Eveready Industries, a leading manufacturer of batteries and other fast moving products, is finding itself in a difficult situation following its decision to upgrade an enterprise application from Oracle.
Eveready has deployed Oracle's E-Business suite that helps it in its business processes such as purchase of raw materials, manufacturing, quality control, warehouse shipments, sales, distribution, and payment collections. Last year, the company decided to upgrade to Release 12, the next version of Oracle E-Business suite.
Arup Choudhury, Sr. GM-IT, Eveready Industries informed, “We decided to invest in the new version as it would help us comply with IFRS, while keeping up with the latest technology. But the project is stuck as the new version has come with migration challenges and bugs. Oracle has been unable to fix two major bugs for a year now.”
The first bug is related to India-localization of the product that was not found in the previous version. Eveready Industries noticed that the suite failed to include input taxes and duties at the time when material purchase process is executed into the system. The second bug is related to Excise. When any material is returned to the supplier (possibly due to a defect), it does not update its associated excise component in the Register of Goods (RG register). It is important for manufacturing companies to maintain an RG register documenting daily entries of production, dispatches, and receipts of goods.
Terming these bugs as 'show-stoppers', Choudhury said that these bugs could open up the risk of tax non-compliance, potentially damaging the company's market perception and reputation. Eveready reported both the bugs to Oracle about a year ago.
The larger issue
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According to Choudhury the problem is not limited to the two bugs alone. “Oracle has made significant changes in its underlying database architecture. For instance, the earlier version defined suppliers as “Suppliers” and customers as “Customers”. The new release brings both the entities under the same framework, “Trading Community Architecture”. Such structural changes make data migration a big challenge, he added.
As the new version came with several changes, Eveready had to hire and separately pay for Oracle Advance Customer Services (ACS) to carry out the upgrade. Expressing his displeasure with the delay at the vendor's end, Choudhury informed that Eveready Industries had already spent much money on Oracle's technologies. “We paid about Rs 3.5 crore on E-Business implementation and an equivalent amount on Oracle's SCM solution. Add to this the support fees for these products and the Rs 80 lakh as fees separately paid to ACS for the upgrade and our total investment last five years on Oracle's technologies exceeds Rs 8 crore.”
When contacted, Oracle responded:
"Eveready has been our customer/ using Oracle Apps since 2005 and we have been closely working with them to ensure smooth working of the software. We continue to help them in this regard.... there are many other customers who have gone live on R12 successfully, e.g. Titan Industries, Ballarpur Industries, Suguna Poultry, among many others."