BUSINESS BENEFITS SERIES

BUSINESS BENEFITS
SERIES HIGHLIGHTS
$47.7 million in total benefits
projected over five years
240% return on investment over five
years
Investment payback in 30 months
Unified company on common
business platform

ORGANIZATION PROFILE

VeriSign Inc. (Nasdaq: VRSN)

Mountain View
www.verisign.com
Headquartered in Mountain View, Calif.,
VeriSign operates intelligent
infrastructure services that enable
businesses and people to find, connect,
secure and transact across todays
complex, global networks.
Industry
High Technology
Annual Gross Revenue
Approx. $1.1 Billion
Chief Executive
Stratton Sclavos

VeriSign's Global Business Process Platform

Implementation Saves Over $17 Million in 30
Months, Yields 5-Year ROI of 240%
EXECUTIVE SUMMARY

Based in Mountain View, Calif., with offices worldwide, VeriSign, Inc. operates
intelligent infrastructure services that enable businesses and people to find,
connect, secure and transact across todays complex, global networks. The
company's major lines of business include: VeriSign Naming and Directory
services, which operates the registry for the .com and .net Internet suffixes, and
operates two of the internet root servers which support billions of domain name
lookups on the internet daily; VeriSign Communications Services that help
telecommunications companies manage their networks; VeriSign Security
Services, which, among other things, manages the security environment for
enterprises, secures 400,000 websites and processes more than 30% of all ecommerce transactions in North America.
As VeriSign grew rapidly in recent years, through organic growth aided by
strategic acquisitions, so did the challenge of integrating multiple workforces and
business processes. Creating a unified operating platform quickly emerged as a top
priority for VeriSign and was the prime mover behind its recent $14.5 million
investment in Oracle applications and database technology, including related
hardware and consulting services. VeriSign's new infrastructure, which it began
rolling out in 2002, includes Oracle E-Business Suite applications for accounting
and finance, procurement, order management and human resources.
An assessment by Mainstay Partners, an independent consulting firm, documented
significant financial and strategic benefits from VeriSign's investment, notably
more than $47 million in benefits over five years. Savings come from a
combination of process-efficiency improvements in financial management,
purchasing and order handling; staffing reductions and avoidance; and legacy
system retirement. According to the study, VeriSign has already realized savings
of over $17 million after 30 months, recouping its investment, and is on track to
achieve a 240% return on investment over five years.
Beyond the financial savings, the study showed that moving to a consolidated
global operating platform offered valuable strategic advantages for VeriSign,
including faster, smoother integration of business acquisitions, more informed
decision-making, increased system uptime and reliability, and better integration of
workforce skills and cultures.

BUSINESS BENEFITS SERIES

ORACLE
PRODUCTS AND SERVICES

Oracle Financials
Oracle Assets
Oracle Human Resources
Oracle Self-Service HR
Oracle Internet Expenses
Oracle Order Management
Oracle Advanced Pricing
Oracle Purchasing
Oracle iProcurement
Oracle Database
Oracle Application Server
Oracle Discoverer

PROJECT BACKGROUND

VeriSign began looking for a new operating platform in 2001 to gain better control
over its fast growth and to provide better information faster to the VeriSign senior
management team. Executives wanted to eliminate costly inefficienciesand
potential business riskfrom separately managing different workforces, business
processes, IT networks, and support services.
Executing on a plan it developed in late 2001, VeriSign designed and implemented
a globally integrated enterprise resource planning (ERP) solution. According to
VeriSign, the company's success with an earlier version of Oracle applications and
its close working relationship with Oracle were key factors in its choice of Oracle
E-Business Suite 11i.
Today, VeriSign has established a single set of global business processes, taking
advantage of Oracle's integrated applications suite to create a unified operating
platform.

PURCHASING AND PROCUREMENT IMPROVEMENTS

We set out to achieve

$100 million in business

process and technology
savings as well as to
provide better
management visibility into
the business. Were well
on our way to achieving

both objectives.

Brian Lillie
Vice President
Corporate Systems
VeriSign

Substantial benefits came from automating VeriSign's purchasing functions, as

online workflow and approval capabilities helped staff process purchase orders
about 50% faster, reducing average cycle time from six days to three. Labor
productivity has surged: The average buyer now handles three times as many
purchase orders while spending more time managing strategic vendor
relationships.
As part of the launch, VeriSign rolled out a self-service online requisitioning
system (Oracle iProcurement). The system has helped VeriSign decrease spending,
increase contract compliance, and cut administrative costs. Further, purchasing
managers gain insight into trends and spending commitments by linking each
purchase to a specific general ledger category, and each P.O. to an invoice.
Better visibility is helping VeriSigns purchasing department improve vendor
negotiations and secure higher discounts and better terms. Prior to Oracle,
invoices were difficult to track and assign to specific purchases and vendors," said
Jade Dauser, director of purchasing for VeriSign. "With the Oracle system, we can
now focus on trend analysis for spending and vendor negotiations which will
deliver more value to VeriSign. The study estimates that purchase-ordering
efficiencies will lead to well over $15 million in savings over the next five years.

BUSINESS BENEFITS SERIES

AUTOMATED ORDER MANAGEMENT

Never underestimate the

power of a single,
integrated ERP system.
This is no longer just an
accounting system, but

The Oracle system automated the way VeriSign handles sales orders, enabling the
company to phase out manual, paper-based processes that had created enormous
archiving and tracking challenges for the company. With the new system,
VeriSign cut error rates over 80% and boosted productivity by 230% as the
company began handling more orders with less staff.
With its new order-management system, VeriSign can book sales on the same day
they are placed. And checking on orders takes 10 minutes or less now, compared
to as long as two hours before, managers said.

the very backbone of our

companys corporate

CONSOLIDATED, GLOBAL FINANCIAL MANAGEMENT

infrastructure.

Significant improvements and savings were noted in VeriSign's core accounting

operations, including accounts payables, receivables, and cash management.
Oracle Financials applications, with their automated invoicing capability, helped
the company generate up to 13,000 invoices in one day, an amount that took about
seven days to generate previously.

Wendy Shea
Finance Director
VeriSign

Managers also cite more efficient credit checking and collections processes with
reducing days sales outstanding (DSO) by over 50%from over 70 days to under
40 days. Staff productivity surged as VeriSign began managing receivables "by
exception" instead of by looking at each account. Currently, agents in VeriSign's
receivables department manage from 800 to 1,000 customers each, more than
twice the industry average.

SHIFT TO ELECTRONIC PAYMENTS

On the accounts payable side, the Oracle E-Business Suite enabled VeriSign to
shift to electronic payments for more of its transactions. VeriSign has cut its use of
costly paper checks to approximately 67% of all payments (in dollar terms) from
99%. It's also migrated approximately 500 vendors to low-cost automated
clearinghouse (ACH) payments. Today, ACH payments make up approximately
29% of all transactions in dollar terms compared to virtually zero before. The
company also makes more wire transfer paymentsclose to 16% of total dollar
payments today versus approximately 2% previously.
VeriSign continues to increase the efficiency of its A/P processes with features
such as auto-check-signatures and check prioritization, and it has all but
eliminated late payments. The company also introduced online expensemanagement (Oracle Internet Expenses) and is now reimbursing employees
fasterwithin 10 days on average compared to five to six weeks previouslywith
half as many department staff.

BUSINESS BENEFITS SERIES

BETTER CASH MANAGEMENT

Prior to Oracle, invoices

were difficult to track and

assign to specific
purchases and vendors.
With the Oracle system,
we can now focus on

Putting the company on a single financial platform helped VeriSign consolidate its
cash management operations and restructure its bank accounts. Today, treasury
managers can coordinate cash flows across business lines and place more controls
on transactions to comply with changing corporate governance rules.
Moreover, because it now monitors its cash positions continuously, VeriSign can
execute hedging strategies to cut foreign exchange risk. The integrated reporting
structure also helped boost the productivity of VeriSign's tax accounting group.
The savings enabled the group to invest in a new position to cover international
tax and compliance issues.

trend analysis for

STREAMLINED REPORTING AND ANALYSIS

spending and vendor

negotiations.

Jade Dauser
Purchasing Director
VeriSign

The consolidated system features a global chart of accounts with consistent

reporting requirements companywide; and it offers sophisticated tools that
managers use to analyze performance across business lines and assess options
for example, by creating "virtual" profit and loss statements. Integrated reporting
also helps VeriSign adopt innovative incentive programs, such as tying bonuses to
operating profit at the business unit level.
With the new system, VeriSign shaved five days off its monthly book-closing
cycle, even as it reduced headcount. The company simplified and shortened its
audit process as well, because auditors can now get all the information they need
at corporate headquarters. Previously auditors had to travel to several offices to
collect data.
Overall, executives said the Oracle system helps VeriSign move from "managing
transactions to "serving customers," and to "data rich" decision-making. The
company is also cutting overhead by reducing the number of information requests
it directs at local offices. And with more accurate and complete reporting,
VeriSign is reducing compliance risk.

MORE WORKFORCE AGILITY AT LESS COST

Integrated into the platform is a new human resources management system (Oracle
HRMS) that managers said has increased "workforce agility," allowing VeriSign
to move employees around quickly and execute organizational change smoothly, a
must have in VeriSigns fast-paced environment.
The HR system's online workflow and self-service tools removes much of the
burden of processing routine transactions and paperwork, freeing managers to
focus on issues such as optimizing workforce deployment and compensation.
Streamlined HR management is expected to save the company over $1 million
over five years, the study showed.
4

BUSINESS BENEFITS SERIES

STREAMLINED IT

Our information flow has

been broadened,
standardized and
consolidated into one
system, providing a much
more efficient cash
management
infrastructure.

Steven Gatoff
Vice President, Finance
and Treasurer
VeriSign

The company expects to save nearly half a million dollars from retiring its legacy
IT infrastructure and moving to a single, global instance of Oracle applications.
VeriSign further controls IT costs by sticking with out-of-the-box configurations
and avoiding custom coding wherever possible. Other benefits cited of not
customizing Oracle included improved staff efficiency from Oracle's standardized
development environment, faster software upgrades, better system testing and
rollout capabilities, and lower training costs.
Executives said the consolidated system architecture means the IT department
spends less time trying to integrate applications and databases, and more time
supporting strategic initiatives. The IT group has been able to become a true
partner to the business," said Brian Lillie, vice president of Corporate Systems at
VeriSign. "We're now able to consult with them on automating business processes
rather than just integrating different applications.
Executives expect these trends to continue as VeriSign continues to consolidate
applications across the board on the Oracle E-Business Suite platform. Scaling
Oracle to meet the needs of the business, whether adding new products, new
customers, new organizations, or new business functions is not seen as a problem
but an advantage. The power of leverage is real, and so are the benefits, Lillie
stated.

BENEFITS SUMMARY

The study estimates savings of over $47 million over five years (non discounted)
through a combination of business-process improvements, staff savings and
avoidance, and legacy system retirement. Mainstay estimates VeriSign's return on
investment over five years at 240%, with an internal rate of return of 14%, in the
first five years.
The estimates take into account VeriSign's projected investment of $14.5 million
during the period. Future costs and benefits are discounted to the present at 7% per
year. The study concluded that VeriSign achieved payback on its investment
within 30 months of the project's launch.
Table 1 on the follow page summarizes the major operational improvements from
the Oracle project, while Figure 1 shows the costs and cumulative net savings of
the project over five years.

BUSINESS BENEFITS SERIES

ABOUT THE BUSINESS

BENEFITS SERIES
This study is one of a series of investigations into
the costs and business returns of IT investments,
with a focus on Oracle technology and
applications. It is intended to serve business
executives and managers who are evaluating
technology investment options.
Research and analysis for this study was
conducted by Mainstay Partners, an independent
consulting firm, and was based on interviews with
executives at VeriSign, review of company
planning documents, and searches of industry
literature. ROI calculations use industry standard
assumptions regarding the time value of money.
Information contained in the publication has been
obtained from sources considered reliable, but is
not warranted by Mainstay Partners. Copyright
2004 Oracle Corporation.

Table 1

VeriSign: Summary of Operational Improvements

Key Performance Indicator

Before Oracle)

ACCOUNTS RECEIVABLE
Days sales outstanding (DSOs)
Customers per accounts receivables agent
Number of invoices processed per headcount/mo.
ACCOUNTS PAYABLE
Percent of wire transactions (dollar volume)
Percent of ACH transactions (dollar volume)
Percent of paper checks
Number of invoices paid per headcount per month
SALES ORDER MANAGEMENT
Order error rates
Orders processed per headcount per month2
Time needed to research orders
BOOK CLOSING AND AUDITS
Monthly book closing cycle
Number of locations visited to conduct audits
Headcount needed to run reporting activities
PURCHASE ORDERS
Avg. time to process purchase order
Number of POs handled per buyer per month3
1.
2.

3.

After Oracle

Improvement

>70
3501
1,262

<40
800
2,231

50+%
56%
77%

0.7%
0.1%
99.2%
798

4.0%
28.8%
67.1%
1,617

480%
>1,000%
32%
103%

50%
545
2 hours

9%
1,796
10 minutes

82%
230%
93%

12 days
3
36

7 days
1
18

42%
67%
50%

6
183

3
550

50%
201%

Represents industry average

Volume of sales orders increased from 3,815 to 5,387, while headcount fell from 7 to 3
Volume of purchase orders issued increased from 3,345 to 6,649

Source: Mainstay Partners/VeriSign

FIGURE 1. FIVE YEAR CUMULATIVE RETURNS (NET OF INVESTMENT)

$ millions
50
40
30
20
10

Cost
10

Cumulative savings
net of investment

20
2002

2003

2004

2005

2006

Source: Mainstay Partners/VeriSign