The wait is over. Since 2005, the business applications world has watched and waited for Oracle Fusion Applications to be brought to market. With the promise of creating business applications based on modern technology, Oracle Fusion Applications were seen as Oracle's long-term replacement for its existing products. The introduction of Oracle Applications Unlimited in 2006 indicated a change in Oracle's strategy as a coexistent product development path chosen over a replacement convergence path. This dual strategy raised concerns with users who wanted clarity about the road map and which product to plan for. By the end of 2008, Oracle Fusion Applications was still a mystery. With Oracle Fusion Applications now scheduled for delivery, its time to unveil the Oracle Fusion Take away
First let resolve some mysteries around Oracle Fusion and get things straight for us to move forward in the Fusion Ride.
Fusion Strategy
• Oracle Fusion Applications are not positioned to replace Oracle Applications Unlimited product lines. Oracle Fusion Applications or modules that mirror equivalent functionality will dictate a replacement (unless it is on a separate instance in which they can coexist). New functionality provided by Oracle Fusion Applications module(s) will be an "augmentation" to Oracle Applications Unlimited.
• Oracle Fusion Applications serve the purpose of showing what a model-driven application looks like with embedded analytics, embedded collaboration and Web 2.0 technology — for example, Really Simple Syndication (RSS) feeds, flexible business process management (BPM) and a flexible, efficient and role-based user interface.
• We believe that Oracle Fusion Applications are most relevant for users of Oracle Applications; it is not a competitive stand-alone business applications suite yet. Oracle has reported some use cases of Distributed Order Management and Sales & Marketing functionality working outside an Oracle environment.
Fusion Market
• There are 101 Oracle Fusion Applications modules targeted for release in late 2010 & early 2011, distributed across the following product families: 34 — Sales & Marketing; 21 — Human Resources; 13 — Financials; 6 — Purchasing; 7 — Projects Portfolio Management; 10 — Supply Chain Management; and 10 — Governance, Risk and Compliance. Oracle Fusion Applications will not serve as a complete ERP suite before year-end 2013. An Oracle Fusion Applications Administrative ERP suite is possible by year-end 2011.
• Oracle Fusion Applications are not targeted at the midmarket segment. Oracle JD Edwards and Oracle E-Business Suite will continue to be Oracle's products in that market. We expect to see Oracle offer modules from Oracle Fusion Applications as stand-alone, augmented add-ons to its core midmarket products.
• Oracle Fusion Applications are designed to operate in on-premises, on-demand/software-as-a-service (SaaS) or business process outsourcing (BPO) modes. For year-end 2010, Oracle has committed to having all modules "SaaS Ready." This means that Oracle intends to issue the first release of Oracle Fusion Applications as multitenant SaaS, on-demand/hosted and on-premises.
• The end-user clients may find Oracle's positioning difficult to understand. With Oracle Fusion Applications as the future suite product, Oracle Applications Unlimited products having strong road maps, and Oracle Fusion Applications positioned as an augmentation or replacement product, Oracle sales may be challenged to provide clear guidance to end users, despite Oracle's investments in customer-facing centers of excellence.
• Oracle has yet to announce pricing for Oracle Fusion Applications. The pricing structure will follow the one used for Oracle Applications Unlimited products; that most users will be required to pay additional license costs to be able to access meaningful uplift functionality within Oracle Fusion Applications; and that some users will be compelled to license Oracle Essbase to use some of the modules of Oracle Fusion Applications — specifically users of Financials, Projects and CRM Territory.
Fusion Implementation
• Oracle customers who are planning to deploy Oracle Fusion Applications and who have a functional overlap with an existing module will have to replace the existing module, unless it is on a different instance (in which case, they can coexist). Oracle Fusion Applications can also augment as point solutions or product families (module sets) with Oracle Applications Unlimited. Oracle will need to advise clients on the implication of various "mix and match" scenarios (particularly on the needed integration, differences in user interface and impact on data transparency).
• Many users will need new skills, such as BPM and process governance, to manage an Oracle Fusion Applications implementation. Similarly, professional services firms will need to prove their capabilities to implement Oracle Fusion Applications.
• Oracle had cited its Application Integration Architecture (AIA) as the way for Oracle clients to help prepare for the adoption of Oracle Fusion Applications. The recent shift in Oracle's Process Integration Pack (PIP) strategy (caused by low takeup and the complexity of providing PIPs for all scenarios) means a refocus to new Oracle Fusion Middleware and a promise of new "automated upgrade tools."
• For replacement or augmented modules(s), the implementation effort will vary widely, with costs similar to reimplementation levels for replacement modules. Costs will be highly dependent on the Oracle product family, level of customizations, degree of latest release versions installed, and the availability of migration tools.
Recommendations
• Monitor Oracle's ongoing road map and pricing announcements, and focus on specific functional solutions to see if they can add value to your Oracle applications portfolio. Understand the full scope of the pricing model.
• Understand how the different product lines can be combined with Oracle Fusion Applications and their impact on process integrity, integration costs, user interface designs and data model consistency.
• Do not plan for Oracle Fusion Applications completely replacing Oracle Applications Unlimited products before year-end 2011 for administrative ERP implementations; and year-end 2013 for operational ERP suite implementations.
• Notify on-premises clients looking for CRM that the first release of Oracle Fusion Applications supports Sales & Marketing. Clients should consider Oracle Fusion Applications Sales & Marketing for Core Sales Force Automation, and Partner Relationship Management, including Territory Management. Due to the newness of the product, users should conduct an extended trial period.
• Ensure that your enterprise has restructured its support and governance models to enable it to support Oracle Fusion Applications. Enterprises should plan to add process governance before implementing a model-driven packaged application such as Oracle Fusion Applications.
• Detail the integrations needed to bring Oracle Fusion Applications augmentation functionality to your applications environment and look for definitional differences — for example, in the format for an "order" used by multiple functions.
• The cost of integration, the usefulness of upgrade tools and the availability of AIA/PIPs should be costed as part of the business-value validation. Equally, users will need clear escalation paths to Oracle Fusion Applications engineers in the early phases of any implementation.
Watch this space for the second part of the Article.
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