J.D. Edwards switches to best-of-breed strategy

“Even Larry Ellison has great ideas,” admitted J.D. Edwards COO and executive vice-president Dave Girard of his rival, in a recent keynote address.

Speaking at Focus 2000, J.D. Edwards’ users’ conference in Denver, Colo., Girard made the concession about Oracle’s CEO and chairman by way of explaining J.D. Edwards’ new approach to its enterprise resource planning (ERP) software. The company will be offering a best-of-breed solution instead of its traditional all-in-one package. This means instead of writing all of the components in its offerings, the company will borrow from, and plug into, components offered by other vendors.

“In the past, we have been a classical, totally integrated, proprietary software company,” said J.D. Edwards CEO and co-founder Ed McVaney in another keynote address. “Every once in a while, somebody else comes up with a good idea, and we’re convinced that we have to be in a position to attach to, or steal, the best ideas in the industry. I’ve never met a good idea I haven’t stolen.”

In the past, the concept of best of breed was a great idea that worked very poorly because of the integration problem, McVaney said.

“But there’s a new secret weapon out there called EAI (enterprise application integration). We believe that EAI is available to take these traditional difficulties of integration and make it much more routine and point-and-click.”

McVaney recently came out of retirement to once again take the reigns of the somewhat-troubled ERP vendor.

“I’m back, and I’d just like to say that I’m going to be here for a long time,” he told the audience gathered at Focus 2000. “I have been a little disappointed in our performance over the last couple of years. Our quality has suffered.”

But McVaney assured the audience that J.D. Edwards would get back on track with the next release of its ERP package – OneWorld Xe, which is a Web-based version slated to be released in September.

“I can assure you that the quality of this next release…will be very substantially improved. I believe that OneWorld Xe has the potential of being the best software that J.D. Edwards has ever produced.”

McVaney also promised to shore up the company’s support line, which he said was hit hard by dot-com mania. “I have been disappointed in another basic – our support line. I believe our support line used to be better two or three years ago than it is today. I promise you we’ll get our support line very much on track during this next six months.”

Some analysts believe McVaney can turn the company around.

“They’ve lost some momentum of late,” said analyst Kirsten Recknagel of Gartner Group Inc.’s decision driver unit in Stamford, Conn. “Certainly they can regain momentum if they can sustain growth.”

“The strategies that they seem to have come out with (during the conference) seem to round out their offering a lot better than was previously true,” said Nigel Montgomery, the e-business applications strategies research director at AMR Research in the U.K.

“They’ve got to get as many of their customers out to the OneWorld product as soon as they can, because I think the OneWorld product is what’s going to take them through,” he said.

About 60 per cent of J.D. Edwards’ installed sites are of their older ERP application – World.

“One challenge they’ll have in the future months and years is to create a coherent migration plan for those World customers to get them onto the new OneWorld product line. That’s going to be critical,” Recknagel said.

“The World and the OneWorld product lines don’t necessarily have completely parallel functionality right now. So there is a worry on the part of some customers that there may be gaps in terms of the functionality – functionality that they may be leaving behind.”

As for the company’s new approach, Montgomery said, every five years or so the industry changes its mind on which is better – best of breed or an all-in-one offerings.

“One year they say you should buy everything off one vendor, and then people realize that, realistically, one vendor can’t supply everything. So then the pendulum swings back to best-of-breed. Then there will be a nightmare of interoperation, and people will swing back the other way.”

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