Graphic with text, Oracle Fusion Cloud Enterprise Resource Planning
Graphic with text, Oracle Fusion Cloud Enterprise Resource Planning

Oracle Fusion ERP: Inside the Success of One of the World’s Top Applications

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For the past couple of years, Oracle founder Larry Ellison has been proclaiming that Oracle Fusion Cloud ERP is one of the two highly strategic products that will determine Oracle’s fate in the cloud—and by all accounts, Oracle Cloud ERP is living up to that huge billing.

To get a better sense of what’s driving the success of Oracle Cloud ERP, I recently had an in-depth Zoom conversation with Oracle senior VP of applications development Rondy Ng. Out of that discussion, several major points emerged:

  • Oracle Cloud ERP is dominating Gartner evaluations of leading vendors;
  • customers from across all industries are accelerating their digitalization efforts;
  • the move by many customers to subscription models is ideal for Oracle Cloud ERP;
  • the booming demand for industry-specific cloud solutions is opening new doors; and
  • customers are influencing Ng and his teams as they deliver “next-gen capabilities.”

And in Oracle’s Sept. 13 earnings release, the company said Oracle Cloud ERP revenue for the first fiscal quarter ended Aug. 31 jumped 32%, a very nice followup to the whopping 46% increase for Oracle Cloud ERP in fiscal Q4, which is always the company’s biggest and busiest period. 

Oracle now has 8,200 Oracle Cloud ERP customers, with 6,300 of them in production—so the momentum is significant and seems to be just getting started. You can find an extensive list of Oracle Cloud ERP customers here.

As a result, the market dynamics outlined above by Ng are definitely playing out as bullish commitments from customers looking to modernize their operations for the nonstop pace of the digital economy.

Let’s take a look at how Ng views each of those major developments cited above.

Gartner Evaluations of Cloud ERP Providers

In the rankings of Cloud ERP for product-centric companies, Ng said, Gartner chose Oracle as the leader for both ability to execute and vision for the third straight time. For this particular ranking, target customers  are large manufacturers and product-centric companies rather than services companies, and the functional areas include financial management and operational ERP systems. 

“We have been recognized as the best,” Ng said.

The Digitalization Train Is Accelerating—Rapidly

In today’s hypercompetitive marketplace where speed is at a premium, businesses are not just trying to maintain their former pace, but are eager to accelerate. “They are really looking for opportunities and advantages for their companies because they’re seeing competitors in their space getting a lot of momentum,” Ng said. “All the largest companies in each of the key industries where they are not only getting a foot in the door with Oracle Fusion Cloud Applications, many of them are accelerating their investments.”

That acceleration has been shaped by positive initial experiences with Oracle Cloud ERP, Ng said, which has triggered “bigger investments with us. And this is something that, when we started out a few years ago, we didn’t really anticipate this level. But over the last year and a half because of the changing world, we’re seeing this as more of a catalyst to faster digitalization with our software as a service.”

Expanding across the C-Suite

While Oracle has long had strong relationships with CIOs, the rapidly expanding role of technology across every facet of every company is leading to new relationships, Ng said. “In the past few years, the buying center has expanded—it’s not just the IT office. I’m interacting with a lot of chief accounting officers and chief financial officers where  they are looking for improvements in their operating efficiencies, as well as creating different ways to help them manage the business in real time,” Ng said.

“They want to be able to understand, ‘What’s going on with the business?’ The conversations are not only about closing the books faster and processing transactions with fewer people and more automation, but also about taking built-in automation to drive how the company makes decisions day in and day out.”

Mega-Forcing Function: Subscription Models

Expanding on his previous point about going beyond efficiencies, Ng said predictive modeling has become hugely important for companies in today’s disruptive world. 

“We are having extensive discussions with people around planning, forecasting, and different kinds of technology like machine-learning models to drive different kinds of predictive models,” Ng said.

“When we talked to people about this two or three years ago, everybody was very interested but almost nobody was saying, ‘Hey, I need to start the project right away.’ The pandemic changed that mindset: the amount of interest in these solutions has doubled and almost tripled. Companies are looking for ways they can garner all the data and then basically drive better prediction, leveraging different models to help them better manage cash or profitability or other priorities. And in some cases, this leads them to change their operating models.”

And a major element in the creation of those new operating models is the breakdown of the old siloes of “front office” and “back office,” Ng said.

“The whole notion of how you sell a subscription, how you market a subscription, how you bill a subscription, to how you recognize the revenue, to how you manage all the different financial metrics—it’s totally different,” he said.

“We look at cost to acquire a customer, we look at ARO, MRO, all sorts of these churns. From how you market and sell to your customers leading to the backup operations, to how you’re operating, to activating and delivering the services, ultimately to how you manage finance and forecast and so on. Existing systems, including bolt-ons, are not equipped to do that.”

Industry-Specific Solutions Are Booming

A few compelling comments from Ng on this phenomenon that is a direct response to the manner in which new requirements for customer engagements and customer experiences are driving entirely new and more-precise types of applications for various industries.

  • “We are extremely pleased to see the great momentum really centered around many industries where companies are saying, ‘Everbody is already going onto cloud ERP and I don’t want to miss out on the momentum there!’ For example, we have been very successful in the retail industry, including with big fast-food chains. Plus, hotel chains and large brick-and-mortar retailers—which are turning into online retailers—are  coming to us as well. Also, financial services, professional services, large telcos, and some of the world’s largest logistics companies.”
  • “When we first worked with a number of hotels and casinos in Las Vegas, they had all started with Infor Infinium as the system of choice from the early ‘90s. Today, all of them are moving from Infinium to our Oracle Cloud ERP with huge success. Now, 70% of the Las Vegas Strip casinos are our customers.”
  • “Within the last month or so, two of the largest banks in the world just went live with our Cloud General Ledger,” Ng said. “Both of these companies have probably taken 2 or 2-1/2 years preparing for this transition into a core finance cloud general ledger. These companies are pushing the limits of our systems to an order of magnitude higher than the fastest and most scalable E-Business Suite general ledger, which already supports the largest banks in the world.”
  • “Oracle is also investing in target industries where we are seeing increasing customer momentum. For example, energy companies are looking at transforming from legacy platforms over to our modern cloud. We have started working with one of the largest natural gas handling companies that owns 30% of all natural gas in the US and 30,000 miles of pipes. We engaged with the customer and delivered a joint-venture management solution to meet their needs. A lot of these energy-sector companies and asset intensive organizations don’t own every single facility or pipe, but instead they partner with a lot of different companies. How do they manage costs, profit sharing, and invoicing for these joint ventures? That’s where our joing-venture management capabilities make all the difference.”
Creating the Future: Co-Creation with Customers

“The push to digitalization is really helping to validate the great assets and also the investments Oracle has been putting in place for years. But a tight customer partnership is also driving us toward the next generation of investments where there are new innovations for specific industries. Customers can almost be considered our design partners on many of the next-generation capabilities that we are investing in,” Ng said. 

“So this is truly a customer ecosystem and customer-driven partnership that really is unique in the way that our customers are adopting the technology and how we’ve been working with customers to develop the technology. It’s a lot of great progress and we could not ask for more from our customers.”

This article is brought to you by Oracle.