Oracle at CTI Molecular Imaging Inc March 19

Oracle at CTI Molecular Imaging, Inc. March 19, 2004 t o mm i e in o noal tsi ioonn >r i m a d e p p i v e s p a t e n c hpvaosleocguyl a > t thhaat tgi im lgirvoerress ra c tuiilot n t c a r e t ns es s

Who is CTI? CTI has been in business since 1983 and employs over 900 people. We are headquartered in Knoxville, TN and listed on the Nasdaq: CTMI, Web Site: http: //www. ctimi. com Growing ~ 50% annually CTI enables providers, physicians and their patients to discover real life answers through innovative molecular imaging solutions that improve the diagnosis and treatment of cancer, heart disease, and neurological disorders.

What is Positron Emission Tomography & How Does it Work? Before she ever feels a symptom Before her x-ray would show a shadow Before her CT could reveal a mass there’s a cancer cell with a distinct molecular signature

Positron Emission Tomography (PET)

What Is PET & How Does It Work? Cyclotrons FDG Molecule PETNET Distribution Scanners 4

The PET Advantage 5

PET / CT Aids Diagnosis And Therapy Management PET / CT TIME Magazine’s “Medical Invention of the Year” in 2000. Society of Nuclear Medicine Conference’s “Image of the Year” in 2003. 6

CTI Provides All Products And Services For PET Molecular Probes Cyclotrons Services Scanners Detector Materials 14

Why Oracle? • Existing systems would not support our expansion • They were: – Client / server – Non-existent – Out of business! • Information was – Unavailable – Inaccurate – Managed in Excel

We had a Runaway Architecture

Conceptual Solution: Virtual Enterprise Customers • Internet centric Employees Service Insurers PET Providers Investors Distributors Patients Suppliers Oracle Technology Stockholders • Common data model architecture • Scalable • Secure

Project Timeline and Modules Phase I - PETNET 10/1/01 Phase II – CTI, CPS, & PETNET 2003 • Financials • Discrete Manufacturing • General Ledger • Master Production • Purchasing Schedule • Accounts Payable • MRP • Invoicing • Bills of Materials • Advanced Pricing • Inventory • Project Costing • Agile Interface • Project Billing • Costing • I-Procurement • WIP • Oracle Time & • Quality Labor • I-Expense • Order Management • Sales Tax Interface Phase III 2004 • Financials • Shipping Manifest • Globalization • Discrete Manufacturing • Bar coding • PETNET • LEAN / Kanban • Electronic Device History • Process Manufacturing • DIS & CIS Interface • CRM • Quoting • Service Contracts • Spares Management • Call Center • Field Service • Depot Repair • Sales Force Automation • Marketing

Project Resources • Outside consulting used to provide project • • management and Oracle knowledge CTI business staff for CTI business knowledge CTI IT developed an Oracle team as the project progressed When phase 1 began on June 15, 2001, CTI IT did not have any Oracle people on staff The CTI IT Oracle staff now consists of – Three Oracle DBAs (shared with other projects) – Two Oracle applications developers – Three Oracle applications specialists

CTI Project • Advantages – – – Employees aren’t in love with the current system Good software Good people Available funding Business project • Disadvantages – – – High growth environment Separation requirements between units Heavy matrixed resource plan Competition with other high importance projects Hard to get good data from legacy systems

Phase 1 - PETNet • PETNet produces the radiopharmaceutical (FDG) used in PET scans – FDG has a half-life of 112 minutes – Typical dose has 10~15 m. Ci activity • Project started 6/15/01 and system was • • live 10/1/01 with 11. 5. 4 Independent pharmacy management system at 35+ sites was integrated to Oracle through OM open interface – changed the game from monthly upload of field data to a daily upload Advanced Pricing was implemented – eliminated time consuming, error prone manual pricing and review process Projects was implemented to track costs of capital and R&D efforts better About 50% reduction in billing time and monthly closing

Since the Go-Live for PETNet • We’ve implemented – i. Procurement for all PETNet employees and all PETNet facilities globally – Cash Management – Added a UK subsidiary – new books and consolidation – Added joint ventures – Setup additional inventory organizations – Completed two successful upgrades and now run 11. 5. 7+

Phase 2 – Everybody Else! • Started 5/6/02 • Business driven project • Extends system to 3 more operating units with about 12 inventory organizations • Six functional teams: – – – Procure to Pay Plan to Produce Financial Order to Cash Projects Cost • Heavily matrixed project organization • Big bang implementation

A Complex Project • • 200 people to train 250 Tutor Documents 500 Business Processes 22 Test Case Scenarios and Scripts 24 Data Conversions Rapidly growing company FDA controlled Over 100 Custom Extensions • 1, 100 employees • 100 people directly involved • Over $8, 000

Supply Chain Transactions A Simple Overview

Project Organization Structure

Phase 2 Key Process Improvements • Automated the transfer of released items and bills of • • materials from the PDM system to ERP Automated material sourcing Improved material planning capabilities Intercompany requisition and supply processes Automation of expense report, time and labor and requisition processes Elimination of 28 Lotus Notes applications Use of workflow notifications, alerts and approvals Implementation of better controls

Vanilla vs. Customization Issues • Project accounting used to collect product service costs and bill out-of-warranty and non-contract support labor, materials, etc. – substantial effort • Basic changes to approval routings for i. Expense and i. Procurement to allow shared services to buy for other units • Intercompany supply chain – could not accomplish the way we wanted to

Phase 2 Status • In production Feb 2 nd, 2004 • Over 500 classroom hours of user training completed • Very few major issues encountered – Notifications of backordered spare parts orders – Startup of integration with the product data management system – Document printing hiccups – E-mail approvals of i. Expense, OTL and i. Procurement didn’t work at first – e-mail configuration issue

Technology Overview • • • Sun hardware and O/S EMC storage area network 10/100 mbs ethernet network 99% Windows-based PCs for users Extensive wireless networking in place Oracle used in a multi-node environment

Testing Strategy • CTI is an FDA governed company – testing is very formal – – – Unit –> System -> Business process Business people owned testing Tutor was used to define the procedures Test scripts were developed from Tutor procedures Business process testing was conducted in small teams with cross-functional representation – Results were clearly documented and signoffs were required – Documentation was reviewed for completeness – Management signoff was required before go-live

Communicating for Success • Regular steering committee updates • Daily “tidbits” to all employees via e-mail in the last three months • Monthly employee newsletter stories throughout the project • Live “Orientation to Oracle” sessions

Training Overview • CTI team managers were responsible for planning training • CTI and consultants were the instructors • Most classes were hands on the software • Three types of courses – Orientation • General overview of Oracle and the project, processes, etc. – Navigation • Basic “How to Navigate” class – required before taking other classes – Functional and Detailed • Detailed module and process training

Patch Management • Process was clearly defined due to FDA requirements • Requests and approval formalized • Encountered problems with ability to patch an instance without impacting anyone else – created some delays • Typical patch problems – Dependencies and pre-requisites – Need for one-off’s vs. family packs – Patches breaking something else

Summary • Phase 1 went well – Tight scope – Resources were committed – No competition with other initiatives • Phase 2 was much harder but successful so far! – – Resources unavailable – caused delay Competition from IPO, LEAN initiative, growth Much more consensus building required Larger scope – more learning – more innovation • On to Phase 3!

“Life is full of obstacle illusions. ” - Grant Frazier

t o mm i e in o noal tsi ioonn >r i m a d e p p i v e s p a t e n c hpvaosleocguyl a > t thhaat tgi im lgirvoerress ra c tuiilot n t c a r e t ns es s