Oracle Corporation is widely recognised as one of the most dynamic tech companies on the planet.
The world’s second largest software company after Microsoft, made a profound shift when it began transitioning from being an on-premise technology provider to a cloud provider a decade ago, accelerating the process in recent years.
The move, which the group’s chief accounting officer Corey West describes as migrating “from a company that delivers products to a service provider,” is a reflection of how Oracle, launched in 1977 by Larry Ellison, who still owns around 40 percent, responds to market changes.
As a result of its determination to keep innovating, Oracle has grown rapidly in areas such as enterprise resource planning (ERP) and human capital management (HCM). Its share price has grown accordingly, resulting in a market value of around $185bn by the middle of February.
But like every aspect of the group’s willingness to keep changing direction, its finance function is no exception. “There are no hard and fast rules about how finance should be led,” says West, who has been at Oracle for 14 years.
The last CFO of the group was Safra Catz who became co-chief executive with Mark Hurd in 2014 and then sole CEO when Hurd died in 2019. At the time Catz stepped up, the decision was taken to share the areas of finance that would normally come under the remit of a CFO.
“During my time at Oracle, I think we’ve only had a chief financial officer for about 18 months of that period. We haven’t needed one because for most of that duration, we’ve had what I would describe as kind of a three headed team managing the CFO roles.
“I’ve got a colleague who runs tax and treasury and another who manages strategy and corporate development. If you put all those things together, typically those are the things that the CFO does- we all report directly to Safra,” he informs.
“I’ve got all the transaction processing, so anything that involves sending an invoice, collecting cash, paying bills, paying expense reports, paying payroll, if money’s moving inside or outside of Oracle, inbound or outbound rather, it’s part of my organisation, plus the accounting and reporting functions that you would typically see roll up into a CFO organisation,” says West.
Key to all finance-related elements working well together West says is good communication, along with a strong degree of autonomy. “Safra knows where we’re trying to take business. That’s communicated to people like me, and my colleagues, who in turn are empowered to do our jobs and try and execute against set goals.
“So it’s not necessary to really have anybody corral us all together. At different points in time, and we’ve talked about putting a CFO in a role, I think the conclusion has been that would do more harm than good, because things are working quite well, as they exist today”, says West.
One of the vital ingredients in maintaining Oracle’s continual growth has been sharp focus on improving customer delivery, in an age when companies like Amazon have continued to raise the bar.
That’s been especially the case since Oracle migrated to a cloud-based approach, having developed a business of databases and a suite of applications that ran on servers on premises that used this data. The transition to the cloud created a new model for how enterprises host these systems and its data. Rather than a complex upgrade once a year or two, these happen every few weeks automatically, enabling systems to work better together and achieve better visibility into data across a company.
But for Oracle the cloud revolution brought new competitors in existing markets for applications and new models and services for running applications on public and private cloud. Those factors, plus the pace of innovation driven by tech such as AI (artificial intelligence), forced on Oracle a need to rethink the way it was run to stay competitive, to be faster, more responsive to customers, more joined up, and more automated. In the process it acquired SME-focused software firm Netsuite, an early pioneer in the cloud space, for $9.3bn in 2016.
“Customers need to have a good experience not only with our technology, every interaction that they have with our organisation needs to be a positive one. That extends to the invoicing and collections process, so we have spent a lot of time and effort changing the way we operate, to align ourselves to deliver that experience to continuously improve the customer experience, from end to end, from the time that they initially engaged with us all the way through the interactions they have with my finance organisation as well,” says West.
In order to be as effective as possible in client delivery, West says that Oracle has sought to develop a culture based on staff empowerment. “We feel if we can make the employee experience and the customer experience extraordinary, we’re going to win. Those are the two constituents that we need to be kind of focused on,” he says.
“We want our employees to have a great experience in all respects, from a career opportunity perspective, from the way they interact with my organisation, with things as simple as preparing an expense report. We want to make all those things as simple and intuitive as possible,” says West.
He says conversations between finance and other parts of the organisation such as legal or tax become much easier when they are framed in a shared mindset. “It makes those conversations much simpler, the communication in some respects almost intuitive,” he says.
A good understanding of what is expected of finance from the wider organisation, can also help deploy the function’s more effectively, especially in the context of continual change West says the group has experienced over the last 20 years. “Continuous improvement starts with our technology, but we also do it in our business processes as well,” he says.
To some extent the 5,000 strong global finance function acts as a test bed for Oracle’s offer. “I’m a customer of Oracle, I use our technologies and we spend an enormous amount of time leveraging those technologies, looking for ways to close automation gaps in our business.
“We are working with development teams with their roadmap, telling them these are the things that we see value in, whether it’s the closed process, processing an order, delivering a quote, these are transactions we want to move seamlessly. We want them to be initiated and completed without any human intervention.
West says the input of the finance function is even more valuable in the cloud world “where we’re doing it all”, compared with the on-premise world, “where you’ve got a a system integrator who helps implement the applications,” he says.
“My team is spending all its time working on looking at, how can we make those interactions better. That’s one of our priorities right now. Our development team wants to have as much insight as possible into how our customers are using our products, what they see as valuable and not valuable,” says West, who ran an Oracle e-business suite in a previous role, when he was accounting director at software firm Intuit.
West joined Oracle from Intuit after a series of other roles at high profile organisations including retailer Gap, where he was assistant controller, and before that Cadence Design Systems where he was vice president finance.
The move to Oracle was spurred by the chance to join an organisation where West says he felt he could contribute effectively to a culture where he says everyone is given a licence to find solutions to problems. “I don’t necessarily need to be patted on the back, what I want is to be presented with challenges and to go help work to solve those challenges.
“I’ve been in other roles where you could see problems that needed to be solved, and you couldn’t solve them because you couldn’t get the organisation out of the way to go solve those problems. I’ve not had that experience here at Oracle. I think that’s really been the appeal of working here,” he says.
In that respect, West encourages finance staff to be intellectually curious, and has not limited his hiring to Ivy League universities. “We’ve had great success in hiring people who come from other educational backgrounds, who want to go tackle real world problems. Those are the people that we like to have in our organisation,” he says.
That willingness to investigate challenges was put to the test by the outbreak of the coronavirus pandemic, which West says has changed the way people think, “in more ways than I could probably describe”.
“Being able to access these technologies on a remote basis, to collaborate and to work together using your ERP platform, no one would have anticipated how important that would be.
“When this whole thing kicked off, my initial thought was, we’re in a good position, we’re running our cloud technologies, we’re going to be able to make our way through it, I had no idea we wouldn’t be in the office still by now.
“I was concerned about not having folks working together in the office was going to be a very big problem for us. But every one of the objectives of my teams set for themselves for the past year, they’ve delivered on, as if we’re all sitting in the office together. It’s been so much more business as usual than I ever would have anticipated.
“I still want to get folks back working together. I do think that there’s benefits, some intangible benefits that you see of having people interact informally together, and seeing one another. But nonetheless, things have operated, so much better than I would have expected.
“I think a lot of customers have recognised once you’ve been moving to these cloud technologies to recognise the value of them in this kind of environment. I think everyone’s starting to have to rethink the way we all work together. It has very broad implications across many aspects of the way we conduct business and do business together. It’s been eye opening,” he says.
In its second quarter results 2021 results announced on 10 December, Oracle revealed GAAP operating income was up 13 percent year-on-year to $3.6bn on revenues that rose two percent to $9bn. Of this, cloud services and license support revenues were up four percent to $7.1bn.
West says that although a good many companies have suffered during the pandemic, and a smaller number in well placed sectors have thrived, Covid provides an opportunity for firms in the middle who can tie good technology to a strong corporate culture.
“Companies in that middle ground have an opportunity to move forward, or lag. The pivotal difference for many of them is the technology they use, but also how they employ sociology, borrowing a word from Safra.
“The culture and the mindset and the way they organisationally tackle these problems and either embrace the challenge, or try to deflect the challenge and kick the can down the road, may make all the difference.
“If you say this is a problem, we’ve got to go solve it, you will move forward. But if you try to just bide your time to get through, you’re going to struggle. In this environment those differences just get amplified,” he adds.