SOME BIG BUILDERS THOUGHT MAYBE THIS WOULD BE the year—the year a major vendor, PeopleSoft, finally delivered on the promise of a single Web-based lifecycle construction management system. But as the clock wound down on 2004, it became clear that their dream of the efficiency incumbent in a single software solution that worked for everyone would have to wait yet another day.
Takeover turmoil, late delivery on sales software, and questions about the functionality of some modules conspired to derail PeopleSoft's Enterprise One software. Some leading big builders, who had been anxiously waiting its release, decided instead to stick with a best-of-breed approach, employing the best software they could find for various applications. Others took a harder look at competitors SAP and Constellation.
“We can't rely on one vendor to deliver all the functionality of a full construction management system,” concludes Charles Irsch, CIO of Centex, which earlier this year inked a deal with SAP to provide accounting software, replacing an old legacy system. Centex, one of the nation's largest builders, uses Pivotal on the sales side. “PeopleSoft has a vision they want to deliver. The question is will it be delivered,'' says Irsch.
There are two levels of uncertainty about the future of Enterprise One. The first is whether Oracle, which has launched a hostile takeover bid against PeopleSoft, will support major software in the home builder space. But there's also the question of whether the individual software applications within Enterprise One function well. It's for that reason that Beazer Homes, another bellwether builder in the high-tech world, has also decided to cherry pick its software.
“PeopleSoft has a long way to go before it can match the functionality of best-of-breed,'' says Beazer CIO Jonathan Smoke. Beazer has a vested interest in the outcome because it already uses pieces of PeopleSoft's system, which is an outgrowth of the J.D. Edwards system used for years by many of the largest builders.
“If you look at Enterprise One, it's simply a Web interface, and it's not giving us new features or functions,'' says Smoke. “It's also a new product, which injects risk into our environment,” Smoke says.
“It looks like a good platform. If we were starting from scratch that would be one thing, but we don't see a clear business case to put the company through that kind of trauma. If there's an acquisition where it makes sense to start from scratch, we'll entertain that.''
Legal Woes This has been a tough year for PeopleSoft in more ways than one. Every week, newspapers around the country report a new development in Oracle's attempted takeover of the company. Oracle has consistently argued that it needs the deal to compete globally against rivals such as SAP.
At press time in late November, things looked stark for PeopleSoft after more than 60 percent of its shareholders voted in favor of Oracle's $9.2 billion takeover bid. Oracle called on PeopleSoft to drop its “poison pill” anti-takeover defense, and pressed to have a Delaware judge remove the pill. With PeopleSoft's board rejecting Oracle's offer, the more likely scenario was that the merger bid would be decided in the spring of 2005 at PeopleSoft's annual board meeting at which time Oracle will try to get a pro-Oracle board elected. The latest round of news came after a federal judge ruled in favor of Oracle in the U.S. Department of Justice's antitrust case, the Justice decided against an appeal, and former PeopleSoft CEO Craig Conway was ousted. The European Commission has approved the merger.
The reality for PeopleSoft is that by not releasing all the features of Enterprise One until this year, the company was at least one year late delivering its product to home builders. In discussions with several CIOs from big home building companies, the general feeling was that if PeopleSoft/J.D. Edwards had launched a sales system a year or two ago, most big builders would have gladly boarded.