How Oracle is embedding emerging technologies inside its cloud ERP suite

During the transformation journey to the cloud, data becomes a very critical element. Another key part is the role of emerging technologies which become very relevant in how they help customers generate returns and value from their cloud journey. The adoption of cloud applications is moving forward across three platforms.

The public cloud is the first step of migration to the cloud from on-premises, followed by adoption of additional cloud platforms, making multi-cloud progression, a natural next-step outcome. Restrictions around data sovereignty are also making enterprises implement private cloud as well, making hybrid cloud also a logical outcome.

With multiple data platforms, public and multi-cloud cloud environments can challenge end users in terms of data integration. Eventually the complexity becomes very tough for end users to manage data integration across multiple data platforms.

“We see customers resorting to very expensive data warehousing construct. You cannot meaningfully do machine learning across data pools,” explains Juergen Linder, Senior Vice President, Cloud Business Group, Oracle.

“Multi-cloud, hybrid type of environment is going to be the predominant type of footprint for most of our customers, which has to do with data sovereignty issues. Certain type of regulation issues prevents them from pushing everything into the public cloud and serves unique opportunities to coexist,” says Linder.

Oracle’s Cloud@Customer is a complete cloud instance running behind an organisation’s enterprise firewall. It functions as a private cloud and provides complete cloud functionality but runs on an on-premises model of hosting. Oracle has multiple layers of cloud technology that it can bring to the market based on business outcomes around ERP, CRM, HCM, EP, SCM.

“Data gives us an opportunity to engage with customers in their need to transform,” points out Linder. “Cloud offers a very different way to engage with customers, and becomes more intense since we can see actual usage. Every customer is part of the cloud community.”

Data layer and ERP

As part of a customer’s journey to the cloud, Oracle is working hard to ensure there is only one data layer across all its cloud applications. If there is only one data layer that means business processes will not stop at application boundaries and will work seamlessly across all applications. However, the primary benefit remains the ability to automate from end to end of the business process.

With the adoption of digital technologies, it is becoming easier for businesses to move towards becoming a services company from being a product company. However, this does mean that customer experience management from the front office through the middle office to the back office, needs to be seamlessly integrated and needs to flow seamlessly.

“What you are doing is modelling a service at the customer side that needs to be backed up by billing mechanism, revenue recognition, billing in ERP, and to take advantage of IoT sensors data for new billing scenarios,” adds Linder.

Once the data layer has been seamlessly integrated from end to end for business processes, it is possible to embed emerging technologies into the application suite that sits on top of the data layer. For its public cloud stack SaaS portfolio, Oracle is hosting Oracle ERP—Financials Cloud, Oracle HCM Cloud, Oracle SCM and Manufacturing Cloud, Oracle Customer Experience Cloud, Oracle Analytics Cloud, Oracle EPM Cloud, Oracle Data Cloud, Oracle Taleo Recruiting, and Oracle Taleo Talent Management.

Oracle is now embedding emerging technologies like artificial intelligence, machine learning, Internet of Things, analytics, blockchain, security, into its portfolio of public cloud products.

“Sitting on top of a very deep stack of technology allows us to be extremely flexible in deployment mechanisms for customers. This is part of the infrastructure that every SaaS customer naturally takes advantage of when they engage with us,” says Linder.

He also sees the impact of emerging technologies reshaping fundamentally how businesses are going to be run, by reducing the mundanity of tasks, leveraging pattern recognition and machine learning. As an example, 89% of finance functions performed today can be automated.

Aarti Mohan, Director ERP EPM Cloud Strategy, Oracle ECEMEA.

Emerging technologies

By first integrating the data layer across the full suite of cloud applications and then embedding emerging technologies into these cloud applications, Oracle is hoping to give its customers a head-start in successful usage. Emerging technologies are directly embedded into the business process so they do not feel like a foreign element. Some of the more specific technologies include intelligent track and trace inside supply chain, intelligent document recognition, field service logistics, amongst others.

“We are embedding them natively into the application flow and making sure based on the common data layer that we have business processes supported end to end with those type of technologies,” clarifies Linder. He also points out, that in the past when vendors have not built-in these technologies, such as artificial intelligence in isolation, end users have had to experiment themselves.

“In case of applications we owe it to customers to give them a head start. They will not be able to benefit at the same pace that we can provide for them.” To date, Oracle has made 624 million recommendations and delivered them for route recommendations based on machine learning.

Linder adds, “We do not ship technology for the sake of technology and leave you alone with that. Machine learning for us is a super important feature because of pattern recognition and allows us to be very effective. As an example, we are shipping IoT use cases and it is seamlessly integrated into the application.”

Oracle believes that the best way for end users to benefit is by embedding emerging technologies and prebuilt use cases and templates within its Cloud ERP suite. And these are being inbuilt into business processes themselves rather than having users access them outside the process.

“The supply chain module has seen a tremendous uptake in our customer base and tremendous amount of maturity,” states Linder. Out of 2,700 supply chain customers on Oracle Cloud, 1,850 are already live.

“The mapping is already done and prebuilt use cases are being leveraged by customers. The algorithm is already there and the recommendations are on the screen. It is up to the user whether to use the recommendations or not. With machine learning the system is learning,” explains Aarti Mohan, Director ERP EPM Cloud Strategy, Oracle ECEMEA.

The IoT platform and various use cases are prebuilt inside Oracle Cloud ERP. Others include asset management, production monitoring, connected workers. The ability to use these templates and use cases depends on maturity of the end users. Moreover, they are designed to be end user driven and do not rely on consultants for implementation.

“We have invested a lot in IR4 type of capability, augmented capability for stocking and repairs, and digital twins. We are beyond the first step,” adds Aarti.

Soaring to cloud

For first-time end users migrating from on-premises to the cloud, the list of risks and what could go wrong are endless. In the middle of 2018 Oracle announced its Soar programme to help end users accelerate to the cloud from on-premises in a risk free, predictable and planned manner.

Says Linder, “We have served enough customers to really be in an advisory function as to what is the right approach for each customer. If they are on-premises how can we complement them and move them to the cloud in a very predictable fashion.”

Customisations are pervasive in every on-premises ERP customer base. The Oracle Soar methodology makes a proper assessment of the customisations that have come into existence over a prolonged period of time, sometimes decades. Looking at the real usage of these customisations, many of these may not be critical anymore. And more over business processes keep evolving well after customisations have been made.

During the cloud journey, customers are keen to arrive at their destination with the right business model and the right technology. During their stay on-premises they may have used older versions and built customisations for their processes, which they may now find in-built and standardised in new versions and upgrades available in the cloud.

“Often times, a like for like conversation is not necessarily what you want to see. I want to understand what is your business transformation goal. Where do you want to be and map that against what is in the system? What are the best practices of today, and then do a candid corporate assessment, if the customisations of the past are the ones you want to bring over?” explains Linder.

The Soar approach is meant to take the risk out of the migration equation. The Soar offering is a fixed time-frame, fixed price, fixed scope, no surprises methodology for customers on their journey to the cloud. The methodology for the Soar migration and the tools has been built by Oracle. The Soar assessment is made by Oracle Consulting and extrapolates the existing landscape into what is the required cost and time. The purpose is to ensure there are no surprise left while migrating to the cloud.

While the Soar methodology is implemented by Oracle Consulting, Oracle’s global system integrators also have their own methodology for migrating end users from on-premises to the cloud. Oracle’s global system integrators include KPMG, Accenture, Manai, Deloitte, Wipro, TCS.

“Soar is a risk-free approach for our customers to move from their current on-premises investment to the latest Oracle platform called Fusion. We call it the last upgrade that you will ever do,” remarks Aarti.

Innovations

Oracle has built-in artificial intelligence and machine learning into its database resident in the cloud that supports its applications. The Oracle autonomous database is self-securing, self-driving, self-running, and self-patching. Now Oracle has expanded the autonomous capability to the Linux operating system.

“What that fundamentally means is we are using machine learning and artificial intelligence to run and operate the cloud on its own, without human error and mistakes. The system itself is able to drive all these operational capabilities to provide better quality of service at a lower price for the customer,” says Ashish Mohindroo, Vice President Oracle Cloud, Oracle. “Oracle is the only vendor in the market that is offering autonomous cloud,” he points out.

(Left to right) Juergen Linder, Senior Vice President, Cloud Business Group, Oracle; Aarti Mohan, Director ERP EPM Cloud Strategy, Oracle ECEMEA; and Ashish Mohindroo, Vice President Oracle Cloud, Oracle.

Key takeaways

  • Once the data layer has been integrated it is possible to embed emerging technologies into the application suite.
  • You cannot meaningfully do machine learning across data pools.
  • Multi-cloud, hybrid is going to be the predominant type of footprint for most of our customers.
  • When vendors have not built-in technologies, such as AI, end users have had to experiment themselves.
  • 89% of finance functions performed today can be automated.
  • We do not ship technology for the sake of technology and leave you alone with that.
  • Out of 2,700 supply chain customers on Oracle Cloud, 1,850 are already live.
  • The Soar approach is meant to take the risk out of the migration equation.
  • Soar offering is a fixed time-frame, fixed price, fixed scope, no-surprises methodology.
  • Soar assessment is made by Oracle Consulting and extrapolates existing landscape required cost and time.
  • Oracle’s global system integrators have their own methodology for migrating end users from on-premises to the cloud.
  • Oracle’s global system integrators include KPMG, Accenture, Manai, Deloitte, Wipro, TCS.
  • Soar is a risk-free approach to move from an on-premises investment to the latest Oracle platform.
  • What that fundamentally means is we are using machine learning and artificial intelligence to run and operate the cloud
  • Oracle is the only vendor in the market that is offering autonomous cloud.

Battle for top position in ERP cloud, Gartner’s Quadrant  

The worldwide public cloud services market is forecast to grow 17% in 2020 to total $266.4 billion, up from $227.8 billion in 2019, according to Gartner. At this point, cloud adoption is mainstream. The expectations of the outcomes associated with cloud investments therefore are also higher. Adoption of next-generation solutions are almost always cloud-enhanced solutions, meaning they build on the strengths of a cloud platform to deliver digital business capabilities.

Within the spending on public cloud services, software as a service SaaS will remain the largest market segment, which is forecast to grow to $116 billion next year due to the scalability of subscription-based software. The second-largest market segment is cloud system infrastructure services, or infrastructure as a service IaaS, which will reach $50 billion in 2020.

The market for cloud management suites is benefiting from the addition of new functionalities and the rise of digital capabilities. According to Gartner’s Magic Quadrant for Cloud Core Financial Management Suites, released in May 2019, by 2024, 60% of all new midsize core financial management application projects, and 30% of large and global ones, will be public cloud implementations.

In simple terms, a cloud service must confer the benefits of SaaS on its users. In other words, the application software must be delivered and managed remotely, based on a single set of common code and data definitions, and must be consumed in a one-to-many fashion by all contracted customers at any time. The cloud service must be purchased either on a pay-for-use basis or through a subscription based on usage metrics.

Gartner surveys the behavior trends of customers referenced by participating cloud vendors. Each vendor has adopted a specific position in the market based on how it faces an industry and the size of the customers it wishes to address. Therefore, the term Leader or Visionary that Gartner uses to describe a specific position in the market does not negate one vendor versus the either.

Each of the products is as worthy as the other. Vendors may struggle to become Leaders because they may not have the reach to address the complete market, and yet have worthy products.

Oracle

Oracle is a Leader in the Gartner Magic Quadrant, due to its market traction, sales and product strategy, business model, vision with respect to close integration with Oracle ERP Cloud. Reference customers for Oracle reported their top-three product selection criteria, were functional capabilities, ease of use, compatibility with MS Excel.

Strengths

Oracle has many large customers, global reach, and both a large implementation partner ecosystem and service organisation, with broad business domain and industry coverage. Reference customers cited the partner ecosystem as having become more reliable in implementing Oracle cloud-based financial planning and analysis solutions.

Oracle continues to have a high degree of name recognition in this space. It had the leading market share in the past with its Hyperion solutions, and Oracle continues to lead the market today in the number of customers leveraging its cloud financial planning and analysis solution.

Cautions

Respondents scored Oracle in the middle or below in 11 key areas, with three scores being especially weak. Lowest scores were reported in ease of implementation, application governance, life cycle management, performance. Both implementation and application governance scores improved slightly since the last Quadrant. These scores should be taken in the context of Oracle’s numerous complex deployments involving a large number of users.

SAP

SAP is a Visionary in this Magic Quadrant. Reference customers for SAP reported that their top-three product selection criteria, in order, were analytics, ease of use and cloud capabilities. SAP reference customers reported having a higher degree of technical expertise than those of the other vendors in this Magic Quadrant.

Strengths

SAP scored in six of 11 key areas surveyed. Analytics, ease of implementation, overall experience received the highest scores. Respondents cited SAP Analytics Cloud’s discovery and visualisation capabilities as major reasons underpinning their scoring. Deployment speed results continue to improve over prior years’ results, with reference customers citing deployment times of less than six months.

Additionally, SAP scored for those taking one week or less to upgrade to new versions of its solution. Respondents cited satisfaction with SAP’s accelerated feature development and roadmap, and integration with other SAP and non-SAP offerings.

Cautions

Only 50% of SAP Analytics Cloud reference customers surveyed would recommend the solution without qualifications. The rest would either qualify their recommendation, or stated they were unsure. They cited the need for tighter features and more usability improvements, in addition to better planning workflows and more frequent communications related to changes being made to the solution.

SAP Analytics Cloud customers surveyed placed application governance, life cycle management, solution flexibility, performance and meeting needs versus money spent as lowest. Customers cited the need for deeper integration between parts of the solution, planning and analytics, and analytics functions and response time improvements, when using large datasets.

Why cloud solutions

  • Ability to keep up to date with new releases.
  • Consumer-like interface easing training and onboarding.
  • Digital capabilities, including AI, ML, RPA
  • Digital capabilities cannot be retrofitted to legacy platforms
  • Agility through faster introduction of new functionalities
  • Emphasis on end users managing the applications, less reliance on IT

Key takeaways

  • Cloud is a tool for business agility, empowerment, scalability, simplicity, and not an achievement of technology bricks and mortar.
  • Gartner’s survey of reference customers shows they value functionality significantly more than technical architecture.
  • The market for cloud suites will continue to evolve during the next five to 10 years.
  • Large organisations with extensive on-premises business application architectures are investigating cloud solution capabilities.
  • Resellers and system integrators may have insufficient knowledge of current releases of vendors’ software, and vendors have had to step in to help.