Event
Summary
On October 29, the French government awarded the first contract of its Accord
Mission, a project to integrate computing across all state departments. The
first project will see 15 ministries install an accountancy package from Peoplesoft,
in conjunction with Sequent and French systems integrator, Steria. The three
companies beat off competition from SAP with PriceWaterhouseCoopers, and Oracle
with Cap Gemini. The government declined to put a value to the contract, but
Peoplesoft claims it is one of the two biggest IT contracts awarded in France
this year. At the moment, all French ministries operate different accountancy
systems, and Peoplesoft says it is the first time the French government has
invested in ERP.
Market
Impact
This win has multi-dimensional importance for PeopleSoft. First, it should boost
the Company's dismal software license revenues in 1999 (down 58% compared with
the first 3 quarters of 1998). Second, PeopleSoft badly needs a stronger market
penetration outside the North American market, and this contract provides needed
credibility. Third, the scope of the first project's phase is finance and accounting,
which is not necessarily regarded as PeopleSoft's strongest area of competence.
We believe that PeopleSoft is now in the sweet spot for the next phase of project,
which will involve HR system implementation, where PeopleSoft is a recognized
functional leader.
User
Recommendations
As a summary of our recommendations in TEC's note on PeopleSoft (See TEC Technology
Research Note: "PeopleSoft
- Are Business Intelligence and e-Commerce Enough?" ), PeopleSoft is
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 and financial modules are the main pillars
of an enterprise application. However, organizations currently evaluating PeopleSoft
should keep a close eye on PeopleSoft's future product development and support
strategies, particularly how top management will address poor market perception
of its manufacturing software.