Oracle ImplementationROI Case Study

September 10, 2003

Agenda

Base Case – Legacy System

Infrastructure

Next Generation – I-POWER

Collaboration

Future

Michael Stoeckert, CIO/CTO Prior to EPL Inc.

– Macromedia: Java and Internet experience– Ernst & Young, Cognos: eCommerce and

Datawarehousing experience– EDS: Business Reengineering initiatives

Price Waterhouse Coopers Study of EPL– Recommendations for infrastructure & products– Re-architect Website and Products– Increase staff

EPL Background EPL Inc is a technology company that

provides software solutions for the credit union industry. – ASP solution for over one hundred Credit unions,

600,000 members– In-house solution for more than 600,000

members

Beginning in 1977, EPL has a reputation for superior service and client satisfaction.

Long-standing relationships with our clients.

EPL Situation – 2001

In the competitive marketplace to provide information technology products and services to credit unions, EPL was experiencing:Declining revenue growthAfter a profitable history, two consecutive years of losses

EPL Product Offering – 2001 Core Product Offering (VISION)

– Implemented on a Unisys mainframe platform, accessible to user via a “green screen” text based interface

Client Server (PLUS)– Implemented a Windows based front-end to Vision

Challenges– Deficiencies were Major Cause of Business Decline– Feature Additions & Fixes Extremely Difficult

MF/Distributed Environment Closed System with Arcane Languages

– System Modules Not Integrated– No Relational Database– Installation Issues -- touch every desktop to install

Legacy System

Growth Continuing with current

technology platform, based on demonstrated performance and trends:

– Flat to negative revenue trend

– Modest positive earnings possible only with extreme cost control

2000 20021999 20011998

5.0%

9.2%

2.6%

%

-.2%

15.2%

% Year to Year Revenue Growth

Different Signals!!

Negative

2002 2003 2004 2005 2006 2007

Economic Profit without i-POWEREconomic Profit without i-POWER

$0

Pre Tax EarningsPre Tax Earnings

% of Revenue Change

-1.7% -2.2% 2.5% 2.5% 2.5% 2.5%

2002 2003 2004 2005 2006 2007

$0

Earnings and Economic Profit

Unsustainable Business Model Prime example of why Growth is NOT Always

Good The EPL Enterprise Value before i-POWER to

all Investors was negative With this Business Model, Growth did not

increase Economic Value. Low Earnings Rate was Offset by

Asset Increases Necessary to Support the Growth.

Agenda

Next Generation – I-POWER

Infrastructure

Base Case – Legacy System

Collaboration

Future

Strategy: Oracle and I-POWERChallenges Feature Additions

Extremely Difficult Systems Modules Not

Integrated No Relational Database Installation Issues Governmental

Compliance Issues Customer Reliability

Solution J2EE XML Oracle 9i AS Oracle 9i Relational

Data Base Oracle 9i RAC Oracle Collaboration

Suite

Oracle Enabled Solution Manageability

– Oracle Enterprise Manager Scalability

– Increased Performance at High Transaction Volumes (RAC)

Secure Feature Rich Environment– Portal capability Out-of-the Box– Oracle Technology Leadership (J2EE)– Enables Better Controls to achieve Compliance – Open Architecture Allows Rapid Product Feature

Development Low Total Cost of Ownership Complete, One Stop Collaboration Suite

Feature Additions

Pre Oracle

Post Oracle

600%!

Increase

SystemFeature

Additions

/Month

6

42

Number of Defects Closed

PreOracle

PostOracle

900%

Increase

Defects Closed

/Month

22

222

Defects Seen by Customers

PreOracle

Post Oracle&

Mercury Interactive

94% Reductions in

Product Defect Rate!

Index:Product Defects

To

Customer

100

6

Training Intuitive navigation

incorporated Training Time

– 2 days to 1 hour– Teller immediately utilized

iPOWER in the CU!

Saves Credit Unions time when implementing the system as well as saving the ongoing cost of training new employees.

Positively effect the CU bottom line.

16 hours

1 hour

94% reduction!

Hours

Installation I-POWER client

installations are both fast and easy to perform by the user.

Installation Time– Single client from 1

hour to 10 minutes – Branch from 25 to 4

hours

25 hours

4 hours

84% reduction84% reduction!!NewInstallTimePer

branch

Next Generation - i-POWER

Why Oracle 9iAS Portal ?Out of the Box Capability

75

25

200% Improvement!

%

$1M

.5M

50% reduction!

$ Implementation Costs10 people

2 people

80% reduction$680K Yearly Savings!

On-Going Development Costs

i-POWER Forecast

% ofRevenu

e

Pre Tax Earnings (k$)

2002 2003 2004 2005 2006 2007 2008

-2.3% -3.0% 5.2% 12.3% 19.0% 21.7% 20%

Driven By:GM % Increase (1/3)SG&A% Decrease (2/3)Revenue+109%SG&A +57%

Very Positive

2002 2003 2004 2005 2006 2007 2008

Revenues (k$)

% of Revenue Change

-1.2% 13.4 % 22.1% 14.8% 15.6% 13.9% 10.0%

Very Positive

i-POWER Forecast

2002 2003 2004 2005 2006 2007

Economic Profit (k$)

ValueValueCreation!Creation!

Very Positive

I-POWER Roadmap

i-POWERMR 1.5.0MR 1.4.0MR 1.3.0MR 1.2.0

AR 1.0.0/MR 1.1.0

MR 1.6.0 MR 1.7.0 Future

Winter

2003

Spring

2004

January

2003

October

2002

January

2002

Project Start

Beta Start

1st ASP Production Install

1st In-House Production Install

June

2003

1st Open System Install-

No Mainframe or Microsoft!

Branch Controller Beta

Agenda

Infrastructure

Base Case – Legacy System

Next Generation – I-POWER

Collaboration

Future

•Provide Failover at a high incremental cost

•No load balancing, capital is not used unless a crisis occurs

•Customers still affected as failing over to redundant box is not instantaneous

•Only utilize 50% of total capacity.

Unisys Solution

UnisysMainframe

Direct AttachedStorage

XUnisys

Mainframe

Oracle9i RAC Solution Provide cost effective Failover Load balancing, capital is used

all the time Customers not affected as

failover is instantaneous Available with any application

using the oracle 9iDB Small incremental cost Utilize 95% of total capacity due

to low overhead of load balancing

OracleDatabase Server

Direct AttachedStorage

OracleDatabase Server

X

Oracle9i RAC Customer Reliability

In the financial services industry, reliability is a key differentiator among institutions. Any break in service will have long term negative

impact on the credibility of EPL AND EPL’s Client, the financial institution itself,

in terms of lost customers, revenues, earnings

Investment Cost to Maintain Very High Customer Reliability

84% reduction84% reduction!!M$

Unisys 9i RAC

Increased Performance

Oracle9i RAC provides EPL with increased performance and failover at high transaction volumes

– Fraction of the cost when compared to our legacy system.

Oracle9i RAC empowers EPL to take advantage of the technological advancements in server hardware taking place every 6 months.

– We feel that it is not cost effective to buy systems to last 3 -5 years anymore because of the price performance advantage to systems that allow horizontal scalability, which RAC provides.

Agenda

Collaboration

Infrastructure

Next Generation – I-POWER

Base Case – Legacy System

Future

Pre-Oracle Collaboration SuiteRequired Functionality Pre OCS

Email & Calendaring Microsoft Exchange

Voicemail & Fax 3rd Party Call Express & Right Fax

Files sharing Microsoft Windows

Web Conferencing WebEx

Authentication Microsoft Active Directory

Workflow None**

Wireless & Voice Access None**

Enterprise Search None**

Integration None**

** Required by EPL to Provide Leading Edge Service to CustomersRequired by EPL to Provide Leading Edge Service to Customers

Oracle Collaboration SuiteRequired Functionality Oracle Collaboration Suite

Email & Calendaring Included

Voicemail & Fax Included

Files sharing Included

Web Conferencing Included

Authentication Included

Workflow Included

Wireless & Voice Access Included

Enterprise Search Included

Integration Included

Total Cost Of Ownership! TCO is the only way to look at the economics for

business communications. – Hardware, Software and maintenance are only a fraction of

the total costs – Upgrades, Migration and Integration with 3rd parties is

expensive – Looking at TCO, Oracle Collaboration Suite results in

tremendous cost savings. Oracle Collaboration Suite meets all of our

communications needs in one application. – This one stop shopping enables tremendous internal

efficiencies.

TCO: $ per Employee per Year

$745Microsoft Exchange Platform

-75%!

License/Maintenance

$160

Administration Labor $ 571

Hardware

Administration & Labor $142

License/Maintenance

$34

Hardware

$14 $10

$187Oracle

Collaboration Suite

TCO=Reducing Operational Costs

Operating system consolidation System management consolidation Integrated installation of entire suite

components– No third parties required

Efficient configuration & deployment Improved diagnostics & manageability

Corporate Governance New Securities regulations around retention and

supervision of email communication. Oracle Collaboration Suite

– A Consolidated Infrastructure – Federated Search – Currently developing a collaboration classification system

that allows our compliance officer to review communications that appear to be in violation of corporate/regulatory policies, such as transmitting member information, dishonest conduct, and other forms of irregularities.

Implementation

Live Today!– Email, Voicemail, Calendar and Oracle Internet Directory

Accelerated process with Oracle Consulting– Best practice implementation methodology

Take the opportunity set it up for the enterprise– Apply collaboration best practices

Phased implementation approach– Set up, migration and switch over without mixing

environments

Agenda

Future

Infrastructure

Next Generation – I-POWER

Collaboration

Base Case – Legacy System

Key Insights In 2001, EPL faced crucial decisions regarding its long-

term competitive position. – Early results indicate EPL’s Business Transformation and

technology re-architecture enabled by its partnership with Oracle & Sun will regain EPL’s competitive edge.

The Management Team quickly and effectively addressed the technology Challenges.

Some solid quantitative proof points are starting to emerge.

Cost reductions are resulting from this new IT architecture. Oracle Collaboration Suite is positioned to significantly cut

business communication and collaboration costs. Quantitative proof points will continue to be monitored by

EPL to assure strategy is on track.

Future Plans

Implement Oracle Files– More than just a replacement to file servers

Implement Web Conferencing with version 2– Real-time collaboration for the enterprise

Authentication for all applications through Oracle Internet Directory

– Centralized secure data and user profiles Implement Collaboration Suite wireless capabilities Further automation of corporate governance policies Proliferation of Oracle Portal through further integration Integration of Oracle Collaboration Suite with I-POWER

Think Strategically

Focus on standards and integration across your entire enterprise to interoperate efficiently

Increasing need to optimize your business using technology

Collaboration is mission critical to today’s enterprise You’ll have to run email on a relational database Disaster recovery for mission critical applications is

required Regulations require auditability of all communications

with your customers