By Alison Weiss
Executive decision-makers have always staked business success on building strong workforces, managing back-office systems, and supplying goods and services. Too often these key operations have not been addressed holistically. But a recent KPMG report found that 76% of companies that have embraced cross-functional process integration and cooperation across their enterprises (including implementing seamless commerce, advanced data and analytics, and streamlined people capabilities) are successfully reaching their business objectives, compared to just 57% that have not made similar investments. To gain a competitive edge in today’s fast-paced marketplace, where digital transformation is disrupting organizations right out of business, companies need to encourage collaboration and use cloud-based solutions to quickly integrate finance, HR, and supply chain management (SCM) across their enterprises.
Although creating a cloud-based connected enterprise can be challenging due to the investment it requires across the entire enterprise value chain, the resulting payoffs are huge: better efficiency, higher revenues, and improved customer experiences. To offer concrete steps to achieve this enterprise goal, the Oracle Modern Business Experience conference in Las Vegas, Nevada, held March 19 through March 21, 2019, brought together thousands of finance, HR, and supply chain professionals. Attendees connected with industry communities, discovered opportunities to collaborate with cross-discipline peers, and explored the newest applications and innovations. Along with inspiring demonstrations and keynotes, 303 breakout sessions presented by 525 speakers provided opportunities to learn about Oracle’s comprehensive and integrated cloud-based finance, human capital management (HCM), and SCM solutions.
In his March 20 keynote, Oracle CEO Mark Hurd emphasized that cloud computing is critical to helping companies worldwide achieve their four main priorities: to increase revenue, boost cash flow, decrease spending, and manage risk. He said that cloud computing isn’t so much a technology as a new business model.
Why has cloud stuck over the course of 10 years? It’s not a technology. It’s really a business model.”—Oracle CEO Mark Hurd
At the root of that business model shift is the ability to free up money and people to innovate—helping to create new and different digitally driven products, services, and customer experiences within flat IT budgets. That ability becomes particularly important in the current slow-growth economic environment, in which most companies must grab market to increase revenues, he said.
Unlike the tech special du jour—whether that’s big data, virtualization, AI, or blockchain—the cloud is something bigger. “Why has cloud stuck over the course of 10 years? It’s not a technology. It’s really a business model,” Hurd said. “At its core, it simply drives down capital expenditures, reduces labor, creates certainty of outcomes, and reduces the cost of overall maintenance. In the end it costs less. And while it does all that, it’s actually more reliable, more secure. And it gives you access to more innovation.”
Rather than have to hire armies of experts and assemble the supporting infrastructure to deploy big data analytics, AI, blockchain, and other emerging technologies, companies can simply subscribe to cloud application services that come with these advanced technologies and the latest capabilities built in. In this model, the cloud accelerates the speed to innovation—and bottom-line results—Hurd said.
“It fundamentally shifts the work from your IT budget to [Oracle’s] R&D budget,” he said, noting that Oracle’s 10,000 developers essentially become part of customers’ IT organizations. “It fundamentally shifts the risk, shifts the modernization, the hope that you can ever keep up.”
In his opening-day March 19 keynote, Steve Miranda, executive vice president of applications product development at Oracle, also focused on why it’s imperative to embrace cloud across the enterprise. He believes that Oracle Cloud makes the best business sense to adopt now—and not down the road—because it enables companies to rapidly adapt to digital transformation. He observed that the opportunities presented for business change fueled by technology change are accelerating. “What you as a customer need is to make sure you are not burdened by or restricted by your ERP, your HCM, your supply chain, or your CRM systems,” he said.
During his keynote, Steve Miranda, executive vice president of applications product development, emphasized why it’s imperative to embrace cloud across the enterprise.
According to Miranda, Oracle’s delivery model in the cloud is much faster than that of on-premises Oracle product options. The company currently manages approximately 17,000 customer pods in Oracle Fusion Cloud. Although cloud technology enables customers to save money, benefit from strong security, and take advantage of modern applications, Oracle Cloud’s main value driver is that its speed of innovation allows customers to respond quickly to business pressures.
He noted that in the months since Oracle OpenWorld 2018, Oracle has focused on adding tremendous feature functions across applications in Oracle Cloud. He cited a new subscription management module and new AI capabilities to improve supplier management in Oracle Enterprise Resource Planning Cloud (Oracle ERP Cloud) as well as new products to improve supply chain collaboration and service logistics in Oracle Supply Chain Management Cloud.
During his speech, to illustrate the usefulness and convenience of chatbot technology and machine learning incorporated across Oracle Cloud, Miranda used a tablet to quickly submit an expense report in Oracle Human Capital Management Cloud. In a matter of seconds, the expense bot determined the amount on the receipt, pinpointed the number of attendees, and even identified the customer through integration with the calendar. He characterized the process as involving “not only device integration, again modern and mobile, but machine learning to parse the receipt better.”
Although the message conveyed at Oracle Modern Business Experience is that a cloud-based connected enterprise holds the promise of improving the way it runs its finance, HR, and supply chain functions, there are deployment challenges. Customer and industry veterans at the conference addressed whether cloud application suites should be implemented all at once—the so-called Big Bang strategy—or in discrete increments. The answer was a resounding “it depends”—on the company, its culture, and its sense of urgency.
TCF Bank, a national bank holding company with US$23 billion in assets that provides banking and lending services to retail and commercial customers, took a two-phased approach to installing its cloud supply chain applications, said Sharon Krumm, TCF’s executive vice president of strategic sourcing and property development. The first phase involved implementing modules for “strategic sourcing,” such as contract negotiations, the business case for which had already been made, Krumm said.
Percentage of companies that have embraced cross-functional process integration and cooperation across their enterprises
The second phase involved transactional aspects of the cloud technology, she said, including purchasing requisitions and a supplier portal. The impact of the bank’s implementation of such online requisition capabilities helped establish necessary controls and significant “efficiencies from an AP [accounts payable] perspective,” Krumm said. But the process change involved was felt across the entire organization, she added—although it was mitigated by an education effort that took place in between the cloud implementation phases.
“The two-phased approach really paid off with the amount of change management we had to do,” Krumm said.
A significant factor in implementing enterprise cloud applications is that procedures and business processes for using them are hardwired in. That means companies must replace their current processes with best practices dictated by the cloud tools. The advantages are that the processes incorporated in the cloud apps are modern and task-specific. But this kind of change can be difficult for employees to embrace, especially in a short period of time.
Keith Causey, senior vice president and chief accounting officer at Caesars Entertainment (left), explained the Big Bang strategy of how the company went live with two cloud finance applications in 2017.
“This is ‘move-in’ technology,” said Keith Causey, senior vice president and chief accounting officer at Caesars Entertainment, which went live with two cloud finance applications in 2017 and with Oracle Human Capital Management Cloud last year.
“You can’t really customize it for your processes. You need to change your processes and move in,” Causey said. Caesars began preparing for the cloud apps while it was still negotiating the contract, he said.
The all-at-once, Big Bang strategy has its adherents, who point to speed of transformation as a motivating factor. But even advocates of that approach advise caution.
“It’s not for the faint of heart,” said JoAline Olson, chief human performance and innovation officer for Adventist Health, a US$5 billion nonprofit healthcare system based in Northern California. Adventist Health chose Oracle Cloud applications to replace a 30-year-old green-screen application used for both finance and HR operations.
Ivgen Guner, Oracle senior vice president of global business finance (left), led a session of female finance leaders.
Adventist’s cloud ERP and HR rollout started in 2016 and finished last year. “We did Big Bang with both—finance six months ahead of HR,” Olson said. Next up: Oracle’s cloud-based supply chain apps.
Now that the dust is settling, Olson is happy that Adventist leaders chose to take the aggressive approach. “I love the fact that we’re not still implementing and rolling out, that we’re now fixing and stabilizing,” she said. And while the Big Bang has provided a foundation for growth, it’s a back-office transformation, Olson said, with the true benefits still ahead.
“The real transformation,” she said, “will be when we can focus on the professional and personal well-being of our associates . . . so they, in turn can focus on the well-being of our patients and really help transform their lives and communities.”
Oracle Modern Business Experience was the perfect venue for Oracle to announce the latest smart enhancements incorporated across Oracle Cloud. For example, Oracle Service Logistics Cloud improves SCM, because it makes it easier for organizations to address customer issues by linking field service and customer service teams. Customer service personnel can order parts from within a service request, coordinate delivery times, and even manage service technician trunk stock. Further, Oracle Supply Chain Collaboration Cloud is a new platform to manage cross-company planning and execution processes. Users can receive timely updates from key suppliers and contract manufacturers to more accurately manage supply replenishment by tracking on-hand supplies. And, Oracle Project Driven Supply Chain is a new capability that automates the tracking of project attributes and related costs from sales orders, making it easier when orders are fulfilled to bill in a more accurate and timely manner.
The legendary Magic Johnson shared leadership and business advice.
The conference was also a showcase for demonstrating new machine learning innovations and AI capabilities incorporated into Oracle ERP Cloud and Oracle Enterprise Performance Management Cloud to give finance and operations teams more competitive advantage. One enhancement is Oracle Advanced Financial Controls Cloud, a solution that provides ongoing analysis of transactions, setups, and configurations to automate audits and halt financial leaks. Data science techniques and self-learning algorithms automatically enable incidents to be flagged and directed to analysts for tracking, investigation, and closure. In addition, the Oracle Advanced Access Controls Cloud Service solution incorporates AI methods to automate security analysis to protect business information from insider fraud and threats, while the new Oracle Project Management Digital Assistant improves project management by providing instant, accurate project status updates. The assistant learns from a user’s project planning data and past time entries to capture critical project data and personalize interactions.
It’s obvious to finance, HR, and supply chain leaders that digital disruption is not going to stop, but attendees at Oracle Modern Business Experience were given a valuable roadmap demonstrating how cloud-based solutions connecting ERP, HR, and SCM functions across the enterprise can enable digital transformation—and fast. As Miranda observed, “If you’re presented with that business opportunity, that business challenge, and you need to transform the way you do business, the last thing you want is to be burdened and held back by the questions ‘Can our ERP system support it? Can our supply system handle that?’ It’s all about speed.”
Photography by Oracle