Do I upgrade to Oracle R12.2 or Fusion Application release 7? Summarized Pros and Cons with key points to guide your decision making
EBS customers often ask this question but do not get answers to their satisfaction, the answer seems to be consistently ‘it depends’ and most companies begin an assessment effort to understand the business and technological needs of the organization and analyze how those needs can be met by each solution.
Let’s begin and get to the points,
Business/Functional Processes and functionality – Oracle Fusion applications is ready for prime time, when it comes to functionality no major difference exists between Fusion Applications and EBS 12.2. A plus on Fusion you get embedded analytics and analytical power that EBS does not have - The GL is underpinned by Essbase and for accountants you can replace the screens with excels spreadsheets .The one delta - downside for government customers within the financial suite of Fusion, encumbrance accounting not available in release 7. What is encumbrance accounting? Encumbrance accounting is mostly used in public sector municipal, government, and schools. It is a reservation of the fund prior to accrual of the expenses. An encumbrance is a transaction that occurs when someone needs to put money away (to hold it) for a specific purpose. In government accounting, an encumbrance is created when a Purchase Order is issued to buy goods or services. The money has not yet been spent, but is selected for that purchase and no one else can use it.
In our everyday life, it`s like you put money into an envelope to hold it to pay a bill, you have encumbered that money. Similar in putting an envelope in your office drawer marked “Phone bill”, the money you put in the envelope for the next bill is your encumbrance. How much should be encumbered? How much do you think your bill is going to be? That’s encumbrance.
User Experience: Fusion applications makes R12 look bad when you compare the user experience; I have seen customers express a WOW effect when demoing Fusion. Oracle has really taken their time to get Fusion applications right, they have concentrated heavily on the user interface and user experience and they got it right. In my opinion, this is the biggest advantage of Fusion, end users love the look and feel and the functionality empowerment towards the end user in my opinion is a notch above release 12.
Development: If you are looking at Fusion Applications you need to have a hard look at your existing EBS RICE(Reports-Interface-Conversions-Extension) and determine if they are really needed and whether there is a strong enough business case to carry them forward. Do not ask yourself should I replicate my 50 extensions in Fusion apps; use it as an opportunity to make processes fit as per application. The customizations towards external 3rd party systems using Oracle Fusion Middleware works well in release 7.
Cost/Internal Staff/Long term support - Fusion Applications is built on cutting edge technology and consequently, the hardware required to support it needs to be that much bigger. Internal staff will require re-training and if you look at some facts on the Oracle Fusion customers already in production, they opted for a cloud deployment –current stats 8/10 deployments in production with Fusion apps have been deployed in the cloud. I think clients are taking this approach mostly because expertise does not exist internally and to build the support knowledge this will create challenges to your business case and your project timeline.
Applications Unlimited Program - Customers that have significant investments in EBS, have no other choice than to utilize the co-existence deployment model. Oracle made long-term commitments to older products like EBS or PeopleSoft through its Applications Unlimited Program; I think this has caused a less attractive proposition to go with Fusion applications, I suspect Oracle will begin in 2014 some client incentives to get their clients onto Fusion apps. Customers should not feel it's a one-size-fits-all scenario, from my independent Oracle client discussions some clients have begun their co-existence strategy in implementing HCM, others CRM, others small steps with Fusion Accounting Hub linking to their current ERP financial transactions, others with Fusion GL,AP,etc.
Stability - One of the most common comments I receive, Fusion is not mature, in my opinion that is an incorrect statement, Fusion is a lot more mature than people are realizing out there, especially around HCM and Financials including Fusion accounting Hub, with Fusion you can envision a global instance for your global organization, harder to do than with R12 .
Licensing – As per my knowledge the cost of licensing between Fusion and R12 are similar, but the internal infrastructure cost grows more for Fusion. I think this is the main reason clients are selecting a SaaS deployment approach. The cost savings will come from customers moving to SaaS with Fusion.
Upgrading Starting point – If you plan to upgrade to EBS 12.2, a direct path is included with the releases 18.104.22.168, 12.0 and 12.1
Link to the complete documentation EBS 12.2 Product Information Center (Note 1581299.1)
If you plan to move to Fusion Applications, begin by reading (DOC.id 250.2) here is the link Life Cycle Manager
Then reference back to Fusion applications- Product Information Center (Doc ID 100.2 ) Link
My view on the current Oracle client mindset is that they are mostly following an approach that is better to continue with the older more mature products with current technologies till the organization is convinced about the benefits from the upgraded system before deciding in favor of a move to Fusion apps, the time will come soon I think, were Oracle will start pushing incentives towards Fusion!
Feel free to share your thoughts on the topic!