Oracle’s R12 solution has now been here for more than 3+ years since it was released in the year 2007. The adoption of the R12 solution over the past few years has grown as expected, with companies seeing value in their investment in the new solution. The new R12 solution not only has a  good number of technical changes, but in many process areas there are major functional changes for example, financials, and manufacturing. In addition to this, Oracle has also introduced many new products bundled with the R12 solution which can also work standalone with 11i. Customer can leverage these solutions while retaining their current investments in R11i or migrate to R12. They can either look at moving to R12 solution through an implementation route or through technical upgrade route. Each of this approaches have their own pros and cons and  every industry vertical has something to look up to for leveraging this solution.

Through this blog I want to share my views  on the R12 solution, upgrade approach, best practices, challenges for process industry vertical. As a part of its strategy for R12, Oracle has introduced many solution enhancements for the Process industry customers. I believe the R12 upgrade initiative by any process industry enterprise  is a major decision which should be evaluated and planned with proper due diligence.

In the next part of this series, I would write about the process manufacturing industry in general, the typical challenges that they face and so on. The subsequent blogs would be about IT approaches suited for this industry, challenges, solutions and best practices available as of now.

Stay tuned.

I’ve noticed what a sorry state the Search Engine Optimization (SEO) world is in.  This is not a new idea with me, I know other people see the same thing.  Companies everywhere are constantly chasing the best way to boost their Google results to the top of the list, but it’s a fools’ errand.  They pay big money to consulting firms, and their own internal staffs, to figure out ways to get in front of millions of users when someone types in “best Hawaiian vacation” or whatever.  But the search engine companies keep changing their algorithms so no one gains an unfair advantage.  So the target subject is perpetually moving, which of course generates tremendous churn like a school of hungry piranhas after a piece of never-ending meat.  For the search engine users just looking to find unbiased information, it’s a total waste of time because no honest little vendor can compete with the companies who are constantly throwing trunks of money at SEO.  So to the people doing the searching it’s like watching an endless stream of infomercials about the ShamWow when all you want is an honest opinion on a good towel.  I wonder what effect this is having on our online shopping habits.  I think it’s probably forcing us to give up in a lot of cases and just end up purchasing products from whichever vendor is screaming the loudest.  Or maybe it’s forcing us to return to talking amongst ourselves and simply using word of mouth recommendations.  All available on Facebook, of course.

As I write my first blog, I want to share my thoughts on the business in the emerging markets.

The emerging markets are an interesting mix of challenges and opportunities. The opportunities lie in overall growth of the economy and fast increasing consumer base. The customer expectations are  very high and they want goods and services to be delivered  at global quality at locally affordable price points. It is interesting to observe that such an environment coupled with high expectations of value from customers is spawning innovations faster than ever before. In the case of products, companies have achieved this by understanding the local customer priorities and stripping away the ‘bells and whistles’ features of the products. Indian cell phone maker Micromax demonstrates a good example of this strategy. A relatively new entrant into this business, Micromax has notched up to the third position in the market by offering highly cost effective phones with features that are a big hit among the users. The strategy was to focus on providing the customers with high priority features such as long standby battery time (up to 30 days) and dual SIM and do away with other, more expensive but rarely used features. This is forcing the leaders like Nokia and Samsung to launch similar new products to compete with them.

In the case of services too, including the IT services space, the expectation of most customers is that there would be some ‘innovative’ way for providing the solution at much more attractive price points, is driving new innovations in technologies, service delivery and business models. Unlike the traditional view of innovation as a focused R&D effort, in the case of services in these markets, innovation is viewed as solving the problem with the means available at hand. Some may call it ingenuity and not innovation. But, it is such ingenious solutions that have eventually resulted in disruptive innovations. A large percentage of the worldwide developer population being in the emerging markets and a variety of interests on the part of government, industry and academia are encouraging adoption of open source software for solving critical problems.

The most visible innovation in the service delivery model may have been the application of mass-production techniques to services. But, after maturing to what is popularly known as ‘Global Delivery Networks’ based on tools and processes, IT service companies are proactively moving to service models akin to SaaS, where higher volumes of usage make pay-per-use models a win-win for both customers as well as the service providers. Likewise, the move to platform solutions where the service provider builds a robust software platform to standardize and automate the business processes for a particular industry (which in turn can be based on orchestration of one or more commercial off the shelf platforms), and uses that to provide end-to-end services to multiple customers in the same industry, e.g., end-to-end customer care and billing functions for an industry, etc.

The emerging markets are also witnessing a wide range of contrarian business models to the typical effort based consulting model. In a first of its kind deal in India, Bharti, the largest cellular service provider in India, outsourced all of its IT to IBM where IBM assumed responsibility for all of Bharti’s IT systems, infrastructure, and people for a percentage of Bharti’s revenues, which directly linked IT cost to business performance. The agreement construct was innovative not only from the perspective of the remuneration model for IBM, but also in terms of the scope of the delivery, which was comprehensive and included practically all of IT—current and future. As Bharti went through an explosive growth in the next few years, IBM benefited directly from the revenue growth.

As emerging markets have fewer legacies in systems and business models, I expect this innovation trend to continue. Organizations in the rest of the markets may not have similar business drivers, but they could all benefit from these innovations, of course adapted for the local requirements.

We recently conducted a very successful webinar “Peer Advice: The Inside Story on Upgrading to Oracle E-Business Suite R12” in collaboration with CIO.com. One of our customers Clopay Corporation, the nation’s largest manufacturer of residential garage doors along with Oracle Corporation participated sharing their insight and experience. This webinar was very well attended with large number of CIO’s and VP’s of IT throughout North America. You can view more details at our website. A large part of the webinar was devoted to Clopay Corporation discussing their R12 upgrade journey with details on strategy, business case, execution, successes measurement and finally advises to CIOs. Oracle also updated the participants on the business benefits they will realize upgrading to R12. One of the benefits to live interactive webinars is that you can get real world feedback on the fly.

When we asked the participants “Are you planning to upgrade to Oracle EBS R12? More than 50% of the participants mentioned that they are not looking for upgrading to R12 in 2010. I was really surprised that more participants hadn’t started the upgrade planning process. There are many benefits that can be realized by upgrading. Part of the reason could be waiting for Fusion. I expect Oracle will be clearer on this path over the next few months. Companies that are starting to research their service provider will be on top of their game. An interesting next question was – What is your reason for not upgrading until now? 32% of the participants cited no in-house bandwidth as the reason with 30% not sure about ROI. This partially answered above response. Choosing a right service provider to help with your upgrade is critical – given the R12 upgrade momentum, one might want to consider moving fast to get the right attention from a provider whose capabilities fit the best. Creating an ROI can be daunting; this is where methodical approach such as Clopay’s can help in overcoming the issue. Every organization is unique – with Oracle and service provider’s help, IT leadership team can make an appropriate case with ease. I would love to hear your thoughts. Have you started your upgrade yet? If you haven’t started the upgrade what is the reason? I look forward to your feedback and thoughts on this interactive blog.

Tools: Multishoring & Valuesourcing

As the world is slowly emerging out of economic downturn, the question lingers on everyone’s mind is “What is next”?. While a set of people are busy validating the ‘revival reality’, I thought it is time to look at some trends that could potentially change the landscape of business models. The large volume outsourcings that have triggered a major outsourcing wave during Y2K and .com wave have not only disappeared but the value gaps are widening with no proper model to support. Developed economies such as US & Europe are not only focused on commodity and low cost alternatives to sustain growth and also starving to create bandwidth for innovation. The large scale outsourcing of IT services and BPOs have virtually created new industries in India, China and other destinations in Eastern Europe and also in Latin America. The GDP growth and stronger economies in Emerging markets have created new markets for corporations in North America. It is hard to ignore these trends for a economy which needs to recover to year 2000 level and then progress from there.

I believe companies will look at ‘multishoring’ in a value and growth expansion context as opposed to volume and cost basis. Service providers need to focus on vertical solutions that could potentially solve ‘global expansion’ problems to sustain growth. The traditional offshore players with large number of people presence in emerging markets, interestingly needs to invest in “building value drivers” (both people & solutions) in developed economies such as Europe & US. In the coming years corporations will have to focus on more ‘Internet & mobile retailing’ as well as ‘vertical solutions’ that can help them to grow globally. If this trend is adopted by both SMB and Fortune 1000 companies as a sustenance strategy, it will trigger next wave of outsourcing which I would like to call its as “valuesourcing”. Service providers irrespective of their size needs to build on

(a) Global delivery capabilities
(b) Vertical Solutions that can help companies to grow rapidly & globally
(c) “Valuesourcing” with right blend of people & solutions.

I am sure every corporation in North America and Europe will ask themselves this question at some point of time in the next 10 years (2010 – 2020). “How can we sell our products and services through internet and also serve & expand into global markets”. US & Europe markets will re-tool its people and systems to ride on this wave. If M&A strategies focus on ‘valuesourcing’ and they will trigger job creation to support global expansion as opposed to downsizing. Well managed and result oriented companies will pursue more acquisitions to reach this trend.

“In my opinion, it is the brand that makes more business sense as opposed to shifting too much toward one particular shore”.