Oracle today announced an expansion of the Oracle Supply Chain Management Cloud with the inclusion of two new applications, Oracle Order Management Cloud and Oracle Global Order Promising Cloud. These new applications are part of Release 10 or Oracle SCM Cloud, not to be confused with the predominant on-site Oracle Business Systems (EBS) suite of applications which is currently within Release 12 versions. Eventually, both release nomenclatures will converge and perhaps provide more confusion for customers. The takeaway however is that Oracle remains committed toward a broader development and release plan surrounding broad SCM applications in the Public Cloud platform than perhaps other competitors such as SAP. Both providers claim that they are responding to the stated needs of customers.
Oracle Order Management Cloud is an order capture and fulfillment Cloud application that is includes integration with Oracle Global Order Promising Cloud. The application was designed to improve order handling across the order-to-cash process. Pre-integration, centrally-managed orchestration policies, global availability, and fulfillment monitoring are included.
Supply Chain Matters spoke with Oracle SCM Vice President Jon Chorley, who informed us that these new SCM applications are linked with a dependency on Oracle CPQ (Configure, Price and Quote), the result of a prior Oracle acquisition. According to Oracle, this totally cloud-based application is currently appropriate for small or large-scale firms that have a predominant quote-to-cash customer fulfillment driven process. Down the road, in future Oracle Public Cloud releases, other sales and distribution channel customer fulfillment needs will be targeted and supported.
The pricing model for the cloud-based order-to-cash application is pegged to a combination fee structure associated with internal users supported and with order lines being processed.
Release 10 Cloud further includes Product Lifecycle Management (PLM) support, including a Product Hub, a primary vendor facing, master data management support application and a front-end, product development support application.
In Release 11 of Oracle Cloud SCM, the enterprise technology provider will target additional manufacturing focused support needs, most likely to be announced at the upcoming Oracle Open World conference in the fall.
Breaking Tech News- Kinaxis Reports Significant Deal as Part of Fiscal Q4 and Full Year 2014 Results
Supply chain planning and response management technology provider Kinaxis today formally reported fiscal Q4 and full year 2014 financial results. Beyond the rather positive growth and financial performance results, the most significant news was the landing of a $20 million five-year supply chain planning deal.
On the financial side, full fiscal year 2014 revenues were reported as $70.1 million, up 15 percent from the year earlier. Gross profit was $49.3 million, also up 15 percent and adjusted earnings before interest and taxes (EBITDA) totaled $16.1 million, up 7 percent. Kinaxis reported nearly $57 million in its end of December cash balance, mainly from the proceeds of its recent IPO activity.
For its fiscal fourth quarter, Kinaxis reported total revenues of $18.8 million including $13.9 million of subscription revenues. Gross profit was $13.4 million while adjusted EBITDA totaled $3.8 million.
However on the Kinaxis earnings briefing call, many equity analysts wanted to hone-in on the reported $20 million “mega-deal” booked in Q4.
Kinaxis executives were very careful to respect customer confidentiality and hence had measured responses to analyst queries. However, Supply Chain Matters was able to garner from the Q&A back and forth that this was a five-year, cloud-based deal involving a new customer described as a large global enterprise. The customer elected to pre-pay the $20 million up-front, and that number will be reflected in Kinaxis fiscal Q1-2015 performance. The deal was brought to Kinaxis from an unnamed large systems integrator. We suspect the deal involves one of the existing vertical industries that Kinaxis currently supports.
Upon further probing, it was disclosed that the customer had an existing backbone systems footprint involving a combination of Oracle and SAP systems, and apparently elected to pursue a Kinaxis strategy for various supply chain planning technology needs. Kinaxis executives hinted that the customer had “given-up” on both the timetable and future promises of the incumbent vendors.
Supply Chain Matters highlights the reporting of this “mega-deal” because, by this author’s recollection, it represents one of the largest deals involving supply chain planning, and further, it appears to be totally cloud-based.
A trend that we continue to pick-up from other supply chain planning vendors is that their pipelines increasingly include both large and emerging enterprises that are becoming more and more impatient with the overall commitment of larger ERP and enterprise vendors to support today’s line-of-business and supply chain needs for added predictability, responsiveness and more informed decision-making. Time-to-benefit, quicker implementation and industry track record have become very important criteria. With the option of cloud applications, such enterprises are exploring methods to surround existing ERP based supply chain systems with more advanced, outside-in facing technology. From our lens, such a deal is an endorsement for needs and desires for fusing supply chain planning, execution and customer fulfillment processes as much as possible toward a single data model approach.
While it is not likely that the broader market will garner more specifics regarding this significant deal until later within its implementation phases, it will serve as an important milestone of continued market shifting favoring more nimble, cloud-based technology approaches.
In full disclosure, we share with readers that Kinaxis has been a prior sponsor of this blog, and we are in the final stages for having Kinaxis as a Named sponsor for 2015. That aside, this is a significant watershed development for the supply chain planning market, and should be referenced as such.
Congratulations to all involved.
There has been some noteworthy news regarding enterprise technology provider SAP.
Yesterday, the business software provider made a significant announcement regarding its marketing leadership. SAP appointed Maggie Chan Jones, a former Level 3 Communications and Microsoft marketing executive as Chief Marketing Officer (CMO). The news release cites her extensive cloud technology marketing experience as important for the renewed emphasis of SAP’s marketing efforts. Ms. Jones will be based in SAP’s Global Marketing office in New York City.
Former CMO Jonathan Becher has been appointed to the new role of Chief Digital Officer. Becher will lead a new business unit to expand entry into new areas of digital content and data. With this change, SAP will combine its existing online stores into one SAP Store where prospective buyers can discover, buy, download or upgrade software, services and content.
By our Supply Chain Matters lens, these moves indicate a far more aggressive SAP stance for leveraging cloud applications and cloud-based customer technology delivery. The new role of Chief Digital Officer will be especially challenging since it foretells of less influence and touch points for SAP’s direct sales and system implementation partner teams, who have garnered considerable influence these past years. SAP’s current CEO, Bill McDermott’s background is direct sales, and his active sponsorship of this new effort will be something for SAP customers to monitor in the coming months. One thing is certain for the short-term, we do not foresee SAP customers downloading mission critical business software from a storefront.
On an entirely different front, both SAP and Oracle recently agreed to settle their long-standing legal battle regarding alleged software copyright infringements from SAP’s prior acquisition of now defunct TomorrowNow. Under the settlement, SAP will pay Oracle $359 million to settle this case. In August, an Appeals court overturned a previous $1.3B jury award against SAP, instead identifying true damages as $356.7 million. SAP has now agreed to pay Oracle that amount and added interest charges, plus a previous payment of $120 million for legal and dismissal fees.
In early September, Supply Chain Matters opined that it was time for both SAP and Oracle to move on from their four year legal bitter legal battle. TomorrowNow, has obviously turned out to be not one of SAP’s most astute acquisitions and was time to put aside the egos from both sides. Both technology providers have suffered public embarrassments in the eyes of each’s individual customers and both have other pressing needs in terms of investments and services for supply chain, manufacturing, procurement and B2B network customers.
As many of our readers may be aware, the Supply-Chain Operations Reference Model (SCOR) was developed by the Supply Chain Council (now APICS Supply Chain Council) to assist multi-industry and organizational supply chain organizations make meaningful and rapid improvements in supply chain business processes. This model’s methodologies describe the Plan, Source, Make, Deliver and Return activities associated with supporting customer and business fulfillment needs and have become a common language to articulate industry supply chain capabilities.
We all know that today, industry supply chains are driven by customer requirements and service needs, and the SCOR model is a tool that helps organization’s with a single standard reference upon which to understand the processes that make-up the supply chain along with their relationships to performance metrics. The power of SCOR is that it does not document the supply chain in the lens of functions (planning, procurement, manufacturing, logistics, etc.) but rather that of business process inputs and outcomes.
This author has been both trained in SCOR methodologies and has volunteered in various positions of the Supply Chain Council, including being a prior member of that organization’s North America Leadership Team. I can therefore attest that SCOR is a rather versatile tool that has assisted many industry and service focused supply chain teams to describe the depth and breadth of their supply chains as well as provide the basis for supply chain improvement or transformational initiatives.
The multi-level SCOR framework maps all customer interactions, all physical and informational transactions, planning and fulfillment processes. SCOR is a hierarchical and highly defined model which can capture the detail of supply chain processes with their relationships to the all-important performance attributes of responsiveness, agility, cost or assets associated to a supply chain. Those teams that have had experience with SCOR know that the real power of the tool is in understanding how all processes relate to one another and where processes need to be adjusted or modified to meet changing business or customer requirements. SCOR is an important tool that brings detailed understanding of the entire makeup of a supply chain, including best practices derived from other multi-industry supply chains.
The power of a comprehensive process definition tool is in providing common taxonomy and detailed cross-organizational and management understanding of the many supply chains that can exist within a particular company. Too often, teams get bogged down in documenting and updating the SCOR framework models which takes away from broad cross-functional support and from the timeliness or effectiveness of the framework as a reference to support decision-making. This is where technology can provide needed assistance.
Supply Chain Matters has previously called attention to highly focused system integrators, such as Bristlecone, who have developed self-contained service offerings that address very specific business needs. These are fixed-cost, managed scope application accelerators developed from prior successful implementations and industry best practices.
To assist firms that utilize SAP’s supply chain management applications the BristleconeStore offers ProcessesNow, a series of pre-built process maps based on the SCOR framework. ProcessesNow provides a central repository of process maps that extend the SCOR model by additional three levels . It uniquely links these processes to the various transactions within SAP’s APO or Oracle’s Demantra planning application helping teams to better align the process maps with the transactions that enable them, hence, enhancing user adoption of the related planning solutions. Teams can interact with SCOR models both online and offline utilizing an easy to navigate expand and collapse structure.
Another neat feature is that Bristlecone has augmented ProcessesNow to support certain industry unique process needs. According to Bristlecone, this tool can typically save 4-8 months of framework documentation efforts, allowing teams to more productive time to analyze and iterate their SCOR models, and the tool itself typically can be installed in about a week. As with DemandPlanningNow which has previously highlighted, this application is built upon acquired knowledge, best practices and technical expertise acquired from prior supply chain implementations.
Disclosure: Bristlecone is a client of the Ferrari Consulting and Research Group
September is a unique month. Folks return from summer vacations, outings and getting closer to family, and then, the marketing juices ramp-up. These past two week alone have featured non-stop significant announcements concerning enterprise, B2B and supply chain management focused technology which we will capsule.
On the enterprise and ERP software front, the blockbuster news is the announcement that the founder of Oracle, Larry Ellison, is stepping aside, but alas, he is instead assuming a different role.
Larry Ellison to Step Aside
Business and social media is buzzing with today’s stunning announcement that Oracle founder Larry Ellison will step aside from his CEO role in favor of two Co-CEO’s. The Wall Street Journal’s alert story termed the announcement as: “one of the momentous corporate handovers in the history of Silicon Valley.” Well stated!
Other publications equate the significance to when Bill Gates gave-up the CEO role at Microsoft in favor of Steve Ballmer.
Both Safra Catz and Mark Hurd, two other senior leadership executives will assume the role of Co-CEO’s. But there’s more. Ellison will supposedly assume the role of Oracle’s Chief Technology Officer (CTO). Isn’t that interesting?
Twitter is lit-up with all forms of reactions, one tweet equates Ellison stepping down to assume the CTO position the equivalent of Vladimir Putin stepping down to become Prime Minister of Russia. Somewhat humorous but perhaps insightful.
Obviously, there is more to this announcement which is timed just before the kickoff of Oracle’s annual OpenWorld customer conference that begins this weekend.
Supply Chain Matters has been on-record of not inclined toward the Co-CEO model at technology companies. We did not see it as productive when it was previously practiced at SAP, AspenTech and other firms. The broader organization plays favorites as to whom will prevail as the ultimate successor and strategic initiatives suffer from internal political maneuvering and jousting. Just make a frikkin decision on whom is the top dog and let the chips fall.
Look for lots more buzz emanating from San Francisco and Redwood Shores in the coming days.
SAP Announces Next Iteration of Collaborative Supply Chain Management
The latest significant announcement from Walldorf concerns SAP Supply Chain Orchestration, an initial significant milestone from SAP’s prior acquisition of sourcing and procurement provider, Ariba. The application is described as integrating functionality of SAP Supply Chain Network Collaboration (SNC) and Ariba’s Collaborative Supply Chain application. The combined application will be made available as a private cloud-based delivery platform which includes the SAP HANA Enterprise Cloud service.
For existing customers utilizing either SAP SNP or Ariba Collaborative Supply Chain, the obvious questions will be on depth of support for both indirect and direct materials procurement collaboration, along with license pricing structures incorporated in this new application. There are obvious implications regarding other SAP applications supporting supplier network connectivity.
Supply Chain Matters is in the process of gathering additional data and will provide a follow-up commentary.
Infor Announces Updated Release Supporting Sales and Operations Planning
ERP provider Infor announced Infor Sales and Operations Planning 10x. The 10.4 version of the application is reported to feature Infor’s 10x technology platform and includes a built-in social collaboration engine, Infor Ming.le, to aide in facilitating and recording internal discussions across all process participants. The enhanced application reportedly features a single point to review planning alerts, exceptions, tasks and workflows along with enabling escalations from process stakeholders.
A rather neat feature is a termed playbook component to assist in organizing those time-consuming pre-S&OP meeting reports into structured chapters along with generating formatted Microsoft PowerPoint presentations. A built-in GIS capability provides users with a visualization of where various product demands are occurring, along with other data.
SPS Commerce and Bristlecone Partner for Cloud Transaction Automation
SPS Commerce, a technology provider with a focus on retail industry cloud services has partnered with specialty SI firm Bristlecone in expanded support for Oracle Applications to the SPS Universal Network, a broad retail industry trading partner network consisting of 55,000 members.
The announcement indicates that joint customer, Fruit of the Loom, recently deployed the Cloud Transaction Automation offering for Oracle. The Cloud Transaction Automation Solution is the latest addition to SPS Commerce’s portfolio of services.
Oracle Introduced Cloud Support for Transportation and Global Trade Management
Finally, we conclude our technology capsule commentary with news that Oracle has released Oracle Transportation Management Cloud and Oracle Global Trade Management Cloud applications. According to the announcement, Oracle has now made the functionality of its applications in this segment available for either on premise or cloud deployment. Both applications are noted to be designed for phased, rapid deployment from either Oracle Consulting or other Oracle specialized partners.
Readers may recall that the basis of Oracle’s transportation management support offerings is from the former acquisition of G-Log. These cloud-based deployment options were part of the multi-year product roadmap involving support in supply chain transportation, trade and supply chain execution areas.
Disclosure: Bristlecone is a current client of the Ferrari Consulting and Research Group
We all tend to have our favorite sports teams and we often come to enjoy the classic rivalry among certain teams. Regardless of the season’s record, the game between two noted rivals is often an event to itself.
So it is among certain businesses as well as large enterprise software firms where bitter rivalries seem to transcend other needs. One such longstanding rivalry has been SAP and Oracle where a contentious legal battle continues to unfold to what Supply Chain Matters views as a public embarrassment for both of these firms.
A prior SAP subsidiary, TomorrowNow, which turned out to be not one of SAP’s most astute acquisitions, had been performing software maintenance support for Oracle clients. Oracle sued SAP in 2007 after discovering thousands of suspicious downloads of its software. SAP later admitted that its subsidiary had violated Oracle’s copyright protections leaving a jury to resolve the level of damages to be paid. Oracle sought damages in excess of $1 billion, and indeed a jury found in favor of Oracle in a 2010 trial proceeding. However, a U.S. District Judge determined that Oracle’s claim was excessive and revised the damage award to $272 million. Both firms then agreed that SAP would pay Oracle $306 million in damages plus substantial legal costs to settle the matter. Oracle then elected to pursue the case before the 9th U.S. Circuit Court of Appeals in an attempt to recover the original $1 billion claim.
Last week, the 9th U.S. Circuit Court of Appeals court ruled on this matter. Media reports indicate that for the most part, the appeals court rejected Oracle’s $1.3 billion damage claim, in essence ruling that Oracle must either accept a lower amount or face a new trial. The three judge panel instructed the lower court to offer Oracle a choice of $356.7 million in damages or seek a second trial. Thus far, Oracle has declined to publically comment as to which action it will take.
After four years of legal wrangling, it is time for both firms to move on. Both have suffered public embarrassments in the eyes of each’s individual customers. From our lens, both firms have other pressing needs in terms of investments and services for supply chain, manufacturing, procurement and B2B network customers.