Reading Tea Leaves at Oracle
Oracle, the 800-pound gorilla of ERP, is helping customers predict -- and react -- to future business demands, while continuing to keep everyone guessing about its own future: namely, the three-years-and-counting development of new Fusion applications.
By Bill Kutik
Clarity of the future for you, but not about me, may describe the stance at Oracle, the 800-pound gorilla of ERP, after acquiring dozens of enterprise software companies in the last three years.
On one hand, it has developed ground-breaking new work in Predictive Analytics for the workforce, stemming in part from the company's participation in Jac Fitz-enz's Workforce Intelligence Institute, a consortium of vendors and companies. The new functionality is bleeding edge for its forward-looking workforce analytics -- at a time when few enterprises have yet to get backward-looking analytics right.
On the other, there is the continued secrecy around Fusion, the long-awaited next generation of applications built on a single architecture, with the best features and functions of everything Oracle owns. When Oracle executives' only comments on Fusion change from "available in 2008" to "early adaptors by the end of 2008," that's actually significant! And isn't that ridiculous?
But some new major details have leaked out.
Let's consider the Predictive Analytics first because even though it concerns an organization's completely unknown future, Oracle has made it available today. And in the future, it will be part of Fusion HCM.
The key here, according to Brian Gaspar, director of product strategy, is to go from a company's known problems to its unknown problems. This is no easy feat and involves collecting internal and external indicators, using data-mining technology to analyze them against established baselines, identifying critical indicators exceeding those established thresholds and getting a workforce prediction out of it.
For individual employees, the known problem/performance indicators might include the national unemployment rate, the number of changes made in management or a project, how much paid time off has been taken and salary increases year over year.
All of this is pretty straightforward. It gets black-boxy when identifying unknown problem/performance indicators. That's where algorithms and secret sauces get employed.
The example Oracle shows is the easiest imaginable, but no criticism for that. After Company X had its best year ever in 2007, the bonuses paid out in 2008 and decreased sales are resulting in a 24-percent loss in Q1 2008. A Q2 sales revenue and deal shortfall are predicted; the productivity of the salesforce (and its turnover) is analyzed and an advisory to hire five more salespeople pops out in the end.
Lucky for Oracle, all those acquisitions have brought it most of the analytic tools necessary to pull this off. Google Gadgets are used for alerts; Oracle Business Intelligence (including from Siebel) are used for the warehouse and data sources; predictions come from Oracle Data Miner (part of the Oracle database); and forecasting is Hyperion's Crystal Ball (long used in financial forecasting).
Customer adoption in HR will undoubtedly be slow but very interesting to watch.
As for Fusion, thousands of PeopleSoft and Oracle HCM users have waited three years for details of what to expect beyond "available in 2008." The Oracle strategy team has happily admitted that some key elements from each product will be included: Profile Management from PeopleSoft and Flexfields and DateTrack from Oracle. Also some structural details: It is being based on Oracle's HCM. And not much else.
The annual conference of the largest user group for both products, OHUG (Oracle HCM User Group), has been the source of a few more details.
At last year's conference, various technical and architectural details came out, reported in
What the Big Boys are Doing
. And at OHUG this year, Oracle held a secret briefing for its customer Strategy Council on Fusion HCM. That and earlier private client meetings resulted in five glowing (but unattributed) quotes for the PowerPoint presentation, including ones from Alcoa and 3M.
After signing a nondisclosure agreement with penalties bordering on giving up her first born or a major limb, analyst Christa Degnan Manning of AMR was asked into the meeting to give an outsider's reaction. Despite an intensive waterboarding session from other analysts afterward, she would say nothing.
Lately, I'd been thinking that, from a marketing point of view, Oracle has been foolish to maintain such secrecy, instead of leaking out details and building widespread enthusiasm. The five blind quotes are headlined "Customers are Engaged and Excited." Sure, maybe some of those who have been briefed are.
But the rest, judging from the OHUG audience, went from intense curiosity last year to utter indifference this year. Remember, with Applications Unlimited, everybody is getting upgrades of every major application.
Now it appears that Oracle's secrecy may have been designed for really keeping its options open. The recently published Gartner's 2008 Guide to Options for Upgrading Oracle Applications says for the first time that Oracle has shifted its focus to sell Fusion applications only to new customers and that migrating the installed base to Fusion is no longer a near-term goal.
And it notes the long-touted 2008 release will not include the ERP applications expected, but instead so-called "Fusion Edge" applications. The report mentions "Sales Prospector," which was described to me in July as part of Predictive Analytics, which is a Customer Relationship Management application to help identify sales leads and what they might buy.
So does the change to "early adaptors in 2008" simply mean a hiccup in the development deadline that every big software vendor experiences?
Or have Oracle's fundamental plans for Fusion changed? Be nice to be told. Perhaps information will be forthcoming at Oracle's own gigantic user conference in September, Oracle Open World. Otherwise, it's back to reading tea leaves.
HR Technology Columnist Bill Kutik is co-chairman of the 11th Annual HR Technology Conference & Exposition® in Chicago, Oct. 15 to 17. Read the full agenda and register before discounts expire this Friday, Aug. 1, at
www.HRTechnologyConference.com
. He is also host of
The Bill Kutik Radio Show
. He can be reached at
bkutik@earthlink.net
July 28, 2008 Copyright 2008© LRP Publications
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