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Oracle edges out SAP at logistics firm

A lengthy evaluation process led Schneider National to pick Oracle over SAP for its transportation management needs.

Oracle beat its chief rival, SAP AG, in the race to provide one of North America's biggest logistics firms with comprehensive new business management systems.

Schneider National, a Green Bay, Wis.-based transportation and logistics outfit with $3.7 billion in annual revenue, announced this week that after a lengthy evaluation process -- during which the company looked closely at both Oracle and SAP -- it has decided to use Oracle applications and infrastructure software to build a fully integrated transaction and data environment.

Schneider, which provides truckload, logistics and intermodal services to customers in more than 28 countries, says it will rely on Oracle Fusion Middleware, Oracle Database, Oracle E-Business Suite applications and Oracle Transportation Management -- a product Oracle acquired when it purchased G-Log -- to help it gain better visibility into its many operations and take advantage of service-oriented architecture (SOA).

"This was a real tight horse race," said Judy Lemke, Schneider's executive vice president and chief information officer. "[SAP] showed well. It's just that Oracle provided a more convincing and compelling set of evidence that they were pretty far ahead in the [transportation management] space with the acquisition of G-Log; they have a compelling case for their middleware; and they certainly provided compelling evidence as to their willingness to partner."

An unusual evaluation

Schneider's management team knew going into the vendor evaluation process that they wanted to build an asset-based transportation management system. But, according to Lemke, neither Oracle nor SAP offered advanced asset management systems. As a result, it became clear that Schneider executives would need to work closely with the winning vendor over time to develop such capabilities.

"It was a little bit different evaluation than you might see if there were fully mature capabilities in both products," Lemke said.

A typical vendor evaluation involves looking at products and deciding which one is best, but for Schneider, Lemke said, choosing between Oracle and SAP meant looking at the differing business goals, strategies and attitudes of each company.

"For us, the first and most important criteria was strategic alignment," Lemke said. "The second thing we looked at was their willingness and ability to partner, because we knew that we were going to rely heavily on each other for the ability to develop the asset-based capabilities."

Lastly, Schneider looked at Oracle's and SAP's technology. While the competition was close, Lemke said Oracle came out ahead in all three areas.

"We are working with Oracle on its [Oracle Transportation Management] product and working with its system development team in terms of co-developing some of the capabilities," Lemke said. "We are helping to define the requirements that they are putting into the system."

Deployment details

In addition to overhauling IT, one of Schneider's main goals is to use Oracle technology to improve the experience of its customers and ensure that shipments are delivered in the most efficient and cost-effective manner possible.

Lemke said Schneider purchased Oracle E-Business Suite because it wanted to implement a fully integrated suite of procurement, financials, payroll, human resources, supplier management, enterprise asset management, demand planning and supply chain management applications.

"We wanted to go to more packaged software so that we can focus our resources on the more strategic things and the things that would differentiate us the most," she said.

Oracle Transportation Management will provide Schneider with "end-to-end" planning, execution and visibility into its transportation and logistics operations. Lemke said Oracle Transportation Management is a key aspect of Schneider's plan to improve the customer experience.

On the SOA front, Schneider plans to use the Oracle SOA Suite, Oracle Application Server 10g and Oracle Identity Management 10g, Lemke said. The company will also run Oracle Real Application Clusters and Oracle Database 10g.

Schneider, which already runs Oracle-Siebel CRM, an application it purchased long before Oracle bought Siebel, is currently in the process of implementing Oracle Contact Center Anywhere, Siebel Marketing, Oracle Real-Time Decisions and Siebel Partner Relationship Management. The rest of the project is expected to be a multiyear effort, Lemke said.

Pain points

Schneider is about four months into its Oracle implementation project, and thus far the technology has met or exceeded Lemke and crew's expectations. But, Lemke says, dealing with Oracle on licensing and contracts can be a somewhat painful, red-tape-filled process.

"Oracle does have a little bit different makeup than SAP does, and we are more litigious in the United States than others," Lemke said. "But I think [it's] always a little bit more difficult to go through the Oracle machine when you're trying to discuss terms and conditions or get approvals and signatures."

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