At OpenWorld Oracle executives promoting Business Intelligence pushed the notion that there is a huge pent up demand for pre-built analytic applications. That may be true, but as my company calls on JDE customers we find that Oracle is making an underlying assumption that may not yet be valid. That assumption is that the executives running businesses that use JDE applications are pre-disposed to “manage by the numbers”.
Many companies constantly measure a large number of different facets of their business. Doing so has been popular since at least the 1950’s when AT&T, the largest company in the world at the time, adopted it as a key management principle. Advocates of this approach believe that to measure is to improve. The metrics they use to judge performance have come to be known as key performance indicators. The best practitioners have a metric to gauge how each facet of their operation is performing. Some complex businesses employ thousands of these metrics.
The emergence of BI in the 1990’s provided those who liked to manage by numbers with their dream tool. In the early days of BI, each business needed to define its own specific metrics and then create the associated reports. Over time, pre-built metrics along with reports, displays and dashboards started to become available.
The Siebel acquisition propelled Oracle into this new market. The result was the family of offerings now known as Oracle Business Intelligence Applications or OBIA. So far, giant organizations have been the main source of OBIA sales. The more modestly sized organizations that form the heart of the JDE market have not yet tended to participate.
At Open World I asked one of the Oracle executives how many JDE customers were using OBIA. His answer was none so far. The lack of sales can partially be attributed to the newness of this offering in the JDE market, its current limitations, and a relatively high price. These reasons do not fully explain the lack of interest, however.
Our experience working with hundreds of JDE customers indicates that the norm is to base decisions more on experience and instinct than on a detailed use of metrics and analytics. There are certainly exceptions to this, especially at the top end of the user base. More often, however, sophisticated metrics have not been employed in the past partly because there has not been a practical way to report them. Just as importantly, doing so has not yet become a part of the management culture.
As a first step, it is usually necessary to educate executives on how and why management by numbers is superior to using instinct. Well-designed analytic applications can have a major positive impact on results, but only if they are used effectively. Assuming that all organizations inherently want and know how to use detailed metrics to make decisions is a mistake.
Oracle will only succeed in penetrating the JDE base with OBIA when it finds a way to sell the concept of management by numbers to those not yet inclined to apply it and then to teach them how to do it effectively. Historically, Oracle has seen its role as the builder of software and not as the provider of management solutions. As long as it remains in that mode the success of OBIA in our community will be limited.
If any of you have decided to buy one of the OBIA products I would love to hear about it. Feel free to share your experiences.