General Motors' CIO Speaks Out On Oracle's Acquisition Strategy

General Motors spends billions of dollars annually on IT and considers Oracle one of its top vendors. Information Week editor-at-large Mary Hayes Weier sat down with GM CIO Ralph Szygenda recently and asked what he thinks about Oracle's aggressive acquisition strategy, and his opinion of president Charles Phillips, who serves as Oracle's customer advocate and acquisition executor and has emerged as a potential successor to CEO Larry Ellison.

InformationWeek: What's your impression of Oracle's acquisition strategy?

Szygenda: Acquisitions are not always successful for the end customer. I like to see competition; I don't want a monopoly situation. Given that, I like companies doing acquisitions [if it means better integration of software]. If they don't do integration in the GM model, I pay systems integrators to do the work, and it costs money.

In the earlier days of Oracle buying PeopleSoft, there was a lot of consternation [among] CIOs. Some in this town [Detroit] were writing letters not supporting Oracle. I refused to do this. I believe I was right in this result. I have been unbelievably impressed by Oracle's acquisition strategy. I've been thrilled by the benefits I've received because of it.

InformationWeek: What do you think of Charles Phillips' performance as president of Oracle?

Szygenda: I think Charles has brought tremendous customer sensitivity to the company. I remember his history on Wall Street. [Larry Ellison's hiring of Phillips] was a little bit of a surprise because Charles traditionally had not been in the business of supporting customer bases. At least in my relationship, Charles is one of the most customer-sensitive individuals in the IT industry. He listens. He addresses problems. And he still makes [Oracle] money.

Oracle has been known to be difficult negotiators, especially on terms and conditions. We've had difficult times with Oracle, and Charles Phillips has basically smoothed those over from prior history. I thought very highly of him prior to Oracle, but he didn't run a major corporation. So Larry Ellison made one of the best moves in the IT industry.

InformationWeek: What do you think of Oracle's decision to continue to support multiple versions of acquired ERP software?

Szygenda: I sat down with [Phillips] early on and told him, "Don't immediately tell me I have to move to a new platform and change the world." They didn't mesh all these [acquired] companies overnight to get cost reductions; who came up with the idea not to do that, I'm not sure, but someone made some really good decisions. That says if I'm using PeopleSoft, Siebel ,or Hyperion, that No. 1, I will not be disadvantaged by an acquisition; and No. 2, they would extend [the acquired software] and make it better. I don't have a history of saying how wonderful IT companies are all the time, but I say every one of those products has gotten better for General Motors. You would think they would lose focus, but they didn't.

InformationWeek: Do you think Phillips will have Ellison's job one day?

Szygenda: I would not be surprised of anything Charles can do. I've worked with a lot of analysts on Wall Street, but I wouldn't expect them to go be president of company, and be a customer advocate, and he's done an amazing job. I would not sell Charles Phillips short of anything. His discipline must come from his background as a Marine, and he's brought a lot of discipline to Oracle. And it's not the discipline of a dictator, it's more of [discipline] of process. It's a much easier company to work with than 10 years ago.

InformationWeek: What's your biggest concern about Oracle's acquisition strategy?
Szygenda: Whether there is continuity to this vision. All of a sudden, a few quarters Oracle doesn't meet numbers, which puts high pressure on cost containment, and then someone says, "This strategy isn't working and needs to change." So, is there continuity to this strategy? That's my question. It feels good, but will it feel good two years from now? I'm watching, and I will be all over Larry, [CFO and co-president] Safra [Catz], and Charles on continuity. I meet with them several times a year, and one day a year visit the headquarters. In those reviews I will be watching continuity. Are they sticking to their strategy, is it delivering what they want?

I have the same [requirements] for SAP(SAP) and Microsoft. I look for continuity. If I'm trying to put in a two, three, or five year plan at GM, [I need a] commitment of products to do that.

...The other concern is that Oracle doesn't close me in. I have to have competition [among vendors].
InformationWeek: Couldn't Oracle's rapid acquisition rate become a distraction for that company?

Szygenda: They've told me they have a very lean acquisition strategy. Companies [can] send in an army and destroy a company by bringing in too much corporate help. Oracle doesn't put tons of people on an acquisition, and they leverage the organization that's been acquired.

InformationWeek: So if you had to sum up Oracle's acquisition strategy in a word or two, what would you say?

Szygenda: Unbelievably encouraging. A year and a half ago, it felt OK.

Author: Mary Haeys Weier @ InformationWeek

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Vodafone Spain Extends Oracle App to Support MVNOs

Oracle today announced that Vodafone Spain has extended and upgraded its deployment of Oracle Communications Service Activation to activate complex, next-generation subscriber services, enable Mobile Virtual Network Operator (MVNO) services and lower operational costs.

As the wireless market evolved and industry competition intensified, Vodafone Spain faced several key challenges including numerous manual processes that reduced service delivery timeframes and increased order fallout, high operating costs, and slow time to market for new services. With Oracle Communications Service Activation, Vodafone Spain has streamlined its operations onto a single convergent platform for rapidly enabling new services, including its MVNO service offering, recognizing significant cost savings through reduced customization and higher levels of product configuration as a result of an integrated service creation environment.

"Oracle Communications Service Activation has been instrumental to our success in delivering high-volume next-generation mobile subscriber services," said Lorenzo Merchan Arevalo, Architecture and Management of Systems, Vodafone Spain. "As the recognized market-leading service activation product, Oracle has enabled the automation of our provisioning process and reduced activation times from hours to seconds. This has enabled Vodafone Spain to launch new services quickly, provide a significant return on our investment while allowing us to maintain a low total cost of ownership."

"Oracle is proud to have partnered with Vodafone Spain as it derives significant value and time-to-market from our activation product," said David Sharpley, vice president, Marketing and Alliances, Oracle Communications. "We continue to see mobile operators worldwide follow the lead of Vodafone in selecting Oracle applications to streamline their systems, enable new services and increase automation resulting in an improved customer experience and reduced churn, as well as a high return on their investment."

Source: www.wirelessiq.com

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Oracle edges out SAP at logistics firm

Oracle beat its chief rival, SAP AG, in the race to provide one of North America's biggest logistics firms with comprehensive new business management systems.

Schneider National, a Green Bay, Wis.-based transportation and logistics outfit with $3.7 billion in annual revenue, announced this week that after a lengthy evaluation process -- during which the company looked closely at both Oracle and SAP -- it has decided to use Oracle applications and infrastructure software to build a fully integrated transaction and data environment.

Schneider, which provides truckload, logistics and intermodal services to customers in more than 28 countries, says it will rely on Oracle Fusion Middleware, Oracle Database, Oracle E-Business Suite applications and Oracle Transportation Management -- a product Oracle acquired when it purchased G-Log -- to help it gain better visibility into its many operations and take advantage of service-oriented architecture (SOA).

"This was a real tight horse race," said Judy Lemke, Schneider's executive vice president and chief information officer. "[SAP] showed well. It's just that Oracle provided a more convincing and compelling set of evidence that they were pretty far ahead in the [transportation management] space with the acquisition of G-Log; they have a compelling case for their middleware; and they certainly provided compelling evidence as to their willingness to partner."

An unusual evaluation

Schneider's management team knew going into the vendor evaluation process that they wanted to build an asset-based transportation management system. But, according to Lemke, neither Oracle nor SAP offered advanced asset management systems. As a result, it became clear that Schneider executives would need to work closely with the winning vendor over time to develop such capabilities.

"It was a little bit different evaluation than you might see if there were fully mature capabilities in both products," Lemke said.

A typical vendor evaluation involves looking at products and deciding which one is best, but for Schneider, Lemke said, choosing between Oracle and SAP meant looking at the differing business goals, strategies and attitudes of each company.

"For us, the first and most important criteria was strategic alignment," Lemke said. "The second thing we looked at was their willingness and ability to partner, because we knew that we were going to rely heavily on each other for the ability to develop the asset-based capabilities."

Lastly, Schneider looked at Oracle's and SAP's technology. While the competition was close, Lemke said Oracle came out ahead in all three areas.

"We are working with Oracle on its [Oracle Transportation Management] product and working with its system development team in terms of co-developing some of the capabilities," Lemke said. "We are helping to define the requirements that they are putting into the system."

Deployment details

In addition to overhauling IT, one of Schneider's main goals is to use Oracle technology to improve the experience of its customers and ensure that shipments are delivered in the most efficient and cost-effective manner possible.

Lemke said Schneider purchased Oracle E-Business Suite because it wanted to implement a fully integrated suite of procurement, financials, payroll, human resources, supplier management, enterprise asset management, demand planning and supply chain management applications.

"We wanted to go to more packaged software so that we can focus our resources on the more strategic things and the things that would differentiate us the most," she said.

Oracle Transportation Management will provide Schneider with "end-to-end" planning, execution and visibility into its transportation and logistics operations. Lemke said Oracle Transportation Management is a key aspect of Schneider's plan to improve the customer experience.

On the SOA front, Schneider plans to use the Oracle SOA Suite, Oracle Application Server 10g and Oracle Identity Management 10g, Lemke said. The company will also run Oracle Real Application Clusters and Oracle Database 10g.

Schneider, which already runs Oracle-Siebel CRM, an application it purchased long before Oracle bought Siebel, is currently in the process of implementing Oracle Contact Center Anywhere, Siebel Marketing, Oracle Real-Time Decisions and Siebel Partner Relationship Management. The rest of the project is expected to be a multiyear effort, Lemke said.

Pain points

Schneider is about four months into its Oracle implementation project, and thus far the technology has met or exceeded Lemke and crew's expectations. But, Lemke says, dealing with Oracle on licensing and contracts can be a somewhat painful, red-tape-filled process.

"Oracle does have a little bit different makeup than SAP does, and we are more litigious in the United States than others," Lemke said. "But I think [it's] always a little bit more difficult to go through the Oracle machine when you're trying to discuss terms and conditions or get approvals and signatures."

Author: Mark Brunelli

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