SmartAdvice: Oracle Will Merge Application Features--Eventually

Editor's Note: Welcome to SmartAdvice, a weekly column by The Advisory Council (TAC), an advisory service firm. The feature answers two questions of core interest to you, ranging from leadership advice to enterprise strategies to how to deal with vendors. Submit questions directly to [email protected]

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Question A: What should Siebel users expect from the Oracle acquisition?

Our advice: The customer-relationship-management race is now, for the most part, a two-horse contest between Oracle/Siebel and SAP, notwithstanding Microsoft's internal development in this area and smaller vendors such as Salesforce.com, etc. By providing customers with a totally integrated product set from database and application server to the specific business application, Oracle should have an advantage over rivals IBM, Microsoft, and SAP in putting together end-to-end sales bundles. With a larger development organization, it's also well-positioned to integrate these disparate suites and ultimately develop the combined super-suite that Oracle calls Project Fusion. In the short run, however, TAC expects SAP to continue to gain market share as a result of marketplace confusion.

Oracle's future direction will emphasize retention of customers, adding Oracle's infrastructure stack to PeopleSoft's suite, JD Edward's suite, and Siebel's suite, integrating the PeopleSoft and Siebel acquisitions, and ultimately providing an upgrade path to a single new enterprise suite that incorporates all of the functionality of the progenitor suites plus new features, new standards-compliant middleware, and service-oriented architecture application components.

Oracle's support and maintenance services, a key source of the company's enormous cash flow, should enjoy increased efficiency with higher levels of customer satisfaction. Oracle announced that it would support existing PeopleSoft releases for 10 years from the time the acquisition was set in motion. Oracle said that it would provide upgrade tools for each suite to Project Fusion. TAC expects that the same or similar polices will be applied to Siebel customers.

Oracle will continue to support JD Edwards, PeopleSoft, and Siebel applications that run on non-Oracle infrastructure for existing customers and for the next set of suite-specific releases. While it hasn't been guaranteed that Oracle's Fusion applications will run on non-Oracle middleware, TAC expects that it will. However, there's no strategic advantage to Oracle in taking a public position on this important matter at this time.

Related Links Oracle: Welcome Siebel Oracle To Acquire Siebel Systems For $5.85 Billion

Long term, expect a future release of the Oracle application suite that incorporates the functionality of the three merged suites. This integration of CRM, ERP, and supply-chain management has been a steadfast differentiator for Oracle versus SAP up to this point. However, the policy also has extended release cycles versus what could be achieved with separate data schemas.

Consolidation within the software industry is inescapable. Enormous economies of scale provide a kompetitive advantage that forces market participants to acquire, be acquired, or exit the business. Fed up with the high costs associated with integrating and maintaining disparate applications, there's a trend for buyers to prefer to purchase enterprise software from as few suppliers as possible. On average, they're allocating an additional percentage of their IT budgets to enterprise suite sales each year. Based on these trends, most user companies should seek competitive advantage based on lower IT operational costs, rather than on IT differentiation, which may be a reasonable strategy for agile competitors.

-- Peter Taglia and Peter Schay

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Question B: What does my company need to know about electronic data discovery, and how should we be prepared to deal with it?

Our advice: Electronic data discovery (EDD) refers to the identification, gathering, organization, and production of relevant electronic documentation as part of the legal-discovery process during litigation. The electronic format is used for most important enterprise records; other information is created, retained, and used in electronic format, but it isn't well managed. Retention and organization of E-mail, for instance, often is haphazard. Technological advances extend the list of potentially "discoverable" information, e.g., company Web sites, blogs, instant messaging, iPods, and mobile phones with cameras. Most companies lack policies for producing required information from this electronic hodgepodge during discovery.

Related Links The Sedona Principles The Sedona Guidelines www.KenWithers.com Information Nation, Randolph Kahn and Barclay Blair

The courts are gradually raising the bar for what must be disclosed, how well it must be organized, and the timeframe for producing it, and are growing less tolerant of sloppy record-keeping-practices and other excuses for "missing" records. Recent court decisions, particularly Zubulake v. UBS Warburg (2003 and 2004), clarified the scope of discovery, highlighted duties of counsel, set criteria for apportioning discovery costs, and established new expectations for sanctions. Courts may invoke the doctrine of "adverse inference" and instruct juries to assume that missing documents substantiate the opponent's case. In a May 2005 case in Florida, Morgan Stanley & Co. was ordered to pay more than $1 billion in punitive and compensatory damages after the judge ruled that the company had failed to produce required E-mail and other documents in a case. In August, Merck was found responsible for a death resulting from its product Vioxx, a verdict based partially on documents disclosed at the trial.

The best preparation for EDD is a comprehensive records-management system, which includes training for all employees, retention and disposition schedules, responsive information-retrieval systems, and appropriate information technology. Related strategies:

Management interest. Top management should be aware of the legal implications of information management, support sound policies, and assign responsibilities.

Team approach. EDD is complex, so a good approach is to appoint a team that includes corporate counsel, the records-management officer, the chief information officer, IT managers, and representatives from top administration to develop policies and help coordinate a response if discovery is ordered.

Information locator systems. It's essential to know where electronic data resides and how to get at it.

Retention and disposition policies. Systematic records- retention and -disposition schedules are vitally important and are needed for all records.

Audit and monitor. This helps ensure and measure your company's compliance with its records and information-management policies.

Manage the discovery process carefully. Usually one person, e.g., corporate counsel, should be designated to lead, coordinate, and assume responsibility for ensuring that discovery orders are carried out.

"Hold" requested records. Once a discovery request is received, or even if one is anticipated, "hold" notices to preserve appropriate records should be circulated to appropriate parties, and relevant records should be preserved until litigation ends.

Follow the courts. Continue to watch for new court decisions about EDD, particularly at the federal level.

-- Bruce Dearstyne

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Peter Taglia, TAC Expert, has more than 20 years of IT experience from the vendor perspective, focused on process automation for eBusiness, eCRM, contact centers, telecomm operations support systems, E911, wireless and wireline networks via n-tier applications, integration, middleware, and portals. His experience includes complex planning, project management, financial justification, ROI, metrics and strategies for growth via opportunity assessment, product management, value innovation, benchmarking, and industry structure research for alliances, mergers, and competitive analysis.

Peter Schay, TAC executive VP and chief operating officer, has 30 years of experience as a senior IT executive in IT vendor and research industries. He most recently was VP and chief technology officer of SiteShell Corp. Previously at Gartner, he was group VP of global research infrastructure and support, and launched coverage of client-server computing in the early 1990s.

Bruce Dearstyne, TAC Expert, has more than 30 years of experience in government, universities, and association work. He is the author of five books, most recently "Effective Approaches For Managing Electronic Records And Archives," and approximately 75 articles on records and information management and strategic information management. His expertise is in leadership, development, and management of information programs; the role of CIO's; integration of information programs into enterprise operations; knowledge management; trends and developments in information management; and records management, including legal issues.