profit201105 dl
TRANSCRIPT
oracle.com/exadata
Individual results depend on a number of factors. Actual results may vary.
Copyright © 2011, Oracle and/or its affiliates. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates.
Exadata
Runs 11x Faster
1 Exadata replaced
2 large UNIX servers
and 2 storage racks.
profit resizes.indd 4 4/11/11 8:59 AM
VOLUME 16 • NUMBER 2 • MAY 2011
Ashling Cunningham,
CIO, Bord Gáis
Oracle systems help Bord Gáis become a force in
Ireland’s newly open energy markets
THE EXECUTIVE’S GUIDE TO ORACLE APPLICATIONS
ORACLE.COM/PROFIT
Ways
to align it
With business
strategy4
POwER PLAYER
Focus on:
sustainability“WE ARE mUCH bETTER PREPARED
fOR ANSWERING THE NEED fOR
RELIAbLE AND TRANSPARENT
DATA IN A RAPIDLy GROWING
INTERNATIONAL COmPANy WITH
AN INCREASINGLy COmPLEX
COmPANy STRUCTURE. IT’S A
COmPLETELy NEW WORLD.”
—NIELS STRANGE PEULICkE-
ANDERSEN, DONG ENERGy
build anything, anywhereA SINGLE INSTANCE Of ORACLE APPLICATIONS
SImPLIfIES mANUfACTURING fOR EATON’S
VEHICLE GROUP SOUTH AmERICA
on track For growthSySTEm UPGRADES kEEPS CSX RAIL
OPERATIONS GOING fULL STEAm AHEAD
PM11_cover.indd 1 4/4/11 2:29:55 PM
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Certain services may not be available to attest clients under the rules and regulations of public accounting.
Copyright © 2011 Deloitte Development LLC. All rights reserved.
Member of Deloitte Touche Tohmatsu Limited
Winning teams are the ones who rack up all the awards. And this year, we’re happy to
add even more Oracle Titan and Oracle Global awards to our list. Our award-winning
track record makes us proud because behind every award, there is a successful client.
2010 Oracle Awards:
•ConsumerIndustrySolution
•GlobalSystemsIntegratorApplicationsMomentum
•ManufacturingandDistributionSolution
•OracleRedStackSolution
•GlobalApplicationsPartneroftheYear
•ApplicationsPartneroftheyear,UnitedKingdom
•OraclePartneroftheYear,TheNetherlands
•OraclePartneroftheYear,SouthEastAsia
Here’s to another great year of valued partnership and to giving our clients more.
Deloitte & Oracle
Together.
Scanhereandlearnhow
to get more value from
your Oracle investments.
www.deloitte.com/us/oraclevideo
profit resizes.indd 8 4/11/11 4:42 PM
Editor’s notE
5 Reduce. Reuse. Replace. The three well-known environmental edicts have
meaning beyond the world of consumer waste. They also can be applied to help enterprise systems support more sustainable business practices. —By Aaron Lazenby
LuminariEs
6 sMaRT sTeps Oracle’s senior director for industry strategy and insight
finds an effective framework for helping technologists create a sustainability footprint for manufacturers. —Harshad Khatri
7 FoRwaRd ThinkinginsidE oracLE
11 shipping MoRe wiTh less Oracle Transportation Management
minimizes shipping costs and carbon footprint. Plus, Oracle Governance, Risk, and Compliance Applications Suite gets an upgrade, and Oracle introduces the world’s first exabyte storage system.
LEading stratEgiEs
14 BRidge To The FuTuRe Gina Tomlinson, CTO of the City and County of San
Francisco, shares her thoughts on how to build a municipal IT policy worthy of California’s Silicon Valley. —By Aaron Lazenby
BusinEss EfficiEncy
25 expeRT RepoRTing An Oracle-based portal benefits Intertek, its customers,
and the environment by streamlining paper-based reporting. —By Minda Zetlin
EnvironmEntaL data
28 susTainaBle eneRgy Executives at Denmark’s DONG Energy follow a
sustainable path with the help of accurate reporting from Oracle Hyperion Financial Management. —By Tara Swords
Human capitaL managEmEnt
31 Managing a healThy woRkFoRce Year after year, Premera Blue Cross earns kudos for
being a great place to work—and Oracle’s PeopleSoft human resources solutions are part of the prescription. —By Alison Weiss
gLoBaL manufacturing
35 a singulaR View Eaton’s Vehicle Group South America
uses a single Oracle platform to support management’s goal of building products at any global facility. —By David Rosenbaum
appLications upgradE
41 on The RighT TRack A near-simultaneous upgrade to Oracle E-Business
Suite 12.1 and PeopleSoft Enterprise 9.1 keeps business moving for one of the biggest rail companies in the U.S. —By Alan Joch
it stratEgy and BudgEts
45 Think like a ceo Sales professionals use research and communication
tactics to get project buy-in from senior management. Can IT execs do the same? —By Mark Kuta Jr.
sustainaBiLity mEtrics
49 geTTing To gReen The data you need to do sustainability
reporting is already captured in your systems. But how do you get it out? —By John O’Rourke
QuEstions and @nswErs
52 wiThin youR poweR Profit readers use Twitter to ask Oracle sustainability
strategist Jon Chorley about Oracle’s approach to software that supports cleaner, greener business. —By Kate Pavao
M A Y 2 0 1 1 V O L U M E 1 6 N U M B E R 2
fEaturE story
cover: John Blythe
Ireland’s electricity market opened to broad competition in 2005 after years of government control. To meet new market opportunities, Irish utility Bord Gáis began a multi-year IT transformation based on Oracle technology. Today, managers enjoy improved operational efficiencies and compliance with new regulatory mandates, and provide excellent customer service for 425,000 new residential electricity customers. —By Tony Kontzer
18
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 1
it power players
2 M a Y 2 0 1 1
editorial
editor in chief Aaron Lazenby
Managing editor Jan Rogers
contributing editor and Writer Blair Campbell
contributors Jeff Erickson, Bobbie Hartman, Caroline Kvitka, Margaret Lindquist,
Monica Mehta, Christopher Null, Kate Pavao, Katheryn Potterf,
Fred Sandsmark, Leslie Steere, Alison Weiss
senior creative director Francisco G Delgadillo
design director Richard Merchán
production designer Sheila Brennan
contributing designer Chris Strach
publishing
publisher Jeff Spicer
production director and associate publisher Jennifer Hamilton
[email protected], +1.650.506.3794
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[email protected], +1.650.506.1985
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associate publisher Kyle Walkenhorst
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PM11_TOC.indd 2 4/4/11 12:33:16 PM
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over 15 years of integration experience and over 1,000 satisfied clients, our experts understand the
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Untitled-1 1 4/11/11 8:45 AM
4 M a Y 2 0 1 1
oracle.com/prof i t
THE EXECUTIVE’S GUIDE TO ORACLE APPLICATIONS
Special Report: Business Intelligence
In January 2011 the Gartner Magic Quadrant for
Business Intelligence Platforms placed Oracle in the
Leaders Quadrant. It’s easy to see why: Oracle Business
Intelligence Foundation Suite offers a complete,
open, and unified solution that serves every class of
user—providing multiple channels of information access
and supporting all enterprise business intelligence (BI)
requirements. Learn about Oracle’s BI offerings and how
customers are using BI to manage their data.
oracle .com/us/corporate/prof i t / features/
businessinte l l igence-197817.html
Other Highlights
Creating Effect ive Col laboration:
Q&A with Author Mehrdad Baghai
Global izat ion and technology have made i t easier than
ever to work together to create new solut ions and reach
new customers. However, the rapidly changing way we do
business also demands execut ives develop new strategies for
successful col laborat ion. Prof i t recent ly spoke with Mehrdad
Baghai, managing director of Alchemy Growth Partners and
one of the authors of As One (Penguin Group, 2011), which
out l ines eight di f ferent archetypes for col lect ive leadership.
Learn why hierarchy st i l l matters and how ident i fy ing your own
management archetype can shape your technology strategy.
oracle.com/us/corporate/prof i t/opinion/021611-mbaghai-
321118.html
Oracle Exalogic: The One-Day Instal lat ion Chal lenge
Ram Sivaram, product development engineer at Oracle, has
been unboxing and instal l ing Oracle Exalogic machines in
rapid t ime. Today he unboxed a brand-new machine and had i t
running and ready for product ion in just 10 hours.
youtube.com/watch?v=aWHPC188tus
Master Data Management Deployment Tips
Oracle Senior Director David But ler makes the case that the
modern IT appl icat ion landscape is fragmented. This leaves
cr i t ical data domains such as customer, product, s i te, and
suppl ier created and managed di f ferent ly within each of the
many appl icat ions. But ler draws on his exper ience with master
data management (MDM) to propose solut ions for f ix ing the
data fragmentat ion problems that plague businesses today,
arguing that a sound MDM strategy can “measurably assist
organizat ions across a wide var iety of top IT in i t iat ives.”
oracle.com/us/corporate/prof i t/opinion/020911-dbutler-
310287.html
Mythics Advances Data Consol idation with Oracle Exadata
Oracle partner Mythics recent ly launched a pract ice working
with customers focused on implementing Oracle Exadata
Database Machine as a way to consol idate datacenter
operat ions. This strategic move has led Mythics to be one of
the f i rst Oracle partners to achieve Oracle PartnerNetwork
Special ized status in Oracle Exadata.
oracle.com/us/corporate/prof i t/partners/022311-mythics-
323987.html
Five Ideas: The Way We Work Now
As execut ives prepare for an economic recovery, many are
unsure of how to invest in new IT endeavors—from enterpr ise
resource planning tools to Enterpr ise 2.0 technologies. Here,
get expert insight into choosing technology that helps you
col laborate better and get projects done. Plus, see how you can
keep yoursel f f rom burning out as the economy accelerates.
oracle.com/us/corporate/prof i t/ features/5ideas-exadata-
144061.html
Fol low Profi t on Twitter @OracleProfi t
Add @OracleProf i t to your l ist of enterpr ise technology sources
and get dai ly updates of news, v ideo, events, and blogs—all
f rom the editor ia l staff of Prof i t .
Subscribe
Profi t Onl ine Executive Strategy Newsletters
Subscr ibe to P ro f i t On l ine ’s two regu la r news le t te rs : the
Execut i ve S t ra tegy Week ly bu l l e t in fo r the bes t new con ten t
and the Execut i ve S t ra tegy Month l y f o r in te r v iews, podcas ts ,
and fea tu res on today ’s ho t tes t en te rp r i se t rends .
oracle .com/newsle t te rs
PM11_TOC.indd 4 4/4/11 12:33:42 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 5
EDITOR’S NOTE
Three words, otherwise known as the “waste hierarchy,” have been bouncing
around in my head as the editorial staff researched and wrote the stories contained
in the May 2011 issue of Profit.
Maybe it’s because I’m a child of that era, but edicts to reduce, reuse, and recycle
have defined my view of environmental responsibility. And while there are many
more-complex and more-detailed models for executing and managing corporate
sustainability programs, the simple waste hierarchy still offers a good framework for
strategic thinking on the subject, with replace as a substitute for recycle.
Reduce. From what I learned this issue, reduce is pretty much synonymous with “improving efficiency”—
and represents the fastest path to mitigating a company’s environmental impact. For example, managers can
reduce the energy associated with logistics by using technology to optimize shipments (see “Shipping More with
Less,” page 11). Or, they can switch from paper-based reporting to a cloud-based solution and eliminate tons of
printed material from existing processes (see “Expert Reporting,” page 25). In either case, reduce requires smart
managers to look at established processes and remove obvious inefficiencies.
Reuse. This insight comes from an unexpected mind-set: looking at existing enterprise systems and tuning
them to do the work of sustainability. Jon Chorley, vice president of supply chain and sustainability product
strategy at Oracle, shares his systems reuse strategy in his interview (see “Within Your Power,” page 52), and
Denmark’s DONG Energy put that plan into action by tuning Oracle Hyperion financial management applica-
tions to track greenhouse gas emissions (see “Sustainable Energy,” page 28). While some may “greenwash” enter-
prise solutions to capture attention, many sustainability tracking and management functions are already built
into core enterprise IT functions.
Replace. While it might differ from what to do with your empty soda cans, replace makes more sense for the
enterprise. It means supplanting outmoded systems and processes with modern, efficient solutions. IT-driven
businesses might look to swap outdated servers in the datacenter for newer, less-power-hungry machines. Oracle’s
“Cash for Clunkers” program was designed for just that reason: to help customers scrap costly and inefficient
servers in favor of Oracle’s SPARC Enterprise M8000 and M9000 products.
Reduce. Reuse. Replace. It’s about more than altruism—it’s about smart business.
Best,
Aaron Lazenby
Editor in Chief, [email protected]
Reduce. Reuse. Replace.B
oB
Ad
le
r
PM11_EdNote_R1.indd 5 4/12/11 3:19:28 PM
6 M a y 2 0 1 1
Luminaries By HarsHad KHatri
SMART Steps
If building a sustainable enterprise was a
fashionable trend five years ago, today it is
a strategic differentiator. According to the
nonprofit organizations the Climate Group
and the Global e-Sustainability Initiative
(GeSI), transforming the way people and
businesses use technology could reduce
annual man-made global emissions by 15 percent by 2020,
and deliver energy efficiency savings of more than US$800
billion to global businesses.
Indeed, recent breakthroughs in the technology industry—
primarily in computation and communications—have pro-
vided unprecedented capabilities in capturing the promise of
sustainability. In the manufacturing industry, the benefits span
the entire lifecycle and value chain
of any product, including incep-
tion, design, manufacture, sales,
and service, as well as supporting
services for each of these business
functions. In today’s global economy,
where the mantra is “design any-
where, make anywhere, and sell
anywhere,” manufacturers continue to leverage efficiently
coordinated global capabilities. The impact of technology-
driven sustainability spans the entire value chain by allowing
for global design team collaboration; global manufacturing
coordination; and low-cost, energy-efficient supply chain and
logistics execution.
But how do organizations go about leveraging technol-
ogy to complete this transformation? The Climate Group and
GeSI recommend managers use a framework to standardize,
monitor, account, rethink, and transform (SMART) their busi-
nesses to “optimize for energy efficiency and how we live,
work, and play in a low-carbon world.” This approach will
be successful when low-carbon business models become the
norm and proliferate across all industries and economies.
For manufacturing companies, applying technology within
the SMART framework allows for a closed-loop view of the
value chain, enabling the ongoing review, optimization, and
transformation of the organization to capture sustainability
benefits. Here’s how:
Standardize. Technology ensures the standardization of mea-
surement methods to help managers understand and capture
the sustainability impact of products across the entire life-
cycle, from design and manufacturing to transportation. With
standardized measures, the drivers of sustainability can be
modeled, analyzed, and optimized globally.
Monitor. Organizations can use technology to link and make
sustainability goals and outcomes visible, as well as to
monitor statistics such as energy use across the value chain.
This step involves ensuring that the monitoring is consistent
throughout the company and processes, implementing
monitoring devices and tools for power management, and
applying remote monitoring and control of systems
wherever appropriate.
Account. Technology-driven monitoring of statistics such as
materials and energy usage creates accountability across the
organization, driving and aiding
managers who must make decisions
and create sustainability goals.
Rethink. In time, business environ-
ments will change, and sustain-
ability goals will need to be refined.
Technology drives this process
by offering tools that can develop
alternative, updated scenarios and processes. The informa-
tion will enable industry leaders to rethink their own opera-
tions and product development for materials, cost, and
energy reductions.
Transform. Technology allows for the scaling of optimized
sustainability-enabling tools and practices across the value
chain on a global scale. As with any other initiative, a “think
big, start small, and scale rapidly” cadence will allow for
global sustainability transformation.
Manufacturing companies that focus on technology-
enabled sustainability are expected to gain a dual edge on
the competition: a “green edge” that comes with being an
environmental leader, and a financial edge gained by captur-
ing and leveraging that reputation in the market. Using the
SMART framework allows companies to monitor and trans-
form value chain activities—which, in addition to reducing
emissions, optimizes results and reduces costs across the
board. Over time, these benefits are truly strategic advan-
tages, driving both the top and bottom lines. <>
HARSHAd KHATRi is a senior director for industry strategy and insight at Oracle.
Applying technology within
the SMART framework
allows for a closed-loop
view of the value chain.
How tecHnology can create a SuStainability Footprint For manuFacturing
Sh
ail
ja
Kh
at
ri
PM11_Luminaries.indd 6 4/1/11 10:29:47 AM
FORWARDTHINKINGN E W S A N D I N F O R M A T I O N F R O M A R O U N D T H E G L O B E
Eco-advantage was a novel idea five years ago when environ-
mental strategist Daniel C. Esty coauthored the first edition of the
business book Green to Gold (Yale University Press, 2006).
“There were just a handful of companies that had begun to
realize the value of bringing an environment or sustainability
focus to corporate strategy,” Esty recalls. “Today, a very large
number of companies understand this logic, and the challenge
has turned out to be not just that you should
do it, but what to do.”
That’s where Esty’s new book, coauthored
by Corporate Eco Forum Chair P.J. Simmons,
comes in. “Green to Gold was basically about
why it makes sense to bring environment and
sustainability focus into core business strat-
egy,” he says. “The Green to Gold Business
Playbook [Wiley, 2011] tells how to do this.”
Here, he lets Profit readers in on the secrets
to shaping a smart sustainability strategy.
Profit: What do businesses need to know
about going green?
Esty: It turns out that the environment and
sustainability agenda has lots of pieces.
Not every green initiative will pay off, and
there will be a certain process of trial and error. It makes sense
to expect some success and some things not to work out.
Companies should do more of the things that are paying off—and
end those things that are not, so they can try something else.
It’s important for companies to pick some initial priorities to
focus on, and then move on to other issues. Recognize which
initiatives will pay off—and pay off biggest—and focus on
those first.
Profit: What are some easy initial wins?
Esty: Almost every company is going to find opportunities to cut
their energy spend, which will both reduce emissions and bring
down costs. And for a good number of companies, there are
going to be opportunities to become more efficient with other
products—whether that’s water or the materials that go into
something they’re manufacturing.
Profit: How can companies use technology to become more
efficient?
Esty: One of the big areas of opportunity for companies that are
in any way information technology intensive is to really pursue a
green IT agenda that, again, cuts costs and
improves results at the same time. A lot of
companies have realized you can improve
the efficiency of operations, cut the electric
bill, and reduce emissions if you embrace
some of these new opportunities like cloud
computing and virtualization as a strategy.
Profit: What about compliance and regulation?
Esty: It certainly makes sense to keep an
eye on the unfolding environmental issue set.
Companies managing that with a clear focus
are more likely to spot issues early and figure
out how to become compliant with the law
in the lowest-cost way. They may in fact get
themselves advantage in the marketplace
while the competition is still floundering.
Profit: You just started working as the commissioner of
Connecticut’s new Department of Energy and Environmental
Protection. What’s exciting about the new job?
Esty: It gives me a chance to put into the policy realm the work
I’ve been doing over 20 years on a more business-oriented
approach to environmental protection. I’ve tried to argue that
the best path forward toward a clean energy future and a world
that’s going to make environmental protection central to how
we do business is to get beyond the narrow focus of command,
control regulation, and figure out a broader portfolio of incentives
that engage the private sector in delivering solutions to our range
of environmental challenges.
By Marta Bright, Bobbie Hartman, Kate Pavao, and Alison Weiss
SMART SUSTAINABILITYCreating an environmental policy that works for your company
H O W T O
IMPLEMENT SUSTAINABILITY
PRACTICES FOR BOTTOM-LINE RESULTS
IN EVERY BUSINESS FUNCTION
T H E
DANIEL C. ESTY AND P.J. SIMMONS
P R O F I T : T H E E X E C U T I V E ’ S G U I D E T O O R A C L E A P P L I C A T I O N S 7
PM11_Forward thinking.indd 7 4/1/11 11:02:05 AM
FORWARDTHINKING
When you die, will your blog live on?
As we live more aspects of our lives
online, there’s a growing concern about
just what happens to all those tweets,
e-mails, photos, and accounts—not to
mention social network pages—that
we’ve created dur-
ing our lifetimes.
“It’s a hard
subject for people
to get their heads
around,” says
Evan Carroll,
interaction design
expert and coauthor, with interaction
designer John Romano, of the Website
thedigitalbeyond.com and the book
Your Digital Afterlife (New Riders Press,
2010). The book is a how-to primer for
securing digital assets for your loved
ones and, perhaps, posterity. Internet
service providers like Facebook, Yahoo!,
and Twitter have widely different
regulations governing access to the
accounts of deceased members.
Carroll and Romano suggest making
an inventory of your online assets and
giving it to someone, along with pass-
words and instructions for what you’d
like done with them. “It takes just 15
minutes, and it will save your loved ones
untold hours of agony, wrestling through
passwords and service agreements. A
list and a conversation can help people
secure the things that are important to
them,” recommends Romano.
Digital estate planning also includes
which blog posts, photos, or online mus-
ings are worth passing on. To learn more,
go to thedigitalbeyond.com.
From Here to Eternity in Cyberspace
Contestants in the
Solar Decathlon are
challenged to design
and build houses
that are powered
exclusively by the
sun. Sponsored by
the U.S. Department
of Energy, the con-
test brings together
20 teams from engi-
neering and architecture schools around the world.
The students spend almost two years designing,
building, analyzing, and testing their solar-powered
houses to ensure that they can provide all the comfort
of modern conveniences. The teams are judged in 10
contests to determine which house best blends afford-
ability, consumer appeal, and design excellence with
optimal energy production and maximum efficiency.
“It’s the education of a lifetime,” says Richard King,
director of the Solar Decathlon. “Students want to
find a way to live sustainably. Over the years, they
have been very inspired by this challenge and get
passionate about it.”
Since the first Solar Decathlon was held in 2002,
72 solar houses have been built. The 2011 competi-
tion will be held on September 23 through October 2,
2011, in Washington DC. To learn more about renew-
able energy in action, go to solardecathlon.gov.
THE SOLAR OLYMPICS
In Tokyo’s Shinagawa Station there are vending machines that
use facial recognition cameras to scan customers and link their
faces to a database of demographic facial characteristics. By
identifying a person’s age and gender, the machine then makes a
personalized drink recommendation.
The appeal of facial recognition technology is that while it is very accurate, it’s
not as intrusive as other biometric methods such as DNA testing. Japan is also
embracing digital billboards that use facial recognition technology for tailored
advertising, as well as pilot projects that employ walk-through facial scanning
instead of passwords or fingerprints for access.
REAd MY FACE: dRInk THIS
Top: Sun screens and a gray water filtration system reflect the sun off the solar-powered Virginia Tech house at the 2009 U.S. Department of Energy Solar Decathlon on the National Mall in Washington DC.
Bottom: Team Boston member Clay Larsen installs a rainwater-capturing sculpture that will deliver water to a fish pond.
St
efa
no
Pa
lte
ra
/U.S
. D
ePa
rt
me
nt
of
en
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gy
So
lar
Dec
at
hlo
n
8 M a y 2 0 1 1
PM11_Forward thinking.indd 8 4/1/11 11:03:03 AM
Pet recovery experts Annalisa Berns and Landa Coldiron use
skills and tools that go far beyond posting missing-pet fliers on
telephone poles. Their methods include crime scene investiga-
tion techniques, legwork, signage, low-tech capture nets, and
the skills of highly trained scent dogs.
Berns and Coldiron also employ an array of high-tech tools—
including satellite mapping, night vision
goggles, wildlife cameras, and snake
cameras—turning pet recovery into
a hard science that produces results.
These gadgets provide images of
the animal activity in any given area,
helping determine where to place
feeding stations and humane traps.
GPS collars and handheld tracking
devices are used to monitor their
search dogs and locate them quickly
in the event that they’ve become injured or separated—or
have found the missing pet.
Fortunately many pets are reunited with their owners, often
within the first 72 hours. In the sad event that pets aren’t
recovered, forensic science can help provide closure. If a
search dog picks up the scent of blood or fur, the remains can
be tested to determine a DNA match.
“Pets help us all sustain a sense of
well being, so our number one goal
is to help people get their pets back
quickly,” says Berns. Coldiron adds,
“When you’re dealing with animals
and their sometimes erratic behavior,
your best line of defense is to get a
plan in place quickly.”
For more information, visit
lostpetdetection.com.
HigH-TecH PeT DeTecTives
seconD cHancesNew and innovative design products are conserving precious resources like water and breathing new life into everyday items that
would otherwise find their way into landfill. From high artistry to a highly intelligent approach to conservation, these are some of the
more-interesting offerings Profit editors have found:
Portable meets potable with this device from Element Four
that draws moisture from the air and converts it into safe
drinking water at a rate of up to 18.9 liters per day.
elementfour.com
Israeli artist Amir Zinaburg has taken industrial
design to new heights with furniture made from
crushed steel cans. greenprophet.com
For those who are
committed to the
age of digital music
but still have a fond-
ness for vinyl, the
spirit of the turntable
remains alive in
these bowls made
from old records.
modernartisans.com
Eco-chic purse maker
UrthBags has found a
way to pay homage to
the often-forgotten and
frequently trashed paper
telephone directory.
urthbags.com
Automobile tires are
notorious breeding
grounds for mosquitoes,
and they pose a high
risk of contaminating
surface water. The rub-
ber meets the road war-
rior in a whole new way
with these belts made
from recycled radials
that have done hard
time on the highway.
uncommongoods.com
La
nd
a C
oLd
iro
n
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 9
PM11_Forward thinking.indd 9 4/1/11 11:03:41 AM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 11
InsIde OracleP r o d u c t s . B u s i n e s s . r e s u l t s .
s companies work to deliver goods,
analysis of transportation and
logistics is one of the best and earliest
indicators of economic contraction or
expansion. Recent growth in the demand
for transportation and logistics services
across all industries demonstrates that the
global economy is starting to rebound.
However, transportation and logistics
managers still must contend with vola-
tile fuel prices and capacity shortages,
as well as continued pressure to restrain
budget and improve sustainability.
Transportation and logistics costs can
range from 8 to 20 percent of a country’s
gross domestic product.
According to analysis from Logistics
Management, the transportation indus-
try is currently growing. But capacity
is restrained because firms made fewer
investments in transport assets during
the recession. Additionally, the U.S.
Energy Information Administration
predicts that energy markets will
remain tight, so trucking fuel prices
will continue to increase in 2011. As
a result, shippers will have to find
ways to use fewer and more-expensive
resources to address a rebounding
demand for goods this year.
Oracle Transportation Management
6.2, introduced in January 2011, features
a variety of market-driven enhancements
that give users a single unified platform
to reduce global transportation and
logistics costs and boost efficiency, while
providing critical economic incentives to
expand enterprise sustainability efforts.
Oracle Transportation Management
6.2 helps companies effectively manage
the physical movements of goods in
their supply chains, ranging from local
deliveries to international shipments.
The latest release offers improved fleet
management, load management, rail
transportation management, and dock
scheduling—areas where companies can
achieve sustainability benefits as well.
“Oracle Transportation Management
6.2 helps users do a better job sourcing
freight services and transportation,” says
Derek Gittoes, vice president of logistics
product strategy at Oracle. “Users can
make transportation carrier or supplier
decisions not just based on cost but also
based on the environmental profile.”
Gittoes says that shipping optimiza-
tion features in Oracle Transportation
Management help companies minimize
the costs associated with moving goods
by optimizing the number of goods
loaded onto a truck and the travel miles
associated with delivery. This leads to
less fuel consumed and lower emissions
from the fleet. New three-dimensional
load configuration features, for example,
allow users to carefully plan loads when
shipments must be divided into different
compartments with different tempera-
tures or other handling requirements.
The load configuration feature even
helps plan loads when shipping in rail-
cars with the unique curved roof designs
used in Europe.
“The more you can fit into the
equipment, the less it costs you on a
per-unit basis,” says Gittoes. “There’s
always a direct benefit tied together
between the operational efficiency and
environmental impact.”
Improvements in fleet management
also mean that firms managing logistics
can now benefit from enhanced schedul-
ing capabilities and an interface that sup-
ports street-level routing and mapping.
This allows users to change routes and
deliveries even when a schedule has
already been executed and trucks are
on the road. “Oracle Transportation
Management can be used to replan the
route and give drivers new assignments
in real time,” says Gittoes.
Because rail travel typically offers
companies a cheaper alternative
to moving freight by truck, Oracle
Transportation Management 6.2 includes
more support for rail transportation,
including shipment rating, shipment
execution, and rail equipment tracking
features. “The environmental impact of
freight that’s moved on rail is also a lot
less,” Gittoes adds.
Also featured is an improved schedul-
ing algorithm, making it easier than ever
to manage dock appointment schedules
at distribution centers. Now, companies
can give trucks specific time slots to pick
up or deliver goods, eliminating both
downtime and the emissions generated
by idling trucks.
“When you’re more efficient with
logistics and transportation, you’re
moving more, and trucks are better
filled,” says Gittoes. “It’s a direct cost
benefit with a direct environmental
impact benefit.” <>
Derek Gittoes, Vice President of Logistics
Product Strategy, Oracle
Bo
B A
dle
r
Shipping More with LessOracle TranspOrTaTiOn ManageMenT cuTs shipping-relaTed carbOn and cOsTs.
PM11_InsideOracle.indd 11 4/1/11 4:20:16 PM
InsIde Oracle
racle Governance, Risk, and
Compliance Applications Suite 8.6,
introduced in March 2011, offers an inte-
grated and complete approach to manag-
ing risk, coordinating compliance tasks,
and automating business controls—within
a single solution. The new release of the
suite makes it much simpler to quickly
roll out multiple governance, risk, and
compliance (GRC) initiatives across differ-
ent departments, allowing organizations to
rapidly respond to challenges in a timely
and cost-effective manner by incorporat-
ing business risk information and continu-
ously monitoring critical processes across
multiple lines of business.
“Some of our competitors focus just on
documentation and process automation,
and others on detecting fraud and errors,
but there’s no one that is looking at it as
an integrated problem the way Oracle is,”
says Siddharth Sinha, senior director of
GRC product management at Oracle.
The latest release of Oracle
Governance, Risk, and Compliance
Applications Suite provides a graphical,
template-based approach to allow users
to tailor the GRC solution to meet their
specific business needs and priorities
across various industries, regulations,
and geographies. This release includes
new features to quickly migrate Microsoft
Excel–based solutions and author
user-driven extensions. It also provides
embedded reporting while maintain-
ing fine-grained security across large
numbers of users.
“Oracle Governance, Risk, and
Compliance Applications Suite 8.6 is a
lot smarter, not just in coordinating risk
and compliance activities, but in the
underlying engine, which is finely tuned
to detect fraud and errors—like errone-
ous payments to suppliers—in ways that
can directly impact the bottom line. It’s
easy for business users to articulate fairly
complex business controls with a high
degree of precision in an easy-to-use
graphical manner,” says Sinha. “This dra-
matically reduces false positives and frees
up time for business users to focus on the
most critical issues.”
The latest release also includes the
ability to manage exceptions detected by
the application. By providing a systematic
way to triage exceptions, the product
makes it possible to route issues to the
right experts within an organization for
proper corrective action. Furthermore,
Oracle Upgrades GRC Applications Suite
news briefs
PeoPleSoft IntegratIon wIth
PrImavera P6 aPPlIcatIonS
In another
move to help
customers reap
the rewards of
project port-
folio management, Oracle’s
Primavera P6 Enterprise
Project Portfolio Management
is now integrated with
Oracle’s PeopleSoft program
management and project
costing applications. This
new integration, announced in
March 2011, gives Primavera
applications users the abil-
ity to combine the portfolio,
resource, and schedule
management capabilities of
Primavera P6 with the power
of PeopleSoft’s project finan-
cial and resource manage-
ment applications.
This integrated solution
helps IT and project-driven
organizations align project
investments with strategic
initiatives and overcome
fragmented processes that
can hinder managers’ ability
to monitor resource needs.
The integration also helps
improve project governance
by increasing visibility into
project team assignments,
milestones, and financial
progress that have a direct
impact on cash flow.
“Until now, many custom-
ers have used Primavera P6
for project management and
PeopleSoft for costing and
budgeting, but the processes
between these disciplines
have been manual and not
integrated,” says Kristy Tan
Neckowicz, vice president for
Primavera product strategy at
Oracle. “With this new integra-
tion, there is traceability and
improved governance, con-
necting back-office financial
systems with projects man-
aged in Primavera applica-
tions. The integration helps
eliminate human errors, and
the combined end-to-end
system provides a holistic
view of project investments.”
“With this scalable solu-
tion that rapidly configures
to the unique business flows
of professional services, IT,
and capital projects, our cus-
tomers can consolidate their
disparate project manage-
ment tools onto a standard
enterprise platform, lower IT
integration costs, and accel-
erate the communication of
project progress among key
stakeholders,” concurs Mark
Rosenberg, senior director of
PeopleSoft product manage-
ment at Oracle.
new oracle aPPlIcatIon
IntegratIon archItecture 3.1
ProceSS IntegratIon PackS
Oracle Application Integration
Architecture 3.1, introduced
in February 2011, is a com-
prehensive
update of
prebuilt
integrations
designed
1 2 M A Y 2 0 1 1
Siddharth Sinha, Senior Director of GRC
Product Management, Oracle
Bo
B A
dle
rC
hr
is s
tr
AC
h
PM11_InsideOracle.indd 12 4/1/11 4:21:04 PM
Oracle Debuts Exabyte Storage System
to reduce integration costs
for all Oracle customers.
The release features prebuilt
integrations across all major
Oracle applications and
includes nine cross-industry
process integration packs
(PIPs), eight vertical PIPs,
and two direct integrations
that are certified for Oracle
Fusion Middleware.
One PIP garnering atten-
tion is the newly enhanced
Oracle Value Chain Planning
Integration Base Pack. The
PIP already delivers prebuilt
integration from Oracle’s JD
Edwards EnterpriseOne to
Oracle’s value chain plan-
ning and Demantra Demand
Management applications.
It also offers direct integra-
tion with current and future
planning applications in
Oracle E-Business Suite and
provides PeopleSoft supply
chain management integra-
tion with Demantra Demand
Management. Now, JD
Edwards EnterpriseOne and
PeopleSoft users can have
access to a wider variety
of tools for their advanced
planning systems, thanks
to integration with Oracle
E-Business Suite value chain
planning applications.
oracle’S autovue enterPrISe
vISualIzatIon aPPlIcatIonS
Oracle’s AutoVue enterprise
visualization applications
release 20.1.0 offer an updated
enterprise-class architecture
that makes it an excellent
option for handling an organi-
zation’s document visualization
requirements on a single plat-
form. Now, AutoVue can func-
tion for both enterprisewide
visualization and collaboration
within applications and as a
personal productivity tool for
desktop users.
The new release of Oracle’s
AutoVue enterprise visualiza-
tion applications includes
important improvements to
performance, reliability, and
stability, which are critical as
more organizations consider
moving visualization capa-
bilities beyond application in
single departments for use
throughout an enterprise. The
new release also includes a
rearchitected
desktop
deployment
platform for
desktop users.
Enterprise users can benefit
from a variety of enhance-
ments such as hotspot
links, which allow particular
areas on a drawing or docu-
ment to trigger actions or
launch pages within other
applications. Among other
improvements are AutoVue’s
document print services,
which enable users to pro-
vide high-volume printing,
and AutoVue’s text extraction
Web service APIs, which have
been extended to include
support for MicroSoft Office
document types.
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 1 3
racle has introduced the StorageTek
T10000C tape drive, the industry’s
fastest and highest-capacity tape drive,
with a world-record capacity of 5 TB
per cartridge and an industry-leading
240 MB/sec data transfer rate. When
the tape drive is combined with the
StorageTek SL8500 modular library
system, a single Oracle tape library can
now house more than an exabyte of
data and offers cost savings of as much
as 23 percent over five years compared
to other tape vendors.
The speed and capacity of this new
storage solution is designed to make
massive amounts of archived data
available to applications, while requir-
ing minimal datacenter floor space.
Industries such as healthcare, media and
entertainment, and biomedical research
are expected to be some of the primary
beneficiaries of this new technology.
“The release of the StorageTek
T10000C tape drive reaffirms Oracle’s
undisputed leadership in tape technol-
ogy,” says James Cates, vice president of
hardware development at Oracle. “The
StorageTek T10000C sets the new stan-
dard in tape by storing more than three
times more data on a single cartridge
than any other tape drive. Combining it
with the StorageTek SL3000 and SL8500
modular library systems helps ensure
that customers, regardless of size, can
afford to retain critical data without
concern for future scalability.”
Now that applications are generating
and utilizing greater amounts of data,
tape drive performance has become a
critical factor in generating backups
within an allotted time window. The
lightning-fast data throughput of the
StorageTek T10000C tape drive speeds
the backup window and also leads to
reduced power consumption because
less power is required to write the same
amount of data.
Tape solutions are a cost-effective
way for customers to back up large
datasources and maintain copies of
infrequently used data. The StorageTek
T10000C tape drive is part of Oracle’s
tiered storage approach, which incor-
porates the advantages of both disk and
tape and balances the cost of different
types of storage media against applica-
tion performance requirements. <>
the extensibility framework of Oracle
Governance, Risk, and Compliance Suite
8.6 enables companies to tap into multiple
Oracle and third-party business applica-
tions at the same time.
“We’ve focused on helping compa-
nies achieve their performance goals
by making it simple to incorporate risk
intelligence and continuously monitor
business controls in their existing IT
environment,” Sinha says. “Oracle
Governance, Risk, and Compliance
Applications Suite 8.6 includes signifi-
cant enhancements that help companies
quickly deploy targeted, role-based
GRC solutions driven by the needs of
the business user community within a
unified GRC application.” <>
Ch
ris
st
ra
Ch
PM11_InsideOracle.indd 13 4/1/11 4:21:33 PM
14 M a y 2 0 1 1
hen Gina Tomlinson joined the San Francisco Department
of Technology as chief technology officer in 2010, she was
surprised by what she found. This golden gateway to Silicon Valley
was suffering from many of the same ills thwarting less-renowned
municipalities—antiquated systems, antiquated processes, and
limited technical skill sets.
But Tomlinson, with IT experience in both the public and private
sectors, is determined to bring one of California’s oldest cities into
the twenty-first century. “When I came here and I got the lay of the
land, the environment, and the culture, my goal became how to get
San Francisco to a level of technical standards to compete with other
cities within the state,” she says.
Profit spoke to Tomlinson about the challenges she faces as she
consolidates and modernizes the city’s enterprise IT infrastructure,
expands the city services available to citizens, and manages IT for
one of the most tech-literate cities in the United States.
Profit: When you arrived in your current position of
CTO, you found IT structure, processes, and procedures you
By AAron LAzenBy
Gina Tomlinson, Chief
Technology Officer, City and
County of San Francisco
Bridge to the FutureSAn FrAnciSco chieF technoLogy oFFicer ginA tomLinSon iS BuiLding municipAL
it worthy oF SiLicon vALLey.
LeAding StrAtegieS
Pe
te
r
St
em
ber
PM11_LeadingStrategies.indd 14 4/1/11 10:41:06 AM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 15
describe as being well below
what you expected. How do
you begin to tackle that as an
IT executive?
Tomlinson: It’s a tough path.
The first thing we did was a very
accurate, very detailed deep dive
into the infrastructure—into the
belly of the city—to see where
the vulnerabilities and the holes were, identify opportunities
for us to bolster the infrastructure, and insert technology to
improve processes.
We went to various city agencies and business units to learn
about their business. We visited all 60 agencies in the city to
learn what they do and how their infrastructure works, and
to understand their dependencies on the city’s core datacenter
and core systems. So, the first thing I did was understand the
business—understand the lay of the land.
One of the things we’re working on now is relocating from
our old datacenter. This is a huge culture shift and a departure
from the norm for the city. So, the first task was to relocate our
data—our core, the heart of the city—and move that into a
structurally sound, secure, highly rated datacenter facility.
That’s a huge feat. Any organization will attest that it’s kind
of like a heart transplant.
Profit: Is it important for you to understand the end user,
whether it’s a citizen or a city employee?
Tomlinson: Absolutely. I think for many technologists, we
only think about the technical feasibility of what we’re imple-
menting. We often struggle to grasp how viable a solution is
for the customer or the user. We’re only considering whether a
project is a very good technical thing to do.
The mind shift we had to take here at the Department of
Technology for the city was to not implement technology just
for the sake of implementing technology. For several reasons,
we really needed to touch the business—talk to the business.
The primary reason for this is that the taxpayers fund us, so
we want to make sure we are implementing solutions that our
constituents can truly use day to day.
There is no glory in implementing
technology no one uses.
Profit: How does centralizing IT help
the city and citizens of San Francisco?
Tomlinson: As an example, right
now we are working with an Oracle
solution for our criminal justice system
here in the city. Currently, there are
several disparate criminal justice
systems. There’s the San Francisco
Police Department, the sheriff’s office,
the district attorney’s office, emergency
management offices, and so forth.
They each have systems and
data sets that they use to do
their day-to-day work.
Right now, with the dis-
parate systems, it can be a
challenge to understand if an
offender has a case somewhere
in the sheriff’s department or
has a case somewhere in the
public defender’s. That information isn’t as readily available
across the board as it should be.
We’re really combining all the data sets from those criminal
justice areas and pulling them into an Oracle back end, so each
of those criminal justice agencies can have the same accurate,
updated information. So if an offender has multiple offenses,
that information is readily available to all criminal justice sites
and agencies, as needed.
It’s a huge opportunity for us to leverage Oracle in a very
customer-facing way, ensuring for the citizens of the City and
County of San Francisco that if an offender is arrested or has
an interaction with any of our criminal justice agencies, each
agency has an appropriate awareness of that offender. Our plan
is to have this system officially up and running by 2012.
Profit: The data sets you are working with must be quite large.
Tomlinson: Yes, lots of data! For example, we have Oracle
implementations at our Metropolitan Transportation Authority
[MTA]. They’re using Oracle as a back-end data warehouse for
a lot of the parking and metering data from the smart meters
around the city. The parking meters are one of the biggest
revenue points for the MTA.
That data warehousing back end at the MTA allows the
department to leverage the entire business intelligence suite of
tools that Oracle provides to do dashboards, trend analysis, and
other data mining. Also, they can export that data into other
tools—other MTA business systems and systems that could be
used in other areas of the city.
We also have an initiative called DataSF that mirrors the
Obama administration’s OpenGov initiative of open govern-
ment and access to data. We literally
peel the lid off, so to speak, of many
data systems and data sets in the city
that are deemed most of interest to
the citizens: for example, bus sched-
ule information, library information,
city hall information. Citizens are
able to download the data sets, and
we’ve found that they are being inno-
vative and creating all kinds of apps
for the Android smartphones and the
iPhone. They’re using that to develop
their own systems and applications,
do their own development, and later
>>snAPsHoTThe City and County of san Francisco
sfgov.org
Headquarters: San Francisco, California
industry: Public sector
Gina Tomlinson, Chief Technology
officer
length of tenure: 1 year
Education: BS in computer science
Personal quote: “Stay true to yourself,
and all else will take care of itself!”
“ Taxpayers fund us, so we want to
make sure we are implementing
solutions that our constituents
can truly use day to day.”
—Gina Tomlinson, CTO, City and County of San Francisco
PM11_LeadingStrategies.indd 15 4/1/11 10:41:54 AM
1 6 M a y 2 0 1 1
generate revenue out of those sites.
Profit: Does that reflect the tech-literate population of San
Francisco? How do you formulate your IT strategy with them
in mind?
Tomlinson: Absolutely. By some accounts, San Francisco
is the number one social-networking city in the country. San
Francisco is a very mobile city. Mobility is critical to a lot of
citizens here. We needed to ensure that many of the services
people utilize every day—city hall, the library, and other city
agencies—are made available online.
To do that, we need to develop a robust infrastructure
to port current “in-person” types of transactions to online
transactions and decrease a lot of paper and process we have
today. So we knew we had to lay the foundation by develop-
ing and building a strong core datacenter to enable these
new services.
We now have that core datacenter, and we have the core
foundation. We can do things like increasing access to online
forms and services. So, we’ve really set ourselves up with a
framework to build on, and we did that at the behest of many
of our citizens here in the city. They wanted more availability
and accessibility of services online, and we’re beginning to do
that. This is a huge first step for us.
Profit: How has the recession and budget crunch impacted
the way you run your organization?
Tomlinson: Certainly in the past three or four years, the
recession has driven many changes in strategy and process. I
think innovation and productivity comes from strife and hard
times. When we have to be more focused, more stringent, and
more disciplined, we find more-creative ways to do things. This
is one of those times.
In San Francisco—which has a very socially and politically
conscious citizen base—citizens want to see where and how
their taxpayer money is being spent. They don’t sometimes
mind spending the money, as long as they see a return on that
investment. So we really need to make sure that we are doing
the right things and have tangible evidence of how we’re using
their funds. I feel strongly about that.
Again, I think it’s critical that IT managers in local govern-
ments understand the needs of the core agencies that run the
city, so in the process of implementing technology they work to
fine-tune and cut some of the fat.
Profit: How does improved IT efficiency impact the work-
force of the city?
Tomlinson: I think the initial shock of implementing new
technology does give people fodder for thinking that it replaces
people. But for a city like San Francisco, which as I said is very
people conscious, we cannot implement a technology that takes
the position of abandoning the worker.
With the technology we implement, we want to make sure
it’s technology that uplifts the city employee, teaches them
new skill sets, gives them an opportunity to learn a whole new
work methodology or a whole new way of thinking. That’s
often a challenge.
San Francisco is a city that embraces history. We embrace
our historic buildings. We embrace the historic cable car.
We embrace the old Victorian homes. So it’s a delicate dance
between embracing and respecting history while still trying to
drive us forward into new technology. We want to re-engineer
the way a city worker works—the way they do their job every
day. We don’t want to eliminate that job; we want to repurpose
it into something more strategic, something that will grow
workers’ technical maturity and skill set. <>
AAron LAzenby is the editor in chief of Profit.
>> For more inFormation
Oracle Solutions for the Public Sector oracle.com/us/industries/public-sector
Oracle Solutions for Smart Cities oracle.com/us/industries/public-sector/smart-cities.htm
After ORACLE Racing won the
world’s oldest trophy in sports—the
America’s Cup—in 2010, team founder,
owner, and afterguard Larry Ellison sug-
gested that he would like to stage the
next race in San Francisco, California.
Indeed, the 34th America’s Cup will be
coming to the City by the Bay in 2013.
The news, no doubt, will excite sailing
fans. And it’s surprisingly good news
for city CTO Gina Tomlinson.
“For technologists, it’s really excit-
ing,” she says. “We in the Department
of Technology and many of our other
city agencies across the city see this as
an opportunity to show our wares.”
What she needs to do, technologi-
cally, is to support throngs of interna-
tional visitors, the US$1 billion in
economic activity, and the equivalent
of more than 8,000 jobs expected to be
generated by the event.
In the two years prior to the running
of the race, Tomlinson will participate
in a team that will be working on initia-
tives to extend the city’s technology
infrastructure into the public space.
She hopes to “light up the port” with
technology that automates services
for visitors, brings tourism and event
information to spectator sites on the
waterfront, supports video of the race,
and relays real-time data from the ships
competing in the race.
This is an effort Tomlinson does
not take lightly, and she describes it
in civic terms. “Those 54 days of the
America’s Cup are an opportunity for
us to showcase San Francisco in a
way that we haven’t seen in a very long
time,” she says. “We want to show the
world that San Francisco deserves this
honor to host the America’s Cup, and
it makes us a venue for future interna-
tional events.”
America’s Cup Brings IT Excitement to San Francisco
PM11_LeadingStrategies.indd 16 4/1/11 10:42:19 AM
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profit resizes.indd 3 4/11/11 8:57 AM
Ashling Cunningham, CIO, Bord Gáis
PM11_BordGais.indd 18 4/1/11 3:02:05 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 19
By Tony KonTzer
Famed microbiologist Louis Pasteur once said that
“chance favors only the prepared mind.” And while
the management of Irish energy provider Bord Gáis
may not have been thinking of the French scientist’s
formula for luck when energy deregulation came to
Ireland, it certainly was ready to match market
opportunity with IT preparation.
Ireland’s electricity market opened to broad
competition in 2005 after years of government
control, allowing customers to change energy
providers on demand. This introduced competitive
pressure and created a whole new market. Bord Gáis
was a major single-fuel gas player in this market, and
as deregulation unfolded, the management of Bord
Gáis initiated a complete IT overhaul to deliver better
integration of customer service and billing for the
company’s 650,000 gas customers and to equip the
company to also supply electricity, offering a complete
suite of energy services to Ireland’s 4.5 million
residents and numerous industries.
IT Power PlayersenTerprise Technology helps ireland’s Bord gáis
capiTalize on energy deregulaTion.
Ph
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Ph
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lyt
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PM11_BordGais.indd 19 4/1/11 3:02:31 PM
20 M a y 2 0 1 1
Today, due to a cocktail of planning and opportunity that
would make Pasteur proud, Bord Gáis serves more than 1
million gas and electricity customers. “We needed a new plat-
form to allow us to launch into that market,” says Bord Gáis CIO
Ashling Cunningham. “We launched a massive marketing cam-
paign, leveraging social as well as traditional media,” explains
Cunningham. “We called it ‘The Big Switch,’ and we embraced
that kind of reinvention message within our technology organi-
zation. Today you wouldn’t recognize
our core energy systems compared to
what we were using a few years ago.”
Indeed, Bord Gáis’ multiyear IT
transformation, based on Oracle tech-
nology, allowed the power supplier’s
business leaders to improve opera-
tional efficiencies for the existing gas
business, comply with new regulatory
mandates, and provide excellent cus-
tomer service for 425,000 new resi-
dential electricity customers—even as
the energy market made its dramatic
shifts from public to private owner-
ship. These were all major develop-
ments that Bord Gáis’ legacy systems
could not have sustained.
“It was high-wire stuff,” says David
Bunworth, who as managing director
of Bord Gáis’ energy business oversaw
the business side of the billing
systems transformation project before retiring last December.
“If we had switched without going on the Oracle system,”
Bunworth adds, “I think the old system would’ve blown up.”
Deregulation BreeDs Complexity
The path to opening up Ireland’s energy market can be traced to
a directive from the European Union in the 1990s that Ireland
end the monopoly of the state-run electricity supplier. In 1999,
Ireland formed the Commission for Energy Regulation to
oversee this process, and six years later the residential electricity
market opened to competition, with new competitors free to set
their own prices while the incumbent supplier’s prices would
be set by the commission. That advantage ceased in April 2011
when the commission released the price controls and allowed
all market players to start setting their own electricity pricing,
introducing new competitors to the market.
In other words, management at Bord Gáis, which embarked
on its IT transformation path in large part to take advantage of
the opening up of the electricity market, must now fend off the
formerly state-run Electricity Supply Board (ESB) from whom
Bord Gáis has been working so hard to lure customers. “There
was no doubt this would be a challenge,” says Cunningham. “So
within IT, one of our goals was to create systems that would really
allow us to engage with our customers very differently. We know
that someday very soon we are going to have to compete—not
just on price but with our ability to deliver excellent, friendly, and
pervasive services internally and externally to our customers.”
Additionally, Bord Gáis must comply with an EU directive
to separate its networks business (which develops, operates,
and maintains gas transmission and distribution networks)
from the energy supply business to ensure fair competition.
It has also had to meet a deregulation requirement to send
and receive XML messages that alert networks and suppliers
to actions such as meter readings
and customers switching suppliers.
Meanwhile, Bord Gáis, which also
performs home service calls, must
preserve its hold on gas customers in
an increasingly competitive market.
Given all of this, it’s mission criti-
cal that the Bord Gáis executives be
able to count on a modernized IT
environment to meet new business
requirements. Just a few years ago,
Bord Gáis still relied on its “inte-
grated utility system,” a legacy billing
platform that was rife with limita-
tions. The initial wave of deregulation
allowed Bord Gáis to provide elec-
tricity for the first time, but only to
a small number of large commercial
customers, the scale of which didn’t
necessitate a systems overhaul.
But that overhaul would become
very necessary a few years later, as the company prepared
to take advantage of the opening up of Ireland’s residential
electricity market to competition—an opportunity too big
to let pass. The green-screen legacy system was unable to
handle billing of residential customers for both gas and elec-
tricity. Call center staff providing customer service via phone
had to navigate multiple screens to complete the most-basic
transactions—transactions that could take at least three
minutes each to process. The complexity made training of
new employees a drawn-out eight-week ordeal that often
ended with trainees leaving before the process was complete,
requiring the company to start the eight-week cycle again.
If Bord Gáis was going to effectively move into the consumer
electricity market before it was crowded with other new players,
management determined it had until 2008 to prepare a new
IT system. In the fall of 2005, IT staff and the business started
evaluating new options, selecting a utilities billing platform
from SPL WorldGroup (acquired later that year by Oracle) to
replace the legacy IT environment.
It was work that was long overdue.
“The old technology was an extremely slow and cumber-
some system with a lot of patchwork quilt around it,” says
Bunworth. “It had been going for 25 years, with fixes every
three or four months to modify it. It served its purpose well,
but really had gone well past its sell-by date.”
>>SNAPSHOTBord Gáis
bordgais.ie
Headquarters: Cork City, Ireland
Year founded: 1976
Employees: 1,100
Customers: Approximately 1.1 million
(650,000 gas and 425,000 electricity)
Revenue: €1.3 billion in 2009
Oracle products: Oracle Utilities customer
care and billing solution; Oracle E-Business
Suite, including Oracle iProcurement and
Oracle Time and Labor; Oracle Hyperion
Financial Management; Oracle User
Productivity Kit; Oracle WebLogic Suite;
Oracle SOA Suite for Oracle Middleware for
Oracle Applications; Oracle Discoverer 11g;
Oracle Database 10g
PM11_BordGais.indd 20 4/1/11 3:03:13 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 21
The DeploymenT paTh
By the fall of 2006, Bord Gáis started the implementation.
The Oracle Utilities customer care and billing solution was
being installed, database schemes were being built to match
Bord Gáis’ billing processes to the technology, and Bord Gáis’
development team was feverishly building customizations.
The initial plan was to have the new Oracle system up and
running by November 2007.
But by November 2007, it was becoming clear that the
project was off to a false start. According to Bunworth, the
company’s customer billing database simply wasn’t clean
enough to ensure a good installation, and there were quality
issues with the software.
Bord Gáis management made the difficult decision to
halt the project completely and begin again with a rebuilt
database. It would delay the project several months, yet it
turned out to be exactly the right move (see sidebar, “When
to Restart an IT Project”).
In February 2008, Bord Gáis executives signed off on a clean,
stable billing system that was ready to be built upon. Over the
following nine months, the project team focused its efforts on
another 20 to 30 customizations that were needed—some still
in design, others in development, and a handful in testing. Most
of the development was completed by August 2008, with the
remaining months devoted to acceptance processes.
The deployment of the Oracle Utilities customer care and
billing solution went live in November 2008 with Bord Gáis’
residential gas customers, who were moved into the new system
in batches until all 650,000 customers had been migrated.
elecTric iT
Over the ensuing three months, the project team worked
feverishly again to ensure that the system’s electricity billing
functionality was ready to take on new customers. In February
2009, Bord Gáis entered the deregulated residential electricity
market, marking the beginning of what the company states has
been the most successful utility switching campaign in history.
It started small, as the company tested the system by estab-
lishing its 1,100 employees as the first electricity customers.
With that success, Bord Gáis started marketing to existing gas
customers, promoting a process that would allow them to switch
from their existing electricity provider in a few clicks online.
The program was then extended to new customers.
Cunningham says management expected to add 80,000 elec-
tricity customers in the first year but reached that number in
less than six weeks. “From an IT perspective, we weren’t antici-
pating these numbers,” says Cunningham. “We had to ramp up
really quickly, both in IT and in the business, to deal with the
volumes of customers that we were taking on.”
All told, Bord Gáis has now accumulated some 425,000
PM11_BordGais.indd 21 4/1/11 3:04:04 PM
2 2 M a y 2 0 1 1
residential electricity customers to date, more than adequately
delivering the core capability on which all the hard work had
been focused. “We exceeded our forecasts by a significant mul-
tiple and in doing so developed a system in which we have
exceptional confidence,” says Cunningham. “Our system deliv-
ers business value right from the executive level to the indi-
vidual call center team member.”
The final piece of the billing system migration came in
September 2009, when Bord Gáis added its “complex” gas
customers. These mostly commercial customers are large-scale
users who are billed in 15-minute intervals, and as such the
billing requirements related to their accounts are much more
data intensive. The company has since started offering complex
electricity service as well.
But it’s not just the ability to support dual utility billing that
the Oracle system has brought to Bord Gáis. The company has
realized a wide range of capabilities and benefits that wouldn’t
have been possible no matter how much updating it might have
done to its old legacy system.
One of the most critical of these capabilities has enabled
Bord Gáis to comply with a regulatory requirement that utili-
ties providers separate their energy supply businesses from the
networks they use to transmit critical customer data such as
new service orders, switches in providers, and meter readings.
The idea is to prevent the competitive imbalance of having a
provider that’s in control of the network competing against one
that’s not. The information is now sent as XML messages, per
regulations, and Bord Gáis is sending and receiving 50,000 such
messages a day via the new billing system.
The company was also able to build in real-time messag-
ing with the suppliers who manage home service visits. Those
messages are delivered directly to mobile devices carried by the
engineers who conduct the visits, which can be for such things
as energy usage consultations and boiler servicing. Engineers
then update the system after finishing a visit, and if the cus-
tomer follows up via phone to provide feedback, the customer
service rep has all the information on the service call.
“There is no way we would have been able to build that off
the legacy system,” says Alexandra Gillies, who was the lead
architect on the project for Oracle, and who later joined Bord
Gáis as energy systems IT manager. “It was great to have a foun-
dation in place that we could leverage.”
Charged Up
In terms of more-measurable benefits, the eight-week call center
training cycle has been shortened to just three weeks, resulting
in lower training costs and less turnover of call center staff. And
many of those simple transactions that took three minutes or
longer to complete are now done in less than a minute.
Customer satisfaction is on the rise, too, as gas and electric-
ity users can now use a Web-based interface to do everything
from starting service to accessing their bills and arranging a
service call. And the company is readying what Bunworth says
is Ireland’s first iPhone utilities app, which will make all of this
information available to customers on the go.
Call center staff also are empowered with more information
at their fingertips. The system is easily configurable, allowing
staff to populate their screens with the kinds of information
most customers are calling about—from what their balance is to
when their next bill is due and when their meter was last read.
With the old legacy system, there was only one standard config-
uration, and employees had to scroll through multiple DOS-like
No one wants to restart a major IT
deployment. Doing so brings all
sorts of potential consequences, from
product or service rollout delays to
unexpected costs and a decline in staff
morale. But there are times when it’s
the best choice for moving forward.
Executives at Bord Gáis found them-
selves at this juncture, partway through
their large-scale deployment of the
Oracle Utilities customer care and bill-
ing solution. Problems with the quality
of the company’s database surfaced
months into the effort, forcing execu-
tives to face a key decision: scrap the
deployment and start over with a clean
database, or move forward as planned
and pay the consequences later. They
chose the former.
“That Friday is commonly referred
to as ‘Black Friday’ at Bord Gáis,”
says CIO Ashling Cunningham, who
as deputy CIO at the time was called
in to assume IT oversight of the proj-
ect. “One of the toughest but most
rewarding decisions our executives
ever made was to call a halt to the
initial project. That took courage, but,
wow, did it ever pay off.”
Project leaders met every morning
at 8 a.m. for months to ensure constant
communication about the state of the
effort. Employees would show up in
large numbers—as many as 50—on
just a few hours’ notice to work on an
important detail over a weekend.
This effort was not lost on CEO
John Mullins, who took over the reins
of the company in December 2007,
just as the project was hitting full
speed. Once he was briefed about the
circumstances that led to the reinstall,
he knew how important all the extra
work was.
“We had to back out of the cul-de-
sac and actually start looking at the
open road again,” says Mullins.
But Cunningham, along with her
counterparts at Oracle, believed that
getting the project done right was more
important than just getting it done. “To
actually pull the product was quite a
courageous move, both on the Oracle
side and on the Bord Gáis side,” she
says. “At that point, a lot of time,
energy, and money had been invested,
but it was the right call because it
didn’t matter what we were doing going
forward. What we were building on was
fundamentally flawed.”
When to Restart an IT Project
PM11_BordGais.indd 22 4/1/11 3:04:31 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 23
screens to get to such information. It was confounding for a call
center staff that’s increasingly young and has grown up in the
point-and-click internet era; the new system falls much more in
these employees’ comfort zone.
“They were configuring their own screens within weeks,” says
Tony Bridgeman, who as business transformation manager in
Bord Gáis’ energy business answered directly to Bunworth and
was the person charged with delivering the new billing system.
The Oracle platform also has enabled Bord Gáis to start
delving into customer segmentation for the first time. The
old legacy system provided almost no insight into customers,
preventing the company from analyzing its interactions with
customers based on their relative value. A customer that spent
€20,000 a year was treated no differently than one who spent
€4,000. Now, the company can
offer customers tailored services
and rewards.
The company plans to build
on its newfound customer rela-
tionship management (CRM)
foundation by bolstering the
system to take its relation-
ship with customers to another level. Last year, Bunworth
and Bridgeman attended the Oracle OpenWorld conference
and were impressed by new functionality that’s likely to spur
Bord Gáis to upgrade the system in another 12 to 18 months
so they can take advantage of new customer-facing capabili-
ties. As Bunworth notes, Bord Gáis is essentially a billing
company, and utility bills aren’t exactly tools for forging
bonds with customers. But new Web-based features soon to
be introduced will enable the company to leverage its emerg-
ing online interface to do exactly that.
“It’s about getting them to be able to manage their energy
and to interact with them more than to say, ‘You owe us
€2,147.37,’” Bunworth says. “It’s about the whole management
of that relationship with the customer. What we now know we
have is an accurate on-time billing system, but it will develop
into a more CRM-based one.”
CEO John Mullins, to whom Cunningham reports, says such
insight is critical if Bord Gáis is to maintain its hold on electric-
ity customers and remain competitive for the long term, espe-
cially now that the ESB is free to set its own prices.
“I’d like to understand why Mrs. Smith in Dublin or Mrs.
Jones in Galway doesn’t want to stay with us,” he says. “I can
only do that in the context of transactions on the billing site.
I need intelligence. I need a system to effectively tell me a lot
more about my customer.”
Next-GeNeratioN Service
What’s more, Mullins wants to be able to tap that insight to
reach out to customers in new and innovative ways.
Future success in the utility market won’t be achieved simply
through efficient energy service and billing. Utilities like Bord
Gáis are also preparing for an onslaught of customer data about
energy use, sharing that data with customers via the internet
and mobile devices, and billing in smaller-than-ever increments.
With Bord Gáis moving beyond a decades-old legacy system,
management is now in a position to deliver next-generation
service that can compete for more-informed, and thus more-
demanding, customers.
The years-long effort to update its billing and customer care
platform to a modern, Web-friendly system has done more than
allow Bord Gáis to capitalize on a deregulated residential elec-
tricity market. Managers are providing modern products and
services, including smart meters, remote energy management,
and interval billing.
Bord Gáis’ experiments with smart meters have been limited
to fewer than 20,000 of its 1 million customers, but feedback
suggests potential for a wide acceptance of the new technol-
ogy. The company has run
two pilots—one for residential
gas customers and a smaller
one for its fast-growing roster
of residential electricity cus-
tomers. With the new billing
system in place, the company is
already capable of calling data
from and sending it to smart meters with pinpoint accuracy, and
that’s allowing it to display energy usage data in new ways using
the internet.
“The feedback has been very positive,” says Cunningham.
“People love the graphics, and they love being able to see the day-
by-day consumption and where the demand is during the day.”
Meanwhile, Bord Gáis is charging steadily ahead in an
effort to provide interval billing and remote energy manage-
ment. Cunningham says Bord Gáis’ new billing system is fully
capable of billing residential customers’ energy usage in 15-
or 30-minute increments, much like the company has been
doing for complex commercial customers—thus allowing for
more-precise charges and more-granular use of energy. It’s an
approach to consumption that’s increasingly of interest to cus-
tomers and is expected to become common practice over the
next several years.
Additionally, Bunworth says a prototype product that
enables remote management of energy resources—for instance,
being able to adjust your home’s heating while away on vaca-
tion—should be ready for use within the next year.
With so many unrealized benefits on the horizon for Bord
Gáis, that Pasteur quote needs an update if it’s still to apply:
“Chance favors only the prepared—and visionary—mind.” <>
TONY KONTZER is a freelance writer based in Albany, California, and a regular
contributor to Profit.
>> For more inFormation
Oracle Solutions for Utilities
oracle.com/us/industries/utilities
Oracle Applications for Customer Care and Billing
oracle.com/us/industries/utilities/046909.html
“ I need intelligence. I need a
system to effectively tell me a lot
more about my customer.”
—John Mullins, CEO, Bord Gáis
PM11_BordGais.indd 23 4/1/11 3:05:59 PM
Copyright © 2011, Oracle and/or its affiliates. All rights reserved.
Trade in any HP Superdome for 50% off the list purchase price of a Sun M8000/M9000 server.
Offer expires 5/31/11. More details at oracle.com/goto/CashForClunkers
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profit resizes.indd 9 4/11/11 4:43 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 25
odiac Pool Systems is one of the largest manufacturers of
pool equipment in the world, with operations in North
America, Australia, South Africa, China, and Europe. Shajee
Siddiqui, director of global product safety and compliance at
Zodiac Pool Systems, oversees product safety and regulatory
compliance across all of those locations.
It’s a tough job that used to be even tougher before
Intertek—Zodiac’s vendor of choice for testing, certification,
and reporting on many of its products—launched the cus-
tomer interface My TestCentral, built on Oracle Portal.
“We would have to wait for the hard copy of Intertek’s
reports to come in the mail,” Siddiqui says of the old days
before the launch of the system. “They might get lost in the
mail, or in our company’s mail system. It was really difficult
if I was traveling. I would have to get someone back at my
office to go find the document, scan it, and e-mail it, or fax it
to me. It was a five- or six-step process.”
Delays like these could affect a product’s whole lifecycle. “We
don’t let any product go to market unless it has met all compli-
ance requirements,” Siddiqui explains. “It’s a critical part of our
process.” Product managers, often under intense pressure to
meet product launch deadlines, would ask him, “When will we
be able to go to market?”
In the past few years, Intertek’s executives have been able
to deliver stunning efficiency gains for many of the company’s
customers with the new Oracle system. Working with Oracle
Consulting, developers at Intertek’s Commercial & Electrical
division created My TestCentral, enabling online access to
more than 20,000 reports a year for Zodiac and thousands of
other customers.
Now, customers can sign in to a Web interface from wherever
they happen to be and get test results and reports—eliminating
the inefficiencies of the old process and giving customers access
to vital information whenever they need it.
“I can be sitting in a new-product development meeting
with my laptop, and tell people then and there that we have the
results,” Siddiqui says.
The success of the My TestCentral system inspired
the creation of another portal at Intertek, called Reports
Manager. Both systems are hosted by Oracle On Demand,
saving Intertek roughly US$250,000 a year in paper, ship-
ping costs, and labor. The company has also reduced its
carbon footprint by eliminating 161 tons of paper and
36,000 courier shipments a year. For these achievements,
Oracle awarded Intertek the Enable the Eco-Enterprise
Award for 2010.
“It’s exciting to find something that provides significant
internal benefit and also benefits customers,” says Dean
By Minda Zetlin
Expert ReportingPortal-Based solution Benefits intertek, its custoMers, and the environMent.
St
ev
en
Ly
on
S
PM11_Intertek.indd 25 4/1/11 2:15:04 PM
2 6 M a y 2 0 1 1
Davidson, vice president, business
process management, at Intertek.
“And it’s better for the environment.
It’s a trifecta.”
Access And security
For more than 125 years, companies
have depended on Intertek to test
products and processes for safety,
quality, and regulatory compli-
ance. With experience in auditing
and inspection, testing, quality assurance, and certification,
Intertek has expertise, resources, and global reach to support
customers through a network of more than 27,000 staff in
more than 1,000 laboratories and offices all over the world.
But that long history entered a new chapter when manage-
ment turned the page on inefficient, paper-based processes.
The creation of My TestCentral began in 2005, when
Intertek’s Commercial & Electrical division wanted to give
customers Web access to test reports, and build a system to
store these reports. With more than 20,000 reports a year,
averaging 65 pages each, eliminating the cost of printing
multiple copies, shipping them to customers, and storing
them would make a significant difference to the bottom line.
Moving to a Web-based approach for delivering reports
could also provide a competitive advantage by giving cus-
tomers access to reports the moment they were completed.
“Within our market, our number-one value proposition is
speed of delivery,” Davidson explains.
But management quickly real-
ized that security would also be a top
issue. It was absolutely critical for
customers to get access to the reports
they needed, and for that access to be
restricted to the right people. So iden-
tity management and security was a
top priority for protecting trade secrets
contained in Intertek reports.
Intertek had a long-standing
relationship with Oracle, so it made
sense to return to a known vendor for the new project. But
beyond the pre-existing relationship, Oracle’s reputation for
security contributed to the case for choosing Oracle, says
Sherrie MacNeill, global business systems manager at Intertek.
“Oracle is noted for its databases and for having extremely
strong security,” she says. “We have clients accessing this
information who need to control who can see what. If we were
working for two competitors, think how awful it would be if
one customer could see another’s confidential information.”
no More new Filing cAbinets
To keep that from happening, MacNeill says Intertek man-
agement turned to Oracle Portal 11g, hosted by Oracle On
Demand, a cloud-based solution that would deliver both the
functionality and scalability required to streamline the report-
ing process and the security to safeguard vital information.
Intertek also uses Oracle E-Business Suite for core enter-
prise resource planning functions and can do internal vali-
>>SNAPSHOTIntertek
intertek.com
Headquarters: London, England
Founded: 1885
Employees: 27,000
Revenue: £1.37 billion in 2010
Oracle products and services: Oracle
Portal 11g, Oracle Discoverer, Oracle
Database, Oracle On Demand, PeopleSoft
Enterprise applications, Oracle Consulting
When Intertek created two portals,
My TestCentral for customers
and Report Manager for internal use,
it did so using Oracle Portal hosted by
Oracle On Demand.
“Because we were offering our
portals, outsourcing the hosting to on-
demand made sense,” explains Sher-
rie MacNeill, global business systems
manager at Intertek. “The technology
is not simple. There’s a database layer,
middle tier, and applications servers—
it’s a whole stack that we would have
to support. Oracle knows how to host
and support its products. We’ve had a
great support relationship and wanted
to stay with the experts.”
More than 5.5 million end users cur-
rently use Oracle On Demand solutions
to improve productivity while their IT
departments reduce expenses to a
predictable monthly charge. Customers
can choose how to deploy Oracle On
Demand software based on their spe-
cific needs and budget requirements—
hosted and managed applications and
software-as-a-service (SaaS) deploy-
ment models are currently available.
Both these offerings allow custom-
ers to move the cost of hosting and
managing their Oracle implementations
from a capital expense to an operating
expense, thus freeing up more capital
dollars for revenue-generating (or stra-
tegic) projects.
Intertek’s MacNeill especially
appreciates having a service delivery
manager at Oracle On Demand. “He
is our one-stop shop,” she says. “Like
any large company, there are multiple
points of contact at Oracle. We can
take any issue to him, and he will get it
moving or find the information we need.
It’s a great partnership.”
Using Oracle On Demand saves
on labor and provides greater flex-
ibility, she says. “We do not employ a
database administrator; that comes
with our On Demand relationship.
We have developers who understand
the technology, but they don’t have
to apply patches or perform other
maintenance. A lot of the workload is
removed from the Intertek staff. With
the Oracle stack, we have the option
to expand or migrate to different tech-
nology as we need to.”
In fact, Intertek is currently doing just
that. “We’ve upgraded our database,”
MacNeill says. “We were on Oracle
Database 10g, and now we’ve moved
up to [Oracle Database] 11g.” Working
with Oracle On Demand, the company is
now planning ahead. “We’ll be upgrad-
ing to Oracle Portal 11g and are investi-
gating other technology options.”
On Demand Makes Sense
PM11_Intertek.indd 26 4/1/11 2:15:29 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 27
dation of the reports distributed through the portal. This
ensures that no document is ever posted to the wrong place
and that only the right people have access.
Customers also use the portal to reduce their own paper
usage by giving their manufacturing partners access to needed
information. Back in the paper world, a customer would receive
one copy of a document but might have to distribute that infor-
mation to multiple manufacturers who also needed to see it.
Now they can set up a community of people who need to see
the document within the portal.
With the new system, customers can access report data from
a single online location, regardless of where the end user is
sitting. For example, a large international company may have
dozens of locations around the world, each engaging with a
local Intertek office. But there may be one manager at a head-
quarters location who wants to control and monitor all these
activities and all the work
Intertek performs. Because
everyone at all locations can
log in to the same portal, no
one is left out of the loop.
One of My TestCentral’s
biggest benefits is that it vastly
decreases the number of paper
documents customers must
store. Siddiqui recounts how after a product is certified by
Intertek, a field inspector may pay an unannounced visit to the
Zodiac manufacturing facility to ensure that a product’s design,
construction, and quality are maintained.
When that happens, Zodiac is required to have the most
recent revision of certification files or listing reports available at
the facility, because that document describes how the product is
made. Now, staff members at Zodiac have immediate access to
these documents through My TestCentral and no longer need to
retain a hard copy.
“We used to have a room about 8 by 10 feet set aside just
for storing records,” Siddiqui says. “I still need an area to keep
old files, but for the last five years I haven’t had to continue
ordering filing cabinets every year, and I don’t have to keep
asking management for more physical space.”
The Power of Tracking
After the success of My TestCentral, Intertek IT executives
began wondering if there were more ways that Oracle Portal
could help cut down on paper. The result was Report Manager,
another custom-built portal, this one for internal use. This
solution not only allows Intertek employees to reduce paper
usage, but it has dramatically improved efficiency—merely by
giving the workforce the means to track each report at every
stage of its creation.
“Now we have end-to-end tracking for every one of our
reports through Report Manager. Each little step, from when
the document is first started to its issuance to the customer, is
visible now, and that’s huge for us,” Davidson explains.
Report Manager also saves time by connecting Intertek
employees from all over the globe. That helps speed projects
along when tests are performed or reports are written and
reviewed in multiple locations. Better yet, it allows projects to
be routed away from overburdened locations to ones where
engineers have fewer projects—increasing engineer utilization
in a human version of the process that makes cloud computing
more efficient.
The portal also helps efficiency by ensuring that everyone
working on a report is using the most up-to-date version of
the listing or requirements. Put all these elements together,
and the efficiency gains are impressive: the average time to
produce a report has fallen from 25 days to 12 days. Thanks
to Report Manager, Intertek now tells customers to expect
reports within 15 days—a powerful selling tool.
Siddiqui says that for Zodiac, one of three or four major
manufacturers in the highly competitive swimming pool
equipment business, getting
reports quickly can make a
huge difference. Typically,
swimming pool builders like
to start their season well
stocked with whatever they
might need to complete that
season’s jobs. So they often
do all their buying for the
year at an industry show just before the season begins. Miss
that show, and those few preseason weeks, and you’ve lost all
of that business.
“Speed to market is absolutely critical, and the certification
listing is such an important element of bringing a new product
to market that if it’s delayed by even a few weeks, it can cause
us to lose an entire season,” says Siddiqui.
And that’s where the combined effect of Report Manager
and My TestCentral delivers a powerful benefit. “Seven or eight
years ago, once a product was tested, it might take several
weeks to get an official report,” Siddiqui says. “We had an
Intertek engineer here week before last, and within three or four
working days, I had the report.”
“We’re extremely satisfied with the efficiency gains that
we’ve been able to deliver to our customers through My
TestCentral,“ Davidson says. “The substantial reduction in our
carbon footprint and the cost savings that we have realized are
just icing on the cake.” <>
Minda Zetlin is coauthor with Bill Pfleging of The Geek Gap: Why Business and
Technology Professionals Don’t Understand Each Other and Why They Need Each
Other to Survive (Prometheus Books, 2006).
“ Each little step, from when the
document is first started to its
issuance to the customer, is visible
now, and that’s huge for us.”
—Dean Davidson, Vice President, Intertek
>> For more inFormation
Oracle Portal 11g
bit.ly/e0gOml
Oracle On Demand
oracle.com/us/products/ondemand
PM11_Intertek_R1.indd 27 4/12/11 3:25:20 PM
28 M a y 2 0 1 1
nergy companies that have a largely coal-based power
supply are in a unique position of being both the cause of
and the answer to many of the world’s environmental prob-
lems. Denmark-based DONG Energy is one such company.
Acknowledging its status as one of Denmark’s largest emitters of
carbon dioxide (CO2), its leaders have committed to becoming
part of the solution with aggressive sustainability goals that aim
to minimize the company’s environmental impact. The compa-
ny’s official policy is to cut its CO2 emissions per kilowatt-hour
by 50 percent between 2006 and 2020, and by 85 percent by
2040. By the end of 2010, DONG Energy was already further
ahead in meeting its goals than anticipated. The company has
begun closing down coal-fired power-generating units and has
shifted its focus to natural gas, biomass, offshore wind energy,
and the development of second-generation bioethanol.
The current incarnation of DONG Energy formed in 2006
when a number of large Danish energy companies merged to
become DONG Energy. From the outset, the company’s
decision-makers took environmental sustainability seriously,
and that same year they joined the United Nations Global
Compact calling for voluntary adherence to 10 principles,
including three that are intended to protect the environment.
But there’s no sense in setting goals if you can’t track prog-
ress toward them.
“I think many companies have visions for the sustain-
ability or corporate social responsibility [CSR] work that they
are doing, but if they are not converted into concrete goals
that you can measure, it’s very hard to know if it is just talk
or if it’s also action,” says Niels Strange Peulicke-Andersen,
common systems manager in the Quality, Health, Safety, and
Environment group at DONG Energy.
In 2006, DONG Energy also became part of the Global
Reporting Initiative, which provides a universally accepted
framework for reporting nonfinancial sustainability data. The
company went a step further and brought in an external auditor
to declare the data solid so it could be included in the com-
pany’s annual CSR report.
Unfortunately, things didn’t go as planned.
“The first assurance statement we got wasn’t very good, actu-
ally,” Peulicke-Andersen recalls. “It said they could state that we
are very good at adding numbers together on a company level,
but we were not completely sure of the quality of data that we
gather at that level. That’s when our department got the assign-
ment from the CEO that next year he wanted a very good assur-
ance statement from the external auditor.”
These reporting problems are typical of enterprises just
beginning their CSR journey and preparing their first CSR
reports, says Birgitte Mogensen, the PricewaterhouseCoopers
by Tara SwordS
Sustainable EnergydoNG ENErGy backS up cLEaN powEr ViSioN wiTh hard ENTErpriSE daTa.
Gin
Ge
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afa
ye
tt
e
PM11_DONGEnergy.indd 28 4/1/11 12:08:53 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 29
auditor who performed DONG
Energy’s first nonfinancial data
audit. “When no consolidated
CSR reports are prepared in an
enterprise, there is no need for
group accounting instructions,
and I often experience that this
is forgotten by those responsible for reporting at the group
level,” Mogensen says.
So the executives at DONG Energy turned to Oracle
Hyperion Financial Management to replace a cumbersome
and error-prone spreadsheet-based system for tracking sus-
tainability data. In the process, they dramatically improved
data quality, gained visibility into every part of the business,
and created new appreciation for the company’s environment,
health, and safety goals.
Finding the Right Solution
The first audit went poorly for several reasons. First,
Peulicke-Andersen’s team was collecting data using a Microsoft
Excel spreadsheet. Every month, people in different business
segments e-mailed their spreadsheets to Peulicke-Andersen’s
team, which copied and pasted the numbers into the master
spreadsheet. But spreadsheets are prone to human error; it’s
all too easy for someone to accidentally delete a formula in a
cell, overwrite someone else’s data, or overwrite an entire file
version. The spreadsheet owners might never know that some-
thing was incorrect.
Even if users were careful to avoid breaking formulas
or overwriting data, the data itself was sometimes bad. For
example, the spreadsheet required users to record things such
as “production” and “emission,” but those terms didn’t have
universal meaning throughout the company. People were also
using different conversion factors when entering data, resulting
in apples-to-oranges comparisons.
“You can measure something at different points in the
system,” Peulicke-Andersen says. “But you need to agree: is
it, for example, net or gross production? You have to have the
same definition of the data.”
In addition, DONG Energy’s current power generation
ownership structure is far more complex than it was in the past.
For example, the data reporting must allow for partial owner-
ship of wind farms. If DONG Energy owns only a portion of
a facility and partners own the rest, the spreadsheet would
need to indicate that the company is
responsible and consolidate only a
portion of the facility’s production.
Finally, it was almost impossible
to know whether all relevant data—
correct or incorrect—had even been
collected. DONG Energy has more
than 160 legal entities, and some of
those entities were being overlooked
in the spreadsheet.
“When the external auditors
came to us, they said, ‘How do
you know that you get all the
data from all the companies
into your accounts?’” Peulicke-
Andersen says. “They took the
legal entity chart of DONG
Energy. They just put their finger through a few of them and
said, ‘What is happening in that company? What kind of pro-
duction? What activity is happening? What data are you gather-
ing from that specific entity?’ And it was a completely new way
for us to look at the company.”
It became clear that Peulicke-Andersen and his team needed
to overhaul data gathering and reporting at DONG Energy. A
spreadsheet wouldn’t cut it.
“We knew that we needed a database to put the data into,
instead of spreadsheets, and we knew that we had to import or
use all of the basic principles of financial reporting,” Peulicke-
Andersen says. “We researched the market for suitable software
solutions and asked around: what did other companies use?”
As it turned out, Peulicke-Andersen’s department wouldn’t
need to invest in a new solution. The answer to its problem was
already within the organization.
RaiSing the BaR FoR data Quality
Elsewhere in the company, complex reporting was already
being done without a hitch every day: on the financial side.
When Peulicke-Andersen learned that the finance department
used Oracle Hyperion Financial Management, he asked his col-
leagues in finance to show him how the tool worked.
“I saw that it’s a very flexible tool,” he says. “You can specify
your own accounts, so they don’t really have to be financial
accounts.” Using this approach, Oracle Hyperion Financial
Management would let Peulicke-Andersen’s team track things
such as CO2 emissions or waste. He was intrigued, but the
finance department wasn’t eager to open up its Oracle Hyperion
server to the nonfinancial side until Peulicke-Andersen and
his team could dramatically improve their data quality. So they
started with a separate database on a separate server. But one
thing that Peulicke-Andersen could use was the finance depart-
ment’s in-house knowledge of the Oracle Hyperion solution and
its map of the corporation’s complex structure.
The results came quickly. Oracle Hyperion Financial
Management helped DONG Energy improve visibility into
every area of the energy production
chain and spot where the greatest
improvements could be made. The
Oracle Hyperion solution not only
improved the quality of the non-
financial data collected; it also gave
Peulicke-Andersen’s team the ability
to look beyond raw numbers and
understand the relationships
between them.
“ We are much better prepared for
answering the need for reliable
and transparent data.”
—Niels Strange Peulicke-Andersen, Manager, DONG Energy
>>SNAPSHOTDONG Energy
dongenergy.com
Headquarters: Fredericia, Denmark
Employees: 6,000
Revenue: DKr 54,6 billion in 2010
Oracle products: Oracle Hyperion Financial
Management
PM11_DONGEnergy.indd 29 4/1/11 12:09:17 PM
3 0 M a y 2 0 1 1
“You need to be able to show the numbers in many different
ways depending on the target group and the content that it’s
being used for,” says Peulicke-Andersen. “That’s why it’s very
good to have the data in a database where you can extract data
in multiple ways. You can relate emission to production. You
can relate it to an index number. You can say, ‘Now I just want
to look at the Danish part of the production.’”
Subsequent audits have proved the value of the new system.
Mogensen says there are two ways to perform an audit: the
auditors either test data themselves or they test the controls the
company uses to collect data. In CSR reporting, she says, there
is growing consensus that auditors should be testing controls,
not the data itself.
Mogensen says DONG Energy is at the leading edge in this
regard. “I expect that in three to four years, our assurance will
be based only on DONG Energy’s own controls being effective
for ensuring correct data for the CSR reporting.”
From SuStainability to ProFitability
Although the majority of DONG Energy is owned by the Danish
state, it operates as a company and must remain profitable to
stay in business. That means no matter how beneficial its CSR
initiatives are for society, the environment, and end customers,
they also must contribute to the bottom line.
“I think the next step, when you have raised the quality
of the nonfinancial data, will be that people will expect
companies like us to link the data closely together and help
interpret for stakeholders what it means in terms of finan-
cial performance when the nonfinancial data is going up or
down, or vice versa,” Peulicke-Andersen says. DONG Energy
has put itself in a unique position in that regard, making the
core of its business strategy to help solve society’s need for
reliable and clean energy—and to do so on a sound commer-
cial basis. While DONG Energy aims to halve CO2 emissions
per kilowatt-hour between 2006 and 2020, management also
wants to double earnings in the meantime.
Currently, DONG Energy uses Oracle Hyperion Financial
Management to consolidate data at the corporate level while the
business segments use their own software to gather the data ini-
tially. In the near future, Peulicke-Andersen anticipates that the
other segments will begin using the Oracle Hyperion solution
too. They also plan to streamline the processes by using auto-
matic transfer of data from datasources into Oracle Hyperion
Financial Management and to evolve further in the direction
of financial reporting by adjusting the procedures that define
who can input and alter data at what times, helping to ensure
that data quality is maintained and numbers are thoroughly
vetted before being locked down and moving up the corporate
approval chain.
Peulicke-Andersen says the software’s flexibility and the
ability to use the entity-based company structure that the
financial department founded and maintains in the system has
changed everything.
“We got most of the data in before, but it’s nothing compared
to today, where we have implemented the financial principles
for reporting on financial data gathering. We are much better
prepared for answering the need for reliable and transpar-
ent data in a rapidly growing international company with an
increasingly complex company structure,” he says. “It’s a com-
pletely new world.” <>
TARA SWORDS is a freelance writer based in Chicago, Illinois.
>> For more inFormation
Oracle Hyperion Performance Management Applications
oracle.com/us/solutions/ent-performance-bi/
performance-management
Oracle Solutions for Sustainability Reporting
oracle.com/us/products/applications/green/054217.html
Since implementing Oracle Hype-
rion Financial Management for
nonfinancial data reporting, Niels
Strange Peulicke-Andersen’s Quality,
Health, Safety, and Environment group
at DONG Energy has proved the value
of its new sustainability reporting to
the finance side of the business. As a
result, says Peulicke-Andersen, who
serves as project manager for the
group, the two sides have much more
trust and mutual respect for each
other—an additional benefit that he
didn’t anticipate.
In fact, today the financial and nonfi-
nancial data reside on the same server
in the same application—a level of trust
previously unimaginable.
“If we hadn’t been using software like
Hyperion or we hadn’t been doing the
data gathering of the quality that we are
doing now, we would never have been
given the opportunity to be part of the
financial annual report of DONG Energy,”
Peulicke-Andersen says. But his group
did have the opportunity and, as a result,
“sustainability is being given a much
better platform in the identity of the com-
pany, both externally and internally.”
In fact, he says, one could say that
the dramatic increase in the quality of
nonfinancial data is helping everyone
take the company’s sustainability goals
a little more seriously.
“In many companies, their financial
department looks at nonfinancial data as
being lower quality,” Peulicke-Andersen
says. “The best thing about this is the
closer relationship between the two
departments internally: the financial
department and the nonfinancial data
gathering part of my department. I think
that’s the whole starting point of talking,
working more together in combining
the data and showing the value of CSR
[corporate social responsibility] progress
and sustainability progress, relating per-
formance to profit.”
Increased Data Quality Leads to Increased Trust
PM11_DONGEnergy.indd 30 4/1/11 12:09:59 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 31
t’s the big unknown in the U.S. healthcare industry: what
is the full impact of the sweeping regulatory changes intro-
duced by the 2010 Patient Protection and Affordable Care Act?
No one is certain how the implementation of the law will play
out, but the changes could be transformative. Add data privacy
concerns and rapidly increasing healthcare costs, and it is
clear that the health insurance industry faces significant—and
evolving—challenges.
For Premera Blue Cross, a health benefits company that
serves 1.6 million people in Washington and Alaska, the solu-
tion is simple. Leadership is looking to its biggest and most valu-
able asset to maintain competitive advantage—its employees.
“Without great talent, we really can’t be successful,” says
Barbara Magusin, senior vice president of human resources at
Premera. “Our company invests huge energy into finding the
right people and making sure that we optimize their contribu-
tions by training them for new and different types of work over
their careers and putting together a value proposition to retain
them. Managing all these pieces and getting them in the right
balance is a part of our business.”
And while Premera has received numerous accolades for
being an employee-focused company, management realized that
more could be done to put data from its human capital man-
agement (HCM) system to work for the company’s more than
3,000 associates. According to Magusin, Premera wanted to do
more-strategic analysis to hire and retain the right staff with the
right skills to successfully navigate market challenges and spark
the innovation the company needs to grow and thrive.
Fortunately, Premera’s integrated PeopleSoft HCM solution
from Oracle has the depth and functionality to enable the
By Alison Weiss
Managing a Healthy WorkforcehumAn cApitAl mAnAgement gives premerA Blue cross A strong AdvAntAge.
Bo
B A
dle
r
Barbara Magusin, Senior Vice
President of Human Resources,
Premera Blue Cross
PM11_Premera.indd 31 4/1/11 3:52:39 PM
32 M a y 2 0 1 1
company to achieve its objec-
tives. The system features core
HR, payroll, benefits admin-
istration, and self-service,
as well as financial manage-
ment. With the recent imple-
mentation of ePerformance,
associates and managers can
monitor progress against goals
in real time, changing per-
formance management from an annual review to an ongoing
process. At the same time, HR professionals can more easily
access accurate and timely workforce statistics required for
long-range planning.
Why TalenT ManageMenT?
A few years ago, human resources strategists were focused on
policies and programs that support a workforce with genera-
tional differences. “What’s important to our employees and
what’s important to our company has changed as the world
itself has changed,” says Susan Hill, senior manager, HR systems
and projects, at Premera. “Talent management has always been
important, but as things like the economy and the political
climate shift, talent management demands shift. PeopleSoft
allows us the flexibility and functionality to predict, meet, and
support those changing demands.”
Premera’s focus on talent management is smart, according
to Jodi Starkman, a human resources consultant with more
than two decades of experience. In her work transforming
businesses with talent management, most recently as vice
president of global talent management consulting at global HR
management consulting firm OCR Worldwide, she has found
that good talent management practices start with some very
fundamental principles.
“Talent management starts with the premise that people
matter. Regardless of the kind of organization you work for or
the kind of business you’re in, it is critical to provide an inven-
tory of the capable and productive people to be able to deliver
whatever service and/or product offerings you have,” says
Starkman. “And to be profitable, you
need to make sure you’ve got them at
the right price.”
Starkman reports that any time
an industry is undergoing significant
changes—like those facing healthcare
today—there are also changes in
the skills and competencies that are
going to be most critical for the orga-
nization’s performance or an indi-
vidual’s performance moving forward.
It becomes even more important
for managers to understand what
personnel they have, what knowl-
edge employees possess, what jobs
employees are doing, and
how much they cost.
“All this information
comes together in the HR
system, but historically, not
very well,” says Starkman,
sharing that HCM systems in
the past may have provided a
good inventory of personnel
and their job titles, but they
didn’t easily identify what employees know.
Indeed, this was the case for Premera. With a driving need
to continue to efficiently and effectively leverage the deploy-
ment and utilization of its HCM system, the company decided
to work with Optimum Solutions, an Oracle Platinum Partner,
to upgrade to Oracle’s PeopleSoft Enterprise 9.1. The upgrade
would allow Premera to take advantage of key integrated talent
management features.
Now, Premera has a systems-based talent management
solution that helps the company be competitive, supporting
strategic analysis of workforce skills. In addition, this under-
standing can provide a more engaging work experience for
employees. Employees can self-report accomplishments, use
the system to track required certification and licensure, and
keep abreast of career opportunities and the skills required to
move into different roles.
CreaTing an hCM FoundaTion
Premera’s strategic investment in HCM didn’t begin with the
project in 2010. In fact, the company’s incremental HCM meta-
morphosis started six years ago. In 2005, Premera was using
a largely paper-based system to manage administrative work
filling out forms and occasionally pulling reports. Then, man-
agement decided to implement PeopleSoft Financials to get
better consistency.
Next, in 2006 management recognized a need to trans-
form its HCM system. Premera partnered with industry leader
Optimum Solutions to implement an integrated PeopleSoft-
based HCM system, including core HR, payroll, benefits admin-
istration, and self-service applications.
The company also hired a new human
resources technology team with strong
PeopleSoft experience.
Susan Hill, in her work with HR
systems and projects, found that
consolidating the system gave associ-
ates and managers one source to see
information that previously was pulled
from multiple sources. She says this
work, in itself, drove changes in talent
management for her own department,
as different skills were needed to
maintain a fully integrated enterprise
resource planning suite than what was
>>SNAPSHOTPremera Blue Cross
premera.com
Location: Mountlake Terrace, Washington
Industry: Health insurance
Employees: 3,000
Members: 1.6 million
Oracle products: PeopleSoft Enterprise 9.1
human capital management applications,
Siebel Customer Relationship Management
Partner product: Optimum Solutions’
RapidSolutions Upgrade program for
PeopleSoft Enterprise 9.1
“ What’s important to our employees
and what’s important to our
company has changed as the
world itself has changed.”
—Susan Hill, Senior Manager, HR Systems and Projects,
Premera Blue Cross
PM11_Premera.indd 32 4/1/11 3:55:20 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 3 3
needed to support the legacy paper-based system.
“Since then, there’s been a focus on continuing to evolve our
HCM and technical skill sets, and we’ve made our decisions on
how we implement very deliberately,” says Hill. “We listen to
our end users, and we draw on our expertise to provide solu-
tions that support our business.”
Optimum SOlutiOn
Fast-forward to 2010. Once again, Premera’s management
wanted to expand the HCM system to include more system
analysis functionality—with an emphasis on talent manage-
ment. “We wanted to enable better decision-making, as well as
use data to drive action,” says Hill. “As HR professionals, it can
give us the ability to contribute to the success of the business by
understanding what our workforce looks like and plan for the
workforce we need.”
Optimum came aboard for the project because it had played
such an instrumental role in implementing the PeopleSoft
HCM foundation years earlier. “They understand our com-
pany’s culture. Optimum was a natural choice to help us from
a PeopleSoft Enterprise 9.1 perspective to assess and do the
actual upgrade,” says Hill.
With a very aggressive timeline starting in April 2010 and
launching in November 2010, Optimum helped Premera use
a “big bang” approach to deploy PeopleSoft Enterprise 9.1
human capital management and financial management appli-
cations, PeopleSoft Enterprise Learning Management, and
PeopleSoft Enterprise Applications Portal, as well as PeopleSoft
PeopleTools 8.50—all at one time.
Premera has a tight integration between HCM and financials,
and needed to upgrade both suites at once to take advantage of
design and testing efficiencies.
Human resources managers like to
claim that they put their employees
first, but it’s rare to find a company that
has the pedigree to prove it. Premera
Blue Cross has that pedigree—it has
consistently achieved recognition as a
company that truly values its employees.
In 2007, Premera Blue Cross was
awarded Highest Member Satisfaction
with Commercial Health Plans in the
Western United States by J.D. Power
and Associates. Premera has been
recognized as a Start! Fit-Friendly Com-
pany by the American Heart Associa-
tion for promoting a culture of health
in the workplace that includes physical
activity and good nutrition. The Seattle
Times/Post-Intelligencer “People’s
Picks” competition named Premera
Blue Cross as the Favorite Snohomish
County Company in 2010.
Barbara Magusin, senior vice presi-
dent of human resources at Premera,
spoke with Profit about by how by
focusing on its employees and act-
ing on deep core values, the company
continues to succeed in a changing
marketplace.
Profit: What are some of your core
values at Premera?
Magusin: I think the main one we’re
driven by is integrity, and every company
will say that’s a high priority, but we really
believe it, we walk it. When we have our
performance evaluations every year,
we’re evaluated on the degree to which
we show integrity in everything we do,
the degree [to which] we make a differ-
ence in our community. I’m very proud of
the organizational culture that we have.
We’ve worked hard at it.
Profit: How do you think Premera’s
core values are reflected in your HR
policies?
Magusin: Another one of our core
values is accountability. When you
make data broadly available in the
organization, it allows managers to be
more accountable to the work they do.
And I think when you push data out to
all managers in an organization, you’re
assuming a level of trust, confidential-
ity, and integrity. You’re showing that
the integrity of the management is valid
and that we trust it. At Premera, we
work to be very open and transparent
and yet still appropriately complying
with privacy laws.
Profit: How does Premera demon-
strate that it is focused on its employ-
ees as its core asset?
Magusin: I think that our health and
wellness initiative is a clear illustration.
We provide a lot of easy access to ser-
vices to our associates, and we also
provide health information by having
biometric events and fairs. Yes, we’re
a health insurance company, so this
makes a certain kind of sense, but I think
the larger issue is that we really care
about the health and well-being of our
associates and that, in turn, translates
into caring about the health and well-
being of our members and customers.
Profit: What kinds of events do you
have to recognize your employees and
their contributions to the company?
Magusin: We have an employee
appreciation event every year where
we really try to acknowledge the
contribution of every associate in the
company. We have a number of recog-
nition programs that recognize people
who contribute to their communities
and who exemplify Premera’s values—
both individual contributors as well as
management.
Profit: Effective communication is at
the core of good employee relations.
How does Premera keep connected as
a workforce?
Magusin: We’re not a huge company.
We’re 3,000 people located primarily
on one campus outside of Seattle. And
I think we have the rare opportunity
these days to actually walk across the
street and talk to people in person. But
we also have an employee portal and
several blogs. Premera has a whole
intranet system called iConnect that
publicizes all sorts of things—even
weather reports.
The Benefit of Being an Employee-Focused Company
PM11_Premera.indd 33 4/1/11 3:55:52 PM
34 M a y 2 0 1 1
“Our industry-leading
PeopleSoft Enterprise 9.1
expertise and 9.1–specific
RapidSolutions upgrade
approach enabled us to mitigate
the clear risks associated with
a parallel upgrade of four sepa-
rate 9.1 applications at once,”
says John Doel, senior director
of HCM practice at Optimum
Solutions. “Having implemented more than two dozen 9.1 solu-
tions, we were able to draw upon our considerable 9.1 experi-
ence to provide proven recommendations for the most impactful
and efficient way for Premera to proceed with its upgrade.”
Integrated talent ManageMent
Since going live with PeopleSoft HCM, Premera has seen posi-
tive results regarding talent management. “Our biggest payoff so
far is efficiency,” says Hill. “Before, we had the data and we had
the processes, but they weren’t in a single database, requiring a
great deal of manual intervention to cull data and consolidate it.
When things were on paper, it was very challenging to identify
trends or conduct true analysis in a timely manner.”
According to Tracy Martin, senior director of PeopleSoft
HCM strategy at Oracle, the newly integrated talent manage-
ment features in PeopleSoft Enterprise 9.1 make it possible
for HR personnel to do higher-end strategic analysis, such
as determining why certain business units outperform other
units or whether it is possible to mobilize and target new
markets. “Talent management tools are easier to use, you can
get to information more quickly, and the data is more reli-
able,” she says.
One goal was to put the specialized data in the hands of
the employees who know it best, empowering associates and
managers by giving them the accountability to maintain the
data that they own. “In order for those individuals to have the
data they need, we required a system that was accessible at the
desktop and accurate and timely and that could serve first-line
managers and team leaders who could access information about
their workforce at their desks,” says Magusin.
And while Premera’s improved talent management function-
alities benefit the company in terms of systems analysis, there is
definitely a positive payoff for employees, as well. Many talent
management features are employee-specific, like career plan-
ning, allowing employees to be proactive. Such features help
provide a better workforce experience for Premera personnel.
PeopleSoft Enterprise 9.1 also offers a wealth of system
enhancements, making it more efficient and easier to navigate.
There’s more real estate on the screen to see more transac-
tional menus, and menus are more efficient. A new approval
workflow engine automatically provides a multilevel audit trail
for any transaction that’s in the system, delivering regulatory
and legal benefits by automating what used to be very dif-
ficult and expensive to customize. The new system leverages
Oracle Business Intelligence
Publisher capabilities to
expand the PeopleSoft
ePerformance review
process. “From a reporting
perspective, the company
now has a robust, Premera-
specific, user-friendly visual
[PeopleSoft} ePerformance
report,” Doel says.
Jon Wilson, vice president, IT application delivery services,
at Premera, applauds the depth of functionality available to
his IT team as a result of implementing the latest version of
PeopleSoft PeopleTools. “The improved functionality with the
base application has simplified the support of the platform. We
find ourselves having to develop and maintain fewer customiza-
tions than we did,” he says.
Future PayoFFs
And the work is not finished yet. Magusin says that Premera has
a long-term talent management commitment and will continue
to invest in HR technology going forward.
Starkman agrees that taking a long view on talent manage-
ment is the best strategy for companies that hope to weather
regulatory, economic, and security pressures like those that
face the health insurance industry. “Companies need to begin
to think from a leadership perspective, asking ‘What kinds
of leaders do we need, and what experiences do they need to
have in order to be effective?’ These things are information
that the business needs in order to make good business deci-
sions. It’s an opportunity for HR to contribute hugely to busi-
ness performance,” she says.
To serve that end, Premera will be adding the next build-
ing block to the HCM system later in 2011 for improved
talent management. “The opportunity for us with PeopleSoft
Enterprise 9.1 is to have a detailed manager profile of our entire
workforce—what are the competencies, who are the people,
what is their potential? It’s a much richer, deeper functionality
than we’ve had,” Magusin says.
“We’re in the process of changing the way we do our work
and looking at ever more efficient and cost-effective ways to
do it,” says Magusin. “It remains to be seen exactly how it’s
going to go with healthcare reform, but we stand at the ready
to move quickly.” <>
Alison Weiss is a frequent contributor to Profit.
“ Our biggest payoff so far is
efficiency. Before, we had the data
and we had the processes, but
they weren’t in a single database.”
—Susan Hill, Senior Manager, HR Systems and Projects,
Premera Blue Cross
>> For more inFormation
Oracle’s PeopleSoft Enterprise Human
Capital Management
oracle.com/us/products/applications/
peoplesoft-enterprise/hcm/053827.html
Oracle Solutions for the Healthcare Industry
oracle.com/us/industries/healthcare/038209.htm
PM11_Premera.indd 34 4/1/11 4:01:21 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 35
any companies have mission statements, found framed
and hung on cafeteria walls or lying on the desks of corpo-
rate officers, their stretch goals and earnest promises etched into
Lucite knickknacks. Those statements, once written, are often
soon forgotten, the knickknacks buried under spreadsheets on
the executives’ desks.
But not at Cleveland, Ohio –based Eaton Corporation. The
70,000-employee, US$13.7 billion company is managed using
the Eaton Business System (EBS) —a shared set of values, a
common philosophy, and a standard set of tools and processes
deployed throughout the highly diversified global power man-
agement enterprise. Eaton embeds the company’s core values in
every facet of executive decision-making.
Promoting customer focus and a culture that emphasizes con-
tinuous improvement and the transfer of best practices and key
learning across the organization, the EBS is how Eaton works as
an integrated company. That same singleness of approach pro-
vided the philosophical platform that helped Eaton executives
pursue an intensive effort to achieve a single instance of Oracle
E-Business Suite in the century-old, US$2.5 billion Eaton Truck
Group. This business serves major global truck, automobile, and
agricultural supply manufacturers such as GM, Ford, Mercedes-
Benz, John Deere, and Volkswagen, among others.
A Burning PlAtform for ChAnge
The truck operations in Brazil were acknowledged to be a
potentially difficult step in this transformation due to size,
business complexity, and the significant number of localiza-
tions required. But the Eaton Truck Group in Brazil represents
a significant portion of sales by the Eaton Vehicle Group,
which also has responsibility for global automotive manufac-
turing. Motivated by what Eaton executives called a “burning
platform for change,” leaders at the Valinhos, Brazil–based
Vehicle Group South America (VGSA) needed to rationalize
their highly fragmented and customized IT environment by
integrating the multiple instances into a single Oracle instance
for the entire group.
The effort began in 2002 with the development of a “build
By DaviD RosenBaum
A Singular FocusBusiness anD iT have a shaReD vision aT eaTon’s vehicle GRoup souTh ameRica.
Pa
ulo
Fr
idm
an
Eaton’s Marcos Baccetto (left), Operations
Services Manager, and Patrick Randrianarison,
President, South America and Vehicle Group
South America
PM11_Eaton_R1.indd 35 4/12/11 3:36:07 PM
36 M a y 2 0 1 1
anywhere” strategy, which, according to
Mark Tudor, then the group’s IT direc-
tor, would allow Eaton to manufacture
and assemble any machine part in any
plant on the globe and bring the com-
pany’s products to customers anywhere
in the world. “We determined that
the best option was to build a single-
instance environment so we could
manufacture product from one organi-
zation to another without significant IT
effort,” says Tudor, now vice president
of IT in the Eaton Aerospace Group.
“We wanted to drive common
processes through the utilization of a single technical environ-
ment,” Tudor continues. “The business wanted to use common
planning, inventory management, and shipping, along with all
the other processes within the manufacturing environment. We
could help them do that. We could help enable the utilization
of a single process through the use of a single application. And
Oracle was the right tool.”
Business Drivers
Before he became a business project lead on the single-instance
implementation, Eaton Operations Services Manager Marcos
Baccetto was a manager in the VGSA light duty business unit,
producing transmissions for pickups and other smaller vehicles.
Baccetto was responsible for manufacturing, quality control,
and engineering—and he was not an entirely satisfied customer
of the VGSA’s IT department.
“Our plant is very big,” explains Baccetto, “and the IT team
was not so big. So often we had to struggle to have the systems
we wanted implemented. And IT at that time did not have good
portfolio management, so it did not understand the prioriti-
zation of projects, of what was
important to us.”
Not only were IT systems out
of sync with business operations;
they also weren’t delivering the
service levels necessary for Eaton
to pull away from the competi-
tion. Failures in the inventory
system resulted in shrinkage,
which affected the bottom line.
Scheduling spreadsheets in Brazil
could not easily communicate
with systems using electronic data
interchange (EDI) standards in
the U.S., making data collation a
manual, error-prone process.
The lack of timely, reliable
data in Brazil made it difficult
for Eaton to plan for shop floor
capacity. That led to stoppages and
of course made it hard to satisfy
Eaton’s customers—a primary focus of
the company. “In 2009, our on-time
delivery was in the range of 60 percent
per Eaton internal no-offset metric,”
says Patrick Randrianarison, who
serves as both Eaton president, South
America, and president of the VGSA.
“That’s really bad.”
Eaton IT managers have a long
history with Oracle; the company has
used Oracle solutions since the 1990s.
But according to Tudor, the world-
wide Y2K remediation frenzy made IT
staff more worried about migrating off
the legacy environment than investing in a flexible, extensible
IT environment. This led to a proliferation of multiple enter-
prise resource planning (ERP) instances, creating a lack of inte-
gration in many business areas—including order management,
which according to Baccetto was “very dependent on many
Excel spreadsheets and parallel department controls.”
Systems suffered from hundreds of customizations within
the VGSA including the shared services centers, which cen-
trally support finance and HR functions—many installed in the
mid-1990s and left in place during the Y2K remediation. All
these customizations made IT less agile and inevitably resulted
in friction between IT and the business. “Any request from
operations became very difficult for IT to achieve because there
maybe was only one person in IT capable of doing the job,”
says Randrianarison. And that person would have to pair with
a subject matter expert in the lines of business to execute a
change to the system, creating delays in deployment.
The vision of a single Oracle instance, minimizing cus-
tomizations and, wherever possible, using out-of-the-box
code, emerged from this profusion of systems and applications
that continuously strained IT’s
resources and stood in the way of
the company being able to build
anything, anywhere. But getting
to that single instance was going
to require a lot of change manage-
ment. “Any change is always a
barrier because people don’t like
change,” says Randrianarison.
“That’s human nature.”
Business anD iT inTersecT
To overcome that barrier, Baccetto
was asked to be the project lead
on the single-instance implemen-
tation. He says that as a business
unit manager, his insight into
planning, leadership, customer
focus, data analysis, and process
management provided the insight
necessary for the project to be
>>SNAPSHOTEaton Corporation
Headquarters: Cleveland, Ohio
Employees: 75,000
Revenue: US$13.7 billion in 2010
Oracle products: Oracle E-Business Suite,
including Oracle Order Management,
Oracle Discrete Manufacturing, Oracle Flow
Manufacturing, Oracle Product Configurator,
Oracle Warehouse Management, Oracle
Advanced Supply Chain Planning, and
Oracle Release Management
Mark Tudor, Vice President of IT, Eaton Aerospace Group Bla
ke
J.
Dis
ch
er
PM11_Eaton.indd 36 4/4/11 3:11:19 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 3 7
successful. And the IT group
agreed: “The leadership of the
project must be functional
people,” says Tudor. “IT partners
with them. We do the technical
stuff like data conversions and
code development, but the owner
of the project is the business.”
It was equally critical to match
Baccetto with IT support that
understood information systems
must reflect and complement
business processes—not fight
against them. Jesiele Lima, then
the VGSA IT manager, was the
right person for this role and
joined Baccetto on the project.
Baccetto and Lima coordi-
nated the efforts of five groups:
Order Management, Supply
Chain Management, Engineering,
Finance, and Manufacturing. Over the 26-month project, they
met daily with the team leaders, discussing the previous day’s
progress and the mitigation of risks, among other things. They
met weekly to set the agenda for the next two weeks, and they
reported to the project steering committee, which included
Patrick Randrianarison, every month.
To improve communication between business and IT, Tudor
trained his IT staff in Lean-Six Sigma manufacturing principles.
“In my opinion,” says Tudor, “if IT doesn’t speak the language,
the business won’t listen to you . . . period. And one of the lan-
guages that manufacturing people speak is Lean.” (See sidebar,
“Business Insight, IT Execution.”)
The result was a coordinated
team that knew how to meet
Eaton’s greater business goals—
aligning with the EBS and building
enterprise IT that could support
Eaton’s vision of building anything,
anywhere. As Baccetto says, “The
beauty of this project was to build
a team composed of functional
people, internal IT experts, and
Oracle personnel. IT worked
together with Oracle and built the
functional needs into the system.”
“The knowledge Marcos
brought to the project from
beginning to end—from the
initial customer order coming in
until you do your receivables—
was critical,” says Lima.
Build Anywhere
The single-instance project was completed in 2009, and the ROI
has been rolling in ever since. An April 2010 headline from a
Reuters financial report read: “Asia, Brazil Lift Eaton Profit Above
Forecasts.” According to Lima, the implementation of a single
IT instance of Oracle E-Business Suite for managing orders,
scheduling, planning, production, supply chain, and shipping
delivered to executives the unified, global view of Eaton’s truck
business necessary to achieve that goal. That accurate single view
of processes is in alignment with Eaton’s integrated operating
philosophy. Now, managers can configure customer orders more
When Marcos Baccetto was first
asked to be the business-side
project lead on Eaton Corporation’s
Vehicle Group South America (VGSA)
Oracle project, the operations services
manager responsible for running man-
ufacturing was, he confesses, “a little
afraid” because of his lack of IT experi-
ence. Today, Baccetto calls the project
“a fantastic experience,” and he is a
true believer in the benefits of a close
relationship between IT implement-
ers and their line-of-business peers.
Through his partnership with Jesiele
Lima, then VGSA IT manager, Baccetto
and Eaton’s South American opera-
tions team came to understand several
important principles of business and
IT. Here he shares nine tips managers
should consider when working on an
enterprise technology project.
1. Make it a business project, not
an IT project. All levels of functional
management must have ownership,
responsibility, and accountability for the
success of the implementation.
2. Share responsibility. Business own-
ers should sign off on tests and data
conversion.
3. Clean your data. Dedicating a team
to improve core data quality prior to
project launch can be a significant
time-saver.
4. Select resources properly. Have
functional people who can translate
business needs to IT and can influence
organizational change.
5. Manage scope. Follow project
management methodologies and
disciplines.
6. Adopt common processes, global
solutions. Avoid customized, local
solutions. The big-picture business
goals can get lost in the details.
7. Implement processes prior to the
go-live date. Change management can
be key. Keep the workforce informed
and train users in advance.
8. Define metrics milestones.
Assume there will be a crisis during
deployment. Having baseline metrics
to compare against will help imple-
menters keep their cool—and the
project moving forward.
9. The sponsor’s commitment is
critical. It is needed to support the
truly difficult decisions.
Business Insight, IT Execution: 9 Project Management Tips
Jesiele Lima, IT Manager, Manufacturing Systems
Implementation, Eaton EMEA Region—Electrical Sector
Be
rt
Bo
ste
lma
nn
/Ge
tt
y I
ma
Ge
s
PM11_Eaton.indd 37 4/4/11 3:12:06 PM
38 M a y 2 0 1 1
efficiently, letting the company
truly build anything, anywhere
based on capacity, regional
demand, and cost.
Tudor stresses that the ben-
efits extend beyond reduced
cost and increased access to
new markets. He says this
approach also improves quality.
“In the past, if we needed to make an engineering change,
we would have to utilize a manual process to make the bill of
material the same,” he says. “Today we don’t have to do that.
It’s all automatic.”
The group now operates from a global set of items and bills
of material, which allows Eaton to operate engineering centers in
different places—all working on the same system, on the same
database master. Eaton executives can manage globally for cost,
quality, and compliance, and can balance production across the
globe. “You can optimize your production the same way you can
optimize your logistics when you produce a particular product
that can be sold in different parts of the world,” says Lima.
Randrianarison agrees. “When you have one unique process,
you don’t need to reinvent when you grow,” he says. “For
example, we have a new facility in China, and we can just imple-
ment the same Oracle solution there that we have everywhere.”
Taking STock
The Oracle single instance not only supported the implementa-
tion of “build anywhere” but also improved Eaton’s ability to
serve customers. According to Randrianarison, on-time delivery
of the VGSA products improved from 60 percent in 2009 to 90
percent and above in 2010. It’s a point that Tudor corroborates:
“We increased our on-time delivery by four times at one plant.”
This is, in large part, because Eaton managers can count on
a unified repository for enterprise data to see exactly what a
customer needs. “Change management is easier; bill of materials
management is easier; we can compare costs between each facil-
ity, wherever it is, and make the best decisions about manufac-
turing,” says Randrianarison.
According to Tudor, the single instance removed about 30
percent of those growth-constraining, resource-draining cus-
tomizations from Eaton’s global technology stack, and about 60
percent from the Brazil-based VGSA. Indeed, Tudor says, during
the implementation 56 percent of the data on customers found
to be inactive was purged from the database, and 75 percent
of the inactive supplier data was also purged. This led to gains
in productivity as well as an increase in accuracy. Overall Lima
estimates that Eaton has realized about US$700,000 in annual
savings with the Brazil implementation.
These improvements also allowed Eaton management to
repair one of the VGSA’ s persistent inventory problems: shrink-
age. The VGSA could retire the spreadsheets and receive data
through EDI, allowing managers to optimize transactions on
the shop floor using bar codes with the Oracle Mobile Supply
Chain model. According to Lima, the use of bar codes elimi-
nates the need for comput-
ers or terminals on the shop
floor previously required for
manual inventory movement.
A scanner reads the item bar
code and automatically relays
the information to the supply
chain system, giving manag-
ers a clear, accurate view of
their resources at all times. This allows them to reconfigure and
optimize the floor layout as production priorities change, not to
mention providing “almost real-time inventory control, 24/7,” as
Lima puts it. “That helps reduce discrepancies on inventory,” she
adds, and it ameliorates the shrinkage problem.
a Singular SucceSS
The savings and business opportunities the Truck Group has
reaped from a single-instance implementation are impressive. But
Randrianarison lights up when he discusses the transformation
of the group’s business processes, the promise of global growth
that transformation holds for the future, and the way the project
supports Eaton’s customer-focused ethos. “Now,” Randrianarison
says, “we can see exactly what our customer needs. I’d say that’s a
tremendous driver for customer satisfaction.”
The project also helped cement the relationship between IT
and the business, Randrianarison says, as together they have
experienced “the birth” of the new system. And he expects that
closeness to continue. “If, for example,” he says, “there’s an
EDI issue, the business team understands what the issue is and
the IT team knows its impact on the business. Now there’s a
common language, a common understanding.”
Indeed, Randrianarison plans to keep the core of the single-
instance project team together to leverage their hard-won
experience and expertise. “We’re not finished with the single
instance,” says Randrianarison. “We still have some facilities
using a different ERP. So the goal for the next two years is to
have everyone using Oracle. And now when we implement
Oracle solutions, it will be easier because we have that core
team capable of doing the job quickly.”
And, Randrianarison adds, “today, when we have an issue,
it’s not a Brazilian issue, with limited resources to resolve it. It’s
a global issue. And because it is a single instance, we can get
support from other countries to resolve it.”
Most importantly, Randrianarison concludes, the single
instance “makes us more agile. It makes us more global.” <>
DAVID ROSENBAUM, the former editor of CIO magazine, frequently writes on
technology topics.
>> For more inFormation
Oracle Solutions for Manufacturing
oracle.com/us/industries/industrial-manufacturing
Oracle E-Business Suite
oracle.com/us/products/applications/ebusiness
“ We can compare costs between
each facility, wherever it is, and
make the best decisions about
manufacturing.”
—Patrick Randrianarison, President, Eaton South america and VGSa
PM11_Eaton.indd 38 4/4/11 3:12:41 PM
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profit resizes.indd 5 4/11/11 9:03 AM
merica’s railroads are experiencing a back-to-
the-future moment. The backbone of freight
shipping in the U.S. since the 1800s, trains are
enjoying renewed interest by customers eyeing
rising energy costs that are forcing them to find
more-efficient and more-economical ways to ship
materials throughout the country. Railroads are
coming into focus in part because industry sta-
tistics show freight trains burn only one gallon
of fuel to move a ton of freight 480 miles. That
makes trains about four times more fuel efficient
than trucks, according to the U.S. Department of
Transportation’s Federal Railroad Administration.
Industrial customers are taking notice. Last year
saw the biggest year-over-year gain in rail shipping in
the U.S. in more than 20 years. One industry asso-
ciation recently predicted that rail companies will be
on a hiring binge for the next five years—partly to
keep up with demand and partly because companies
will see many of their workers hitting retirement age
during that period.
CSX, one of the oldest and largest rail compa-
nies in the U.S., is in the thick of these transforma-
tive trends. In business for more than 180 years,
CSX employs more than 30,000 people and is
successfully riding the economic recovery—the
company’s stock rose 63 percent in the last year.
But to keep the company strong, management
By AlAn Joch
On Track
for GrowthUpgrAdes to orAcle e-BUsiness
sUite And orAcle’s peoplesoft
systems help csX ride the
eXpAnding rAilroAd indUstry.
Bo
B M
or
ris
Tony Papa, Director of
Applications Development, CSX
PM11_CSX.indd 41 4/1/11 9:50:47 AM
42 M a y 2 0 1 1
needs more than 21,000 miles of track and a modern fleet
of energy-efficient locomotives. In addition to the operating
infrastructure, CSX needs modern technology systems, so the
rail company recently completed major upgrades of two core
business systems: Oracle E-Business Suite, which manages
CSX’s financial processes, and Oracle’s PeopleSoft Enterprise,
the main platform for human capital management.
When CSX went live on the latest versions last August, new
capabilities brought immediate benefits to the company, while
also bolstering its underlying technology foundation. CSX
is now poised to unveil long-term
innovations built around a service-
oriented architecture and more-
sophisticated business analytics. At
the same time, the upgrade gave
CSX management the foundation to
replace an old and expensive main-
frame revenue accounting system.
“We saw strategic benefits by partner-
ing with Oracle, which has a history
of keeping its technology current and
continuing to grow its products,” says
Tony Papa, director of applications
development at CSX.
Solid Financial Foundation
With two upgrades on the agenda,
CSX pulled off a two-pronged
implementation plan that launched each of the new systems
on back-to-back weekends. To accomplish this, IT leaders at
CSX formed two implementation teams consisting of technical
and business staff that worked in parallel over the first seven
months of 2010.
The first application to go live was Oracle E-Business Suite
12.1, a platform CSX has been relying on since 1998 for a
wide variety of activities ranging from accounting, cash, and
treasury management to purchasing; inventory control; and
governance, risk, and compliance duties. A tight implementa-
tion plan wasn’t the project’s only challenge; managing the
sheer scale also required careful planning. CSX had to roll out
the changes to 10,000 Oracle E-Business Suite users across
23 states. Training took time because the user interface for the
latest Oracle E-Business Suite release had changed somewhat
from CSX’s earlier version. On the technical side, the IT staff
had to run hundreds of upgrade scripts supplied by Oracle to
revise the underlying Oracle E-Business Suite database, which
spanned 1.7 TB.
Those are big jobs under any circumstances, but the desire
to minimize the impact on business operations added extra time
pressure. The CSX implementation clock started at noon on
Friday, with plans for the cutover to the new business systems
scheduled for Sunday morning to allow the business and tech-
nology groups to review thoroughly. The schedule called for
sign-offs by business department heads to indicate that every-
thing was in working order by Sunday evening. To help meet
these goals, Oracle provided technical support throughout the
planning process and kept an expert onsite to step in as needed
throughout implementation weekend.
In the end, everything went as planned. “When everybody
came in Monday morning, they were using 12.1,” Papa says.
Upgrade plans were put in motion in 2009 when the
CSX controller group became responsible for freight revenue
accounting, an activity at the heart of CSX’s business that
generates bills for all the products and materials that its trains
transport across the country. This
important area was being managed
by a mainframe application written
and launched by CSX in the early
1990s. “It ran COBOL and had all
the maintenance costs associated
with an aging system,” Papa says.
“The time had come to retire the old
system and move it onto a modern
platform, and the upgrade laid the
foundation for migrating off the
mainframe and onto Oracle.”
In addition to eliminating those
maintenance costs, moving freight
revenue accounting to the latest
version of Oracle E-Business Suite
will enable CSX to take advantage
of a consolidated billing, col-
lections, and accounting process inherent in the Oracle
enterprise resource planning (ERP) suite. The legacy
system allowed CSX to upload only summaries of freight
revenue information to the general-ledger portion of Oracle
E-Business Suite, which limited the financial details available
within a single system. Now, with complete records of freight
revenue funneling into Oracle E-Business Suite, the finance
staff can drill down from the general ledger to find answers
to any questions that arise.
PeoPleSoFt PayS oFF
While one team of business and technology people worked
toward the Oracle E-Business Suite launch, a separate group
plotted the upgrade to PeopleSoft Enterprise 9.1. CSX needed
the latest version for its Web services capabilities, which over
time will help the company replace its legacy HR programs.
Web services will also be a way for CSX to bolster security. Each
of the mainframe HR applications maintains a separate database
of employee information; accessing employee data with one
shared Web service will make it easier to manage and protect
the sensitive information.
In the near term, CSX is benefiting from PeopleSoft’s person-
model module, which gives HR executives a more effective tool
for maintaining employee information and assigning codes to
accurately describe each person’s relationship with the company.
This tool is paying dividends for CSX’s employee onboarding
>>SNAPSHOTCSX
csx.com
Headquarters: Jacksonville, Florida
Founded: 1827
Customers: Industrial companies that ship
raw materials, commodities, and finished
manufactured goods via railcars or intermodal
containers and trailers.
Employees: More than 30,000
Revenue: US$10.6 billion
Oracle products: Oracle E-Business Suite;
Oracle Database; PeopleSoft Enterprise,
Primavera, and Hyperion applications
Partner services: CedarCrestone consulting
and global IT services
PM11_CSX.indd 42 4/1/11 9:51:47 AM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 4 3
activities. “We’ve been able to clean up our records and stream-
line the whole process,” says Papa.
In the past, a standalone master employee program main-
tained personnel records and sent updates to any CSX appli-
cation that needed the information, which ranged from HR
applications to plant security systems. An ongoing challenge for
CSX was the additional tracking required for outside contractors,
retirees, and spouses receiving benefits from deceased former
employees, plus regular full-time
employees. In the past, CSX relied
on custom codes to distinguish
each of these groups. Contractors
received a Z at the start of their
employee ID, for example.
But when everybody is
lumped in the system as an
employee, a coding error might
mean that a spouse or contractor begins receiving checks
from the payroll system. “With the person model, there is
no opportunity for somebody to get paid or get benefits that
they’re not supposed to get,” says Michele Hellstern, direc-
tor of human resources information systems and workforce
analytics at CSX.
With the new PeopleSoft implementation, software execu-
tives can also readily create reports about any group in the
personnel database to see how many full-time employees
and contractors are working in a particular department, for
example, without facing the onerous task of writing custom
queries using unique codes. In a time of staff volatility the
new system also enables CSX to use the same employee IDs
to track an employee throughout his or her career with the
company, even in the common instance that someone begins
as a contractor but is eventually hired as a full-timer. “We can
look back to track all of their training and certifications over
the years,” Hellstern adds.
Eventually, the person model will help CSX create a Web
service that feeds employee information to all the other appli-
cations that now maintain separate records. “Our vision is to
create a portal for managers and
employees that all connects back
to PeopleSoft,” Hellstern says.
That single source of truth
would support improvements
in two areas critical to HR man-
agers at CSX: talent manage-
ment and succession planning.
Facing a wave of retirements
in the next few years, executives at CSX need new tools to
track the skills available in the workforce and identify where
investments must be made for training and recruitment.
CSX’s HR department has created a plan to rotate younger
managers into a variety of new positions to round out their
understanding of CSX’s operations and acquire skills to fill
vacancies as they open up. CSX is also re-evaluating its com-
pensation program, which relies heavily on manual process-
ing of compensation plans and incentive bonuses. These
activities may eventually be managed by PeopleSoft
eCompensation Manager Desktop, which would eliminate
another custom application and the hard-to-maintain cus-
tomizations that come with it.
CSX used its Oracle E-Business Suite
and Oracle’s PeopleSoft Enterprise
upgrade project as an opportunity
to consolidate and modernize the
underlying infrastructure. This included
virtualizing the servers that would run
the new PeopleSoft software, and the
benefits of virtualization appeared early
in the modernization process. A fleet
of virtual servers meant that CSX could
quickly set up and reallocate test bed
servers and storage resources to run
scores of test scripts.
“We felt there could never be too
much testing. We ran dry run after dry
run—testing, fixing, and retesting,”
says Tony Papa, director of applica-
tions development at CSX. When a
module passed its tests, the IT teams
ran the scripts once more to get their
timing down for the weekend when the
actual upgrade occurred. “This was
crucial so that everybody knew what
tasks had to be run before, during, and
after the upgrade,” he adds.
CSX had the help of Oracle partner
CedarCrestone, an IT systems-
integration company that had been
supporting the rail company’s
PeopleSoft operations for more than
a year before the upgrade. That role
expanded in 2010 and played an
important part in CSX’s housekeeping
efforts. CedarCrestone analysts per-
formed a full review of CSX’s human
resources systems and integration
points, including the wide array of
proprietary mainframe and third-party
applications. Consultants then devel-
oped a plan for updating or replacing
outdated or unnecessary systems,
hardware, and applications. It also cre-
ated a strategy for addressing a partic-
ularly nettlesome holdover, Structured
Query Reporter (SQR), a venerable
coding language used for processing
complex SQL logic and batch files.
CSX maintained a large volume of
SQRs—more than 600, in fact—and
each had to be reviewed to see if it was
still relevant. “We were able to elimi-
nate a lot of SQRs, while many others
still had to be converted” to work with
the upgrade, Papa explains. “That
meant every SQR had to be reviewed,
touched, updated, and then tested.”
In the end, all these upfront prepara-
tions paid off with a modern, efficient
technology foundation that CSX is using
to ride the rail industry’s resurgence.
With Modernization Comes Housecleaning
“ The time had come to retire the
old system. . . . The upgrade laid
the foundation for migrating off
the mainframe and onto Oracle.”
—Tony Papa, Director of Applications Development, CSX
PM11_CSX.indd 43 4/1/11 9:52:20 AM
44 M a y 2 0 1 1
Succession planning is another area currently being handled
by a third-party program, which requires custom interfaces
to facilitate data flows between it and the PeopleSoft imple-
mentation. But CSX sometimes experiences data-integrity
problems when information needs to be consolidated between
two systems. The problem: updates to information in the core
PeopleSoft system aren’t immediately reflected in the third-
party applications, which rely on nightly batch processes. This
creates a scenario where an executive may receive a succession-
planning report that’s been created with old data and the infor-
mation can’t easily be refreshed until the next day.
The PeopleSoft upgrade is also spurring CSX to evaluate
all of its third-party HR systems
to determine which ones it can
now replace with the new capa-
bilities. “There’s clearly value
in having everything in one
system so you are not having
to go reach out to all these
other systems and get the data,”
says David Carter, director of
client services for CedarCrestone, an IT systems-integration
company with expertise in ERP solutions that works closely
with CSX.
“CSX had the faith in CedarCrestone to tackle this
upgrade project with them, and their faith has been vali-
dated,” Carter adds.
Separate systems also challenge reporting and analytical
activities, because each system may format data differently.
In the meantime, analysts must continue to pull the desired
data from PeopleSoft and then manually slice and dice the
information to coax out comparisons of performance data for
particular time periods. CSX management is looking to use
consolidated data records as a base for expanding its analyti-
cal capabilities.
Hellstern is meeting with Oracle representatives about
business intelligence technology, including Oracle Human
Resources Analytics, with the goal of eventually creating
dashboards that display much of the information CSX execu-
tives need. “This would allow a vice president to drill down
into his or her group to identify trends or to see at a high
level results about the overall workforce,” she says. “Our
overall strategy for analytics is to provide our executive team
with the tools to do more modeling, forward projections,
and what-ifs.”
The ImporTance of Good Governance
Up-front planning was essential for CSX’s successful simulta-
neous upgrade of its Oracle E-Business Suite and PeopleSoft
Enterprise systems. In addition, company executives say, a
strong governance team made a crucial contribution to the
modernization effort’s success.
The governance team provided a forum for keeping
everyone up-to-date on the planning and preimplementation
activities and offered a way for team members to find solu-
tions when unexpected problems threaten to derail progress.
“We wanted our business partners to feel comfortable when
they went in and turned on the new system. We didn’t want
a technology upgrade to wreak havoc on the organization,”
explains Melissa Mucha, assistant controller and a committee
organizer at CSX.
Getting technology and business groups meeting regu-
larly was especially important given the scope of the upgrade
project, which included 10 technology and 13 business
teams. “We would talk through a status update for each of the
modules in the testing process and identify any issues that
were being discovered,” she
says. The group would then
assign a red, yellow, or green
mark for each module to show
its ongoing readiness for the
go-live date.
CSX established two
governance teams to manage
the ambitious IT project. On
the Oracle E-Business Suite side, the group consisted of
senior-level business and IT managers, Mucha and another
representative from accounting, technology managers,
purchasing professionals, and internal auditors. For the
PeopleSoft Enterprise project, governance was managed by
team members from HR benefits, payroll, and IT as well as
internal auditors.
Mucha considered the internal auditors an integral part
of each governance team. “As a public company, we knew
our external auditors were going to require documentation
of the testing we did for the upgrade,” she explains. “So we
partnered with internal auditors to walk hand in hand with us
through the process.”
The internal audit staff knew what information would be
required for external oversight and enforced a discipline on the
implementation teams to document their activities as they re-
engineered processes and performed their systems tests.
“We got to a point where internal audit was actually par-
ticipating in the business and technology meetings to stay
abreast of any major issues,” Mucha adds. “The result was that
we didn’t implement the system and then spend the next three
months scrambling to get the auditors comfortable with our
procedures. We stayed ahead of the game.” <>
AlAn Joch is a new England-based technology writer.
“ We didn’t implement the system
and then spend the next three
months scrambling. . . . We
stayed ahead of the game.”
—Melissa Mucha, assistant Controller, CSX
>> For more inFormation
Oracle E-Business Suite
oracle.com/us/products/applications/ebusiness
Oracle’s PeopleSoft Enterprise
oracle.com/us/products/applications/
peoplesoft-enterprise
PM11_CSX.indd 44 4/1/11 9:52:47 AM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 45
LEADERSHIP | IT STRATEGY
alespeople know that their jobs depend on getting a cus-
tomer to sign on the dotted line. Successful salespeople
often approach this challenge by using tools that better align
with the executive who has the checkbook. This means
presenting a clear business case and delivering a concise,
compelling C-level message that will increase the chance of
making the sale.
When significant investments that can run into the millions
of dollars are involved, utilizing this same approach can help
an IT manager gain funding for an internal project. It can shift
the focus of the IT department away from features and func-
tionality and toward strategic support of management’s core
business goals. Approximately 80 percent of most IT budgets
are for maintenance and
support of software, so the
competition for new invest-
ment is intense. Here are
four sales tips that can help
enterprise techies and line-of-
business managers close the
deal on essential IT projects.
Step 1: FocuS on proFit
Bob Wood, a marketing direc-
tor for Sony PlayStation, says
it is important to focus on
profit while selling a project.
“Managers who don’t think
profit are not likely to be
aligned with their CEO,”
Wood says. “While manag-
ers devote time to projects,
processes, and managing
resources, this is not the same
as thinking first and foremost,
‘How is what I am doing
driving profit?’”
The first step is to equip
the team to generate value.
To do this, everyone on the
project team must understand the company the way the CEO
does. Forget the divisional or product-level responsibilities for
the time being, and get the information to analyze the company
from the aggregate level. The best place to start is the company’s
annual report. Many employees misplace this document when it
comes in the mail, but it is still possible to pick one up from the
shareholder relations department or download a digital record
of the company’s financial results from the corporate Website.
As a first step, the team should review the company’s
metrics, as well as those of several industry competitors.
What have revenues done over the past several years? Has the
company kept up with the competition or exceeded it? Now
look at the gross margin, and see how the company compares.
If the company’s gross margin is higher than the competition’s,
it’s either because the company is more productive or because
it can sell its products at a
higher price. The trend of
the gross margin is one of
the telltale signs that execu-
tives look for. At this point,
it would make sense to start
looking at ways to drive gross
margin at the departmen-
tal level. If the company is
lagging in the market, what
can be done to increase gross
margins by a small amount
every day?
Another great productivity
measure that company execu-
tives consider is sales per
employee. A company that
is utilizing its resources in a
productive manner has higher
sales per employee. How does
the company compare? IT
managers who couch invest-
ment requests in terms of
additional sales that full-time
employees will generate—and
the break-even point of the
investment decision—will
Closing the Deal
By Mark kuta Jr.
Four steps to successFully selling your it proJect to senior ManageMent
We
nd
y W
ah
ma
n
PM11_CEO.indd 45 3/31/11 4:49:48 PM
46 M a y 2 0 1 1
LEADERSHIP | IT STRATEGY
have a much greater opportunity to get
their project reviewed.
An excellent overall metric that brings
to bear market realities on the impact
of faster decision-making is called the
cash2cash cycle. Sometimes referred to as
the cash conversion cycle, this quantifies
how speed in decision-making affects
the cash required to run the business.
For example, if a project will allow a
company to execute processes that will
let it collect cash from its sales three days
sooner, the executive can easily see the
financial impact that this will drive. Make
no mistake—senior executives know that
in today’s business, it’s all about speed, so
get to know this metric.
Step 2: Speak the Language of BuSineSS
To gain an advantage in getting the
project funded, everything should be
presented in the language of business,
which is the language of the CEO.
Rather than use the term money, discuss
capital. The project won’t affect sales, but
rather will drive revenue. If the project
will increase profit, it’s best to outline
which type of profit it will drive. Gross
profit, as we discussed above, is gener-
ated by higher sales revenue or produc-
tivity. Operating profit will increase if the
project drives productivity in the admin-
istrative functions.
On the spending side, costs are what
are required to drive sales. Expenses gen-
erally fall into the general and adminis-
trative groups. For example, reducing the
requirement for parts that the company’s
product requires is driving down costs.
When it comes time to discuss the reason
for investing in an IT project, speak the
language of business by speaking not just
in terms of ROI but of a specific metric.
For example, “This project will generate a
45 percent IRR [internal rate of return].”
Speaking the language of business will
allow you to effectively communicate the
message to senior management.
This is particularly important for
technologists, who operate with their
own mystifying and arcane language.
Speaking the language of business will
align the project with the vernacular of
the CEO and will help dispel some of
the long-standing barriers and prejudices
that often define the relationship between
IT and the business. To make a successful
pitch, technologists should trade in their
TLAs (three-letter acronyms) for those
favored by their peers in the lines of busi-
ness. This can show that IT has not only
the best interest of the business in mind
but also the ability to match solutions
with strategic business goals.
“In order to close sales with top execu-
tives, you must get inside their heads,
understanding what they want, and—per-
haps most important—what they worry
about,” says John Rutledge, chairman of
Rutledge Capital, a private equity invest-
ment firm that owns a portfolio of manu-
facturing companies.
Step 3: aLign the project with
Strategic oBjectiveS
Every year, executives have to make deci-
sions that economists call “the allocation
of scarce resources.” To CIOs or CFOs,
it simply means that they decide which
projects to fund, and which will die by
the wayside. IT projects—as well as IT
careers—often depend on which projects
get funded. A software salesperson faces
this pressure all the time, and despite
how unappetizing it may seem, IT man-
agers pitching internal projects are often
in the same boat as the salesperson.
However, there is one area where
selling an internal project provides a dis-
tinct advantage. The idea revolves around
one of the best ways to get momentum
for an IT project—aligning it with the
overall goals and profit strategies that
the CEO is driving. An outside salesper-
son has to figure this out, while internal
employees will have a much easier time
understanding this strategic direction.
Company meetings, divisional presenta-
tions, and budget forecasts will prove to
be a big help in this regard.
To increase the chance of getting
the project funded, frame it in terms of
how it supports these objectives. Does
the company have a growth-through-
acquisition strategy? If so, how does the
project drive cash generation and speed
information integration? (Remember that
growth equals cash requirements.) Is the
company facing a highly competitive
sales environment in which revenues are
driven by capturing competitive market
share? Show the anticipated gross profit
impacts in terms of raising sales. Would
it be easier to drive sales an additional 2
percent, or to fund the project?
Step 4: think Like Your ceo
All projects require ROI, but successfully
presenting the analysis in terms that dif-
ferentiate among the various projects and
investment decisions will increase the
chances of funding. It is a capital-budget
horse race, and the objective is to present
the project as a winner in the style of
Secretariat—rather than that famous
talking horse of the 1960s, Mr. Ed.
To do this, remember that the CEO,
the board, and senior executives are
looking at not only returns but also
the risk associated with the project.
Present the project in a way that both
addresses the question of risk and takes
it off the table. The best way to do this
is to subject your project to a sensitivity
analysis that outlines the various risks
involved with the implementation and
what those risks do to the returns.
For example, if a project as outlined
by the team shows a 125 percent IRR,
delay the anticipated returns by several
quarters and analyze how this affects the
IRR. Do another analysis with the costs
escalating beyond what the assump-
tions said. Think of the risk factors, and
adjust the base model to see what the
returns are. Then, during the presenta-
tion, outline these risk factors that the
team has quantified: “The project shows
an IRR of 120 percent, but if the returns
are half as much as anticipated, the
IRR drops to 75 percent. If the returns
are half as much as anticipated and the
costs are double, the return drops to 40
percent, which is still twice our hurdle
rate.” This type of statement tells a much
different story than “the anticipated ROI
is 40 percent.”
the BYproduct: career acceLeration
With the approach described here, team
members associated with a project will
be viewed by both superiors and peers
PM11_CEO.indd 46 3/31/11 4:50:44 PM
p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 4 7
as profit generators. By succeeding in
the competitive environment of capital
projects, team members will find their
newfound expertise in demand on the
departmental or divisional level. This
expertise can lead to other initiatives and
can generate more responsibility—fast.
“The way that I have used these steps
to understand our suppliers has been a
huge value generator for our business,”
says Jo Fickes, procurement manager at
Ascent Healthcare Solutions. “We are also
able to understand the risks of purchas-
ing from different suppliers based on
their business models. An added benefit
is that these steps help us in the negotia-
tion with those suppliers.”
Fickes and her team are able to bring
in metrics that few others look at when
negotiating. For example, as her team
members negotiate with suppliers, they
do a complete analysis of their supplier
using the steps above and further out-
lined in my book Think Like a CEO (Flow
Publishing, 2007), and use what they
find out in the negotiations. Her team
once uncovered that a potential supplier
paid bills on average 20 days later than
other similar suppliers. They realized
that cash was a much more important
issue, and used this insight to drive price
concessions from the supplier for quicker
payment terms.
Although IT managers and execu-
tives may not earn commission, it is
still their job to drive value for the
firm. A senior executive once said
that no matter what job his employees
had, they were always on commis-
sion. IT managers who can think like
senior executives will drive significant
value for their firm and have expanded
opportunities in their careers. <>
Mark kuta Jr. ([email protected]) is a value
chain planning sales manager at Oracle and author of
the award-winning book Think Like a CEO.
>> For more inFormation
The Oracle Insight Program
oracle.com/us/corporate/insight
Enterprise Performance
Management and Business
Intelligence
oracle.com/us/solutions/
ent-performance-bi
Mark Kuta Jr. knows a thing or two about what motivates
senior executives. During his career as a technology
sales manager, Kuta has sold nearly US$100 million in
enterprise software to CEOs the world over. In the process,
he’s found that knowing what keeps them awake at night is
critical to delivering a solution that solves the problem—and
closes the deal. “If you are dealing with senior level execu-
tives, you’d better be able to align your product to the strat-
egies that the CEO is pursuing,” says Kuta.
In the following excerpt from his book Think Like a CEO
(Flow Publishing, 2007), Kuta describes some of the things
that motivate CEOs in their daily jobs and how to propose
projects that intersect with what’s on their minds.
Most C-level executives, like successful individuals in
every field, have a healthy ego. Their direct staff may not
be of the same stuff, but you can safely assume that in any
event, they are concerned about what their boss is thinking of
them. If you are going to deal with them, you have to use this
to your advantage. I’ve found that most executives share sim-
ilar concerns that can be summarized in three basic buckets.
The first thing that the executive is going to be concerned
about is the metrics that his boss is focused on. Every
executive has a boss. The COO has the CEO; the controller
has the CFO, who reports to the CEO, who of course has
the board of directors. What is the group of metrics that the
executive’s boss sees on a regular basis, and what is the
first thing they point to when they are looking at this report?
As a board member of a large multiple branch financial
institution, I see a board packet monthly. The first thing that
I look at is return on assets. Now, there are other metrics
that are important (earnings, customer service metrics, etc.)
but the CEO knows that he needs to be able to address the
ROA [return on assets] numbers at our monthly board meet-
ing. Find the bottom line for the executive you are dealing
with, and you’ll get his attention.
The second thing that seasoned executives are interested
in, and aware of, is their competitors. Many execs that I have
known get some type of information daily on their key com-
petitors. While they are getting all the public information that
is available, what would be of value is additional information.
Do analyses of the industry, talk to your competitors, and
see what they are doing. Then try to fit your project into this
space and educate your executive.
Finally, executives are focused to customers, and worry
about how their supply chain will impact them. Talk to the key
suppliers in the supply chain, and understand the issues and
difficulties they face. Understand their customer base. This
secondary type of information is what will get you listened to,
and if you do some of the basic analysis . . . you will be able
to bring significant insight to those discussions.
Now that you understand how executives think, you need
to focus on getting action out of them. Just like you, virtu-
ally every executive has more work than hours in the day, so
they focus on key initiatives, and eliminate all the other noise.
To get your project visible you must get them interested in
the project, and not let them push you off on someone else.
You want them to say, “This is interesting, and this is worth
following up on.” To keep them from sending you to others
in the organization, make them the owners of what you are
working on. There is no better way to do this than to inte-
grate the value that your product or solution brings to their
profit strategies.
What Do CEOs Want?
PM11_CEO_R1.indd 47 4/12/11 3:44:45 PM
Copyright © 2009, Oracle. All rights reserved. Oracle is a registered trademark of Oracle Corporation and/or its affiliates.Other names may be trademarks of their respective owners.
oracle.com/goto/utilities
or call 1.800.275.4775
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profit resizes.indd 5 4/11/11 10:45 AM
P R O F I T : T H E E X E C U T I V E ’ S G U I D E T O O R A C L E A P P L I C A T I O N S 49
DATA MANAGEMENT | SUSTAINABILITY
s organizations around the world adopt sustainability
initiatives, executives need tools to support the report-
ing and management of these initiatives. While sustainability
reporting is mandatory in some countries, many business
leaders are working to become more responsible in manag-
ing their energy and water usage, greenhouse gas emissions,
and social and community programs. They are collecting
and reporting this information to support internal improve-
ment initiatives and to provide stakeholders a better sense of
the impact an organization has on the environment and the
regions in which it operates.
So how do organizations collect, consolidate, and report
their sustainability metrics? Customer surveys and discussions
indicate that most start out using spreadsheets, text documents,
and e-mail to collect and report the information—especially if
the process is being done only once a year for external reporting
purposes. But as the need for sustainability reporting becomes
more frequent, organizations will look for software solutions
that can support a more easily
repeatable process, while provid-
ing a higher level of quality and
confidence in the data being
reported. This is particularly
important if the data is subject to
external auditing and assurance.
Technologies that support
these activities should
conform to global sustain-
ability reporting guidelines.
There are many reporting
guidelines companies use to
achieve this end—the Global
Reporting Initiative (GRI) and
the Carbon Disclosure Project
(CDP) are two commonly used
examples. There’s also the
recently launched International
Integrated Reporting
Committee, which is focused
on driving a framework for
integrated financial and sustainability reporting.
While there are a number of specialized applications emerg-
ing to support energy, carbon, and sustainability reporting,
many enterprises are starting to leverage their existing enter-
prise performance management (EPM) and business intelligence
(BI) solutions to collect and report sustainability metrics. These
existing applications support a repeatable high-quality sustain-
ability reporting process built considering three key activities:
data collection and contextualization, data aggregation, and
data reporting and analysis.
Once the right technology is implemented or leveraged,
following such guidelines becomes a much simpler endeavor.
“Whether for companies or cities, carbon and energy man-
agement software will become the fundamental platform for
enabling corporate sustainability strategy, as transparency into
carbon emissions and other resource use is the prerequisite to
setting appropriate reduction targets and identifying and
prioritizing sustainability projects to reach those targets,”
wrote Forrester Research analyst Daniel Krauss in his
December 2010 report The Evolution of Enterprise Carbon and
Energy Management Software.
DATA COLLECTION AND
CONTEXTUALIZATION
The data required for sustain-
ability reporting and manage-
ment originates in a number
of internal and external data-
sources. Metrics about carbon
emissions and electricity, fuel,
and water usage can exist in
applications for enterprise
resource planning; facilities,
transportation, and supply
chain management; and shop
floor and process control. Some
of the information may need
to be collected from external
sources such as electricity pro-
viders, and in some organiza-
tions, meters and sensors are
being installed within various
Getting to Green
BY JOHN O’ROURKE
THREE KEY STEPS FOR PREPARING ENTERPRISE DATA FOR SUSTAINABILITY REPORTING
I-H
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EN
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DATA MANAGEMENT | SUSTAINABILITY
facilities and locations to provide more-
granular detail regarding energy usage.
Social metrics such as workforce
diversity, compensation levels, and
employee training and development
programs may originate in HR systems.
And economic metrics needed for sus-
tainability reporting, such as spending
with local suppliers at significant loca-
tions of operation, will mostly originate
in financial applications.
Key technologies required to collect
the raw sustainability data from these
sources include extract, transform, and
load (ETL) and data quality tools, which
directly pull the required metrics from
operational applications. The ability to
connect to remote sensors and meters
may also be required for more-granular
tracking of energy usage. In some cases,
organizations are using spreadsheets,
surveys, and Web-based data entry tools
to collect sustainability metrics from
managers in remote locations and load
them into the reporting database.
Locating and collecting the raw data
needed for sustainability reporting and
management is just the first step; the data
also needs to be contextualized. This may
include summarizing raw data into the
appropriate time frames—for example,
hourly or daily electricity consumption—
and matching up sustainability metrics
with operational metrics such as revenue,
head count, and production figures to
calculate key ratios such as emissions
per employee. ETL and data quality tools
working together with database systems
can usually perform the data collection,
transformation, and aggregations required
to put the sustainability metrics in the
right context for user consumption.
Data aggregation
Once the relevant data to support sus-
tainability initiatives is identified and
collected, it must be aggregated and
organized for analysis and reporting
purposes. This includes applying the
required conversions and calculations to
support standard sustainability guidelines
or to create carbon equivalents. There
are a number of alternatives to consider,
including relational databases, multi-
dimensional online analytical process-
ing (OLAP) servers, and purpose-built
sustainability reporting applications that
leverage these technologies. Key factors
to consider include whether the intended
audience for the data is internal or exter-
nal, the level of analysis required, and the
frequency and level of granularity needed
for analysis.
If the reporting requirements are fairly
simple, such as internal delivery of energy
usage and greenhouse gas emissions to
managers via standard reports or graphi-
cal dashboards, then a relational data mart
or warehouse can be a viable solution. If
managers want to perform more-complex
types of comparative analysis, modeling,
or forecasting of sustainability metrics,
then multidimensional OLAP server tech-
nology will provide a more viable solution.
If the sustainability data will be used
for external reporting to key stakeholders
and may be exposed to external audit and
assurance processes, then packaged EPM
applications, such as financial consolida-
tion and reporting applications, can be
leveraged. These applications integrate
sustainability metrics with financial
reporting and provide additional features
such as data validations and controls,
workflow and process management, and
audit trails. The EPM applications can be
used on their own or in conjunction with
a relational or multidimensional data mart
to support both internal and external sus-
tainability reporting requirements.
Denmark-based DONG Energy
recently used Oracle EPM applications for
such reporting. (See “Sustainable Energy,”
page 28.) Analysts previously used spread-
sheets and e-mail to collect and report
sustainability metrics—and the company
received a poor audit report on the
quality of its data. Since managers were
already using Oracle Hyperion Financial
With several options to consider when it comes to
collecting, aggregating, and reporting sustainability
information and metrics, Oracle Vice President of Product
Marketing John O’Rourke offers some considerations that
should drive an organization’s technology strategy.
1. Determine the best practices in your industry or
region. One example might be collecting energy usage data
at the facility level in retail or financial services. Determine
what your peers are doing in response to regulations and
which high-return opportunities they are pursuing, such as
reducing energy usage and carbon footprint in supply chains.
Engage partners as needed.
2. Review current IT platforms and reporting tools. Look
for opportunities to leverage existing investments, data,
and processes to minimize incremental cost. For example,
if you are already using Oracle Essbase or Oracle Hyperion
Financial Management, these systems can be extended to
support sustainability reporting.
3. Identify sources of necessary data. Examine current
sources such as Microsoft Excel spreadsheets in the envi-
ronmental health and safety department, but also identify
whether data capture can be achieved via accounts pay-
able processes or Web forms. Automating data capture
can reduce time and effort and improve accuracy in sus-
tainability reporting.
4. Understand data granularity demands. Determine
whether a sensor-based approach, collecting data at the
facility or department level, is justifiable, and which data fre-
quency makes sense for operational versus enterprise-level
usage. Fitness First collected weekly energy usage measures
for internal reporting and analysis and then rolled up for
external reporting on an annual basis.
5. Determine audience for reporting. Will the data be pub-
lished internally, externally, or both? Data collected for external
publishing and assurance will need stronger controls and pro-
cesses to be in place to ensure accuracy and audit readiness.
Developing a Tech Strategy for Sustainability
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p r o f i t : t h e e x e c u t i v e ’ s g u i d e t o o r a c l e a p p l i c a t i o n s 51
Management for financial consolidation
and reporting, they decided to extend
the application to address sustainability
reporting requirements. The company
now has a single system that aligns its
financial and nonfinancial/
sustainability reporting, which
has earned a clean bill of health
from auditors.
“With Oracle Hyperion
Financial Management, we can
now identify the hotspots in
our work with sustainability,
where we can obtain maximum
change and results—and we
can track progress in our work to achieve
our goals,” says Niels Strange Peulicke-
Andersen, common systems manager
in the Quality, Health, Safety, and
Environment group at DONG Energy.
“We can also publish our results in line
with our financial results because our
reporting is transparent and valid.”
Data analysis anD RepoRting
Once sustainability data is collected,
aggregated, and contextualized, it is ready
for formatting and delivery to stake-
holders. Internal stakeholders can include
senior executives who are interested in
tracking high-level trends and metrics
against goals, facilities managers and ana-
lysts who may want to perform ongoing
analysis and benchmarking of energy and
water usage across departments and loca-
tions, and staff who need standard reports
on a regular basis. External stakeholders
may include regulators who require sus-
tainability reporting in a specific format.
But the broader audience includes inves-
tors, customers, suppliers, employees, and
others who want to access information
and metrics about sustainability initiatives
on the organization’s Website.
For senior executives and managers,
sustainability reporting data and metrics
can be delivered via graphical BI dash-
boards or scorecards that highlight trends
over time and provide drill-down analysis
and comparisons of sustainability metrics
against predefined goals and initiatives.
For managers and analysts who require
ad hoc analysis, the same dashboards and
scorecards may provide a starting point.
But they may also need ad hoc query and
reporting capabilities, and data mining,
planning, forecasting, and predictive mod-
eling tools to perform forward-looking
modeling and forecasting of energy and
water usage and greenhouse gas emis-
sions. Spreadsheets connected to relational
or OLAP servers can also be popular tools
for performing ad hoc reporting and anal-
ysis of sustainability data. For line manag-
ers and other casual users, production
reporting tools with the ability to print or
e-mail PDF reports may be sufficient.
To report sustainability metrics to
external stakeholders, organizations will
need the ability to feed the metrics into
their published sustainability reports—or
into annual financial reports, if they are
taking a more integrated approach to
sustainability reporting. Alternatively,
some organizations are making sustain-
ability information and metrics available
in an interactive format on their Websites
using graphical BI dashboard technology.
Beyond publishing annual sustain-
ability reports on company Websites,
some organizations are going further by
updating and publishing sustainability
goals and metrics on a more frequent
basis. SABMiller, the world’s second-
largest brewing company, provides a
Sustainability Assessment Matrix (SAM)
reporting portal for external stakeholders.
The SAM reporting portal displays how
the organization has performed against
its 10 sustainable development goals.
The site includes interactive reports and
charts that allow stakeholders to view
sustainability performance by region
and subsidiary.
people, planet, anD pRofit
Although sustainability reporting is mostly
external in nature, this is not necessarily
the end goal. The triple bottom line of
people, planet, and profit also has merit
for internal purposes, such as cost reduc-
tion and raising awareness about sustain-
ability matters. For example, Fitness First,
the largest global health club and gym
operator, implemented the Environmental
Management and Measurement
Application (EMMA) from
Oracle partner Knowledge
Global to automatically collect
and report energy data from
sensors and meters across 95
gyms in Australia. This data is
fed into a consolidated analytics
dashboard, which establishes
accurate baselines, creates
benchmarks across facilities, measures
improvements, and helps forecast savings.
This consolidation of energy data also sup-
ports Fitness First’s mandatory greenhouse
gas reporting to the Australian govern-
ment for the coming financial year.
“The primary goal of Fitness First in
undertaking this project was to reduce
our carbon footprint by lowering energy
consumption within our gyms,” says
Michael Rose, procurement manager at
Fitness First Australia. “The vast amounts
of energy data consolidated in EMMA’s
dashboard make complex analysis very
straightforward but outstandingly valu-
able to Fitness First’s plans.”
Organizations can derive strategic
advantage by embracing sustainability
as part of the business and disclosing
the details of their sustainability efforts
to external stakeholders. The benefits
include cost savings by limiting waste
and consumption of natural resources,
enhanced brand value and reputation
with customers and partners, better risk
management, the ability to attract capital
from green investors, and the opportu-
nity to attract better staff by offering a
great place to work. <>
JOHN O’ROURKE is vice president of product market-
ing at Oracle.
“ We can now identify the hotspots
in our work with sustainability,
where we can obtain maximum
change and results.”
—Niels Strange Peulicke-Andersen, Manager, DONG Energy
>> For more inFormation
The Evolution of Enterprise Carbon
and Energy Management Software
forrester.com/go?docid=56555
Oracle’s Solutions for Sustainability
Reporting
http://bit.ly/hqTZav
PM11_Sustainability.indd 51 4/4/11 12:18:03 PM
52 M a y 2 0 1 1
Questions and @nswers
ccording to Jon Chorley, vice president of
supply chain and sustainability product
strategy at Oracle, savvy business leaders
can green their operations by looking at
Oracle solutions they already own—products
that manage reverse supply chain, transpor-
tation, product development, and account-
ing. “If you look at the solutions you already
have from Oracle, we have already added
many capabilities that help you address your
requirements in the sustainability space, and
we continue to add more,” he says.
Here, Chorley answers questions sub-
mitted by Profit readers via Twitter about
building a smart sustainability strategy—
including where to look for quick payoffs
and how new Oracle solutions can help your
company grow greener and stronger.
@damienreilley: How do you measure
green success? What are your bench-
marks and metrics?
CHORLEY: There are many dimensions
to consider. There’s the perception of your
brand in the market; also, your compli-
ance with various governmental regulatory
requirements. But here’s the key measure:
a company that is successful in terms of
sustainability will see improved efficiency,
reduced waste, expanded market oppor-
tunities, and a long-term ability to grow
in an increasingly sustainability-conscious
business climate.
Now, how does Oracle view its own
success in this sector? For one, Oracle sets
an example. We have consistently driven
down our energy consumption with
state-of-the-art datacenters, and we run
as a true e-business to reduce our use of
physical materials as well as save money.
However, Oracle’s biggest impact is
to drive benefits to customers through
its products. While IBM seems to think
the route to a “smarter planet” is through
high-priced consultants, Oracle’s route is
through the delivery of actual hardware
and software solutions that can dramati-
cally improve sustainability performance
and compliance.
@eco_center: What ecological metric do
you feel has the most leverage in bringing
about business-scale transformation?
CHORLEY: Energy is the most obvious.
The cost is going up, so savings will
have an ever-increasing business value.
Also, energy is a good surrogate for
greenhouse gas production, which will
be subject to more regulatory scrutiny.
Additionally, the cost of housing and
running servers now exceeds the cost
of acquiring the servers. So changing
to energy-efficient hardware is good
business sense. But it’s good for IT per-
formance as well. For example, Oracle
Exadata and Oracle Exalogic series
servers have a far lower environmental
impact than the hardware that they
replace, and they perform much better.
Also, we’ve just acquired intellectual
property from a company called Ndevr
related to tracking, analyzing, and report-
ing on greenhouse gas production. We’ll
be delivering standard Oracle versions
of those products in the coming months.
They will have the huge advantage of
integrating with the related enterprise
systems and business processes and so
will deliver this capability at the best pos-
sible costs of ownership.
@capriprakash: Is Oracle’s SSDM solu-
tion relevant for operations at energy-
intensive manufacturing companies?
CHORLEY: SSDM stands for sustain-
ability sensor data management, and
yes, it is extremely relevant. Last Oracle
OpenWorld, we introduced the sustain-
ability sensor data management solu-
tion as a major extension to Oracle
Manufacturing Operations Center. It lets
business leaders directly track, manage,
compare, and analyze energy expendi-
tures across any operating equipment or
at any facility under their management.
Manufacturing businesses often have
a high energy and environmental foot-
print, and anything that they can do to
monitor, manage, and optimize their
usage will drive significant bottom-line
benefits. It will also have additional ben-
efits in terms of compliance and govern-
ment regulation, as well as adding to any
business’s reputation for being a good
corporate citizen. <>
Thanks to @damienreilley (Damien Reilley, Eminent
Group, Inc.), @eco_center (Evan Marks, the Ecology
Center), and @capriprakash (Prakash Singh) for sub-
mitting questions to Jon Chorley through Twitter.
Ready to join the conversation? Follow @OracleProfit
to find out the topic of the next column and tweet your
questions using the hashtag #askprofit. You’ll receive
a 1 GB flash drive if your question is selected.
Within Your PowerHow Existing oRaclE solutions DElivER EnERgy anD cost savings
Bo
B A
dle
r
Jon Chorley, Vice President of Supply Chain
and Sustainability Product Strategy, Oracle
PM11_QandA.indd 52 3/31/11 3:01:21 PM
3G 9:41 AM
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