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J.D. Edwards & Co. knows that as a midsize ERP software developer, it cant go it alone. Thats why the Denver-based company last year introduced its Extended Process Integration, or XPI, engine, which offers adapters to allow users to interface with any enterprise resource planning system. Chairman and CEO C. Edward McVaney said users of the companys OneWorld ERP package, as well as its older World enterprise software, will soon take collaborative, business-to-business e-commerce out of the lab and put it into production. eWeek Senior Writer Renee Boucher Ferguson recently discussed the future of collaborative e-commerce with McVaney.
eWeek: Customers that Ive talked to are thinking about collaborative e-commerce, but theyre not there yet. There seems to be skepticism over Internet security or in just not being ready to make a change. How is J.D. Edwards going to allay those fears?
McVaney: This is clearly a case of where were out ahead of customers. Imagine if, in 1990, I would have started talking to you about client/server computing. You would have said, “What?” Then, finally, around 1994 you would have said, “Oh, I understand what youre talking about.”
I think what youre seeing here is the IT industry really sees collaboration as an important, powerful next wave. It is the substance of B2B. I talk about the transformation from an introverted IT organization to an extroverted IT organization. Up until now, our entire careers have been looking inside, at how to reduce this cost or make this run better and that run better. What weve got to do now is say, “Whoa, theres a lot more opportunity outside my organization.” Now that the Internet is so easy, so friendly, its like it opened up this whole world.
And most people are still looking back inside their organization, and theyve got enough problems there they dont even want to think about going looking for problems. But it is those problems they dont want to look for that just have these massive financial advantages in terms of eliminating inventory, speeding up deliveries, improving service.
eWeek: What is the timeline for user pickup of collaborative e-commerce?
McVaney: Were at the very beginning of a natural maturity curve, and were 10 percent into that curve. Most of our customers are just beginning to understand it now. We, even at J.D. Edwards, [are just beginning to understand collaborative e-commerce].
eWeek: How much is your collaborative e-commerce strategy a reality now?
McVaney: Five percent. Its at a minimalist stage. All we do is storefront and e-mail—all the simple things have already been done. All the technology is there. Its not fancy technology. Its very diverse and diffuse technology, but its not technically difficult. What weve got to create are the mechanisms to make this thing easy.
eWeek: Another stumbling block seems to be integration from an enterprise to trading partners. How will J.D. Edwards make that easier?
McVaney: Up until now, we have thought of integration in an introverted manner—”Oh, I have JDE, and I have to integrate with PeopleSoft [Inc.] human resources or … with ePiphany [Inc.] CRM [customer relationship management applications].” But all of a sudden, with the Internet, integration becomes, “Whoa, Ive got to integrate with Wal-Mart [Stores Inc.], and Wal-Mart isnt using the EDI [electronic data interchange] standards.” So weve gone from integrating five or six internal systems to integrating to hundreds of external systems. The problem is much more massive than it ever was before.
Our goal [is to enable] any-to-any collaborative commerce in 2 hours or less. We believe that the problem is not doing the integration—because its all doable—its doing the integration rapidly. It cant take three man-months to do an integration; it has to take 3 man-hours to do an integration. So were developing a technology to have the point-and-click [integration]. Thats our goal to facilitate this thing, to create such a pattern and reusability that the connectivity becomes real easy.
eWeek: What are the specifics from the technology side?
McVaney: For ourselves, this is like a snowball. Weve created this little snowball, and its now at the top of the mountain, and we want it to roll downhill over the next 18 months or two years.
Right now, there is a thing called a Score Model, a supply chain optimization model that says all businesses are roughly the same. They have six or seven basic processes. There is a design process, a sourcing process, procurement, a manufacturing, selling, a shipping process and a customer service process. [In] any part of it, there can be collaboration.
Were going to focus in the beginning on collaborative buying and collaborative selling—theyre the collaborative trading, e-procurement and e-selling—[and were going to] master that in the electronics industry over RosettaNet.
eWeek: Does it make a difference for a company that wants to buy some collaborative software if they are on World or OneWorld?
McVaney: Generally, OneWorld is out ahead intellectually with neat features and functions, but this collaborative software … internally, we call it the “Doughnut Project.” The reason we call it the Doughnut Project is, heres your ERP system, and surrounding that ERP system is a big doughnut that captures all the interfaces with the outside world, with World. And that exact same doughnut can lay over World as well as OneWorld. It can also lay over SAP [AG] software and Oracle [Corp.] software, too.
The doughnut—we call it XPI— isnt necessarily dependent on JDE software. Its trying to make connections between businesses, and we have to teach it to connect JDE to SAP and JDE to Oracle, JDE to PeopleSoft. But the mere fact that youve done that means the reverse is true, too, that if Im connecting JDE to SAP, Im connecting SAP to JDE, so that the doughnut is like a reversible thing. It can look inward, or it can look outward. It doesnt know which direction its looking, so itll be a big shot in the arm in our business.