Oracle gains e-business traction through outsourcing

SAN DIEGO — Canadian companies may take more time than their U.S. counterparts to embrace upgraded software products Oracle Corp. introduced this week, executives and analysts admitted at its annual AppsWorld conference.


Shores, Calif-based Oracle expanded its E-Business Suite outsourcing service, which now features improved system administration processes that the software firm said will aid system monitoring and lower maintenance costs.

Madacy Entertainment Group Inc., which has been an Oracle E-Business Suite outsourcing customer since last July, is keen on the upgraded products, which it automatically receives after paying an annual support fee. “”The beauty about going to outsourcing is that eventually you have to get up into the next level,”” which is easier than doing it yourself, said Philip Chung, manager of information technology.

A former public company, Montreal-based Madacy, a marketer of music and video products, turned to outsourcing with Oracle when it decided to become a private firm again. “”I was mandated to find cost savings right then and there. We were paying a lot for outsourcing,”” explained Chung, who was reluctant to name the previous outsourcer.

Six months later, Madacy has experienced significantly reduced downtime, noted Chung. “”I haven’t had a (serious outage) in three months. Before that, they would happen…twice a month.””

Back then, Chung said, he and his team, forced to get the system operational again, had no time to analyze the cause and put in measures to prevent another breakdown. As part of Oracle’s E-Business Suite outsourcing service, companies experiencing system problems receive a root cause analysis and strategy to prevent future system collapses, he said.

The service also helped Madacy cut out the middleman in seeking technical support, Chung explained. He said although the problem was always resolved in the past, it became a draining exercise.

Moreover, the company “”saved over half of what we were paying”” to the previous outsourcing company.

David Rumer, senior director of marketing for Oracle Canada in Mississauga, Ont., anticipated several industries like financial services, engineering and aerospace and defence, which Oracle typically targets, will likely show the most interest in software changes.

“”They are starting to pick up some customers for the outsourcing in Canada”” because of enhancements like automation, management functionality, business recovery and continuity, noted Warren Shiau, software analyst at IDC Canada in Toronto.

But since “”Canadian companies are conservative in their buying behaviors,”” adopting new technologies 12 months to 18 months after the U.S., Rumer predicted it may take a year for the industry to embrace the products.

Traditional outsourcing, in which an outsourcing firm effectively adopts the client’s customers or infrastructure, is seeing “”a very, very high degree of adoption in the Canadian market,”” said Shiau.

Oracle, however, follows a model in which customers’ applications are hosted across business processes, he said. “”For hosted applications – hosted ASP-type models and so on – we’re lagging behind the U.S,”” Shiau explained.

Oracle has come a long way since a year ago when it told customers to “”rip and replace”” their applications, which is costly and disruptive to an organization, Shiau said. Now it’s a calmer and more accurate message focusing on repackaging Oracle’s integration services and tools and selling them in new bundles with the applications.

“”That’s something that’s very effective. Not so exciting maybe from a marketing standpoint, but in reality, it’s more of what a customer needs.””

Oracle also used AppsWorld to unveil the next version of Oracle Warehouse Management software, which will include new radio frequency identification and electronic product code capabilities. The enhancements aim to help customers more easily identify, track and manage pallets and cases as they move through the supply chain, and manage huge volumes of information while remaining flexible to deal with order fulfillment requirements.

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