As Published In February 2005

The Power of an Opinion
By Marta Bright

Time spent on customer advisory boards pays dividends to Oracle E-Business Suite 11i.10 customers.

You may not be able to tell Mars how to make a Snickers bar or Levis how to make jeans, but enterprise software buyers are finding that they have a voice in new software features. Oracle has worked with its customers through product-focused customer advisory boards for more than a decade, and the latest release of Oracle E-Business Suite is all the better for it. At dozens of companies, including aluminum giant Alcoa and visual display products provider ViewSonic, executives have given up precious time and energy to play an active, ongoing role in the development of Oracle applications.

"We've been involved in the Oracle Procurement customer advisory board (CAB) since 2001, ever since we began deployment of the enterprise business solution here at Alcoa," explains Mike Ferguson, global requisition-to-pay development lead and global requisition-to-pay process track lead at Alcoa. "From Alcoa's perspective, we've either made significant business process improvements or we're looking to, based on functionality provided in the products in Release 11i.10."

Ferguson refers to specific requirements in the requisition-to-pay area that relate to global agreements, centralized procurement services, full consignment inventory, advanced pricing, and electronic sequential invoice numbers. "These are a few of the major items we have had on our enhancement request lists that have come to fruition, through either the CAB or other interactions with Oracle Development," says Ferguson.

After Hours

Snapshots Alcoa www.alcoa.com Annual revenues: US$23 billion Year founded: 1888 Employees: 129,000 Hardware: HP 9000 HP-UX 64-bit Superdome for production; 8-way HP rp8400 (version 11.11) for applications Oracle products and services: Oracle E-Business Suite, including Financials, Human Resources, iStore, Marketing, Order Management, Sales, and Supply Chain Planning; Oracle Consulting; and Oracle University ViewSonic www.viewsonic.com Annual revenues: US$1 billion Employees: Approximately 800 Hardware: HP 9000 HP-UX for applications; HP 9000 for failover; HP 9000 for disaster recovery/business continuity Oracle products and services: Oracle E-Business Suite, including Discrete Manufacturing, Financials, iStore, Inventory Optimization, Order Management, and Sales Force Automation; Oracle Consulting; and Oracle University

Ferguson, with several colleagues, including Dean Blemker, director of enterprise business solutions at Alcoa, and David Hofmeister, order-to-cash business process lead and deployment lead at Alcoa, is active in nine Oracle CABs. The immediate benefits—ample opportunities to present and drive their own list of product enhancement requests—are clear. But why would busy professionals commit to a venture requiring, in some cases, two- to three-day meetings (twice a year) and numerous follow-up activities? "Participating on CABs gives us a unique opportunity to meet other Oracle customers," says Ferguson. "Oracle does not filter any discussion that goes on between the companies and with Oracle Development, and it always accepts feedback, sometimes critical and sometimes not, in a very nondefensive way."

Viewing Oracle as "the Alcoa software development house for its main ERP applications," Blemker values the opportunity to work with other CAB members to build and present solid business cases that meet a diverse set of needs. "We summarize through our CAB interactions what we and other customers consider to be our Top 10 list," he explains. "We continually have that Top 10 enhancement opportunity list in front of Oracle, supporting it with presentation material and, in some cases, enlisting assistance from other companies to present Oracle with a more solid business case."

Hofmeister views the CAB experience and the resulting benefits realized in Oracle E-Business Suite 11i.10 from a different angle. "I come from the commercial side of the aluminum business," he says. "I find the CAB process really interesting, primarily because bringing all of your customers together in a room and sorting out priorities is something that's pretty foreign to this business." From Hofmeister's perspective, the collaborative efforts have come to fruition in the area of order-to-cash. "In this area, Oracle Process Manufacturing is a critical piece of manufacturing functionality," explains Hofmeister. "These products needed some enhancements for us to fully utilize them. Oracle Development was very receptive, and together we've made great progress."

Buttoning Down the Details

ViewSonic also has been looking forward to bringing Release 11i.10 on board. "Our entire global corporation runs on Oracle, so it's extremely important for us to keep an open dialogue going with the company," ViewSonic CIO Robert Moon says. "Oracle always maintains a keen interest in what we think about the applications." As for what Moon was hoping for in Release 11i.10, "Oracle really buttoned down the back-office functions in earlier releases of Oracle E-Business Suite 11i. The new Order Management module showed a dramatic improvement. Now, in Release 11i.10, Oracle has placed an emphasis on the front-office portion of customer-relationship management, particularly in partner-relationship management, supply chain, inventory optimization, and advanced planning."

Keeping inventory levels efficient is critical for companies such as ViewSonic. "Controlling inventory levels and the proper product inventory balances between the varying regions—Asia Pacific, Europe, and the U.S.—creates enormous challenges," says Moon. Moon expects that the new features in Release 11i.10 will help him save significant costs by reducing inventory levels, improving planning efficiency, and getting the right inventory to the right regions. In addition, Moon explains, "Release 11i.10 provides us with the ability to model a variety of what-if scenarios to come up with the best strategy for controlling our inventory distribution." Working closely with many original equipment manufacturers, ViewSonic "can use Oracle Advanced Planning to model different manufacturing scenarios and devise the most cost-effective balance of products," Moon adds.

Single Instance, Multiple Opportunities

In discussing his involvement with the continued enhancements of Oracle's business applications, Moon says that when he joined ViewSonic, in January 2001, it had not yet found the wisdom of a single global instance. "ViewSonic was live on three different versions of Oracle applications—one each in Europe, Asia, and the Americas," says Moon. "When I came in, we began a total reimplementation." The impact, according to Moon, has been significant. "ViewSonic was able to save millions of dollars a year by reducing IT staff, decommissioning redundant hardware, and reducing hardware and software maintenance costs. Moving to a single global instance also shortened our financial closings from nearly four weeks to three days, dramatically simplified disaster recovery strategies, and made meeting the requirements of Sarbanes-Oxley 404 controls much less painful and expensive."

Moon also attended a demonstration of a number of products. "Oracle Inventory Optimization and Oracle Advanced Planning in Release 11i.10 are exactly what we've been waiting for the past three years," says Moon. He is looking forward to using Oracle Inventory Optimization to perform more-precise just-in-time ordering. "There's a very fine line between having enough inventory to meet the demands of our customers in a timely manner and having too much inventory," notes Moon. "Excess inventory causes additional storage and handling costs and potential depreciation. The capabilities in Release 11i.10 can definitely help us work on managing our inventory much more dynamically and efficiently."

In It for the Long Haul

"We run on very thin margins, so we can't spend a lot of money running IT and we need to be very efficient," explains Moon. "Our annual global IT costs run at roughly 1 percent of sales." In terms of customizations and what he likes to call "best of bleed" spending, the associated costs are ones ViewSonic simply cannot afford to absorb. "Oracle gives us everything we need in order to run on a global basis," he says. "I'm very confident that Oracle is going to remain a long-term partner."

Alcoa's Blemker shares a similar view about Alcoa's long-term relationship with Oracle. "Our relationship with Oracle Development is a key piece of our future application development strategy, for Alcoa and for Oracle E-Business Suite," he says. "We don't have a fallback; this is our future together with Oracle."