PeopleSoft Manufacturing - This Time For Sure?!

PeopleSoft Manufacturing - This Time For Sure?!
P.J. Jakovljevic - July 17, 2000

Event Summary

PeopleSoft has recently marked a delivery roadmap of its next major release components. PeopleSoft 8, a fully HTML-based, Web-hosted version of the ERP system is only a few weeks away from its official launch. A PeopleSoft e-business portal launch is also just around the corner. At the beginning of June, PeopleSoft also made its first shot at integrating the CRM applications it recently acquired from Vantive with its ERP applications. The company also mapped out the next phase of its new architecture - a suite of applications written in HTML and Java that will build upon the Java Server.

"We're not afraid at all to admit that client/server is pretty much dead. We're focusing all our development toward the Internet," says John Webb, vice president of product management for PeopleSoft's supply chain division.

However, PeopleSoft is a relative latecomer to the ERP fray, having gotten its start in the human resources/payroll applications arena. Today, the company claims only a few hundred customers in the manufacturing market, with a focus on consumer packaged goods, high tech/electronics, and wholesale distribution. Despite persistent perceptions that PeopleSoft is still not a full-fledged player in manufacturing, Webb contends that PeopleSoft is heavily engaged in that industry, in particular with makers of consumer packaged goods. "Release 8 will be very deep in CPG," he says. "We feel we're going to be heads above the competition there."

Market Impact

While PeopleSoft has so far dismally exploited its purchase of Red Pepper several years ago, its new tack of addressing manufacturers' needs may result in far greater success. Namely, PeopleSoft has focused its manufacturing solutions on only the above-mentioned three industries, CPG being one. It already has a strong customer base within these industries, primarily with its financial and human resource management systems, but also to a degree with its manufacturing and supply chain modules.

While PeopleSoft's chances of being a true leader within these industries remain slim, its PeopleSoft 8 product suite may give other manufacturing products a run for their money, since it is envisioned to offer deeper new functionality such as co-product/by-product, recipe management, improved lot tracing management, and flow manufacturing. In addition, the PeopleSoft ERP solution has long featured a manufacturing module with the embedded Red Pepper APS planning engine.

What may also help PeopleSoft in its particular endeavor is the change in both the business applications climate and users' mindset. The times when features and functions (bells and whistles) were the order winners are over. The new selections battles are fought on the outskirts of ERP, in the CRM and the supply chain management arenas, with very sharp vertical focus. Assuming the above-mentioned new manufacturing functionality is for real, bundled with CRM capabilities from its recent purchase of Vantive and with traditionally strong analytic applications developed in house, PeopleSoft may turn out to be a serious contender in future manufacturing and material management software selections.

User Recommendations

PeopleSoft remains a very strong contender in enterprise application selection processes within the following industries: utilities, service providers, financial institutions, public sector, insurance, and higher education. It should be on a short list in any selection where HRMS system, financial modules, and e-business/self-service are the main pillars of an enterprise application.

However, since the company has been touting the significant manufacturing and supply chain product enhancements within its new release, which is due later this year, current and potential users are advised to inform themselves about these, particularly in the above-mentioned industries of focus.

Organizations that are in an early stage of evaluating PeopleSoft, as well as its existing clients should negotiate incorporation of new applications components by bundling them into the contract now at negotiated license fees, and be wary of application integration work-in-progress. Existing users of PeopleSoft client/server-based products may want to inquire about PeopleSoft's future product support and/or migration strategy.

Furthermore, companies outside of above-mentioned industries may benefit from evaluating PeopleSoft's product components on a stand-alone basis for their e-business needs and leverage that information against other vendors in the selection.

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