‘User-friendly’ and ‘flexible enterprise resource planning’ were the buzz-phrases in Marrakech at the end of January when US ERP vendor JD Edwards introduced its latest big idea.
ActiveEra is a ‘wizard-based’ feature that has been written into JDE’s OneWorld suite that will open a ‘new battleground’ in the competitive ERP market. At least, that is what the JDE marketeers would have us believe.
ActiveEra puts into practice the company’s trademarked concept of Idea To Action, which aims to let finance directors and accountants adapt business processes – invoicing, for example – by following simple point-and-click guidelines rather than having to write or specify endless lines of code.
At the same time, IT staff can use the same software ‘activators’, or applications, to change a technical aspect of OneWorld such as the operating system or database.
‘It’s easy to focus on getting a system to go live and thinking that’s the end,’ said JDE chairman Ed McVaney. ‘We think it’s the beginning.’ The message was clear: rapid implementation of an ERP system was not enough. Users should be more worried about the adaptability of an enterprise package after what can be a lengthy and costly implementation process.
But one major JDE client doubted whether IT and business issues could ever be prised apart. RJB Mining has 1,000 users for JDE’s World software.
Martin Altounyam, head of IT for RJB, said: ‘There is always going to be conflict between business and IT people about who controls the project. Separating the technology is a worthwhile objective, but I’m not sure how achievable it is.’
He added that, even with the new ActiveEra technology, there was no real impetus for RJB to upgrade to OneWorld. But its ability to integrate with the older World software meant some OneWorld modules could be introduced alongside the current system at a later date.
Sceptical users apart, the last few years have been good for JDE. Last year, as rivals like SAP and Baan saw profits drop, JDE doubled its income, with revenue rising 44%. It aims to overtake PeopleSoft in two years and SAP in five. McVaney also insisted that JDE’s robust growth rate could be sustained purely through software licence sales without resorting to services such as outsourcing.
But seasoned observers of the ERP industry will question whether ActiveEra is really a breakthrough in functionality or just a clever line in marketing.
The ‘flexible, but sophisticated’ pitch is is hardly new to ERP, but highlights the growing emphasis on catering for changing business needs. Most of JDE’s competitors have made similar claims – Baan, for instance, has a dynamic enterprise module to help users tweak their business processes.
ActiveEra was developed with Big Five firms, like Ernst & Young and KPMG, and could offer a new source of revenue to help develop best practice ‘activators’ for different industries and business functions.
But Tony King, European managing director for ERP operations at Deloitte Consulting, was not impressed. ‘ActiveEra is spin and nothing new,’ he said. ‘It’s like SAP four years ago when they talked about templates for users.’ He added that the joint emphasis on business best practice and technology had long been adopted by Deloittes. ‘The SAP model is pretty technical but increasingly its implementations are about businesses processes rather than technology configuration,’ he said.
Peter Thorne, a director with consultant Cambashi, argued that ActiveEra’s separation of business functionality from the underlying technology was an interesting innovation. ‘The complete separation of business and technology is new, although you need to select the right activators for your business,’ he said.
Thorne added that ActiveEra had the potential to make life easier for finance staff by giving them more independence from the IT department.
This could mean introducing an automatic email alert system to help chase debtors without having to sit down and plan the idea with the IT department.
But a peaceful co-existence between IT and business systems will demand restricted access to finance and business functions to keep track of departmental spending, he pointed out.
While JDE is aiming to take on SAP, Baan, PeopleSoft and Oracle at the high end, it could open the mid-range market up both for smaller companies such as Platinum. JDE could also bump into the big players as they attempt to move downmarket. Michael Pennell, vice-president for product marketing at Platinum Software, said although JDE was a strong competitor, it was handicapped by its large AS/400 user base. ‘They’re very strong and definitely a threat, but they seem to be going more upmarket. However, they have to focus on Windows NT and SQL Server revenue. The mid-market is not looking for AS/400s.’
JDE’s aim to become the number one vendor in the ERP market within five years is certainly ambitious, but the software roadside is littered with vendors that have set out to overtake the German juggernaut of SAP. And if JDE, still a relatively newcomer to the high end of the market, sees its licence revenues dip after 2000, then the enhanced flexibility offered through ActiveEra will be little consolation.
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