BlogERP: Jim Holincheck's HCM Software Blog

Oracle Fusion Applications: How Real Are They?

Dennis Howlett (@dahowlett) gave me a gentle reminder in Twitter that there has been a lot of praise out there for something that has not been officially released yet.  Again, this is my personal opinion, not the official Gartner position (as all blogging on the Gartner Blogging Network is), but his point reminded me of a blog post I did last year at the end of Oracle OpenWorld.  Here is an excerpt:

I could not help thinking during these sessions of a software joke told to me by Brian Sommer a long time ago.  It goes like this:

Think about the answer to two questions: "Can I see it?"  and "Does it exist"?

• If I can see it and it does exist, then it is Real.
• If I can see it, but it does not exist, then it is Virtual.
• If I cannot see it, but it does exist, then it is Transparent
• If cannot see it and it does not exist, then it is in the Next Release

So, let's ask these questions again about Fusion Applications now.  Can I see it?  Last year, I answered "yes, sort of".  Oracle did demo parts of the solution at OOW last year.  I have had the chance to see more since last year so I know there is more to it, but as I indicated in my earlier blog post, I have not seen the full HCM suite (or full suite of any Fusion Applications).  So, the answer is "yes, to some degree".

Does it Exist?  Last year, I said:

That is probably the more interesting question... Certainly there are "edge" applications such as Social CRM that do exist... However, based on the information provided to date, it is difficult to know exactly how much of the Fusion Application Suite is built.  

It is still difficult to know.  We know the planned scope at a broad brush, but the detailed feature/functions have still not been communicated.  Last year, I also said:

there was no firm commitment on delivery dates for the first release of the Suite or any indication of early customers that were implementing the Suite. 

There is a firmer delivery date (sometime in 2010).  We also know that some customers have been testing the solution.  However, testing parts of the solution is not the same as implementing it.  As I said last year, early customers that implement and go live are the real litmus test for "does it exist".  So, does the first release of the full suite of Fusion Applications exist?  Not yet.  Will it exist in 2010?  I think it will.  However, they need to start implementing early customers soon to make that a reality.  Hopefully, Oracle will provide more details soon about the detailed functionality that will be delivered in version 1.  Customers want and need this information to make informed decisions about their application strategy.

What do you think about Oracle Fusion Applications announcement?

Oracle OpenWorld 2008 - Day 2

Thomas and I started Day 2 with a briefing on Oracle E-Business Suite (EBS) for the upcoming MQ for Employee Performance Management software.  Oracle continues to make progress filling in some of the functional gaps and the product remains quite good in areas such as compensation management.  The adoption rate is also quite good within the EBS installed base (especially for compensation management).

Thomas and I also had some briefings with the product strategy folks for both EBS (Anand Subbaram) and PeopleSoft (Tracy Martin along with Paco Aubrejuan the new GM of the PeopleSoft BU). From a PeopleSoft perspective, I admit I was actually pleasantly surprised.  Even though 9.1 is a little later than expected, they plan to add quite a bit of functionality including cascading goals in Performance Management as well as a new Succession Management capability (delivered with core HR -- so no additional licensing required).  In addition, Oracle is revamping compensation management in 9.1 (re-writing and adding to the existing capabilities and better integration to ePerformance), adding new Talent Management Dashboards to its Workforce Analytics product (the one based on OBIEE), and bringing out a new employee survey tool (tentatively called Workforce Connect) which leverages customer survey tools from the Siebel CRM solution.  Also, in terms of leveraging Siebel CRM, Oracle is creating what it termed "Fusion Edition" applications the first of which will be what is called Talent Pool Management (TPM).  Fusion Edition applications are edge applications meant to work with PeopleSoft, EBS, and Fusion.  The name is a bit of a misnomer as it is really focused on Candidate Relationship Management (marketing and communicating with passive candidates) not talent pool management as one would think of it in Succession Management.  The next Fusion Edition application expected is Talent Review (sometime in 2009).

Speaking of sometime, that is when PeopleSoft 9.1 is expected in 2009 (though indications were that it would not be the beginning or end of 2009 so expect it to be released over the course of Q2/Q3 for new customers).  However, some of the most interesting things going on were with PeopleTools.  PeopleTools 8.50 includes a number of noteworthy features, but the one with the most immediate impact is the new Ajax-based User Experience.  PeopleSoft 9.1 is built on PeopleTool 8.50, but it is backward compatible to previous application releases.  So, 8.9 and 9.0 customers that want to enhance the user experience can do just a PeopleTools upgrade to get the necessary capabilities.

For those EBS customers out there, things are a little more definitive.  Version 12.1 is coming in Q109.  It too will include new succession management functionality (as well as Profile Management based on the design from PeopleSoft 9.0).   There are a number of incremental enhancements across the rest of the product line from interview management in iRecruitment to setup enhancements and better market data integration in Compensation Workbench.

I also went to Gretchen Alarcon's presentation on Oracle's HCM vision.  She did a good job laying out the trends (thanks for the plug) and how Oracle is looking at opportunities around workforce planning and modeling and predictive analytics.  It was a pretty good size crowd and it was a little surprising to see no one was really doing anything with predictive analytics.  There is tremendous potential business value in the right applications of planning and analytics.  What do you think?  Will the hype around social software and HCM overshadow the emergence of workforce planning and analytics? 

Oracle OpenWorld 2008 - Day 1

Here are the headlines, in my mind, from the opening day of OpenWorld:

• Complete. Open. Integrated -- This is the main theme for the conference which I saw repeated in a number of presentations.  Here is my take on what Oracle intends it to mean:
  • Complete -- Oracle is very focused on industry solutions.  That is, providing a comprehensive footprint for specific target industries.  It used the Communications industry as an example and cited its footprint in 2004 and how it has done a number of acquisitions which it has integrated together since then to fill out its solution map (the solution map is not an original Oracle concept, but it has been put to good use)
  • Open -- Oracle has been pretty consistent in its support for a variety of standards and allowing customers to "plug and play" where possible.  It has created an abstraction layer in Oracle Fusion Middleware (OFM) that includes common business objects, web services, and reference process models that customers can use out of the box or adapt with the tools as necessary.
  • Integrated -- This is where Oracle's Application Integration Architecture (AIA) comes into play.  Oracle has taken industry standards along with a modern integration architecture (leveraging process model-driven integration with an enterprise service bus and standard integration definitions).  Oracle had a number of customers touting the benefits they thought they would achieve, but almost all were still in the process of implementing (this is not a new topic, it was hot for Oracle at the last OpenWorld).
• Delays
  • We knew this from pre-briefing prior to OpenWorld, but it pretty much is official now (and has been suspected for far longer).   There will be no suite of Oracle Fusion Applications delivered in 2008.  We published this (Gartner subscription required) in 2007 based on an interview with John Wookey about Fusion Applications.  Oracle had indicated at that time the first release of the suite would be in 2008.  Then, we published this (Gartner subscription required) when we started to have concerns about whether or not Oracle would deliver Fusion Applications in 2008 when John Wookey left Oracle.  The first phase will be edge applications, like the Social CRM applications, which have been delivered in 2008.
  • PeopleSoft Enterprise 9.1 will not be delivered in 2008.  I do not know if Oracle committed publicly to this date, but they had been indicating privately that 9.1 would be delivered in 2008, not 2009.  HCM is the first pillar to be delivered in 9.1 and given the scope of the release (including new applications such as Succession Management and a rewritten Compensation Management), it is understandable that it would take some time.  However, release 9.0 became generally available in December 2006 (see Oracle's Lifetime Support Policy for more details).  So, it is going to be well over two years before the next release.  In a market where new releases from Talent Management application vendors come out as frequently as monthly, that is a very long time.  More to come on version 9.1 in a later post.
• Social Software Strategy -- I am not going to discuss this too much now as I am still trying to understand Oracle's strategy here.  Suffice to say that there are a number of products out there including Oracle Collaboration Suite (been around for a long time), Beehive (announced today and prominently placed in the opening keynote), WebCenter (the UI for Fusion Applications that includes some elements of social software), and PeopleSoft Enterprise Portal (that also now has some elements of collaboration included with it).  As soon as I get to the bottom of it with some clarity, I will post again.
• Upgrades -- As I was communicating with my colleagues and attending sessions, it became clear that sessions which discussed Applications Unlimited (Oracle EBS, PeopleSoft, JDE, etc.) product vision/roadmaps and upgrades were among the most popular.  I think that supports what we have been seeing in our inquiries in terms of the primary concern for customers:  is this the right time to upgrade and if so, to which release should I upgrade?  There are some sessions on Wednesday around Fusion applications.  I would imagine they will be popular for similar reasons.

In closing, Thomas and I had a good chat with Charles D'Souza from Emirates Bank (HQ in Dubai).  It has implemented implemented core HRMS, self-service, learning management, performance management, some compensation management and succession management (which some of its own extensions to Oracle) on E-Business Suite R12.  It is also about to embark on an implementation of iRecruitment as well.  If you are an EBS customer looking for an understanding of what is possible (to support upgrade planning) in Talent Management on R12, this is a good customer reference.  

It is always good to get the customer viewpoint, I have a number of customer sessions on the agenda for tomorrow and Wednesday.  If you are an Oracle Applications customer, what do you think the highlights were for Day 1?

Oracle OpenWorld 2007 Tidbits

There were no major announcements around HCM, but there were some important learnings for customers at the conference:

• More than 400 customers have either upgraded or are in the process upgrading to version 9.0 of PeopleSoft HCM according to Oracle
• Version 9.1 of PeopleSoft HCM is expected in Q4 of 2008. The major theme for the release is improving the talent management capabilities (no big surprise). Beyond talent management, other enhancements include support for multiple encumbrances in public sector, local payroll support in additional countries, and expanded use of the approval/delegation engine
• Version 12 of Oracle E-Business Suite HCM has one live customer
• Oracle demonstrated the Fusion Compensation Workbench as an example of the changes that they were making for Fusion. Oracle showed the use of PeopleSoft-like Tree functionality within a data grid to allow expanding and contracting of items within the grid for example

Gartner is working on an Event note for the whole conference (to which I am contributing).  There will be more details as well as well as more analysis in that research note.  I will post a link (subscription required) when it is published.  I did not get a chance to see too many user presentations at the conference, but I did get a chance to speak with a number of customers.  Regardless of which product line, the message was pretty much the same.  Talent management was on the top of the agenda for 2008 investments.

Oracle on SaaS and the SMB Market

There has been a lot of chatter "Larry Ellison Saying No to SaaS" in the blogosphere based on a post on Information Week.  It has been picked up on ZDNet and Intelligent Enterprise blogs as well.  Here is part of the transcript from Oracle's most recent earnings call.  You be the judge:

"It’s very different than SAP’s strategy which is to go after small companies; small companies with their new Business ByDesign, formerly known as A1S product. Now, we see the problem in that because we’ve looked at going down market. We’ve looked very closely at it, and we think it’s very hard to make money because there is no synergy. To go down market you need a new product and new product development teams. You spend a lot of money developing a whole new product for the low end. But you also need an all new sales force because we don’t call on those customers. We don’t call on small businesses, and it’s very expensive to call on small businesses. It’s very expensive to do ERP implementations in small businesses. The cost of sales is high. The cost of implementation is high. There are virtually no synergies in sales, marketing, and product development and support.

So while we think it’s an interesting market — the small market — because it’s large, we just haven’t figured out a way to make a substantial profit in that market. We think it’s hard to make money. Our strategy: add more value, go upstream, sell industry-specific software to our existing customers, and we’ll watch and see how SAP does going after small companies. Especially with in Software as a Service which we think is very interesting, but so far no one has figured out how to make any money at it."

Does this sound like that he is "saying no to SaaS"?  What do you think? 

The Importance of Ecosystems

We have published a lot of research at Gartner (here is a research note that describes criteria for evaluating innovation from ecosystem partners that links to some of the other research) on the concept of Ecosystems and how the big enterprise application vendors are starting to build them.  Phil Wainewright at ZDNet did a good post identifying the constituencies that are trying to get into the Ecosystem game. 

We have not seen too many HCM vendors jump on the Ecosystem bandwagon yet, but if some of the early vendors have success, it may spur more movement to align with a specific ecosystem providers.  Keep track of which vendors have become ecosystem partners as you make decisions about new HR technology.  In addition, dig under the covers to find out if the vendor has just a marketing relationship with the ecosystem provider or if they have really created deep product integration (including standardizing on the ecosystem vendor technology platform/architecture).  Not all partners make the same level of commitment to a particular ecosystem.

OHUG Recap

I have spent the last several days at the Oracle Human Capital Management Users Group Meeting (OHUG).  I spoke on an industry analyst panel about key trends in HCM technology.  The usual stuff.  The conference itself was very good.  Oracle did a good job balancing presenting information about the upcoming PeopleSoft v9 and Oracle EBS v12 releases with getting feedback from customers for future releases and for Fusion.  Speaking of Fusion, Oracle also had the first presentation I have seen that provided detail around how it is reconciling different approaches in PeopleSoft and Oracle EBS as it creates Fusion.  I am not going to go into details here.  I am hoping to write a research note on this in the near future.  E-Business Suite is still the starting point for much of Fusion, but there are definitely changes anticipated to EBS for Fusion.  Overall, it was a very good conference and feedback from attendees, both PeopleSoft and Oracle EBS was positive.

More next week from the SAP Industry Analyst Summit ...

Oracle OpenWorld 2006

I am sitting at my desk in my hotel room at the end of day one of Oracle OpenWorld 2006.  It has been a long, but productive day.  I had two presentations today, one solo and one as part of a panel.  Thanks to all who attended.  I hope I have made amends to the Disney folks for my faux pas from the Workbrain conference last week with my opening anecdote. 

I thought the panel discussion on HCM Intelligence/Workforce Analytics was very interesting.  Jason Averbrook from Knowledge Infusion and Lexy Martin from CedarCrestone were also on the panel moderated by Row Henson.  It was very much of a surprise to see how many in the audience were HR professionals who had a background in statistics.  It was a much higher number than I would have suspected.  I still get the feeling that many companies think that Workforce Analytics is about implementing technology to create neat dashboards of HR efficiency metrics.  Hopefully, the tide is changing.  A couple of people talked to me after the panel discussion about how much they appreciated the "real world" point of view we provided.  One of the things we discussed is that you can start with smaller, well-defined workforce analytic projects to show the value for additional larger infrastructure investments (like a HCM data warehouse/data mart).

I have also started to see more interest in Workday (both at the HR Technology Conference and from Gartner clients).  The big launch is scheduled in the very near future.  I have a had a chance to a do a little bit deeper dive into the product, technology, and vision.  Given the interest, I expect to do a First Take.

What are Clients Asking About -- Week Ending August 4, 2006

Last week, there were four major themes from client inquiry were:

• Talent Management Applications (including inquiries on Recruitment, Performance Management, and Talent Management Applications Suites)
• Workforce Management Applications (Time and Attendance, and Expense Management)
• HRMS
• Specific Vendors (SAP, Oracle, Kronos)

Talent Management application inquiries were the leader this week with the rest split evenly among the other themes.

In terms of the breakout of inquiries, we had the following:

• End User Inquiries-- 71%
• Vendor Inquiries-- 5%
• Vendor Briefings -- 19%
• Investor -- 5%

Gartner HCM Research from February and March 2006

Cool Vendors in Human Capital Management Software, 2006
Author: Holincheck, James

Summary: These "cool vendors" represent emerging trends in HCM technology. They take familiar HR and workforce problems (such as timekeeping, analytics, recruitment, employee engagement surveys and benefits) and use new technology to achieve improved results.

Best Practices for Uncovering Differentiators in Midmarket Financial and HR Evaluations
Author: Herrmann, Michael E.; Recknagel, Kirsten L.

Summary: When midmarket organizations are evaluating financial and HR solutions, they should employ three techniques to highlight the differentiators necessary to make well-informed decisions.

Continued Consolidation Headlined the Human Capital Management Software Market in 2005
Author: Holincheck, James

Summary: The HCM software market continued to consolidate in 2005. In 2006, if you make new HCM solution decisions, consider the effect of ongoing market consolidation. Before making any HCM software purchases, evaluate vendors' underlying talent management application suite strategies.

Findings From the Gartner 2006 Global Research Meeting: Prepare for the Business Application Decision Olympics
Authors: Rayner, Nigel; Genovese, Yvonne; Holincheck, James; Eschnger, Chad; Phelan, Pat

Summary: For multinational companies, recent vendor consolidation in the business application market appears to have simplified selection decisions between megavendors SAP and Oracle. The opposite is true, however; many users will face hard decisions through 2012.