Oracle Corp.’s oft-repeated promise that its business applications can help users slash costs and boost operational efficiency is finally starting to strike home with some companies that have installed its E-Business Suite 11i software.
Early rollouts of the 11i applications were often problematic, and Oracle had trouble persuading many of its existing users to upgrade. But at the company’s AppsWorld conference in Orlando, users said their 11i installations have improved internal business processes and, in some cases, are providing returns on their investments.
Building on earlier promises to make installation of the software less complex, Oracle CEO Larry Ellison said during his keynote speech that the company is working to give users a firm idea of 11i costs upfront. “One thing we focused on is reducing the cost of the implementation and trying to make it predictable [so we can] tell you before we begin how much it will cost to run it every day,” Ellison said.
Joshua Greenbaum, an analyst at Enterprise Applications Consulting in Daly City, Calif., said Ellison’s vow marks a change for Oracle – and potentially for its rivals. “Providing complete total-cost-of-ownership [numbers] for all new deals will be hard to do, but it’s doable,” Greenbaum said. “And I think it’s going to be an important competitive advantage that will force other vendors into promoting better understanding of the lifetime costs of their software.”
Hosted versions of Oracle’s call centre, finance and other applications saved United Asset Coverage Inc. (UAC) more than US$3 million during the first 12 months it used the software, said Brad Snook, vice-president of client relationship management at the Naperville, Ill.-based telecommunications services provider.
Before going live with 11i in August 2001, UAC ran a hodgepodge of business applications. Oracle’s software gave the company an integrated set of contract, billing and customer relationship management software that made it possible for individual call centre workers to handle more inquiries, Snook said. “We made up what we spent in about a year,” he noted.
ViewSonic Corp. also has seen a payback on its investment in 11i, according to CIO Robert Moon. But it took the Walnut, Calif.-based maker of computer monitors, projectors and other technology products two attempts to install Oracle’s software before it succeeded.
Four years ago, ViewSonic tried to roll out a heavily customized version of Oracle’s Release 10.7 applications. But that project lacked end-user participation and produced faulty data, Moon said. “It was a mess,” he noted. “We were running a US$1 billion business on Excel spreadsheets.”
ViewSonic scrapped the 10.7 system and tried again, this time using 11i. The company went live with the software in November 2001 after a five-month installation. Since then, ViewSonic has consolidated its servers and seen a reduction in its hardware support costs, saving about US$2.5 million annually, Moon said.