PeopleSoft Says It’s Working Hard to Make a Better World
September 13, 2004 Alex Woodie
It’s been a year since PeopleSoft acquired J.D. Edwards, and while there have been some rough patches, PeopleSoft is pleased overall with how things are going. As far as the World product line goes, PeopleSoft says it has increased developer resources, and enjoys a 90 percent satisfaction rating among former J.D. Edwards customers. Most World users seem happy with the product improvements but cite concerns in other areas, such as tech support and maintenance fees.
With 6,700 users, J.D. Edwards was the gold standard of OS/400 ERP software providers. When the Denver, Colorado, company was acquired last summer by PeopleSoft, based in Pleasanton, California, officials with both companies called it a win-win for everybody involved: customers, employees, and shareholders.
Following the acquisition, one of the first things PeopleSoft did was to put WorldSoftware users at ease by pledging to support World (as WorldSoftware became known) forever, basically, just as J.D. Edwards had done several years before when users revolted at the prospect of being forced to upgrade to OneWorld (which is now called EnterpriseOne). Then the company got busy on a major new release of World that would include a new HTML interface–the number-one enhancement requested by users–which became available in March 2004 as World Version A7.3 Cumulative Update 15 (see “PeopleSoft Gives World ERP Suite a Web Interface”).
World customers have lauded PeopleSoft for the new interface, which they say was necessary in order to keep their users from rebelling against World (it was available only in green-screen, unless you customized it yourself). Besides the GUI, the new release of World had 53 percent more enhancements than the previous release, under J.D. Edwards; this resulted in a 39 percent increase of developer resources devoted to World over what J.D. Edwards spent, company officials say. Right now, these “developer resources” (PeopleSoft declines to specify exactly how many people are working on World, but does say that developers in India are working on World for the first time) are working on a service pack for World Version A8.1 this fall, and Update 16 for World Version A7.3, which will focus on supply chain functionality and should be out next spring.
John Schiff, PeopleSoft’s director of strategy for the World product line, says that the process of merging J.D. Edwards into PeopleSoft is for the most part over, and that the company is now hitting on all cylinders. “It’s been an exciting year for World and for employees in the World organization,” Schiff says. “We’ve come together as a company, which has been great, as we’ve been able to invest in more developer resources and provide better support.”
Schiff says that World is standing on its own now, more so than it did under J.D. Edwards. “We’re getting more feedback these days,” he says. “One of the more exciting things [is that PeopleSoft] is committed to the product line, committed to bringing out enhancements. There are no restrictions [as there were within J.D. Edwards] as to whether this will be part of World, or OneWorld. World is seen as a product in its own right.”
To see if PeopleSoft’s claims mesh with how actual World users feel about the product and PeopleSoft, Guild Companies spoke with five IT managers at World shops. All of them were impressed, to some degree, with the product enhancements PeopleSoft is making.
Al Hintz, director of information services at CCL Custom Manufacturing, said, “Web enablement of the World product is a significant selling point.” Another IT manager, for a midsized food grower that requested its name not be used, because it is being acquired, also pointed to the new Web interface. “The last cumulative update for World did have more enhancements and fixes than the last several releases have had in total,” she said. Another analyst, with Washington Companies in Montana, a $1 billion conglomerate of companies in mining, land management, and transportation, says, “I would have to generally say they are ‘doing things right by us’ right now. They are taking care of the product.”
The enhancements PeopleSoft is making to World prove the company wants to keep the product around for the long haul, says Martin Fern, the manager of information systems at a large international steel services firm. “J.D. Edwards at various times announced the end of life [for World], which was a serious problem for us. When we head the rumors of the acquisition by PeopleSoft, we were very worried indeed, as we didn’t know what the plans were,” he says. “And now they’re remarketing it and redeveloping it. This does not happen to a dead duck. We’re sure this product is going to be around for along time.”
While PeopleSoft’s product enhancements were applauded by all five managers, three of the managers reported difficulties in getting good technical service from PeopleSoft.
“It has become increasingly difficult to get technical support when calling in to the help desk,” the IT manager for the food grower said. “We find that we are often transferred two to three times before anyone is able to dig into the issue.” The analyst with Washington Companies is having similar experiences. “Global support is still being integrated, so calls to them take awhile to get routed to the correct people,” he said.
Another person with experience in managing World accounts, Steve Landess, says he was never very impressed with J.D. Edwards’ support before the PeopleSoft acquisition, and that the poor level of service has continued under PeopleSoft. “In the past, I have called J.D. Edwards technical support on numerous occasions, and in most cases did not receive what I would call stellar support.”
One manager says PeopleSoft has improved on J.D. Edwards’ technical support. “We used to have trepidation. Their response was sluggish, and the quality of their response was not necessarily good,” Fern says. “Since then we’ve noticed such a massive improvement.”
Hintz says he doesn’t have a problem with the technical support at PeopleSoft. “I think, generally, any time an organization is turned over, a few people pass on. That transition went fairly smooth,” he says. “There was a time when J.D. Edwards had taken away a lot of support [personnel] and had them trained in OneWorld, creating a lack of support for all the World customers.”
PeopleSoft is implementing a new Web-based automated support system that will be used across its three product lines. Behind that system are most of the same technical support personnel in Denver who worked World for J.D. Edwards, PeopleSoft’s Schiff says. “We have very qualified staff sitting behind the product. It’s the same people,” he says.
SURVEY SAYS. . .
Schiff says he is baffled by reports in the industry press that customers don’t feel PeopleSoft is as committed as it could be to the former J.D. Edwards products or its customers. “I have not heard that from customers. We survey customers constantly,” he says. The most recent survey gave PeopleSoft an average of a 90 percent customer satisfaction rating across several categories (the company refused to provide more detailed results of its in-house surveys).
While PeopleSoft’s refusal to provide details fuels some skepticism, an independent report came up with similar numbers. In January the IDC analyst group surveyed former J.D. Edwards customers to see how they felt about the acquisition by PeopleSoft. As it turns out, 80 percent had a more favorable view of PeopleSoft following the acquisition (see “IDC Says JDE Users Have Favorable Views of PeopleSoft”), which is close enough to PeopleSoft’s in-house number to warrant some speculation over whether the complaints are as widespread as some reports have made them out to be.
QUEST AND PEOPLESOFT
Hintz’s biggest concern has been the way PeopleSoft handled its relationship with Quest, the independent group of about 15,000 J.D. Edwards users, which had a close relationship with J.D. Edwards leading up to the acquisition. “Basically PeopleSoft forgot that Quest was made up of users, not a competing organization, and things went downhill rapidly between PeopleSoft and Quest,” Hintz says. “Both had their points, but it left users wondering what was going on.”
Hintz was the president of Quest’s consumer processed goods special interest group, which provided an avenue for users to communicate to J.D. Edwards the requirements that their industry had in store for the World software, and what changes would be needed. Since PeopleSoft did not recognize Quest, there was about a one-year gap in this critical give-and-take between enterprise software developers and their users, until all 20 or so special interest groups eventually migrated to equivalent committees, called industry user groups, within the PeopleSoft organization. “Quest is going to be a shell of its former self because the special interest groups have gone away,” Hintz says.
MAINTENANCE FEE INCREASES ON THE HORIZON?
Then there is the touchy subject of maintenance fees. Before it acquired J.D. Edwards, PeopleSoft priced all maintenance fees for what it now calls its Enterprise line based on “value-based pricing,” which is not based on server capacity, number of processors, or number of users (which is how J.D. Edwards priced its software), but is a complex equation that assesses the value of the software to the business based on industry, annual revenue, and other factors.
Some World customers are concerned that PeopleSoft will decide to impose value-based pricing on World customers when those customers’ contracts run out, which could bring about increases in maintenance fees. Hintz says that PeopleSoft wants to increase his World fees by 10 to 20 percent when his current contract runs out in a year. Another World customer says maintenance fees went up 15 percent following the acquisition.
Schiff denies that PeopleSoft has forced any World customers to renegotiate their contracts. All World customers are given a choice of moving to value-based pricing or sticking with their current contracts, he says. PeopleSoft provided this statement about its maintenance fee policy: “Customers who decide not to migrate to current PeopleSoft enterprise or solution price models will have their annual maintenance fees calculated based upon the price model that was utilized for each of their software license contracts.”
‘NOT A BAD JOB’
Overall, World customers have expressed satisfaction with PeopleSoft’s acquisitions, with the product enhancements getting a big thumbs-up. While the Oracle takeover still looms as a wildcard for World’s continued existence, PeopleSoft has put World customers at ease by showing that it will continue to improve the application.
The report on technical support is mixed, with some customers saying it has regressed, some saying it has improved, and others saying J.D. Edwards did it poorly to begin with. The standoff with Quest is over, with PeopleSoft basically taking over some of its core responsibilities. Quest won’t be the same, but you will see Quest at PeopleSoft’s Connect conference in San Francisco next week. As for maintenance fee increases, PeopleSoft can always make the argument that improvements in “developer resources” have to come from somewhere.
“A year later, not a bad job,” Hintz summarizes. “Could have been better, but not a bad job.”
Editor’s Note: This article has been corrected since it was first published. Connect is PeopleSoft’s conference, not Quest’s, as originally stated. And the conference will be held next week, not next month, as originally stated. Guild Companies regrets the errors. [Changes made 9/15/04.]