By Kirk Carlsen, SCM Cloud Product Marketing, Oracle
With an ambitious growth strategy to diversify beyond its core semiconductor business, Broadcom has made some newsworthy acquisitions in the past several years. Brocade Communications, which specializes in data and storage networking equipment for data centers, and software developer CA Technologies are among the most recent. This M&A activity has transformed Broadcom into one of the world's leading providers of infrastructure technology. Prior to the acquisitions, Broadcom was already one of the largest makers of semiconductor components, with customers including Apple, HP, and Dell.
The pace and diversity of Broadcom’s acquisition strategy posed significant challenges for the company’s product lifecycle management (PLM) and revenue management systems. Broadcom had to consolidate and manage data from entirely new product lines and revenue streams into its on-premises Oracle E-Business Suite (EBS) system. To onboard its acquisitions as quickly and efficiently as possible, Broadcom turned to the Oracle Cloud: specifically, Oracle PLM Cloud and Oracle Revenue Management Cloud.
The acquisition of Brocade Communications in 2017 brought an entirely new suite of products to Broadcom’s portfolio. Whereas Broadcom’s typical products maxed out at five components, Brocade was in the business of manufacturing, shipping, and supporting entire systems with upwards of 400 components and six subassemblies each, totaling 31,000 across the entire product line. In addition, the Brocade engineering team needed to track multiple change orders prior to a new product release. This resulted in more complex configurations, bill-of-material (BOM) structures, and support services than Broadcom was used to handling. At the same time, Brocade’s service contracts and other subscription-based business models meant that the company now had to track additional revenue schedules.
Broadcom’s E-Business Suite was not configured to support these business needs easily, meaning that the company’s engineers would have to spend additional time managing data in the system. What’s more, accounting for these additional revenue streams would delay Broadcom’s month-end close.
Broadcom CEO Hock Tan has made speed and cost savings top priorities for the company. To support those goals, Broadcom has adopted a cloud-first strategy. “We looked at other solutions, like Agile, which is a very established, very mature system,” says Hock-Leng Lee, global director of IT at Broadcom. “Then we looked at Arena, Aras, and Oracle PLM Cloud.”
After comparing the offerings, the company chose Oracle PLM Cloud because it provided the needed functionality and integration with Broadcom’s existing systems at a lower cost. “We knew that choosing Oracle PLM Cloud meant that integrating PLM into our current and future environment would be less complex and less costly,” Lee says. “When talking about operating costs, we are talking about not just the product support costs, but also the overhead that we need internally and externally to maintain the running of the product. And we wanted to pick a product that, when it comes to the day-to-day support, is going to interface with the Oracle E-Business Suite we currently have on premises.” Having both solutions from the same partner meant that Broadcom could rely on Oracle for end-to-end accountability.
Lee applied the same logic when researching revenue management solutions. Brocade was using an on-premises version of Zuora RevPro that did not support ASC 606, the revenue recognition standard for customer contracts that took effect this year. After evaluating its options, Broadcom chose Oracle Revenue Management Cloud for its seamless integration with E-Business Suite and its powerful automation capabilities. “Our aim is always to simplify the process without compromising the business objectives, and standardize the process so that it's scalable,” Lee explains.
Oracle PLM Cloud and Revenue Management Cloud have allowed Broadcom to scale and grow into entirely new businesses with minimum disruption.
“We could not have successfully integrated Brocade Communications without the Oracle Cloud solutions,” Lee says. With Oracle PLM Cloud, Brocade’s engineers can easily manage complex BOMs and process multiple engineering change orders per release, allowing Broadcom to integrate a business with very different engineering and operations requirements than its own. On the revenue management side, Broadcom has been able to close the consolidated books in five days, even with its new revenue streams—which Lee estimates would have taken 2 to 3 times longer in its current EBS environment due to additional manual processes.
Despite these immediate benefits, Lee feels that the true value of Broadcom’s transition is yet to come. “The best part about having implemented Oracle Cloud is that integrating our next acquisition will be that much easier,” he explains. “It has really positioned Broadcom for growth.” Oracle Revenue Management Cloud’s ability to scale has already prepared Broadcom for the integration of its recent acquisition of CA Technologies, whose software and subscription business will seamlessly roll into the cloud solution. “This just shows you that Broadcom is better positioned for future acquisitions and changes to the business, thanks to Oracle Cloud,” Lee says.