COVER FEATURE

As Published In March/April 2011

Plug Into the Cloud

Businesses choose Oracle cloud services based on a complete and integrated stack of Oracle applications and platform software.

Increase speed. Improve efficiencies. Reduce costs. For years, those have been the big promises of most new IT initiatives. They’re also the big benefits of cloud computing. In pursuit of those benefits, organizations are choosing both public and private cloud strategies. Because cloud computing is based on pooled and elastic computing resources to provide high efficiency, scalability, and availability—at the lowest-possible cost—choosing the right cloud technology to support cloud-based applications is a critically important element of any cloud computing strategy.

The technology behind a cloud deployment may be a collection of best-of-breed components from different vendors, integrated by a cloud service provider or an organization’s own IT staff. But a cloud technology platform that is engineered to work together, preintegrated and preconfigured by one vendor, can be optimized for much higher levels of performance, scalability, availability, efficiency, and manageability compared to heterogeneous solutions.

“In terms of economies of scale in an on-demand world, it’s about having a unified technology stack that enables standardization and provides for operational efficiency and much lower operating costs,” says Gene Eun, director of product management, Oracle On Demand. “The fact that Oracle’s on-demand cloud offering is an integrated solution that’s designed to work together means that it’s all built for scale and stability, ensuring that the solution is optimized for performance and is always going to be available.”

Plugging into Oracle’s integrated cloud platform solution is a strategic choice for customers like Arcor SAIC and Phibro Animal Health Corporation, both multinational companies that standardized their complex and wide-reaching supply chain and manufacturing operations by moving from on-premises operations to Oracle’s JD Edwards EnterpriseOne On Demand, built on the Oracle cloud platform and running in Oracle’s Austin Data Center (ADC). 

Suite Success, On Demand

Confectioner giant Arcor SAIC is one of the world’s largest producers and exporters of confectionary, with a distribution channel that stretches across more than 12 Latin American countries and annual sales that total US$2.2 billion. Founded in 1951, Arcor now operates 40 industrial plants and employs 20,000 people. Arcor’s IT department totals 155 members, supporting approximately 10,000 JD Edwards EnterpriseOne On Demand users. 

Several years ago, as the company expanded its operations, it became clear that neither Arcor’s IT infrastructure nor its business process flows were able to meet operational d ay-to-day requirements. “We needed to revise all of our business processes, reduce the number of customized applications, and focus on standardizing across the company,” explains Oscar Botto, CIO at Arcor SAIC.

In March of 2009, Arcor learned that Oracle was offering an on-demand service based on JD Edwards EnterpriseOne. “At that point, we started analyzing our migration of data to the latest version of JD Edwards 9.0 with Oracle On Demand,” says Botto. Arcor’s first-phase JD Edwards EnterpriseOne On Demand environment went live in January of 2010, and as a result, the confectioner was able to reduce software customizations by 80 percent. “We needed to improve our processes, and the end result with JD Edwards EnterpriseOne On Demand was very satisfactory,” Botto says.

Currently Arcor’s application and technology combination includes JD Edwards EnterpriseOne On Demand, Oracle Linux, Oracle Database Enterprise Edition 11g, and Oracle Application Server. In addition to running JD Edwards EnterpriseOne On Demand, Arcor is also incorporating new products from Oracle’s Demantra and Siebel lines of applications, which also will run in the Oracle On Demand environment.

Arcor is currently completing the migration of all business processes for logistics and export to JD Edwards EnterpriseOne On Demand. The migration includes 35 plants in Argentina, as well as plants in Brazil, Chile, Mexico, and Peru. By the end of 2011, the rest of Arcor’s subsidiaries will be running the Oracle applications and technology stack hosted at Oracle’s ADC.

Botto says one of the primary functions of his role is to find the best technology and apply it to Arcor’s business. “Everything that cloud computing is offering today is what we were seeking, and it gives us greater flexibility and a lower cost of software, infrastructure, and overall operations,” he says. “Our working relationship with Oracle has gotten even stronger since we moved to an on-demand environment. With it we can easily separate out fixed costs, which in turn is helping us focus on planning for market growth and future technology upgrades.” 

A Suitable Recipe for Animal Welfare

For Phibro Animal Health Corporation, realizing the efficiencies of both cloud services and JD Edwards EnterpriseOne applications were key considerations when making a technology choice. Specializing in life sciences for animal health, Ridgefield Park, New Jersey–based Phibro offers a range of medicinal and nutritional products for animals, as well as industrial and custom chemicals. The company has a complex global supply chain with manufacturing operations in the U.S., Brazil, and Israel. Phibro selected JD Edwards EnterpriseOne On Demand as its primary global enterprise resource planning (ERP) system for financial, sales order, and inventory transaction management. Operating as a single instance, the JD Edwards system is hosted through Oracle On Demand and deployed at four locations in the U.S. and Brazil. 

“Part of our business rationale for choosing JD Edwards EnterpriseOne On Demand was wanting a global view into both our supply chain and our financial situation as it relates to our businesses, our products, and our customers,” explains Gary Fling, CIO at Phibro. “We were seeking an integrated solution like JD Edwards EnterpriseOne On Demand to replace our disparate legacy systems with a global, standard, and scalable ERP system. With JD Edwards EnterpriseOne On Demand, we have been able to implement best practices for transaction processing within all of our divisions while applying global standards for our chart of accounts, inventory classifications, and coding structures.”

Since starting its deployment in 2009, Phibro has implemented JD Edwards EnterpriseOne On Demand at its corporate site and each of its major divisions, and lessons have been learned with each successive deployment. “Each time, we have improved our implementation with greater attention to change management, user training, and adoption and application of global standards and processes,” says Fling.

With the deployment of JD Edwards EnterpriseOne On Demand, Fling says he’s very glad to be in the cloud. “Cloud computing is in line with my philosophies of IT. When I think about how IT can provide solutions and services to an organization like Phibro, I have a flexible capacity model in mind. For commodity-driven IT services, I look to vendors for hosting or cohosting opportunities in order to provide cost-effective, repeatable, and sustainable solutions. That frees up our precious internal IT resources to concentrate on business-aligned, value-added solutions and services,” Fling says. “We’re definitely happy with the decision we made.”

Parting the Clouds

The benefits of cloud computing are numerous—increased speed, improved efficiency, reduced costs—and companies like Arcor and Phibro are looking to Oracle cloud services as a way to make IT much more responsive to the business, while keeping IT management and infrastructure costs down. 

“The Oracle technology stack is a strong value proposition for on-demand solutions,” concludes Rona Shuchat, program director of application outsourcing services in International Data Corporation’s outsourcing and offshore services research team. “By leveraging Oracle’s software portfolio for its virtualized, agile cloud capabilities, you can realize the benefits of an optimized, integrated stack, from the infrastructure layer up through the database middleware and application tiers.”

“I can look to Oracle as a service provider to run my ERP in a cloud environment,” Phibro’s Fling concludes. “Hosting JD Edwards EnterpriseOne with Oracle permits Phibro to deploy more of its resources and attention to core competencies that drive business performance. But one of the reasons that strategy works is the competency and effectiveness of the service and support we receive from Oracle. Who better to run our ERP then the vendor that provides it?”