Feature

New JD Edwards chief focuses on customer base

Bob Dutkowsky, new chief executive of enterprise software maker JD Edwards, speaks to CW360.com about his company's future focus and what really happened with Siebel.

There has been some rapid turnover in the JD Edwards boardroom in recent years. In April 2000 company founder Ed McVaney was asked back, replacing Doug Massingill who resigned as chief executive less than 18 months after taking the post.

McVaney had served as chief executive from 1977 to 1998. His return marked a change in the company's strategy. Under McVaney's leadership the company ended an 18-month relationship with Siebel and acquired Youcentric.

On 3 January 2002, the company appointed a new chief executive. But can Bob Dutkowsky, who took over from McVaney, last the distance?

"Our main goal," said Dutkowsky, "is to continue the momentum to re-energise the business." The strategy, which began with McVaney's return, is to move the company back to its core areas of expertise.

"The company lost its way a few years ago which was a consequence of us going after Fortune 500 business," Dutkowsky said. JD Edwards invested heavily to compete alongside giants like SAP, PeopleSoft and Oracle - an investment that did not pay off.

"We forgot about our strengths in the mid-market," said Dutkowsky.

One of the casualties was JD Edwards' 18-month relationship with Siebel. "Siebel did not work out," Dutkowsky explained, "The Siebel system, is very complex. Our customers are mid-sized businesses, certainly not the same size as a Boeing. The software was just too complex [for them]."

Instead, JD Edwards acquired CRM firm Youcentric in November 2001. Dutkowsky is optimistic he will be able to use the acquisition to improve the company's customer relationship management (CRM) product base. Of the 6,300 businesses running JD Edwards software Dutkowsky said that less than 5% had installed a CRM package. However, he said: "30% of our users plan to deploy CRM within the next two years."

Today, Dutkowsky said the company's target customer base were organisations valued at between $200m (£141m) and $2bn (£1.41bn). Here, he said, users predominantly ran systems based on AS/400, Windows NT and Unix. According to Dutkowsky, some 60 to 70% of new implementations are now on Unix or NT.

Dutkowsky sees the company focusing on a number of core vertical industries, such as manufacturing and distribution. Another goal is to move away from being seen as a purely US software company. "We want to renew our focus on Europe and target Asia-Pacific mid-sized business," he said.

The drive to re-energise the business could prove a bumpy ride for JD Edwards' channel partners. Dutkowsky said: "The bulk of our revenue will come from a direct model."

As with other ERP firms, Dutkowsky wants to grow his consulting business. "We have articulated to [channel] partners that we want the direct consulting [business]," he told CW360.com.

For Dutkowsky this business will come from the company's existing customers and among users in sectors that the company has identified as core: hi-tech electronics and industrial fabrication.

For Dutkowsky it is early days. The company has still a long road to recovery.

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This was first published in March 2002

 

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