PeopleSoft Keeps Truckin' On A Potholed Road Ahead
On August 13, PeopleSoft (NASDAQ: PSFT), one of the leading business
applications providers, announced it had launched a new reporting software
partner program for Enterprise Performance Management (EPM) customers,
which should further strengthen its leadership position in business analytics.
The program provides customers the flexibility to integrate third-party
reporting products that complement PeopleSoft's EPM solution that gives
organizations the insight needed to improve business performance in the
areas of customer satisfaction and profitability, supplier effectiveness
and employee potential.
members of the program include leading business intelligence software
companies, such as Business Objects, Cognos, Hyperion,
Information Builders, MicroStrategy, and Crystal
Decisions. The program is designed to allow PeopleSoft EPM customers
to take advantage of features and functionality from market-leading business
intelligence solutions. Customers can create analytic reports in their
favored reporting environment, allowing them to preserve existing investments
in their preferred business intelligence technology.
to InformationWeek.com, after 12 months of evaluation, the Internal Revenue
Service (IRS) said on August 23 that it has awarded a $10 million customer
relationship management (CRM) software contract to PeopleSoft. The IRS
is licensing PeopleSoft 8 CRM suite, including PeopleSoft CRM Marketing,
CRM Support, CRM Sales, CRM Help Desk, CRM FieldService, and CRM Interaction
Management, as well as PeopleSoft's analytics tools. This is reportedly
one of the biggest deals PeopleSoft has won in the CRM sector while going
up against top competitor Siebel Systems Inc., with a few more
significant wins to be announced soon.
August 6, PeopleSoft announced that the U.S. Department of Defense
(DOD) has licensed the PeopleSoft 8 Human Resources Management System
(HRMS). The solution will provide personnel and payroll information
to all branches of the U.S. military including the Army, Navy,
Air Force, Marine Corps, Reserves, and National
Guard, and will serve 3.1 million military personnel located around
the world. DOD's Defense Integrated Military Human Resource System (DIMHRS)
will unify HR support for both active duty and reserve members of the
touts that its global, pure internet human resources management solution
will enable DOD to consolidate its legacy HR applications and information
systems into one system, enhancing service to military personnel and to
dramatically lower the agency's administrative and maintenance costs.
With PeopleSoft's portal solution, DIMHRS will enable DOD to provide its
military personnel with key HR information and services in such areas
as benefits, payroll and pension using a standard web browser. In addition,
PeopleSoft's internet-based applications will supposedly support the unique
personnel requirements of each military branch, allowing individuals to
access, view and respond to their unit's tailored information.
above announcements might also illustrate that PeopleSoft remains one
of a handful of enterprise application vendors that have been prospering
in 2001, although this has been a slow period for the sector as a whole.
On July 24, PeopleSoft announced fifth consecutive record financial results
for the quarter ended June 30, 2001. Total revenue of $533 million was
the highest reported in company history, and was up 27% compared to the
same quarter of 2000 (See Figure 1).
company touted strong market demand for its Internet-based collaborative
application suite, for the stellar license revenue growth of 51% to $166
million in Q2 2001. Net income from recurring operations increased sharply,
rising 188% to $46 million, up from $16 million in the same quarter of
2000. However, somewhat slower service revenues growth of 20% over the
Q2 2000 to $337 million, might indicate existing customers' cautious adoption
of PeopleSoft 8 after the indications that the early adopters experiences
have not been quite spotless.
has been reaping the rewards from having delivered an attractive broad
product portfolio while exercising immaculate managerial execution and
financial discipline. During these times of risk-averse customers, PeopleSoft's
'can-do attitude' and the general perception of how well it deploys its
Internet-based products (cost cutting and increased productivity) commands
attention both from its existing customer base and new prospects.
8 contains well-integrated applications for almost every business function,
from managing customer relationships and global corporate finances to
supply chain planning and administering human resources programs. It also
exhibits a set of analytic programs that allow a company to constantly
monitor its overall performance. Users access these applications through
Web-based portals that reflect their specific roles as an employee, customer,
or supplier of the enterprise. A broad functionality footprint, product
interconnectivity and support for many industry accepted open integration
standards, product scalability, provision of the support for leading web
platforms, and the product global capabilities all speak for PeopleSoft's
should continue to thrive despite the ailing economy, since in times like
this, companies are ever more compelled to get a better grasp of their
customers' needs. Having a strong CRM offering integrated to back-office
in its fold holds a great potential for PeopleSoft, as seen in its recent
wins. Whether it will overturn Siebel from its royal CRM position is completely
another matter. Although CRM driven revenue still represents significantly
less than one would expect, it is not a problem because PeopleSoft has
many more legs to stand on.
has achieved success in many other concurrent product initiatives including
its Accelerated Solutions for the mid-market, Enterprise Portal Solutions,
Enterprise Service Automation (ESA), hosted and/or ASP offerings, etc.
Even its erstwhile holy grail, HRMS and Payroll applications, have been
experiencing rejuvenated acceptance, as seen in the case of DOD and IBM
opting to deploy these. PeopleSoft has managed to add new spin to these
supposedly mature technologies and make them attractive despite the slow
times. Global Payroll features and HRMS amenability to efficient recruitment
purposes are the examples thereof, in addition to now proverbial self-service
and workflow routing capabilities. It appears that PeopleSoft will also
soon provide a solution to enable mobile users to use a system without
the current mandatory need for Web connections or to export data elsewhere
(e.g. MS Excel or Access) and work offline.
particularly encouraging for the company should be the success of its
supply chain management (SCM) campaign. These applications are currently
among its fastest selling products, possibly trailing only the analytic
applications. This should be attributed to a sharp focus on specific vertical
markets, such as consumer products, wholesale distribution, and high-tech
manufacturing, and to aptly predefined solutions and service delivery
options for these industry segments (see PeopleSoft
Supply Chain Is Music To Mid Market Ears). Gone are the days of other
vendors' complacency and shrugging PeopleSoft off as a serious contender
in this area.
one should distinguish between first time users product deployment feasibility
and the not quite so easy migration efforts of existing users of older
product releases. Likewise Oracle's experiences with its 11i product,
new users have experienced (product bugs aside) far fewer implementation
difficulties compared to what existing users have undergone in implementing
product upgrades. Customers always prefer a more gradual and, therefore,
less painful, transition from their existing fat client client/server
based systems, and may consider PeopleSoft's HTML-only new product release
a steep technology leap.
service revenue growth compared to impressive new license growth in Q2
2001 may indicate existing users' reticence to jump on an upgrade bandwagon.
, PeopleSoft is not immune to problem-plagued upgrades when they involve
a quite complex application that is interfaced to a number of legacy and/or
third-party systems. There are indeed indications that upgrades to PeopleSoft
7 and older releases have been taking much longer than originally anticipated,
which might force the company to rethink the date of PeopleSoft 7 support
discontinuation. On the other hand, a bifurcated product strategy continuation
would then mean doubled product development and support resources.
the Vantive-to-PeopleSoft 8 CRM migration likely involves much more than
a standard upgrade, requiring customers to invest both in new technology
and training. While the recently delivered methodology, toolset and packaged
services to assist customers in migrations from Vantive to PeopleSoft
8 CRM platform are a step in the right direction, they do not address
integrations Vantive customers might have made to other systems. Also,
current Vantive users may not appreciate the need to convert to PeopleSoft's
value-based pricing model that charges based on the number of modules
and the size of the company, which is the departure from the user-based
pricing Vantive had originally used. Therefore, PeopleSoft needs to speed
up the installed base PeopleSoft 8 acceptance and the upgrade success
testimony, in order to preempt any bad publicity and customer defections.
It appears the market has been buying into PeopleSoft's message and the
benefits of Internet-based products. It remains to be seen whether the
pure-play competitors will emulate the pure Internet architecture before
PeopleSoft delivers the all-encompassing deeper e-procurement, CRM and
SCM functionality. If one considers all aspects of e-Business evaluation,
PeopleSoft has earned the license to be evaluated along with market leaders.
The depth, breadth and innovativeness of PeopleSoft's offerings for the
above-mentioned industries are attractive at first sight and deserve due
attention bearing in mind the risks associated with the first release
of the product.
general, enterprises in need of a CRM or SCM solution and departments
with a need for a solid customer service product should evaluate PeopleSoft
8. However, enterprises that need mobile computing or personalization/data
mining right away should evaluate other vendors at this stage. PeopleSoft
8 CRM's value proposition comes for enterprises that are XML-compliant
and/or have data scattered over several different systems/platforms, and
the need to integrate those into a single solution. Discrete manufacturing
enterprises within PeopleSoft's industries of focus and with extensive
distribution needs may benefit from evaluating the PeopleSoft SCM solution.
will also be interesting to see how PeopleSoft shores up its existing
customer base and keeps them from undertaking complete reevaluations and
possibly defecting. Existing Vantive users have a more complex decision
process that involves pricing, new implementation, new skills, and new
technology. PeopleSoft is still defining specific services packages for
Vantive customers, which will be supported on the Vantive product for
the next 30 months. It is likely that most of the upgrade tools will be
covered under normal maintenance fees, and customers will receive credit
for existing investments in the software. However, users must recognize
that there is much more at stake than a standard upgrade and that they
will have to invest in services, technology, and training.
comprehensive recommendations for both current and potential PeopleSoft
users can be found in PeopleSoft
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