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PeopleSoft Turns Up the Heat
PeopleSoft makes its big bet on e-business at its strategy summit in Las Vegas.
Posted Apr 29, 2002
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Amid flashing lights, rolling dice and a whole lot of hoopla, PeopleSoft made its big bet on e-business at its strategy summit in Las Vegas. Despite lagging Q1 numbers, the enterprise software vendor unveiled plans for four vertical flavors of its CRM suite; three modules that make up a brand new human capital-management solutions set; two modules to add to its existing SCM suite; and a bevy of customer wins this year.

Tailoring CRM solutions to certain verticals has become a key strategy among vendors ---- industry leader Siebel touts 20 versions. To this end, PeopleSoft announced plans for CRM versions in government, insurance, energy and high-tech, all of which will be released later this year. And PeopleSoft touted new CRM customers, including Sears, Roebuck and Co., Wells Fargo, and Hughes Network Systems.

The new verticals point to PeopleSoft's strengths, industry watchers say, especially in government where the software vendor came off an impressive CRM customer win -- the Internal Revenue Service -- last summer. "With a win like that, PeopleSoft could go into other government agencies," says Kelly Span, senior analyst at market researcher Current Analysis, though she's quick to point out that the government is chock full of regulations and privacy issues. The complexity of this sector means that no single software vendor has a "slam dunk" in this space, she says.

Then again, PeopleSoft's flagship human resources-management system has become a staple in government. Case in point: The Department of Defense uses PeopleSoft's HR system to support all of the soldiers in the military. "Historically, we've done about 20 percent of our business in the government vertical, across all of our business lines," says PeopleSoft CTO Rick Bergquist.

PeopleSoft added a new wireless architecture to its sales force-automation solution. Berquist claims the architecture is easy to use and makes synchronization of mobile devices to desktop computers a snap. "The reason for many CRM failures is that sales forces find CRM cumbersome and difficult to use," says Bergquist. "We took a year's worth of data and synchronized it in six minutes -- significantly less than the many hours it would have [taken] in different approaches."

Playing off its strengths, PeopleSoft also announced a new family of products, called human capital-management solutions, aimed at improving employee productivity and retention. The three modules, planned for release in Q3, include sales incentive management, performance management and enterprise learning management. "These are products designed to align what the work force is doing, how you reward the work force, and how you provide feedback to either correct or reinforce behaviors to get business outcomes," says Jenni Lehman, vice president of global human capital-management strategy at PeopleSoft, adding, "We're known for our people processes."

Not surprisingly, these modules are deeply integrated with PeopleSoft HRMS. They ride the current trend of employee relationship management -- that is, software that helps get more out of employees while keeping costs low. "Enterprises have the obligation to shift their narrow views of human capital management from traditional HR support such as benefits, personnel or payroll, to the delivery of a comprehensive set of enabling services required by employees and managers," said Kathy Harris, vice president and research director at Gartner Group in a statement. "Enterprises must broaden their views of human capital-management ... by integrating critical services such as knowledge management, business intelligence, and e-learning that are outside the scope of traditional HR."

The third prong of PeopleSoft's announcement today concerns supply-chain management (SCM). During Q1 this year, more than 50 organizations, (notably Toyota Motor, Honeywell FM&T, Sprint and NEC Electronics), went live on PeopleSoft SCM, the company claims. New Q1 customer wins included Time Warner Cable; Duke Energy; Ford Motor; Ameriquest Morgage; Office Depot and others. All told though, the wins could not prevent PeopleSoft from missing estimates of $160 million in sales for its first quarter this year.

Undaunted, PeopleSoft unveiled two new modules in is SCM suite: strategic sourcing and trading partner management. They round out a suite that already consists of SRM manufacturing; supply chain planning; and customer fulfillment management. And many industry watchers continue to be bullish on PeopleSoft's prospects in the wide-open e-business space. "PeopleSoft led with its Internet architecture and has great technology," concludes Mark Verbeck, principal at financial research firm Think Equity Partners.

Tom Kaneshige also writes for Line56.com

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