PeopleSoft says customer focus is paying off

9 Dec 2004

Meeting the head of PeopleSoft UK and Ireland and not being allowed to talk about the most important issue facing the company globally – the ongoing takeover battle with Oracle – is slightly surreal to say the least. But it is a sign perhaps that one of the most protracted and venomous takeover bids of recent times is nearing the endgame.

However, Crosbie Burns (pictured), vice-president and managing director of PeopleSoft UK and Ireland, is more than happy to talk about another merger – the one that followed PeopleSoft’s acquisition of software rival JD Edwards in September 2003. “When people look back at the integration of JD Edwards and PeopleSoft, they’ll say it was a textbook case in almost every way,” reflects Burns.

“We’ve done a really good job of integrating our people, of positioning our products and working with customers and our prospects to continue to grow the business and deliver value out of the combination of the two. If you look at it from that point of view, the results we’ve delivered over the past 12 months have been astounding, really.”

Effectively the Irish office of JD Edwards for a dozen years before the merger, independently owned Software Resources, Peoplesoft’s business partner in Ireland, now sells the integrated product line of both software firms. Tiernan Quinn, sales director of Software Resources, takes a similarly positive view of the merger, particularly in terms of its impact on products such as the enterprise resource planning (ERP) suite PeopleSoft Enterprise One. “It has become a much stronger product in terms of depth of functionality. PeopleSoft has provided more than 250 enhancements to Enterprise One in the course of the past year – particularly in the areas of human resources and customer relationship management [CRM].”

He adds that the merged company has also brought a sharper focus to individual market segments. In manufacturing, for example, PeopleSoft’s Demand Flow Technology, which it licenses from the well-known nimble manufacturing proponent, JCIT International, has now been incorporated into Enterprise One’s Manufacturing module, helping to give Software Resources/PeopleSoft an edge in that market.

Quinn also notes that despite the uncertainty caused by the ongoing takeover battle, his company continues to win new customers. Its newest customer is Cork-based Punch Industries, a shoe care firm. It will use Enterprise One to manage its supply chain, which comprises manufacturing facilities in Scandinavia, the UK and Cork as well as a distribution operation in 26 countries.

According to Quinn, Enterprise One will allow Punch to meet the rigorous trading requirements of the UK grocery trade as well as give it better visibility of its own operations. “They want to get a global view of their business,” he remarks. “With three separate manufacturing plants, effectively all producing the same product, they want to ensure they are producing the right product for the right market in the right location.”

Enterprise One has also a growing footprint in the public sector, he notes, where the Department of Culture, Rural Affairs and the Gaeltacht became its second large government user earlier this year, after the Department of Finance came on board in 2003. Other public sector customers include NUI Maynooth and Cork City and County Councils.

However, Element Six, the De Beers industrial diamond-making unit based in Shannon, Co Clare, is still PeopleSoft’s flagship customer reference in Ireland. The company recently celebrated the end of its successful two-year implementation of PeopleSoft Enterprise One. According to Crosbie, the success of the Element Six project is a timely counterweight to the bad publicity that has dogged enterprise resource planning (ERP) implementations in recent times.

“There has always been a lot of press in our industry about projects that start but never finish. But here is a company that rolled the system out to 14 different operations and 700 users, covering supply chain, manufacturing and finance and it’s all gone well,” he says.

Quinn sees the project as a good example of the changing role of ERP consultants – from technical specialists to business advisors. “We would really consider our consultants to be more business consultants in terms of the level of expertise they’re expected to bring to a customer when we’re beginning to implement a system. The reality is that there is no point in putting in one of these solutions just to replicate an existing legacy system. We have to deliver real process improvement and that requires that our consultants understand what are the trends in the market, what are the emerging technologies and so on.”

He adds that there is a recognition among ERP vendors that they have to deliver better value to customers and for this reason PeopleSoft has invested heavily in a new company initiative called ‘Total Ownership Experience’, which aims to achieve this by making the software easier to install, use and maintain. “If you make the software easier to use, you don’t have to spend as much money training people how to use it so it directly relates to owning and implementing the software,” says Quinn.

Crosbie adds: “We have a very clear differentiator between us and SAP and Oracle. It’s about ease of use, flexibility and cost of ownership. We also think we are probably the leader in terms of functionality in many areas, including demand-driven manufacturing, finance, CRM and compliance.”

Crosbie feels that the quality of PeopleSoft’s technology has fed into top line performance at the expense of its main rival. “In the third quarter, our licence sales from business applications was US$161m compared to US$69m for Oracle. And whereas we showed quarter-on-quarter growth, Oracle experienced a 36pc decline,” he says with satisfaction.

This hardly disguises the fact that it has been a long and difficult year for PeopleSoft, which faces the prospect of starting 2005 with Oracle CEO Larry Ellison still breathing down its neck – hardly a pleasant prospect. But for its Irish partner, 2004 will go down as two steps forward rather than one back. “This time last year it was all very new to us and we were wondering how it might pan out for us,” says Quinn. “The reality is that everything about the merger of JD Edwards into PeopleSoft has been very positive.”

By Brian Skelly