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A Clearer View

Oracle On Demand eases complexity, speeds innovation.

by Karen J. Bannan, November 2008

Oracle On Demand eases complexity, speeds innovation.

Essilor, the world’s leading provider of ophthalmic eyeglass lenses such as Transitions photochromic lens, and Varilux, the world’s first progressive lenses, has been around for more than 150 years. But it’s only recently that the company established its back-end software implementation strategy.

Essilor, which has been an Oracle software customer since the mid 1990s, had been using a version of Oracle E-Business Suite installed on premises for back-end and manufacturing processes. Dallas, Texas-based Essilor of America, the U.S. arm of Essilor, followed a similar strategy. Essilor’s financial, inventory management, and stock business order management applications—and related data—were installed on premises as multiple, siloed modules. It was increasingly difficult to manage the growing complexity of such a large IT infrastructure and give end users the resources they needed to be innovative and continue growing the business. This was one of the main reasons that the company adopted Oracle On Demand to facilitate outsourcing the operational management, says Hervé de La Sayette, IT vice president, Essilor of America.

“We were growing in-house technical expertise for managing a technology that is pretty common; Oracle’s software relies on systems and servers that are pretty common to every company,” de La Sayette says. “In other words, what I was doing to manage the technical environment of my Oracle ERP [enterprise resource planning] instances were the same things that other companies were doing. On the other hand, there are other applications more Essilor-specific on which IT needed to focus its attention and resources. We needed to be able to take the people who were working on the Oracle environment management, including DBAs and system engineers, and reallocate their time, effort, and knowledge to more Essilor innovation-specific applications.”

In 2006, to facilitate innovation as well as enable the continued integration of additional systems and infrastructure coming from the companies it acquired, Essilor of America implemented Oracle E-Business Suite On Demand.

From Many to Fewer

Meanwhile, in Houston, Texas, full-service natural gas compression technology and equipment provider Exterran (formerly Hanover Compressor Company and Universal Compression Holdings) was seeing rapid growth. But with that growth came challenges. In 2002 Hanover alone was running 86 different ERP applications at the 40-plus companies it had acquired across the world. The main issue, says Stephen York, vice president of the Business Technology group at Hanover and for Exterran, was the large number of different applications throughout the organization. “We’re a global organization,” he says, “so having integrated information is critical. We must be poised to create value through customer retention and employee efficiency yet have the scalability and flexibility to seek additional opportunities.”

Hanover, and later Exterran, like Essilor of America, implemented Oracle E-Business Suite On Demand in many of its locations around the world and instantly reduced the number of applications it needed to support as it moved to a hosted environment.

“With Oracle On Demand, we don’t have to worry about planning resources to run our applications or think about 24/7 coverage to make sure that our applications are up and running—something that is crucial for a global company like ours,” York says. “Our uptimes have stabilized at 99.95 percent from 99.7 two years ago. Every step toward 100 percent means value and credibility when you think about lost employee productivity and job satisfaction.”

The implementation has also allowed Exterran to focus on the specific benefits the technology can create within the company. “That’s why we’ve changed our department’s name from Information Technology to Business Technology,” York notes. “The new name signifies a change in philosophy. We now focus on enabling the business and helping our partners meet their organizational goals through enhanced intelligence that can create a competitive advantage.”

IT Equals Innovative Technology

Both Exterran and Essilor of America share a vision and a strategy—outsourcing applications—that is sweeping progressive IT departments, especially those in manufacturing, according to Framingham, Massachusetts-based research firm IDC. Among IT respondents in IDC’s 2008 Transformation Services Survey, 44 percent cited improving links between business processes and IT as a leading reason for leveraging outsourcing as a means of transformation. In addition, among line-of-business respondents in the same study, executives from manufacturing cited supporting innovation and product and service creation as a leading reason for using outsourcing.

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