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COVER STORY: Enterprise Systems: Risky Business?
9/23/2005
Influence Vendor DirectionIn the early stages of the Oracle takeover bid, it was not so clear that things would go smoothly, and the client base—organized as the PeopleSoft Higher Education Users Group (www.heug.org)—was prepared to go its own way, if necessary. There was talk of forming a nonprofit consortium to keep the PeopleSoft applications alive long enough to allow the member institutions to choose a new course. “The worst-case scenario was that the only purpose of the merger was to capture the revenue stream and customer base, but not to maintain the business functionality, and so to force a transition,” says Huish.
Did the user group’s readiness to pursue other alternatives influence Oracle’s decisions about how to handle the transition? “It couldn’t have been a bad thing,” says Huish, “although the quality of the underlying PeopleSoft functionality ultimately would have carried the day.”
In the end, the plan that Oracle developed was aimed at convincing the client base that their message had been heard and that their needs, as well as Oracle’s business objectives, would drive the agenda.
“We have tried to listen to customers and reassure them about the continuity of service,” says Jim McGlothlin, VP for Higher Education at Oracle. “The key to the roadmap is to give the customers plenty of time to determine their own migration timeline. Customers have various goals. Some want to take advantage of the new version as soon as possible, others want to minimize the impact of their conversions.” McGlothlin himself is a symbol of Oracle’s desire to make the blending of the two companies smooth: A former Oracle executive who went to work for People- Soft’s Education and Government division, he is now back at Oracle after the acquisition, as one of the people overseeing the melding of the two companies’ higher education offerings.
The new Oracle roadmap provides for a major release of the PeopleSoft software, version 9.0, in 2006, followed by a fusion of the Oracle and PeopleSoft suites in about 2008. The fusion product is still in the design stage. Oracle says that the expense and change required to follow the new roadmap will not be much greater than the upgrade path for PeopleSoft would have been, if they had not acquired the company. If institutions generally agree with that, it is because customers who choose products at this level already accept high levels of technology evolution as unavoidable, and have budgeted for it.
| Insider Tip |
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| “We have tried to reassure customers about the continuity of service, but the key to the [transition] roadmap is to give the customers plenty of time to determine their own migration timeline.” —Jim McGlothlin, Oracle |
Weigh Industry Clout vs. Higher Ed Market Share
When Northern Kentucky University went looking to replace its ’90s-era software, the metropolitan masters institution saw that it had a lot at stake. “The partnership with a vendor becomes especially important for schools in the middle,” says Bill Reed, director of Special Projects at Northern Kentucky. “We only get one shot at doing this right. If we got halfway down the road with someone and we had to stop and start over, that would be a disaster.”
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