Edwards Finds Its Inner-Self Within Its 5th Incarnation
4: Challenges and User Recommendations
- October 7, 2002
the acquisition of YOUCentric bears its challenges too. The major one
is that YOUCentric has had only a handful of customers that have integrated
their new SFA software to an ERP system including J.D. Edwards' one,
whereas other CRM modules have yet to create a live reference. As YOUCentric
offering is rather a CRM development platform than a well-defined CRM product,
it may not have a major appeal to customers that prefer the off-the-shelf product.
Therefore, it will take some time for the complete architectural products' alignment
beyond the mere integration at portal level as to have an overall market appeal
and consecutive impact to J.D. Edwards' top line, despite the products compatible
architectures, data mapping technology and therefore potentially expedient integration.
There has almost not been articulated industry-specific CRM functionality yet,
contrary to the company's espoused vertical focus at the J.D. Edwards 5 level.
in spite of all the a impressive announcements in Part
One and Part Two, J.D.
Edwards still faces more challenges ahead. Indeed, to put things in the right
perspective, one should bear in mind that the company's license revenue in 2002
will still likely be almost 50% less than the corresponding revenue of $419
million in 2000, back when the company was still merely an ERP player, although
the total revenue may remain flat or will grow 5% compared to $874 million in
2001 (still being well below the $1 billion mark in 2000).
as J.D. Edwards 5 is still an evolving concept and portfolio of applications,
SAP and Oracle still feature much broader functionality footprints.
To compete J.D. Edwards recently turned to a number of alliances (see Part
Two). Nevertheless, with these competitors' impending endeavors to complete
re-architecting their products' flexibility, they may be better positioned than
J.D. Edwards in the future. To that end, J.D. Edwards 5's actual SRM functionality
is still largely a figment of imagination, as in its current state, the SRM
solution is on par with a basic e-procurement package for indirect materials.
Lifecycle Management (PLM) is another area where the company seems to be trailing
the competition. Although there have been partnerships with several prominent
PLM suppliers (e.g., Agile, MatrixOne, and PTC), none of
these have been vocally touted, which makes one skeptical about the true strength
of these partnerships if they are based on serendipitous necessity (i.e., common
customers) rather than on virtue of strategic alliance. This, combined with
an apparent lack of more decisive announcements by J.D. Edwards in this regards,
leads us to the conclusion that PLM product strategy is not a high priority
at this stage. Similar situation is with regard to portal solutions and trading
exchanges, which, until the IBM deal materializes in earnest some time on 2003,
still lack important pieces such s search engine and knowledge management (KM),
most of which have been mastered by SAP, PeopleSoft, or Oracle.
Additionally, J.D. Edwards 5 product cohesiveness across the range will have likely been uneven at this stage given higher level of XPI/XPB-based integration between CRM, manufacturing and distribution applications are still in progress, as well as industry-specific XBPs (e.g., real estate, construction, field service, high-tech, etc.). The company will therefore have to articulate more clearly the current state of affairs of its entire portfolio integration (i.e., disclosure of its current and future approaches to application programming interfaces (APIs), with a level of granularity, hierarchy, technical build, and so on), as to avoid any ensuing customers' disillusion and disappointment.
Also, although the company has smartly federated its service-based product architecture in preparation for Web services compliance, there is still a colossal outstanding work to address many aspects of enabling full end-to-end collaborative processes via multiple applications from multiple vendors with disparate architectures, such as language-independent calls to APIs (preferably via Simple Object Access Protocol (SOAP)), publicly available documented APIs (preferably using Web Services Description Language (WSDL)), backward API compatibility for last few product releases, and APIs should be registered in an industry-accepted directory (i.e., Universal Description, Discovery, and Integration (UDDI)).
is Part Four of a four-part note on J.D. Edwards. Parts One and Two covered
recent announcements. Part Three discussed the Market Impact. This part outlines
the Challenges J.D. Edwards faces and makes User Recommendations.
Edwards' competition is also growing direct proportionally to its product offering
growth, which might become too much to cope with given it has lower license
revenue (expressed both as a percentage of total revenue and in raw dollar amounts),
market share, global presence, and resources compared to some (albeit not many)
competitors. In a pure ERP sense, it competes against SAP, Oracle, and PeopleSoft
in the higher-end of the market, while in the Tier 2 range it faces Intentia,
IFS, Baan, SSA GT, QAD, MAPICS, and Geac
as some of just as fierce competition.
the company starts to build up its channel market with VARs owing to its strong
focus at the small-to-medium enterprises (SME) level, it will inevitably (despite
its attempts to downplay the likelihood) face an army of competitors spearheaded
by Microsoft Business Solutions' Great Plains and Navision offerings
'The Great' Poised To Conquer Mid-Market, Once and Again), Epicor,
Exact Software, Scala and Best Software to name only few.
further at the SCM market, the company challenges SAP, Oracle, Baan and PeopleSoft
and the pure player likes of i2, Logility, and Manugistics.
As mentioned earlier, J.D. Edwards also has to be taken quite seriously in the
CRM space against Siebel, Onyx, Pivotal, SAP, PeopleSoft
and Oracle, while in the professional services automation (PSA), there are again
Lawson, PeopleSoft, Ariba, Siebel, SAP, Oracle, and a number of
PSA specialists such as Deltek, Niku, Evolve, Novient
the other hand, as a part of its more aggressive sales strategy and revenue
boost, J.D. Edwards has also been targeting a number of vertical markets for
its solutions, and is thereby attempting to bolster its professional service
organization. Already, there are solutions for high-tech/electronics, industrial
fabrication & assembly (IFA), architectural & construction, while the company
expects to release a series of collaborative solutions, focusing on specific
industries like automotive, consumer products goods (CPG), and life sciences
verticals in the near future. Nevertheless, defining verticals in such broad
terms as manufacturing and distribution, asset intensive, and project-management
is simply too broad for today's market requirements, and these also have to
span across all functional areas, not mainly within ERP and SCM. Furthermore,
leveraging some high-profile consulting companies (e.g., Accenture and
Cap Gemini Ernst & Young) to co-develop the strategic industry solutions
should also help in that regard.
professional services, J.D. Edwards unveiled a common methodology for enhancing
implementation times and trying to bring all of the services into so called
OneMethodology. The company has traditionally struggled in this area
and will need to give it attention as it tries to offer a lower TCO for customers,
and OneMethodology could be the company's answer to the customers that are inclined
to work directly with the vendor in an effort to curb risks and better predict
costs. The challenge will be to maintain the roster of available service & support
staff that will be proficient in a plethora of offered diverse applications
and in XPI/XPB integration. To that end, the company's decision to rationalize
a number of system integrating partners might be regarded as wise, given the
unwieldy number of forthcoming new components.
The company's decision to focus first on customer support, rather than on sales per se, should encourage the company's customers. The vendor's staff better knows where the traps are hidden and often are more efficient than the SI's counterparts in avoiding problems and speeding implementation. The vendor's consultants typically have deeper knowledge of the product simply due to the direct access to the product development departments. Still, as the indirect channel works well in the lower mid-market and may offer much broader offering than a mere system implementation (e.g., the change management consulting), J. D. Edwards will have to prove that it has the means to support its customers in the future, should the demand surge sharply again at the times when the now dismissed partner belong to its competitors' folds.
Despite the challenges, the company seems to be in a much better shape now to provide a number of its own must have' applications notwithstanding. As a summary, in anatomic terms, J.D. Edwards has been showing some well-toned muscles on top of its solid but unexciting ERP skeleton and XPI-based connective tissue, chords and cartilages. More important and in athletic terms, the company is leaner, meaner, much more aggressive and with a winning attitude than it has been in the past. It is not easy to regain momentum in a down economy, and kudos to J.D. Edwards for seemingly succeeding in doing exactly that.
Existing J.D. Edwards' customers should certainly welcome the improved vendor's posture and should consider the new offering bearing in mind the immaturity of recently released products, and the magnitude of still outstanding product delivery. They should evaluate the add-ons emanating from the new products and/or alliances as a way to add value to their existing applications whether with an interim integration solution now or by waiting for J.D. Edwards to supply a generally available seamlessly integrated solution. Question the company's ability to deliver promised both horizontal functional modules and vertical enhancements both in short and medium-to-long term, and across different geographies.
Existing users of the IBM iSeries-based WorldSoftware should be aware that the sexy CRM and collaborative SCM modules will be interfaced to their product through the XPI technology, and should inquire about a more detailed product integration strategy and the statement that J.D. Edwards 5 will not support WorldSoftware coexistence. Still, J.D. Edwards can breathe a sigh of a relief as the latest product release extends the life of its antiquated WorldSoftware that still has a large loyal user base. This should significantly ease both new implementations and/or migrations from a WorldSoftware release, which have been a daunting experience for many users, especially for early adopters in 1999.
would be hard pressed to justify not including J.D. Edwards on at least an initial
long list of vendors in a global manufacturing and distribution enterprise applications
selection. Evaluate J.D. Edwards if you are a mid-market or a low-end Tier 1
enterprise (with $100 million - $3 billion in revenue) and if your requirements
fall within the scope of the traditional ERP and SCM offering, with manufacturing,
logistics and financial modules as main pillars of an enterprise application.
Key verticals sectors served are manufacturing and distribution, including consumer
packaged goods, food and beverage, pharmaceuticals, chemicals and general engineering.
Asset-intensive and project-orientated service and/or manufacturing/distribution
industries also score well, and the company also targets high-tech and general
industrial fabrication and assembly. There is no preference on manufacturing
style as the offering can fit in almost about every environment from configure-to-order
(CTO) and engineer-to-order (ETO), to process manufacturing and mixed-mode/hybrid
manufacturing. Still, existing customers and prospects should thoroughly evaluate
the vendor's vertical strategy to ascertain whether it will coincide with their
Edwards' value proposition is for rapid change environments particularly with
distributed plants, and that value system flexibility and openness and/or have
data scattered over several different systems/platforms, and the need to integrate
those into a single solution. Existing customers that have inclination towards
custom-developed solutions and/or have significant legacy systems interfacing
needs and have internal Java resources should evaluate YOUCentric CRM components,
particularly those other than the marketing management one.
detailed information about J.D. Edwards ERP 8 is contained in the ERP
Evaluation Center at http://www.erpevaluation.com.