Oracle looks towards the East

The opening of a new global support centre in Egypt indicates a shift in services support by applications giant Oracle — and the first step towards a borderless organisation

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By  Peter Branton Published  November 6, 2005

|~|GavinCbody.jpg|~|It was important to maintain customer support while moving towards a borderless organisation, says Clarke.|~|As the business software market grows increasingly competitive, firms are looking to services as a way of making their mark —and making extra revenue. Oracle is no exception, withthe database and applications giant looking to drive revenues from services as well as using the quality of the services it provides to differentiate itself from rivals such as SAP and Microsoft. In the Middle East, Oracle has made a substantial investment in services, with the opening last month of its Global Product Support Centre in Egypt. Before the launch, IT Weekly met with Gavin Clarke, vice president, support services for Oracle France, Benelux and Middle East and Africa (MEA) region, to discuss what services it would provide and how it would help customers in the region — and beyond. Can you explain what your role is within Oracle’s services team, and what exactly that services team covers? We’re the support services team for France, Benelux, Middle East, which is one of five regions, and includes parts of Africa. Oracle has a fairly wide range of models for services. In principle we have a global product support organisation. What we used to have was a country support product organisation, that’s evolved into this global organisation, which all reports vertically. The reason why we have done this is because it’s all about having any customer globally who has a problem getting picked up by an expert in that field, regardless of where that expert might be based [geographically]. We have moved to a fairly bor- derless organisation. One of the things that happened as a result was that we were a little bit con- cerned about what could happen if we lost touch with the customers. What we’ve done as a result is we have a customer support organisation, which basically handles all the customer touching activity that we do. That includes all the renewals that we do on a country-by-country basis, it includes the customer management team that handles any problems that customers might have. We also have an advanced customer services group, which is quasi-consultancy. Basically if you include standard products such as support, on top of that customers are allowed to choose additional services such as performance management, security management — those kind of things —up to the high end on services, where we’ll manage a customers’ entire applications environment if they choose. We can either do that on site or at Oracle where we have a very large customer support centre. What scale of customer do you offer that support for? It depends on how large the customer is, for our bigger customers we invest a lot of time and money keeping that customer happy. It [advanced customer services] is relatively small for us within this area [Middle East]. We really believe that this is an area of opportunity for us. We have a fairly small contract base of customers here on advanced customer services but it is a growing area for us from a licensing perspective. We were looking at some figures, and growth in licensing has been quite good for the past few years, from a planning perspective we are expecting that to continue. From a product support perspective we continue to get pulled along by that licensing growth but we’re looking at adding those other support services as well. Oracle is announcing the opening of a customer support centre in Egypt. What services is that going to be offering and how will it fit in with the rest of your services organisation? There’s a few things that are either already happening or are being considered. The things that are already happening are we have created two discrete areas and created a centre within Egypt. The first one is for global product support, so we have got a team that has already been established there. We’ve got a number of people already, up to about 30 now, these are primarily application support people and there’s a specific reason for that. One of the biggest challenges that we had in the Middle East was different days, so the weekend being a different day in this region, we were finding that our customers were in a situation where they were having a really large problem on a Sunday as there were very limited resources to support them. One of the key reasons that we have done this is because we believe we will be better able to serve the customers from a global product support perspective on weekends. We’ve established our global product support and that will continue to expand. The second thing that we’re doing there is creating a on-demand backbone team as well. There are fairly similar reasons why we’ve done this, one of the bigger blocks that we have had in selling on-demand in the region was we’ve got different time zones, different work days and so on, so this will help us [win customers]. There is another key advantage too in that a lot of the proactive work that were doing with on-demand is you know patch management or performance review, we’re actually doing systems work on live systems then Sunday is a fantastic day for us to do that. If we look at getting somebody in the UK to do it for instance then we have to pay them double time while we can get our people in the Middle East to do that on a normal work day for them. This is a very efficient and cost-effective model for us to do this. So does that mean that the centre in Egypt will be providing services to customers in Europe, as well as to customers in the region? Absolutely and the intention is that we will continue to grow that as well. That’s where working on Saturdays and Sundays in this region is perfect for us. So those are the two services that are already in the process of being implemented. What sort of services does the on demand backbone team, that you mentioned earlier, provide? It’s part of the support team so for example if we are hosting an application for a customer there are different customer-facing things that we do. Then we have a number of engineers in the backbone team that do the actual physical work, patch management and so on. These are the engineering guys that we put into the support centre. And again, is that backbone engineering team working on European accounts as well as customers in the Middle East? How significant is the Middle East business as a proportion of your on-demand business? At this point in time it is not [significant]. The backbone support team will serve two purposes. First of all, it will give us the presence in the Middle East, which we currently don’t have. When we visit a customer the feedback that we get from them is that “do you have a presence here and if you don’t then get one and then we’ll talk.” The second one is that it will help us in Europe, its a kind of double-edged sword there. ||**|||~|buildingbody.jpg|~|Oracle’s Global Product Support facility will be based at the Xceed Contact Center in Egypt, the largest contact centre in the southern Mediterranean region.|~|OK, so how big a proportion is on-demand services for your European business? We currently have around about US$20 million for this. There are reasonably aggressive plans in place for this year; We’ve been getting good growth. We are hoping that within the next year or so we will double that business. If you look at our advanced customer services business for example, across EMEA that is close to US$100 million, its 20% of that, but we are getting more growth in that area than others. Strategically it is very important to us, both Charles Phillips and Larry Ellison believe that software services and software management is going to very much become something for the future. What about buying a company that is active in the on-demand space, such as Salesforce.com? Obviously, you’ve noticed we’ve been buying quite a lot recently. Most of the strategy is around acquiring key niche parts of the applications portfolio, be they industry or a component where we perhaps are comparatively weak. Siebel for instance, we consider best of breed, and the intention is we are taking applications from all of the acquisitions, Retek, PeopleSoft, iFLex, Siebel and so on — and we’re taking all of these products together — and providing one application suite. It really is about building a complete portfolio. We would have liked to have seen more growth than we have actually seen [on on demand services] but we are starting to get some good critical mass now. If you look at the US then we are seeing good growth on the on demand side, very often EMEA is a bit behind. Now, we have hundreds of on demand customers in Europe, for instance BMW is a customer for us in that space. In the Middle East right now we have Tejari. For the Middle East this is a new market for us and it is something that we want to develop. What other services are you planning to offer from the Cairo centre? The next step, which is currently under review, is to build an advanced customer services team there as well. If you could imagine in this consulting type environment a lot of the work that we’re trying to do in advanced customer services is to do proactive work for the customers. If you look at what we do in global product support the work is reactive. If the customer has a problem they will phone us up, we fix the problem and hopefully they’re satisfied with that solution. Advanced customer services is all about trying to change that to ‘Let’s have a look at your environment. Does it make sense? Do you have performance management in place? Is your security management OK?” All of those kinds of things that we are looking at on a proactive basis. We recommend changes for them and hopefully that works for the customer and us because not only do we end up with happier customers but we get less services stress from those customers as well. Some of that work we do very much face to face on site with customers, some of that work we do on a remote basis. We are currently reviewing EMEA’s advanced customer services delivery and we are going to be specifically discussing a backbone team in Egypt. If you look at Europe historically, in the old days people used to go to countries such as the Czech Republic, Poland and Hungary for services. Centres would be set up in those kinds of countries because they were low-cost countries. What has happened is that these countries have evolved and they are not low-cost anymore. If you look at some of these countries now, then you have also got to the stage where resources are becoming a problem. Finding good quality engineers is not so easy anymore. Does all this mean that we are going to see jobs actually shifting from Europe to the Middle East? We do this [changes] in a very controlled way, we’ve done this with global product support, and throughout Europe we were virtually able to either reposition those people into consulting or something like that. Some of the smaller centres we’ve now closed down. In global product support that’s all history — we did that last year. Originally we had specialist support centres, all of those sectors have been merged into one team. We do keep some local staff in most of the countries that we operate in, it’s really only the global product support area that I’m talking about. In customer support I think we have been growing staff. So, you have been cutting jobs in services? We can use things like attrition for this. For example, over the last four or five years we have had relatively low attrition in support. In some countries it’s zero, in a bad area it can be 5%. The numbers we have had in support has been relatively stable across EMEA, we’ve lost about 50 to 100 people over that time. But we are growing in some areas, such as Egypt and Romania. But are you shifting jobs away from Europe into more low-cost markets? That allows us to add head count for a similar cost. Egypt is low-cost for us. In terms of support, we have tried to concentrate it on one or two areas, what we don’t want to try and do is create support teams in every country that we operate in. We are looking at having a very concentrated area in Egypt. We’ve put in just under US$1 million of comms as far as line capacity and things like that is concerned in Egypt to manage the traffic. When you spend that kind of money it makes sense to allow more people to share it. Did you have support from the Egyptian government to open the centre in Cairo? Did it influence your decision at all? I don’t think there were any specific support. We did have a lot of high-profile meetings and we have had some very influential ministers involved in the project to open doors. That clearly helps. ||**||

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