The Bloor Perspective: Oracle's 11i under scrutiny, FI's future with Druid, and IT in the mega-merger

Millipore Corp, a $700m manufacturing company in the US, is one of the first customers to adopt Oracle's centralised global ERP roadmap. It will be combining its European and US operations onto a single database server with the aim of reducing data centre costs and of providing users and management with a unified view of the business. This is a brave move indeed.

The current system is based on the "green screen" terminal version of Oracle applications. The new global system will be based on Oracle's Release 11i software which makes a GUI compulsory. The company hopes to test the implementation over the summer and go live in October. These timescales are very aggressive given that 11i has not been released yet.

However, the whole thing is not quite as crazy as seems. The two main areas of risk to projects such as this are the physical infrastructure - network, desktops and so on - and secondly, the need to combine business logic and data.

Millipore has, in fact, addressed both these issues. This leaves one final major risk: that of Oracle not delivering on the applications. Release 11i is already six months behind schedule and Millipore does not have a big margin for error. Michael Dapcic must have confidence though. He is the Manufacturing Business Systems Manager at Millipore and undoubtedly has the inside scoop having had a team working closely with Oracle developers for 12 weeks to "debug" order management.

For a company like Millipore to go public on such a high-profile, high-risk project is a good indication that Oracle's 11i release is now back on track. There will still be uncertainties but the one thing Millipore can be sure of is a lot of attention from Oracle to ensure success and an early reference site.

** Druid adds strings to FI's bow **

FI Group has announced it is gong to buy Druid for £763m. This is acquisition makes a lot of sense.

FI Group specialises in IT services such as technical consulting and applications management alongside its recently formed/acquired business consulting unit. The part FI has lacked is the bread-and-butter implementation of packaged applications - which is what Druid does.

Druid has developed an extremely strong business implementing ERP solutions like Baan, Oracle and SAP, which it recently extended into the CRM space with a tie-up with Siebel. The problem with Druid however was that its financial performance has suffered recently, due in part to the downturn in ERP sales of late. As a result, it is only expected to break even for the year ended June 2000, compared to impressive growth and profitability in previous years.

This is a good example of two organisations adding value to each other and their customers through a merger. One of the big problems facing companies is understanding the dependency between the various layers in the business/IT equation (process, applications, tools, operating software and hardware). This is becoming even more of a problem with the drive to ecommerce and the proliferation of ASP options. But the combination of FI and Druid could well provide the solution, as they can now engage with a customer at any level, all the way from business-change planning through software selection and finally to solution rollout and management.

Services companies who can take an holistic view of the world like the new FI Group will become very valuable as ecommerce blurs the line between IT and business. If engaged wisely, such companies can help IT directors put more emphasis on the "I" and less on the "T". We believe this is an important enabler to closing the gap that often exists between IT and "the business".

** IT and the mega-merger **

Some companies have an IT strategy which is designed to take into account future acquisitions and mergers, such as that adopted by the highly acquisitive Nations Bank in the US.

But such a strategy is far from the norm. In the latest mega-merger between Glaxo Wellcome and SmithKline Beecham, the programme is merge first, sort out the technology later.

While this view is understandable, it can cause problems. In the case of the Bank of Scotland's bid for NatWest, part of the NatWest defence is the claim that the Bank of Scotland does not have the appropriate IT infrastructure and capability to implement the acquisition.

Integration obviously has to take place between the systems while services continue to operate, something which takes considerable time and effort even in the presence of an appropriate architecture. So in some cases it helps to choose an acquisition target without too many IT incompatibilities.

For Glaxo Wellcome and SmithKline Beecham however we are back to the old approach. And it looks as if there will be some tricky problems to solve. At the technology level, the two companies have different choices in some key areas. Messaging and groupware is handled by Lotus Notes in SmithKline, while Glaxo is a Microsoft Exchange user. And similarly with the ERP solutions in the companies - Glaxo is primarily with SAP, while SmithKline is a J D Edwards user. Of course many large corporates have more than one ERP system, but to achieve fully integrated operations will require a lot of work.

Obviously we can see why companies have their mixed solutions, but, with the recent spate of high-profile mergers, it has become increasingly apparent that life would be much easier if everyone committed to open standards - and stopped allowing vendors to set their own standards to the detriment of the community at large.

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