J D Edwards (JDE) was, until recently, an almost unknown quantity innext five years. the UK's high end enterprise resource planning (ERP) market. But in September 1997 it staged the largest initial public offering on NASDAQ, raising over $417 million (#250 million) in the process. Since then, it has been capitalising on the five years spent developing its OneWorld client/server, object oriented offering and in the last year has not only grown phenomenally, but attracted a great deal of attention.
What makes JDE different to the other main ERP contenders - SAP, PeopleSoft, Oracle and Baan - is its approach to software architecture and its ability to perform the Houdini trick of escaping from its traditional role as an AS/400 focused vendor with World Software, and successfully move into the open systems world without alienating its installed base. According to Jan Zapapos, JDE's senior VP product development, "It was really important that we retain the idea of co-existence between World and OneWorld so that customers could transition when they choose."
JDE has achieved this by developing a single code base that operates across the product line so that customers can mix and match their implementation of JDE products across AS/400 and client/server architectures, depending on what kind of functionality is important to them. According to Zapapos, this development principle will continue until late 1999 at which point, World and OneWorld development will diverge. JDE believes that over the next three years the current sales mix between AS/400 and non-AS/400 platforms will change from the current 80/20 split in favour of AS/400 to a position of equality, with AS/400 dropping away after that. This is all part of its CEO, Ed McVaney's vision of becoming the leading ERP vendor in the next five to seven years. An ambitious objective, but one that may be achievable.
McVaney characterises software vendors as being either artists or engineers.
He said that "Artists do gorgeous software but if you look at Oracle and Baan for example, they appear really flashy but when you put their applications together, it looks like a pile of junk." Modelling his company on the engineering type approach adopted by SAP, he added, "It is absolutely critical that we are masters of constancy of purpose." With an installed AS/400 base in excess of 4,000 users, McVaney wants his customer to feel as though they remain in the same application regardless of functionality.
This means that rather than partner, JDE develops its applications in line with required functionality.
It believes in the object oriented approach to development, but when one examines what this means, it becomes apparent this is an expression that describes discrete business functionality, albeit at a very fine level of granularity. In OneWorld, for example, there are over 3,500 components that feed up to 21 master and 259 major business functions.
Normally integrated applications require a long development cycle but, according to Michael Schmitt, JDE's senior VP open systems solutions, its approach has allowed it to come to market with customer services functionality in less than six months - the latest addition to its supply chain management and execution solution SCOREx is also due for release towards the end of this year.
However, the fully-integrated, one-stop shop goes against the current swing in favour of "best in class" ERP. Indeed, in an analysis issued at the beginning of the year by Forrester Research, the authors said, "JD Edwards 'do-it-all-myself' culture won't nurture the trust required to make partnerships and indirect channels thrive." The report goes on to say that if JDE continues with that strategy, "it will be squeezed into the oblivion of tiny niches".
McVaney responded by pointing to JDE's relationship with Manugistics in its SCOREx offering but added, "I am a fantastic believer in best of breed but what happens is that we have companies doing tit-bits that only have one or two modules." McVaney said that in a best of class scenario, JDE sees "the enormous difficulty in making it all hang together". He predicted it will be around five years before the ERP industry is able to offer a way to readily integrate applications between the vendors.
In the meantime, McVaney's development team is charged with providing an environment where the customers only need to bolt together the functionality they require for their business processes, making any customising tweaks through a scripting language. McVaney says the idea is that 90% of the project team should be staffed by business analysts rather than the current mix of 85% technicians. In his view this will give a much better implementation with the possibility of enhanced functionality.
There is no doubt about JD Edwards ERP zeal, but it has its work cut out against giants such as SAP. However, McVaney is adamant that "you're gonna see JDE get up and growl." The problem is that one cannot hear SAP whimpering just yet.
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