iflex to become history

Rajneesh De

SAN FRANCISCO: iflex could soon become history. But iflex would continue to live and even thrive, thanks to its transformation as Oracle’s Financial Services Global Business Unit (FSGBU) earlier this year in New York.

Speaking at the Oracle Industry Leaders Media Roundtable at the sidelines of Oracle OpenWorld, Rajesh Hukku, head, FSGBU and chairman, iflex, hinted that the iflex brand would probably be subsumed by the stronger Oracle brand in the near future.

“Though brand change is a marketing decision, ultimately it makes sense to maintain the bigger umbrella brand. However, individual iflex product brands like Flexcube, Revelus and others would continue to exist,” informed Hukku, currently running Oracle FSGBU based out of New York.

This is in line with Oracle’s standard policy where strong product brands like Siebel, Hyperion continue to exist even after coming under the Oracle umbrella.

FSGBU flexes financial muscle

Historically, iflex has been particularly strong in third world markets like Latin America, Africa and East Asia, but as Hukku mentioned, the trend was already changing before the Oracle takeover.

Today, Oracle’s FSGBU is present in 120 countries, including a large number of developed markets. It boasts of marquee clients in first world markets like Allied Irish Bank, Barclays Bank, Deutsche Bank and UBS amongst others.

In North America too it is particularly strong with its Revelus product for Risk and Compliance; four out of Top 10 banks including Wells Fargo and Wachovia amongst others are its customers.

In line with Oracle president Charles Philip’s assertion earlier in the day about the importance of the Application Integration Architecture, Hukku agreed that FSGBU’s prime mandate at present is to integrate the best-of-breed solutions. “While the Oracle Fusion Middleware would provide the horizontal application stack, we are providing applications that incorporate the business processes.”

The result of this amalgamation is already out, when FSGBU’s first product on consumer lending was launched a month back.

While most of Oracle’s vertical expertise has been gained by means of acquisitions (retail and utilities are two examples), the case of financial services has been slightly different. iflex has been what Hukku describes as “a typical Indian software company” in that it has a large services component (nearly half its revenues is contributed by services).

While the other industry verticals were primarily product-centric, Oracle FSGBU has smartly incorporated PrimeSourcing, this services component, into its fold. It is largely being used in North America, where most banks still run on legacy applications and are gradually looking at migrating.

A tale of retail

Financial Services GBU might have been the new toast in Oracle, but some of its other GBUs too are doing fairly well. For example, the genesis of the retail GBU lay in the Retek acquisition three years back, at a time when bidding and counter-bidding created lot of acrimony between Oracle and SAP.

Since then, Oracle Retail has come a long way with 1900 customers, incorporating merchandise and supply chain solutions from Retek; profit optimization solutions from ProfitLogic; enterprise applications; middleware and database technologies from Oracle; store solutions from 360Commerce; human capital management from PeopleSoft; and transportation management and logistics from G-Log.

Seventeen out of Top 20 retailers in the world run Oracle applications including the likes of Tesco, Sainsburys, Woolworths SA, Selfridges and Carrefour.

However, Duncan Angove, general manager and senior vice president, Oracle Retail GBU, still warned about a new challenge particularly in the developed North American market.

The continuing depreciation of the US dollar and rising oil prices could soon hit the retail market, even though the impending festival season is almost there starting from Thanksgiving.

“The challenge for our solution would be to help retailers better manage their businesses in such a scenario, especially to help them cut corners with more efficient management of their supply chain and other business processes,” reminded Angove.

This can be achieved through measures like managing the impact of 24/7 retailing on customer loyalty, creating an agile supply chain, accurately predicting customer demand to maximize sales, improve margins and minimize store and supply chain costs and constraints, besides maximizing RFID investment by improving information quality, managing data scalability, and increasing speed to market.

The approach would be slightly different in emerging markets like India, China and Russia, where apparently there is a retail boom in the offing. According to Angove, China is best positioned of the lot especially because many of the global retailers like Tescos are already well entrenched besides large native players too having established them.

India is still suffering from having largely unorganized sections in the retail sector, though the situation is changing with the emergence of players like Reliance, Bharti and the Birlas.

In fact, a large announcement of a retail client in India is expected over the next few days.

Telecom, utilities gain ground

Bhaskar Gorti, senior vice president and general manager, Oracle’s Communications GBU and Quentin Grady, senior vice president and general manager, Oracle’s Utilities GBU were also present in the interaction.

While Gorti welcomed the boom in telecom sector worldwide contributing to the business, he mapped the differing growth patterns in distinct geographies. In developed markets like North America, where mobile penetration itself is much in excess of 100 per cent, Oracle applications help telcos and related communications companies (the likes of Google, Facebook, Myspace, etc.) to manage the complexities created thereof.

On the other hand, in developing markets like China, India and the Middle East, where monthly subscriber addition is in the range of five-eight million, the challenge is to maintain and manage the enhancements in infrastructure thereof.

While eight of world’s top 10 mobile operators run Oracle applications, in India too 90 per cent of telecom operators including the likes of Bharti are partnering with Oracle.

According to Grady, on the other hand, the biggest challenge for Oracle applications in the utilities sector has been to successfully mitigate the various challenges of different deregulations in the last few months. Oracle’s pursuit for excellence in the utilities sector (here it lagged behind SAP) started with the acquisition of SPL WorldGroup, known for its revenues and operations management expertise in utilities and gained further thrust with the acquisition of Lodestar earlier this year.