Oracle EPM Index II - Businesses Combat Recession With Principles of Enterprise Performance Management

Oracle & Quocirca Report Shows Businesses Acknowledging Role of Finance in Monitoring Performance Across all Operations; Stakeholder Engagement is Still low

READING, England, January 19 - News Facts

Oracle today launches Oracle Enterprise Performance Management (EPM)
Index II - the second study to investigate the progress of business towards
Management Excellence. Conducted by analyst group, Quocirca, Oracle EPM Index
II assesses the ability of businesses in Europe and North America to unite
management processes and information systems to form a consolidated view of
business performance.

Calculated on a scale of 0 to 10, the overall Index for all of the
surveyed countries has leapt by 38% from 5.13 in the first report to 7.04 in
Oracle EPM Index II. The increase reflects an improvement in performance
management confidence across all geographies, sizes of organisations and all
verticals.

Oracle attributes this rise in confidence about enterprise performance
management to the global economic situation. The first EPM Index was
conducted in January 2009 as businesses grappled with the deteriorating
economic outlook. The consequent assessment of operational efficiency
highlighted the lack of integration and the poor quality of information
exchange between key business functions.

Rather than signifying any material improvements, the stronger
performance in Oracle EPM Index II reveals that the majority of businesses
now feel more confident about their ability to address these shortcomings.

As with the first report, the research for Oracle EPM Index II asked
800 business decision makers in Europe and North America to rank their
organisations on the quality of their processes and accuracy of information
governing the six inter-dependent areas of EPM: the stakeholder environment,
market model, business model, business plan, business operations and business
results.

Along with increased confidence about progress towards Management
Excellence, results from the six key areas assessed in EPM Index II reveal
that businesses:

    - Increasingly accept the need to adhere to the principles of enterprise
    performance management.

    - Perceive significant improvements in their strategic planning and
    reporting processes.

    - Are still too internally focused, at the expense of wide-ranging
    stakeholder expectations, and have comparatively weak levels of
    integration between the operational areas.

    - Have an increased focus on customer loyalty to drive growth as opposed
    to new products, services or geographies.

    - Now generally acknowledge the importance of Business Intelligence as a
    key reporting tool.

Supporting Quote

Frank Buytendijk, vice president and fellow of Enterprise Performance
Management, Oracle Corporation, said: "The findings from the Oracle EPM index
II reveal that businesses feel more confident in how to handle the new reality
of today's economy. The improved Index doesn't as much signal any material
advances, but this rediscovered confidence creates the preconditions for real
improvement to take place. Comparing it to a rise in consumer confidence
preceding a spending increase, this increase in performance confidence will
precede new projects and improved ways of working. Finance departments have
spent 2009 fixing broken processes and information flows. The findings from
Oracle EPM Index II reveal that businesses now understand better that key
management performance processes need to be integrated."

Alain Blanc, senior vice president, Oracle EPM and BI EMEA, Western
Europe Applications, said: "Overall, it is very encouraging to see that
businesses are making good progress in their quest for Management Excellence.
The research really highlights the value of improving the integration between
all of the various EPM processes."

Clive Longbottom, research director, Quocirca, said: "The interesting
findings for Quocirca are the growth in realisation of how the six areas need
to be better drawn together, yet the incapability for this to be done at this
stage. What we are seeing is part of an overall EPM journey - from a siloed
approach last March, through to a better understanding of the need now.
Quocirca believes that, with the right tools in place, organisations can now
build on this and move forward into a far more cohesive and coherent set of
EPM processes."

Headline Findings from the Research

Business Acceptance of the Principles of EPM

The Oracle EPM Index II demonstrates greater acceptance of the need for
close integration and a consolidated view of the six processes supporting
enterprise performance management and progress towards Management Excellence:

    - Nearly a third of companies now consider that the six processes are
    interlinked and require an integrated approach (up from one-fifth).

    - Previously, over a quarter of businesses thought the six processes
    could be viewed in isolation. This is now down to under 5%.

Buytendijk said: "Those countries which have a more consistent level of
attention across all EPM processes - indicated by low variations between the
six sub-indices - generally have better overall performance. Organisations
need to pay attention to all their critical Management Excellence processes
to ensure that they are best placed to adapt to, and capitalise on, ever
evolving economic and market conditions."

Confidence in Strategic Planning and Reporting

The Oracle EPM Index II reveals that businesses perceive significant
improvements in their strategic planning and reporting processes:

    - The largest proportional increases in overall values in the EPM Index
    II are in the areas Business Plan (44%) - which assesses the capacity of
    business planning to respond to changing operational circumstances and
    market conditions - and Market Model (40%), which assesses the ability of
    organisations to fully understand and thus capitalise on their position
    in the sector and changing market dynamics.

    - In absolute terms, the Business Results Index at 7.32 has become the
    strongest which reflects the increased pressure on being able to report
    solidly on actual results.

Buytendijk said: "The Index for Business Plan has made a particular
improvement, from below average in the first report to above average now.
This underlines how businesses are taking more care in their business
planning process to make best use of available resources. The improved Index
for Market Model also emphasises the focus businesses are placing in more
effective planning - firms are applying more rigour to the process of
identifying the best opportunities, determining competitive differentiators
and ultimately creating a competitive advantage."

Stakeholders Overlooked - Businesses Too Internally Focused and Lacking
Integration

However, other findings from Oracle EPM Index II reveal that businesses
are still too internally focused and have poor levels of integration between
operational areas:

    - Stakeholder Engagement, the process of connecting corporate strategy
    with the interests of key stakeholders (employees, customers, suppliers,
    regulators, society, and investors), has worsened in relation to the other
    indices and the average.

    - Overall, although each Index has made a marked improvement on the
    previous cycle, the variation between the indices has increased, which
    suggests that little focus appears to have been put on integrating between
    areas of the business to further improve overall performance.

Buytendijk said: "It would appear that there is still too much focus on
internal business matters in organisations' finance departments. For long
term health, a company should solicit contributions from its stakeholders to
drive business performance - a key part of meeting stakeholder expectations.
Those countries which paid most attention to their stakeholders - such as
France and Germany - also made the most progress in achieving Management
Excellence.

Increased Focus on Customer Loyalty to Drive Growth

The Business Model Index reveals an increased focus on customer loyalty
to drive growth. Although winning new customers still ranks as most important
overall, a comparison of what companies will be concentrating on to drive
growth as we emerge from recession shows a move from new products and
services (from second and third in the first report to third and fourth in
EPM Index II) to reducing customer churn (from fourth to second).

Buytendijk said: "Reducing customer churn has become a much higher
priority, indicating that businesses are looking to maximise what they
already have, rather than investing too much in higher-risk activities such
as new products/services or attacking new geographies. New geographies and
new channels, while still growing in overall importance, remain down the list
of priorities for organisations."

Business Intelligence (BI) Revealed to Be a Key Reporting Tool for
Management Excellence

The first report showed a strong correlation between organisations who
considered BI an important reporting tool and their overall Index score. This
suggested that organisations which recognise the capabilities of BI had made
better progress towards Management Excellence.

This correlation is even clearer in Oracle EPM Index II. Those
companies who rate BI as an "important tool" or a "major means of monitoring
and reporting" have overall Index scores well above the overall average (7.4
and 7.5 respectively - the amount by which they exceed the average has
roughly doubled from the first report).

More generally, there is increased recognition of BI's capabilities and
the role it plays in attaining Management Excellence:

    - Over half of respondents regard BI as an important reporting tool
    (compared with one-fifth in the previous report).

    - The number of respondents dismissing BI as an expensive visualisation
    tool or who are "not sure" about it has decreased from 40 per cent to 12.

Supporting Resources

    - Oracle Journal of Management Excellence (bit.ly/77dtqv)

    - Oracle EPM Index - first cycle (bit.ly/8RpIkC)

    - Oracle Guide to Management Excellence (bit.ly/5re3fq)

    - Oracle Enterprise Performance Management and Business Intelligence Home
    Page (bit.ly/5TrU2C)

    - Oracle Performance Management Applications (bit.ly/8NEu20)

    - Oracle Business Intelligence Foundation (bit.ly/7goflq)

    - Oracle Business Intelligence Applications (bit.ly/7ivMy7)

    - Oracle EPM and BI Customers (bit.ly/7jyKUR)

Notes to Editors:

Quocirca conducted the research in November and December 2009. 800
organisations have been interviewed in the following countries/regions:
Belgium/Netherlands; France; Germany/Switzerland; Iberia; Italy; Nordics;
North America; UK.

100 organisations were interviewed in each group, to give statistical
validity.

Interviewees were senior personnel involved with finance processes.

Large (> US$100M revenue) and very large (> US$1Bn) organisations were
selected by Quocirca for interview.

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    Contacts:

    Marc Sparrow
    CMG for Oracle
    +44-(0)-207-067-0480
    msparrow@cmgrp.com

    Steve Walker
    Oracle
    +44-(0)-118-924-0779
    steve.walker@oracle.com

Contacts: Marc Sparrow, CMG for Oracle, +44-(0)-207-067-0480, msparrow at cmgrp.com; Steve Walker, Oracle, +44-(0)-118-924-0779, steve.walker at oracle.com