Building Muscles To Overcome The Rough Patch
- June 19. 2002
the beginning of 2001, PeopleSoft Inc. (NASDAQ: PSFT), one of the
largest enterprise applications providers, ebulliently indicated its continued
interest in rounding out its product portfolio through favorably priced
acquisitions. Instead, the company recently unveiled a number of new products
developed either internally or via alliances. It is likely its recently
tamed new revenue generation has played a part in the company backpedaling
its bullish attitude on acquisitions.
- PeopleSoft eSettlements Part of PeopleSoft's Finanacial
- General availability of PeopleSoft Enterprise Service Automation
- Expansion of Human Capital Management (HCM) solutions
- Supply Chain Management Solutions Strategic Sourcing and
Trading Partner Management (TPM)
- Next generation Enterprise Portal
- CRM solutions for Government, Insurance, Energy, and High Technology
- Vigilance Supply Chain Event Management
- Agile Software Company Comprehensive Product Life Cycle
is Part One of a four-part report on recent PeopleSoft announcements.
Parts Two and Three will discuss the Market Impact of these announcements
and Part Four will make User Recommendations.
on May 28, PeopleSoft announced the general availability of PeopleSoft
eSettlements, an integrated, comprehensive solution for electronic
invoice presentation and payment (EIPP) for global enterprises. As a part
of PeopleSoft's Financial Management Solutions, the application
was devised to optimize the source-to-settle' process by providing a
common platform for buyers and sellers to exchange and match transactions,
such as purchase orders, receipts, and invoices.
many companies, the settlements process is still primarily manual and
paper driven and essentially one-way, resulting in expensive, inefficient,
and error prone business processes. With PeopleSoft's eSettlements, companies
would receive invoices electronically, send alerts and notifications,
and resolve disputes online. In addition, buyers are able to extend their
procurement and payment rules, such as matching and payment selection
criteria, whereas sellers can improve customer relationships and reduce
days of sales outstanding (DSO) through on-line tracking and resolution
of payment issues. The result should consequently be lower costs, shorter
cycle times, fewer errors, and higher productivity.
May 14, PeopleSoft announced the general availability of PeopleSoft
Enterprise Service Automation (ESA) 8.4. The product reportedly continues
to gain strong market acceptance, with more than 180 customers licensing
the product since its introduction in Q3 2001. PeopleSoft ESA was devised
to provide real-time visibility and control to manage spending on services
as well as internal projects to reduce costs associated with securing
contractors and managing resources, and streamlining the execution of
projects across the enterprise. The release of PeopleSoft ESA 8.4 includes
new functionality especially designed to meet the unique requirements
of global customers and customers in the public sector. To that end, the
key functionality to meet the specific needs of the Education and Government
sector includes commitment control, fund accounting and services procurement.
for Global Customers, PeopleSoft ESA 8.4 introduces European country-specific
functionality. The solution now supports Value Added Tax (VAT) in Contracts
and European Expenses, including Per Diem, Mileage Reimbursement, and
VAT configuration by expense type and country. This new functionality
should increase efficiencies for global organizations that operate and
manage projects across multiple countries.
addition, PeopleSoft ESA 8.4 delivers expanded integration with Microsoft
Project 2002 to provide enhanced project control functionality that
includes project level budgeting, work breakdown structure (WBS) support
and activity level integration. PeopleSoft ESA includes the following
applications: Services Procurement; Resource Management;
Contracts; Projects; Expenses; Mobile Time and
Expense; Mobile Time and Expense - Palm and Travel.
at the PeopleSoft Leadership Summit 2002 at the end of April, PeopleSoft
unveiled a number of new applications that should extend its already broad
applications portfolio. First of all, building on 14 years of leadership
in the human resources management systems (HRMS) industry, the company
announced touted breakthrough Human Capital Management (HCM) solutions
that should align and leverage workforce contribution with corporate objectives.
PeopleSoft announced three new modules with a view towards extending its
proverbial lead in the HRMS industry providing solutions from managing
traditional HR and payroll, to connecting employees and managers through
self-service. PeopleSoft's new HCM solutions include:
- PeopleSoft Sales Incentive Management (SIM) should enable
organizations to design and implement incentive plans that align sales
force behavior with enterprise objectives in real time. The solution
should also reduce the complexity and repetitive, error-prone nature
of today's incentive compensation systems, as the entire sales incentive
process from planning through payment will be provided online.
- PeopleSoft Performance Management should enable a company
to overlay and enforce corporate objectives all the way from the boardroom
to the storeroom, as every employee can be aligned with the management
by objectives (MBO's) of the company, and any employee not aligned can
be easily identified to ensure that valuable resources are not wasted.
- PeopleSoft Enterprise Learning Management should enable organizations
to dynamically deliver training where it is needed, both inside and
outside the enterprise, with learning systems being integrated with
both performance and incentive management applications.
up on this strategy, on June 11, PeopleSoft announced Enterprise Incentive
Management (EIM), a product suite to be included in the above-introduced
HCM solutions. PeopleSoft's EIM suite will also provide organizations
with the capability to model, manage, communicate, and measure incentive
compensation in alignment with specific business objectives across departmental
boundaries. PeopleSoft Sales Incentive Management (SIM) is the first product
to be introduced in the EIM suite.
during the same event, PeopleSoft announced that organizations around
the world are rapidly adopting its Supply Chain Management (SCM)
solution, which includes Supplier Relationship Management (SRM),
Manufacturing, Supply Chain Planning (SCP), Customer Fulfillment
Management and PeopleSoft Supply Chain Analytics solutions,
and provides more than 450 embedded performance indicators for the management
of real-time business processes. During the first quarter of 2002, more
than 50 organizations reportedly went live on PeopleSoft SCM. The company
also announced the general availability of two new supply chain solutions,
Strategic Sourcing and Trading Partner Management (TPM).
the announcement of PeopleSoft Strategic Sourcing, PeopleSoft claims to
offer the only solution that manages the entire source-to-settle process
for all goods and services, as companies can directly generate contracts
and purchase orders from bid evaluation screens, and thereby significantly
reduce processing time. In addition, with PeopleSoft Strategic Sourcing,
companies should identify and measure suppliers on numerous criteria driving
more profitable supplier relationships. PeopleSoft Trading Partner Management
(TPM) provides a unified interface to manage any type of electronic trading
relationship. Companies can choose from multiple communication methods,
including FAX, EDI, XML, Portal or Web Services, which should enable them
to remove barriers associated with supplier enablement.
PeopleSoft announced the general availability of its next generation Enterprise
Portal. PeopleSoft believes it has raised the bar for enterprise portal
solutions with functionality such as Intelligent Context Manager and Web
Services integration. Intelligent Context Manager proactively prompts
users with relevant information when they initiate transactions within
the portal. Information is automatically displayed enabling users to navigate
through the business process in an informed manner.
example, using a traditional portal approach, an accounts payable clerk
would see that a customer is overdue on a payment. The clerk would typically
send the account to a collections department or agency -- never knowing
there is a large sales opportunity in the pipeline from the same delinquent
payer. With Intelligent Context Manager, the clerk is directly notified
of the sales opportunity at the same time he or she is accessing the receivables
also touts to be the only enterprise portal vendor to utilize Web Services
standards as its primary integration method, as the Enterprise Portal
enables customers to directly syndicate Web Services content into the
portal, with a prospect of reducing costly programming and maintenance,
and lowering the total cost of ownership (TCO).
CRM Products Coming
but not least, PeopleSoft announced new industry solutions for Customer
Relationship Management (CRM), expected to be available later this
year. In addition to existing solutions for Financial Services and Communications,
PeopleSoft announced CRM solutions for Government, Insurance, Energy and
- PeopleSoft CRM for Government should give government organizations
the ability to provide fast, effective service through multiple channels.
For example, state and local governments will have the capability now
to be able to: manage non-emergency "311" communication between government
organizations and their constituents; automatically assign constituent
inquiries to the right department; graphically display the location
of reported problems and work crews; and reduce administration costs
by providing self-service access to online support services.
- PeopleSoft CRM for Insurance should deliver functionality
to manage all lines of insurance including property and casualty, life
and health. The solution will model insurance policy relationships,
providing a comprehensive view of a customer's insurance portfolio —
from claim to billing to payment, while self-service capabilities will
give customers online access to product information, policy quick quotes
and the ability to file claims in real time.
- PeopleSoft CRM for Energy should provide a comprehensive solution
designed specifically for energy retailers and distributors. The functionality
will include: premise management support to administer service points
and assets; service management support for move and transfer of service
transactions; tracking and resolution of power outages, gas leaks and
other emergency and non-emergency services; comprehensive account billing
and management functionality; and loyalty and retention analysis for
up-selling and cross-selling products and services.
- PeopleSoft CRM for High Technology should provide functionality
for manufacturers and distributors of hardware, software and other technology
products. The solution will include: self-service product registration;
contract and entitlement management; real-time tracking of availability
for materials and spare parts across multiple locations; and up-sell
and cross-sell of products and services, such as extended warranties
and professional services.
May 28, PeopleSoft also announced an alliance with Vigilance, Inc.
to provide a supply chain event management (SCEM) solution that should
give customers extended visibility and expanded control over the supply
chain. The integration of PeopleSoft's Supply Chain Management (SCM)
applications with Vigilance's Supply Chain Event Management Suite (SCEM)
should enable companies to immediately alert employees and suppliers to
unexpected events and take corrective action throughout the supply chain.
new solution combines cross-enterprise event detection, closed-loop analytics,
role-based portals, and collaborative business rules to enable companies
to identify and prioritize emerging issues, alert escalation paths, and
facilitate immediate corrective action. For example, procurement managers
can be alerted immediately to an unexpected production stoppage with a
key supplier, and apply real-time analytics and alternative business rules
to rapidly deploy a new sourcing strategy. As a result, companies should
minimize costs and short-term disruption.
its attempt to compensate for a functionality long offered by its more
manufacturing-oriented nemeses like SAP and Baan, on May
9 PeopleSoft and Agile Software Corporation (Nasdaq: AGIL) announced
that they have formed an alliance to provide a comprehensive solution
for product life cycle management (PLM). PeopleSoft's Supply Chain Management
(SCM) and Customer Relationship Management (CRM) solutions will be integrated
with Agile's comprehensive suite of Product Chain Management (PCM)
applications. The solution should enable companies to manage the complete
product life cycle from development to end-of-life including sourcing,
production, sales, service and distribution.
Integrated PeopleSoft and Agile applications should drive rapid product
development, change management and partner collaboration. Critical business
processes like New Product Introduction (NPI), Product Change Management
and Total Product Cost Management will be addressed by the combined solution
that should enable suppliers, customers, employees and partners to share
key information such as design adjustments, product changes and customer
requirements for new products.
above announcements came on the heels of the April 25 announcement of
less than upbeat first quarter 2002 results, which ended a string of record
results during previous six quarters. For the first quarter ended March
31, 2002, software license revenue declined 13% to $133 million, from
$153 million in Q1 2001 (See Figure 1). Likewise, total Q1 2002 revenue
was $483 million, a decline of 6% from $514 million a year ago, justified
by the management with all-too-familiar slowdown in IT spending.
income from recurring operations, however, increased by 28% to $46 million,
up from $36 million in the same quarter of 2001, while net income for
the first quarter of 2002 was $45 million. Other positives were the Company's
cash and investment balances at March 31, 2002 at $1.82 billion, an increase
of $149 million during the first quarter. Days Sales Outstanding (DSO)
at March 31, 2002 declined to 58 days, an improvement from 63 days at
December 31, 2001 and possibly the record low level in the industry.
again cited significant deals against its competitors in the fourth quarter
in all product lines and across all geographies. Nevertheless, many important
indicators were down compared to previous quarter, including average sales
price, net new customers, and number of contracts with more than $1 million
value. While license revenue from existing customers was flat, possibly
the most major negative effect was that new customers represented only
25% of revenue, down from an average of 39% and from 42% in the previous
quarter. A bright spot was the education and government market, which
continued to show some strength throughout the quarter.
concludes Part One of a four-part report on recent PeopleSoft announcements.
Parts Two and Three will discuss the Market Impact of these announcements
and Part Four will make User Recommendations.