Are the customers the final winners in the Oracle-PeopleSoft battle?
Oracle and PeopleSoft have laid down their swords, but will customers be ready to take the next step to outsource?
A colleague of mine made a trenchant comment about the recently resolved Oracle/PeopleSoft standoff: Sticking with one provider today is like ruling a European nation in 1914 with a collection of Victorian-era alliances sitting on your desk.
Now that the war is over and Oracle has strengthened its position in the HR application software market, perhaps a new analogy is apt. Assuming full responsibility for managing your companys transition from one HR application package to another could be just as daunting a task as rebuilding a war-torn country without allies.
CUSTOMER RETENTION 101: THE CUSTOMER IS ALWAYS RIGHT
For the HR outsourcing industry, the end of the Oracle/PeopleSoft battle provides an even larger opportunity to win and impress customers. For many companies, the question is no longer whether to stick with the status quo or pursue outsourcing. Change is now a given. From here, companies must decide the best way to manage and harness that change.
The Oracle/PeopleSoft war has made great copy in the business press with ever-changing proposals on the table, controversy over PeopleSoft profitability, a dethroned CEO, numerous legal battles and, in the end, yet another enormous victory for Oracle CEO Larry Ellison. While the business story has been fascinating, the anxiety of HR software customers has been real and growing.
Think for a moment of a PeopleSoft customer managing a massive installation. Oracle promises to fully update PeopleSoft for 10 yearsthe bat of an eyelash for global corporations. Furthermore, this company, which may have just recently installed or updated PeopleSoft, must decide when and if to migrate to the new Oracle/PeopleSoft product expected to reach the market in 30 to 36 months.
Customers grew increasingly uneasy about Oracles promises during the 19-month battle. According to a November survey by Boston-based AMR Research Inc., 63 percent of 150 PeopleSoft customers said they would cancel their software-support contacts if Oracle bought PeopleSoft and stopped enhancing the programs.
HOW CAN HRO BENEFIT FROM THE MERGER?
Without question, the combined Oracle/PeopleSoft offers customers great potential. But again, why should any enterprise make the risky decision of when and how to change trains? By making the move to an HR outsourcing provider, enterprises get a once-in-a-lifetime opportunity to outsource risk.
Theres even better news for HR outsourcing providers, because enterprises that have long used SAP installations may now want to take a second look at Oracle and HR outsourcers are an ideal opportunity to make this transition possible.
Since the battle for PeopleSoft began, the HR industry has changed dramatically. New HR outsourcing providers have emerged, major companies have merged, the customer base has grown dramatically, and the center of gravity has shifted from the software providers to the companies that can make these installations manageable and affordable.
Oracle emerges the winner in a very different world than when the battle began. Now they must work to make HR outsourcing a central part of their strategy. No doubt the customers will be there for Oraclethe question is whether customers looking for solutions, not software, will even know or care which application manages their HR service one or two generations from now.