January 23, 2004 Annette Melatti, Director, FMS Product Management Jose Mora, FMS Sr. Product Marketing Manager PeopleSoft Enterprise Financial Management

January 23, 2004

Annette Melatti, Director, FMS Product Management

Jose Mora, FMS Sr. Product Marketing Manager

PeopleSoft Enterprise Financial

Management 8.8:

Making the Case to Upgrade

Page 2

PeopleSoft Proprietary and Confidential

Leadership in PeopleSoft Financial Management

• Market Leaders• #1 in North America*

• #2 Worldwide*

• Available Worldwide• Distribution in 150 countries

• Solutions address 36 industries

• Innovation • First to announce solutions for

Sarbanes-Oxley

• Hackett Best Practice Certified

• Lower Cost of Ownership • SAP is 51% more expensive;

Oracle is 25% more expensive

• Total Ownership Experience: • Easier to use • Faster to implement

*source: IDC Market Share Report

0

50

100

150

200

250

300

350

400

New PeopleSoft SAP Oracle

Revenues 2002 (Lic/Maintenance in $M)*

$368

$316

$184

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Why Customers are not Upgrading

10. Limited or no budget11. Wary of Internet technology12. Won’t implement .0 release13. Too many customizations14. Too many disparate systems & integrations15. Limited knowledge of product roadmap16. Squeeze every penny out of support policy17. If it ain’t broke, why fix it?18. Don’t see value in new applications19. Can’t build a defensible business case

Page 4


7.x Customers

• 1000 + FMS customers have production instances of 7.5 or lower

• The top 3 industries where this pool of customers are from is:• Services• Healthcare• Financial Services

• Support ended December 31, 2003

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Recent Poll Results from Advisor WebEx

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Agenda

• Building a Business Case• What’s New in 8.8• Capturing Value of Total Ownership Experience• Customer Case Study

• University of Virginia Medical Center

• Additional Information/Resources• Question and Answer

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Business Benefits of Upgrading

• Meeting today’s challenging business climate• Compliance with Sarbanes-Oxley

• According to AMR Research, 85 percent of public companies are planning IT systems changes to support SOA compliance and get the maximum benefits out of their IT investments

• Leverage finance best practices• According to the Hackett Group, world-class companies that implement

best practices have lower finance costs as a percent of revenue than average companies

• Reducing total cost of ownership• Faster, easier updates and upgrades• Enhanced application usability• Quicker incident resolution• Lower support costs

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Technology Advantage

• Reduced Costs• No code or clients to deploy to users with web-based applications• Centralized administration with single sign-on and LDAP

integration• Prebuilt integrated enterprise applications using Integration

Broker

• Increased efficiency• Single role-based interface Enterprise Portal delivers• Full text search• Perform faster and higher quality upgrades with Upgrade

Assistant• Enable overall system performance with Query Monitor

• Improved Productivity• Web-browser access increases collaboration• Mobile technology keeps travelers connected

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Opportunities as Customers Upgrade

Expanded ESA•Mobile Time and Expense•Resource Management•Contracts

X

Portal Solutions•CFO Portal •Financials Portal Pack •EPM Portal Pack – EPM v. 8.3

Continued Investment in Core Financials•eSettlements

X

Portal Solutions•Investor Portal

X

Continued Investment in Core Financials•Collections and Deductions in Receivables

Portal Solutions•ESA Portal Pack•Internal Controls Enforcer (2Q04)*

PRODUCTS

XX

X XX

X

X

X

X

8.4 8.88.0 7.5

*Backward integration available

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Increased Depth and Breadth of Functionality

• Financial Control and Reporting• ChartField Configuration Utility• Commitment Control• Centralized inter/intraunit processing• Support for XBRL • Real-time updates of Payables and Receivables activity

• Improved Cash Management• Automated global cash positioning• Improved cash application• Regulatory compliance• Streamlined bank relationships• Automated bank statement processing

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Increased Depth and Breadth of Functionality

• Managing and optimizing project and travel costs• Centralized expense billing and vendor payment• Expense policy enforcement and administration• Centralized project budget administration• Streamlined asset capitalization

• Extending global/industry depth• Unicode enabled• Statutory reporting and accounting support for Italy and India• Support for multiple GAAPs in a single ledger

What’s New in 8.8?

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PeopleSoft 8.8 Themes

• Intelligent Best Practices• Total Ownership Experience• Global and Industry

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Intelligent Best Practices

• Widely recognized best practices across ERP systems

• Self-service delegates accountability to users closest to process while ensuring control

• Embedded analytics bring intelligence to the desktop for faster decision-making

• Advanced technologies streamline key business processes

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Settlement Settlement Processing CostsProcessing Costs

55% Less with Best Practices

Source: Killen & Associates

• Electronic invoices and payments• Supplier self-service• Workflow and email notifications• Online dispute resolution

Fully automated invoice settlement solution

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Proactive Credit and Collections Management

Tough balancing act in a weak economyTough balancing act in a weak economy

Extend credit to Extend credit to sustain salessustain sales

Tighten credit to Tighten credit to avoid lossesavoid losses

• Automatic identification of exception conditions requiring follow up

• Intelligent, enterprise-wide action plans distribute workload

• Automatically perform key actions

“Enterprise collections

management solutions can

reduce days sales outstanding by 10-2010-20 percentpercent.”

-- John Van Decker

META Group

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1

2

3

4

56

7

8

9

10

1112

Balance Reporting: Opening Balances

Disbursements, funding

Debt Repayment Short-term

Investments

Late incoming wires/ receivables

Automated Sweep Investments

Time to MoneyTime to MoneyStreamlined bank communication and payment

processing can achieve up to

40 percent 40 percent savings.

Integrated Cash Management

• Single global cash position with continuous daily cash positioning

• Enhanced bank connectivity

• Productivity through automated accounting entries

-- Killen & Associates

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Ensure Expense Policy Compliance

T&E represents the 2nd largest controllable

expense in most organizations.

American Express Survey of Business Travel

Management 2000-2001

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• Automated process puts disposal decisions in the hands of asset owners

• Role-based access to asset information• Authorization process provides an approval step before completing the

retirement

Selection criteria limits scope of Selection criteria limits scope of asset searchasset search

Selection criteria limits scope of Selection criteria limits scope of asset searchasset search

Self-Service Asset Disposal

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Real-time Expense Real-time Expense Inquiry Inquiry

Real-time Expense Real-time Expense Inquiry Inquiry

Real-Time Cost Control Analysis

Embedded analytics

provide real-time insight to

increase competitiveness

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Real-time Reporting

• Packaged regulatory financial reports• Support for XBRL standards• Electronic distribution• Immediate access to key data

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Resolve Disputes in Real-Time

• Online collaboration with suppliers• Yahoo Instant Messenger and IBM’s Lotus Sametime

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PeopleSoft 8.8


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Total Ownership Experience: The Next Era

• Focused energy on complete customer lifecycle:• Installations in days, not weeks• Implementations in weeks, not months• Real-time software support and performance diagnostics• Out-of-the-box multi-vendor business process integration

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Using the Applications

Implementing Implementing the Applications the Applications


Maintainingthe Applications

The Experience of …

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PeopleSoft Express InstallationPeopleSoft Express InstallationPC Like PC Like InstallationInstallation

Implementing the Applications

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PeopleSoft Setup ManagerPeopleSoft Setup Manager

Automated Automated ConfigurationConfiguration

PC Like PC Like Installation Installation

Implementing

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Implementing the Applications

After: Out of the Box IntegrationAfter: Out of the Box Integration

ESA Project CostingESA Project Costing to SAP GLto SAP GL

EnterpriseOne GL to EnterpriseOne GL to Enterprise GLEnterprise GL

PC Like PC Like InstallationInstallation

Automated Automated ConfigurationConfiguration

Out of the Box Out of the Box IntegrationIntegration

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Usability testing:Usability testing:

120 120 Most Common Tasks TestedMost Common Tasks Tested

200+ 200+ Users Tested Financial ManagementUsers Tested Financial Management

81% 81% == Overall Avg. Task Completion Rate Overall Avg. Task Completion Rate vs. Industry Average of 60% vs. Industry Average of 60%


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Built-in Pictorial Built-in Pictorial NavigationNavigation

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Built-in PictorialBuilt-in PictorialNavigationNavigation

Fewer ClicksFewer Clicks 1

2 Clicks to Create an 2 Clicks to Create an Expense ReportExpense Report

2


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Intuitive Error Intuitive Error HandlingHandling


Fewer ClicksFewer Clicks

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• Allocations• Conversion from COBOL to Application Engine

delivers high volume performance by using set-based processing• Approximate 66% improvement over 8.4

• Journal Generator• Conversion from COBOL to Application Engine

enables real-time/on-demand processing for Payables and Receivables• Decreased overhead for on-demand processing

• Combination Editing• Conversion from COBOL to Application Engine

enables real-time integration with other PS databases• Decrease overhead for other products calling

Combo Edit





Increased Increased through-putthrough-put

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• Summary Ledger• Conversion from COBOL to Application Engine

for improved performance• Approximate 20% improvement over 8.4

• Receivables and Payment processes• Partitioning splits transactions for parallel

processing

• Payables payment processing• Tuned for improved performance




Increased Increased through-putthrough-put

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Using Using the Applicationsthe Applications


MaintainingMaintainingthe Applications the Applications


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Built-in Support Built-in Support DiagnosticsDiagnostics

““70% of the time it takes to resolve a 70% of the time it takes to resolve a customer problem is spent on customer problem is spent on

reproducing the issue.”reproducing the issue.”- PeopleSoft Global Support Center- PeopleSoft Global Support Center

Maintaining the Applications

PeopleSoft PeopleSoft Global Support Global Support

CenterCenter

Customer Customer SiteSite

• Embedded diagnostic Embedded diagnostic scripts scripts

• Single click Single click maintenance upload maintenance upload

• Remote WebExRemote WebEx

• Remote VPN accessRemote VPN access

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Instrumented Instrumented Performance Performance TuningTuning


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Built-in Support Diagnostics

Instrumented Performance Tuning

Automatic Updates

Development

Test

Production

Installation Complete






Instrumented Instrumented Performance Performance TuningTuning

Automatic Automatic UpdatesUpdates

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PeopleSoft 8.8 Focus Areas


Page 41


Global and Industry

• Examples of industry-specific features include: • Electronic payment format enabling Healthcare customers to

comply with HIPAA • Streamlined capitalization and unitization of constructed

assets for asset-intensive industries • Support for the latest Joint Financial Management

Improvement Program (JFMIP) requirements and FPDS reporting

• Examples of global enhancements include: • Consolidated value added tax (VAT) setup, default,

calculation and reporting for goods and services • Continued support for multinational companies, including

local and statutory support for India • Increased book code flexibility for multiple GAAPs

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Asset Intensive IndustriesExpress Capitalization

• ‘Hands-Free’ Capitalization of Work-in-Process assets• Improved processing efficiency: eliminates existing

manual unitization process

• Configurable Capitalization Rules • Capitalization rules template• Defaultable asset integration rules • Expanded asset retirement processing• Configurable asset adjustment and year-end processing

options

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Asset Intensive IndustriesExpress Capitalization

Capitalization RulesCapitalization RulesCapitalization RulesCapitalization RulesIntegration TriggerIntegration TriggerIntegration TriggerIntegration Trigger

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• Enhanced reporting with electronic Treasury reports, internal reports, and all required interfaces

• Full support for expired year processing

• Streamlined reimbursable processing and reporting

• General ledger• Payables• Receivables• Purchasing• Billing• Projects• Contracts

FederalJFMIP Compliance

Capturing the Value of Total Ownership Experience

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Leveraging Total Ownership Experience

• Compelling reasons why customers would choose to upgrade• Compliance > FMS achieves compliance• Financial Efficiency > FMS drives world-class financial processes• Replace Outdated Systems > Value of world-class, integrated,

internet-based applications

• “How much is this going to cost me over the long term?”• Primary focus of Total Ownership Experience initiative

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The first wave of Total Ownership Experience includes…

LIFECYCLE FEATURESTAGE BENEFIT

MaintainSupport

Upgrade

Performance MonitoringDiagnostic FrameworkEnvironment Manager

Change Assistant

Faster incident resolutionLower support costs

Faster, easier update andupgrade process

Use Improved UI and work flowApplication-specific

enhancementsUse

Higher completion rates Increased productivity

Implement

Install WizardFixPackInstall

Faster installation(particularly mid-market)

Setup ManagerComponent InterfacesImplement

Faster configurationand data loading

Integration PointsIntegrate

Reduced time and costfor integrations

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The Prospective Value of Total Ownership Experience

Using the Applications15% to 25% Increase in Value (ongoing)

Implementingthe Applications 10% to 20% Cost Reduction15% to 20% Faster(one-time)


30% to 50% Cost Reduction(ongoing)

*Incremental value: pre/post Total Ownership Experience, based on internal PeopleSoft research and analysis conducted by Crimson

Consulting Group

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PeopleSoft Leads Today

“Deriving Value from 21st Century ERP Applications”

April, 2003 Study

Total Cost of Ownership for PeopleSoft:

Oracle TCO is 25% higher than PSFTSAP TCO is 51% higher than PSFT

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PeopleSoft Leads Today

43% better customer experience than Oracle

36% better customer experience than Siebel

8% better customer experience than SAP

“Forrester Application Ownership Satisfaction Report”

September 17, 2003

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How much can be saved when implementing and

maintaining the applications?

How much faster can the value of using the

applications be realized?

How much incremental value can be realized by using the applications?

User ValueTime to Implement

(TTI)

Value Metrics

Total Cost of Ownership(TCO)

Cost Metrics

3 Components of Economic Benefit

Page 52


Economic benefit via the Value Analyzer

• New functionality at the business process level:• Compliance Efficiencies (Sarbanes-Oxley)• Enhanced Analytics (Governance)• Portals (CFO Portal, Investor Portal, Government Portal)

• Adjustments to standard default data in the areas of:• Performance Tuning• Systems Troubleshooting• Data Archiving• 3rd Party Integration Costs• Internal Integration Costs

More to come!!!!

Page 53


PeopleSoft Value Analyzer

Page 54


Business Benefits Captured at Business Process Level

Customer Case Study: University of Virginia Medical

Center

Page 56


• Who is UVa Medical Center?

• What has UVa Medical Center done with PeopleSoft?

• Project Management Techniques for Successful Upgrades

• What is Next for UVa Medical Center?

Agenda

Page 57


• A fully accredited 541 bed hospital

• Employs approximately 6000 employees

• A teaching hospital for UVa Health System

• Solucient Top 100 Hospitals past 4 years

• Clinical departments listed by US News & World Report

Who is UVa Medical Center?

Page 58


What Has UVa Medical Center Done with PeopleSoft?

• 1995 Purchased P/S Financials 5.0 from SMS

• July ’96 Implemented GL/AM

• Dec ’96 Implemented PO/AP

• Aug ’97 Upgraded GL/AP/PO/AP from 5.0 to 6.0

• Oct ’97 Implemented Inventory 6.0

• Oct ’99 Upgraded from 6.0 to 7.5

• 1998 Purchased P/S HRMS from SMS

• Dec ’00 Implemented HR/PAY/BEN 7.5

• May ’01 Implemented Recruit Workforce 7.5

• Sept ’03 Upgraded HRMS from 7.5 to 8.3

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What Has UVa Medical Center Done with PeopleSoft ?

• UVa Medical Center’s reasons for upgrading:

• Be current and take advantage of new functionality and

features

• Expand functionality such as self service modules

(Employee and Manager Self Service, eRecruit and

eProcurement)

• Required a technology platform that would allow us to

support future needs

Page 60


Timeline for the PeopleSoft 8.3/8.4 Upgrade• November 2002 Began work with Upgrade Lab – Phase 1• December 2002 HRMS Fit-Gap Completion• January 2003 HRMS First “Test Move to Production”• February 2003 Began HRMS testing, validation and eRecruit

implementation• June 2003 New Tax Tables Regulation (Federal mandate)• June 2003 Began work with Upgrade Lab – Phase 2• July 2003 FMS/SCM Fit-Gap Completion• July/August 2003 eRecruit Manager Training

FMS/SCM First “Test Move to Production”

• September 2003 Live with HRMS and eRecruit• October 2003 Began FMS/SCM testing, validation and

eProcurement implementation


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• Financials/Supply Chain 8.4 SP1 (upgrade in process)• Asset Management• eProcurement• General Ledger• Inventory• Payables• Purchasing

• Human Resources 8.3 (Live)• Core HR• Benefit Administration• E-Recruit Employee and Manager Self Service


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• Executive and Administrative sponsorship at all levels

• Dedicated project team of functional & technical members who could devote a minimum of 75% - 100% of their time to the project

• End users were brought in as subject matter experts (SMEs) to help define requirements and test scenarios

• The project team was well defined at the beginning of the project for roles and responsibilities

• Get quality people on the project, not whoever is available

Project Management Techniques for Successful Upgrades

Page 63


• Up front planning and organization is key• Have a well defined scope and project plan (key

milestones) before starting actual work to manage scope creep

• Review customization requests on a case-by-case basis, route to post-production if possible

• Allow flexibility in the testing phases/process, you can never have too much testing


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• Leveraged PeopleSoft Upgrade Lab• Allowed UVa to perform multiple steps across both HRMS and

FMS/SCM upgrades with a small IT staff

• Without Upgrade Lab would not have been able to maintain production environments at the same time

• Ensured project was completed in a timely fashion

• Estimate lab saved UVa approx. 6 months/2 FTEs to work through Upgrade Assistant

• Reporting/compare reports from lab proved very useful to internal staff not on original implementation

• Reports provided customization documentation used to facilitate fit-gaps


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• Try to use as “vanilla” system implementation as possible• Re-examine old customizations before upgrading them, they

might not be needed anymore

• Try to use PeopleSoft delivered business processes where ever possible, adapt your business practices to match PeopleSoft (especially in eRecruit)


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• Optimization Efforts• Add new functionality to the core system

• Increase automated processes

• Look at new Peoplesoft modules for possible solutions

• Currently assessing eDevelopment, ePay, eProfile and eBenefits

What is Next at UVa Medical Center?

Page 67


PeopleSoft FMS: What other customers are saying

“Leveraging PeopleSoft 8, we’ve really reaped the benefit of reducing the costs of our transactions tremendously. In addition, we’ve been able to match the growth of the company without adding headcount. Plus, we’ve reduced the time it takes us to close the books from five days to three.” Tracey Doi, VP and Corporate Controller, Toyota Motor Sales U.S.A.

“As a private university, we’re always trying to find ways to become more effective with our funding. PeopleSoft 8.4 Financials enabled us to save money and reallocate funds toward programs that will be strategic differentiators for Santa Clara University.”

Ron Danielson, Chief Information Officer, Santa Clara University

“PeopleSoft Enterprise Service Automation gives us a single source of real-time information to control project costs and optimize the management of our global consulting workforce. And thanks to PeopleSoft Consulting, we were able to implement PeopleSoft’s industry leading best practices and business processes for ESA in 90 days, without customizations.”

Patricia Murphy, Sr. Dir. Worldwide Professional Services, Business Objects

Page 68


Agenda

• Building a Business Case• What’s New in 8.8• Capturing Value of Total Ownership Experience• Customer Case Study

• University of Virginia Medical Center

• Additional Information/Resources• Question and Answer

Page 69


CustomerReferences

-------------------------

-PRG -BDO Seidman

---------------------------

Field intelligence

Customer Testing9/03 – 11/03

-----------------------Customer

feedback on usability and functionality

-----------------------Detailed

Functionality References

8.8 HostedBeta

11/03 – 12/03--------------------------

-3M -AON -Reg. Mun. of Durham----------------------------

Early Access to 8.8

8.8 EarlyAdopter

12/03 – 6/04--------------------------- -Canon (Program Management)

--------------------------

First Look at new 8.8 modules

Customer Programs for 8.8

FMS 8.8 Launch

8.8 EarlySuccess

12/03 – 6/04--------------------------

-3M -Reg. Mun. of Durham

---------------------------

1st upgrades to 8.8

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Feedback on 8.8

• "With Enterprise Financial Management 8.8, PeopleSoft is meeting its commitment to improving the Total Ownership Experience for customers. As one of the pre-release testers, we were able to experience for ourselves the dramatic improvements in the quality, usability, and performance of the software. The look and feel of the system is much more intuitive, which should speed user adoption and reduce training costs.“• John de Rijk, financial systems development manager, P&O Nedlloyd

• "We've been involved extensively in testing PeopleSoft Financial Management 8.8 and are impressed with the intelligence of the applications. With the new release, we will be able to set up the rules so that the bank accounting and reconciliation processes are done automatically. The ability to import and upload bank files automatically in PeopleSoft - without third-party software - should generate significant time and cost savings.“• Steve K. Myers, CPA, finance operations center manager, Entergy, Inc.

Page 71


Where to Find Additional Information

• Release Documents• Click on Customer Connection, Support,

Documentation, Documentation Updates, Release• Release Value Proposition

• FMS/SCM 8.8

• Prerelease Notes• FMS/SCM 8.8• Tools 8.44

• Release Notes• FMS/SCM 8.8 • Tools 8.44

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Building a Business Case – A New Resource

• White Paper posted on

Customer Connection

• Also available for :• PeopleTools• Human Capital Mgmt.• Customer Relationship

Mgmt.• Supply Chain

• Only available in PDF

Page 73


Supported Upgrade Paths

• Availability: 2/20/04• FDM 7.52

• FDM 7.53

• FDM E&G 7.51

• FDM E&G 7.52

• FDM 8 SP1

• FDM 8 SP2

• FDM 8 SP3

• FDM 8.40

• FDM 8.4 SP1

Page 74


Final Thoughts

• PeopleSoft Enterprise Financial Management 8.8

• Sets a new industry bar for financial management software

• Over 200 new features and enhancements across 20 applications• Easier to use• Faster to implement with lower cost• Intelligent Best Practices to improve control and efficiency

January 23, 2004

Annette Melatti, Director, FMS Product Management

Jose Mora, FMS Sr. Product Marketing Manager

PeopleSoft Enterprise Financial

Management 8.8:

Making the Case to Upgrade