Merger OK say users

Juken Nissho head office accountant Allan Rohde says he 'hasn't given too much thought' to the acquisition of JD Edwards by PeopleSoft announced last week. However, the prospect wasn't worrying him unduly. 'I can't see it having any major impact on us.'

Juken Nissho head office accountant Allan Rohde says he "hasn't given too much thought" to the acquisition of JD Edwards by PeopleSoft announced last week.

Speaking before the weekend's announcement about Oracle's intention to acquire PeopleSoft, the prospect of of PeopleSoft merging with JD Edwards wasn't worrying him unduly. "I can't see it having any major impact on us."

Juken Nissho, which runs timber mills in Kaitaia, Gisborne and Masterton and owns licences to cut timber at three plantations, recently replaced a disparate set of enterprise systems with JD Edwards' ERP 8 package.

The package, which includes financial, inventory, sales order management and payroll modules, went live earlier this year and Rohde says it's generally been a success.

"You have your teething problems, but we're getting over them and things are settling down and going relatively satisfactorily."

Juken Nissho chose ERP 8 over offerings from SAP, PeopleSoft, Oracle, Intentia and Navision. The upgrade was prompted by the company's Japanese parent wanting reports within three days.

Mid Central District Health Board IS manager Chris Dever says he has no problem with the PeopleSoft takeover.

"It's going to happen, they're both significant players and there will be a migration path to the new platform."

The DHB has been using JD Edwards' OneWorld since 1999 and Dever says the system, which replaced SSA BPCS, "goes well, but it's a complex tool and shouldn't be underestimated".

On the PeopleSoft side, Manukau City Council information and technology services manager David Stringer says he doesn't see it affecting the organisation.

"I imagine that seeing we've made our choice, it provides added weight to that vendor."

The council is implementing PeopleSoft CRM, financials, HR and a portal, all planned to go live later this year, to replace several aging systems.

Fisher and Paykel IS head Andrew Cook says his initial reaction was "one of surprise - we didn't know it was coming."

It's not a cause for concern, though.

"We don't think it'll make much difference to us - it makes no difference to our immediate plans."

Fisher and Paykel implemented OneWorld XE in 1999 and Cook says the company is "perfectly happy" with how it's running.

"We had some grief during installation, like any install, but now that we have it, we're very happy with it."

John McCullough, industry solutions manager at HP's enterprise systems group and an attendee at a JD Edwards presentation in Auckland last week, says the acquisition is "a lead-in" to the predicted reduction in ERP vendors.

"Mergers and acquisitions are a way of life, and for customers it provides a good breadth of product capability," he says.

"From a New Zealand perspective, PeopleSoft [is] much smaller than JD Edwards, so it'll be beneficial to PeopleSoft and get them into the SME market. And for JD Edwards, HR isn't an area where they've been a real player, so it's a good thing."

Meanwhile, Gartner issued a statement shortly after the announcement that made a number of predictions about the merged company's future.

"PeopleSoft will likely organise JDE as a line of business focused on the mid market, with the existing PeopleSoft products focused on large enterprises. Though the merger is simple in concept, execution will entail abundant complexities and PeopleSoft will consolidate general and administrative expenses and search for operational efficiency. It will seek consolidation targets among the merged entity's two sales forces, at least three product development teams and technical foundations and multiple support groups."

Gartner says over time, a high- and low-end product strategy may work, but product rationalisation is likely to cause some "evolution and displacement of products, strategies, technology and people".

Gartner predicts rationalisation of both companies' current CRM products, indirect rationalisation in the distribution and reseller channel, with PeopleSoft HR products becoming available through the mid-market channel and supply chain planning product rationalisation.

"PeopleSoft realises the JDE AS/400 customer base is a valuable, entrenched asset and will support that product line at least until mid-2007."

Customers won't feel any impact from the acquisition until next year, but a details of the merger come out, the impact on specific products will become clearer. according to Gartner's statement.

The merged entity will have a combined annual revenue of $US2.8 billion, making it the second largest enterprise application software vendor after SAP.

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