ERP systems for the 21st century, a buy-out market

Gijs Houtzagers
Director competence center PeopleSoft
Hoofdweg 640
P.o. box 255
2130 AJ Hoofddorp
The Netherlands
Tel 31 23 5659319
Fax 31 23 5659500
Email: [email protected]

Keywords:
Risks for the business
Integration technologies
Integration strategies
Consolidation

In the 20th century the 5 leading ERP vendors fought heavily to gain market
share, each with very different strategies towards their own software and
towards the market. The first decade of the 21st century will show a major
change in the ERP market. This change is being facilitated by the struggle for
market dominance of the two remaining vendors SAP and Oracle.
Look at the interesting figures that are part of this process:
1. Oracle is the largest supplier of ICT components. Lots of them rebuilt in
the newest technology, the so-called service oriented architecture, that
allows you to to provide processes in the web portal to be used with
other applications
2. Sap is the largest supplier of business applications, but is being
challenged mow Oracle has taken over the former number two,
PeopleSoft en intends to integrate both ERP systems in a couple of
years under the name Fusion
3. Sap has chosen not to reengineer the basic applications but to use a
tool, Netweaver, to access the applications. Again to capture processes
and publish them in the web portal
4. Oracle is hitting ground in permeating also the small and mid market.
It is doing so using its own applications. Sap has developed special
applications for these markets
5. In their struggle for marketshare both will also attack ERP systems in
other branches or in the small markets. Recently Oracle snatched
Retek, ERP for the retail market, for the nose of SAP
6. Some players will try to consolidate with each other to rebuff these
attacks, but they lack the enormous funds of SAP and Oracle
7. And most important: how will the customers react, because of the new
strategy of SAP to refund the investments in PeopleSoft and
JDedwards, the decision to follow the Oracle strategy or to over to SAP
is no longer a question of funds or investments but of choice for
technology, vendor’s strategy and functionality
This article will analyze in depth how this struggle will unfold and what are
the dangers for the business that use these ERP systems
Foreword
This article describes the world of ERP. It starts with a short description of the
history of ERP, it continues with a look ahead how ERP will cope with the
problem of flexibility as a result of the ever faster evolvement of the business
environment and the struggle for leadership in he market. The article ends
discussing the risks involved for the customer that has committed its
business processes to ERP and is surprised with the take-over by another
vendor and how a Dutch company, called Holland Casino is coping with this
issue.

Introduction

A short history
In the 1980s the use of computers in business generally fell into two very
different, and often co-existing camps. On one hand were the big mainframe
monoliths – large powerful computers that performed calculations such as
MRP1 and managed the financial records. This software was generally home-
built, run by specialists with a lot of technical knowledge, and difficult to
change. On the other hand were the PCs - computers so small and powerful
that they could fit comfortably on desktops. This level of computing was more
democratic - every manager in every department could write up or buy
applications that would help them manage their piece of the business.
Mainframes were not good at providing relevant, timely information in an
easy-to-use format. PCs could not store huge databases of corporate
information or simultaneously serve multiple users. And because there was
no easy way to connect the two on a timely basis, it lead to a massive
information management problem - how to co-ordinate all the data in all the
databases around a company.
What were needed were systems that could tie together all the information
stores in a company, while making the best use of desktop technology.
The result was ERP - a marriage of MRP II (Manufacturing Resource Planning)
systems and client/server technologies. MRP II was a model for bringing
together all the major processes of a business under a standard
computerised planning system2. Client/server refers to the technical means
by which a small, user-friendly computer (the client) could communicate with,
and extract information from, a large data-processing system (the server).
A number of software companies, such as SAP, Baan, and JD Edwards, were in
the right place at the right time. By repackaging their business software as
ERP, they were able to capitalise on a business world that was hungry for new
IT-driven solutions. ERP became a huge money-spinner almost overnight,
spurred on by legions of IT consultants who marketed it as the perfect
solution for every company's woes. The feverish demand to adopt ERP was
exacerbated by the latest management fad - Business Process Re-
engineering, and also the prospect of major problems with existing systems
during the change-over from the year 1999 to 2000 - the so-called Y2K bug.
Today the total ERP business is measured in tens of billions of dollars
annually, and the principal ERP vendors, such as SAP and Oracle, earn
revenues comparable with those of Microsoft.
But with the global acceptance of ERP new problems for the organizations
using it became visible:
1. Multiple methods of doing something are straightened into one way of
doing it to just one way - resulting in a lot of people with their noses
put out-of-joint when they are forced to give up their tried and tested
procedures for a standardised one.
2. The sharing of data globally threatens the many fiefdoms that exist in
any large company, particularly the ones that jealously guard their
information from other parts of the organisation. Because of
integration it is no longer clear who owns the data, thereby frustrating
integrated management information on boardroom level
3. Implementing ERP takes a lot of time - between one and three years -
and a lot can happen in any business during that time. Management
could change, new markets could open up, increased competition
might force the company to change course. Most ERP systems work
with parameters you have to set up before doing the real
implementation. Rethinking these parameters during the
implementation process results often in a reimplementation
4. ERP is very complex. As the company gets into the project, often lacks
in scoping occur and new understandings will continually come to light,
which might in some cases require significant changes to the project
timescales.
5. ERP is hugely expensive - it is not unusual for ERP budgets to overrun
wildly, as companies fail to account for all the non-software costs,
particularly the costs of training, back-filling key staff, overtime and
the aforementioned creep in scope and timescales. A key issue here
that is often

The Future of ERP

ERP is by no means some sort of management fad - it is, in fact, a product of
the increased automation of all aspects of the business environment that has
been taking place over many decades. Many of the world's largest companies
now use ERP software routinely, and increasingly many of the smaller ones
are adopting it also. Despite its costs and risks, ERP platforms help
companies compete better. Aside of this it becomes visible that integration
between organizations forces those who act within this chain to deploy the
ERP system that is used in the chain. This is stimulated by the strong trend
since the late 1990s, to conduct business online (e-business) and this cannot
be easily accomplished without an ERP platform working in the background.
One of the big improvement areas for ERP concerns increased flexibility.
Many ERP systems are notoriously difficult to change once the initial design is
complete. This is because most systems are parameters-driven. Once you
have set the parameters you cannot change them anymore without far-
reaching consequences for the implemented processes in the various
modules that are often not to be foreseen. The result is than a
reimplementation with all time and costs involved if it where the first
implementation. As a result, many sensible change initiatives get killed, and
companies can find it difficult to react quickly to rapid changes in the
business environment. Organizations are thus demanding that ERP systems
work more closely with other applications and that ERP suppliers make it
easier to implement changes without the need for huge delays and massive
budgets.
Also organizations are starting to link their computer systems together so
that even greater efficiencies may be realized. This has lead to the concept of
Extended ERP, where moves are afoot to deploy computer systems which not
only look inside the information of your own company, but can actually query
the core business data of customer and supplier systems in real-time.
Looking at the two remaining suppliers, Oracle and SAP one can see that they
are working on this issue. Oracle with self developed tools, advocating that
they now can deliver a services oriented architecture1
Another development that is already taking place is the consolidation phase.
From the big five, SAP, PeopleSoft, Baan, Oracle and JDEdwards that were
there at the beginning of the 21st century now only SAP and Oracle remain,
fighting for market share.
There is not very much market share to gain among the larger and especially
international companies. They already have their ERP in place and companies
are reluctant to replace their implemented ERP by something else because of
the large investments that were made during the implementation en the
invested knowledge on these systems.
Market share can however be gained by take-overs of other smaller ERP
suppliers. We saw this happen with the take-over of Baan by SSA, JDedwards
by PeopleSoft, PeopleSoft by Oracle en finally Retek by Oracle. More
takeovers will take place on mid-market level . In fact this has become a fight
for absolute dominance. SAP is the biggest, but Oracle is growing fast thanks
to these take-overs. Oracle shows more success in these take-overs than
SAP.
But SAP has reacted with a brilliant strategy. They have bought a PeopleSoft
development house, Tomorrownow, and are now offering PeopleSoft
customers the choice between the:
• Safe Harbor: Customers can stop their expensive support with
PeopleSoft and bring this support for half of the price at Tomorrownow.
They can also remain for en period of 10 years on their current version.
PeopleSoft allowed just a period of five years. So customers are not
pushed to do major expensive upgrades after a couple of years
• Safe Passage: SAP refunds 75% of the license costs customers have
initially paid for their PeopleSoft applications as a discount for the SAP
licenses. MySap is implemented at the customer and he will be able to
migrate application by application whenever he feels up to it.
This latest strategy looks contrary tot the statement mentioned earlier that
customers are not likely to change their current ERP applications by another.
1
Services Oriented architecture (SOA): enables creation of composite applications by
integrating a set of synchronous and asynchronous services and systems into a process flow.
Enabling these applications is a two-step process. The first step is to publish various services
that will be used in the application and the next step is to compose, or orchestrate them into
business flows. Publishing a service means taking a function within an existing application or
system and making it available in a standard way, while orchestration is composing multiple
services into an end-to-end business process.
This is however not the case, because the customer knows that eventually
PeopleSoft will no longer exist and will be replaced by Oracle apps. So a
migration will always be necessary. SAP has eliminated the Oracle advantage
that customers were facing a large disinvestment of their PeopleSoft
licenses. The choice is now whether to migrate to Oracle or to SAP.
Customers are now in the position to think “out-of-the-box”
. The choice is no longer blurred by discussions on disinvestments but can be
made on:
• Functionality: The functionality of SAP fits better with European
companies. The functionality of Oracle fits better with US companies
• Technical architecture: Sap consists on a lot of “best-of-breed”
products and is database independent: Oracle consists mostly of self-
developed applications and tools and only works with their own
database
• Vendor strategy: Anglo-Saxon model of Oracle vs. European model of
SAP
However because of the lack of analyzing capacity at the customers it is not
to be expected that more than 10% of the PeopleSoft customers will
exchange their licenses for SAP.
Still also the customers who remain with PeopleSoft/Oracle will have a chance
to renegotiate with their suppliers for better terms and lower support costs.
Also other ERP vendors, mostly local players will take part of the battle,
especially focusing on the crumbs. These crumbs can for instance be
companies that suffer financial problems and see the consolidation battle as
en excuse to get off the expensive support costs of PeopleSoft and Oracle
and exchange the product for a far more cheaper local solution, that can
even fit better for the local purposes than the international systems of SAP
and Oracle.
The second decade of the 21st century will present a huge effort for most of
the 12.700 PeopleSoft customers to define which road they want to travel. It
will also be interesting to see which supplier will win the war and what will
happen than. Will there be a party take part in this struggle. Only Microsoft
has the funds to interfere. But Microsoft is a close ally of SAP and has a lot to
loose if would participate. Their current ERP products are far from able to
cope with SAP and Oracle. The coming years will give an answer to these
questions, but at this moment the PeopleSoft and JDedwards customers are
more concerned what he should do the coming five years. The following case
provides an analysis for such a customer, the possible roads to follow and the
risks of these various roads involved.

Holland Casino
Holland Casino

Background
Thanks to a series of implementations and upgrades Holland Casino
succeeded in 2003 to develop a complete integrated solution for Finance, HR
and payroll with PeopleSoft. Also an extensive BPR project was implemented
and new HR processes were automated, like competence management and
training management.
Than in December 2004 the take-over followed, leaving Holland Casino with a
burden of questions how to proceed. Within a month time the decision was
made not to wait until all clouds around what will happen in the future with
PeopleSoft/Oracle are cleared, but directly starting an analysis of the various
possible scenarios en routings to follow.

The loss of integration was considered the main threat of the Oracle
takeover. How shall we succeed at a certain time again to provide the
organization with a similar integrated solution with the new product line
Oracle is promising to deliver. So it is not so much the various products that
are a risk but the way they are working with each other.
Of course acquired knowledge of PeopleSoft of the team members will be a
disinvestment, but these things happen. One specific crucial part of the
integration is the payroll process. It is completely unclair how in the future
this process will be integrated in the Oracle environment. Therefore it will
have the highest priority when it comes to choose which way to follow.
The basic question that predominates the following scenarios is: Will Holland
Casino accept the take over and follow the strategy of Oracle, or will the take
over result in a debate if we want to go through with Oracle/PeopleSoft or
choose for another option, like SAP, a local product or business process
outsourcing?
First we will focus on the Oracle strategy and which possible scenarios can be
the result of it.

Outline Oracle strategy

The take over of PeopleSoft by Oracle has two main reasons:
• Getting more market share and so threaten the no 1 position of Oracle
• Getting hold on the very lucrative support fee of the PeopleSoft
customers. The estimate is that a return on investment can be
obtained within 3 years.
Oracle communicated the following stages for the absorption Of PeopleSoft in
its own application suite.
1. Deployment of PeopleSoft 8.9 in 2005
2. Oracle e-business suite 12 in 2006 based on SOA (100% Java)
PeopleSoft Enterprise 9 in 2006 which can be considered a dead end
3. JDedwards 8.12 in 2006
4. Components FUSION (data hubs and transaction db’s) in 2006. All
8.000 developers will be working on this project
5. FUSION applications available in 2007. These applications will contain
minimal the same functionality as the Oracle apps version 12,
combined with the functionality of PeopleSoft 8.9
6. Migration in 2008, automated update
7. Until then maintenance of THREE development surroundings!
A remark with this outline. The concurrent development of three different
products with different development tools looks difficult, especially if all
developers are targeted at one product.
Holland Casino analyzed three possible scenarios for the coming 5 years:
Scenario 1 – The rest assured scenario

Oracle supports and develops the current PeopleSoft

products until 2013 and integrates all Oracle and
PeopleSoft products into an integrated suite
This scenario requires that Oracle during a period of eight years will do
system development with three different development tools, will support
various third party middleware products next to its own and third party
databases. This support is at this moment contrary to the Oracle strategy
concerning the Oracle products.
This scenario would also mean that there will be a version 9 of PeopleSoft.
Next to the development of version 9 a new product will be developed, called
Fusion, containing the best functionality of the current Oracle and PeopleSoft
products. Both products will be ready in 2008
Customers are allowed to migrate from 2008 to the new products, but they
don’t have to. They can wait until 2013. All products are being actively
supported until then.
This scenario is communicated by Oracle during the various trials. It differs
from previous take-overs, but there was never one of this size.
Migration towards the new product will only be supported for the highest
version of de PeopleSoft product line. This is by the way congruent with the
current PeopleSoft strategy on upgrades.

Probability of this scenario

The possibility that a supplier will maintain and develop two of the largest
ERP systems at the same time with totally different architecture,
development tools and functionality during a period of eight years looks
highly unlikely, because it is very costly and lacks focus.
This scenario is only possible if Oracle intends to integrate both products in a
new application. Question will remain: Will Oracle be successful to integrate
this new product with their middleware. It looks nearly impossible from a
technical point of view that they are able to reengineer al their products and
middleware within a period of three years (2008). According to research done
by Information Week in January 2005 2/3 of a group of 310 PeopleSoft
customers in the USA consider this as highly unlikely. This opinion is shared
by 51% of a group Oracle customers.
However this is the scenario that Oracle communicates and it fits the struggle
they want to enforce with SAP. This scenario is only possible if Oracle
succeeds in keeping PeopleSoft developers on board.
During the webcam on January 17 again this scenario was mentioned by
Oracle, however there were some inconsistencies in the presentations. Larry
Ellison mentioned the development of a version 9 of PeopleSoft while at the
same time he declared that all the developers of Oracle and PeopleSoft would
go working on the Fusion project. You cannot develop two applications at the
same time.
Somewhat later was mentioned that an automated migration toll would be
available in 2008 to migrate the last PeopleSoft 8 towards Fusion. Version 9
was no longer mentioned.
The conclusion is that at this moment it is a possible scenarion that however
can be readjusted if the integration becomes troublesome because of the
variety of products that have to be integrated.

Holland Casino strategy for this scenario

This scenario is the most favorable for Holland Casino. There is enough time
to prepare for a migration en to invest in knowledge on the new architecture
and development tools. However it is important to do a fit/gap research in
2005. An upgrade towards version 8.9 can be done in 2006 as well in 2007.
Migration towards Fusion should be planned in 2009, a year after the first
release. It is to be expected that the first release will contain a lot of faults
and errors.

Scenario 2: The take it or leave it scenario.

ORACLE supports for the time being the existing

PeopleSoft products but will end this within a
period of 30 months. Tools will be provided for a
migration to the Oracle suite.
This scenario requires fast decision making. The following questions are
relevant:

1. Will Holland Casino remains a Dutch organization. In that case it is

possible to dunk PeopleSoft and implement a local product that is more
orchestrated for the Dutch regulations and easier to manage.
2. If Holland Casino intends to become an international organization it
must chose for an international product, like PeopleSoft/Oracle. A
choice for SAP is than also a possibility. An advantage of SAP is that
the payroll functionality is localized for the Dutch market and proven
technology. A migration to SAP will be cheaper than the
Oracle/PeopleSoft migration because it is quite clear at this moment
how the migration should be performed, while nothing is known of the
future Fusion product and because of the possibility to do payroll in
house. SAP can also be the choice in case of question 1
3. Does Holland Casino accepts that it is forced towards an Oracle
product with one update en one migration within 5 years, not knowing
what the result will be, or do we define an "out- of-the-box" strategy.
For instance we are going to outsource all our ERP systems to a third
party, like TomorrowNow. This party has been taken over by SAP in
January 2005.

Probability of this scenario

Gartner describes this scenario as the most probable in a presentation of
November, 4 2004. It fits the behavior that Oracle has shown in the past and
it fits the overall strategy of Oracle to provide an integrated SOA architecture
for all its products with no room for third party products providing an
environment with Oracle apps, Oracle application server, Oracle middleware
and Oracle database.
Oracle risks that a number of clients will turn their back that would remain at
Oracle in case of scenario 1. The expectation is that more than 75%
(PeopleSoft has now 12.700 customers) of the customers will remain
customer because of the investments in the past and the lack of knowledge
of other environments like SAP.
The announcements that Oracle will put all the developers, Oracle AND
PeopleSoft, on the FUSION project seems to support this scenario. However it
conflicts profoundly with everything Oracle is now promising and would in the
end backfire. Also would Oracle give way for lawsuits because of lack of
integrity. In the US there is a lot of regulations on this issue. Therefore we
consider this scenario as least probable.

HC strategy for this scenario

The high speed of this scenario highlights the question if HC should let it be
pushed to go along with Oracle. High speed also leads to higher risk and one
should keep in mind that the future will probably not provide a better
environment than HC has now in place. High speed also leads often to
products that are not 100% tested.
If HC decides it will not be pushed, the coming lack of support does not pose
a problem for the short term. All PeopleSoft environments are stable,
including middleware, databases and system environment. The problem will
start to occur if one of the components other than the application is no longer
supported, for instance Microsoft 2000. A newer version effects all other
components and one will have to migrate if that occurs. This situation will
come up in 2006.
If HC chooses for this scenario than all PeopleSoft applications must be
upgraded towards version 8.9 in 2006. The contract with the payroll provider
must be terminated on December, 31 2005, else a new contract period of
three years will be at hand.
In 2007 or 2008, depending when Oracle gives the signal, the migration
towards Fusion will take place. The results for payroll cannot, at this moment,
be assessed
Considering the risks other routes than the major upgrade to PeopleSoft
8.9/migration to Fusion will be more in favor.

Scenario 3: The reality scenario

Oracle pursues scenario 2 and will diminish support

for existing PeopleSoft customers, who don’t
want to migrate directly in 2008, but minimal
support will remain until 2013
Oracle will provide as little support as possible for the third party products,
like weblogic and databases, like DB2 and SQL
This scenario provides Holland Casino with the opportunity to develop a
sound strategy to retain or recreate the existing integration. It is however
prudent to investigate as soon as possible the ins and outs of an upgrade
towards 8.9 because of this integration. Again the out of the box solution for
another supplier is possible in this scenario.
Was PeopleSoft not to be discussed in the payroll implementation project in
2003 and therefore the current solution was obvious, now everything is open.
We should consider the best solution for Holland Casino for HR and Finance
based on integration, functionality, risks and costs. It is very important to
notice in the decision process that Holland Casino is a typically Dutch
organization that has no benefits to gain from an international product, like
PeopleSoft or Oracle. On the contrary products that are developed for the
Dutch market will provide mores specified functionality, like support for
national legislation, than an international product. As an institution we are
financially spoken not that complicated.
The lack of support for the short term is not so much of a problem because of
the current stable environment. Support is most needed when an upgrade is
at hand and not during the consolidation period afterwards. We must
however consider the risk that the third party products on which PeopleSoft is
running (Windows 2000, Oracle 8.7.2 and weblogic) are end-of-life cycle and
we cannot for a long period remain working with these products.

Probability of this scenario

I consider this scenario the most likely. It fits best with the reasons
mentioned why Oracle started this operation in the first place: getting market
share and getting hold on the lucrative support fees. It allows Oracle to put
all its developers on the new product, so in terms of strategy it allows Oracle
to focus. It provides Oracle with the opportunity to use the new version 12 of
its suite as a kind of preparation for the beta version of Fusion, especially for
the improvement of the webtechnology. I think that this is also the case with
version 9 of PeopleSoft. No adding of functionality but preparing the
application for the Oracle architecture.
Within this scenario further development of PeopleSoft will be marginal, at
best some Java components for, for instance, component interface. Oracle
will discourage new customers who want to buy PeopleSoft modules and will
try to attract them to Oracle modules.
Despite the fact that this scenario buys time for the PeopleSoft customers it
is important to take care not to find oneself in a “house of the deceased”
situation. A situation where there will be neglect and little support. Customers
who after 2008 are not making any visible moves towards upgrading or
migration will face various forms of pressure to do so.
One can think of contractual pressure. A customer is not obliged to follow this
up, but what is his choice than?
As an example: The application environment in the case of Holland Casino is
completely stable. It is possible to keep it there and discontinue the support
contract. However PeopleSoft just supplies the application and not the third
party products that go with it (middleware, webserver, database). For these
components one also have to stay on the old versions resulting in al kind of
control problems. The same goes with interface to other applications. It will
become harder and harder to keep communicating with current interfaces.
Besides this one should make all kinds of customizations to keep up with new
legislation and other rules.
HC strategy for this scenario
If we decide to go for the Oracle migration we will have to investigate this
year what an upgrade towards PeopleSoft 8.9 will mean, so that the upgrade
can take place in 2006. Important issues to investigate are:

• The choice for the applicable middleware and webservices. We must

keep in mind that the probability that Oracle will also takeover BEA is
major. In the last case the choice for BEA is without saying
• Holland Casino depends on an external party for its customizations in
PeopleSoft for the payroll process. It is therefore of the utmost
importance to level with the supplier on the coming strategy. The
payroll process will again be the focus for the time table Holland
Casino will have to follow like the implementation of the current
process in 2003. It is not quite impossible that the supplier will start to
cut down its activities for PeopleSoft, because there will be les and less
demand for PeopleSoft development. This must be considered as a
main risk.
For this scenario also counts that we should analyze other products, because
there is in fact no surplus value to follow the Oracle strategy. The last part of
the article will do some compares considering risks and opportunities.

Conclusion
Three scenarios are mentioned:
1. Oracle keeps developing PeopleSoft actively till 2013 and offers from
2008 a migration tool for a transfer to a new integrated product Fusion
that will provide at least the current functionality
2. Oracle forces customers to migrate to a new product within the period
of 30 months
3. Oracle provides minimal support until 2013 and will from 2007/2008
try to persuade customers to migrate to the new product before 2013
but without force

Actions to be taken when Holland Casino wants to

follow the Oracle route
Scenario Fit/gap Implementation Migration to
research Date 8.9 Fusion
PeopleSoft 8.9
1 Yes, but not Not necessary sooner Yes, not
necessary in than 2007 necessary
2005 sooner than
2008/2009
2 Yes, highest 2006 If yes, then in
priority 2007 of 2008
3 Yes 2006 2008
A company want to manage its largest risk, even if it is not the most
probable, in the most simple way. Therefore it is wise that aside from the
PeopleSoft/Oracle route also others will be researched.
The next chapter will provide an overview of the various possible routes and
the risks and costs involved.

The route to follow

Only scenario 2 provides a direct problem for Holland Casino. For the time
being scenario 3 is considered the most probable. This means that we must
start with a fit/gap analysis this year along with research into alternative
options. These options are:
1. migration to Oracle 11.10 in stead of PeopleSoft 8.9 and later
migration to Fusion. The idea behind this route is that de migration
from one version of Oracle to Fusion will be less complicated. Also the
current version of Oracle is a stable version and we will know what we
are getting. An integration problem remains with the payroll process.
This issue could be handled with doing payroll in company. Oracle
offers this functionality from 2002.
2. SAP. From a customer point of view this looks like the most safe route
on the long term. There will always be newer versions, also with SAP,
but it is not to be expected that in a mid term period SAP will
reengineer there core applications because of the complicated
structure and the propriety infrastructure. SAP will go on to provide
toolsets to extend functionality, like Netweaver. So a more stable
situation is presented looking at the future.
3. Microsoft with Exapta. If other routes than PeopleSoft/Oracle are
researched one must give attention to Microsoft, because it is a major
player. At this moment the functionality and product strategy are not
very clear. Therefore the same risks as with PeopleSoft/Oracle emerge.
Aan advantage is that Holland Casino uses only Microsoft products for
its development environment, so it would fit the internal development
strategy
4. Local products. Because Holland Casino is a typical Dutch organization
it can be assumed that for the more administrative side of HR local
products will prove more adapted to the local administration than
PeopleSoft. For Finance the same. Problem will most likely be the lack
of support for implemented high level HR instruments, like Training
management and competence management. These processes are
already implemented and in place and it will be a absolutely no-go to
get back to paper and pencil. However it is possible that with a
workaround possibilities do occur.
5. Risk Outsourcing: application management is outsourced to a third
party. This is a route that in fact is a no-choice, but stay where you are
and pay a third party to carry all the risks. The decision to do this has
to lie with the business. Outsourcing must not considered lightly. There
are surely risks involved, especially concerning the communication on
daily actions and procedures between customer and supplier.
Routes, risks, opportunities and costs
The following overview is at this time not complete, but does provide on
headlines risks, opportunities and costs involved.
Routes Risks Opportunities Project costs Yearly costs
PeopleSoft • No € 1.25 mio, € 200 k, the
8.9/Fusion knowledg estimated same as now
e what
the final
product
will offer
technical
as well as
functional
• Only
knowledg
e on the
final
product
with the
supplier of
the
product
• Possibl
e decline
of support
for
payrolling
Oracle • No • Possibl € 1.25 mio, € 200 k, the
11.10/Fusion knowledg e easier estimated same as now
e what migration
the final Oracle –
product Fusion
will offer than
technical PeopleSof
as well as t – Fusion
functional • Possibl
• Only e payroll
knowledg in
e on the company
final (to be
product analyzed)
with the
supplier of
the
product
• Possibl
e decline
of support
for
 payrolling
SAP • Extensi € 1.25 mio, € 180 K
ve estimated
knowledg
e
available
on the
product
• Fully
localized
payroll in
company
• Knowle
dge on
the
product is
also
available
other than
just the
supplier
• SAP
has by
means of
Tomorrow
-now also
PeopleSof
t
knowledg
e in house
Local To be To be € 0.5 mio € 40 K
products examined examined estimated
Microsoft To be To be € 1 mio € 100 K
examined examined estimated

Final Conclusion
The coming years customers of PeopleSoft will have to make an analysis for
their own situation and how to react to the arisen situation. The outcome can
differ for each organization. Holland Casino, a Dutch foundation with a rather
flat administration cannot be compared with an international company that
produces goods. It is easily to imagine that the more complicated the
business of a company is, the more one will choose to remain with the
current supplier, hoping for a good result.
Still it is important for all customers of PeopleSoft to realize that in the end
they will have something completely different from what they have now and
the must make the choice if they want to go that way.