Oracle this week rolled out software that integrates its Value Chain Planning (VCP) applications with its JD Edwards EnterpriseOne product suite. The new integration lets EnterpriseOne users fully exploit all of the supply chain management tools and processes in the VCP apps. Lenley Hensarling, Oracle group vice president and general manager, Oracle's JD Edwards and Applications Unlimited, sat down with SearchOracle.com Editor Ed Scannell to talk about the significance of the release for corporate customers.
SearchOracle: What is the importance of this announcement for corporate users? Why should they care?
Lenley Hensarling: People want to be able to attack specific supply chain problems and do it in what I call an asynchronous fashion. By that I mean, instead of upgrading the ERP system, they might want to work on inventory optimization or on other specific areas such as collaborating more closely with suppliers. The value chain planning story is really a holistic picture that enables you to attack one part of it and to do that when you are ready. It allows you to prioritize which business problems you want to attack while you are building up a complete and cohesive system, including a system network optimization plan that helps you figure out where you need to have warehouses or where you need to do your manufacturing.
SearchOracle: How difficult will it be for IT shops to integrate complex products like EnterpriseOne with products like this?
Hensarling: Well, this has been a real focus. Before, we had all of these assets, whether it was the demand planning from Dementra or supplier collaboration or network system optimization, and people would say this is great. But if they wanted to deploy all these they had to deal with all this integration. And there were some really awful integration scenarios that we offered them. So what this new integration model says is: Let's do the integration on the basis on the complete value chain planning picture so we can pull all these things into an XML sort of world. So as people add different components, they won't necessarily have to implement separate integrations. They will already have a good bit of that done for them. This will help lower the total cost of attacking these problems. It certainly lowers the cost as they decide to pick up an incremental component of the overall value chain planning solution.
SearchOracle: How many of your EnterpriseOne users currently use AIA?
Hensarling: I can't give you an exact count, but I would say it is something less than 100, although it is growing a lot. Now, what I have tracked is what we call, internally, edge products. These are products like the value chain planning products sold with the JD Edwards deals.
SearchOracle: How does this announcement relate to the Fusion Middleware 11g line just announced on July 1?
Hensarling: A core piece of the integration model we have here is Oracle Data Integrator (ODI), which is a part of Fusion Middleware. One of the things that have helped us to significantly lower the total cost of integration is the fact that Oracle is this very broad technology company as well as being an application company. With assets like ODI, we have a framework for both data movement with mapping and security. This allows us to build AIA integrations. Fusion Middleware provides a foundation in terms of technology and technology assets, ODI being a primary one here, although there are also components of this integration that use the BPEL (Business Process Engineering Language) real-time messaging component.
But we have what I call a horses-for-courses kind of approach to all this. That says AIA is good at handling bulk data movement and mapping from a source system to the planning systems. Other applications are best handled in batch, and ODI is the primary tool there. Some integration components in a solution need real-time messaging and orchestration, and so tend to leverage BPEL.
SearchOracle: What sort of user feedback have you received from the 9.0 version of EnterpriseOne released in May? What did they think you did well or not so well?
Hensarling: The most feedback we got had to do with the quality of the release, where I think we have reached a tipping point. There were many fewer fixes and patches they had to deploy. Customers also said that migrating to the release was a lot easier than last time. People with a product like this don't move every year. So if they haven't moved in four or five years, they probably had a certain anticipation of how difficult it was going to be. But when they went out and did it, it was a lot easier than they thought. They would come to us and say, "I would like to move to 9.0, but it will take me 18 months, so is there any way I can work with you to have extended support?" We have a consulting services group to do things to help users with things like back porting end-of-year taxation and W2 support and things like that. But we haven't sold any of those services because just about every customer has passed on taking some interim step and gone live with 9.0. This has been a surprise to both them and me.
SearchOracle: What is typically the adoption rate among users to a major upgrade like EnterpriseOne 9.0? Will it take two or three years before you get 60% or 70% of the base to move over?
Hensarling: Well, the 8.12 release, which has been out about three years, is close to 50% of the installed base. The 9.0 release is now approaching 10% of the installed base, and that has been out since September. Its adoption rate is higher than 8.12. Contrast that to five years ago, around the time of the acquisition (of JD Edwards by Oracle). Close to 75% of the installed base was on XE, which is now only 11%, heading toward single digits pretty rapidly. So that adoption rate and the movement have changed dramatically.