By Margaret Lindquist
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Modern, cloud-based finance systems can generate significant growth for businesses because they can empower more employees to make better decisions, Oracle CEO Safra Catz said during a luncheon with finance professionals at Oracle OpenWorld 2016 in San Francisco.
However, as Catz's experience at Oracle illustrates, new technologies have their greatest impact when they are part of an overall corporate transformation.
When Catz joined Oracle in 1999, Larry Ellison asked her to help with a complete information technology transformation at the company, moving from multiple, disparate systems across the globe to a single source of truth for the business. "We had many, many systems, all written by us, but all just a smidge different," said Catz. "Larry thought that if we moved all of these systems into one, we'd get a better idea of what was happening."
But what at first looked like an IT or enterprise resource planning transformation, she says, became a companywide transformation, and the impact was enormous. Oracle simplified, standardized, and centralized its operations and in just one year, Oracle went from 22% operating margins to 34%. That shift served as a foundation for subsequent successes. "We were able to understand ourselves much better-we had a much better view of our past and better intelligence about what we were doing in the present," Catz added.
Catz noted that she'd come without a PowerPoint presentation, because she's much more a spreadsheet person. "I have to see it in the numbers or I won't believe it. It's all about the dollars and cents." Her drive for data resulted in the discovery of duplication of effort across Oracle and organizational silos.
"By eliminating that duplication and consolidating systems, we were able to invest in our main business. When we started this effort, we spent $650 million a year on R&D. Now, we spend $5.6 billion. That is the goal with these ERP transformations. It's critical to simplify and run the business in such a way that resources are released to invest in your main business."
But getting to that kind of result isn't easy, and the people element is the biggest challenge. "The hard thing about these transformations isn't the technology. It's the sociology," said Catz. "People say they love change. Actually, they love it when you change. Even if they hate a process, hate a system, when you try to change something, you have to peel their hands away from it."
The solution is to provide employees with so many benefits in terms of productivity, cost savings, and efficiencies that they begin to look for other opportunities to push the capabilities of the systems. "That forward motion came from them-not from me, and not from Larry," said Catz. "Because they understood that the technology would make them more productive and give them better results."
Taking the Next Step
In the end, it's the customer who benefits most from all this transformational effort, in the form of new and better products and services, said Catz.
And now it's time for the next step. The cloud services that Oracle uses today empower employees to make decisions about the future and execute quickly and efficiently. "What happened in the past can help you know what's going to happen in the future," said Catz. "That insight brings a next level of intelligence not just to sales and marketing, but to ERP, where you can save more money in procurement, or figure out whether the people you recruit are going to be successful in your organization."