“Outsourcing enables these types of businesses to help support business unit alignment, restructuring and strengthening and getting better visibility into their data. This ultimately improves financial management and supports innovation and product service creations,” explains Rona Shuchat, director, Application Outsourcing, IDC.
And it’s exactly what many Oracle On Demand customers are looking for, says Marc Schwarz, senior vice president of Oracle On Demand. “Large enterprises in particular are looking to use IT as an enabler for business transformation and are partnering with us to achieve business success faster and with lower risk,” says Schwarz. “For a company like Essilor, that means getting lenses to the right places at the right times and being able to deal with issues such as privacy and new product development. And both Essilor and Exterran want IT to enable their businesspeople to sell. That takes technology as well as people and processes.”
Indeed, this question of bringing your IT organization in sync with your users to support different functions and requirements of the business is one that’s been long debated, Shuchat says. Surprisingly, outsourcing isn’t always looked upon favorably by the business units and end users. Conceptually, business users think of outsourcing as a way of cutting costs, lowering total cost of ownership, and lowering labor costs—all things that sometimes come with the side effect of fewer end-user benefits and services. Sometimes, there’s also a misconception that problems with outsourced applications can’t be resolved as quickly as those hosted in-house. This presents a problem, because unless the IT department can get buy-in from the business users, even on-demand implementations that promise strong return on investment (ROI) may fail.
This is where extensive communication comes in, says Shuchat. In fact, it’s imperative that the IT team make sure that business users are part of the decision-making process from the very beginning. This starts by making it clear to stakeholders how on-demand computing can free up resources that the business can use for value-added activities.
Adds Shuchat, “You need to think about how your current IT resources are being allocated within your organization. Where are people spending the bulk of their time? Are they spending 60 to 70 percent of their time on the maintenance of applications that are not at the core of the business? If so, a hosted service would definitely bring benefits and release those resources for more-critical strategic projects. But if you don’t bring in your business users, you’re going to have a lot of confusion in the user community as to what functionality is being delivered. Are you planning on just holding on to existing functionality? Are you bringing in new functionality? Making things clear and working directly with business users to support their needs is what’s going to help you succeed.”
Beneficial—and Easy, Too
Essilor of America’s de La Sayette says he and his team did just that—communicating about both the resources the company had and how it was using them as well as what an on-demand product could bring to the table. “Businesspeople were counting on us, the IT organization, to make sure that we were not jeopardizing the quality and the experience they were used to with the Oracle E-Business Suite and the operational management of those applications. And of course they were also expecting us to improve their experience,” he says. This meant not only providing better flexibility around the ERP solution, accommodating growth, and gaining agility, but also explaining how all of these things would affect the business in a positive manner.
In Exterran’s case, York was able to communicate the benefits of Oracle On Demand for two merging companies, and most importantly, was able to follow through on delivering those benefits. After the merger in August 2007, the new company, Exterran, integrated the infrastructures and software of two companies into Oracle On Demand. “We were scheduled to go live on Oracle On Demand for all U.S. operations, and we did it on February 4, a day ahead of schedule and ahead of budget—very important for two companies with aggressive timelines to integrate information to run the combined business,” York says. The project went a long way toward convincing business users that it was a smart move—in part because the few implementation issues that came up were handled quickly and adeptly.