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PeopleSoft Joins The Hunt For SMEs

Written By: Predrag Jakovljevic
Published On: February 1 2001

PeopleSoft Joins The Hunt For SMEs
P.J. Jakovljevic - February 1, 2001

Event Summary

On January 8, PeopleSoft Inc. (NASDAQ: PSFT), one of the leading business applications providers, announced PeopleSoft 8 Accelerated Enterprise, one of the first turnkey solutions that combines Internet-based applications, rapid implementation services, training, and financing for small-to-medium enterprises (SMEs) ranging from start-ups to companies with $500 million in revenue.

Accelerated Enterprise should allow mid-size enterprises to rapidly implement and manage PeopleSoft 8 eBusiness applications, including Customer Relationship Management (CRM), Supply Chain Management (SCM), Human Resources Management System (HRMS), Financials, and Professional Services Automation (PSA). The company claims its comprehensive PeopleSoft 8 Accelerated Enterprise solution can be implemented in eight to 12 weeks.

"Mid-size enterprises are being left behind in the race for eBusiness," said Jim Hosner, vice president of PeopleSoft Mid-Market Solutions, the division responsible for Accelerated Enterprise. "PeopleSoft Mid-Market Solutions delivers the market's only cost effective, fully integrated, pure internet eBusiness solution that can be rapidly deployed to customers as a turnkey packaged solution."

PeopleSoft CRM, Supply Chain, and PSA solutions are scheduled for delivery in the Accelerated Enterprise model in the first quarter of 2001. Industry solutions will also be available in the first quarter.

Also on January 8, IBM and PeopleSoft announced a partnership to speed up the delivery of business applications. PeopleSoft has selected IBM Business Partners to offer mid-market customers a rapid deployment program for PeopleSoft 8 applications. The companies announced Architecture Jumpstart, an ISO 9000 certified, rapid eBusiness deployment program designed for the fast implementation needs of mid-market customers. The pre-packaged turnkey solution includes a workstation and an NT application and database server, all pre-bundled and offered with fixed pricing to deliver a completely installed and configured environment which includes demo, testing, training and production databases.

In the initial roll out, IBM, PeopleSoft's Architecture Jumpstart partner, will combine its hardware platform, IBM eServer xSeries (NT) with PeopleSoft eBusiness applications to deliver to customers a completely installed and configured environment. Architecture Jumpstart will also include the recently announced support of DB2 Universal Database with PeopleSoft 8. Current plans call for further IBM platforms such as IBM's eServer pSeries (AIX) to be added as the Architecture Jumpstart program is expanded.

PeopleSoft selected IBM Business Partners Innovative Information Solutions (Innovative) within the United States and Compugen within Canada to sell Architecture Jumpstart. PeopleSoft Consulting will be providing the implementation services for PeopleSoft Architecture Jumpstart. PeopleSoft Consulting pledges it will help customers adopt the technology quickly, easily and with minimal disruption to daily business activities, with the potential for higher value realization for customers. PeopleSoft Architecture Jumpstart is now generally available. The program will be rolled out globally after trials in the North America.

Market Impact

While the mid-market open season started over two years ago, the last year saw a growing awareness of the market segment as fertile ground, and PeopleSoft is no exception. We believe 2001 will see culmination in this space, as SMEs rush to adopt newly announced offerings tailored for them. Look also for a continued evolution of these suite applications. Over the last three years the market has seen a plethora of fixed-scope and fixed-price applications, pre-packaged vertical solutions, attractive support programs and hosting services with catchy names, all aimed at making it faster, simpler and cheaper for enterprises under $500 million to use them. However, all of these typically also involved some form of trade-off in the name of expediency. The features traded might have been functionality, customizability, platform options, solution scalability or extensibility. In that regard, it is not very clear from PeopleSoft's typical PR announcement what the 'killer' value proposition differentiator is.

Vendors, particularly the Tier 1, still have their work cut out for them. Those who can deliver solutions that satisfy the exacting, stringent requirements of vertical markets are in the driver's seat to capture that market segment. Meeting the mid-market's needs will also require ERP vendors to improve ease of installation, ROI, interoperability, and service support networks. Moreover, escalating competition in the market will definitely make price a significant competitive factor. The key consideration for solutions that serve this market will also be the level of integration throughout the entire offering.

While short implementation benchmarks will remain an important decision factor, quick implementation will evolve into an order qualifier rather than an order winner, as vendors have been converging in delivering more streamlined methodologies to meet customers' business needs and tight budgets. Differentiation will become a tight vertical focus, with solutions targeted down even to the individual SIC code. This granularity of vertical focus has been apparently adopted by SAP (for more information, see SAP Claims Big Gains In The Low-End Battleground). It appears that PeopleSoft will follow suit and one should look for its vertical solutions' general availability announcements in the future.

As a recap, the major factors of success in business applications for the small and mid market segment are price, speed of implementation, vertical focus, product suite integration, product scalability and scope expandability, and a single point of contact. PeopleSoft seems to have tackled most of them, partly owing to its pure Internet-based product architecture (which provides for easier deployability and a more intuitive user interface).

Nevertheless, one should not expect PeopleSoft's mid-market initiative to have a smooth ride. Although less notoriously negatively publicized than SAP, PeopleSoft remains a complex application, and the Internet architecture and new interface can mitigate that only so much. This perception of complexity remains as the ammunition that the smaller vendors will continue to exploit in order to hinder their bigger brethren's attempt to penetrate their traditional stronghold.

User Recommendations

Interested customers in particular industries should certainly consider PeopleSoft's mid-market offering and carefully determine their needs and implementation time framework, bearing in mind problems typical with new product releases. Organizations seeking a Web-based solution and out-of-box functionality with little or no customization may benefit from evaluating the ASP offering.

We strongly recommend identifying your clear e-business strategy and conducting thorough comparison-shopping, at least for the sake of information leverage. Consider all options. Most importantly identify what needs are "must have" requirements and a timeline for additional components. Once identified, comparison-shop and use the related information to negotiate the best price for the solution.

Most vendors offer their own version of SMB solutions with programs for rapid, lower-cost implementations. While vendors' endeavors in that regard are highly commendable, the "caveat emptor" approach is still applicable. Although some smaller companies would be well off with scaled-down versions of rapidly implemented, Tier 1 software applications, for many companies this may not necessarily be the best solution. PeopleSoft remains a complex application; therefore, make sure that you do not sacrifice functionality and/or customizability for the sake of a quick implementation, since that may cost you more in the long run.

For mid-market companies today's dynamic business environment means the survival of the most agile and flexible. When evaluating a software application, companies often fall for a snazzy user interface or raw number-crunching power. However, a flexible system should also offer features like tools and templates, cross-reference checks, and many other parameterization utilities that provide significant system changes without changing source code. Make sure that what you select now will keep abreast of the technology changes in the future. It may sometimes be more beneficial to implement the right solution slowly than to rush the wrong one into place.

More comprehensive and generic recommendations for both current and potential PeopleSoft users can be found in PeopleSoft 8 Launched - Anything to Write Home About?

 
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