:
Management Excellence
Establish Enterprise
2 Architecture Program
Enterprise Solutioning:
Business-Driven
Initiatives
3 Define “Future State” EA Transformation Focus:
Architecture Operational Excellence
(Business, IT)
Define Rationalization EA Future State:
4 Applications,
Roadmap
Technology
Establish EA
5
Governance
Copyright ©2008 Oracle Corporation. All rights
reserved. 21

22. Rationalization Deliverables
Key findings and conclusions including targeted analyses of the
Current State Gap & current state environment and its key performance gaps and
Opportunity Analyses opportunities
Target architecture and process model that defines the
applications, services, information and infrastructure required to
Future State Vision satisfy key business goals and requirements
High level, multi track program of phased actions, initiatives and
implementations that provides a framework for planning and
High Level Roadmap managing the future state migration
Identification of potential cost savings and other benefits to be
Targeted Benefits derived from the future state

23. RESPONSIBILITIES
1 Identify the • Establish an EA Governance model and an
Business Strategy Architecture Review Board
• Promote the EA agenda and adherence to
“Future State” EA Prescriptive Guidance:
Establish Enterprise • Review IT project designs
2 Architecture Program
• Review proposed enterprise solution
architectures and major initiatives
• Provide direction
3 Define “Future State”
Architecture
BOARD MEMBERS
• Chief Information Officer
Define Rationalization • Chief Enterprise Architect
4
Roadmap • At least one Executive Sponsor
• At least one major Business Executive
• At least one Business Architect
Establish EA • Lead Solution Architects pulled in on an as-needed
5
Governance basis
Copyright ©2008 Oracle Corporation. All rights
reserved. 23

24. 8 Strategies for Transformation
Composite Business Processes
Composite Business Processes
8

25. IT Standardization Strategy
Driven by business model
Common Processes
Common Data

26. Accelerate Transformation Benefits
Leverage Integration and BI platforms
End-to-end visibility
Unified workplace
Compliance Composite business processes
Composite Business Process
Composite Business Process
and business analytics accelerate
business results
• Deploy standardized business processes
over legacy application silos using
Application & Data Silos standards-based services.
No single source of truth
Redundant applications • Improve process management and controls
Incomplete and conflicting data enforcement.
Labor intensive compliance
• Improve visibility through common
Long-term goal: Standardize processes, consolidate enterprise information model.
redundant applications and eliminate data silos
• Improve business analytics using out-of-
the-box analytics capabilities.
• Publish key performance indicators
Common Enterprise Information Model
• Shelter users from changes to underlying
Common view of information
systems as they are consolidated over time.
Key Performance Indicators
Business reporting and analytics
Compliance reporting

27. Enterprise Software Architecture
Customers Employees Partners
Applications Documents
User
Interaction
Analytics Collaboration
Composite Industry Processes
3rd Party Legacy
Applications Applications Applications
ERP HCM CRM Industries
Business Intelligence Security &
Integration & Analytics Compliance
Technology Existing
Technology
Data & Scale & Application Enterprise
Content Continuity Development Management

28. Architect a More Competitive Enterprise
• Mergers & Acquisitions : Guide
strategic fit assessment and post-merger
consolidation
• Business Processes : Provide insights
into gaps or redundancies ; Enhance
customer service
• Compliance & Audit : Facilitate
transparency across applications ;
Manage users & applications life-cycle
management
• Enterprise Architecture : Consolidated
technical infrastructure ; Reduced costs &
Increase agility
• Vendor Management : Negotiate terms ;
Risk Reduction