Thursday, 15 May 2014

Oracle EBS Support Timebomb - Not So Black and White

I was on vacation at Easter, diving in Egypt with no internet above or below the surface so did not see the ComputerWeekly article, "Businesses face Oracle applications support timebomb" until I returned.

I read the article by Cliff Saran who I have known for over 10 years many times, the sources, UKOUG who I am part off worked with Original Software on the EBS survey, I trust the data, Forrester and PwC are renowned companies and Ray Wang is a personal friend whose integrity I admire, there are no incorrect statements so why do I feel the need to reply?

In a recent blog about my thoughts on Collaborate, the biggest Oracle Users Conference in the US, I spoke about mis-information, this is not the case here, but the Computer Weekly article doesn’t go far enough, it isn’t the whole story.

Oracle E Business Suite is successful because it is flexible, and this flexibility and the harsh fact that many adopters customised the ‘hell’ out of it, means that no two organisations have the same install. Add to that that each organisation has a different overall portfolio of IT, from hardware, operating systems, and plethora of applications and technology, one size does not fit all.

Each organisation needs to look at their own situation, strategy and needs, and not simply take statistics and guidelines at face value.

E Business Suite release 11 is stable, has been for many years with very few new patches, customers still using it have low cost of ownership. Yes they have no new functionality and Oracle have kept their Applications Unlimited promise and have delivered lots of new functionality, and lots of opportunity to benefit from new technology, but if an organisation doesn’t need it, or can’t afford it then they may simply have decided to stay put.

I have a car, it isn’t key to my business, it is reliable, and is 7 years old. The cost of ownership is low, and it doesn’t matter how many times my dealer offers me a ‘great’ deal, or tells me it is cheaper to upgrade in my case it isn’t, I do less than 4,000 miles a year and I’m fine thank you.

Is it too late to upgrade? No and many people are still upgrading for sound business reasons.

Sustaining Support may be enough for organisations; in most cases, and again there will be a few exceptions, the legislative patches Oracle supplies are around payroll. If you don’t use payroll and the survey does not say how many of those not upgraded are payroll, then again you may not be worried.

So should these organisations that are sticking to Release 11 move to third party support? Personally I think their value proposition is only as an exit strategy. If you stop paying Oracle you lose the right to upgrade under your current contract, and they can and should charge you all sorts to reinstate. At that point I doubt you will have saved, but again you need to weigh up individual circumstances.

Are some organisations waiting to see if Fusion is the answer? Perhaps and yes a lot will have decided not to go early, or been put off by the challenges. My recent interviews with Dennis Howlett talk about these.

PwC remind us in the article that you need to be on R12 to migrate to Fusion directly, again this is correct, but let’s dig a little deeper. You migrate to Fusion, it is not an upgrade, and Oracle provide migration scripts from R12. If you are migrating a module that at data level looks the same or very similar to R12, then the script may well work or need a very small tweak. For most modules this is true, the really BIG exception is Financials, the table changes at R12 mean the migration scripts simply won’t work.

So does this mean a financials customer can’t go to Fusion? No it means there is no direct migration script available. A partner may have written some bespoke and I am sure if there is one, they will happily sell you the service (let me know). Equally when organisations adopted EBS for the first time they had no automatic migration of their existing data. You load balances as journals and open items for the sub modules, and how much data you bring over as historic is a business decision (that must be approved by your internal auditors). I am not saying this is easy, I am not saying it has no cost, you have historic data storage and retrieval to consider, but is it cheaper than an upgrade project to R12, which Ray Wang explains is no easy feat? – probably. Again it is a personal business decision for an organisation after weighing everything up.

Forrester are quoted as saying Fusion immaturity and Oracle’s lack of clarity of strategy as being barriers, and yes I agree they have been. Again my recent interviews talk about some of these, but my message is clear, Fusion is being adopted and Cloud makes that possible in a quicker timeframe with predictable costs. I wrote for Profit Magazine's 2014 Trends Report that this was something we would see more and more of, and Collaborate proved that for me. Adoption in the US has traditionally been quicker and UK has been slower to come out of recession, another important factor David Warburton-Broadhurst our UKOUG President spoke about in the article, but it is coming.

So it was a great article, factually correct but a general statement of the position, each organisation has many other factors to consider. This is what makes my role so interesting.

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