Dead software walking: PeopleSoft 7 years after its acquisition by Oracle

PARIS

With most PeopleSoft customers
having reached the end of the
toothpaste, time has come to
throw the tube away and get
something else

Two years ago I wrote a post on the waning of PeopleSoft and its corollary, the various options left to its customers. Back then I was heavily criticized by the Oracle/PeopleSoft ecosystem as exaggerating the reports of the death of the once-king of HR systems. And yet, today, developments are proving me right. As the following timeline graph shows, Oracle has stopped investing in any meaningful way in the PeopleSoft platform, no net new customers have been reported, the number of projects and resources are down and current customers are embracing the below options in greater numbers. It is therefore time to provide an update on these options.

ON DEATH ROW: Innovation goes out the window when Oracle comes through the door. Hardly surprising
when we realize that last time Oracle brought truly great innovation to the IT market was
THIRTY YEARS AGO with the modern relational database.
Since then Oracle has either copied its competitors (e.g. Apps -SAP, Fusion -SAP/Workday) or
 bought and killed them (e.g. PeopleSoft, Siebel, Hyperion etc.)

As the timeline graph shows, as an independent company PeopleSoft released a  new version every 12-18 months with substantial functionality in each one. However, in the seven years since Oracle took over, only two releases have come out. Yes, that's one every 3 ½ years which even in the glacial pace of ERP releases is quite unique. Now, if the features developed were game-changing and disruptive one might make the case that maybe it was worth waiting that long. But look at what has been delivered in those releases. Release  9.0 (December 2006) brought the first talent management feature (Talent Profile) aiming at stemming the hemorrhage of PeopleSoft customers going to the likes of Taleo and SuccessFactors. That concern was even more apparent with the next release, PeopleSoft 9.1 (September 2009), which delivered the back integration of Talent 9.1 to previous PeopleSoft releases (actually just 9.0 and 8.9.) It did not stop the hemorrhage and Oracle was left with no other solution than to buy Taleo five years later thus proving the futility of its PeopleSoft-based talent management offering. The only feature of note was the three localized payrolls (Argentina, China, Thailand - in the case of Argentina it was a partner-developed solution which  was productized in 9.1.) Apart from that you are more likely to find a four-leaf clover in the Mojave Desert than truly innovative PeopleSoft functionality in these releases.


OPTION #1: Upgrade to PeopleSoft 9.X and wait for 9.2 

To be thorough in the analysis, let us consider in detail the option of staying with PeopleSoft and upgrading to one of these two releases. The advantage is that you remain on the same product, your users will not be traumatized with having to learn a new user interface, you can use the Oracle maintenance for longer (remember that Oracle usually maintains the latest release for five years after general availability.) This could be the opportunity for you to implement features you never switched on and which could bring some business value. That's what some companies are doing and which I call "squeezing the PeopleSoft lemon."

The problem with this option is that, first, 9.0 didn't get much uptake from customers (and, anyway, support is ending this year) and, as shown in the graph, 9.1 is hardly any better in terms of features of value (unless you are a global company with a significant workforce in the three countries that got a new payroll.) Also, be aware that every upgrade requires more than just the latest release. For instance, moving from PeopleSoft 8.9 to 9.1 requires an upgrade from PeopleTools 8.46 to 8.51 and also a platform upgrade (from Oracle database 9 to 10, Weblogic and all other third-party software.) New hardware may also be required which, needless to say, Oracle would be glad to supply you with. And, of course, there is no guarantee yet on when 9.2 will be released and what it will contain. (Oracle is making noises about end 2012 meaning it will not be  available before mid 2013 at the earliest)

When taking into account the costs, time, resources, complexity and energy involved in carrying out this upgrade vs. benefits received, it is clear that this option does not make much sense. Why continue to invest on a product on its last legs? Investing in PeopleSoft now is like buying a roundtrip ticket on the Titanic after it has hit the iceberg.


OPTION # 2: Switch to Oracle Fusion

The main reason Oracle stopped investing in PeopleSoft is that it has been throwing all its R&D firepower on the successor product, Fusion. (For a detailed analysis of Fusion, read my post "Error 404: Oracle Fusion not found"  from November 2011.) So if you have a good relationship with Oracle (admittedly a rare occurrence for many customers) why not try and see whether Fusion can meet your needs? Because it is the same vendor there are some advantages, in particular license-wise. Like for like you are supposed to get a free license (but check that first.) Another advantage is that because it is the same vendor, some migration help is available in the form of an upgrade path (but not necessarily a direct one) depending on the point/major release (8.8, 9.0, 9.1 to Fusion.)

On the downside, if the customer uptake on 9.X was not as impressive as Oracle might have liked, Fusion is getting tepid response from the US and even less from Europe, despite a better user interface and good analytics features. And of those who have decided to take the leap of faith, very few hail from the ranks of PeopleSoft, making it even less of an obvious choice for you. (One exception in Europe is French banking giant SocGen which is currently implementing some Fusion HCM modules*.) Clearly Oracle customers are reluctant to be the guinea pig for a largely unproven product, especially knowing Oracle's track record when it comes to beta releases. Many modules are still not ready for prime time, neither are many country localizations (If with PeopleSoft you could manage your workforce in 10 countries, why would you be ready to settle for less in Fusion?) Because the Fusion code is different all the upgrade help Oracle promises cannot hide the fact that we are talking here about a full-fledged reimplementation.  And any help in the form of an upgrade path or an upgrade script is limited, only for those customers on 8.8 or 9X, meaning that you have to upgrade from, say 8.3, to one of these point releases and then to Fusion. Going through two implementations may be asking too much and will prompt the search for alternatives.

One variant of the two previous solutions is to maintain your HR system of record on PeopleSoft and move everything else to Fusion or vice versa: adopt Fusion Core HR but interfaced to the other PeopleSoft products you have already implemented. One key advantage is that it allows you to test the Fusion waters before you decide whether Fusion is ready for prime time and expand the footprint. The biggest drawback of this son-of-Frankenstein approach is that, contrary to Oracle's statements, you'll have to do all the integration work which largely preempts the point of a full-Oracle solution. A recent ZdNet article ("Oracle's Cloud Fusion app integration: More complicated than it has to be") explains some of the issues with this mongrel  approach: I love the reporter's comment that "No, Mr. Customer, you don't need to do the integration work, Oracle does!" (I'm paraphrasing.)


OPTION # 3: Third-party support

Considering the limited value that releases 9.0 and 9.1 bring, one might wonder why on earth any customer has upgraded. And even if not large in numbers, there are PeopleSoft customers that have moved to one of these two releases. Why? Shall we question their sanity? Apart from ignorance and mistakes, which we all make, the main reason can be seen from the below support table.

End of the line? Dead in the water? Whatever you want to call it, PeopleSoft's
best days are behind it... and its customers!

Sadly, most PeopleSoft customers who have upgraded have done so not because of the carrot of high-value functionality but because of the stick of desupport. Caught between the rock of an upgrade to 9X and the hard place of moving to Fusion, many have chosen what they feel is the least of the two evils.

And yet, if the issue is support, there is an alternative: third-party support. If you are unsure of which final alternative to pursue (see Options # 4 and 5 below) but are unhappy about paying Oracle a hefty maintenance fee and getting little in return you can move to a company like Rimini Street which will take over supporting your implementation at half of what you are currently paying. In Europe, for instance, companies such as Deutsche Post and Sita have done exactly that. In these days' tough economic climate saving 50% of your maintenance bill is not something to be scoffed at. Some of the savings can then be used to research other more permanent options, while doing it at your own pace without being pressured by your vendor to upgrade to a new platform that you don't feel is right for you.


OPTION # 4: Switch to a new HCM system

Once you start looking at non-Oracle alternatives, the first obvious choice is to expand your ERP footprint. Since a large proportion of PeopleSoft HR customers run SAP for Finance, it therefore makes sense to look at whether running SAP HCM brings value. If the business case, which you will of course have done comprehensively, shows many integration points between HR and Finance (e.g. employee data needed for expense refunds or employee skills for project management) then SAP HCM is a  valid choice. (I am discarding Oracle EBS HR since its shelftime is as limited as PeopleSoft.) Many large PeopleSoft customers have adopted this approach, such as French banking giant BNP which has discontinued using PeopleSoft as its HR system of record and is moving to SAP.

Another variant is to look at HCM suites (vendors that only focus on HR) which would make sense if your project is domestic or limited to a single region of the world. If you are US-centric Ultimate or Lawson could be a good choice, if European/Latin American why not Meta4?

OPTION #5: Going SaaS 

You can cast your net wider and, if ready to move your HR system to the cloud, rip and replace it completely with a SaaS system. Of course I am talking here of a true SaaS system, so that will rule out the cloud version of Oracle Fusion which purports to be SaaS when it is just hosted. Revealingly, a majority of Fusion early adopters have picked the on-premise flavor.

SAP has a promising true SaaS offering based on the SuccessFactors platform: its HR admin module (Employee Central) may not be as robust as its on-premise counterpart but is a good way to start. Workday is the other true SaaS vendor, the one that started the whole SaaS ball game rolling, and has replaced many PeopleSoft implementations. For a full comparison of Workday vs. PeopleSoft, you can read my post of a year ago, recently updated, PeopleSoft vs Workday - Old vs New, which became this month my most popular post, further evidence that momentum is shifting from on-premise to SaaS, with PeopleSoft customers looking at Workday even more actively. Among PeopleSoft's customers defecting to Workday (I gave some examples in the previously mentioned blogpost) a historic customer, computer maker HP,  is adding its name to the list.

In both cases the advantages of a SaaS system, if you are ready for this delivery model and want a full web-based system, are just phenomenal: unlike PeopleSoft you don't have to pay for any database license, hardware, third-party system, middleware nor maintain an army of in-house IT consultants. And you get the most modern of HR systems, with some of the best user experience around. On the minus side: if your requirements are truly unique, and the configuration capabilities of the SaaS system do not meet all these requirements, then customization is necessary and SaaS will not work for you. Also, be careful not to underestimate your resource needs when doing your business case: you may not need the cast of thousands required by a traditional PeopleSoft implementation, but every Workday update will require several FTE days of work per quarter to test the new features.

SOFTWARE GRAVEYARD:
After three decades of
invaluable service
to the business community
it is time for PeopleSoft
to rest at Oracle, where
all software products
go to die

With PeopleSoft way past its sell-by date, time has come, for those who haven't done so yet, to look even more seriously at the various available options. One option, though, is no longer available: do nothing. Stay on an antiquated HR platform at your own risk and peril, and see how your HR and business objectives are hamstrung by old, obsolete technology.

*UPDATE Jan. 2014: SocGen, like Dutch bank ING, have stopped their Fusion implementation and keeping PeopleSoft...for the time being!

(Ahmed Limam spends a large part of his time on 3P activities: Post-PeopleSoft Planning, helping organizations from different geographies and industries make an audit of their PeopleSoft implementation and decide on the best course forward.)