Michael Schmitt
Sr. VP, B2B eCommerce
J.D. Edwards
Mon, May 1, 2000
Externalizing The Internal
This is Marc Holland for the IT Radio Network. Once a dominant ERP powerhouse, J.D. Edwards began to fade from the spotlight early in 1999. Whether it was a combination of their products falling short of expectations, Y2K fears, or just the lack of investor confidence the company?s stock tumbled.
Recently, Michael Schmitt was promoted, to head and lead the new B to B e-commerce business unit. Joining us now is Michael Schmitt, here to discuss the company?s evolution and its new emphasis on B to B.
HOLLAND: Michael, thanks for joining us.
SCHMITT: Thank you, Marc.
HOLLAND: Excuse me. I just have to go here, but I?m sure you?ve been asked this before. Many analysts and insiders believe that you guys missed the boat on Internet based enterprise solutions for whatever reason. And I was recently talking to an analyst that called you guys the Burt Reynolds of ERP companies. Now, Burt Reynolds, he may have fallen from grace, but he?s making a comeback. What are you guys doing?
SCHMITT: I don?t think J.D. Edwards is in a comeback mode. I think the reality is J.D. Edwards missed the client serve wave. The key change that?s happened is the complex problems they?re trying to solve right now are no longer internal to a company. They are external. And that required the new technology for new processes for these new business models.
HOLLAND: Interesting distinction. What?s the difference?
SCHMITT: The internal world dealt with products in internal efficiencies of manufacturing and pushing inventory out into the channel. Those type environments were generally asset intensive. So the focus now isn?t so much on efficiencies of product generation. The focus is on control and manipulation and visibility of key information across the entire value chain.
HOLLAND: You?re leaving out communication. Is that on purpose?
SCHMITT: No, not at all. Not at all. Communication is key. It?s just if it?s at a 1 and 0 level, going engine to engine across the Internet is more efficient from a cost perspective, as opposed to people on a telephone. That is slow, takes money, and is not reliable.
We have a customer that implemented supply chain collaboration, and their cost per sales order from their telephone R3 system was reduced by a factor of 50 ? 5-0, because they got machines talking to machines.
That is competitive advantage in the new economy, that takes new technologies to support new business processes with new business models.
Ellison is Absurd
HOLLAND: Should companies attempt to integrate their ERP and supply chain management solutions or should they, as Larry Ellison put it, just scrap it and start again?
SCHMITT: Larry Ellison is absurd. People are not going to throw out the baby with the bath water. The key is to integrate existing systems internally, and more importantly, integrate with external systems. So open interoperability is the key to life going forward.
It is unreasonable to think that a company is going to throw out every system them have for Oracle right now. It is even more absurd to think that every company that company does business with will throw out their existing systems. Rather, open interoperability that can transparently move data from one system to another, in real time, will be the key to success in the future.
HOLLAND: All right. I recently had Lou Unkeless on from Oracle, talking about Oracle?s marketplace strategy. Give me an idea ? give our listeners an idea of what the fundamental differences are in the two companies? approaches.
SCHMITT: Many industry analysts have portrayed that with Oracle?s dual complexity of architecture comes huge investment cost in upgrades and changes to the system after you go live. Key to the Internet is reiterate, reiterate, reiterate. That means constant change, constant change, constant change. You can install J.D. Edwards software now, but you can change it at lunchtime, tomorrow morning, next week, the month after. We call it idea to action. If your customer, trading partner or manager has an idea of a better way to do business, you can implement it in the system now with business analysts and not have to wait for the next multi-million dollar upgrade.
Commerce One = Communism
HOLLAND: Now I understand that the Active Marketplace is in partnership with Ariba. Why Ariba?
SCHMITT: Ariba is head and shoulders above the rest of the pack . . .
HOLLAND: More so than a Commerce One?
SCHMITT: The major difference I?ve seen between Ariba and Commerce One is much like the Free World and Communism. Ariba and J.D. Edwards very much believe in freedom of choice. To choose what system you want to deal with, who you want to interact with, that users will have control of their content and data, but it?s that free flow of digits across the Internet that?s important ?whereas Commerce One and SAP and Oracle, for that matter, try and bring a totalitarian approach to put it all within my system.
And the reason I mention Communism, it?s like the Warsaw Pact. That worked as long as everybody was communistic. When it tried to address different systems, different ways of doing business, it fell apart. |
