No Regrets For JDE Shop Following Move To Third-Party Support
March 16, 2016 Alex Woodie
Like most technology executives, Dean Foods CIO Brian Murphy has to balance his company’s wants and needs. Its JD Edwards ERP systems must be maintained, but at the same time, employees desire things that make their lives easier, such as a new email system. Murphy found a way to fit both items into his budget after shifting the JD Edwards maintenance and technical support duties from Oracle to Rimini Street.
Dean Foods is a longtime user of the IBM midrange server that’s gone by various names over its nearly four-decade run. The Dallas, Texas-based company is one of the largest manufacturers and distributors of dairy products in the United States, and as such it’s done a lot of custom coding. Its homegrown Dairy Management System (DMS) was built long ago with a mix of RPG and LANSA code, and still serves the company’s needs.
Dean Foods is also a big user of Oracle’s JD Edwards ERP software products, along with IBM i applications from other vendors. Dean Foods powers its order-to-cash system using the original JD Edwards World product, while it relies on the newer EnterpriseOne software for its company-wide general ledger and financials.
Both systems have been modified to some extent and are critical to day-to-day functioning of the $8.2 billion conglomerate. But at the same time, Dean Foods isn’t counting on innovation in the ERP systems to drive competitive advantage. “It’s not like the business is saying I need more and more capabilities within the JDE systems,” Murphy says. “It’s a GL. There’s only so much you have to do, unless the GAAP laws considerably change.”
Like many JD Edwards customers, Dean Foods continued to pay Oracle an annual maintenance fee in case anything went wrong. “It’s an insurance policy,” Murphy says. “That’s how we view it.”
However, at close to seven digits, the costs of the insurance policy with Oracle was proving to be out of line with the expected benefits–especially considering the fact that Dean Foods makes on average one (very expensive) call per year to Oracle’s technical support department on one of those platforms. “I have very low risk and very low costs,” Murphy says. “But we have a couple billion dollars going through that specific platform. I don’t want to risk having an issue and having to tell my business we can’t get that platform back up.”
In early 2014 Murphy did the math and decided that it was time to explore other options. He evaluated several providers of third-party maintenance for JD Edwards ERP systems and eventually settled on Rimini Street, which is arguably the biggest and most established third-party provider serving the JD Edwards installed base.
Initially, Murphy was wary of Rimini’s claims, in particular Rimini’s guarantee that customers would save 50 percent of their maintenance fees while getting better services. “I’ve heard that before,” Murphy says. “It’s usually too good to be true.”
But after beginning the onboarding process with Rimini, Murphy’s skepticism gradually turned around. In particular, Murphy was pleased that Rimini assigned a dedicated contact engineer to the Dean Foods account.
“We like that approach,” Murphy says. “It gives us a lot of stability in terms of who we’re dealing with. You don’t necessarily get that from Oracle. You go into the queue and get somebody you may have never dealt with before.”
Patches and Upgrades
Murphy was particularly impressed with the flexibility that Rimini demonstrated toward its JD Edwards EnterpriseOne systems, which the company adapted to suit its particular needs. The dairy business has certain financial requirements that aren’t met in the plain vanilla ERP package, so the company made some modest modifications to make it its own.
Initially, there were no plans at Dean Foods to upgrade the EnterpriseOne system. The company was using version 9 of the ERP suite, which Oracle shipped in 2008. “We weren’t looking to do a lot of upgrades,” Murphy says. “It’s a pretty stable platform.”
Despite that stance, Dean Foods did embark on an upgrade of EnterpriseOne while under the care of Rimini. According to Murphy, the third-party support provider did everything right.
“The real test for us was when we had an issue, and how effective were they at resolving the issue,” Murphy says. “They didn’t use the [excuse of], ‘Well that’s a custom bit of code’ or ‘You need to apply this patch,’ which is what an Oracle or SAP will say. These guys [at Rimini] will just fix what needs fixing” as opposed to telling the client to install a bunch of patches.
The experience went so smooth that Murphy decided to expand his contract with Rimini and allow the company to manage its CNC (network) services for EnterpriseOne. Overall, Murphy is pleased with the work done by to Rimini.
“I have very low risk and very low costs,” Murphy says. “But we have all our financials going through that platform. Am I going to go to my boss, the CEO, and say, ‘We saved on maintenance on Oracle, but by the way we couldn’t close the books’? You’ve really got to have that confidence that you’re not going to get into that dialog. You’ve got to save the money and close the books.”
A Breath of Fresh Air
While negotiating the contract with Rimini, Murphy also talked with Oracle about its JD Edwards maintenance bill. To its credit, the IT giant engaged with the CIO and ultimately offered to throw in some credits on other products and training. But ultimately, the credits could not compare with the promise of saving hundreds of thousands of dollars in cold hard cash.
Oracle simply was not delivering enough value for the cost of the maintenance, Murphy says. “I was open with Oracle,” he says. “I said, ‘Look guys, you know your margin better than I do, and my viewpoint is you’re making too much margin on me. If you don’t change your margin structure, I’m probably going to make a similar decisions going down the path.'”
Dean Foods is now looking at areas where options are available with other third-party vendors. Having proved the approach, they will continue to shift dollars from run to grow. Whether that be in software or in hardware maintenance, they welcome the opportunity.
Murphy appreciates how Rimini is disrupting the business of enterprise software. “I think over time the Oracle mega vendors of this world have been making an awful lot of money for doing very little for the customers,” he says. “These companies like Rimini are finding a breath of fresh air for us and delivering the same services at a cost that we feel is realistic.”
Murphy applied the money he saved on JD Edwards maintenance to a new Microsoft O365 email system, which replaced the old IBM Lotus Domino system it had used for years. “That excited the company,” he says, “and Rimini helped me do it.”