The great thing about the Software-as-a-Service (SaaS) model is that the innovation keeps rolling with updates delivered quarterly in the cloud to every customer. This latest quarterly update from Oracle is very consistent with previous updates: new integrations across the suite, machine learning features and user experience enhancements.
I have been following the progress of Oracle Fusion Cloud Applications Suite with several articles on the subject. I believe Oracle’s success is primarily due to using a SaaS model to rapidly evolve the software suite in both breadth and depth of offerings, with hundreds of new features delivered quarterly to thousands of customers in the cloud.
On the company’s recent quarterly earnings call, Oracle Co-founder and CTO Larry Ellison commented that Oracle continues to take customers away from SAP. Ellison then read off the names of dozens of companies and organizations to support his claim but did not delve into why this was happening. SAP then returned the favor a few weeks later. Who ever said that enterprise app competition was boring?
This article will discuss the new features and my take on why Oracle is winning based on the commentary from the three customers who took to the stage today with Oracle and my one on one conversation with Steve Miranda, Executive Vice President, Applications Development at Oracle.
What is new within Oracle Fusion Cloud Enterprise Resource Planning (ERP) and Enterprise Performance Management (EPM)
Net-net, this quarterly update from Oracle emphasized machine learning (ML) and artificial intelligence (AI).
Oracle Digital Assistant is an AI-driven interface that helps users accomplish tasks in natural language conversations. Oracle Digital Assistant has been enhanced in Oracle Cloud ERP to enable finance teams to efficiently manage account reconciliation, financial consolidation, and close processes by asking simple natural language questions.
Oracle Intelligent Performance Management (IPM) identifies and leverages financial and operational data patterns to improve accuracy. It contains Monte Carlo simulations to determine the likelihood of various scenarios and can run predictions on the latest actuals. IPM is enhanced in this update to enable machine learning models from third-party applications, such as analyzing customer data, deal profile data, or other operational data outside of finance, into Oracle Cloud EPM.
Oracle Risk Management provides security and transaction monitoring to strengthen financial controls and stop fraud. New workflows and dashboards powered by AI improve risk awareness, collaboration, and executive oversight to help improve corporate governance.
Oracle’s Project Management manages projects across the enterprise with connections to finance, HR and operations. Users can now propose projects in Oracle Cloud EPM and send them directly to Oracle’s Project Management for execution or easily extend budget controls and approvals in a single solution.
In Oracle’s event today, it highlighted three customers.
TTX Company keeps rolling with Oracle Fusion Cloud Applications
TTX Company, a provider of railcars, went live on January 1st, 2020, with Oracle Cloud ERP, EPM, Supply Chain & Manufacturing (SCM) and Human Capital Management (HCM) migrating from a heavily customized SAP system on-premises.
The impetus for change with this customer was the inflexibility of a customized SAP system that could not keep pace with evolving business processes. The statement “The days of running systems for years without updates are over” really summed it up for this customer.
TTX said it chose the Oracle solution because it was the complete suite of enterprise applications on a common platform. The quarterly updates were a significant change that needed new processes to evaluate and test the new features. But now, business processes can continually improve as the software continues to evolve.
Kroger shops for the Oracle HCM platform
The Kroger supermarket chain has been on a transformation journey, replacing legacy applications and standardizing them with the Oracle Fusion Cloud Applications platform.
Kroger said it is in the process of adopting the Oracle Cloud HCM platform for core HR, talent management, compensation payroll. Having those functions in the cloud allows Kroger to modernize and standardize business processes. Also significant was the mobile experience, to put applications at the associates’ fingertips, helping to attract new talent and keep existing associates happy and productive.
It sounded like the Kroger story is a work in progress. Still, Oracle received high marks, with the Oracle and Kroger teams operating highly collaborative and transparent throughout the project’s life.
Mondelez International snacks on Oracle Fusion Apps
Mondelez is a snack company with well-known brands such as Oreo cookies, Chips Ahoy, and Ritz crackers, to name a few. Mondelez has started its transformation journey with Oracle Fusion Cloud Applications.
The customer said it is a user of Oracle Transportation Management, part of Oracle Cloud SCM. The story is consistent with software on-premises which over time became customized, leading to inflexibility with updates. Mondelez decided to go to a SaaS model. This required a shift in mindset from customizing software to a much more standardized model, as well as shifting from yearly updates to quarterly updates, which required process changes to test and vet the upgrades.
Why is Oracle winning customers?
One of my favorite “cut to the chase” The key to Oracle’s success is the SaaS model. That fact came over loud and clear from the customer testimonials. The regular quarterly cadence of new features is just something that legacy competitors on-premises cannot match.
The cloud model is winning because it accelerates the speed of innovation. The SaaS model with quarterly updates is fundamentally different from the historical on-premises model we have endured for 50 years. This appears to be increasingly problematic for SAP as it has not written its ERP system for the public cloud or a SaaS model.
Consistency is essential with the SaaS model. While customers emphasized the need to test and vet the new features, they also described the latest innovations arriving each quarter without disruption.
The world is constantly changing, and business models need to change extremely quickly. Technology is changing incredibly quickly. If you’re on a system that receives updates once every five years or even every year and your processes are rigid, you are at risk of being left behind. That is why Oracle is winning.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.