Is Oracle Really Ready for BI and EPM?

Instead of just making a broad set of statements on the recent Oracle announcements made on July 16th, this is a little more depth and perspective that might be useful for you as you think about Oracle and their BI and performance management approach to the market. Oracle updates on the market in their EPM and BI product areas were delivered by their key executives Charles Phillips, president of Oracle, Thomas Kurian SVP Server Technologies and John Kopcke, SVP and GBU of EPM and BI. Oracle rolled out their last product strategy over a year ago after their acquisition of Hyperion and portfolio of BI and performance management technologies. The last major update to customers from Oracle was at Oracle OpenWorld in fall of 2007, where there seemed to be more confusion than actual answers, as pointed out in this previous blog - Oh Oracle Let's Be Honest Now.The devil is in the details of these announcements, and the impact on your review or use of these products needs to be clear and precise to ensure that you chart the proper path forward. Oracle has continued to operate their EPM portfolio of applications and technologies in their middleware portfolio, and even their sales organization, which primarily focuses on IT, and has little focus on business. This is a conflict, as applications for performance management are not middleware but intended for business. The lack of clarity between their middleware and performance management applications has confused those in line-of-business areas, who do not care about Oracle database or application server, which is managed by IT. This is a critical issue that Oracle has as LOB are the individuals driving the sponsorship and budget for this class of applications called enterprise performance management (EPM).

This apparent disconnect by Oracle on EPM, which they manage as middleware, continues to alienate buyers. There has also been significant turnover in the sales organization, leaving little to no strategic sales force to sell to executive and business management. By selling as part of middleware technologies, Oracle will not reach their full potential in the market. This is not to say they will not sell the technology, but the questions is whether they get deployed and valued by business in what they are presenting as part of their management excellence approach to performance management. Let's take a quick trip through the details they announced from the business and technology perspective to provide more color.

Finance and Operations

Oracle EPM is really focused on the competency of finance and is just starting to deliver on their vision of what they call "management excellence." For those in finance, Oracle has continued to provide incremental usability and functionality updates to Hyperion Planning and Hyperion Financial Management applications, as these are the core applications that have the most customers and deployments. Oracle is building further integration into the Oracle ERP suite of accounting applications, which is critical for finance to streamline their financial management processes.

Oracle previously had persuaded many of their customers to use the previous set of applications, like Oracle Planning and Budgeting and applications from their PeopleSoft acquisition, which are now in maintenance mode and not recommended for purchase. Oracle highlighted Oracle Hyperion Profitability and Cost Management, which is built on Essbase and touted its uniqueness based on dimensional aspects of the applications; however other viable options are available from Acorn, IBM-Cognos and SAP-Business Objects.

For the majority of business management in the realm of what I call Operational Performance Management (OPM), Oracle is just beginning to advance beyond the basics of BI and pre-built metric and business models. These operational BI applications are integrated with Oracle portfolio of transactional applications like PeopleSoft, Siebel and Oracle and do not address the technology-independent needs of management processes across LOB areas. The needs of management and their teams across sales, supply chain and manufacturing, customer operations, and call centers are not just about integrating to a specific application where currently Oracle is a major supplier. As your organization has dozens of transactional applications, BI systems and spreadsheets in specific operational management areas, you need a set of applications that match your management and accountability roles. For example, what an organization does in sales management is specific about their operational and performance requirements and is completely different for customer management teams who focus on customer experience and interactions. These applications are just as specific as the applications in ERP and CRM suites, and the needs include much more than dashboards and metrics integrated into existing installed applications.

As part of the overlap of applications and products, Oracle brought forward a new product called Oracle Integrated Operational Planning, which helps in the functional operational planning areas. But instead of presenting and expanding Oracle Hyperion Planning, they introduced another new product which, for most organizations, will be a replacement to using Microsoft Excel. Oracle is not clear on the product and deployment advantages of this new application.

Product and Technology

On technology advancement, Oracle has further leveraged the strength of BI and EPM products with Oracle middleware and their application server, which will help for enterprise IT teams looking for a strong and robust platform. Yet the core Oracle EPM and diverse BI products have not yet become complete and integrated, and are still cumbersome to integrate in terms of business metrics across the technology and sharing of master and metadata across the applications. Many different administrative and user interfaces are required to work across the suite of products. These challenges are clearly evident across their portfolio, and the products are just beginning to be integrated together.

To address this, Oracle has stepped in the right direction with new technologies that still need to be proven in real-world deployments. One of these is Oracle new common calculation manager, a critical component in providing a consistent way to manage measurements and metrics across teams of business users. Oracle EPM Architect is also a key component to start to bring the master data and metadata management aspects across the suite of applications and tools together. On integration and information management to support the EPM direction, Oracle is bringing together its suite of MDM technologies, including Oracle Customer Hub, Oracle Product Hub, and Oracle Hyperion Data Relationship Management, which have to be rationalized and considered as part of an enterprise deployment. These technologies, and the overlapping data integration technologies in the Oracle portfolio, will need to be reviewed to determine the best approach for your enterprise. I'd warn that all of these integration and information management technologies look good but are still being tested and integrated in real-world deployments. I have yet to see an organization put them all to work in one enterprise as part of a significant commitment to Oracle's approach to EPM and BI.

Oracle has also taken the long-standing Oracle Hyperion Essbase and further integrated into the Oracle BIEE platform. Essbase is now a source to access analytic data or can source data from the Oracle BIEE platform. To help manage this, Oracle has advanced Oracle Essbase Studio to more easily model and manage data and lineage in the OLAP server. This is a great step in the right direction as Essbase is used by thousands of organizations that need to further integrate it in the enterprise.

Oracle is stepping forward to rationalize the portfolio of disparate front-end BI technology and, just as importantly, the varying interfaces for giving business users access to information. Oracle has advanced the EPM Workspace, which can integrate business information and provide a unified portal type interface. Next, Oracle SmartView for Office provides the first step in rationalizing to a single approach to accessing and analyzing information inside of Microsoft Office. Oracle SmartSpace brings a new-generation approach to leveraging user-interface-type gadgets that can be placed directly on a desktop, much like Google has done or what people are used to if they have experience with the Apple Macintosh interface. This step forward brings a significant simplification to the traditional approach of providing a rigid tool for every capability.

Absent from Oracle's overview of strategy and products were any reference on mobility. Something that Oracle recently announced was their Apple iPhone support, which is called Oracle Business Indicators and is a significant move to simplify business functionality for BI. Though this requires some serious investment into Oracle applications and BI technologies, it brings new perspective to the rapid changes and needs of a workforce. The absence of this in their EPM and BI middleware division announcements was an indication of the silos of efforts across the applications and middleware technology groups at Oracle; be smarter about this assessment than Oracle when evaluating the varying types of form factors and requirements for mobile support.

Overall

Oracle is obviously very serious about its $6-billion-plus investment into Hyperion. But the question will be whether it can organizationally establish and manage not just IT but business relationships and be considered a strategic supplier for BI and performance management. I have seen a lot of excitement about the announcements, but if you look into the details, there is a lot to review and understand, including a lot of new technology and integration that has yet to be proven in deployments. At the same time, Oracle has plenty of competition that is smaller and nimbler, and it has yet to be proven if a single-vendor strategy is going advance and innovate your organization.

Oracle likes to competitively compare themselves against IBM and SAP due to their acquisitions of Cognos and Business Objects respectively and their size globally. Not to say that these other large vendors do not have their own product-evolution roadmaps that need to be rationalized and tested, but this is only a distraction. The reality is that hundreds of vendors are already deployed across finance, operations and IT, and these applications and technologies can provide similar or better capabilities. These providers, as you can find on our site by LOB focus on performance management (www.ventanaresearch.com), have found plenty of opportunity with Oracle's historical and acquired application customer base. Oracle has not made it easy for customers, especially for those having deployed Oracle financials and previous EPM products, to advance into the new suite of products. For those customers, starting over is probably the only choice, as the new products and strategy is completely different. If you do this, you should completely reevaluate your technology and vendor for use in finance and the enterprise, and compare Oracle against many other providers who are just as focused on your IT needs or have specific focus in LOB areas.

Oracle speaks about lower TCO but has yet to add it all up and let you know what the license, maintenance and consulting costs will be for all of this EPM and BI technology. Providing more depth on the costs and how an organization could plan to budget for such a grand vision is one big issue, and organizations still struggle to make the business case for investment. This promise of a low TCO was also made by Microsoft, which requires you to buy into the latest version of Microsoft Office and back office technologies to find full value in their technology. This requires organizations to reevaluate their computing platform from desktops and notebooks to back-room servers, which is no easy feat to upgrade when you are talking about thousands of business users.

If Oracle is going to be successful in Performance Management for executives, finance, operations, sales and overall deployments, they will have to significantly improve their management engagements and become a business partner to organizations. Historically Oracle has been up and down with their partnerships with business and management consulting firms that have this level and trusted relationship. Oracle has earned the right to have this type of relationship with IT and the CIO, but will not be able to immediately leverage this to gain significant advancements in business.

Oracle announced many advancements, but it will take some time to determine whether these technologies are ready for your organization. It's clear that it's still a very large, not-so-simple portfolio with many components. It will take significant resources to rationalize and manage the deployment in your organization. Oracle is a key provider of BI and performance management applications, and your challenge is to decipher and translate a lot of technology to the needs of your people and processes from management to business-specific needs to determine the viability of their approach for your organization.

Let me know your thoughts.Instead of just making a broad set of statements on the recent Oracle announcements made on July 16th, this is a little more depth and perspective that might be useful for you as you think about Oracle and their BI and performance management approach to the market... The devil is in the details of these announcements and the impact on your review or use of these products needs to be clear and precise.