Business & Technology Nexus

Dave Stephens on technology and business trends

Oracle’s E-Business Suite – Chapter 1

with 2 comments

Perhaps a better name for this post would be "what was right about Oracle's E-Business Suite Strategy."

I will tie my opinions into choices I made in the Procurement area & along the way you'll get a good idea of similar choices Oracle made across its ambitious ERP & CRM footprint.

It makes sense to start this story by relaying a snippet of a conversation between Ron Wohl and Larry Ellison. In those days, and likely to this day, Larry would host a weekly meeting on Applications development. Key leadership at Oracle would attend and discuss a variety of topics requiring action.

One interesting feature of these meetings was the waiting. You see, you never knew just when they would start. If the scheduled start time was 2:30pm, the meeting might begin anywhere from 1pm to 6pm. Everyone was on call, ready to go whenever Larry arrived.

If you were in the board room, you could tell Larry was close at hand when his food arrived. Maybe it was a fish sandwich from McDonalds, maybe it was accompanied with a nice fresh root beer float. You see, when you're Larry you can have whatever you want whenever you want. I'm sure it's a strange existence – and tough in it's own way (yes, you say, I'd like to have that kind of tough!)

Now Ron Wohl at the time (and up until shortly after the Peoplesoft acquisition) ran Oracle's Applications Development organization. And make no mistake about it, this meant Ron ran Oracle's Applications business. Ron is an amazing intellect. He is a great leader and remains a fantastic mentor. Ron always seemed to expect people to do great things – and sometimes we did..

But on this day, long ago, Ron and Larry were bantering on the state of the Applications business, and somehow the topic turned to Marketing. Now, as usual, you are getting my best effort at a recollection, not necessarily to be confused with the truth. I hope it's fair.

In any event, Ron told Larry that Applications (ERP & CRM) was a mixed bag of products that were bought by different buying centers within a company and with wildly different value propositions.

Larry: Well, how do you market them then?

Ron: By area – for HR it's "blah", for CRM it's "blah"

Larry: But how do you market the whole thing?

Ron: It's very difficult – there's no central message

Larry: No, no, no. This stuff has to all tie together. We have to brand Applications as a whole – we can't possibly do it area by area.

And just like that, Larry dove into Oracle's Applications business. The press somehow knew about Larry's increased involvement and wrote about it a lot. And it sure was interesting seeing how Larry's perspective evolved over time (or more correctly, my perception of his perspective).

Larry declared right away that what was wrong with Applications (ERP & CRM) was that there were too many different systems & too many different configurations. He could never understand the schizophrenic feedback he'd get: some customers would say quality was great, others would say they were ready to sue.

He theorized the reason for this was that every system was unique. And this uniqueness was driving up support costs, and driving down customer satisfaction. And not only that, most customers were running too many systems, thereby fragmenting their corporate information horribly. Including Oracle.

He started asking questions like "How many employees does Oracle have?" or "How much did we spend worldwide with Dell last year?" And he never could get an immediate answer. It always took awhile. And when he got an answer, it wasn't "as of now." It was always stale.

So he posited that every customer should have a single, global instance of ERP & CRM applications. Oracle would make darn sure that system was engineered to work together – in fact that would be job 1.

Further, Larry posited the system should be vanilla – no customizations. And he'd start with Oracle itself as a testbed.

– Chapter 2 on it's way –


Written by Dave Stephens

04/16/06 7:47 PM at 7:47 pm

Posted in IT, Opinion, Technology

2 Responses

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  1. Having worked at a number of software companies, with Oracle as a customer, partner and competitor, I can understand Larry’s comment about some customers think quality is great and some are ready to sue. I think this is a problem for the Entreprise software space in general — anyone from SAP or Oracle down to some of the smallest players have this issue.
    Configuring App Servers, dB, web applications, etc is extremely complex and some individuals are better at it then others. In many cases, the companies that think Oracle’s (insert SAP, etc) quality is great probably employ highly skilled technical people; those that want to sue have people with lower technical skills. But because they are human like the rest of us – adverstise to their management that they are highly skilled and the software is too complex.

    Part of the value of SaaS is that it hides all the IT complexity and ensure that people who are highly skilled are working on the technology. If not that SaaS vendor won’t be around for long.

    Of course SaaS doesn’t solve the business domain expertise issue but at least you don’t need as strong technical domain expertise.

    Karl Waldman

    04/19/06 6:23 AM at 6:23 am

  2. How true. And your point undermines one of Larry’s early premises about customization being the root of the problem with Apps quality, which I intend to talk about some in a future post.

    Dave Stephens

    04/19/06 6:48 AM at 6:48 am

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