Just when South African companies have come to accept that outsourcing enterprise IT resources might not actually deliver cost savings at the end of the day, Oracle has come up with an outsourcing model focused very much on delivering cost-efficiencies.
According to Joe Heunes, director of Support Services, Oracle SA, recent research carried out by Oracle revealed that customers who outsource their software management to Oracle are saving up to 66% in IT administration costs.
In addition, they are resolving product support issues 50% faster and are increasing employee productivity 35% or more.
"This is a far cry from traditional outsourcers whose `facilities management` approach rarely delivers meaningful savings," he says.
Oracle`s outsourcing solution, which is now available in SA, can be delivered in either of two ways. Customers can have their Oracle software (applications, database, application server or a combination of these) hosted and managed in an Oracle data centre and access it via a secure internet connection, or they may keep the hardware and software on their own premises, and have Oracle support engineers manage it remotely via a secure 24/7 Internet connection.
Having pioneered the marketing of these "@Oracle" and "@Customer" models in SA, Oracle is now actively recruiting channel partners to act as third-party hosting providers and help drive the market and achieve the economies of scale that will ensure even lower-cost enterprise IT at midsize and large SA corporations.
"If we can match the success that Oracle has achieved elsewhere in the world then we`re going to achieve those economies of scale very quickly. We already have more than 50 instances where we provide outsourced services, most of which are managed remotely," says Heunes.
"We see outsourcing providing us with an ideal opportunity to form closer relationships with our partners, enabling them to be part of this rapidly-growing market where their niche market knowledge, implementation, support and other value added skills will be the keys to success."
Globally, Oracle announced its 100th outsourced customer in 2001. Today this figure is more than 500. Significantly, between March and May 2002 Oracle grew its outsourcing business by 50% with the acquisition of more than 100 new customers.
Much of that success is said to be due to the company`s fixed pricing policy, which is based on providing all or any part of its enterprise application portfolio on the basis of full outsourcing only and a single deal with no special clauses.
"As we own the software there is no unplanned down time for upgrades and maintenance. We do it automatically, which means that, unlike in the case of in-house systems, companies do not fall behind technology. What`s more, the customer does not have to lose productivity through unplanned downtime," adds Heunes.
This outsourced software management model has been highly rated by IDC, which sees Oracle leading the transformation of the software industry to online software delivery.
The company is backing up its full outsourcing offering with a guarantee that if a customer is not satisfied with the full outsourcing offering during a given month, he will receive a 20% credit of that month`s management fee.
"Such penalty guarantees are an indication of the confidence we have in our model and the level of skills we and our partner channel have and are continuing to develop," concludes Heunes.
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