In our previous dispatch commentary we provided general impressions from this week’s Oracle Industry Analyst World Spring event being held at the company’s corporate campus in Redwood Shores California.  In this Supply Chain Matters dispatch, we focus on briefing highlight elements of Oracle’s supply chain management support strategies.

Rick Jewell, Oracle’s senior vice president of supply chain applications development delivered an update on supply chain applications strategy, some of which we can share, and some we cannot because of non-disclosure agreements.

The core attributes of Oracle SCM remain, namely:

• Providing a complete suite of supply chain management support.
• Being ERP agnostic, including the support of other major ERP backbones via open applications integration architecture.
• Providing modular applications that can be matched or mixed to customer needs.

The core Value Chain Planning (VCP) grouping of applications has undergone 8 point releases in the last 3 years. Four new planning applications have been added including service parts planning.  The Oracle Rapid Planning application has been augmented with integration to S&OP support, inventory optimization and collaborative planning needs.

Oracle Value Chain Execution has also undergone its share of enhancements including 95 new releases to Oracle Transportation Management (OTM) since the acquisition of G-Log.  By the end of the year, OTM is planned to include mobility support for information and business function access across smartphone and mobile platforms. Oracle Warehouse Management has added 42 new features including 2 industry specific solutions. Oracle Global Trade Management is a recent addition to this grouping.

Oracle Supply Chain Management’s 12.2 Release was described as imminent and includes some rather interesting new functionality including an expanded Advanced Planning Control Center, an equivalent to support for an executive-level S&OP process.  It is designed to bring together the product hierarchy dimensions of Demantra S&OP with supply and distribution planning capabilities.  The new release will also feature some long overdue simulation capabilities for Oracle Rapid Planning to support intra-day simulations of supply and demand plans.  The 12.2 release was also positioned for Oracle enhancements related to support of asset intensive industry SCM needs.

Oracle PLM and Product Value Chain comes under the umbrella of Oracle’s SCM and includes PLM/PDM support utilizing Agile PLM and Agile PLM for Process. Since the original acquisition of Agile, Oracle indicates that there have been over 500 customer-driven enhancements added.  A neat new feature is the ability to analyze the product development pipeline or simulate product demand scenarios from PLM within an overall S&OP process framework. One other highlight of Product Value Chain is the addition of enterprise quality management functionality, soon to be enhanced with the addition of some Endeca powered information discovery capabilities. Jewell was not shy in naming recent Oracle customer acquisitions in competing with SAP.

Another important highlight to share with our readers is the current direction concerning Oracle’s Fusion or cloud-based SCM offerings. Fusion is the Oracle strategy to allow applications to run in a public/private cloud as well as on-premise.

Dispatch three will address this element of Oracle’s direction.

Bob Ferrari

©2012 The Ferrari Consulting and Research Group and Supply Chain Matters blog.  All rights reserved.

Disclosure: Oracle has no current financial or sponsorship interests in this blog or our consulting services business.

Supply Chain Matters will be traveling to the west coast this week to attend Industry Analyst World, hosted by enterprise technology provider Oracle. The agenda calls for a series of briefings from various Oracle senior executives on market, industry and product strategies. We will especially be attuned to Oracle strategies focused on supply chain business intelligence, predictive analytics and overall applications strategies.  Considering the current competitive environment among Oracle and other enterprise vendors such as SAP, the timing is ideal.

Stay tuned this week for updates and impressions from this briefing.

Oracle today announced the availability of Release 6.2 of both Oracle Transportation Management and Oracle Global Trade Management.  The significance of this release is that Oracle continues to broaden both TMS and GTM from a singular applications platform, with built-in integration to the existing Oracle E-Business Suite 12.1. Also unique is the ability to have both TMS and GTM functionality available on a singular platform, which is not always the case among various technology vendors.

As noted in the Oracle press release, Release 6.2 of Oracle Transportation Management provides functionality enhancement in the areas of transportation sourcing, private fleet management, transportation planning and business intelligence. Release 6.2 also adds support for Oracle Data Integrator, which better facilitates the ability of customers to add any number of additional transportation costing or business intelligence data attributes for costing analysis.  Readers should take further note of the continued enhancements in small parcel and rail transportation rating, tracking, freight payment and audit which have previously been the purview of best-of-breed vendor offerings catering to high tech or industrial manufacturing clients.  Supply Chain Matters believes that this is further evidence that Oracle intends to be a serious competitor in the TMS area.

The additional functionality within Oracle Global Trade Management Release 6.2 that now features built-in integration with Oracle E-Business Suite 12.1, now includes the ability to conduct trade or denied parties screening for various sales orders within the order processing workflow, to conform to trade compliance needs in international sales. Unfortunately, this integration does not include Oracle Fusion integration components at this time. Also included is somewhat sophisticated functionality that supports product classification of items based on parent/child relationships of an item’s bill of material or sub-component configuration which should help in determining the optimal product classification for global trade reporting and duty considerations.

In our briefing with Oracle management, pricing and reference customers for the 6.2 Release was not disclosed.

Bob Ferrari

Oracle is taking advantage of the International Supply Management (ISM) Conference being held this week to showcase the availability of both Oracle Supplier Lifecycle Management and Oracle Supplier Hub. Both applications are part of the Oracle E-Business Suite Release 12.1.2, being offered as Supplier Management support.

These applications were designed to be complimentary to each other and are being offered to companies who have a large number of suppliers to support.  They were designed to support needs for improving overall supplier visibility and to overcome supplier data fragmentation.  Oracle Supplier Lifecycle Management is positioned more towards business process applications needs, supporting supplier discovery, qualification, contract compliance, scorecarding and self-service registration and applications needs.  Oracle Supplier Hub is positioned more as a master data management hub to consolidate, cleanse and share supplier data with other applications.  The application creates a blended supplier record from multiple sources and supports a cross reference to each connected application. It further supports the importing of data via multiple means, including XML or spreadsheet uploads.

Interesting enough, Patni Computer Systems partnered with Oracle to jointly develop both of these applications is an unusual occurrence for Oracle. I was informed by Nagaraj Srinivasan, Oracle’s Vice President of Supply Chain and Procurement Applications Development that Patni will be a prime, but not exclusive implementation partner. 

Oracle is targeting a broad swath of vertical industries with these applications, to include not only manufacturing and retail, but communications, financial, insurance and public sector.  The common denominators are companies that must manage and support a very large number of suppliers at any given time.

 Bob Ferrari

ERP software customers have gained a renewed sense of power with last week’s announcement from SAP AG that the company would step back from its previous plans to move all customers to Enterprise Support contracts priced at 22%.  According to an article featured in InformationWeek, SAP will instead adopt a two-tiered system that reintroduces a Standard Support option priced at 18%, which is 1% higher than 2008 rates. 

This move is a victory not only for SAP customers, but others as well, including Oracle’s ERP customers.  The issue of increased maintenance fees concerning SAP dates back to a July 2008 decision to increase software maintenance fees to 22% over the next five years.  SAP’s European customers, specifically Germany and Austria were the first to cry foul, and ever since, more and more of the worldwide SAP customer base have been pushing back.  The revised plan is to gradually increase support rates starting in 2011.

The current challenging economic times have forced many companies to slash costs and preserve cash.  While most employees and suppliers were often asked to give concessions, the major ERP providers persisted in raising overall software maintenance fees.  As most IT professionals would explain, software maintenance is double-edged. Companies must not only pay the annual fee, but must also expend efforts to remain current with new software releases or upgrades, or upgrade IT headcount and infrastructure to maintain current release levels. What can be even more frustrating is when the ERP supply chain module is not even being used, or lies “on the shelf” because functional teams have lost interest or focus in the application.

To present both sides of the issue, the ERP providers argue that maintenance revenues provide the means to keep new enhancements and technology flowing to installed base customers, along with insuring that the software will be supported when a problem occurs. Those arguments do not hold much value with today’s more empowered customer base.  To no surprise, companies are also turning to other non-ERP technology alternatives including hosted or software-as-a-service providers, or even third-party maintenance providers.

I agree with the consensus that credit should be given to SAP for biting the bullet and finally listening to the voice of its customer base. 

In April of last year, Supply Chain Matters called attention to an open letter blog entry penned by Bob Evans of Information Week, which at the time was directed to Oracle CEO Larry Ellison.  That letter challenged some fresh thinking regarding Oracle’s 22% maintenance fee.  Evans correctly noted that rather than a fee, the name should be changed to “innovation and development funds“. Others chimed in, utilizing other terms such as “M&A capital raising activities” or “user tax”. With this development concerning SAP support, Oracle customers should feel more empowered to exert their voice of protest as well.

A lot of commentary regarding the new decade reflects on the notion of “reset”.  In the case of ERP and perhaps the entire installed customer base of enterprise-level software, that reset is underway.

Bob Ferrari