ERP Survey Leads to Oracle’s Answers

April 18, 2011 Dan Burger

The results of corporate-funded surveys are as predictable as finding donut crumbs in the conference room after RPG development team meeting. These surveys are designed to give the appearance of independent authority, but they rarely mask the built-in bias. In this case, I think Oracle is propping up its marketing efforts with a survey report that reveals what we already agree with while adding support for exactly what it wants to sell. If you have software upgrade worries, read this survey warily.

Just last week, Oracle was chirping about a survey of more than 400 enterprise application managers that confirms what everyone already knew: upgrading core business applications is less fun than a root canal without the Novocain. Wisely the survey had specific pain points to poke and pick: unplanned circumstances magnify the expected difficulties and unleash new demons, most upgrades fall behind schedule, cost overruns are common, and the accompanying business disruptions are agonizing.

This is the equivalent of hearing the dentist’s drill revving and your mind jumps ahead to when it breaks through the enamel and rips into the nerve. All of this is a set up designed to make you ponder your next ERP software upgrade.

How can you avoid the pain?

The survey is the answer. It tells us there is “increasing interest in applying best practices gleaned from three inextricably linked initiatives–governance, risk, and compliance (GRC) management.” Remember those words. They will be reinforced when Oracle leads the conversation toward its new Fusion application technology.

Did that strike a nerve? It probably did if you’ve been worried about what Oracle might ultimately have in mind for the users of the ERP software brands it has acquired during the past half dozen years or so. JD Edwards and its substantial IBM i and OS/400 installed base come to mind as one niche where the worry fever sometimes causes temperatures to rise. Companies running Seibel and PeopleSoft ERP sometimes get the sweats, too.

Although Oracle tries to diminish any thoughts of pending forced migrations, that fear does exist for all the reasons mentioned several paragraphs earlier. And because it does exist, Oracle wants to demonstrate how Fusion provides better management, control, and accountability to the upgrade processes. GRC is the key to mitigating the risks associated with serious enterprise application upgrades.

And, by the way, GRC is one of the components of the Fusion Applications suite.

Now back to the survey. Let’s see about the momentum that’s developing among members of the Oracle Applications Users Group. Upgrade activity is strong, according to the survey. More than one-third of companies have already upgraded to the latest version of their enterprise ERP suites, or plan to do so within the next 12 months.

Among those companies that have already upgraded, or currently have an upgrade underway, a majority say they employed formal methodologies during the upgrade process to implement controls and manage the risks associated with non-compliance, fraud, errors, potential downtime, disruption and other losses.

Close to half of the Oracle enterprises are preparing for their next major upgrade within the next three years.

Companies planning migrations are concerned about the impact of change on their infrastructure. A majority are preparing for the challenge with formal risk management methodology.

Half of all survey respondents indicated their companies incorporate GRC-based internal controls to ensure compliance, risk management, accuracy, transparency, and reliability in key IT initiatives, including enterprise application upgrades. Nine out of 10 of them report that their financial systems are the primary enterprise applications subject to GRC-based internal controls. About seven out of 10 report that their human resources and payroll systems fall under the GRC purview, and a majority also cite identity and access management systems.

So, class, what have we learned? Those ERP software upgrades need to be done. You knew that already. This is not a good area in which to fall behind, even if the economy hasn’t been kind to you and the new owners of your ERP software scare the bejeezus out of you.

Managing risk is part of the job. Sitting still is not a risk management strategy. If you look up the meaning of the term “a sitting duck,” you don’t want to find your picture being used to illustrate the definition.

The Oracle survey indicates respondents are using software to manage risk and only about one out of five attempt to use manual processes. Four out of 10 report too much staff time is consumed to manage compliance and risk issues, but only 14 percent have automated a substantial portion of their GRC processes.

Everything you know and fear about ERP software upgrades is shared by others in similar circumstances. That makes them your friends because you share this concern. They say they want to manage risk and so do you. Not very many use a governance, risk, and compliance management system to help, but, as Oracle points out, it has that system if you move to Fusion application software.

And that, Oracle implies, that is what you need to escape from your current ERP upgrade nightmare.

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