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The Supply Chain Management Blog covers the latest in SCM strategy, technology, and innovation.

Oracle CEO Mark Hurd Shares Vision at Modern Supply Chain Conference

Donna Lee
Product Marketing Analyst

Executives in all industries are under tremendous pressure to modernize supply chain management (SCM) to remain competitive and maximize growth in the face of digital disruption. Oracle CEO Mark Hurd, in his keynote at the company’s annual Modern Supply Chain Experience conference, outlined why cloud technology is driving process improvements, not only in IT and SCM, but throughout business operations.

“You hear us talk about products, but it’s a lot bigger than products,” he said. “This is about strategy and business models.”

According to Hurd, technological innovation has upended conventional ways of doing business. This is illustrated by the fact that more than 50 percent of companies on the Fortune 500 list 18 years ago no longer exist. However, the majority of enterprises still spend most of their IT budgets on maintaining legacy systems with customized business applications that are two decades old on average. Enterprises also face further security risks due to the difficulty of applying patches and upgrades. 

When it comes to supply chains, traditional models of doing business are no longer sustainable.  The internet and social media have changed the way people make purchases. Customers now expect to be able to place orders and get same day delivery. Older supply chains simply cannot meet this demand.

Hurd also observed that, while cloud applications are often touted as technically better than on-premises options, the cloud is more than a technical issue.

“You’re going to see a complete change in the way IT works,” he said. “There’s not enough money to keep the status quo going.”

Ultimately, enterprises will have to modernize by moving SCM and other business operations to the cloud because cloud applications can cost less, require less work, and provide more secure features. It’s an attractive business proposition for a company to implement cloud applications and innovate on Oracle’s R&D bill instead of their own IT bill. It is much easier to use cloud upgrades to acquire new technologies such as artificial intelligence and machine learning — capabilities and features that companies could never hope to get in the old on-premises business model.

Hurd also offered his predictions for how widely cloud technology will spread by 2025:

  1. The number of corporate-owned data centers will have decreased by 80 percent.
  2. 80 percent of IT budgets will be spent on cloud services.
  3. 80 percent of IT budgets will be spent on business innovation and only 20 percent on system maintenance.
  4. All application development and testing will be conducted in the cloud.
  5. Enterprise clouds will be the most secure place for IT processing.

Hurd noted that companies that fail to modernize IT and fall behind on these trends will find themselves at a huge competitive disadvantage.

“You’ve got to get started,” he said. “We’re focused on leading and driving this transition, and we do this hopefully to your benefit.”     

Watch Mark Hurd's Modern Supply Chain Experience keynote to learn more about how cloud technology is driving IT and SCM modernization efforts and creating new business models.

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