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Oracle ERP Cloud 'complete'; localization, industry tools in works

Rondy Ng, Oracle senior vice president, calls SaaS ERP a 'full suite' and details the thinking that went into designing a standardized cloud platform that allows some configurability.

Oracle ERP Cloud is now a "full suite -- broader than anything else out there, even broader than some of our on-prem products." So says Rondy Ng, senior vice president of application development at Oracle.

Ng leads the team responsible for Oracle ERP Cloud, the brand name for a growing collection of modules designed to provide software-as-a-service alternatives to the vendor's huge portfolio of older, on-premises ERPs, which includes E-Business Suite (EBS), JD Edwards and PeopleSoft. He sat down for an interview at the recent 2016 Oracle OpenWorld conference in San Francisco to explain the design philosophy behind Oracle ERP Cloud and how it differs from the competition.

Gartner has put forth this concept of the "devolution" of ERP that is very cloud-oriented and sounds like a multivendor vision, where instead of having monolithic ERP, you would have, for example, Salesforce CRM plugged into core financials. Is Oracle trying to be the one-stop shop with Oracle ERP Cloud?

Rondy Ng: Oracle's strategy is always about a complete, end-to-end solution, but it's not about monolithic. We're not trying to lock ourselves into one particular industry, or size or country.

Over 30 years of building E-Business Suite, JD Edwards, PeopleSoft, Hyperion, Siebel -- all those big, on-prem products we've been successful with over the years -- the things that we've learned from there, all the customer interactions, all the best-practice experience, we put that together when we conceived our whole cloud strategy.

Rondy Ng, senior vice president, OracleRondy Ng

We started the project eight, nine years ago, and we put a lot of effort into redesigning everything. We didn't even have the terminology cloud. We knew that it was going to be a software solution and a subscription service.

We looked at all the elements of all of the key flows -- say, just in the ERP domain, order to cash, procure to pay, record and report -- just three basic flows within ERP. There are a lot of niche players out in the market [instead] creating point solutions.

Traditionally, people understood the amount of integration work involved. We don't anticipate that just by moving to the cloud, with open integrations and so on, it's going to make it any easier. There are just a lot of connections, because these are big, complex processes.

Some of the brands you mentioned had integration issues because they were acquired. Taleo was the most recent significant piece. Is most of that work done?

Ng: Yes. Many times, when we bought [those products], we didn't want to disrupt the business model that these companies had. So, initially, we kept them as more of a stand-alone because a lot of the success is carried forward [that way].

But, generally, our strategy is when we acquire a product, we try to integrate it into our business processes, architecture and technology stack very aggressively. So, when a customer is interested in the acquired one, as well as possibly other parts of Oracle, they don't have to spend all of their IT to stitch them together. We try to do it out of the box for them.

Can you position what Oracle is doing with ERP in the cloud versus what SAP is doing?

Ng: Our strategy is very different from theirs. Instead of just taking our existing applications on premises and putting them on the cloud and calling them cloud applications -- we didn't do that. We rewrote all the applications.

We rewrote it with an architecture and with the mindset that customers are not customizing the applications. People will use business configurations to control the behavior of the applications.

This is a very key point for us, because people used to finish their ERP implementations with 50% of the effort going into hundreds, sometimes thousands, of customizations to finish the job. We cannot afford for people to do that on the cloud, because if we do it that way, then every time that we go from one release to another release, we [have to] apply all those customizations. I'm talking about changing the software code.

If we try to do that, we'll never be able to bring them the new releases fast enough in a consistent way and not cause them the grief and the pain.

Some of our competition just took the easy way: [They] took their old products and put them into the data center essentially as a hosting service. They still need [system integrators] to customize everything to achieve the full function the customer needs.

To me, the cloud model is about continuous innovation. That's why we took all the effort to rewrite all the applications.
Rondy Ngsenior vice president of application development, Oracle

That is not the cloud model. To me, the cloud model is about continuous innovation. That's why we took all the effort to rewrite all the applications. With all those customization points gone, we bring configurability into the applications.

For example, I can go into a business user interface, not a development tool, and control the behavior of the applications, including the look and feel, the colors, the fonts, the styles.

Let's say you need to keep an additional data element -- three more tracking identifiers. You can easily add those additional data elements into our applications and be able to specify a business rule, [such as] what is the future of these fields, what's the list of values, what are the validation rules?

These things are not hardcoded software code. They are actually stored as metadata in the database. [When] it becomes metadata, we will be able to upgrade consistently.

That's one key complexity with rebuilding all the applications for cloud: To take all the things that people used to do in customization and turn that into business configurations.

What can you say about the Oracle ERP Cloud roadmap?

Ng: I would break it down into two portions. One is around the cloud model, [which] is bringing us a lot closer to working with customers -- the implementations, the go-live, the constant feedback. We want them to bring the requirements to us, and we give them the return on investment very quickly. Almost 40% of my R&D [research and development] is focusing on supporting these customers' input.

Because we operate in the cloud, we understand how our customers are using our cloud applications. That doesn't mean that we look at people's data. We never look at people's data, but we know how our customers are spending what kind of time and activities on which functions. [For example], people are struggling with these three fields because it requires more than a .5 second response time.

The other 50% to 60% is about our strategic roadmap. We are getting customers of more and more complexity in nature. So, a lot of times, we are getting into, generally, four key areas that we invest in.

No. 1: advanced industries. We have more and more customers in very specialized industries wanting to get more advanced functions, like financial services, healthcare, manufacturing and so on. Sometimes, those were custom stuff that people did on the side with EBS or PeopleSoft. We're bringing a lot of those back into the core, so people don't have to do it.      

The second thing is additional globalization support. We already support 50-plus countries with localizations: statutory compliance, tax compliance, payment formats and so on. The majority of those came from our E-Business Suite. Now, we are getting into some of the more advanced countries, like Brazil, India, Poland and Turkey.

The third part is more and more new technologies. For example, how we use adaptive intelligence, a new class of machine-learning apps combined with a massive amount of web-scale data. This is a big part of our vision. Data-driven applications design is going to be the next generation.

The last part is a whole bunch of specific, advanced capabilities. For example, we're getting into more and more high-tech companies [and] software-subscription companies. Sometimes, there's advanced compliance -- for example, this new rule called IFRS 15 ... the new revenue-recognition rules. All of those are already in the works. Many of them are being rolled out at this conference and early next year.

Next Steps

Learn more features of Oracle ERP Cloud

See a video on moving to cloud from E-Business Suite

Read about Oracle's purchase of NetSuite

Dig Deeper on Cloud-based ERP systems