This week is turning out to be a noteworthy week for enterprise software technology.
Two major enterprise software providers, SAP, and Oracle are now fixated on helping to accelerate existing licensed software customers to migrate to more modern Cloud-based software suites. The timing of messaging is beyond accidental, strategies and approaches are different, and the battle lines are growing more pronounced.
In our prior Part One commentary, we provided highlights and initial takeaways from SAP’s Sapphire NOW customer conference held this week. In this Part Two commentary, we highlight a significant announcement by Oracle this very week, along with thoughts related to contrasting approaches.
Announcement of Oracle Soar
On Tuesday, Oracle CTO and Chairman Larry Ellison unveiled what Oracle describes as: “the world’s first fully automated enterprise cloud application product that will enable Oracle customers to reduce the time and cost of cloud migration.” Ellison, in his remarkable flair for marketing, coined this new capability as: “The last upgrade you will ever do.”
The timing was not accidental, coming as SAP was conducting its Annual Sapphire NOW customer conference. This newly announced capability is being directed to assist existing customers to remove much of the time, cost and effort associated with migrating applications currently running in an on-premise environment to Oracle’s collection of cloud-based application suites including supply chain management.
Oracle Soar, as it is named, includes a set of automated software, project management and other capabilities that focus on making upgrades from legacy software applications suites a much smoother and controlled process.
Initially, the service is being offered for upgrades involving existing customers of on-premise Oracle E-Business Suite, Oracle PeopleSoft, and Oracle Hyperion, who plan to move to either Oracle ERP cloud, Oracle SCM Cloud or Oracle EPM Cloud. Noted are plans underway to add similar enhanced upgrade capabilities to Oracle HCM Cloud and Oracle CX Cloud, the latter targeted for existing Oracle Siebel CRM customers.
The automated software aspects are an extension of Oracle’s AI and machine-learning capabilities, and include several components:
- Evaluator Process Scan Analyzer that scans-for and identifies software customizations in the legacy product suite. The process is supported by True Cloud Method, Oracle’s proprietary design approach to automate upgrades.
- Configuration Analyzer that extracts from the existing system’s key parameters, for example, chart of accounts, cost centers, business entities, users, hierarchies, along with total data storage needs.
- Auto Configurator software that automatically configures the new destination cloud-based application, for instance, Oracle ERP Cloud.
- Auto Data Migration software that extracts, transfers, and loads all of the data and information from the legacy application to the cloud-based system in an autonomous automated sequence of activities based on the determined parameters in the previous steps.
Oracle Soar comes as a bundled services offering, which is guided by a dedicated Oracle concierge service that includes milestones and tasks that need to be completed daily. Oracle indicates that leveraged use of this new set of automated services can lead to upgrades in as little as 20 weeks.
Dealing with Existing System Customizations
In a prior commentary related to SAP, we noted the challenge of customers that elected to highly customize their existing ERP or supply chain systems. Oracle indicated that it will address this challenge leveraging machine learning and other technology. Once the customization is identified, a termed Integration Accelerator provides a large library of what was describes as more than 100 pre-built, pluggable integration routines.
Oracle has also been rather aggressive in already moving a large portion of the provider’s application systems support capabilities to cloud-based suites, including the SCM Cloud suite. This has been occurring for the past two years, and thus the bulk of new technology enhancements such as advanced analytics, IoT, machine-learning and other advanced process support capabilities were targeted toward cloud-based application suites. Oracle can thus make the argument that insuring functionality related to customization is not such a challenge because the cloud-based suite includes support for augmented or changed business processes.
Just to be sure, the enterprise tech provider has assembled an Oracle Consulting Services offering that includes support for up to 30 custom integrations. A dedicated “Success Manager” is provided to the upgrading customer to insure a smooth transition, with that resource dedicated to the customer for up to one-year after the upgrade. Dedicated upgrade support teams are located both in Denver Colorado and Bangalore India.
The video of Larry Ellison’s announcement of Oracle Sour provides contrasting optics to SAP’s customer event. His presentation touches upon existing embedded machine-learning capabilities applied to various work-intensive financial reconciliation processes not just for closing the books, but continuous. He stresses the notions of Oracle’s autonomous database capabilities with little or no downtime and automatic detection of information theft or cyber-security threats. Further noted were voice interaction interfaces in Cloud ERP as well as automated OCR scanning and electronic conversions of documents approaching 100 percent of accuracy.
Since Oracle has strategically elected to host all offered public or private physical cloud platforms on a global-wide basis, there was continued reinforcement of the differences in cloud infrastructure, namely hardware servers customized for software or data management support needs, especially related to encryption and information security.
We mention all the above because we felt is was uncanny that both providers seemed to have been following the same customer messaging script, but from two very distinct approaches and perspectives. SAP’s on-stage keynote demo of voice-recognition in ERP faltered in real-time. Added information related to SAP’s new notions of Digital Cloud Suite are likely to, as in previous years, take on different interpretations, depending upon who you speak with.
The battle lines have become more direct and the differences more evident.
Added Initial Takeaways
In addition to takeaways provided in our prior commentary, we add some additional insights for our readers and clients.
Make no mistake that for the major enterprise software providers, the strategic goal remains moving existing customers to the various cloud-based suite platform offerings.
This challenge is compounded by the reality that the bulk of existing customers have hesitated in full upgrades of backbone business systems. Thus, such older systems remain over-taxed in their ability to support more advanced applications supporting today’s needs for digitally-based business process support, enhanced data and information movement or better leveraging of advanced analytics to secure business insights. The gaps among such existing systems and the newest cloud-based platform systems is widening ever more. Consumption-based pricing is a barrier as-well, depending on how the individual vendor elects to interpret “consumption” and usage.
Functional supply chain as well as line-of-business teams deal with such software support gap realities every day and the pressures translate to continual calls to action. Such actions turn to discussions related to upgrading existing enterprise system applications or turning to best-of-breed applications providers for specific, more narrow-scope new process supports needs.
The best-of-breed vendors continue to relish this gap because they can provide a powerful business case for not having to wait for a perceived business disruptive and costly upgrade for the enterprise system. Best-of-breed tend to be more flexible and realistic in pricing, because their goals are related to undercutting the resident enterprise provider. They further have more control of limiting the need for added systems integration costs.
Enterprise software and technology providers themselves have been aggressively filling-in functionality gaps with plug-in acquisitions of cloud-based best-of-breed providers as well as innovative start-ups to meet advanced applications and technology support needs. They have partitioned business process functionality into specific modular, Cloud suites to ease the migration burden. They must now actively help customers to remove the burden of a disruptive upgrade, and the need for added hordes of systems integration consultants to manage technical upgrade intricacies.
SAP and Oracle have had different product strategies and approaches, but this week marks what we view as an inflection-point on which of these vendor’s strategies can best accelerate customer movement to the Cloud.
At one point in time, Oracle had a reputation for glossy PowerPoints, slick demos, but laggard development related to actual product. More and more, the tables are changing, and Oracle is assuming the momentum in actual released Cloud applications and helpful, customer-focused tools. That includes the existence of Oracle SCM Cloud.
For actual customers, the goal remains obtaining the right technology support, in the most-timely manner, at the least overall cost and disruption to the business. Your needs, objectives and milestones are those that should govern technology acquisition, Keep such focus in mind, regardless of your invested backbone system.
Once again, Supply Chain Matters will provide added SAP and Oracle focused commentary, as well as some added insights related to SAP’s strategies and direction for supply chain management business process support in subsequent follow-on commentary.
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