Understanding the journey to cloud for E&C

2017 Engineering and Construction Conference

June 26-28, 2017
Agenda

Module/Topic
Why Cloud?
Paths to Cloud
Oracle and SAP Cloud Footprints
Cloud Tax Footprint
Pre-Configured Cloud SolutionPrint
The Cloud Transition Lab
Q&A

Copyright © 2017 Deloitte Development LLC. All rights reserved. 2

CNL Financial Group
Why Oracle Cloud?

CNL Financial Group

Copyright © 2017 Deloitte Development LLC. All rights reserved. 3

Why Cloud
What does Cloud have to offer E&C
companies?

Copyright © 2017 Deloitte Development LLC. All rights reserved. 4

Current Trends in the ERP Landscape
Cloud is a major driver in the ERP marketplace based on new capabilities and
continuous innovation

TREND 1
Industry trend to cloud is accelerating
Embracing TREND 4
Increased focus
Software as a
Service (SaaS) on analytics 47% of Organizations plan to move
to Cloud in next 5 years–Gartner
TREND 2 TREND 5

$18B
The move Innovative
towards a tiered application user SaaS to grow from $49B in
strategy interface 2015 to $67B by 2018–TBR Inc.

TREND 3 TREND 6
Enhanced Leveraging
flexibility in
applications
wireless and
mobile $66.3B PaaS to grow from $1.7B
technology in 2014 to $68B by 2026–WRS.

Source: Deloitte Tech Trends 2014

As used in this document, “Deloitte” means Deloitte & Touche LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure
of Deloitte USA LLP, Deloitte LLP and their respective subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Copyright © 2017 Deloitte Development LLC. All rights reserved. 5

What is Cloud?
Cloud comes in several flavors and varying levels of flexibility

Software-as-a-Service (SaaS) Platform-as-a-Service (PaaS) Infrastructure-as-a-Service (IaaS)

• Personalized, secure, and • Enrich your SaaS • Delivery of computing

Applications Applications Applications
connected • Create New features and infrastructure(network,
New applications storage and compute
Platform • Functional Applications Platform Platform
resources, usually with
hosted by a provider on a • Providers deliver not only some virtualization
cloud infrastructure infrastructure but also
Infrastructure Infrastructure Infrastructure technology) delivered as
• Delivered as subscription middleware (databases, a service
service messaging engines and so
on) and solution stacks for
application build,
development and deploy)

Use Case(s) Use Case(s) Use Case(s)

• ERP, CRM • Extend SaaS functionality • Extend your existing IT

footprint with advanced
• Personalize the delivered UI • Create Custom Web and Mobile applications
Engineered Storage and
• Change existing business processes • Modernize legacy apps Compute functionality
• Public cloud • Private cloud

Vendor Managed Customer Managed

Copyright © 2017 Deloitte Development LLC. All rights reserved. 6

What Do Clients Expect of the Cloud?
Our clients have clear expectations of the value a cloud solution will provide to the
organization
I
Want….
Lower total cost Extensibility
of ownership (upgrade friendly)

Unlimited
Modularity and
elasticity
choice of adoption
and scalability
Ongoing Social collaboration, contextual
innovation business intelligence, role-based
and upgrades dashboards, mobile applications

Standard practices,
Completeness
vanilla mandate, data
of solution
isolation and protection

Companies leverage a Cloud model for ERP to advance business objectives:

Change Increase
Drive Process
Reduce Costs Customization Speed to
Standardization
Mindset Deliver

Copyright © 2017 Deloitte Development LLC. All rights reserved. 7

Forces Driving the Value of Modern ERP
The Modern Enterprise Cloud transforms back office business and IT operations and
there are six key value drivers to consider

Enforces out-of-box functionality,

Eliminates the need for upgrades are automatically
organizations to maintain available periodically, equal or
hardware, infrastructure, greater security, and modularity
associated costs and software framework provides choice of
licensing. Instead, enables user 4. Cloud adoption
3. Total cost of
based subscription. operating
ownership
model
Increased productivity
Built ground up by through extensibility,
leveraging other digital 2. In-built
5. Underlying 100% open standards,
enablers: Social, Mobile, digital
technological ability to tailor business
Analytics and Cloud transformation
foundation processes
enablers
Economics, business transformation,
standardization and simplification,
1. Business agility, speed-to-market,
process talent availability, retention and attraction 6. Front and
transformation
back office
enabled by
synergy
product
capabilities

Features and Increases overall

capabilities that
Value Delivered adoption, lowers
positively impact key learning curve,
operational drivers reduces total cost,
and therefore the limits vendors and
bottom-line application support
providers

Copyright © 2017 Deloitte Development LLC. All rights reserved. 8

When should clients consider the cloud?
There are three primary drivers that cause clients to begin evaluating cloud options
Business transition points
• Business unit consolidation
• Acquisition
• Divestiture/spin off
• Significantly changed business model
• Preparation for IPO
• Business transformation mandate
(e.g., increase working capital)
Copyright © 2017 Deloitte Development LLC. All rights reserved.
System transition points
• Losing support on an old version or
eliminating a burning IT platform
• Alternative to costly upgrade
• Reduce maintenance on highly
customized applications
• Systems consolidation (e.g., HCM,
expenses, procurement, projects)
• Data center consolidation and support
cost reduction
• Avoid new IT infrastructure costs
Business value
• Cost reduction through business
process automation, lower total IT
cost of ownership, self service
operations etc.
• Revenue growth through greater
customer insight, improved pricing,
etc.
• Revenue growth through enhanced
customer experience and customer
satisfaction.
• Improved working capital, enhanced
cash flow or better asset efficiency
9
Is the value real?
Let’s take an example of two similar projects

Private Cloud (IaaS) Public Cloud (SaaS/PaaS)

GL, KK, AP, PO, AR, AM, BI, TR, GL, AP, PO, AR, OTBI, CE,
Modules T&E, Grants, Project Costing and Billing, Contracts, Expenses, Grants, Project Costing and Billing, Project
SS, ePro, eSupplier Contracts, Financial Reporting Center
COA Re-design and
Finance Transformation COA Re-design
Merger of Over 50 State Organizations
26 Reports 67 Reports
16 Interfaces 44 Interfaces
Technical Development 19 Conversions 33 Conversions
33 Enhancements 2 Enhancements
94 Total 145 Total
No Training Responsibilities Full OCM team
Change Management
OCM Lead/Comm Lead Full Training Materials and Delivery
Security Full Security Responsibilities Full Security Responsibilities
PMO Standard PMO Approach/Team Standard PMO Approach/Team
Testing Limited Test Management Responsibilities Full Test Management Responsibilities

Copyright © 2017 Deloitte Development LLC. All rights reserved. 10

The implementation benefits are tangible
SaaS ERP implementations are faster and more agile than private cloud and on premise
approaches

Public Cloud
Private Cloud (IaaS) SaaS Benefit
(SaaS/PaaS)
Full Procurement Full Procurement
Procure to Pay Capabilities Capabilities 6.5x more users
Supporting 10,000 Users Supporting 65,000 Users
200 Grants 8,000 Grants 20x more grants
Project/Grants
400 Active Projects 30,000+ Active Projects 75x more projects
Technical
25% decrease in
Development 263 hours/object 192 hours/object
hours/object
Hours/Object
50% greater offshore
US/Offshore Mix 52%/48% 28%/72%
leverage
25% increase in hours
Engagement Hours 58K 72K
(additional scope)

Duration 19 months 12 months 25% shorter time

Hourly Rate $129/hour $110/hour 15% lower hourly rate

Copyright © 2017 Deloitte Development LLC. All rights reserved. 11

What About After Go Live?
Notwithstanding the reduced maintenance overhead, SaaS solutions continue to deliver
cost savings while allowing continuous innovation

Private Cloud (IaaS) - PeopleSoft Public Cloud (SaaS/PaaS)—Oracle ERP Cloud

Timeline and Release External Hours Life of Timeline and Release External Hours Life of
of Support Solution of Support Solution
Initial Go-live 6 Years Initial Go-live 6 Months
2005 2015
Upgrade to Release 9.1 111,625 Hours 5 Years
2011 Upgrade to R10 2,000 Hours 6 Months
2015
Upgrade to Release 9.2 41,338 Hours Estimated
Upgrade to R11 800 Hours 6 Months
2016 5 Years
2016
Totals 152,963 Hours 16 total Years Totals 2,800 Hours 18 Months

9,560 Ave Hours Per Year

2,100 Ave Hours Per Year

Copyright © 2017 Deloitte Development LLC. All rights reserved. 12

Where is the Effort?
With accelerated innovation cycles and faster timelines, the effort has shifted in
implementing and sustaining the ERP

Less effort Similar effort More effort

Install Hardware Standardize

Develop Interfaces Configure Solution
and Software Processes
Implement
IT and Operations Lead Change
Develop Reports Test Solution
Training and Adoption

Develop Cleanse and

Migrate Data
Customizations Validate Data

Train Users

Upgrade to Manage Service

Operate New Releases Requests

Install Patches Perform

Regression Testing

Copyright © 2017 Deloitte Development LLC. All rights reserved. 13

Paths to Cloud
How do I move my company towards
Cloud?

Copyright © 2017 Deloitte Development LLC. All rights reserved. 14

Cloud Marketplace and Products
ERP Cloud Market has more than 25 different named products with different cloud
flavors and depth of functionality

Key SaaS
Players
Integrated
Suite

Choose the
right ERP
Cloud Product

Qualifies as
Modern ERP
Cloud?

Depth Of
Functionality

Copyright © 2017 Deloitte Development LLC. All rights reserved. 15

How Well Does Oracle ERP Cloud Fit E&C Organizations?
Functionality continues to grow in Cloud and vendors providing less functionality in On-
Premise

ERP vs. Cloud Functionality Over Time

Better than where

we started

More functionality
= more adoption
New Functionality

Oracle is investing
$5B in Cloud
functionality

Time

Cloud Func. Cloud Use On Prem Func.

Copyright © 2017 Deloitte Development LLC. All rights reserved. 16

How Well Do Oracle ERP Cloud Fit E&C Organizations?
Cloud solutions have come into their own in terms of product maturity; however,
functionality is still evolving to support E&C companies. Best of breed can be used to fill
gaps

Core finance, procurement, and human resource

capabilities meet the needs of most companies
but projects, billing, equipment and union
payroll continue to evolve

ATR- Acquire to Retire (Assets and Equipment)

CM- Change Order Management
FIN- General Ledger, Record to Report, Budget
HTR- Hire to Retire
PTC- Project to Close, Billing, AR
PTP- Procurement to Payables
TAX- Indirect (sales & use) and Direct

Copyright © 2017 Deloitte Development LLC. All rights reserved. 17

Migration paths to ERP cloud
Customers need clear migration paths to Cloud

• Customers on Tier 2 can move to On-Premise or Cloud

JDE E1 9.2
• Customers on older On-Premise can upgrade On-
Premise or Cloud
Tier 2 Vendors Oracle 12.2.5
SAP
• Customers on any On-Premise can adopt a Hybrid
Cloud model 1 Oracle ERP Cloud
Tier 2 Vendors
SAP S/4 Hana Cloud

JDE World JDE E1 9.2

ERP Cloud
EBS 11.x EBS 12.2.5
2 JDE World
ERP Cloud
EBS 11.x

Cloud

3
JDE World JDE E1 9.2 Modules
ERP Cloud
EBS 11.x EBS 12.2.5 (HCM, Risk,
P6)

Copyright © 2017 Deloitte Development LLC. All rights reserved. 18

ERP Cloud Hybrid Model
The Hybrid model allows customers to migrate from On-Premise to Cloud over time by
both adding functionality and mitigating gaps

• Implement Human Resources Cloud with no impact on On-Premise financials or projects

• Implement Cloud for financials and revenue recognition

• Implement Project Management and Supply Chain for projects, billing and direct materials procurement and vendor management

• Implement added functionality for schedule, risk, and subcontract management

• Implement Capital Asset Management for equipment, devices and mobile *

5- Capital Asset
Mgt.
Real Estate Mgt.
4- Primavera P6
IoT
Risk Management
Textura Mobile
3- Project Portfolio
Management
Project
2- Corporate Management
Financials Solution
Procurement Supply Chain
1- Human Capital (Indirect) Management
Management with Procurement
Teleo Revenue Mgt.
Cloud (Direct)

* Since Capital Asset Management

functionality is not in the Cloud, this could
be integrated to earlier

Copyright © 2017 Deloitte Development LLC. All rights reserved. 19

Oracle Cloud
High Tech Manufacturing
Challenges and Objectives Company Overview Relevance to You

Acquisition of two subsidiaries Global high tech Consolidating and standardizing operating
Multiple processes/systems and manufacturing leader companies
manual operations $15B in annual revenue Migration to shared services
Inconsistent reporting and 20+ countries Mandate for single finance platform and
governance 75,000 employees corporate consolidation
Mandate to achieve growth and Establishing a platform for future
synergy objectives acquisition growth

Modernization Roadmap

INITIAL STATE PHASED PROGRAM

Multiple systems and disparate Options: Standardize on one existing platform or establish new platform
processes Approach: Build a foundation first, defer new area risks (operations)
(representative examples below) Key components: Operating model implementation, process standardization, systems consolidation,
data cleanup/governance

EBS R12 Workday Hyperion

ERP HCM Planning
ERP Phase 1 ERP Phase 2 ERP Phase 3 ERP Phase 4

COA/Financial Master Data Supplier Management Customers Supply Chain

Close and Consolidation Indirect Procurement Contracts Manufacturing
Financial Reporting Finance Operations Order Management
SAP R/3 Workday TM1 Financial Planning
ERP HCM Planning

SAP R/3 Success TM1 Cloud Global Identity Integrated Legacy

ERP Factors HCM Planning Middleware HCM Management Reporting Decommission
Copyright © 2017 Deloitte Development LLC. All rights reserved. 20
Oracle Cloud
HSBC Company Overview

• World's fourth largest bank Consolidating and standardizing operating

companies
• Total assets of US $2.67
trillion Staggered approach, heavy dependency on Oracle
Projects

Challenges and Objectives Deloitte Partnership

• Establish a new Why the Cloud DELIVERING RESULTS

operating model • Enhanced transparency, governance • Global operations shared services,
enabled by: and cost control with streamlined processes
− New ERP solution • Platform for standardized processes • Platform that supports:
− Re-engineered • Scalable model accommodating − 300 Legal entities
processes additional services
− 12,000 Profit centers
− Migration of • Integrated technology solution
activities to global − 40,000 intercompany transactions
service centers • Improved compliance with regulatory
− 2,000 Finance users
requirements
− Ability to meet − 20,000 Procurement users
regulatory needs
− 60,000 Expenses users
UK

Planning Finance & Expenses Procurement I\C Billing Hong India Next: US &
Projects Kong Switzerland
Implement Core Implement Implement Intercompany HKK India Next
Oracle PBCS Financials Expenses Pilot, Procurement and new Deployment Deployment Deployment
to plan the plus projects, then fully recharging to US &
bank
Copyright © 2017 Deloitte Development LLC. All rights reserved.
plus new op across the UK model Switzerland 21
model
Oracle and SAP Cloud Footprints
What Oracle and SAP offer to run your
business in the Cloud

Copyright © 2017 Deloitte Development LLC. All rights reserved. 22

Oracle ERP Cloud Solution for E&C

Oracle ERP Cloud

ORACLE
(integration Finance Procurement HCM
required)
Time & Goal
Primavera General Accounts Self Service Labor Management
Risk Purchasing
Prime Ledger Payable Procurement
Manager
Project Mgt.
Talent
Payroll
Account Cash Expense Supplier Management
Oracle Sales Receivables Management Management Portal
Unifier
Cloud
Compensatio Performance
n Mgmt
Revenue
Fixed Assets
IoT Cloud Management
Textura
Mobile
HR Master Learning

Billing
SAAS Project Project
Workbench and
Management & Project Costing PPM Contracts &
Invoice
Controls Billing
Presentment
Credit Card Capital Asset
Invoices Management
Supply Chain
Procurement SCM Inventory Logistics
Planning
ACH
Estimating
Payments

EPM Reporting

Currency Health & Financial

Rates Safety Planning &
Consolidatio Smartview OTBI
Budgeting Planning &
n & Close
Reporting
Account
Real Estate Enterprise
Tax Reconciliatio FRS BIP
Management Planning
n

Copyright © 2017 Deloitte Development LLC. All rights reserved. 23

SAP S4/HANA Solution for E&C

Copyright © 2017 Deloitte Development LLC. All rights reserved. 24

Cloud Tax footprints
A variety of solutions and benefits in the
Cloud

Copyright © 2017 Deloitte Development LLC. All rights reserved. 25

Understanding Cloud-based ERP and Tax
Cloud-based ERPs offer a variety of solutions to fit your company’s most stringent tax
requirements

Tax Features
of Cloud- ERP Tax Functionality
Partner Tax Integrations
based ERP

Reporting Tools
Industry
Reporting directly from the source
Analytical
Considerations
Apps Dashboarding reporting
• Intercompany
• Transfer Pricing
• Revenue Recognition

Cloud-based ERP

Copyright © 2017 Deloitte Development LLC. All rights reserved. 26

Tax Benefits of switching to a Cloud-based ERP
Legacy ERP Stability Flexibility

Totals & Indices

General ledger Processing
Financial Accounting
Logistics Pre-Defined Aggregates
document
Sub-modules Totals & Indices Management
(AP, AR, Assets) Account Analytics

Cloud-based ERP Flexibility

Stability

Processing
Universal Journal Aggregation on the fly
Logistics Entry via views
document
Single repository across Analytics
applications

Tax opportunities of cloud-based ERP

• Ability to drill down to transactional data • Gain efficiency through redesign of business processes
• Less time spent gathering and validating data • Automation of intercompany processes, insightful analytics, and
• Reduced reconciliation effort transfer pricing automation
• Capture key attributes through extensions to the code block • Higher flexibility in reporting and analysis

Copyright © 2017 Deloitte Development LLC. All rights reserved. 27

Pre-configured solution
Introduction to the new Oracle ERP Cloud
SolutionPrint for E&C

Copyright © 2017 Deloitte Development LLC. All rights reserved. 28

What is SolutionPrintTM?
An accelerator and delivery model that expedites implementations by use of Deloitte’s
collective industry and Oracle expertise in the form of a pre-built, end-to-end solution

100’s of industry-specific detailed flows covering key process

Process flows
areas (OTC, PTP, PTM, RTR, etc.)
1000’s industry-specific requirements linked to the associated
Requirements
process steps
Single ~4000-line project plan encompassing all threads and
Project plan
phases of the implementation
Technical objects ~100 objects typically leveraged in implementations
Tested and industry-pertinent configurations of all modules
Configurations
within the solution

Increased quality Time to value

Project affordability Reduced risk

Copyright © 2017 Deloitte Development LLC. All rights reserved. 29

The SolutionPrint™ Difference
Traditional “Design and Build” phases are collapsed into an “Adapt” phase to accelerate
decision making by focusing on exception based design

Phase Design Build

Traditional

Stage Requirements and Unit String

Design Processes Configuration Integration Test
Fit/Gap Test Test

Lifecycle (Specs, Code and Test)

• “Cloud” delivery of a pre-configured

Phase environment provides greater agility
SolutionPrint

Adapt

Stage Process and Requirement • Immediate Process Confirmation allows

Integration Test development to start sooner
Confirmation
Lifecycle (Specs, Code and Test) • Overall ~ 50% reduction from traditional
Design and Build Phases

SolutionPrint differentiators
Leverage industry specific best-practice processes Minimize configuration, unit testing and string testing stages
Leverage industry specific system as part of design confirmation Jump directly into integration testing
Early identification and head start on development and data Timely Oracle knowledge transfer to client due to early system exposure

Copyright © 2017 Deloitte Development LLC. All rights reserved. 30

The cloud transition lab
A structured framework for organizations
to assess and prepare for Cloud

Copyright © 2017 Deloitte Development LLC. All rights reserved. 31

What is a Cloud Transition Lab (CTL)?
A structured and comprehensive framework to help organizations assess and prepare
for cloud a transition that is focused on business value and balancing risk

Cloud Transformation opportunities

Business Case
Awareness and Cloud Fit

Cloud Marketplace Strategy and Roadmap Tactical Plan

• What is Cloud? • Players • Digital Finance • Optimal • Qualitative / • Implementation

demo experience architecture Quantitative Approach
• Why move to • Product
“Demo Day” assessment business value
Cloud? Evaluation • Deployment
Criteria • Phase & scope assessment
• Priorities & Drivers Timeline
• What does
definition • Cloud readiness
Digital Finance • Assessment • Current Landscape • Resource Plan
& risk
mean?
• Pain points & assessment • Budgetary
• How to move? Challenges estimate
Critical aspects
• Fit gap • Licensing
of the Cloud
Journey

Industry perspectives

Copyright © 2017 Deloitte Development LLC. All rights reserved. 32

Q&A

Copyright © 2017 Deloitte Development LLC. All rights reserved. 33

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and
their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not
provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the
“Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of
public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

Copyright © 2017 Deloitte Development LLC. All rights reserved.

36 USC 220506