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Will Oracle’s Fusion CRM pave the way for the rest of the Fusion apps?

Oracle finally took the wraps off its Fusion Applications, and CRM got plenty of the attention. But how long before people start migrating?

Oracle's long march toward Fusion Applications, a massive effort to bring together the best functionality of its many acquisitions, took a significant step forward last week at OpenWorld when CEO Larry Ellison demonstrated the forthcoming Oracle Fusion Applications.

"We basically decided to take all the best features of PeopleSoft, Oracle and Siebel and reimplement those features on top of a modern middleware infrastructure entirely written from Java," Ellison said. "We will deliver these applications to real customers at the end of this year."

It’s a significant step for an effort "more than five years in the making," according to Ellison, but for customers, it is only the beginning.

While Oracle has continued to support, and even update, PeopleSoft, JD Edwards, and Siebel under its Applications Unlimited program, the new applications require some careful thinking.

For example, Pella Corp., the window manufacturer, has meticulously maintained its Oracle applications environment for years and is planning to update its Oracle E-Business Suite (EBS) in December. That will allow for an easier transition to Fusion Applications, but that does not mean that Pella is diving in headfirst. It currently runs Oracle's own CRM product from EBS and has some seats of Oracle CRM On Demand live.

"There's some excitement amongst our team," said Rick Hassman, director of applications with the Pella, Iowa-based company. "We've made a decision to get to [E-Business Suite] 12, so we had the flexibility to pick and choose around the Fusion apps we want to move forward with."

Which applications Pella ultimately adopts will be decided on a project basis, and it’s the CRM functionality that holds most of the appeal.

"We’re stable and not looking for a lot of enhancements in manufacturing," Hassman said. "There's less likelihood we'd go down that road. As we're looking at the MDM stuff, territory management stuff, they've shown us capabilities that have been very inviting. I get notes from one of my managers in CRM: 'We just had the demo and it looks like there's a lot of potential.'"

CRM represents the early Fusion Applications

In fact, CRM has led the way for Fusion Applications. It was three years ago that Ellison first announced that Fusion Applications had arrived, demonstrating a couple of Social CRM tools for sales collaboration. In addition, it was clear from sessions at OpenWorld that the Fusion CRM capabilities received a lot of attention. It will probably get a lot of customer attention as well, thanks partly to the core customer data model.

"One of the core things in Fusion CRM is that as people are starting to use different pieces, it all comes back to the data model," said Ray Wang, partner, enterprise strategy, with San Mateo, Calif.-based Altimeter Group. "The customer record gets tied back to Fusion CRM. People will gravitate to that because a lot of the core Fusion CRM product has been built on the Siebel customer model."

While the "first" Fusion Applications were Oracle's Social CRM tools, the company has poured most of its CRM development efforts into CRM On Demand, its Software as a Service (SaaS) applications based on what was originally Siebel On Demand. Most new sales of CRM at Oracle have been the CRM On Demand product, according to Wang.

"If you look at the sales structure, most people are on CRM On Demand. The transition is going to be much easier for them," he said.

The migration will be more difficult for PeopleSoft customers, he warned, but for those who truly want to make the move to Fusion CRM, get up to date first.

"The key thing for customers is if you're coming in from Siebel, try to get onto the On Demand product, try to get to the latest version of Siebel," Wang said. "The upgrade path is encompassing more and more Fusion components. Basically, a lot of the Fusion middleware components that are required are showing up in later releases. As long as you're in an upgradeable release, you're on the right path."

Oracle CRM customers thinking ahead

That's been the thinking at Pella – though a key question has emerged.

"We've always done the point releases," Hassman said. "[The upgrades] are painful but they're worth it. They definitely justify themselves. If we start doing point upgrades on certain areas, will that get us out of sync in our total integration? Is there a chance one area gets behind, one gets ahead, and I can't take advantage of something?"

The new Fusion CRM applications hold some promise for Eric Pozil, managing director of CRM Northwest, a Seattle-based consultancy that helps organizations with their CRM decisions and also runs CRM On Demand internally.

"The comprehensive hub around customers and contacts, planning capacity and integration all looked good," Pozil said. "But you have to use the whole ball of wax, it looks like. I don’t know if a customer, from a TCO perspective, will be willing to go to all the components. I have a feeling the subscription cost will be significantly more. Will the increase in functionality be overwhelming compared to CRM On Demand or"

Oracle did not release pricing information on any of the Fusion Applications. It is making the applications available to beta testers at the end of this year, and the applications will be generally available in the first quarter of 2011.Customers up to date on their maintenance and support will be able to do a like-to-like swap.

"They've taken the time to figure out what the largest Siebel customer wants and what their footprint is," Wang said. "Anything in these large installed bases, they've agreed for like-to-like swap."

Customers would have to pay for modules they do not already have installed.

Ultimately, it will still be years before Fusion CRM is fully deployed in the market.

"What we're seeing is really horizontal general-purpose CRM solutions [that] a brand-new customer will use today," Wang said. "In two to three years, the first of the functionality will be built out, and in the next three to four years, Fusion CRM will have complete parity with the base horizontal functionality."

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