Oracle vs PeopleSoft By Derek Brown Adam Nasset Kelly Phelps BA 370 Instructor Rene Reitsma 11 3 05 0 Summary In June of 2003 Oracle began its nearly 18 month takeover of PeopleSoft Inc Oracle was looking to move into the enterprise resource planning ERP systems field PeopleSoft at the time had become the second largest business software producer and their ERP products were greatly superior to what Oracle could create Oracle wanted to be able to compete with SAP the largest ERP vendor in the world The takeover battle included Justice Department litigation and fighting for customer support In the end Oracle acquired PeopleSoft on December 13 2004 for 10 3 billion or 26 50 per share Who is Oracle Oracle is one of the major companies developing database management systems tools for database development and enterprise resource planning software in the world Oracle was founded in 1977 and has offices located in more than 145 countries worldwide As of the most recent year 2005 Oracle employs over 50 000 people worldwide The CEO for Oracle over the past several years has been Larry J Ellison Ellison who served as the chairman of the board until his replacement by Jeff Henley in 2004 still holds command at the CEO of the company and since the successful acquisition of PeopleSoft Ellison is said to be one of the richest persons in the world Who is PeopleSoft PeopleSoft Inc was a software company that provided enterprise resource planning human resource management and customer relationship management software 1 solutions to large corporations worldwide PeopleSoft was founded in Pleasanton California in 1987 by Dave Duffield and Ken Morris The idea behind PeopleSoft was influenced by a Client Server version of Integral s popular mainframe HRMS package When Integral weakened through low development and integration Dave Duffield strove for gain over Integral and PeopleSoft was born PeopleSoft is well known for its unique characteristic to be easily customized to fit the specific business needs of each client while still remaining generic enough to meet corporate and governmental tracking requirements Who is SAP SAP founded in 1972 as is the biggest European software company headquartered in Walldorf Germany SAP s products are mainly focused in the Enterprise Resource Planning ERP business sector Other major offerings include Advanced Planner and Optimizer APO Business Information Warehouse BW Customer Relationship Management CRM Supplier Relationship Management SRM Human Resource Management Systems HRMS Product Lifecycle Management PLM and Knowledge Warehouse KW The company also offers a new technology platform named SAP Net Weaver SAP s original products are generally used by larger companies however now SAP is now also offering products for small and medium sized enterprises SME with SAP Business One and my SAP All in One The size of SAP is so dominant in that more than 28 000 companies run SAP at over 91 500 locations which amounts to over 12 million people in more than 120 countries worldwide What are Enterprise Resource Planning Systems ERPs 2 Enterprise resource planning systems are management information systems that integrate and automate many of the business practices associated with the operations or production aspects of a company ERP software can aid in the control of many business activities like sales delivery billing production inventory management and human resources management All functional departments that are involved in operations or production are brought together in one system Enterprise resource planning systems are often closely tied to supply chain management and logistics automation systems Supply chain management software can extend the ERP system to include links with suppliers To use ERP systems companies often seek the help of an ERP vendor or of thirdparty consulting companies Consulting in ERP involves two levels namely business consulting and technical consulting A business consultant studies an organization s current business processes and matches them to the corresponding processes in the ERP system thus configuring the ERP system to the organization s needs Technical consulting often involves programming Most ERP vendors allow changing their software to suit the business needs of their customer The advantages from enterprise resource planning systems are claimed to include The ability for macro level decision making by having access to consolidated data or information transparency across entire organization integration of all standard business processes and lower accounting and record keeping costs Other benefits are lower inventory carrying costs ordering costs and production costs flexibility for greater product customization resulting in a better match to the exact needs of the customer and potential for increased profitability or increased market share at a lower price due to cost and efficiency improvements 3 The disadvantages from enterprise resource planning systems are alleged to include the systems can be very expensive to install and maintain can be difficult to use problems in any department will affect all users and they can be too rigid so it s hard to adapt them properly to suit the specific needs of a certain company Problems associated with supply chain management systems include the system is vulnerable to a strike or labor problem at any one link in the chain high switching costs once the system is in place there is a resistance to sharing sensitive internal information information that may be essential to the process and there are compatibility problems with the various legacy systems of all the partners PeopleSoft Products PeopleSoft software has changed from the client server based design to webcentric design called PeopleSoft Internet Architecture PIA Now the company s business functions can be accessed and run on a web client Although some security and system setup functions still need to be performed on a fat client machine PIA was successful due to its new meta database design The architecture is built around PeopleSoft s own PeopleTools technology a proprietary development platform PeopleTools includes many different components a developer needs to create an application including a scripting language user interface design tools standard security structure and batch processing tools The benefit of creating their own development platform allowed PeopleSoft applications to run under many different operating systems and database