SAN FRANCISCO -- Oracle advertises its outsourcing program, Oracle Outsourcing, as a complete applications maintenance, management and upgrade service. After all, the company Web site states, who can service your software better than Oracle? In order to make its case, the company presented OracleWorld attendees last week with satisfied users of the service. At the close of the presentation, though, some users in the crowd still had concerns about whether Oracle Outsourcing is the right answer.
Here, we recap satisfied users' presentations and some of the conference attendees' reactions:
Institute of Food Technologists (IFT)
Paul Grassman, director of information services for the nonprofit, Chicago-based institute, described his effort to launch something he called MyIFT. Acting as an extranet for IFT's member base of 28,000 food scientists, MyIFT was planned as the "go-to" knowledge center and idea exchange for food sciences topics, he said.
"We needed to launch a personalized member portal called MyIFT within an extremely short time frame," Grassman said. After determining that the Web was the vehicle to enable MyIFT, he had to tackle challenges such as static content, a limited staff and the relative lack of collaboration among IFT chapters.
In April, the IFT staff voted to use Oracle 9i AS and Collaboration Suite software.
Oracle Outsourcing offered Grassman technical expertise and support, as well as good response time, stable operations year-round, quick hardware and software installations, and disaster recovery. "The result is no IT problems," he said. When asked by a conference attendee what disadvantages he discovered in Oracle Outsourcing, his answer was that he'd found none.
Billed as the largest luxury hotel operator in Latin America, Grupo Posadas has a company mission "to serve the guest," according to Javier Barrera, chief marketing and technology officer. The company owns more than 75 properties with 14,300 rooms in Mexico, South America and the United States.
But Grupo Posadas did not have integrated sales and distribution points and, as a result, hotel staffs were constantly struggling with room inventory rather than focusing on the guest experience, Barrera explained.
Barrera's staff chose Oracle E-Business Suite Outsourcing because it offered minimal risks during enterprise resource planning (ERP) implementation, minimal costs, simpler upgrades and full accountability, he said. "We have no blaming, no complaining now -- it's Oracle's responsibility," Barrera said.
The new system is on schedule for an Oct. 1 go-live test in five hotels, Barrera said. But the implementation didn't come without its learning curve.
"Whenever you do a quantum leap like this, you need to do some re-engineering of your business processes," Barrera said. Barrera's main frustration was that he expected to have one account manager for Oracle Outsourcing -- and instead got several. "We had to learn how to move throughout the Oracle organization," he said.
Unlike the other two companies, Salt Lake City-based Infopia Inc. uses Oracle Outsourcing for 100% of its infrastructure needs, according to chief technology officer Eric Maas. An application service provider (ASP) that creates customized, scalable e-commerce solutions, Infopia currently has 150 large-scale sellers whose inventory the company loads into systems and exposes to marketplaces through listing mechanisms.
The company's 15-person staff lacked the expertise needed to handle its growing infrastructure, according to Maas. It couldn't handle scalability costs associated with upgrades and maintenance, nor the volume of the firm's inbound/outbound e-mail system.
"The volume of e-mail is staggering. We see 100,000 e-mails a day," Maas said. "The system couldn't effectively handle it." Maas turned to Oracle for help.
"Who better to maintain and monitor the infrastructure than the company that built and continued to build the software?" Maas said. Now he has 20 multitier development servers running fully separate development and production environments.
Key benefits he's seen over the past six months include 30% cost savings and a 50% production gain for developers, who are freed up to do more important work. "We have more bang for our buck than we ever did before," he said.
However, Infopia's move to Oracle Outsourcing was not without challenges. "Our largest frustration has been the Collaboration Suite being a fairly new product." As Oracle prepares to release version 2, it's been "painfully slow" for Infopia to get new applications set up, he added.
Additional concerns were raised by conference attendees.
"I'm preparing for offshore outsourcing, but SLAs [service-level agreements] are a big concern," said Richard Speck, manager of database technology for the Troy, Mich.-based Chimes Inc., a managed services provider (MSP) that deals in work force procurement and vendor management services.
Specifically, Speck wants to know how Oracle Outsourcing's application service provider (ASP) model (used by Infopia) would apply to his MSP model, and ultimately save money. "We have a lot of money wrapped up in Oracle licenses," he said, referring to Chimes' 80 processes of Oracle Enterprise Server and Collaboration Suite. "We want to lower costs like everybody else."
Speck and several other session attendees also brought up the issues of performance and security, a topic not directly addressed by panelists. Speck said it's important that he be able to continually respond to security audits by users. Also, user response times "from network router to network router have to be three seconds," he said. "How can Oracle's SLAs guarantee that?" Speck asked the panelists.
"There's not a set number saying that your Web pages are going to load this fast," Maas responded, "but Oracle is committed to making the pages load fast."
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This was first published in September 2003