PG&E Finds Middle Path Between Oracle, SAP Products

Pacific Gas & Electric three years ago decided to modernize its business processes to make them more efficient.

It did so to better position itself in what it saw as a massive wave of consolidation it thought likely to sweep the public utility industry. With modern business processes, it could assimilate other utilities more easily, rather than be acquired itself.

The wave of consolidation never materialized, concedes Billy Glenn, principal architect of PG&E's Internet strategy. But the need for improved business processes remained and the effort has been a testing ground for conflicting ideas within the large PG&E IT staff. On the one hand, PG&E is a SAP applications customer, so it has a large body of SAP users and SAP expertise. They amount to a lobbying block that asks for a build-out of the SAP software.

"Going into this, we said, 'If SAP makes it, we're going to use it,'" recalled Glenn, who took time out from Oracle OpenWorld this week to talk with Information Week.

On the other hand, PG&E is an Oracle database user. When it comes to business process management, it needs a bridge between its reliance on Oracle databases and SAP applications. When BEA Systems was an independent company, PG&E selected the WebLogic applications server. Now that WebLogic has been added to Oracle as part of the BEA acquisition, Glenn suddenly has a counter-pressure to the SAP interest -- a key component of PG&E's middleware is in the Oracle camp.

The fact that WebLogic is a primary building block as he transforms his business processes illustrates why Oracle fought so hard to acquire BEA last January, coming back after an initial rebuff to seal the deal at a higher price. With the acquisition came BEA's sizable middleware customer base, including PG&E.

Having looked at both Oracle and SAP offerings, Glenn said he's increasingly relying on Oracle Fusion middleware, such as Oracle Portal and Oracle Business Process Management Suite, instead of the SAP alternatives.

"We looked at the SAP portal and Oracle portal and said we just can't do it (stay within the buy-SAP mandate)," Glenn said.

In part, said Glenn, he was aided by CIO Pat Lawicki, who had decreed that IT was to stop increasing vendor mixes and standardize certain areas of software. With WebLogic in place, visibility into and management of business processes would be easier if something compatible with WebLogic automated them. PG&E was worried about managing processes and maintaining compliance. "Governance came up all the time," said Glenn, and integration within a single vendor's product line offered part of the answer.

The Oracle middleware replaces PG&E's aging software from SeeBeyond, an early middleware supplier acquired by Sun Microsystems.

There's still not universal agreement within PG&E. Those who like SAP application remain an influence, but Glenn said, "We're chipping away at holdout islands."

PG&E is adding new applications and functionality as services through a service-oriented architecture approach. But "governance is the killer," he said. A new service must meet user expectations before it will become part of a successful business process. Too often, the user says, "that service missed a field that I needed. You don't know who's using the service. You don't know whether to modify the existing one or build another one."

At the same time, PG&E has removed some of the secrecy and urgency with which it surrounded its early business process modernization effort. In its first phase two years ago, it set aside 500 IT staffers in a separate building and made them swear not to talk about what they were working on, leading to speculation that whatever it was, it would eliminate jobs, said Glenn.

Now IT has scaled back what it expects to revise year to year and telegraphs what it will work on next, such as modernizing PG&E fleet management this year, decreasing employee worries about jobs.

Will it be able to complete transforming all the business processes it would like to?

"To be determined," said Glenn. "It looks good on paper. We've been successful in driving toward a shared environment in the data center" instead of different departments and business groups each doing their own thing. "I'm still holding my breath," he said.

For additional comparisons between Oracle's and SAP's handling of business process management, InformationWeek has compiled an independent analysis of the topic. Download the report here (registration required).