Letter to Ed


Dear Ed.

I have been sitting here thinking about why JDEC has slumped in comparison to its competitors - and trying to identify what I would do in your shoes in this market. I come to realize that JDEC is still an ERP company - not a Supply Chain Management company, nor a "Collaborative" company - their core competancy is ERP and the only competition in this market is PSFT, ORCL and SAP. This holds true with software sales - Numetrix is tiny in comparison with OneWorld and World sales.

Don't get me wrong - it is good to diversify your interests - but not in this market today. You need to concentrate on what you know and your internal strengths.

ERP is probably one of the most in depth, complex Enterprise Computer software solutions that one can buy. Whereas Supply Chain Management may have a couple hundred tables (at most) - and products such as i2 can be implemented in a couple of months - ERP systems usually have >3,000 tables - and certainly as many as 100,000 data items. The complexity of such a piece of software means that you often have multiple areas of expertise between consultants - and certainly no single "ERP expert".

ERP systems are extremely complex. I don't think that there are any other computer systems that can rank as complex as an ERP system. The data models that have been created for JDEC, PSFT, ORCL and SAP have taken thousands of man-years to develop.

So Ed - this means that your prospect makeup are not smallfry. As you know, little companies do not implement these systems - they are designed for larger companies with multiple departments. The more dependance on an ERP system a company has - the more ROI. You know that relationships with an ERP company like JDEC are (usually) very long term - as long as it gets when it comes to software.

But whats your differentiator, Ed ? The JOPS (JDE, Oracle, Peoplesoft and SAP) all have relatively the same product. At the very core, each of the companies provide applications to handle Financials, Distribution and Manufacturing. Each of the products certainly have "extras" such as HR, Customer Service, Sales Force Automation etc etc. - and each of these products allow for other 3rd party software to "plugin" such as Siebel, Ariba and i2 to provide extra ROI. So wheres your differentiator ?

I asked some employees and customers for their honest opinion about a single thing they would change if they were in your shoes -- the answers that came back were improvements in Quality, Employee satisfaction, Marketability, Product Diversification, Consultant Training and harsh business partner practices. But these are the same burdens that JDEC has always faced, and not all of these issues are much different from any of the other JOPS. A competant management team can address each one of the issues in their departments individually - they will certainly do something to kickstart the company.

So where are the issues ? Why is it that JDEC languishes at $1bn market cap compared to SAP, PSFT and ORCL ? Software sales is a huge driving force behind each of the JOPS because software represents new long term customer relationships. But what singular perspective can JDEC take to "make it right again" ?

Let us look at the real strategic direction of JDEC. Does JDEC have a direction ? Where are you going as far as your Business Plan ? At the moment, you are redefining the business plan - but still you focus on "Activera".

You see, I think a mistake was made with "Activera" - one of the very core strategies that you (or Doug) came up with a couple of years back.

Activera is the ability of JDE software to adapt and change to business and technical requirements. It encompasses JDE business practices, consultancy practices as well as the core culture. It is certainly a part of the JDE OneWorld product that allows customers to be flexible in their business processes.

I have been at companies where Activera has been a boon - companies have been able to change the software to suit their business processes, and as realtime as it gets. Its a huge differentiator over your competitors - since it does not require that the customer go back to the drawing board - and although the software has always had the ability - the Management Consultancy that you used in 1998 recommended it as a market definer.

OK - very nice. Activera is a good thing. However, was the move to market "Activera" too bold a move ?

Most companies that look to an ERP solution are usually in the 100m upwards revenue mark. JDEC share the midmarket with PSFT and ORCL - and faces competition from SAP coming down from the Fortune 500. It is therefore most likely that the ERP prospect is coming from the bottom - a growing company looking to decrease costs in their business processes by implementating an ERP system. Although there are companies that "downsize" from Mainframes to ERP - these are rarely JDEC customers and more SAP customers.

So when a customer comes to you and states "Show me how I will implement your software" - you answer "we can implement it any way you want, using Activera". Is this the right message ? SAP state instead "We have a template that closely matches your business - change your processes to match our template". It doesn't sound as nice at the table - but let us look at what a company is really looking for.

When I spoke to PSFT last May - I discovered that they had just gone through a major reorganization. Of course, the top management team had been shuffled around a bit - but what I noticed was that PSFT had split their consulting organization into 2 groups - one for direct consulting - and the other called "Solution Delivery". This new group was made up of top consultants with in-depth experience of implementations - and they provided the "templates" for their consulting organization. They did not need to do this - like SAP does - because their software was just as flexible as JDEC. But why ?

Templates tell a company that you are experienced with an implementation in their industry - it helps sell the product, and like Oracle - helps demonstrate the product in presales. Templates also assist in one of the most delicate areas of an ERP implementation - changing a bad business process. I personally believe that most companies, when they are ready for an ERP system - are looking to "clean shop" and eradicate some of the bad processes that have been created over their growth. The CFO wants to standardize on a process similar to every other competitor in his or her industry - and are looking for guidance. Hence the majority of implementations are spearheaded by Big 5 consulting organizations. Its interesting that Big 5 do not implement JDEC as well as the competitive products - because they find it hard to template.

Templating also helps to reduce the implementation time dramatically - and provides the customer with a well defined forecasted timeline in their implementation. As long a rigorous timescales are met, then the implementation would be successful.

Of course, not every implementation are looking for templates - but that is where the power of Activera can step in. I personally believe that maybe changing the methodology to use templating as much as possible and as early as possible - and complement it by using Activera.

I know this would change the methodology, and maybe even the culture of the company - but thats my 2 cents - and I didn't cost you millions to come up with a solution. Please, stop hacking blindly at the workforce and start looking at where your core competancy lies. Get a good management team made up of consultants and sales people - address the little issues and find a way to change the big picture. Its an uphill battle - but I think that your OneWorld product has a lot going for it, much more than your competitors.

So please, don't read this as an attack on Activera - it was a bold decision at the time - but companies are screaming for some sort of consolidation of business processes right now. Come up with vertical templates in Financials, Distribution and Manufacturing - and you'll be 80% of the way there.

Sell your core competancy.

Fascinating reading anon, but may one ask why you posted it here?

Is big Ed a "lurker" on the jdelist? (as some JDE employees are)

Oh, and what is the significance of the "anonxe" moniker?

Just curious.

Larry Jones
[email protected]
OneWorld B733.1, SP 11.3
HPUX 11, Oracle SE 8.1.6
SandBox: OneWorld XE SP15
Extremely good post anonxe - however, there are Solution Kits available under OneWorld - information exists on the Knowledge garden.

Anyone with experience in the Solution Kits available ? Be an interesting side-topic !

Jon Steel

ERP Sourcing
[email protected]
Hi anonxe,

I just endorse Larry's and Jon's reply.
Have I good eyes? Have your post been read more than 3600 times on the Forum? And it is "just only" on the Forum! Let's add the listers counter to it! What a surprise!
I have never seen so greatly very high counter in former times.

Just for your information:
We recently also have created our "template" (OnePack) for our expectable partners which is a pre-configured OneWorld implementation with the flexibility to suit the potential partner's needs, it encompasses our Hungarian specialities as well as some industry branch specialities too.
Our target is to offer a quick(er), cheap(er) but flexible and effective OneWorld implementation for our expectable partners on the mid-market (for mid-size enterprises/companies).
We really hope that it will be a succes in the near future on our market.

Read You Again,


B7332 SP11, ESU 4116422, Intel NT4, SQL 7 SP1
(working with B7321, B7331, XE too)
I jumped up the number of 'views' once to get more people to read my post. You must have really had some time on your hands, anon.

I appreciate your thoughts.

[email protected]

Xe SP13.1, AS400 V4R3, CO-Oracle806, Co-A73c10, Citrix, NT JAS

Now you drive me a bit confused.
I am not sure that I understood correctly, are you "anonxe" too?
You have written: "to get more people to read my post"
Did I missunderstand it?

On the other hand I am very curious to that how many of the readers are working for J.D. Edwards Company? ;-)


B7332 SP11, ESU 4116422, Intel NT4, SQL 7 SP1
(working with B7321, B7331, XE too)
No, no! I'm not anon. I do not have near the business savoy that he/she has.

My apologies for the confusion,

[email protected]

Xe SP13.1, AS400 V4R3, CO-Oracle806, Co-A73c10, Citrix, NT JAS
This post was written by "anonxe" more than 2 years ago

Thought it was interesting to note in hindsight some of the predictions that were made by anonxe

Especially the reference to "consolidation" and the reference to the management.

I guess Ed really didn't hear the message 2 years ago....