The stats pertaining to application development are particularly surprising considering the number of those jobs that are being outsourced and offshored to save company's money. Outsourcing is picking up in practice and general acceptance and some of the first jobs to go are those in call centers and those in application development. Many analysts have been loudly warning workers that they need to acquire new skills if application development is all they have on their resumes.Back in March I predicted that the trend to offshore software development would actually result in an increase in related jobs in the U.S.
[Maria] Schafer [of Meta Group] says not so.
"I think the outsourcing issue has gotten a huge amount of attention, but the reality is that it's a difficult thing to do and to do well," she says. "Clearly, outsourcing has begun to happen and it will increase over time. But fewer companies are doing that than most people believe or that the mass media would have you think."
The addition of Lilly, who has struggled recently, should fit nicely within the discrete solution product suite Infor Global offers, in particular, its Lean Manufacturing solution. Unlike fellow mid-market consolidator SSA-Global though, Infor does not appear to have a coherent strategy for bringing its products together, which over time could create a growing cost burden and compromise future R&D and support for its customers.Related posts
Title: The Enterprise System SpectatorI'm Frank Scavo and I approve this message.
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PeopleSoft officials also confirmed that Duffield circulated a memo to employees asserting that he "didn't come back here to sell to Oracle."There's more detail on eWeek.
"Rather, I'm here to beat Oracle in the marketplace, increase our revenues, re-energize our employees, and deliver greater long-term value to our shareholders," the memo said.
Frank, I would like your input on what you think about a potential client. This prospect first ran software suppliers through an extensive custom demonstration, detailed RFP response, and sales presentations. The prospect then made some first-round cuts to get to a short list and is now going into a reverse auction process in which they are introducing some new suppliers. This is a major multi billion dollar company.To be honest, I've never seen a company attempt to buy software like this. But let's turn it around and ask readers. If you're a software buyer, would you use a process like this? If you're a software vendor, what would you do in this situation? Click on the Read/Post Comment link below, or send me an email with your thoughts.
Mind you--we have been respecting the prospect’s process and rules, and now they pull this. It makes me wonder how the software industry will ever stay in business.
This prospect has also stated how important it is to build a strategic relationship. Also, the software solution isn't a simple straightforward application that anyone can do. In other words, it's not a commodity.
Your thoughts? Have you run into companies buying software like this lately?
Companies are increasingly getting the message.Dignan also points out the obstacles that CIOs face in eliminating, or consolidating, applications.At 3M, Jerry Erickson, vice president for applications, says he expects his company's effort to clean house will reduce an incalculable number of applications in use "by a factor of 5.'' If successful, 3M's cost of sales will decline by 1 percent or more. That's $92.8 million out of the company's current $9.3 billion in cost of sales. Add it up, and 3M could potentially boost its net income of $2.40 billion by 3.9 percent.
- General Motors has cut its mission-critical applications—systems that would hinder GM if they went down—from 7,000 in 1996 to just over 3,000 today. The company doesn't break out direct savings from the consolidation, but it's no coincidence that GM's information-technology budget has been driven down, from $4 billion to $3 billion over the same period.
- Hewlett-Packard intends to slash its enterprise resource planning systems from 21 to four. HP reckons it can cut total applications from 3,500 to 1,500. The consolidation effort is part of a plan to save $1 billion a year in overall operating costs.
- Boeing went from 4,500 applications in 2000 to 3,500 today, and its official target is 500. Chief information officer Scott Griffin says fewer programs will raise productivity, helping the company launch new products and services faster.
"Change is a lot easier when people trust that you are not doing anything that will hurt them," said Robert Jensen, assistant general manager in the L.A. municipal government's department of general services.Change is possible. Computerworld has more on the story.
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One of the keys to success that the general services department will be applying is that it will spend money upfront for change management -- a hard lesson learned from the initial rollout. Good change management requires a communication plan that identifies everyone whose role will change during the implementation.
"The plan needs to identify champions, owners, stakeholders and users and what and when you will communicate with them and the media used for that communication," Jensen explained. "The other part is how to self-motivate these folks to want to spread the word that the change is good and should be supported."
Mark Jarvis, Oracle's chief marketing officer, suggested in an internal June 3, 2003, e-mail that the company "use this news in order to create FUD with prospects and customers alike." FUD is a common term in the computer industry that describes a campaign to spread misinformation or exaggerations.Read the whole CNET article for more excerpts.
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Another excerpt included in the PeopleSoft interrogatory and Oracle's reply was an e-mail message sent by Keven Blake to Oracle President Charles Phillips and others on Sept. 10, 2003. It said that "(we) have successfully spread enough FUD along with our own capabilities to have a good average shot at winning."
"We have increased our total number of clients in this space by 40 to 50 percent," Kleinemeier said. He said that about 500 small businesses now use SAP's Business One software package and 2,000 mid-sized businesses use its All-in-One program. As a result, SAP is out in front of rival Microsoft and its "Microsoft Business Solutions" product.In response, Microsoft is reportedly cutting the price of Axapta by 12% in order to hold ground against SAP.
"Our sources indicate to us that the new PeopleSoft management team visited the Oracle campus last week. This indicates to us that (they are) more willing to engage in a dialogue with Oracle to discuss its options," said Prudential Equity Group analyst Brent Thrill in a note to clients.Further evidence that PeopleSoft's position may be softening came from Steven Goldby's second day on the stand in Oracle's lawsuit to overturn PeopleSoft's poison pill.
The PeopleSoft Inc. director who has been leading the defense of the software company's antitakeover measures said Tuesday the company's board is willing to talk about a deal with rival Oracle Corp.
On the stand for the second day in a Delaware court trial, PeopleSoft director Steven Goldby said German software company SAP AG was the chief beneficiary of the long-running takeover fight between the two companies.
PeopleSoft's board would be willing to talk about an Oracle acquisition now if the price was right and there was a "high certainty" that a deal could close quickly, Goldby said.
"There's been no management team meeting with Oracle," said PeopleSoft (PSFT) spokesman Steve Swasey.Looks like it was just a rumor.
He responded to questions following a report from analyst Brent Thill with Prudential Equity Group that stated such a meeting did happen. Thill cited "sources" that informed him PeopleSoft's new management team visited the Oracle (ORCL) campus last week. In a follow-up research note issued Tuesday afternoon, Thill said a PeopleSoft senior executive confirmed that no senior management members met with Oracle.
Oracle's lawyers played a five-minute videotape of the deposition, in which Conway acknowledged being less than honest during the conversation with analysts in September 2003. At the end of the video, after repeated questioning, Conway admitted that his remarks "weren't true."So this would explain why PeopleSoft only moved last week to fire Conway, a year after his "less than honest" remarks to analysts. Knowing that Conway's admission of his untruthfulness would come out in court this week probably forced PeopleSoft's hand.
Goldby said that last week was not the first time that the board had considered firing Conway, saying "it really goes back further than that." But the board waited to terminate Conway until it had good news to deliver as well, he said.I find that excuse pretty weak, since there have been other points since September 2003 when PeopleSoft had better-than-expected quarterly results and could have taken action against Conway.
Mr. Goldby, the PeopleSoft director, said the board had become increasingly concerned about Mr. Conway's "micromanagement," which made him unable to work well with the rest of PeopleSoft's senior executives. Three key executives were "terribly, terribly unhappy and likely to quit," he said.Back in March, I wrote a short post entitled, "Why are executives leaving PeopleSoft?," but didn't see that it might be a sign of dissatisfaction with Conway.
Charles Di Bona ... said he sees continued problems at PeopleSoft – ones that go deeper than the confusion created by Oracle's bid. He noted that the $150 million in software revenue is 9% lower than last year's third-quarter sales figure.Might be a bit overstated. But on the other hand Di Bona follows PeopleSoft pretty closely.
"I think a large part of the loss of confidence [in Conway] really is more around the J.D. Edwards situation than Oracle," Di Bona said, referring to PeopleSoft's problematic integration of former rival J.D. Edwards & Co., which it acquired last year. "This is not a growing company; this is an ailing company."
Since earlier this year, Lawson has said its business is being hurt by the ongoing efforts of competitor Oracle Corp. to buy another competitor, PeopleSoft, in an unfriendly takeover. The U.S. Department of Justice opposed the Oracle takeover of PeopleSoft on antitrust grounds, but Oracle won the case earlier this month and continued its takeover bid. As a result, some ERP customers have decided to wait out the battle to see which suppliers remain, Lawson said.As I recall, back in April during Oracle's anti-trust trial, Lawson took out two full page ads in the Wall Street Journal thanking Oracle for positioning Lawson as a top competitor!
What this tells me is that the board is in favor of throwing in the towel and, clearly, Conway was not ready to do so. This certainly clears the path for PeopleSoft to be acquired. ... One of the greatest obstacles in this battle has been Conway's ego and the emotional stake he has vested in attempting to out smart Larry Ellison. The removal of Conway eliminates the emotional factor from the process and clears the way for the founder of PeopleSoft, David Duffield, to come back and have the final say.Art Hogan, of Jefferies & Co says, "The obvious interpretation is that this makes the deal more doable."
Executives close to PeopleSoft said that while Mr. Conway's aggressive approach to the Oracle offer was a consideration in his removal, frustration with his handling of strategic business issues was also part of his undoing. Most notably, PeopleSoft's acquisition of J. D. Edwards in 2003, a project that Mr. Conway led, is largely considered a failure. The company has also been slow to give customers a clear plan for the future, the executives said.Although the NY Times insights are helpful, I am still perplexed by several things. First, the contention that the JDE acquisition has been a failure is surely a debatable point. Second, I was at PeopleSoft Connect press conference last week and did not hear any great skepticism voiced by these same analysts about PeopleSoft's product strategy. Finally, Duffield's comment about putting together a technology vision is really baffling--especially after PeopleSoft just signed a $1B agreement with IBM that addresses this very issue. What exactly would Duffield do in addition to, or differently from, what PeopleSoft just stated as a technology direction? Does Duffield disagree with the IBM alliance? If anything, Duffield's comment would make me more concerned about PeopleSoft's direction, not less concerned.
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Tad W. Piper, an analyst with Piper Jaffray, said the ouster of Mr. Conway could smooth the way for an acquisition by Oracle, but noted it was not the only reason for the board's decision. Problems with the company's product strategy were apparent at PeopleSoft's annual customer conference last week, he said, which might account for the timing of the board's announcement.
Other analysts said that the appointment of Mr. Duffield, the company's founder, as chief executive might indicate that the board, though unhappy with Mr. Conway, remained opposed to an Oracle takeover.
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Mr. Duffield told analysts on Friday that he planned to "put together a technology vision that's been absent for a period of time."
There is another interesting twist to this story and that is the appointment of former PeopleSoft employee, Aneel Bhusri, as Vice Chairman to lead the company's product and technology direction. In the conference call Duffield stated that he thought the technology vision at PeopleSoft was "lacking as of late," which brings into question what part of that vision was suspect. At Connect, the company announced a major partnership with IBM and touted the success of their Total Ownership Experience (TOE) initiative, which is getting significant traction among the customer base. Thus it is hard to determine where the company may be faltering - could it be the slow progress in integrating JD Edwards?Update, Oct 4. There's better information now emerging. See my post on Oct. 4, Why PeopleSoft fired CEO Conway.
