Where People and Licenses Meet: Outsourcing with Oracle and SaaS

Where there are definitions, there are reasons to bend them. Outsourcing, the practice of bringing outside organizations to manage a part the business process, is one of those concepts.

In this post, we’ll take a brief stroll through the work of Caliber Point in mixing up both outsourcing and cloud computing.

We look at where it touches on major shifts in enterprise software architectures and franchises like Oracle which this software-as-a-service product is built on.

In a way, the very definition of “corporation” suggests the creation of sensitive information. By having the purpose of bringing people together to generate profit, actions such as retaining employees, building strategies, and defining products create information boundaries within a company, and within the competitive landscape.

It is in the context of outsourcing sensitive information and processes that we analyze a product called Republic, by Caliber Point that has technology to merge Oracle R12 core technology with a software-as-a-service offering for outsourcing Human Resources. This product enables companies to have a product and set of services to run the basic business processes such as HR payroll and administration.

Disruption is In: The Back Office

In all the virtualization and cloud computing change occurring, sometimes it is easy to forget about arguably the hardest to distribute resource, the database tier. And, where the database tier is tightly interwoven with software (like enterprise packages) it can become a sedimentary set of infrastructure.

Although not normally associated with the movement of cloud computing, Oracle in itself has been disrupting the layers of software and infrastructure in the back office with its heavy acquisitions and merger of Siebel, PeopleSoft, BEA, and now Sun.

In a way, the company has faced some of the hardest integration challenges by thinking about enterprise services bus, which is an enterprise version of software-as-a-service that is used extensively in cloud computing.

Both small companies and large companies support this movement, Caliber Points notes here:

“….Larger clients such as Cadbury (50,000), BNP Paribas (65,000), Astra Zeneca (70,000), IKEA (67,000), Philips (110,000) etc. have implemented their HR systems on a multi-tenanted model.”

Multi Tenant: Just Makes Sense

We took a moment to sit down with Caliber Point CEO RU Srinivas to discuss how the company has been working within the Oracle innovation model to help figure out where cost-savings, SaaS, and enterprise licensing meet – and innovating to offer a multi-tenant solution in the midst of the evolution underway for the entire market.

In the one pager, the company offers these human resource services:

  • Administrative HR: Employee Database, Workforce Administration, Employee Self-Service, Reporting Manager, Self Service.
  • Compensation – Records and Updates
  • Payroll and Employee Benefits
  • Time Entry and Management
  • HR Regulatory Reporting and Analytics

The companies Republic product release offers customers a solution that both extends as well as fits into Oracle’s business product offering. In their brochure, Caliber Point stresses the overall value of mulit-tenant solutions and how the combination of configuration patterns lead to more effective software deployment – an easy place to gain cost savings.

We believe this gives Oracle opportunities to look into the future of where PeopleSoft and Oracle database technology future lies. If we live in a “multi-tenant or whither” world, it is key for Oracle (and others) to position themselves for a dominant solution like has been enjoyed in the past in the enterprise.

Unhost: (Verb)

We’re not sure if to “unhost” is an official term, but if it was, we’d suggest this definition: “Reduce technical footprint and save money by leveraging outsourced commodity services that you used to manage yourself”.

It could be argued that public cloud computing (Amazon) is a part of the outsourcing movement. Instead of taking people processes however, cloud computing starts with resources and works its way down by wrapping compute, storage, and networking into service definitions that are accessible by credit cards.

Caliber Point’s CEO, RU Srinivas “RU” shared with us the base case for cost savings with the models of outsourcing. Here, in the company’s Republic white paper the case is being made on the pressure of change to pricing for SAP and Oracle and the benefits of the next wave of outsourced infrastructure.

We asked RU if it was possible to break it down the cost savings in a simple way for large enterprises who pay for licenses for platforms today would be tempted to “un-host” their infrastructure.

RU explained that it wasn’t quite that simple, considering the depth of solutions with tools like PeopleSoft and other factors, but as a basis, cost savings of 30% were a reasonable starting point.

However, as noted in the companies outsourcing products, it is also possible to gain similar cost reductions in human resource outsourcing offerings Caliber Point offers.

This brings us to the conclusion that multi-tenant may mix well with multi-continent support like that offered by big outsourcing organizations.

The opportunity for both hosting and supporting becomes a big win for companies looking reduce expenses in core business functions such as human resources. We wonder if offerings like Republic will emerge out of cloud computing and compete with Amazon (and others) as the new center of the cost-savings universe.

What comes to mind when you think of outsourcing and cloud computing today?

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