CEO Interview: Red Rock banishes recession blues

Oracle applications and technology specialist Red Rock Consulting is flourishing, despite the economic downturn. CEO Jonathan Rubinsztein explains why customer support helps everyone…

iStart: Tell me about Red Rock Consulting?
Red Rock was formed 11 years ago and has grown rapidly from three employees to close to 400. We now have offices in Sydney, Melbourne, Canberra, Adelaide, Brisbane, Auckland and Wellington. Red Rock has become the leading independent provider of Oracle consulting, support and licence sales in both Australia and New Zealand.

iStart: What has led to this continued growth and success?
I think key is the fact that we have had a very clear understanding of what we do best as an organisation and have stuck to it. Our core focus has always been Oracle and we have not strayed from it. It’s our bread and butter and we do it very well.

Oracle now has a very broad offering, which we cover and, I think, deliver better than anyone else. As an organisation we have been scaling up to deliver large enterprise-wide solutions. In this space, in Australia and New Zealand, the only other alternatives when it comes to carrying out this scale of work are the large international companies such as IBM and EDS. We can compete very well against these companies as we are a very agile organisation which can offer lower costs and quicker decisionmaking, and have a strong focus on quality deliverables.

iStart: Are the Indian outsourcers impacting your business in the current market?
Very little, to be honest, as our support offerings are quite different, so we rarely compete.

Whether clients require support in the form of ‘insurance’ or ‘total outsource’, we find they are prepared to pay slightly more in return for quality local support which is lower risk, more tailored to their individual needs and innovative in its approach. But, if required for large-scale projects, Red Rock has the ability to partner with offshore organisations for more ‘commodity’ based outsourcing.

iStart: How has the Global Financial Crisis affected your organisation?
Red Rock is in an extremely strong position in the Oracle marketplace. We have made no one redundant for economic reasons. In fact, we are currently recruiting heavily across many areas of our business.

Our business has seen continued growth in demand around some of our key offerings; these being Oracle support, SOA integration, management reporting and Oracle licence management. I think this is because:

• A number of new clients chose our support model as they wanted to focus on their core business, improve their service levels and reduce costs.

• Management reporting on projects is on the increase, as people need to know more than ever what is happening in their organisations.

• More and more companies are examining not only their applications architecture, but also how they can improve their business processes. This has led to enormous growth in our SOA integration practice.

• Finally, on the licensing side, our licence management services have helped clients re-model their current licensing structure to better fit their ongoing requirements, often without having to invest in new licences.

iStart: Red Rock has a long history of implementing ERP, CRM and back-office systems – how have customers seen the benefits this software promises?
The initial goal of most businesses is to establish a stable and saleable platform for their business, and this is cost-justified through efficiencies and savings enabled by the software. In reality, implementing a package that touches all aspects of the business has a profound impact on the way people work and, in some cases, the culture of the departments. Managing this change is often the greatest challenge our customers face and it sometimes takes their focus off the real gains their business can achieve. But, as customers systems bed down, they can start looking at how to really leverage their investment.

iStart: How can customers exploit their investment in Oracle's application suites such as JD Edwards, PeopleSoft and Oracle E-Business Suite?
We see customers at different stages of their business life-cycle, so the answer is not a simple one. For customers who have been using the applications for a little while, they are often only using a small percentage of the software’s functionality.

They are often still doing things manually when the software could do it for them. We spoke to a customer recently who simply did not know Oracle could automatically reduce the company’s time-toship by two hours by doing what they were doing manually.

We regularly review the effectiveness of how our customers are using their ERP and CRM, to ensure they are getting maximum value. Another example is a customer who was manually typing supplier invoices into Oracle. We set up a scanning solution which cut this process to a couple of hours a week, rather than having two full-time people on it.

Our business support service helps users get more from their ERP. It allows users to talk to application experts and ask the ‘How do I?’ questions and get advice on how best to use the software in their business. Our consultants are, typically, accountants or ex-human resources people, as opposed to technical support, so the users can engage with them in their own language.

The other big gain for application users is in reporting and management information. The focus is shifting from working hard so you can get good data into your ERP to ensuring the business has accurate, up-to-date and consistent information.

iStart: Is this just data-warehousing?
No, it's considerably easier than that.

Organisations have traditionally gone off and created databases using tools provided by a range of vendors. They have loaded, cleaned and presented the data for users so they can create reports in everything from Business Objects to Excel to Word.

This process is usually out of sync with the core ERP and is restricted to a select group of users within the business.

The market has now matured to the point where organisations can select a pre-built data model and, much more importantly, all the key performance indicators, reports, charts and dashboards for their industry. This means you can have someone else do all the hard work, while taking credit for all the information users now have available to them. The delivery of this information has also taken another step forward – you can get it through a browser, on your iPhone or Blackberry, or pushed out to you on a regular basis, wherever you are.

Oracle really hit the jackpot with some of its acquisitions such as Hyperion, which provide prebuilt reporting solutions for not only their own applications but also for the likes of SAP.

iStart: So Oracle provides reporting on SAP?
Yes, the big boost for Oracle was the pedigree it acquired via Hyperion’s and Siebel’s analytics’ offering.

A large proportion of Hyperion’s base was SAP customers – providing budgeting, forecasting and reporting integrated with SAP. Red Rock has seen a growth in this area in Australia, as organisations need to plan more accurately and control costs around the business. We have a number of projects in NSW and Victoria focused on financial control using Hyperion.

Siebel was a long-time partner of SAP, before the Oracle acquisition, so it had developed a large number of reporting suites based on SAP. Oracle has invested and augmented these to include their own applications, JD Edwards, Oracle E-Business Suite and PeopleSoft.

iStart: Like a number of ERP vendors, Oracle has tried to move into the mid-market – is this working?
Clearly, Oracle’s ERP offering is never going to work in a five-person business. However, Oracle now has a proven mid-market application suite in the form of JD Edwards, which has a real pedigree in the Australian market. Our JD Edwards practice has enjoyed enormous growth in recent years.

However, software is only part of the equation.

Organisations such as Red Rock need to be able to implement software quickly and then provide ongoing support for customers to help them keep down the total cost of ownership.

We do have a growing number of mid-market customers. Many of these were very surprised to discover how little cost difference there is now between Tier-1 and Tier-2 applications when you consider all the costs, the ability to scale and the depth of functionality available. Importantly, Oracle has a special pricing scheme for mid-market companies who want to invest in its applications.

iStart: There are many more Oracle technology users than applications in Australia, what trends do you see for them?
The technology market is very busy at the moment. Once again, we are seeing customers trying to get more with less. This means topics such as database consolidation, virtualisation and SOA are all figuring highly within our projects at the moment. Many Oracle users are entitled to upgrades to the new Oracle technology, but haven’t utilised this.

iStart: Is database consolidation a result of people turning off systems?
No, they are simply trying to maximise their hardware and the Oracle licences they have. Why run three different databases, such as MySQL, Oracle and MS SQL, on a variety of servers, when these can all be consolidated on to one technology and one server? Resilience can be improved, and cost of ownership reduced significantly, as you reduce the skills required in the business and the licences you need to pay on an annual basis. It simply makes good commercial sense.

Red Rock is fortunate in having a support team that manages over 100 customers across Australia and New Zealand, so we know the high cost of maintaining skills in a business. We support Oracle, Microsoft SQL and Sybase databases, as well as Oracle Middleware, BEA and all the reporting technology. This takes a big team, yet we see customers with this technology range in their business for just a couple of small applications. The costs versus the return simply don't stack up.

We are seeing customers consolidating or, if this isn’t technically possible, asking us to support and manage their environment. We have the skills and resources, so they don't need to have them.

iStart: What about service-orientated architecture (SOA)? This appears to be a big topic, but what benefits are customers seeing?
The BEA acquisition has been almost a paradigm shift for Oracle. Suddenly, customers who have invested in Oracle's application server technology can move to a mature BEA SOA platform and get results. You have to remember that SOA needs not only technology changes but also a mind-set shift in the way the IT department thinks and works – no more point-to-point, all developments and applications need to be considered as a service.

We are seeing customers venturing into a SOA strategy, initially, setting up a base-level platform and creating a few services. These are usually based on a ported application. While this is not earthshattering, it establishes the base-level technology and allows the organisation to invest in skills and learning. Packaged application vendors are running to catch up with SOA and all its implications, but, luckily for Red Rock, Oracle is well advanced.

We have around five large SOA projects running at the moment, across a range of industries, as well as being one of Oracle's strategic partners forSOA integration throughout ANZ. We're investing in re-training our team in the new BEA technology and we definitely see this as an area our customers will be investing in over the next 12 months.

iStart: And virtualisation? How is this figuring?
Some of the benefits of virtualisation are amazing. If you asked any of the DBAs about the staff time that can be saved through virtualisation they'd probably start to look nervous, as it simply makes a number of their more time-consuming tasks very simple. Take, for example, cloning a live database for a test environment. With virtualisation, it's a few clicks of the management interface and it's done. It really is that simple.

Clearly, there is more to this than switching all your production systems over to virtualisation. However, organisations that are not looking at this technology are really missing a trick. The fact that there are options out there from VMware to Microsoft to Oracle to open source means that this is something worth looking at, even if it's for your development and test environments.

iStart: How is Oracle’s acquisition of Sun affecting your strategy?
The Sun acquisition is probably one of the boldest moves made in the IT market in the past 20 years. The potential of the merger opens up possibilities in areas such as virtualisation, SOA, integration and, of course, the further development of the Java strategy. While the final picture of what the new Oracle/Sun organisation will look like isn’t clear, Red Rock has always been agile and quick to adapt to market conditions and customers’ requirements, so it’s really business as usual for us.

iStart: So, what does the immediate future hold for Red Rock?
Red Rock has been lucky enough to experience a rapid growth in the past 12 months.

Our support and managed-services business has been growing simply because customers want to reduce the running costs of their Oracle E-Business Suite, PeopleSoft or other Oracle technology. Our services are easy to understand, mature and simple to migrate to. Quite simply, if you have Oracle – technology or applications – we are very confident we can run it for a lower cost and with a higher service level. It sounds like a bold claim, but 100 customers are a testament to this.

We have also seen a growth in projects. Australian companies are seeing investment in IT systems as a way to not only weather the current economic uncertainty but also establish a platform for growth and competitiveness once business confidence returns.

Red Rock has a good name in the industry as the leading Oracle consultancy in Australia and New Zealand, and, I think, in tough times organisations choose a name they can trust. We’ve also noticed that clients are engaging us more and more from a strategic point of view, resulting in a closer working relationship.

For more information
>Red Rock Consulting
www.redrock.net.au
Jonathan Rubinsztein, CEO
rubinsztein@redrock.net.au
PH: +61 2 8270 5500

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