As expected, Oracle is working overtime to entice its installed base to migrate to its next generation of business applications, using as incentives promised cost savings and process efficiencies to justify the move.
In speech after speech at the AppsWorld user conference here yesterday, Oracle executives emphasized the value of the company's E-Business Suite 11i, first released nearly two years ago. The company, looking to bolster its revenue, now needs to convince the reluctant half of the installed base that's still running the 10x iterations of the suite to upgrade.
Making his pitch in a keynote speech yesterday morning, Mark Jarvis, Oracle's chief marketing officer, outlined the company's product road map, saying that although the "suite is not finished," there would be few new products added. Instead, Oracle will be adding in new features to its existing lineup.
Jarvis and other executives also showcased an upcoming feature for the suite, dubbed the daily business close. As the suite continues to evolve, users will be able to access all relevant data about their company's activities on a daily basis through different lines of business. Oracle also highlighted its outsourcing program as a way for users to move to 11i with minimal investment in hardware, service and support.
Before the conference got under way, some analysts observed that Oracle is facing an uphill battle with some users.
"There is indeed a perception problem on the user side that Oracle is not delivering what the company promised with 11i," said Jennifer Kemmeter, an analyst at Boston-based AMR Research Inc. She noted that in rolling out the suite, users have had to struggle with upgrading in a timely manner and " and in some cases they've gone horrifyingly over budget."
She noted Oracle has to convince the holdouts that the 11i suite is stable, which it appears to be; that migrating to it won't bankrupt them; and that it can be done in a timely manner. To succeed at that, Oracle is offering new programs to help slash those costs.
A number of Oracle users, particularly those customers relying on the outsourcing program, testified they are seeing some of the benefits of 11i migration. At Washington-based hops products manufacturer John I. Haas Inc., there has been an 80 percent reduction in the time it takes to resolve technical problems, according to Kyle Lambert, vice president of information solutions.
The company is relying on an Oracle-hosted version of 11i, which replaced disparate legacy applications supporting six different locations. The toughest part of the outsourcing initiative was selling the idea to upper management, said Lambert, because it didn't want to give up control of applications.
However, with Oracle taking care of a lot of the 11i management headaches, the Haas IT staff has been freed up to work on core business systems; and Lambert said he has seen an increase of staff productivity of 100 percent, as well as process efficiencies in order entry and other areas.
At Kvaerner Pulping Inc.'s power division, there have been some occasional problems. But there is a direct line to Oracle for assistance, said IT manager Woody Muth. The Charlotte, N.C.-based supplier of boilers and evaporation plants has used Oracle outsourcing since June to manage and maintain its financial, order management and purchasing applications. That led to a savings of US$300,000 in IT costs.
"The big benefit was in the tightened integration, especially of order management," said Muth. Users can now track an order online as it moves through the system from shipping to payment; previously, the process was handled manually.
The company has also been able to reduce in-house inventory by over $1 million.