Much like Muhammad Ali’s fight with George Foreman in 1974, PeopleSoft Inc. has managed to use a rope-a-dope strategy to avoid a knockout punch from Oracle Corp., and this agility is paying off.
With the successful acquisition of J.D. Edwards & Co. under its belt, PeopleSoft is now focusing on being a leading-edge, not bleeding-edge, company, where technology is developed and sold when it is “viable in the marketplace,” said PeopleSoft chief technology officer Rick Bergquist, during a quick customer tour through Ottawa, Montreal and Toronto this week. It’s about “harnessing new technology for business solutions,” he added.
An example of harnessing a new technology is PeopleSoft’s recent integration of instant messaging into its enterprise applications. One customer, who Bergquist did not mention by name, has added IM to its customer help centre. The advantage over a call-centre-only approach, Bergquist said, is that some customer questions can only be answered by specific people, and those people don’t generally work in the call centre. The result is a game of voice and e-mail tag.
Now when a call requires a specific expert, it can be forwarded, via IM, to the expert’s desktop. Companies can set up an on-call system (much like at hospitals) so there is always an expert available to answer customer queries. This allows experts to continue their usual work, except when they are “on call.”
IDC Canada Ltd. software analyst Warren Shiau said he has “heard of a lot of [companies] trying to incorporate…instant messaging into the corporate environment,” but added that no success stories have been “pitched” to him.
PeopleSoft is also working hard on the implementation side, Bergquist said. “You can have perfect technology fail because you didn’t have the right project management,” he said. To avoid this PeopleSoft “tries to be in as early as possible” on new projects, said Peter Smith, vice-president PeopleSoft Global Services with PeopleSoft Canada Co. in Toronto. This gives its consultants a chance to “understand what [customers] are trying to do with their business,” Bergquist added.
In today’s market few solutions are totally off the shelf, and thus require customization, both to integrate properly with existing systems and to gain competitive advantage.
But Bergquist said companies have to “be very focused on what [they] customize.” He said that less than five per cent of an average PeopleSoft install is customized, and that it is enough to get a competitive advantage. After all, there is only a three per cent difference in all human DNA, he said. “And look at the diversity.”
You get the competitive advantage on how your company executes its strategies not with the technology per se, Bergquist added.
Nevertheless, not all PeopleSoft implementations of late that have received praise.
The California State University (CSU) recently attempted to implement the largest software project ever undertaken in a U.S. post-secondary institution. The project, dubbed the Common Management System (CMS), is a new centralized computer system intended to integrate and streamline a range of software applications – some dating back to the 1970’s – with CSU’s headquarters and its 23 campuses.
But according to a recent state audit, CSU is spending more than it had planned.
The initial estimated US$450 million cost has ballooned to just over US$660 million. The audit noted that during its ERP implementation, CSU failed to establish a “clear business case” and neglected to take into account maintenance, operations and implementation costs.
Another install, a PeopleSoft human resources system for the U.S. Department of Defense, is finally ready to start development work on the US$320 million-plus project. But it will take another four years to complete the rollout, military officials said, and the project is already about 12 months behind schedule.
These cases do not surprise Bergquist. He said large-scale projects are difficult endeavours, since so many people and arms of an organization are involved.
How an organization reacts to problems within its project management structure is a good indicator of how a project will succeed, Smith added. Those with the systems in place to deal with surprises tend to have smoother implementations, he said. “They understand there will be bumps in the night.”
In PeopleSoft’s defence, the CSU problem was due more to internal processes than technological issues, according to one insider. The solution was driven from the top down, not the bottom up and each campus had to take on their own customizations. Still PeopleSoft did make some mistakes, he said. For example, the scheduling software PeopleSoft suggested was compatible with its own technology was not, he said.
Overall these cost overruns do not “appear to have cascaded out to create a negative perception of PeopeSoft,” Shiau said. He attributed this to PeopleSoft’s ability to explain in detail to subsequent customers why events like this occur.
No talk with PeopleSoft would be complete without dealing with the Oracle buyout bid. Bergquist said it has been a blessing in disguise. The merger with J.D. Edwards has gone very smoothly in part due to Oracle’s actions, he said. “We’ve got Larry (Ellison, CEO of Oracle) to thank, we have a common enemy.”
Shiau agreed that PeopleSoft customer attitude indicates the issue is behind them. Whether it is over for Oracle, “I’m not too sure,” he said.
– With files from Ryan B. Patrick and IDG News Service