Big Ideas

The New Era of ERP

Changing times and technologies favor Oracle’s JD Edwards customers.

By Aaron LazenBy

August 2011

Lyle Ekdahl, group vice president and general manager of Oracle’s JD Edwards product family, has observed two decades of change in the enterprise resource planning (ERP) world. Ekdahl has been in the thick of some of the biggest shifts in enterprise software—from terminal workstations and client/server architectures to internet-based systems and mobile ERP. That perspective, and his close relationship with Oracle’s JD Edwards customers, has led him to name our current paradigm “the New ERP Era,” reflecting the pace at which market volatility and technological advances are transforming business. Profit spoke to Ekdahl about that new era, how Oracle is addressing these changes, and the investments his team is making to support JD Edwards customers.

Lyle Ekdahl

Profit: Businesses have been dealing with a lot of volatility and budget pressure. How has the JD Edwards community responded to these realities?

Ekdahl: There is no doubt that the volatility in the global economy over the last few years has created challenges and put pressure on IT budgets. Still, I think on the whole, the overall marketplace and the community of JD Edwards users have come through this period quite well. I continue to be amazed at the level of creativity and resilience in the customer base.

It helps that JD Edwards is a good solution for companies on a budget. If you look at our cost of ownership, it speaks well to value-based buyers and owners of enterprise systems. With economic shifts people still need ERP, and certainly ERP can help keep costs under control and give managers visibility into the right places to spend their capital.

That said, many customers have seen this period as an opportunity to retool, and we are in a position to make further investments. So we’ve seen good continued uptake of Oracle-based solutions, both native JD Edwards and those that augment JD Edwards—things like Oracle WebCenter, Oracle Business Intelligence Publisher, Oracle Business Intelligence Applications, and Oracle Business Intelligence Enterprise Edition. During this period, customers are looking for ways to get a little more for their money—given that they’re under budget pressure, that’s to be understood. But we haven’t seen any kind of wholesale retrenching.

Profit: How has the economy signaled, in your words, “the New ERP Era”?

Ekdahl: One example is that the new era of ERP proposes a user model that operates independent of necessary ties to the back office. There now must be a set of good deployment options.

The volatility in the marketplace drives the need to deliver functionality at the point of process. Take the explosion in the world of mobility. A lot of that is because you don’t have people in office buildings sitting there all day long, putting in transactions for you. That’s not something that most businesses can really afford anymore.

In place of the old administrative model is functionality that allows the people actually performing the process to capture and use the data at that point of process. Cloud is certainly a part of this as well—customers see this deployment option as a way of getting better alignment between their spend and the overall solution.

Profit: What do you tell people these days, when they ask if it’s time to upgrade?

Ekdahl: In a word? Yes! Unfortunately, the old era of enterprise systems required people to get far too fixated on specific release numbers and release levels. We’re trying to help customers understand that, not just JD Edwards applications, but Oracle products in general are built on a strategy of evolution. The days of big-bang implementations have to end, given the volatility in the marketplace. Customers today more than ever are looking to get value from solutions that are flexible and responsive to the market. The notion that we pour millions of dollars into ERP and then turn our backs on it for 10 years—this has to change.

We’re working programmatically to drive cost of ownership, including the cost of movement, down. For example, we’re working on solutions that allow our customers to upgrade part by part, system by system, using technical products from Oracle such as Oracle GoldenGate—which helps with synchronization and data replication across release levels. In addition, I’ve assigned some very bright people on my team to work on an upgrade program and technology office. They are focused on technologies, development, and customer-based programs that help drive down the individual elements of upgrade cost.

I think it’s important for our customers to understand that we’re making big investments toward simplifying movement from release to release—and improving our customers’ ongoing return on investment in our software. In addition, we’re making sure we have good, complete solutions that are still flexible and can be modified or configured at the margin. This is an approach that is consistent with lower upgrade costs. We want to help our customers eliminate the need to do deep customization that locks them into specific release levels.

Profit: How does this approach dovetail with the work being done on Oracle Fusion Applications?

Ekdahl: Oracle Fusion Applications fit directly into this approach. Oracle Fusion Applications-JD Edwards coexistence and Oracle Fusion technology adoption is part and parcel to this strategy of evolving applications, where we will incrementally add capabilities and layer in differentiating value over time.

I have a lot of customers asking me, “OK, so is this the last JD Edwards release, and then I have to go to Oracle Fusion?” No. That’s not the way we see it. We see this as two lines of business that are gradually approaching each other. Initially Oracle Fusion Applications are looked at as additive functionality for JD Edwards, and then over time they can be looked at as a successor. But the key is to minimize technical discontinuity.

I hope, however, that it is clear to customers that the JD Edwards EnterpriseOne 9 strategy is the milestone where customers can truly start working toward and benefiting from Oracle’s evolutionary applications approach.

Profit: Will the momentum behind Oracle Fusion Applications change the way JD Edwards applications look?

Ekdahl: We’ve seen a lot of changes in user interface over the last several years. Today, people coming to the workforce have a different view of enterprise systems; many don’t know what to do with an old forms-based application. They’re used to working in an internet-based age. So enterprise systems have to take on some of that more “consumerized,” if you will, look and feel.

This is where JD Edwards drafts so well off of the investments Oracle is making in Oracle Fusion Applications. We are doing a lot of work on our user interface based on the Oracle Fusion standards. Our users will see many of these interface enhancements over the next couple years that will make the system very modern.

Profit: In the past year, is there integration with another Oracle product line that you’re particularly proud of?

Ekdahl: Certainly for the JD Edwards community, the value chain planning integration has been very well received. It really addresses the volatility in the marketplace—the ability to get your arms around spare parts, inventories, and manufacturing supplies and production. This is a best-of-breed set of solutions that helps keep costs and delivery to customers aligned with the market. That ability is just critical today.

Another critical part of the JD Edwards community is our project-based customers—particularly in engineering and construction. Our integrations to Oracle’s Primavera products have served that sector very well. This is what we mean by layered-in differentiating value.

Profit: What is the impact of Oracle’s hardware business on JD Edwards?

Ekdahl: It’s actually pleasantly surprising. While we have supported [Oracle] Solaris for some time, having Sun as part of Oracle is opening up all kinds of opportunity. For example, a lot of people think JD Edwards applications are limited to the midmarket, and we do have a strong midmarket business. And of course we’re hearing a lot of interest from our midsize customers for a prepackaged JD Edwards-Oracle hardware systems solution optimized for a smaller database environment—whether that’s Intel or Linux based. And so that’s something that we’re looking at and working on.

But we also have some very large customers that run JD Edwards applications, and I can say now that we have had great uptake in this space with Oracle Exadata. We posted some very impressive benchmarks last year on the Oracle Exadata box, and we just finished up our benchmarking of Oracle Exalogic and we’re blown away. My performance and scalability engineers recently ran some of our latest code on Exalogic and reported our most-impressive numbers ever. The thing just screams. And then, of course, the two of them together ultimately is Nirvana.

Profit: What technology do you see on the horizon that you’re really excited about bringing to JD Edwards customers?

Ekdahl: I think that over the next five-plus years, it really comes down to this notion of deployment options. Already we are getting steady interest in JD Edwards solutions that are cloud based, where Oracle runs and manages services for our customers.

In addition, we are working with technologies such as Oracle Application Development Framework [Oracle ADF] for mobile. It doesn’t make sense to throw a whole ERP system on an iPad. But there are parts and pieces, thin JD Edwards-based applets built with Oracle ADF Mobile Client, that it makes sense to tie back into your overall JD Edwards system.

So we’re focused on working with those two aspects of deployment technology. I think JD Edwards customers will be pleased to see these deployment options and technologies really come to full fruition over the next several years. It’s all part of the new ERP era.

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