JD Edwards rounds out mid market manufacturing IT with new CRM: acquires US CRM firm YouCentric

Mid market enterprise software vendor JD Edwards has radically changed its approach to customer relationship management (CRM). The firm is to acquire privately held US CRM software developer YouCentric, sever links with strategic partner CRM giant Siebel, and offer the software both to its extensive user base as a pre-integrated solution, and to others as add-on, stand-alone CRM. The deal is worth $86 million in stock and cash, which may yet turn out to be a small price to pay for a surprisingly valuable asset – if correctly targeted CRM takes off as most analysts believe it will. And YouCentric’s suite includes web-based sales force automation, campaign management, contact centre management and partner relationship management. JDE’s marketing director for EMEA Trevor Salomon says it’s the culmination of the firm’s “learning curve” with CRM, which started loosely in 1998 with JDE’s purchase of product configurator software firm Premisys, and the launch of its CSMS (customer service management system), and continued in 1999 with the Siebel partnership. Salomon says these earlier forays were “but components of collaborative CRM”, and that with JDE’s sweet spot being the mid market, Siebel reselling was only ever going to have limited success. “We were looking for a move in line with serving our mid market.” Actually, it’s a bold move. YouCentric extends JDE’s integrated ‘collaborative commerce’ software reach to include comprehensive ERP (enterprise resource planning), APS (advanced planning and scheduling), what’s being termed supplier relationship management (SRM – supply chain planning and execution) and now CRM. And that’s the point: JDE is banking on the opportunity to sell and implement the widest spread of mid-market software covering everything from optimising a company’s planning, to marketing, sales, manufacturing, fulfilment, delivery, and service operations. Quite a deal for a firm with 6,000 companies in its user base, and less than 50 on Siebel (which it will still support)! And JDE says that it’s own research shows “at least one third of our customers expressing intent to purchase CRM technology within two years.” Says Salomon, “I can tell you, we’ve had three calls this morning already.” Broadly analysts agree: “There is a clear propensity for organisations to utilise the CRM capabilities of their ERP backbone providers due to the inherent benefits of pre-integration,” says Steve Bonadio, senior program director at analyst Meta Group. “Our research reveals that CRM integration costs can amount to 60% of the total implementation. Furthermore, organisations must look to application vendors that provide flexible, standards-based architectures.” There do, however, remain a couple of points to resolve. YouCentric’s YouRelate (dreadful names) software has been selling at around $1 million to its former target base of the financial institutions and big corporates – not quite the mid market manufacturing league. And there’s the issue of integration. In answer, Salomon says, “We are currently going through the process of re-pricing. YouCentric was targeting the early adopters and prices were high.” He’s coy on actual future pricing but suggests it will be substantially cheaper. And he adds, “because of its simplicity, the total cost of acquisition will also be comparatively low: it won’t take for ever to implement.” Salomon says he expects “third wave followers” of CRM adoption to be more discerning, and suggests that the JDE/YouCentric combination will be a compelling one. As for integration, Salomon makes light of the issue, simply saying, “YouRelate is Java-based and component-based software that absolutely maps on our technology architecture. It’s a better fit even than Numetrix (JDE’s now integrated APS and SCM offering) was.” He also points out that while YouCentric is hardly a well known brand, this makes it eminently sensible. And it is a fact that YouRelate applications are built with the J2EE development language, which is relatively easy to integrate, provides for a highly flexible data model and is fully platform independent. All of which is good, but there will still be issues around the precise architecture, development tools and product rationalisation. Nevertheless, JDE says it expects “the first phase of integration to be complete by the end of 2001 [and] to combine operations with similar ease and speed.” And Salomon confirms that most of YouCentric’s people will remain with JDE world-wide, which certainly helps. In the UK it means moving the sales office to JDE in Reading, with sales and support being both direct from the existing YouCentric team to the outside world, and through the existing JDE organisation to existing users.