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February 7, 2000

Oracle's Talking: Should You Be Listening?
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Oracle executives say the vendor is blurring the lines between the front office and back office with its integration. "The whole notion of a separate ERP package goes away," says Ron Wohl, executive VP of application development, adding that customers, especially those who are new or upgrading, are increasingly buying all their applications at once.

To help in that effort, Oracle will jump into the supply-chain planning market this spring with the debut of Oracle Advanced Planning and Scheduling. The vendor will be competing against supply-chain management vendors such as i2 Technologies Inc. and Manugistics Group Inc., as well as against ERP competitor SAP, which introduced its supply-chain planning suite more than a year ago and says it now has 350 installations.

Motorola Broadband Communications Services, a manufacturer of equipment for cable-television systems, is an Oracle ERP customer that's evaluating Oracle APS. The company says the package is promising because of its integration with ERP, but it's holding off until the package matures. "I don't know if the stability is there yet to take the risk," says Sanjay Kothary, senior director of business applications for the Horsham, Pa., company.

The release of a complete supply-chain package is critical to Oracle's credibility as a provider of online business-to-business marketplaces, a new area of focus. For example, the initial goal of AutoXchange, the online automotive trading exchange Oracle is building for Ford Motor Co. and its suppliers, is to enable procurement of automotive parts over the Web. But to get the benefits of doing business online, Ford must be able to share forecasts, production schedules, capacity planning, and delivery information with suppliers through the site, thereby reducing inventory throughout the supply chain. Oracle promises to incorporate such sophisticated supply-chain collaboration capabilities into the exchanges it operates to differentiate them from competing marketplaces introduced by procurement specialists Ariba Inc. and Commerce One Inc.

Ford started a pilot test of AutoXchange last week that let it procure items such as office supplies, according to Alice Miles, president of Ford B2B Consumer Connect, the automaker's E-commerce division. By the end of the month, Ford and Oracle will officially open the site to 2,000 participating Ford suppliers, although some of the automaker's top suppliers will begin indirect purchasing earlier.

Ron Pollard Photo by Gary Parker Analysts say more than that is required for the exchange to be successful. "Two thousand suppliers are desperate not to be cut loose from the mother ship," says Joshua Greenbaum, an analyst at Enterprise Applications Consulting. "Anyone can sign up--all that requires is the use of a Web browser. What becomes more difficult, but also more beneficial, is to integrate your back office into AutoXchange." Ford says those capabilities aren't set up yet, and supply-chain activities won't be possible until the exchange is upgraded at the end of March.

Oracle also plans to open its own business-to-business marketplace for office supplies, services, and information, called Oracle Exchange, shortly after the launch of AutoXchange. So far, the company has signed up 950 companies to participate, including Barnesandnoble.com, Boise Cascade Office Products, Compaq, Dun & Bradstreet, Office Depot, and Staples.

But not everyone thinks Oracle's execution is flawless. Living.com's Kass says he's disappointed in the quality of Oracle's CRM product, and doesn't expect Oracle 11i to be a big-enough step forward. "As far as providing the front-end tools, they still have a way to go," he says, adding that Oracle's determination to fit every capability into a single suite blinds the company to its weaknesses. "When you want to do everything, you run the risk of focusing on making your products work together at the detriment of building relationships with other companies," he says. Oracle's Web server, he notes, is subpar: He says the vendor should have focused on partnering with more-established Web-server makers.

Drew Farris Photo by Stephen Sherman And while Oracle wins points for the strategy it's set, Meta Group's Bonadio says the vendor has yet to deliver all that's needed. "If you look behind the strategy and the vision and the marketing, you're going to find a good amount of holes in the products," he says. Oracle simply may not have the maturity and depth of more-established CRM vendors such as Siebel and Clarify. For instance, Oracle's call center is missing several key pieces, including blended call support and predictive dialing. Other analysts say Oracle's marketing-campaign-management component is weak. And Oracle needs to do a better job integrating the pieces of its CRM suite, many of which are the result of a 1999 buying spree.

Also, Oracle 11i's delivery date has slipped about six months to May or June because the CRM components aren't completed. That date won't slip any further, promises senior VP Mark Barrenechea, Oracle's head of CRM development--June is the final deadline. There had better not be any more delays--executing on Oracle 11i is vital if the company wants to prove that it's not all talk. Oracle, says Bonadio, "has got so much riding on 11i that it's not even funny."

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