Oracle’s JD Edwards EnterpriseOne— the Low TCO, High ROI Option for Top Tier ERP

An Oracle Accelerate for Midsize Companies briefing

2

Table of Content

3 Executive Summary

4 Total Cost of Ownership (TCO) Defined

5 Component of JD Edwards’ Low TCO

6 Committed to Flexibility and Ease of Use

10 Architected by Design for Choice and Integration

14 Addressing Industry Needs

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Executive Summary

Since their beginning in 1977, Oracle’s JD Edwards enterprise applications have developed a loyal following of customers in organizations of all sizes and industries.

As an integral component of Oracle’s overall enterprise applications strategy, JD Edwards ERP—EnterpriseOne and World—remain viable and compelling options for midsize companies seeking a low TCO entry point into the entire family of Oracle application, middleware, and database products.

Oracle offers multiple enterprise application suites, each with unique strengths and capabilities but built to a common development strategy across all products. This strategy is united in the goals of helping customers leverage Oracle’s extensive technology platform and array of complementary applications.

Midsize Companies considering Oracle enterprise applications must decide which ERP suite best suits their requirements. JD Edwards has long been known as an appealing choice for midsize and larger companies that are drawn to a low Total Cost of Ownership (TCO).

JD Edwards has established and maintained a reputation for low TCO via three attributes:

Flexibility and Ease of Ownership

Targeted Industry Focus

An Architecture Supporting Choice and Integration

The JD Edwards development and strategy teams focus on:

the general business requirements of growing midsize companies deploying Top Tier ERP for the first time; and

industry requirements for companies in Manufacturing & Distribution, Consumer Goods, Asset Intensive Industries, and Professional Services

This briefing describes the attributes and qualities of JD Edwards ERP that make low TCO a reality for thousands of midsize companies spanning many industries and geographies.

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Total Cost of Ownership (TCO) Defined

Any discussion of Total Cost of Ownership (TCO) requires that first the term be defined by its components. In a practical sense, companies measure the TCO of a technology choice in order to determine its affordability as well as to judge its cost and return relative to other choices.

Does every company measure every technology initiative at the same level of detail? The answer is, “most likely not”. In reality, the way TCO is measured is probably unique to each company.

In today’s business climate, product and service innovation and process reengineering strategies rely heavily on IT enablement. Therefore, any true comparison or evaluation of IT choices mandates also an assessment of the value—Return on Investment (ROI)—of that choice.

Ask ten IT professionals to identify the components of technology TCO and you are likely to get ten different lists. However, all will agree that TCO components include both tangible (“hard”) costs and intangible (“soft”) costs.

COMPONENTS OF TECHNOLOGY TCO (partial list)

Initial Expenses—

Network hardware, software, and setup

Server hardware, software, and setup

Software implementation and training

Applications integration

Software customizations

Legacy system migration expenses

Ongoing Operational Expenses —

IT staff

Risk Management (including backup and recovery)

Cost of downtime and system inefficiencies

Security

Software and hardware maintenance and support

Integration maintenance

Ongoing 3rd party consulting services

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

5

Component of JD Edwards’ Low TCO

Over the last twenty years, many good enterprise applications solutions have disappeared or faded into the background, victims of the “dot.com bubble burst”. Of those vulnerable companies that survived, most were purchased by software consolidators interested more in maintenance and support revenue streams than in continued product development and innovation.

Since being acquired by Oracle, JD Edwards customers have benefited from multiple product releases, linkage to Oracle’s middleware and business intelligence infrastructure, and factory built integrations to industry leading capabilities in other Oracle products.

JD Edwards ERP is not designed to fit all the needs of every company. Instead, the development focus is on a core set of ERP processes that fit general business needs and those that are common to a handful of industries. This keeps down the costs for customer to deploy, maintain, patch, and manage the software.

Shurgard Self Storage Europe Reduces IT Maintenance Costs by 20% with Consolidated IT Infrastructure

Shurgard Self Storage Europe specializes in all aspects of the self-storage industry for private and commercial users.

Shurgard Self Storage Europe Brussels, Belgium www.shurgard.com Employees: 506

“Oracle’s JD Edwards EnterpriseOne applications enabled us to consolidate financial management activities in seven European countries onto a single platform. We now have a shared, global infrastructure, which has helped us to reduce maintenance complexity and costs by nearly 20%.”

– Manuel Barreiro, Senior IS Project Manager

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

6

Committed to Flexibility and Easy of Use

BUILDING A PLATFORM FOR SUCCESS

Low long term TCO starts with basic IT infrastructure considerations. A typical midsize company operates with a lean IT staff—often only 2-10 Full Time Equivalents (FTEs). They will likely rely heavily on external resources while deploying applications and setting up the IT infrastructure, but will ultimately need to be self supportive.

JD Edwards customers have the option to take advantage of bundling and pricing incentives by selecting a complete top to bottom stack of Oracle hardware, database, middleware, and complementary applications. Customers focused on low TCO/high value alternatives can select the JD Edwards EnterpriseOne Oracle Technology Foundation, a complete package of tools, middleware, and database. All components are designed and tested with JD Edwards as well as being priced much lower as a package than if purchased separately.

Oracle is committed to engineering solutions with open industry standards while also matching complementary Oracle products into bundled offerings that present compelling price and TCO scenarios for customers. Yet non-Oracle hardware and databases for JD Edward will remain viable options. Customers with IT resources trained and accustomed to other vendor products can choose to retain those strategies as another way of keeping or achieving optimal TCO.

IMPLEMENTING FOR NOW WITH THE FUTURE IN MIND

Long term costs associated with the ERP ownership experience are impacted heavily by the way solutions are initially deployed.

During installation, anything that slows down or complicates the implementation will increase initial costs and most likely have an impact on long term expenses. A successful deployment of the right solution choice is key to increasing the likelihood of low and maintainable long term TCO.

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

7

Once the most favorable IT infrastructure in place, the focus turns to solution implementation. Five years ago, Oracle launched Oracle Accelerate—Oracle’s approach to helping midsize companies deploy applications rapidly and at a low cost. This ongoing program standardizes rapid implementation best practices across the full range of Oracle applications.

A key component of Oracle Accelerate are Oracle Business Accelerators—optimized configuration tools that incorporate Oracle’s vast industry and region-specific implementation experience while providing the flexibility to personalize the configuration according to a customer’s business requirements.

Oracle Business Accelerators provide industry and region specific business flows and configuration content coupled with an online Q&A tool that captures a customer’s specific requirements and personalizes the resulting configuration. The configuration deployed to the JD Edwards EnterpriseOne instance is not locked in stone and can be subsequently changed in any way necessary as the customer’s business changes.

ORACLE ACCELERATE SOLUTIONS

Often, Oracle partners take the next steps, creating Oracle Accelerate Solutions. These solutions are reviewed by Oracle and represent the packaging of Business Accelerators with implementation services and other products and services such as engineered hardware configurations, financing, applications hosting, training, and partner-developed industry applications or extensions.

The JD Edwards development team has invested in a strategy of continual evolution and optimization of the rapid implementation tools made available to partners and Oracle Consulting. One example is the recently released next generation of Oracle Business Accelerators that provide increased accounting setup personalization via the Q&A component. Implementers leverage the intuitive Q&A interface in personalizing the Chart of Accounts and corresponding accounting rules. In more closely address customer accounting requirements, implementation costs can be further reduced.

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

8

STREAMLINING INSTALLATION

Streamlined installers in the ERP industry have shown to significantly reduce implementation costs. To date, Oracle has created rapid installers for standard and virtualized instances of JD Edwards EnterpriseOne.

For standard instances, Oracle has rapid installers available for the System I (Express Installation for IBM I) and Oracle Linux platforms. Also, there are plans for rapid installers to be built for additional platforms supported by JD Edwards EnterpriseOne, including Windows.

Oracle VM (Virtual Machine) templates for JD Edwards EnterpriseOne are preconfigured, pretested templates of JD Edwards EnterpriseOne ERP, Oracle Database, and HTML servers. Implementation time is reduced from the days or even weeks needed for a traditional approach to a matter of minutes. Once the virtual machines are running, the implementation can be completed—adding users, setting up security, and configuring applications.

Additionally, Oracle’s JD Edwards has invested in creating a powerful collection of configuration tools that assist

with a variety of system administration activities. This includes additional implementation tasks and the maintenance of multiple instances of JD Edwards EnterpriseOne.

TOP TIER ERP THAT IS EASY TO MAINTAIN

Midsize customers should expect their chosen solution to cover the vast majority of their business needs via configuration. Avoiding customization requires deep and broad functionality within the core ERP systems. Additionally, configuration mechanisms must be logical and intuitive to minimize the need for IT support.

JD Edwards is enterprise-class software—all customers run the same applications regardless of their size. Companies within JD Edwards industry focus areas—as well as those requiring the full range of general business process capabilities—can be confident that the applications feature the required functionality lacking in lower tier—Tier 2 or Niche—solutions. Additionally, JD Edwards ERP features embedded tools for system-wide configuration and development that are employed both when the software is first implemented and for adjustments in support of ongoing process changes.

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

9

Through the use of Processing Options, User Defined Codes, Applications Versions, Automatic Programming Interfaces (APIs), and System Constants end users can usually make changes without code modifications. This minimizes the IT resources needed to support interface personalization and application customization. These components are maintained through standard lifecycle management tasks so that configurations are sustained throughout upgrade processes.

Start-up Firm eZono AG Builds a Strong Foundation with Enterprise Resource Planning System

eZono AG, founded in 2004, is a pioneer in application-specific ultrasound imaging devices. Its products and applications enable clinicians of various medical practices to diagnose and monitor medical conditions.

eZono AG Jena, Germany www.ezono.com Employees: 25

“Oracle’s JD Edwards EnterpriseOne and the Pyxis’ Accelerate solution for Medical Devices have given us a sound base for all future business process improvements. Our investors and business partners also highly approve of the implementation which is very important to us as a start-up company.”

– André Jäkel, Chief Financial Officer

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

10

Architected by Design for Choice and Integration

Every midsize company seeks the optimal balance of flexibility, functionality, and complexity when choosing to deploy a comprehensive, integrated enterprise applications solution and its associated IT infrastructure.

For midsize companies, too much flexibility can lead to a confusing situation—where do we start? Likewise, a limited footprint—low complexity—can mean operational needs can’t be met. Oracle JD Edwards ERP has a unique reputation for its ability to satisfy the needs of a broad range of customers within a single application suite.

EXTENSIBILITY AND INTEGRATION

Midsize companies deploying a comprehensive, integrated ERP suite for the first time are typically motivated by the need to automate manual processes or consolidate multiple operating entities into a common IT platform. They justifiably expect to be able to accomplish those goals within their core ERP system.

With its broad solution footprint and deep functionality for select industries and general business, JD Edwards ERP typically provides capabilities that cover the vast majority of business process requirements.

However, growing companies cannot foresee all possible scenarios associated with expanding products and services or venturing into new global markets. Thus, when selecting an ERP solution, decision makers must consider how to maintain low TCO in dealing with potential situations that require integrating to third-party applications or developing extensions to core ERP processes.

Like all Oracle development and strategy groups, JD Edwards has dramatically moved to a Services Oriented Architecture (SOA) approach. For example, with many other ERP suites customers may need to use multiple tools for activities such as change management and security. This requires an investment of time, money, and resources in developing IT staff skills across all toolsets or contracting with partners to perform the related activities. JD Edwards customers need only to learn one universal toolset for open cooperation with other applications outside the core ERP suite whether integrating to 3rd party or other Oracle products.

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

11

When business requirements exceed capabilities within the core ERP suite, Oracle customers first look to Oracle’s portfolio of solutions since there are factory-built integrations between JD Edwards and many of those products.

However, some companies may have a very unique business process that is a competitive differentiator which cannot be met by standard functionality but ideally needs to stay within core ERP processes or applications.

When customers extend functionality within JD Edwards they are advised to follow a framework of processes and tools—outlined in the JD Edwards Extensibility Guide—that are automatically integrated to the Lifecycle Management tools. If these standards are adhered to, minimal effort is required to migrate and merge application extensions.

JD Edwards Architecture Provides Customers with a Vendor-Agnostic Infrastructure and Flexible Extensibility Framework

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

12

SUPPORTING SINGLE OR MULTIPLE INSTANCE STRATEGIES

One of the desirable attributes of Top Tier solutions such as JD Edwards EnterpriseOne is the ability to deploy a single ERP instance that meets a company’s needs in all the global markets they serve. A single global instance is a viable option for most JD Edwards customers. Oracle supports 22 languages and 33 localizations, with additional support providing in some emerging markets by Oracle Certified partners.

Most Tier 2 and Niche vendors can’t offer that option because they are unable to support as many currencies, languages, and localizations. Nor can they provide around the clock technical support in as many countries as can Top Tier providers. Chances are, with a Tier 2 or Niche vendor, companies must make difficult decisions as to how many instances they must deploy to cover all permutations of currencies, countries, brands, and lines of business.

Companies of all sizes deploy the same JD Edwards application suites

Food & Beverage

Food & Beverage

Engineering & Construction

Oil & Gas

Wholesale & Distribution

III Servicios S.A. de C.V. Mexico City, Mexico www.iiiservicios.com Revenue: $30 million USD Employees: 350

Hilltop Neszmély Zrt Neszmély, Hungary www.hilltop.eu Revenue: <$20 million USD Employees: 150

DKG-EAST Zrt. Nagykanizsa, Hungary www.dkgeast.hu Revenue: $35 million USD Employees: 500

ABF Bearings Roosendaal, Nederland www.abfbearings.nl Revenue: $10 million USD Employees: 30

Thiess Brisbane, Australia www.thiess.com.au Revenue: $5.2 billion USD Employees: 17,000

Premium Wine Brands Adelaide, Australia www.pernod-ricard -pacific.com Revenue: $10.06 billion USD Employees: 19,000 Nynas AB Stockholm, Sweden www.nynas.com Revenue: $2.6 billion USD

IGEPA Group GmbH & CO. KG Hamburg, Germany www.igepagroup.de Revenue: 2.07 billion USD Employees: 2,350

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

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However, there are circumstances that warrant multiple instances and the ability to deploy them quickly and at a low TCO. Examples include Merger and Acquisition activity and expansion into emerging markets where margins are squeezed tight and perhaps the communications infrastructure may not be up to the standards of established markets.

All JD Edwards customers, regardless of size, run the same application suite. Some chose to run a single global instance for worldwide operations while others deploy multiple instances when it’s makes sense.

For example, low internet bandwidth and sporadic connectivity in remote locations or emerging economies may justify deploying a unique instance. Information can be pushed back to asynchronously to a main corporate instance when it’s possible and convenient. While not impossible, cost and complexity makes such an undertaking impractical for companies with limited resources that have chosen other Top Tier ERP solutions.

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

14

Addressing Industry Needs—Balancing Complexity and Focus

Every software provider has struggled with how to offer a comprehensive footprint with flexibility and robust extensibility while keeping TCO reasonable.

Oracle solves this dilemma via an industry-focused approach. With three comprehensive, scalable ERP suites, Oracle’s product development strategies can be tailored to the industry strengths of each. This focus can go even deeper into industry sub-segments by leveraging the strengths of each product line.

JD Edwards’ development strategy is complementary to Oracle’s comprehensive industry focused approach which establishes Oracle as the enterprise software provider with the most extensive industry and sub segment coverage.

For JD Edwards, the industry focus is primarily in four areas—

Consumer Goods

Manufacturing & Distribution

Asset Intensive Industries

Professional Services

Additionally, thousands of companies have deployed JD Edwards EnterpriseOne or World as a general business ERP solution for their in-depth capabilities across standard business processes such as Order to Cash and Supply Chain Management.

COMPREHENSIVE CAPABILITIES IN JUST THE RIGHT AMOUNT

The unique underlying architecture of JD Edwards software enables Oracle to provide just the right amount of ERP capabilities without overwhelming complexity.

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

15

When many ERP providers adopt an approach of “less functionality equals less complexity” when going down-market to address the needs of midsize companies. However, this approach often leads to scenarios where the “right stuff” is missing. Customers must augment functionality via customizations or by buying additional products, both of which raise TCO. Oracle’s JD Edwards Product Strategy has picked the “right stuff’ for emerging companies with general business needs and the focus industries. This covers the core General Business processes that just about all customers need to run. Additionally, they take development focus deep into the industry requirements for a few select industries and processes to be complementary with what’s available across Oracle’s three ERP suites.

Learn More about JD Edwards’ Industry-specific Capabilities for:

Asset Lifecycle Management

Food and Beverage Producers (Agriculture)

Manufacturing and Engineering

Order Management

Project Management

Real Estate and Home Construction

Supply Chain Planning

Supply Chain Execution (Logistics)

Supply Management (Procurement)

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

16

Woodside Homes Continues to Benefit from Home Building Industry-Specific Enterprise Solutions

Founded in 1977, Woodside Homes is part of Woodside Group, Inc., one of the nation’s largest privately held home building and construction enterprises.

Woodside Homes North Salt Lake, UT www.woodside-homes.com Employees: 250

“Oracle’s JD Edwards technology is a leader in the homebuilding industry and continues to help us manage our business efficiently with industry-specific tools that meet the unique needs of a homebuilder.”

– Richard Leaf, IT Manager

Sunchang Corporation Improves Capacity Utilization of Wood Products Business

Established in 1959, Sunchang Corporation manufactures plywood, fiberboard, and lumber for commercial and industrial purposes.

Sunchang Corporation Inchon, Republic of Korea www.sunwood.co.kr Employees: 500

“Measuring and tracking logistics can be difficult in the wood products industry. We deployed Oracle’s JD Edwards EnterpriseOne solution to better manage the flow of information, products, and services throughout the organization. As a result, productivity has improved, data is of a higher quality, and we have a system that complies with IFRS.”

– Lee Moon-Duk, Managing Director, Planning & Coordination

TCO Defined Components of JD Edwards’ Low TCO

Committed to Flexibility and Easy of Use

Architected by Design for Choice and Integration

Addressing Industry Needs

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