Oracle to address packaged goods customer woes

Faced with continued problems in bundling together a set of internal and external applications for consumer packaged goods companies, Oracle is starting to develop some of its own functionality to meet the needs of those high-profile users.

Oracle Chairman and Chief Executive Officer Larry Ellison said here Tuesday that order-entry features tailored to manufacturers of consumer goods will be built in to an upgrade of the vendor's enterprise resource planning (ERP) applications that's targeted for release late next year.

Also in the works as part of Oracle's suite of front-office software: pricing and promotions technology related to consumer goods, Ellison said during a press conference that followed his keynote speech at the spring conference of the independent Oracle Applications Users Group.

Oracle has been relying on three other vendors to provide it with the features needed by consumer goods companies. But getting the outside software to work smoothly with Oracle's financial and manufacturing applications has been more difficult than expected, and Ellison said the order entry piece has been especially problematic.

The bundling concept "sounded great, but the trouble is, we can't control our partners,'' he said. "We're going to be very careful going forward not to take responsibility for something someone else has to do. That was a huge mistake, and we will never do it again.'' Users such as cereal giant Kellogg and jelly maker The J.M. Smucker have bought the Oracle CPG package. Ellison said Oracle has no intention of abandoning them and will follow through on promises to deliver an upgrade of the bundle. But he added that "part of our obligation'' now is to give the users a choice between the third-party software and the company's own technology, particularly when it comes to order processing.

The order entry software in Oracle CPG is supplied by Industri-Matematik International. Other vendors supplying applications to Oracle include Manugistics Group for production planning and Indus International for asset management.

Jim Holincheck, an analyst at Giga Information Group, said users are finally going live with Oracle CPG after a series of fits and starts that forced Oracle to put together a development SWAT team to resolve problems. But the process of getting everything to work together can be painful, he said.

The users who have bought the consumer goods bundle are extremely important to Oracle, both because of their size and because of their potential for using the front-office sales and marketing applications that it's investing heavily in now.