Business & Technology Nexus

Dave Stephens on technology and business trends

For Jason: JDEdwards Operational Sourcing

with one comment

Jason asked I comment on the release of a tightly integrated Operational Sourcing package for JDEdwards. The short version is – yes, I think it was a good idea. And yes, I think it puts light pressure on Sourcing point solutions. But perhaps not too much pressure – you see, I think JDEdwards is probably going to expand the size of the market and get customers using Sourcing who otherwise wouldn’t have bothered.

Let me first give a nod to the folks from JDEdwards.

I liked the people I met from JDEdwards post the Peoplesoft acquisition. They were down to earth and tended to focus more on product capabilities and less on “technology for technology’s sake”. My kind of people. Good folks.

In any event, when Peoplesoft acquired JDEdwards, (this is what I heard from others btw, so no more news stories referencing me please!) they didn’t quite know what to do with the company. Should JDEdwards be their mid-market solution, or should they sell it to verticals like Home Building and Discrete Manufacturing? It was a tough call because while the majority of JDEdwards customers were smaller, a good chunk of revenue came from bigger companies. Peoplesoft waffled, JDEdwards revenues shrank, etc.

One of the questionable things Peoplesoft did (to show how great the “integration” of the 2 companies was going) was build links between systems. Never mind demand was tepid.

So Peoplesoft SRM, which certainly had a bucket of features JDEdwards didn’t, became a showcase “integration” to JDE. I’m not sure if a single customer ever bought & went live on the combined offering, but it was there. The problem was, Peoplesoft SRM was built for a totally different type of customer.

IMHO, Peoplesoft was a collection of highly functional, best-of-breed applications optimized for big companies who could afford to spend a bunch of money in IT to rig them up to legacy systems & build a composite system. They were high-end. Meanwhile, JDEdwards customers installed the system as quickly as possible, and had that single system do as much as possible – hopefully everything their business needed. They then promptly locked it away in some closet. The joke goes: A JDEdwards customer’s idea of maintaining their application was “dusting”. Perhaps every 3-4 years they’d consider upgrading if you weren’t a pain in the behind about it.

So even though building JDEdwards Operational Sourcing meant introducing redundant functionality by replicating some of the basic sourcing capabilities also present in Peoplesoft and Oracle products, it was absolutely in line with what customers wanted & where that market was. It was just good common sense.

Now this won’t hurt Sourcing point solutions tremendously. It becomes more like the McDonald’s line “do you want fries with that?” Sell JDE, salesman xyz says “do you want Operational Sourcing with that?” – great! So my guess is it expands the size of the sourcing market more than it takes away business from the smaller players.

As for the debate around best-of-breed Sourcing vs. Sourcing tied into your operational and transactional systems, I defer weighing in for now. I certainly sponsored/authored/architected Oracle’s highly integrated approach to their flagship Advanced Procurement product line. But I’ve had a little less Oracle cool-aid lately and am getting close to forming a more objective opinion.

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Written by Dave Stephens

04/25/06 8:46 PM at 8:46 pm

Posted in Opinion

One Response

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  1. Hi. I am an executive recruiter, looking for a strong VP of IT. with extensive experience with JDEdwards.
    Do you know what blogs I can get onto (and how I can get to them) to post this info? I appreciate your reply.

    Thank you, Lynn

    Lynn Lipton

    05/5/06 2:11 PM at 2:11 pm


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