Every major company has a contract dispute procedure. A vendor gets out of line, vendor management gets involved to resolve it, and if they are not successful the dispute eventually escalates into Legal.
Like so many other things, this nice linear path does not usually apply to Oracle.
Oracle’s aggressive and opportunistic sales team tends to interact with Oracle-loyal staff in the IT department. In some cases, CIO’s begin to wonder on whose side their own people land. This interaction can affect efforts by the CIO to change technology direction away from Oracle, or by the CFO to reduce costs. These efforts may conflict with years of investment in Oracle, financially and personally. If communication about change is not actively managed, it can increase the risk of an Oracle dispute.
Not an audit, a dispute. This is where many people go wrong, an audit is a tool used by Oracle to increase their leverage in a dispute. Audits usually lead to disputes, but the audit is almost never the first salvo in a dispute with Oracle. It is, however, often the first time Vendor Management or Legal hear anything about trouble with Oracle.
Sales people have projections for your company based on past buying behavior, support streams, and other data about you as a predictable source of revenue. Specifically with Oracle, information about cost reduction or technical change efforts leaks constantly in friendly chats between individual contributor technical staff and the Oracle sales team. This information is partial (your front line tech staff may not be aware of everything) and personal (many conversations are filtered by how that tech person expects to be impacted by the change.)
As these informal conversations happen, the Oracle sales organization may perceive a threat to their predicted revenue stream. With multiple sales reps per customer (tech, middleware, apps, etc), they engage with your company at various levels to ascertain the severity of the threat and what can be done to preserve Oracle’s revenue. There is nothing unusual about this, every company who has an annuity revenue model needs it to happen. Oracle is special, like other technology companies, because the company selling your facilities department light bulbs rarely has ‘light bulb loyalists’ on their side in a dispute.
In my experience, IT tends to keep their relationship with Oracle very close. It is a huge part of their annual spending, and they often resist efforts by other groups to review or manage the spend. Some of this makes sense, the Oracle relationship is very complex and easy to mis-manage using standard procurement methods, but it often makes the dispute resolution process a case of ‘too little, too late.’
The best way to see the dispute before it erupts into an audit? Have a vendor management function inside IT that is tech savvy, included in the Oracle relationship, and can recognize when loyalty to a vendor may conflict with the goals of your company. This may be part of your SAM (Software Asset Management) efforts, but needs to have a wider focus on all areas of the relationship (software, hardware, services and cloud).
Palisade clients build their Oracle strategy on a solid foundation of contract intelligence, deployment analysis and up-to-the-minute strategic guidance from our experts. Their resulting control of the Oracle relationship not only avoids disputes, it pays dividends as the right technology is deployed for the right purposes.