A long year plugging the gaps

By ADAM GIFFORD

What a difference a year makes in the enterprise software business.

At last year's JD Edwards Nexus user group conference in Sydney, the Denver-based company reeked uncertainty - not a good signal when you want people to spend big money on your software.

The story it wanted to tell was that JD Edwards had the middleware to make its core ERP (enterprise resource planning) software work with much-hyped new products such as customer relationship management (CRM).

At Nexus last week in Melbourne, the mood was far more confident. New management, represented by marketing manager Les Wyatt, is seen to be addressing some of the missteps of the recent past and filling key gaps in the product range.

New chief executive Robert Dutkowsky has rescinded a decision by the previous management to set a termination date for World, the original JD Edwards product which runs on the IBM AS/400 server.

The company has promised to support World for as long as customers want to use it. This may indeed speed the transition to OneWorld, the open systems version of the software, as customers stop worrying about the technological aspects of the upgrade and focus instead on the business benefits they can gain from OneWorld's new features.

Some 44 per cent of JD Edwards' New Zealand customers are live on OneWorld, compared with 22 per cent worldwide.

Delegates responded favourably to a demonstration of the new CRM module, built with technology acquired through the purchase of CRM vendor YOUcentric.

"We haven't looked at JD Edwards in the past to provide CRM, but there are features in YOUcentric we are interested in," said Jonathan Iles from Winstone Wallboards.

Mr Wyatt said that, technologically, the YOUcentric buy was a pointer to JD Edwards' next generation architecture, for which planning had started.

The new architecture would be oriented round web services and the company would continue to support standard technologies such as Microsoft . NET and IBM's WebSphere tools.

"As a solution provider, we have to maintain the ability to deliver in different environments," he said.

"If you look at our customer base, they are not leading edge companies by and large, so they don't expect us to be out on the fringe of technology."

Mr Wyatt emphasised marketing and branding at the conference - something missing under founder and previous chief executive Ed McVaney, who seemed to take the view the software he wrote spoke for itself.

Although Mr Wyatt's marketing spiel was probably a bit slick for the hard-headed engineers, it will play well in the corporate boardrooms when directors consider buying new systems.

He said the most profitable and successful IT companies shared three attributes: product innovation, operational excellence and customer intimacy.

"The best companies are good at two of those things and superb at one.

"JD Edwards has chosen to be superb at customer intimacy. Our true brand is the way we do business."

That is a lesson it has relearned from its New Zealand and Australian operation.

Denver tried to boost licence sales by bringing in hundreds of partners to sell and implement its software but the local distributor kept a tight grip on the customer base.

The result being that while licence sales worldwide last year slumped 35 per cent to $US271 million ($647 million), in Australia and New Zealand they climbed 28 per cent to $US14 million, with services revenue up 27 per cent to $US25 million.

Former New Zealand and Australia managing director Richard Matthews is now responsible for all JD Edwards operations outside the US, and former New Zealand manager David Batkin is off to Denver to run product localisation and translation.

* Disclosure: Adam Gifford travelled to Australia as a guest of JD Edwards.