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Report: Using ERP As Oracle/PeopleSoft War Rages

While many research firms have been advising clients to steer clear of purchasing enterprise applications since the Oracle/PeopleSoft hostile bid struggle led them into a minefield of fear, uncertainty and doubt (FUD), one research firm has said customers should consider striking deals while the iron is hot.

It is true some customers remain frozen with indecision, particularly after reports from Gartner and others doomed PeopleSoft and scared customers away. PeopleSoft CEO Craig Conway said as much during a preliminary earnings conference call two weeks ago. Of course, the salvo of lawsuits and investigative action by the U.S. Department of Justice won't help ease their FUD.

But Ventana Research said some applications customers aren't running scared by switching vendors or consolidating plans, and needn't fret. Instead, the firm said, they're looking to use business intelligence (BI) to leverage their existing enterprise resource planning (ERP) investments to manage their operational performance.

Business intelligence is a software-oriented strategy for gathering and analyzing data to help enterprise users make better business decisions. BI applications include the activities of decision support systems, query and reporting, online analytical processing (OLAP), statistical analysis, and forecasting. Research firm IDC pegs the market at $11 billion.

Focused on maximizing sales and keeping costs under control, operational performance management is the practice of managing the effectiveness of business activities and processes to a common set of goals and objectives.

Mark Smith, CEO and senior vice president of research for Ventana Research, specializes in charting performance management. Smith said more than 1,000 global companies across vertical industries participated in the study.

At 35 percent, Smith said BI is the leading approach for measuring processes companies are choosing to use, followed by business process management at 26 percent. Enterprise applications are next at 25 percent, with Enterprise Application Integration bringing up the rear at 14 percent.

"Despite everything that's going on with Oracle and PeopleSoft, not everyone is switching vendors or consolidating platforms," Smith told internetnews.com "They are looking at 'how do I get money out of what I have? How do I get more economy where I have no time to screw around and I need to manage or reduce costs, build better customer relationships, and re-up my focus?'"

That isn't to say companies with applications from the vendors who are currently locked in fierce battle are necessarily going to continue buying more software from them, Smith said. But they certainly won't sit idle.

Instead, Smith said customers should take stock of vendors that currently have pre-built integration with PeopleSoft and J.D. Edwards , including Actuate , Business Objects , Cognos , Informatica , MicroStrategy and Vanguard Solutions.

"We are seeing organizations turning away from the ERP systems to BI technologies," Smith said. "We believe that customers shouldn't wait until the dust settles on these acquisitions, but instead take this time to investigate technologies like BI that will help them drive operational performance management within their organizations so that they can remain competitive in the next decade."

Michael Porter, data warehouse project manager at Centerpulse, vouched for this approach.

"We are not letting the Oracle/Peoplesoft debacle distract us," said Porter. "We have already gained tremendous strategic value by implementing Business Intelligence solutions from Business Objects on top of enterprise applications, such as Oracle, to track, understand and manage our enterprise performance. What happens 'behind the scenes' with these transactional applications isn't an issue -- it doesn't matter where the data resides, what matters is how BI enables us to continue benefiting from our enterprise performance management initiatives."

Smith said it doesn't matter whether customers buy business process management or BI software, or build it as long as they have a good strategy to use it. He said the fact that PeopleSoft and J.D. Edwards already have partnerships with multiple BI vendors flies in the face of Oracle CEO Larry Ellison's view that all they need is software from one company.

"You know he's wrong," Smith said. "There is no ubersoftware company. He likes to say there are four software companies -- Microsoft IBM, SAP and Oracle, but that's not true. The reality is that there are many other software vendors who have better business intelligence software and more business intelligence software than Oracle."

Smith said customers with ERP transactional systems are increasingly looking for ways to better their systems to gain advantages over competitors -- not from transactional automation or enterprise application integration (EAI) infrastructure offerings -- but from using data assets from the transactional systems to improve performance management.

"Will the responsibility for operational performance management be the responsibility of the ERP/CRM providers or that of the separate BI and Process Management providers?" Smith asked.

And where does that leave enterprise customers looking to act while the rest of the industry spins its wheels in anticipation of a PeopleSoft or J.D. Edwards acquisition?

Smith said having accurate measurements of business processes will bolster the performance of demand and supply chain systems.