J.D. Edwards Touts Leadership in Collaboration and Flexibility -- There Seems to be Some Notable Functionality Too

J.D. Edwards Touts Leadership in Collaboration and Flexibility -- There Seems to be Some Notable Functionality Too
P.J. Jakovljevic - October 19, 2000

Event Summary

On October 2, J.D. Edwards & Company, one of the leading providers of enterprise applications, announced the general availability of OneWorld Xe, the company's new "extended enterprise" product which offers around 300 Internet-ready applications that will supposedly enable companies to choose the most appropriate collaborative solutions to meet their business needs. The company states that OneWorld Xe, with capabilities enhanced via J.D. Edwards' eXtended Process Integration (XPI) engine, will allow customers to use open, flexible and interoperable technologies to foster communication and commerce among suppliers and customers across their extended supply chain.

"We have already seen tremendous customer demand for OneWorld Xe," said Glenn Tubb, senior vice president of development of J.D. Edwards. "Giving our customers open collaboration is empowering them to automate and streamline business processes across the supply chain to increase shareholder value and optimize working capital."

Currently, J.D. Edwards claims to have over 1,000 customers that are live on various releases of OneWorld as well as dozens of OneWorld Xe customers who have been using the product in beta form. J.D. Edwards' OneWorld Xe is intended to combine the best of back office software, enterprise applications integration (EAI) and inter-enterprise process workflow into one solution.

One of the most notable among a slew of new announced functionalities in OneWorld Xe was the Advanced Planning solution, formerly Active Supply Chain. Advanced Planning is J.D. Edwards' Internet-designed solution that might help customers streamline processes across their supply chains to more effectively collaborate with customers, suppliers and other business partners.

"Our customers have long recognized the potential of enhancing the efficiency of their supply chains with our collaborative technology solutions," said Edward Sitarski, Vice President of Supply Chain Planning for J.D. Edwards. "Advanced Planning, combined with the other powerful solutions within OneWorld Xe, delivers measurable benefits to an organization's short-term productivity and long-term efficiency, offering a competitive advantage in rapidly evolving marketplaces."

New modules available in the latest version of Advanced Planning include the following:

  • Real-time Order Promising - Allows an organization to achieve better customer service by automatically addressing sales order inquiries and providing optimized and real-time answers to client's inquiries.

  • Demand Collaboration - Casual remote users can logon to Demand Planning over the Web in order to view and/or modify forecasts. It allows companies to share real-time, accurate information with their field organizations as well as trading partners.

Enhancements to existing modules available in the latest version of Advanced Planning include the following:

  • Report Writer - New memory-resident On Line Analytical Processing (OLAP) and report writing capabilities enable users to quickly create custom reports to communicate and support business decisions.

  • XML Capable - Standard XML formats are now supported to facilitate integration within trading communities.

  • Geographical Visualization - Additional geographical visualization capabilities have been added to allow users to analyze their supply chain networks more effectively.

Earlier, on September 19, J.D. Edwards announced enhancements to its manufacturing solution that will significantly increase its support for lean/flow manufacturing processes, which must meet high throughput or service demands with minimal inventory. The enhancements, available with the release of OneWorld Xe, include content management capabilities and production scheduling functionality that support discrete manufacturing and bring enhanced efficiencies to complex manufacturing processes.

Market Impact

J.D. Edwards is carrying through what it announced in June during its annual user conference. The company has long intended to embed Enterprise Application Integration (EAI) into its OneWorld product, and to differentiate itself from competitors by doing so. The idea - to spare customers from investing in 3rd-party EAI products to link disparate best-of-breed systems together - is certainly attractive.

While J.D. Edwards' move into the EAI arena is indisputably risky, we commend its determination to bite the bullet and include integration systems into the core product offering. Some of its competitors, who are still convinced that they can deliver most of the necessary functionality themselves, may find themselves seriously lagging once they finally realize the need for interconnectivity and EAI. E-commerce trends are by nature very dynamic, and no single vendor can provide all required components. Native integration is becoming less of an issue, particularly in the higher end of the market - acquiring the best products at an acceptable price to meet an e-business strategy is the major issue.

While we endorse J.D. Edwards in its quest to persuade enterprises to extend their activities into e-collaboration, we also believe that managing this large application portfolio, much of which involves partnering or extensive integration and customization, will remain, nonetheless, cumbersome despite recent technology improvements. In addition to all apparent and/or hidden caveats of disparate products integration (for more information, see J.D. Edwards Chooses Freedom to Choose EAI ), the issue of increased costs of license sales due to an exorbitant number of 3rd-party software sales and subsequently less profit margins has been burdening the company's P&L statements.

The name of the game will be to find a perfect balance (critical mass) between a company's own components and 'borrowed' 3rd-party products. To that end, management should be pleased with the completion of integrating Numetrix, an APS product it acquired in May 1999, with its OneWorld ERP suite and re-branding it as Advanced Planning. We believe it has a potential of becoming a strong foundation for building upon the necessary components of inter-enterprise collaboration, order fulfillment, and digital marketplaces.

J.D. Edwards has long been renowned for its strengths in the distribution and order fulfillment side of the business. As the market required more advanced supply chain planning (SCP) capabilities of its ERP suite, particularly in discrete and complex manufacturing, the company opted for an acquisition, selecting Numetrix for the technology it had to offer, such as supply chain network analysis, complex production scheduling, and the Distributed Object Messaging Architecture (DOMA). (For more information, see J.D. Edwards and Numetrix Ponder the Future as One).

J.D. Edwards should also consider having notably different marketing approaches for the higher end of the market and for its smaller and mid-market fragments, given the different requirements and mindset of decision makers in these respective niches. The 'freedom to choose' message will most likely strike chords with some more aggressive CIOs of larger global companies, who would be unwilling to get locked into the inflexible, proprietary technology that, for example, Oracle's value proposition seems to inherently offer. The increase in new licenses within the higher-end of the market seems to speak in that regard.

On the other hand, the company will have to provide more out-of-box integration for the small-to-medium enterprises (SME) market. These CIOs are very likely to be disconcerted by the prospect of having to deal with a dozen disparate interfaced applications and may rather consider a solution that requires only a couple of critical bolt-on applications. Only time will tell whether the above-mentioned native supply chain planning functionality will suffice and whether it will be very important that J.D. Edwards also completes seamless integration of Siebel and Ariba components with OneWorld suite.

Both approaches should be backed up with much more vigorous marketing and market awareness creation than there has been so far. J.D. Edward's latest, more vigorous posture and marketing initiatives seem to be going in the right direction. Also, to allay recent negative publicity, the company must broadcast a convincing message to assure the market and its customers that it will continue to be viable. It is also needless to say that the execution, particularly the service & support will have to be immaculate.

User Recommendations

Existing J.D. Edwards' customers should certainly consider the new offering, but don't select it before looking at what the other vendors have to offer. We recommend identifying your clear e-business strategy and conducting a thorough comparison-shopping, at least for the negotiation leverage sake.

As for potential customers, we generally recommend including J.D. Edwards in an enterprise application selection long list for mid-market and low-end Tier 1 companies (with $100M-$2B in revenue). Organizations whose requirements fall within the scope of the standard ERP and SCM offering, where manufacturing, logistics and financial modules are main pillars of an enterprise application, would benefit from considering J.D. Edwards. One should bear in mind the company's proven fair treatment of customers as well as its expertise within some industries like automotive, consumer packaged goods, electronics, manufacturing & distribution.

As with all new releases, users should employ a critical approach in their evaluation of OneWorld and require the vendor to demonstrate specific business processes. Future clients are also advised to request the company's written commitment to promised functionality, length of implementation, and seamless future upgrades, particularly for recently announced partnered offerings. Improved technological integration is seldom guaranteed by joint marketing arrangements, and only comes after the arrangement yields considerable implementation experience.

The following are only some of the potential problems associated with EAI that users should be aware of: different security systems and keys, package interfaces that do not provide the information in a preferred format, systems that operate in different time zones and are geographically dispersed, scalability, performance, disaster recovery and contingence. Users for whose solutions J.D. Edwards partnered with other EAI vendors may benefit from informing themselves about the company plans for future service and support and what would be the ramifications of switching to its above-mentioned strategic EAI partners.

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