Oracle finally took the veil off its much-anticipated Fusion Applications suite and, at first blush, it’s a sophisticated product — lots of functionality, great user interface, nice on-demand/on-premise flexibility. So far, so good. Except one thing is conspicuously absent: a “classic” manufacturing-centric ERP module. This begs the question for the thousands of manufacturers running Oracle’s eBusiness Suite (EBS) or its J.D. Edwards (JDE) manufacturing suite: Is there a migration path to Fusion Apps? And if not, then what?
Those questions will become even more apt later this year, when Fusion Apps is set for general availability. In market timing that hardly seems coincidental, SAP is expected to reintroduce its Business ByDesign sometime in 2010. And, while aimed at the mid-market, ByDesign has one thing that Fusion Apps, which serves mid-market and large enterprises, doesn’t: manufacturing support.
Fusion Apps is not entirely devoid of manufacturing chops. The Fusion Distributed Order Orchestration (DOO) module is a strong supply chain tool that will assist manufacturers in managing complex orders across multiple, heterogeneous systems. But heads-down manufacturing support will be left to EBS and JDE.
This doesn’t mean manufacturers have nothing to look forward to in Fusion Apps. Oracle neatly finessed the potential cannibalization problem that a stand-alone Fusion suite could have engendered by making it possible to implement individual Fusion components alongside the rest of the Oracle portfolio, or any other vendor’s portfolio, for that matter. This means the announced pieces of Fusion — talent management; finance; CRM; project portfolio management; governance, risk and compliance; and procurement — can, with the proper application of middleware, be hung off an existing manufacturing IT environment.
Hence, the manufacturer’s dilemma. Does it make sense to stay in what, by dint of Fusion Apps’ arrival, is now a last-generation ERP/MRP system and merely upgrade at the non-strategic edge? Or should manufacturers look at upgrading to a net-new manufacturing system, even though one may not be available until sometime in 2010 or beyond.
There’s a lot to be said for innovating at the edge, and Fusion’s individual components are all relevant to manufacturers. This is the Oracle innovation strategy in a nutshell: Innovate at the edge, using either acquired applications such as Transportation Management (née G-Log) or new apps such as Fusion DOO, and let Fusion Middleware take care of the rest.
But this middleware-heavy solution set makes IT management much more complex than managing a single-code base suite, whether it comes from SAP or Microsoft Axapta, and manufacturers need to weigh the value of innovating in a core suite (SAP) versus using best-of-breed applications and a heavy middleware layer. In the short term, JDE customers with a pressing need for advanced talent management might do well to implement Fusion Talent Management. Would they do better waiting for an integrated suite with both talent management and manufacturing, à la ByDesign? Hard to say.
Oracle and SAP are offering manufacturing customers vastly different choices for both long- and short-term IT strategies. Threading the needle between these two complex choices won’t be easy. And be wary of any vendor that pretends otherwise.