French Government awards ERP contract to Peoplesoft

Event Summary

On October 29, the French government awarded the first contract of its Accord Mission, a project to integrate computing across all state departments. The first project will see 15 ministries install an accountancy package from Peoplesoft, in conjunction with Sequent and French systems integrator, Steria. The three companies beat off competition from SAP with PriceWaterhouseCoopers, and Oracle with Cap Gemini. The government declined to put a value to the contract, but Peoplesoft claims it is one of the two biggest IT contracts awarded in France this year. At the moment, all French ministries operate different accountancy systems, and Peoplesoft says it is the first time the French government has invested in ERP.

Market Impact

This win has multi-dimensional importance for PeopleSoft. First, it should boost the Company's dismal software license revenues in 1999 (down 58% compared with the first 3 quarters of 1998). Second, PeopleSoft badly needs a stronger market penetration outside the North American market, and this contract provides needed credibility. Third, the scope of the first project's phase is finance and accounting, which is not necessarily regarded as PeopleSoft's strongest area of competence. We believe that PeopleSoft is now in the sweet spot for the next phase of project, which will involve HR system implementation, where PeopleSoft is a recognized functional leader.

User Recommendations

As a summary of our recommendations in TEC's note on PeopleSoft (See TEC Technology Research Note: "PeopleSoft - Are Business Intelligence and e-Commerce Enough?" ), PeopleSoft is a very strong contender in enterprise application selection processes within the following industries: utilities, service providers, financial institutions, public sector, insurance, and higher education. It should be on a short list in any selection where HRMS system and financial modules are the main pillars of an enterprise application. However, organizations currently evaluating PeopleSoft should keep a close eye on PeopleSoft's future product development and support strategies, particularly how top management will address poor market perception of its manufacturing software.

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