Oracle- Balanced Score Card

General objectives

Oracle Corporation has it focus on becoming the largest company globally dealing in the field of software development through listening to customers, coming up with smart decisions, creating great products. To ensure its success in this industry, the company aims at being ahead in terms of technological advancement and marketing curve. The most important strategies for Oracle focuses on engineering systems business initiatives, mobile, social, cloud, Big Data Analytics and customer experience. Various overriding themes aim at directing the position of the Company in an increasingly competitive market and a technological position that influences how it relates with its customers.

 The objectives of the firm are based on its strategy that involves embracing Disruptive Technologies. While in the past the firm has not been keen in embracing the disruptive technologies that form part of the strategies and pervades the products, listening to customers and the general market which, already has led to integration of various technologies into applications for business (Humble, Molesky & O'Reilly, 2014). A major objective involves focusing innovation and treating application modernization as part of innovation. The modernization involves achieving cost savings as well as efficiencies and at the same time acquiring larger marker share, increasing sales to customers, retaining more customers and this will be possible with greater predictability. Embracing the disruptive technologies aims at acquiring a specific position in a marketplace that is becoming increasingly crowded (PROFES (Conference) & Jedlitschka, 2014). The company’s engineering systems will enable the transition of Oracle from software firm to silicon and Software Company. The strategy will also involve numerous acquisitions that are profitable and mostly involving Engineering Systems .The disruptive technologies are mostly aligned to the acquisition of more customers and hence larger market share and enhancement of the company’s revenue.

 Another objective involves using the cloud strategy to as an approach for cloud breadth and customer choice. Customer choice involves taking an all-above approach strategy through availing software delivery in public cloud and Oracle cloud or a combined hybrid of the previous technologies. Customer choice is important for business and the ubiquitous cloud strategy will provided portability and flexibility for those customers who are keen on keeping their own applications but have different delivery selection or cloud provider whose basis is on their specific objectives (Information Resources Management Association, 2016). The cloud breadth involves taking a top-bottom strategy, which is a continuation of the bigger idea of not continuing the previous model involving mismatching parts and forcing the integration of the costly system (McKinsey & Company, 2015). The objective involves social software included in cloud continuum and in overall the strategy promises to bring about new technology leverage while mitigating various cloud problems that have been cited including loss of visibility and control and even cloud silos.

Oracle social objective involves enabling organizations as customers to develop social relationships with various stakeholders including influencers, customers, employees and partners by the use of social media technologies for listening, engaging and marketing. The use of Social Relationship Management involves various remedies for social listening and social engagement, internal social-networking and social marketing, social insight and data (Galka & Baran, 2016). To improve Oracle’s capacity to address the challenges facing organizations  which relates to noise-signal filtering and better sentiment analysis , innovation will equip the firm with sophisticated tuning that  beats many  other in the market. Improving Customer experience involves various observations including changing the way companies and customers engage, shifting the purchasing power to customers and increasing the demand for vendor receptiveness (Galka & Baran, 2016).Customer experience improvement will be achieved through improved research and development that is consistent. Focusing on analytics strategy will ensure delivery of a whole Business Intelligence suite, providing options in delivery and packaged analytics.  The achievements of these objectives will be enabled through valuing and respecting Oracle’s partners, through continuous expansion and business interests that overlaps those of its various partners and competitors. This is expected to intensify competition but the firm will use its capabilities and partnerships to improve its position in the market.

To engage more with customers, the company aims at simplifying the marketing process given that markets today encounter a network of technologies, systems and data that make it make difficult the process of managing centralizing and planning customer experience that is major individualized.  As these marketers deal with this complexity, the process may become dysfunctional and hence negatively affect the customer experience. The aim of Oracle Marketing Cloud is to assist the organizations in maximizing the marketing resources and achieving highest revenue through provision of a simple yet unified perception of customer information. Marketers can use this to assess the different behaviors, preferences and attributes which will act as a driver for revenue and loyalty (Sathi, 2014). The development of this capability for organizations will help in increasing the market size by developing a competitive advantage (Sathi, 2014). This will be align with modern marketing that calls for marketers to posses technological knowhow in the process of collecting and assessing customer information that can be used in the  customer oriented products or services. The Marketing Cloud is such technology whose application forms the basis for learning more about customer preferences and coming up with new strategies. The Oracle software can help organizations in having a centric view of the global market with dynamic needs.

 

        

Balanced Score Card for Oracle Corporation

Perspective	Objective	Metric	Target Value
Financial	Revenue	Annual Rate of Growth	3%
	Profitability	% EBIT/Sales	35%
	Liquidity	Debt/Equity ratio	0.2
Customer	Increase Number of Customers	Annual increase	5%
	Maintain existing customer base	Attrition rate	5%
	Improve Customer Satisfaction	Median Score: Customer Survey	95%
Internal	Innovation	% R&D Expense to Revenue	20%
	Technology Replacement	Ratio of Old to New tools	(1:3)
	Product Improvement	Ratio of Old to New products	(1:5)
Learning	Employee Training	Reimbursement for job training	$7,500
	Employee Turnover	Turnover rate	2%
	Employee Compensation	rate of compensation	Market rate

 

Financial objectives

The aim of Oracle Corporation is to attain consistent financial results by leveraging extensive research and market experience in the development of standardized collection methodologies for very business section on which it lays its focus on. For the software section, the organizational objectives involve revenue on sales, net profit and solvency of the company, and observance of ethical and professional standards in financial statements preparation and reporting.  The achievement of the set sales revenue will involve the IaaS (Cloud Infrastructure as a Service), a segment that will form part of the company’s on-premise and cloud software business. The metric for  this objective involves the attainment of 3 % annual growth rate  and this  be possible if the products enabled by this infrastructure will form part of 3 % total revenue for the  coming fiscal years. The segment for IaaS cloud comprises of Oracle Managed Cloud Services and Oracle Cloud IaaS which forms part of the software business. Increased investment in IaaS technologies will ensure that there is simplification of customer migration to Oracle Cloud and also providing customers with workload running flexibility and portability that can help in shifting workloads in between. The target revenue can be achieved through the expected increased sales of cloud which has the ability to sustain impressive growths for the software business section of Oracle Corporation. The U.S dollar is expected to remain constant so that to minimize effect of a strengthening dollar on the sales. The Cloud and On-Premise Software revenues are expected to be up by 3 percent annual if the currency remains constant.

The expected revenue increase is also expected to drive the gross margin up and hence profitability throughout the year. The growth rate in profitability is expected to increase by at least 35 percent annually driven by the improving sales in the software business of the firm especially cloud. In addition, the software maintenance and license will be expected to increase in the same period further lay the basis for targeted increase in profitability as sales increases. Major actions will be carried out to achieve the revenue growth, which includes slashing of operation costs for the updates of performing software, license support, consolidating and redirecting efforts from any area that will not support the attainment of this objective. This involves halting any development work on things that cannot directly improve generation of revenue. The achievement of this financial milestone will be in line with the mission and vision of the company whose outcomes indicates that cash flow is good,  operating costs are under control and returns on investments are acceptable.

Solvency of the company will indicate the financial leverage targeted by the firm and includes both long-term and short-term debt and this will be determined through debt-equity ratio metric. The solvency ratio will be calculated in terms of overall debt divided by total equity if the shareholders. The aim is to have debt ratio for the company being 0.2 which will be an indication that financial health is achieved every year and avoid issues that comes with poor health and inability to deal repay the debts. It will also indicate the ability of the software business operations to remain in course by meeting its obligations. The high ratio will be an indication that the firm is financially sound. The debt/equity ratio is important since it will consider the liabilities of the company against equity.

In the previous financial year, the long-term debt for the firm was about $42.5 million with its total equity totaling about $47 million; with a high debt ratio and this suggest that the financial leverage being weak. In order to achieve a lower debt to equity ratio, the company will result to the strategy of reducing heavy reliance on capital infrastructure. This will enable the company to maintain lower total liabilities which will ensure that the company is financially stable. The objective is to maintain a low value of debt ratio, and this will be possible if Debt to capital ratio is 0.2.  When the total debt for the firm relative to its capital cannot be outweighed, it means that the company will be financially stable due to lower total liabilities. Reducing capital liabilities will be an essential factor in ensuring that the financial health of the firm is maintained in the near future. The company also aims at achieving financial health by ensuring that reporting standards and compliances are met in order to avoid litigations which can be costly to the firm. The objective is to comply with all laws and regulations and codes of conduct that will enhance the firm’s capacity to develop software applications and solutions without any disruptions that can lead to losses in sales and even services opportunities.

Customer perspective

The customers for Oracle Corporation are of different sizes and from different industries, and the objective is to make them the main driver for innovation and increased success especially for Oracle Cloud. The customer oriented objectives aim at capitalizing on a large customer base that is mainly composed of institutional users. The concentration of this customer base can managed to serve an example to the industry and ensure a competitive edge for the company in a very dynamic market (Nasir, 2015).

 Among these objectives is to increase the market share for the company through increasing the number of customers who can use the Saas, IaaS, PaaS and many other such technologies which can transform their business or operations and engage the market in better ways. Controlling a dominant market share is likely to bring about high profits for any company whose products serve this market.  It also implies that such a company will win the power and leadership and all the glory that accompanies such dominance (Galka & Baran, 2016). Therefore, to have a large market share of the dominant market, the objective is to have the market size increase by at least 5 percent annually for the total of software business. To achieve this, the company will seek to spur growth in the software business including Oracle Cloud software with an aim of adding many customers in every year. This will involve a strategy designed to having the major organizations in major industrial countries utilize the software products in order to minimize complexity and cost while at the same time acquire a competitive edge in their particular markets. The software products including Oracle Cloud software will be designed in such a way that it can be used in various organizations. In addition, the achievement of this objective will involve improved innovation, a strong customer relationship and even acquisition of competitors. This will go a long way in increasing the number of institutional and individual customers who are ready to adopt the company’s software products in different areas of their business operations. Innovation is a major method which will be used as strategy for increasing the number of customers.

When a new technology is introduced in the market by a firm and which cannot be matched by the competitors, consumers who are willing to own this technology will buy it, even though they have previously done business with rival firms (European Conference on Innovation and Entrepreneurship, In Dameri, In Garelli & In Resta, 2015). The efficient of the new technology will make these customers to be loyal to Oracle and which will add to the market share already dominated by this firm while reducing the market share for the rivals. Through strengthening relationships with customers, the firm will be protecting the current market share by preventing customers from shifting their attention when a rival firm introduces new software into the market (European Conference on Innovation and Entrepreneurship, In Dameri, In Garelli & In Resta, 2015).  Customers who feel their needs business needs have been met by the products being offered will tell others of the positive experience they have had to their business partners and associates who are very likely to try out the new products.  Gaining more customers through a word of mouth increases profitability of the firm without having to commit resources in expenses for marketing effort. The aim is to have major organizations to  look for Oracle software products especially cloud solutions which will make it possible for them to achieve quick integration , customization and even extension as their business are being migrated to cloud. Through this, the company is expected to see increased adoption of the products by customers with a higher number of organizations seeing the need to move their cloud applications to Oracle Cloud Software.

Innovations will make it possible for institutions to turn to the software products of the company in building, deploying and extending applications that are gaming changing and which can work business workloads that are critical in a secure and reliable cloud software environment. Any marketing strategy adopted by the company will be directed at connected the needs of the customers that what can be provided through the software products provided by the company. Through increased acquisitions, the company is able to increase its share of the market, since the acquired firm is most likely to be a competitor. This will enable Oracle Corporation to tap into the customer base of the acquired firm and improve its position in the market and reducing the number of companies that are endeavoring to take a slice of the pie.  Good management involves having an eye on the possibility of a good deal for acquisition especially when the acquiring company is experiencing growth. Customer satisfaction is expected to be achieved through improved innovation in the software business, which will make it possible for the company to solve challenges that comes with introduction of new software technologies.

Improving customer satisfaction is another objective of the firm which will be measured through carrying a survey on customers’ view on the software products for the firm. The success for the Company will be driven by customers’ satisfaction and this will be achieved through finding means of infusing cutting-edge software technologies into every aspect of how its largest market- institutions and big organizations in the market plan , operate and execute. This will also involve doing so without disruption and in a smooth way. Customer satisfaction involves customer focus driven by effective leadership and teamwork.  The software section in the company will work in collaboration with others in order to understand how the software products can be integrated into customers’ business operations without any hitch or disruption to these operations.  Such efforts will place attention to the fact that leadership and customer focus can be used to enhance the relation between major technological partners and the global organizations. In the current market, such relations do not only become strategic but also intimate and this will improve customer satisfaction. The measure of the customer satisfaction will be carried out and will involve carrying out a survey and finding a medium average of the customers whose needs have been fulfilled – at least 95 %. The objective is to assess the status quo so as to enable the implementation of an optimization strategy.

Customer retention is another objective that aligns with the goals of the company and involves preventing customers from defecting to other software products introduced by competitors. The customer retention rate will be measured through an attrition rate, which will be calculated by finding the percentage of clients Oracle Corporation will have lost in every fiscal year. The aim is to have at most 5 percent attrition rate.

 Customer retention is a major indicator of market performance especially in SaaS market which relates to products offered by Oracle Corporation. To achieve customer retention, efforts will be directed towards collaboration, which entails working closely with software products users to ensure that present and future services or products satisfy the needs of every customer regardless of size and industry of their operations. Providing the appropriate product for every specific customer, helping them understand the software product and how it can be integrated into their own business operations. Investing in a platform for digital adoption will ensure that disruptions are minimized in the business and hence maintaining the continuity of these operations. The software has to be adoptable by the employees so that the organization can see the need for investing and maintaining business relations. Customer retention involves being proactive and aggressive while addressing the adoption of end-user products, without having to change any underlying software. Addressing the present and future needs of the customer is a good way of ensuring the customers do not defect to other products in the market provided by competitors. Therefore, whenever customer needs changes Oracle will adapt to such changes and aim at satisfying them as quickly as possible.

 

Learning Perspective

Learning objective is a very important aspect in ensuring that the other objectives put in place are achieved. The need for employee training is informed by the fact that employees have to feel that they are growing and developing in their career so that can give their best in the organization and remain there (In Mupepi & IGI Global, 2017).The aim is therefore to introduce learning programs that will improve the talent of the employees in a technological environment that is constantly changing. The employees will improve their skills and the technological knowhow which fulfill personal development desires and improve their performance in meeting customer needs. It will involve analyzing skill gaps and motivating the employees to master news skills and develop critical thinking skills in the process of innovation. The metric involves measuring this involves reimbursement funds for employee training at - $7500.

The other objective involves lowering turnover rate in the organization which can affect the performance if the firm especially where best talent is lost. To reduce turnover rate, the recruitment process should involve hiring the right skills and those that fit well with managers, co-workers and the culture in the workplace (In Mupepi & IGI Global, 2017). In addition, employee retention will be enhanced through assisting them in developing a plan for personal growth and development.  Through mastering their own skills and improving their knowledge will enhance their innovation capability. This brings about the possibility of attaining satisfaction in the work environment and giving their best to the course taken by the organization. Improving the working environment will ensure that employee adapt to the culture of the workplace and hence their fitting in (In Mupepi & IGI Global, 2017). Turnover rate targeted is below 2 percent annually.

The other objective involves implementing a compensation plan that motivates and hence ensure employee retention. The plan for the employee compensation will ensure that payment costs are controlled, employees are motivated and there is equity in rewarding. The compensation plan will be based on the market rate, and what other employees are earning in the same industry. A good compensation plans ensures that there is both internal and external equity. The plan will mirror the efforts of employee and the responsibilities undertaken by each in ensuring that the overall objectives of the organizations are achieved (In Mupepi & IGI Global, 2017). Hence, skills and knowledge of an employee and how they contribute towards customer satisfaction and financial performance will be major factors in determining the group in which the compensation rate for each employee falls. Prevailing wage rate in the market will form the basis for target rate of compensation.

Internal perspective

Innovation

The objective involves Oracle Corporation being an organization that is embraces innovation internally, and will involve an innovation strategy implemented by leadership. The software products will be improved through adoption of the emerging technologies both within and outside the company. To achieve this, a culture that offers support for innovation will be encouraged through advocacy team and allocation of adequate resources to research on how to improve the existing technology (Information Resources Management Association, 2016). It is the responsibility of leadership to instill a culture that offers adequate support for innovative technology and being persistent on the need for it. Continuous improvement on technology used in creating software products will provide competitive products into the market and which ensure customer satisfaction and retention. The metric for measuring the objective will be percentage of revenue allocated to Research and Development process – 20 percent.

Technology replacement  

The objective is to phase out the older technology that can reduce productivity, increase cost of operations and whose life cycle has expired. The older machines can bring about unscheduled downtime and inconsistency in producing new products (Information Resources Management Association, 2016). The aim is to replace the older computers with new ones that have high processing powers and which can be used for multiple operations without causing disruptions. Achieving this will involve making the technology replacement plan part of the strategic planning and obtaining feedback from staff involved in software development on how this will impact the budget. By use of asset management techniques, it will be possible to determine the computers that need replacement. The metric involves the ratio of older to new tools - 1:3.

Product improvement

The objective is to have continuously improved software products that are offered by Oracle Corporation through innovation and ensure that they are at par with market trend and prevailing technology. This will ensure that customer value is delivered at any given moment since the changing customer needs will be addressed overtime or at once. The aim is to have a competitive edge in the market since products’ efficiency is addressed as required by existing and new customers. Product improvement process involves active participation of managers who ensure consistency in innovation (ESOCC (Conference), In Celesti et al. 2016). This can be achieved though assessing the market performance of the existing product, selecting the ones to be improved and initiating the innovative process through available skills in the organization. The metric for measuring improved is the ratio of old to new products – 1:5.

References

Humble, J., Molesky, J., & O'Reilly, B. (2014). Lean enterprise. 123-125

PROFES (Conference), & Jedlitschka, A. (2014). Product-focused software process improvement: 15th International Conference, PROFES 2014, Helsinki, Finland, December 10-12, 2014 : proceedings.

Information Resources Management Association. (2016). Project management: Concepts, methodologies, tools, and applications. Hershey: Business Science Reference.1887

McKinsey & Company (2015).The reality of growth in the software industry. Retrieved from: http://www.mckinsey.com/industries/high-tech/our-insights/the-reality-of-growth-in-the-software-industry

Galka, R. J., & Baran, R. J. (2016). Customer Relationship Management: The Foundation of Contemporary Marketing Strategy. Taylor & Francis. 401-403

 

Sathi, A. (2014). Engaging customers using big data: How marketing analytics are transforming business.152

Nasir, S. (2015). Customer relationship management strategies in the digital era.

European Conference on Innovation and Entrepreneurship, In Dameri, R. P., In Garelli, R., & In Resta, M. (2015). Proceedings of the 10th European Conference on Innovation and Entrepreneurship: ECIE 2015 : The University of Genoa, Italy, 17-18 September 2015. 332-334

ESOCC (Conference), In Celesti, A., In Leitner, P., International Workshop on CLoud for IoT, International Workshop on Adaptive Services for the Future Internet, Workshop on Seamless Adaptive Multi-Cloud Management of Service-Based Applications, International Workshop on Cloud Adoption and Migration, ... Workshop on Federated Cloud Networking. (2016). Advances in service-oriented and cloud computing: Workshops of ESOCC 2015, Taormina, Italy, September 15-17, 2015, revised selected papers. 276-279

In Mupepi, M., & IGI Global. (2017). Effective talent management strategies for organizational success.24-27