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Waiting Is Not a Strategy

By Aaron Lazenby

What is your innovation strategy? Is it based on increased quality, stronger customer satisfaction, or lower costs? And how are you planning to apply innovation within the new digital framework?

These are questions all businesses need to be asking themselves, says Lyle Ekdahl, senior vice president of product development at Oracle and general manager of Oracle’s JD Edwards product line. To help address them, Ekdahl’s team is providing “continuous innovation” through the constant growth of JD Edwards EnterpriseOne and its capabilities.

“We want to enable our customers to have a new digital interaction platform,” says Ekdahl.

Of course, waiting to go digital is not a viable option in today’s marketplace. Here, Profittalks to Ekdahl about the importance of digital transformation, how the continuous delivery model of JD Edwards EnterpriseOne 9.2 fosters innovation, and what new capabilities can be found in the current release and on the horizon.

Profit: What’s your major message to JD Edwards customers for 2019?

Ekdahl: We fundamentally believe that digital transformation is real and that it radically alters the value equations in the marketplace—between vendor and customer, and partner and supplier. We’re at a stage in the market where waiting is not a strategy. Success requires our customers to think about what their innovation philosophy ought to be, based on what customer outcomes they are driving. Is it breakthrough quality, stronger customer relationships or satisfaction, or lower costs? If they don’t understand how they’re going to apply innovation within this new digital framework, they won’t be successful.

We use the phrase “moving toward continuous innovation.” Continuous innovation, as it relates to our relationship with our customers, is continuous development, and we’ve been doing that for some time. We’ve been automating everything, and we have a bigger vision for how we deliver. What we’re looking for customers to do is this regular adoption or adaptation of what we deliver to them. This is the other side of the coin.

We do have some customers that are still on older releases. They need to get on the JD Edwards EnterpriseOne Release 9.2 platform, and then they need to get more iterative with what they adopt. Install it. Learn it. Use it. Improve their processes. Instead of thinking in terms of big bang, think in terms of iterative. Get there first and foremost, and then come up with a philosophy or a strategy around how you’re going to innovate to drive an ultimate outcome. That is possible on Release 9.2. It doesn’t happen on XE or older platforms—it just can’t.

Profit: How do you define digital transformation?

Ekdahl: There are three phases of digital transformation. First and foremost is moving beyond traditional ERP as a central repository or system of record and removing manual steps and paper. ERP becomes a digital platform involved in the transaction itself. It becomes more of a heartbeat, as opposed to a static place where you dump a bunch of data. Once we start doing that, we move to the next phase, which is getting new, richer sources of data, through machines as well as humans. The third phase is using that data to create intelligence in the ERP, as an assistant or something that you supervise. We have many customers that are now using JD Edwards to facilitate robotic process automation, which requires no human interaction for every business process, from mundane, manual processes to strategic processes.

Profit: What new JD Edwards capabilities has your team been working on?

Ekdahl: In the last year, we have been working on customer-requested enhancements to ERP processes, including order-to-cash, procure-to-pay, maintenance processes, fix-to-repair, and finance processes. We have delivered more than 50 feature areas within those processes, making them more modern and automating them more holistically. We’re using the frameworks that we have delivered for automation, so we’ve added the ability for our customers to use robotic process automation, to streamline in more machine-to-machine processes, and to have new digital interaction paradigms so they can drive the user experience with voice or data across those processes.

Alongside that, we continue to future-proof our customers’ underlying architecture. We have now delivered JD Edwards EnterpriseOne so that it can be deployed in 32-bit as well as 64-bit, or any combination thereof, given our server-based architecture, helping our customers stay current.

There are a couple of additional big investment areas with respect to features and business functionality. Our first one is that we’ve completed our efforts around lease management, remaking how customers deal with their leases, both property and nonproperty, in a more simplified way. This moved it in line with accounting processes from a process that was more income-statement-based to balance-sheet-based.

We have a whole new capability for joint venture management, for people who are looking to share percentages of ownership, costs, revenues, distributions, overheads—all that is associated with a joint venture. Think of a large plant or a linear asset, an oil well or rig or a fracking field. Those things increasingly are run by joint ventures, so the ability to properly account for that and all the partners associated is critical.

We’ve also hardened our infrastructure for citizen development, extensibility, and UX capabilities, giving users the flexibility to modify the look and feel of our applications.

Finally, we continue to enhance JD Edwards toward a more intelligent ERP, adding more automation to help our customers get out of IT on the back end. ERP should be the heart of adaptive processes, utilizing data and interaction with machines and human users to allow customers to streamline processes and make the process smart.

Profit: You’ve also had success with your deployments on Oracle Cloud Infrastructure. How do you discuss the cloud with customers that have used JD Edwards on premises for decades?

Ekdahl: We’re quickly approaching breakthrough value. The value today is clear for customers: You can get out of the cycle of having to buy or lease equipment and put in big capital expenditures to deploy your ERP system. You can turn that cost into an expense and rent that infrastructure from us. There’s certainly some benefit for many of our customers that don’t want to be in the data center business, because they don’t realize a differentiated value from it. You could rent from other vendors, but Oracle on Oracle flat-out runs better. There are things we do to make JD Edwards run better on Oracle infrastructure. We will continue to support other server-based environments, but we build on Oracle. If you’re a customer and you engage with Oracle at our infrastructure layer, very shortly you and I will be sharing the same topology. That sets up very interesting arrangements in terms of the digitization of our relationship and how customers can consume what we’re delivering on a continuous development basis. That’s where we’re headed—that’s the vision.

Profit: How can partners benefit from the new developments?

Ekdahl: Our partners are telling us that they need to create new strategies and become early adopters in certain areas, or their success quotient is just not going to be what it used to be. We think this opens up whole new avenues for partners to be more involved in the value of continuous delivery for our customers. Many of our partners are sitting on the front end of our delivery mechanism with replicas of the customer’s environment and running continuous test automation for those customers or evaluating latest features to see which ones customers should adopt. Those are some of the service value models that are getting created.

Profit: What new technologies do you see on the horizon that might benefit the JD Edwards community?

Ekdahl: There definitely are areas where autonomous transaction processing will play a role within the JD Edwards digital platform. That will be an investment we make as we look forward. We’re going to be able to use more machine learning to take over processes and make decisions. More intelligence in the database will help make decisions within JD Edwards processes. We’re also looking at blockchain and distributed ledgers and how that would play a role, say, in engineering and construction, real estate contracts, or joint ventures.

We are making sure that JD Edwards has a highly flexible, extensible architecture that allows us to embrace these technologies. We’re looking into whether that means embedding or integrating them or having them as bolt-ons to a JD Edwards process. Given our customer orientation, the automation we natively add to JD Edwards, and the amount of intelligence in the system, our view is that we’re enabling our customers to be JD Edwards customers forever.