Oracle’s Integration of Instantis, Thesis Example

Introduction

Oracle is the leader in database software and software development. Oracle has developed technologies and acquired best-in-class companies over the years. Oracle has expanded their offerings from servers, databases, middleware, storages, applications, into using the cloud platform. Founded by Larry Ellison he saw a description of a working prototype for a relational database. “No company had committed to commercializing the technology, but Ellison and co-founders Bob Miner and Ed Oates realized the tremendous business potential of the relational database model.”(Oracle, 2012) Their 30 year history Oracle has proven its lasting ability, and able to change with the future. Their smart business strategies and acquisitions put them on top with other competing database companies expanded their product portfolio.

“On November 8, 2012, Oracle announced that it has entered into an agreement to acquire Instantis, a leading provider of cloud-based and on-premises project portfolio management (PPM) solutions.”(Oracle, 2012) Taking into consideration the advantages of adding the company to a subsidiary of their company, they decided to go ahead with the acquisition. According to Oracle, Instantis enables project managers, portfolio managers, and executive stakeholders to manage multiple initiatives through a single, simple to use, top-down system.”(Oracle, 2013)

“The combination of Oracle and Instantis is expected to provide a comprehensive, multi-initiative enterprise project portfolio management (EPPM) solution for organizations of various sizes and maturity levels.”(Oracle, 2013) The most crucial part of this project is the successful integration of the two companies and software in the engineering and construction of the IT infrastructure in an effective and efficient manner. The vision of this integration is that customers have a more “set of cloud-based and on premise Enterprise Project Portfolio Management (EPPM) solutions allowing customers to plan and execute initiatives throughout their organizations.”(Oracle, 2012) In order for a smooth integration, Oracle must first prepare the IT infrastructure, educate its staff, customer service department, and product development department for the integration. Also, it must train the Instantis management team and employees on the business methods of Oracle in order to combine both teams under the Oracle Primavera Global Business Unit.

Strategizing using the Triple Constraints, it is necessary to remember that, “Project managers are expected to manage the triple constraint and are often compelled to live in this triangle of time, cost and scope/quality.”(Duggal, 2010) All moves to be done without impact to any existing project, deployment or services engagements according to time constraint of finishing within the first half of 2013. Time constraints are broken down into planning, implementation, integration, and training. The cost and resources are not a constraint as the estimated budget for acquisitions in upwards of $1Billion as their revenue was around $750 million. (InsideView, 2012) However, the entire acquisition budget will not be used as the price of the acquisition of Instantis takes more than a third of the $1 Billion budget leaving only a few million to integrate successfully into Oracle. The cost would include engineering software platforms, restructuring the cloud platform to include the integration of Oracle and Instantis, and the training of employees.

Pre-planning Work

In starting this project, pre-planning work must be done in order to successfully complete all phases of the project effectively and efficiently. The management approach to this project is the Traditional Approach that consists of the job of the project manager to organize the project into distinct process groups. The model that will be used in this project is the Benefits Management Method Model that allows for reduce risks and a better understanding of the projects goals. This comparative approach allows for a cost benefit analysis, economic model, and the Net Present Value. The different approaches to the project include, the Critical Chain Approach, where a single constraint can impede the whole process such as the constraint of a software problem, or customer service problems. Other hybrid project management approaches were the Extreme Project Approach that is useful in handling dynamic projects such as this, and Event Chain Project Approach, where one constraint can cause a series of constraints that disrupts the entire project. (Bentham, 2012) Alternatives to Multi-Weighted Model are Decisions Model, a mathematical approach with Constrained Optimization Model, and other alternatives that include Financial Models that take into account the cost benefits of the project.

The first part of this planning is the Initiation Phase. The initiation phase is the process to get the project started. The tasks include developing a business case. In this project, the business case is Oracle acquiring Instantis and successfully integrating it into its cloud platform. The integration of both companies benefits both sides as each helps the other in successful cloud portfolio management. The risks of integration are low as both business sectors will be combined under the Oracle Primavera Global Business Unit.

In order to evaluate the estimated times and costs a Feasibility Study may be done. The Feasibility Study will examine whether the estimated costs are reasonable, the resolution is achievable, the risks are acceptable and if any issues are avoidable. In setting a project for software integration, much importance is placed on the planning and implementing stages. Using both the Top-Down approach that allows for group consensus and mathematical calculations, and Bottom-Up approach that uses the elements of Work Breakdown Structure (WBS). Using the information from the feasibility study the Top-Down approach factors in the experience of the project leaders, schedule, resources, and funds needed. In the estimate. The high level deliverables are the engineering of the software into the Oracle Cloud platform, and training the staff of Oracle and Instantis on the new product developments.

In estimating the resources the budget is in the range of $1 billion including the final acquisition of Instantis, the activities such as engineering the new software integration that will be slightly lower than other acquisitions since it is based in their cloud platform. Direct costs are low due to no direct materials, equipment, and the cost of labor is directed towards the engineering and software development departments. “It will be important to set time, quality and cost goals, ensure that these are realistic, agreed in advance and based on consultation and consensus, where this is possible.”(Maylor, 2010)The estimated costs for direct project overhead are consisted of mainly salaries paid to employees, and general and administrative overhead costs. In all the estimated costs and time using the top-down approach is $5-$10 million dollars, and time is roughly four months as the acquisition was completed on December 4, 2012, less than a month after the announcement of plans to buy.

Work Breakdown Structure (WBS) is recognized, which includes a tiered set of phases, project actions, and tasks that need to be accomplished. The events and tasks are sequenced, resources are allocated, and a detailed project schedule is designed. This project schedule will become the basis for the Project Manager to measure the progress of the project. In estimating times the Critical Path Method (CPM) is used, it is the chain of events that link the start to the end of the project.

In identifying risks, it is necessary to develop a risk plan that outlines a plan of events which will guarantee that the goals will be met, and identify the techniques used to control the level of value of each task. “Risks need to b continuously assessed throughout the project as the nature, probability, and impact of risks change by phase and activity.”(OFM, 2012) The risks associated with the project include both companies not being able to work together as one unit. This risks can cause negative consequences that will affect customer relations as well. In addition to adding problems that might be anticipated. Risks that could affect the software, the dissatisfaction of customers and stakeholders, software execution speed, not delivered on desired date, and other potential risks that could interrupt the flow of productivity and business enterprises. In analyzing the potential risks, the severity of the risks are all high for the success of the project plan. Each risks impact the businesses that could harm the business development, loss of customers, and revenue flow. The use of risk reporting matrix is essential in evaluating the likelihood and consequences of each risks as seen in the figure below.

The risk mitigation plan is to provide a contingency plan that is able to cover the risks reported in the risk reporting matrix. In ensuring customer satisfaction a quality assurance personnel will be responsible for ensuring user friendliness, the software is easy to understand, and without any glitches. In order for software integration to be delivered on time and within budget, the program manager, software architect, and engineering team will meet for weekly meetings to update on status, and provide specifics that they remain on schedule. To make sure that employees and stakeholders from both companies successfully work together in this acquisition, an understanding of business goals, and potential benefits must be the primary of the principal company Oracle.

The project manager has the responsibility of overseeing all the roles of project presentation including, planning, execution of the budget, project, and closure. However, the project manager will work in coordination of the key team project members including a project director, quality assurance manager, contracts manager, application architect, acceptor of the final project, IT Director that keeps the project manager up to date of all IT tasks, and other IT specialists. The project team will consist of an IT support specialists will stay on the project throughout the duration working on both companies software integration. A Senior Application Specialist and Cloud Network Specialist will be the department’s project manager coordinator responsible for success of Instantis software into Oracle’s Cloud platform, and for building the IT infrastructure of Instantis software.

The organization of the project team is providing a task and responsibility matrix structure that is a hybrid form of team structure. It combines both the function and project team elements to take the advantages in structuring the project. “Matrix structures emerged out of the parent organization’s need to share personnel and resources across multiple projects and operations while creating legitimate project focus.”(Larson, Gary, 2011) Using the matrix approach allows for better use of resources and participation on multiple projects, and greater integration of expertise. The organizational culture is made up of different beliefs and backgrounds that all share different expectations of the project. The different cultures of the project teams include many behavioral norms, shared values, and customs that help for a better cohesion of the team. When forming and managing the team, it is an essential attribute of the project manager to be “culture sensitive” in order to have the correct strategies and responses that will not jeopardize the productivity of the teams. The project group is broken down in smaller subgroups of IT specialists, customer relations, and product development. The culture of the project is diverse and breeds a positive work environment where ideals are encouraged.

Budgeting Strategy

The budgeting strategy implemented in this project is essential in project management. In order to come up with the budget for the project is to estimate intangible, tangible, monetary costs and benefits. The first steps of setting out a budget strategy are outlining a timeline that planning and reporting are essential. Each project lead reports to the project manager in giving suggestions on how long a project will last and the predicted costs. With a proposed budget of $10Million, a budgeting strategy is prepared to identify the amount of money needed for each stage in the project. The total costs are calculated, and a schedule is distinct which will provide the estimated spending costs of the project.

With the help of Microsoft Project software an estimated budget that includes, planning and resource allocation. The resource allocation is useful of team members that are allocated using the limited assumptions that does not allow for activity to be changed once started. Once the activities are delegated to the team members it is to be carried out until completion. In coming up with the budget, the direct costs, overhead costs, and other administrative costs were taken into account. The salaries of the lead project members were essential in making sure they were adequately compensated for their time and quality work. In the case of the spending being more than the budget, a security fund is set in place in order to take care of extra expenses. Also, many checks with upper management are put in place to make sure that all projects and subprojects are on schedule and within budget.

Project Plan

The following software, Microsoft Project was used in developing the Gnatt Chart, WBS, Resource Allocation Chart, and Critical Path. The following information such as the initiating, planning, execution, monitoring and controlling, and closing process. The WBS and Resource Allocation Chart show the different tasks implemented, and the allocation method used in the team organization.

The recruitment strategy for the team members included choosing the right members to lead the software integration. In recruiting members, project managers choose employees from selective departments, IT, Software Engineer, Quality Assurance, Contracts, H&R, and other departments. In the recruitment process, project managers bring different personnel together to quickly establish a set schedule of operations. In choosing the correct roles they need to be skilled in their roles, and bring their own set of skills that hope to contribute to the project. Project managers need to craft out the team identity and provide a shared vision in reaching the goals. “Project managers have to encourage functional conflict that contributes to superior solutions while being on guard against dysfunctional conflict that can break a team apart.”(Larson, Gary, 2011) In doing these things project managers avoid disrupting the cohesiveness of the group and productivity.

For this project, no outsourcing was done, as the need for employees working within both businesses is essential in meeting the customer and the stakeholders’ satisfaction. However, the advantages of outsourcing include reductions in cost, quicker completion, and flexibility. The downside of outsourcing is coordination problems, control loss, security factors, and internal conflicts. The matrix team structure used within this project can lead to potential problems if conflicts and communication errors are not addressed head on. Developing patterns of communication, procedural routines in reporting, and developing trust between members helps to effectively complete the project on time and within budget.

The product control strategy helps in preventing the project from becoming a failure, and making sure that team members are effectively communicating. “The purpose of project control strategy is to evaluate and analyze the project situation, generation of forecasts, and definition of actions to be implemented in the whole project process.”(PPM, 2011) Within project teams there is the possibility of having members of different international backgrounds. “International project teams are where most of the boundary spanning work in international enterprise goes on, making them a key factor in organizational success and an important catalyst for individual and organizational development.”(See, 2009) The Internationalization Strategy is used when combining team member’s different geographical areas, cultures, and backgrounds in order to make the project run smoothly. In approaching this strategy, just as if both teams were in the same location, weekly meetings are mandatory in assessing the schedules, statuses, and updates on the progress of the project. The approach will include factoring in different resource allocations, time schedules, and the use of funds in different areas factored into the budget. In order to align the teams they must open up a clear communications path in order to keep all management in the loop.

Project Approach and Methodology

The project approach is the Traditional Project Approach that relies on the basic phases in order to develop a clear plan that follows the initiation planning, executing, implementation, controlling and monitoring, and closure phases. Value driven project management does not rely on the traditional approach of customer satisfaction as measurement of project success however, Value-Driven Project Management initiates by shifting the paradigm of project management. Rather than, rely on the success of a project from the measurements of the budget, time and costs, quality and other factors, success can also be achieved through planned business values. In this project success of the project is measured by the response from customers and stakeholders in the valuation of the financial value, and customer-related value gains.

In wrapping up the project emphasis must be placed on the environmental impact, ethics, and sustainability. In some large projects, the impact on the environment is a greater risks, with the construction of facilities, parking lots, and other infrastructures, the loss of environmental space can lead to various consequences. In this project, the environmental impact is minimal. No new facilities need to be built, the software integration of Instantis software into Oracle’s Cloud platform leaves no significant environmental impact. Sustainability and ethics however are crucial in just about every project. The questions that need to answered is, “is what the project doing abide by the law and by the PMI code of ethics? Does it agree with your employer and client’s code of ethics and conduct? Does it align with your ethical values and those of the surrounding culture?”(Shirley, 2012) When dealing with all three categories of environmental impact, sustainability, and ethics questions need to be ask in order to answer if what the project and the company doing business in a responsible way that factors in the impact on future generations.

Lessons Learned

The lessons learned section is a part of the closing process. It serves its purpose in several ways. The lessons learned serves as a valuable mechanism for use by other project managers within a company that must manage similar projects. This document should not only describe what went wrong during a project and recommendations to avoid similar issues in the future, The learned lessons should also describe what went right and how similar projects may benefit from this information. Lessons learned is gathered information from throughout the life cycle process project plan that details both understood and unrealized risks in the project. The lessons learned in this document are characterized by project areas that consist of the Triple Constraints, the management of risk, integration, quality and other areas.

Conclusions

In conclusion, the goal of this project was to successfully integrate Instantis software into Oracle’s Cloud platform after the successful acquisition of the company. This project plan follows the traditional project approach that follows the tiered sequence of initiating, planning, executing, monitoring and controlling, and closing. Oracle finish the acquisition of Instantis Available at in December 2012, and is in a continual process of implementing both systems under one unit. The benefits serve both companies and their customers in providing superior surface in Cloud Based Engineering. Oracle hopes with this acquisition and integration that they will acquire a new pool of customers and greater growth in the market.

References

Acquisitions. (2013). Oracle. Available at http://www.oracle.com/us/corporate/acquisitions/instantis/index.html (Assessed 09 April 2013)

Duggal, Jack S. (2011). Next Level Up: How Do You Measure Project Success? Rethinking the Triple Constraint. PMI. Available at http://www.pmi.org/Knowledge-Center/Next-Level-Up-How-Do-You-Measure-Project-Success.aspx (Assessed 09 April 2013)

FAQS. (2013). Oracle. Available at http://www.oracle.com/us/corporate/acquisitions/instantis/faq-1716388.pdf (Assessed 09 April 2013)

General Presentation. (2012). Oracle. Available at http://www.oracle.com/us/corporate/acquisitions/instantis/general-presentation-1716393.pdf (Assessed 09 April 2013)

Instantis, Inc. (2012). InsideView. Available at Http://www.insideview.com/directory/instantis-inc (Assessed 09 April 2013)

Larson, Erik. Gary, Clifford. (2010). Project Management: The Managerial Process, 5/e. Mc-Graw Hill.

Maylor, H (2010) Project Management. Great Britain. Prentice Hall

OCIO. Project Management Framework. (2011). OFM. Available at http://www.ofm.wa.gov/ocio/pmframework/initiation/precharter/riskanalysis.asp

(Assessed 09 April 2013)

Professional Project Management Education. (2011). PPM. Available at http://professionalprojectmanagement.blogspot.com/2011_02_01_archive.html (Assessed 09 April 2013)

Risk Management Guide for DOD Acquisition. Six Edition.(2006) Department of Defense. Available at http://www.dau.mil/pubs/gdbks/docs/RMG%206Ed%20Aug06.pdf. (Assessed 09 April 2013)

Saee, John. (2009). International Project Management: Strategy and Organizational Design. Oxford Business & Economics Conference Program. Available at http://gcbe.us/2009_OBEC/data/John%20Saee.doc. (Assessed 09 April 2013)