J.D. Edwards' CEO Ed McVaney banks on collaborative commerce to drive business

by Michael Vizard

April 26, 2001 —

AS THE CEO of J.D. Edwards, Ed McVaney is in the process of reinventing the company to become a leading player in the area of collaborative commerce. In an interview with InfoWorld Editor in Chief Michael Vizard, McVaney talks about his company's drive to create an anytime, anywhere infrastructure for e-business and the changing nature of supply-chain dynamics.

InfoWorld: Much of the history of J.D. Edwards is associated with the AS/400 platform and ERP (enterprise resource planning) applications. How is J.D. Edwards evolving?

McVaney: In terms of new sales, 50 percent of them are Unix or Windows NT and 50 percent are AS/400. I'd say we are still the guerilla in the AS/400 marketplace, but we have a very strong capability in Unix and Windows NT. Supply chain, meanwhile, is fundamentally important to any ERP business. The whole rest of our business is supply-chain execution. We bought Numetrix 18 months ago, and we've done a really first-class integration between their products and our products. That puts us strongly in supply-chain business. It's our key growth area.

InfoWorld: What's driving all the interest in supply chains?

McVaney: The thing that's driving it is just the economics. Something that's helping us a lot is that we have both the supply-chain execution side and the old ERP side. The whole thing is about inventory optimization and cost control and things of that nature.

InfoWorld: What impact has all the hype around digital marketplaces had on the supply-chain category?

McVaney: I would say they're different tools, in a sense devoted toward the same thing. I think the digital market thing has really subsided a lot in the last couple of months. And when you really think it through, it should. They're not much more than what a farmer's co-op is. Digital marketplaces are better ways of doing procurement, but we're finding an awful lot of businesses want to do private exchanges. I don't particularly like that phrase. Some people are saying that one peer to another peer is a private exchange. The difference is the basic supply chain as we used to know it was a little clunkier. What we're into now is very advanced business-to-business communications. Supply chain could have meant a couple of years ago simply using advanced mathematical techniques to optimize inventory, shop floor control, and transportation. Now we're really getting into collaborative supply chains where not only do I know what's going on inside my business but, because of b-to-b connectivity, I also know what's going on up and down the supply chain.

InfoWorld: How do you define collaborative supply chains?

McVaney: We believe that there has to be any-to-any connectivity. Exchanges are nice. But if WalMart asked me to connect up to them directly, I have to connect up to them; I can't go through an exchange. We think that businesses have to connect with their major suppliers and major customers.

InfoWorld: So how will J.D. Edwards facilitate that?

McVaney: The idea of this next product that we'll announce in June is to essentially create very rapid connectivity within two hours or less. That's any-to-any connectivity in two hours or less. If you try to do that today, it's all technically doable. But it might take you three man months to do it. We're developing technology to make these collaborative commerce connections very, very rapidly. It's a 50 percent technology, 50 percent applications solution. That's a big mouthful because it means you can't deaal with just one standard, you have to deal with six or eight different standards. You have to deal with EDI (electronic data interchange), XML, the WalMart proprietary way of doing things, and the European X.21 standards. So you're dealing with a whole bunch of different standards. We can do it all now with hand coding. The key is to make it point and click and to get it down to two hours per connection.

InfoWorld: Is that something customers will buy and run themselves or will someone host that as a service?

McVaney: It could be both ways. It could be hosted or they could run it in-house.

InfoWorld: So is the phrase supply chain something of a misnomer these days then? It's not really a chain, is it?

McVaney: We can't change those words. To a lot of people, supply chain means just supply-chain planning, it doesn't even mean execution. I never understood that. But those are the words that we're given and we just try to play within those words.

InfoWorld: So what exactly is the benefit of linking the planning and executions aspects together?

McVaney: One of our great advantages is that we have the execution side and the planning side. Without that, the planning side has a lot of trouble adjusting to actual data. Whereas the data we're working from is up-to-the-minute real-time data. It can reflect shipments that were made 5 minutes ago. All the orders flowing through the system are up to date. The raw inventory data is very vibrant and alive, and there's no reason for it to be behind. We can also go out on the Web and go directly to United Parcel Service and see the status of a shipment, both incoming and outgoing. The fundamental inventory in order processing is very real time, which just makes the planning system much, much better.

InfoWorld: Are you working on extending this using wireless technologies then?

McVaney: We've got some demonstrable things. I sometimes say that we sell sex and sizzle, and we deliver bread and butter. We've got some real demonstrable things -- sending messages to handheld devices and things like that. But right now it's cuter than it is practical. But I'm sure in the years ahead those things will become real reliable.

InfoWorld: What impact is the current economic climate having on you and your customers?

McVaney: We're seeing people hesitate and say, I'm going to delay this decision three months. I suspect our whole industry and many other industries will be hurt in this next year. I just hope we snap out of it quickly. I have this belief that we're largely recession proof. To buy our software, you know you're buying something really big. You don't make that decision lightly. When you finally get to the point where you've made that decision, you'll do it whether there's a bad economy or not.

InfoWorld: How do you compare J.D. Edwards to a SAP or an Oracle?

McVaney: I've always admired SAP. They're very good engineers and our software is very much like theirs in that it's highly engineered and highly integrated. We think we're way ahead of them because of the components-based nature and the object orientation of our software. [But] our software is a great deal more flexible than theirs. They used to get a lot of points for flexibility, but those have disappeared and people now perceive them as very rigid. We're flexible not only for the implementation, but after we go live in terms of making changes in the field on the fly six months after they're live. A lot of software can't do that. I think Oracle is good too, but it's not truly an open systems technology. It only works on an Oracle database and it's very constraining to work in an Oracle environment. We think we're a lot more open than Oracle. We can connect to other software better. We're convinced that a key to the future is connecting to other software, especially when you go out over the Web, andd we're really good at that.

InfoWorld: So what's keeping you up at night?

McVaney: Not a whole lot. We've yet to do some management revitalization within this company. We're a 23-year old company and it's time to do some things new, but nothing I'm losing a whole lot of sleep about.

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