Lift off to the supply chain management cloud

Oracle has moved its suite of business management systems into the cloud. Vikram Singla discussed the reasons and advantages with Ruari McCallion.

 

CROP Supply Chain Managmement Cloud - OracleOver two days in February, at the Intercontinental O2 Hotel in London Docklands, Oracle explained in depth to its current and potential users why it is moving its suite of business management systems into the cloud and how businesses are adopting these solutions.

Many modules are already available, including Financial Management and Human Resources; with over 34 billion transactions, across 10,000 customers being processed daily in the Oracle cloud; Release 11 completes the line-up with Supply Chain, Manufacturing and Product Development solutions.

It is fully native for the workstations that business is now actually using, in practice: tablets, primarily. Managers and operators are freed from their desktops and can have genuine visibility anywhere, any time.

 What do users gain from a cloud-based system that is not available in traditional formats for delivery of business management systems?

Vikram Singla, business development director, Oracle.
Vikram Singla, business development director, Oracle.

“It has to be about the speed and cost to deliver a business outcome, rather than technology for the sake of it,” said Vikram Singla, Product Innovation and Supply Chain Apps leader.

“In the past supply chains often suffered by being too inward-focused, optimising the experience for the company running the supply chain rather than the customer they were servicing.”

The result was all too often a “one size fits all” supply chain that left no group of customers truly satisfied.

Compare this to today, when for one customer price might be the key driver, for another it may be speed, whereas for another it may be convenience. The result is that innovation, agility and visibility are the key

“The imperatives of innovation, agility and visibility, mean IT, supporting supply chains, needs to do more for the business.

However, IT budgets are flat and with the majority (70 – 80%) of the budget spent ‘to keep the lights on’ of the large and complex on-premise systems. Analysts indicate that cloud-based delivery is 80% cheaper than through in-house data centres. In the traditional on-premise model, most do not want to buy the very latest,” he said.

“They will typically buy two-year-old technology and take another two years to deploy. But that means you will probably be working with four-year-old technology from the start and you are likely to be using it for several years.”

Supply Chain Managmement Cloud PQ2 - OracleIn short, most businesses are relying on technology that is obsolescent when they finally get it. While this approach worked to serve the customer of the last century, it is just not acceptable in today’s world.

“In the old way, you assembled and customised various bits, for example, hardware/ database/ business applications etc. and it meant lengthy deployment with significant costs,” Singla continued.

He used an analogy using the auto industry. “A long time back you bought components from different suppliers and assembled the vehicle. Now you buy a fully working car that you can use from day one.

“Similarly, the cloud can be provisioned in days and be configured for specific functionality, be it logistics, trade compliance, demand planning, procurement etc. in weeks. It can co-exist with your current infrastructure.

“Moreover, you get the latest functionality being used widely and securely. Not only is the cost significantly lower, multiple financial models, e.g. lease, hire purchase, mean that the budget comes from Op-ex, rather than Cap-ex.”

The pace of change in the new world is more under control as well. “You don’t have to upgrade everything in one go and suffer the consequent disruption, risk and cost.

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The cloud is more like your smartphone; the upgrades are immediate and occur regularly.

The cloud is more like your smartphone; the upgrades are immediate and occur regularly. They are not lengthy re-implementations. You can add some more apps if you find that you need them.

“As the successful usage of cloud service is core to the revenue model of the cloud provider, it regularly adds new capability, like the new car models, to help supply chains keep pace with the changes – import/export regulations change, adding new markets/products, changing organisation structures etc.

“The cloud basically delivers – lower ownership cost, faster time to value, modern user experience and regular uptake of new capability to keep pace with the change.”

The trend towards servitization means moving away from upfront purchases to charge-peruse revenue streams; errors in the value chain simply cannot be tolerated. Similarly, omni-channel/ digitisation means much higher customer expectations, as you are supposed to know more about their needs and desires.

“The servitization model, omni-channel or digitisation means that supply chains have to really deliver the products and services people want; it heightens the importance of the ‘brand promise’,” Singla said.

“The cloud solution enables supply chains to deliver the innovation, agility and visibility.”