JD Edwards (JDE), a Nasdaq-listed business applications vendor, will acquire US-based YOUcentric, a privately-held maker of Java-based customer relationship management (CRM) software.
Under the terms of the agreement, JDE plans to acquire 100% of the capital stock of YOUcentric, valued at approximately $86 million, in exchange for JDE common stock and cash.
"By combining YOUcentric`s applications with our OneWorld ERP applications, we can quickly bring to market one of the broadest suites of customer-facing applications available in the industry today," said Travis White, former EMEA marketing manager and current VP, strategic planning, JDE, in an advisory yesterday.
"Our suite includes traditional CRM applications like sales automation, call centre and field service," said White. "It also includes applications that are not traditionally defined as CRM but which have a significant impact on customers - including delivery, billing, order promising and collaboration. We`re calling this combination Collaborative Commerce CRM."
JDE says research within its 6 000-strong user base shows that the majority have no CRM solution in place, and would prefer to buy their CRM solution from their ERP backbone vendor.
"We believe that our integrated CRM solution will be widely adopted in our installed base," said White.
JDE has had CRM applications integrated into its suite since 1998, originally under the banner of Customer Service Management System. The CRM offering was rearranged under specific modules, including the Field Service Management, Inbound Service Call Management, and the Customer Self-Service module.
"The YOUcentric acquisition ideally complements our existing CRM assets and allows us to expand our offering into a full-fledged, integrated solution suite," said White.
The integrated product is expected to be available in November 2001, delivering sales force automation integrated to sales order processing, a common user interface portal with analytics, and an XPI integration toolkit.
Consolidation of the companies` applications is expected to proceed rapidly, based on complementary technology architectures. "By 1 November 2002, we expect to have complete architectural alignment," said White.
Impact for SA users
Mike Evans, MD of JDE SA, comments: "We don`t have the issue of multi-language support in SA, so we will get the integrated offering the same day it`s available in the English-speaking world."
As to the local customers` demand for an integrated CRM solution, Evans says: "We`ve been needing it for a long time in the SA marketplace, because this is a very price-sensitive market.
"We have had a CRM offering in conjunction with Siebel in the South African marketplace. The difficulty we`ve come up against in our 'sweet spot` - which is the top end of the mid-market going into enterprise - is that in many instances a product like Siebel is overkill. We haven`t been able to move our customers to integrated CRM solutions, of which Siebel is one, because the product is too heavy for them."
Evans says YOUcentric`s YOUrelate applications are aimed at the mid-enterprise market and pricing is going to be "extremely competitive in that targeted space".
"That`s always been the challenge - to get the price point right for the market. YOUcentric positions their applications as 'Siebel functionality at mid-enterprise pricing`."
Both JDE and YOUcentric develop component-based software. YOUcentric`s YOUrelate applications are built with the J2EE development language, which the company says allows easy integration and ensures platform independence.
"Some of our customers do have very sophisticated CRM needs," says Evans. "Like JDE applications, YOUcentric is built on modern technology, it`s not a legacy CRM application, and it involves minimum changes to the underlying architecture in order to clip it on. That`s why we believe we`d be able to ship it integrated by November this year."
Evans adds that CRM functionality will be packaged as another option inside the JDE modular package of applications, which includes financial, manufacturing, supply chain and other industry-specific offerings.
JDE SA will target the new CRM offering primarily at its existing customers. "There will be special programmes to encourage them to adopt it," says Evans.
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