J.D. Edwards On The Mend; This Time Might Be For Real
The following recent announcements by,
J.D. Edwards & Company (NASDAQ: JDEC), indicate that J.D. Edwards has been putting it's house in order, expanding its offerings, and executing an aggressive sales strategy, and improving its cash situation at a critical time.
The announcements include:
- Advanced Planning 4.0
- Financial results for fourth quarter and fiscal year 2001 (ended in October 2001)
- Completed acquisition of YOUcentric
- CRM version 1.1
Part Three of a three-part Event Note on recent developments at J.D. Edwards.
Part One detailed the announcements.
Part Two discussed the Market Impact.
Continuing Aggressive Sales Strategy
On 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 SCM 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.
The challenge will be to maintain the roster of available service & support staff that will be proficient in a plethora of offered applications and in XPI integration. To that end, the company's decision to pare down a number of system integrating partners (almost 40%) might be regarded as wise, given the unwieldy number of forthcoming new components. The vendor's staffs 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. Furthermore, leveraging some high-profile consulting companies (e.g., Accenture, Arthur Anderson, Cap Gemini Ernst & Young) to co-develop the strategic industry solutions should also help.
Still, as the indirect channel works well in the mid-market and may offer much broader offering than a mere system implementation (e.g., the change management consulting), time will only tell who is right J.D. Edwards or SAP given the companies' differing SI partnership strategies (see SAP Farms More Business Out Amid Its Staff Reductions). Therefore, J. D. Edwards, more than its direct competitors, 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.
Extending the Life of OneWorld
Also on a positive note, in addition to OneWorld Xe product's flexible architecture and collaborative capabilities, J.D. Edwards can sigh a sigh of relief as the latest product release extends the life of its outdated World software that still has a large loyal user base. This should significantly ease both new implementations and/or migrations from a World software release, which have been a daunting experience for many users, especially for early adopters in 1999. Both products now can continue their own development cycles separately but interdependently as products can communicate via Xe's XPI interoperability technology. Trying to resolve this predicament has plagued J.D. Edwards' ability to move more aggressively into developing more needed functionality. The iSeries server co-branding agreement with IBM should also breathe a fresh air in this product line.
Although J.D. Edwards also offers native functionality in the company's Product Lifecycle Management (PLM), indirect materials (MRO) e-procurement, and private trade exchanges (PTX) products' offering, the company seems to be in a much better shape now to provide a number of its own must have' applications. As a summary, in anatomic terms, J.D. Edwards has been showing some muscles on top of its solid but unexciting ERP skeleton and XPI-based connective tissue, chords and cartilages.
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. Question the company's ability to deliver promised both horizontal functional modules and vertical enhancements both in short and medium-to-long term. Existing users of the
IBM iSeries-based World software 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.
One 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 $100M-$2B 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. One should also bear in mind the company's expertise within the above-mentioned industries. J.D. Edwards' value proposition is for rapid change environments 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 SFA one.
More comprehensive recommendations for both current and potential J.D. Edwards' users can be found in J.D. Edwards - A Collaboration Thought Leader Or A Disguised ERP Follower? Part 2: Evaluating J.D. Edwards and 'Collaborative Commerce': ERP, CRM, e-Proc, and SCM Unite! A Series Study: J.D. Edwards.