One-to-One: Oracle Integrates Agile into the ERP Ecosystem (yes, SAP's ecosystem too!)
I had the chance to talk
with… with Jose Lazares and Hardeep Gulati of
Oracle about their recent
announcement about PLM integration with SAP. 
I believe
this is a significant step forward for Oracle following their
acquisition of Agile, but also a significant step for the industry
in the further integration of PLM and ERP into a larger
enterprise application ecosystem.
Developing the Opportunity to Integrate the ERP-PLM
Ecosystem
I won’t go into the details of everything Oracle offers, suffice it
to say they have a wide breadth of solutions. Oracle offers a
significant technology stack, including the Oracle database that
has held a strong leadership position in the relational database
market for a surprising length of time. Today I want to focus on
Oracle’s enterprise applications. The Oracle E-Business Suite
includes a full ERP solution, along with significant acquisitions
such as the former leading independent CRM system Siebel. From a
PLM perspective, the most important acquisition has been Agile, a
very successful PLM solution provider acquired by Oracle in 2007.
Lastly, they also have a SOA (service-oriented architecture)
middleware product known as AIA (Application Integration
Architecture) as a part of their solution set.
Why is this footprint significant? With the Agile
acquisition, Oracle had assembled:
- A full suite of ERP solutions
- A strong PLM solution
- An integration architecture
- Significant PLM and ERP expertise
In short, Oracle pulled together everything they
needed to create a fully integrated enterprise system ecosystem
that included both ERP and PLM from one vendor.
Capitalizing on the Opportunity?
Oracle had the right elements in place, so the conversation turns
to how they are capitalizing on the opportunity they have created.
Oracle has a history of acquiring and integrating large vendors,
but how would the integration of Agile be pulled off? Oracle
introduced the use of “PIPs” - or “Process Integration Packs”
- in an earlier
conversation on Oracle’s plans for integrating Agile. PIPs are
the approach Oracle uses with there integration platform to
integrate business processes across application boundaries. The
recent announcement is the realization of those plans, and a strong
step in the direction of offering an integrated. Among some
interesting enhancements to the integration architecture itself,
Oracle announced:
- The Design to Release PIP for Oracle e-business
Suite (announced August, 2008) - The Design to Release PIP for SAP ERP (among
six other new PIPs)
Oracle focused on the primary PLM-ERP overlap, which is the
promotion of a product from product development to production, or
what I like to call the integration of the product
innovation cycle with the business execution cycle. This
is a very good first step, and is one in a series of integration
opportunities between ERP and PLM. Oracle still has plenty of
opportunity (and work to do) to integrate PLM with ERP, but has a
good approach in place. The biggest remaining question will be how
quickly they develop further integrations, and how rapidly their
customers adopt them.
How does this Fit into the Ecosystem?
Manufacturers need both ERP and PLM to play a significant role in
driving product profitability. See my past post on the complementary
roles or ERP and PLM. One of the refreshing things about the
announcement is the realization that Oracle is not the
center of the universe. Specifically, that Oracle chose to
create integration to both the Oracle e-Business Suite and to SAP.
Why do I think this is important?
-
There won’t be one enterprise application that does it
all - the vision that there will be one, monolithic
enterprise application has given way to a vision of more loosely
integrated applications tied together by business processes.
Manufacturers today recognize that they will likely have a suite of
applications from different vendors, and vendors realize they will
offer a suite of solutions themselves. Integration is critical, and
SOA is a big part of this. Integration needs to be built in a way
that it can be reused across different applications. -
SAP is a significant reality in manufacturing
- many of Agile’s existing (and future) customers are running SAP.
Oracle’s commitment to serving the broader market - regardless of
whose ERP system they are running - is critical
All in all, this is a great step forward toward
integrating the ERP-PLM ecosystems. There is a lot more
work to do, but this is a nice sign of progress. So that’s what I
hear from the team at Oracle, I hope you found it useful. What do
you think? What else should I have asked them?
Jim Brown, Tech-Clarity commented:
I responded to Jos on his blog, but for those interested in his
question I believe that Oracle is very firmly committed to PLM.
What I didn't know is that they are also firmly committed to the
hardware market (recently announcing acquisition of SUN)!
Jim Brown, Tech-Clarity commented:
Stan, Yes, exactly. Oracle is making it less tempting for joint
SAP-Agile customers to move to SAP PLM by adding this integration,
while SAP is making it more tempting to move by enhancing their PLM
offerings. More to come on SAP soon, I had an opportunity to speak
with them recently about their PLM plans.
Jim Brown commented:
Javier, I think that pre-built integration from PLM to ERP makes it
easier for companies to work with their PLM solution of choice. It
makes it easier in the upfront selling process, but also for
companies that may have implemented both but not yet integrated
them (there are a lot of companies I have met that have very
side-by-side ERP and PLM implementations with manual integration).
Will pre-built integration be the deciding factor in choosing a
standalone PLM system? Perhaps, but I am sure that functionality
will come first. More likely, I think it will help the PLM vendors
lessen the barrier to adopting a non-SAP PLM system in an
SAP-dominated manufacturer. Engineering and product development
groups frequently end up at odds with the information technology
group when they select a standalone PLM system. If the system is
already integrated to the ERP (frequently SAP), then it takes away
one objection by the IT group. There are still tough trade-offs to
make between functionality and integration (and the benefits of one
vendor versus multiple), this integration helps to put the
trade-offs for integration on a more level playing field. Great
comment, thanks.
Jos Voskuil commented:
Jim, thanks for your interesting thoughts. I responded in my blog @
www.virtualdutchman.com on your post and several other observations
I had in the past. As a biased PLM person I would have asked Oracle
how deep is PLM integrated in your management vision
Stan Przybylinski commented:
And, of course, all of this playing nicely with others helps keep
SAP customers from dropping Agile solutions in favor of the
new-and-improved SAP PLM.
Javier Franco commented:
Jim, How big of a factor do you think these pre-built integration
points will be when it comes time for customers to make a decision
regarding what PLM product to choose or to upgrade to? Thanks
