E-procurement—the purchase and sale of goods and services over the Internet—can allow companies to consolidate purchases, bolster relationships with their suppliers, and streamline their business processes. In March, J.D. Edwards, a leading enterprise resource planning (ERP) vendor, implemented an e-commerce platform with Ariba, a top provider of business-to-business services.
As J.D. Edwards’ CIO, Mark Endry was deeply involved in putting the project together. Here are some of the advantages he believes the project will offer his company and some other insights on his role as well as future projects for J.D. Edwards.
J.D. Edwards and Ariba
TR: Could you discuss the deployment of Ariba’s e-procurement system? How does it work for you? What benefits does it offer?
Endry: We recently completed what we call phase one of that program, which is to roll it out in the United States. We started off with an office supply company in the United States and also a book supply company to get started. It took us about eight weeks. Now, that eight weeks was stretched over 16 weeks because it was over the holidays, so we had some downtime there plus we also had some Year 2K planned downtime.
We used Andersen Consulting to help us with that. During the eight weeks, we were able to wean ourselves off of them. After they left, we have also done the first live client upgrade to what is called version 1.2, which is the J.D. Edwards unique version that integrates with our software.
Today, we have a fully automated process. Ariba gives you the requisition and approval, but in our case we went beyond that and have integrated it with the J.D. Edwards software. Now, we can go completely to the payment side with EDI [Electronic Data Interchange] or use our purchasing card to pay. It’s all automated from the start to the finish. Nobody touches anything.
In two previous installments of our interview with Mark Endry, we discussed changing responsibilities as CIO, ways that J.D. Edwards uses its company intranet, and the company’s efforts to recruit IT talent in a tight labor market.
TR: Have there been any bugs that you have had to work out, or has it gone smoothly?
Endry: It has gone very smoothly. [The implementation] was way ahead of schedule, and it was very well-received because it is very easy for people to use. Today, you can get all of your office supplies in the United States and anything that IT supplies you as well. You can get a laptop, a docking station, all through Ariba. We are just starting phase two now, which is to bring Canada in and add six more suppliers.
TR: When do you expect that to be put together?
Endry: Well, actually I think it starts today [May 1], and in Canada it is probably less than a month. The suppliers we can bring up at the speed the supplier wants to come up.
TR: What are the advantages with a system like this?
Endry: First, the system provides standardization because if it is in the catalog you can buy it, and that means somebody has approved it and put it in the catalog. From an IT standpoint, I know that if they get their laptop out of the catalog I can support it.
Second, the approval process is far easier to maintain. It is graphical. It is all electronic. Having it [the procurement process] automated through the payment process eliminates a lot of management steps as well. Before, you had to call around and try to figure out how to get a piece of something or other. Now, with just a few clicks in your browser, you can have it.
Application services providers (ASPs)
TR: What are some things that you see happening in the next year or so that you will have to deal with as a CIO?
Endry: We have announced an ASP program from the company.
TR: Was that last fall (1999) when you made the announcement?
Endry: Yes, I believe that’s correct. There have been a couple of partnership announcements, too. We have an indirect model and a direct model.
Indirect means that we supply the software to somebody else who really owns the customer. That could be for verticals or something of that sort. There are certain people who have certain pieces of the industry for that.
The direct model is where the customer is actually getting the service from J.D. Edwards. We have found as we talked to a couple of those customers that they really wanted J.D. Edwards to provide it. We originally thought we might partner with Telco or other companies to have it run their data centers, but we are finding that the customers really would like us to run it. Our customer base, if you will, is expanding beyond just J.D. Edwards.
TR: Besides an ASP, what else do you anticipate?
Endry: We are right in the middle of changing our approach on our internal ERP deployment using the J.D. Edwards product. We are rolling out our client server product. We have about 1,600 users on it. We have about 5,000 users, or actually closer to 6,000 users, on our AS/400 product. We decided that we wanted to be the first company of a large size to run our ERP solely using a Web browser. We are now deploying our OneWorld product with the Web client and hope to get all employees on the system during the next couple of quarters.
Skills for the CIO
TR: What are some other things you think are important for CIOs to bring to their job?
Endry: I think we are all going to continue to struggle with the issue of people, but I have seen a slight change in that recently. We were losing a lot of people to dot coms, start-ups, and pre-IPOs, but I think they are learning that they do not all make you a millionaire.
We are beginning to hear from our employees that as long as we can keep them in an exciting job, keep them interested, and keep their compensation somewhat competitive that they really like working for a company such as ours. I think the tide will change a little bit here. It will take some of the buzz off those companies that are going to make everybody in the world rich, but I do not think it is going to help the shortage at all. We are going to continue to face a shortage.
TR: I guess you will continue to offer recruiting bonuses or drawings to continue bringing people on board.
Endry: Right. Plus, we currently subscribe to eight salary surveys a year, so we are constantly looking at comp. With this communications group, I have been traveling around doing annual meetings at as many sites as I can around the world.
I send one of my direct reports to the meetings I can’t attend. We do new hire orientation where the senior IT staff meets all of the new employees who have been hired into IT every quarter. We are really trying to get around to staff meetings and make sure that we get introduced to everyone, understand what they are doing, and develop a relationship with as many people as we can in our organization.
Mark Endry shared some of his challenges with TechRepublic. We’d like to hear about yours. As an IT professional, what are the three issues that you find most difficult to solve? How are you coping? Tell us in an e-mail or post a comment below.