Porr lll lmPiementing btroregy

txercise: Tronsition ot PeoPleSoft

INSTRUCTIONS

b.* under rr6011snt''-and hand in to

Readthecaseintlrisexercise.IdentifydataftomthecasetotepfesenteachSinthe
in ther";;,
?_s Model Wdte the iJ";;;;r
your instructor as instructed'

ProprSort, tNc.
a.cahfomiao":"1 5urLwd";";;;;*g,
eopreSoft, Inc. is a
eooleSoft, calrtorrua-Dase(r
#,..1iX';Ti'jl*:lt#-
':jT::':"":.0^iil# materia* managemeot, distti-
p"irr resources. on an avet ge, a

ffi ililHlffi J;":;;';"ff;n""-"':g:,Hi:':""ff

^1""ta*ated.softwar",P"*T,:::3:- o,rr h'man
i'n;H:Tfi
*r*i:ffi "ffi"i::ffi '#::'.';:T#;;';";&;'o:**or1'to/obe'lween1ee0
tj:ttffTJ":"":::;;d8 were $1'3 billioqiz ti-"' that
or
'6 1ee4

lndustry
Enterprise Resource Plonning

PeopleSoftisoneoffoutmajorql^r=T.se$15billioo":..?o.'.fesourceplanningsoftware The F'RP

Th. ;;;;;.1 e. Sen ei'"f C.r,,r*r, O.""it Corp', and Raan Co'accounhng'
(ERp) industry. softwate for
that drive uu.*.*;ons:,6nancial
industry provides the progtams and manufacturing packages
to auto-
programs for petsonno
humao resource "Jriitirtr"don, aror:nd'
mate productio", *iti a
view toimptoving efficiencies all uket of
y#;;dO ;;;;.1*''d, firms began focusing on Y2K
Theiodustrysawbadtimescteepupsuddenlv.W-hileanalystswetefotecas0ngamz
by as,h"
g52 in ERp
billion sales 20a2,
sales taperinq A;'Elb *;
issues and the market sa". "ff :-t-,":f #;;tffJJJffi"|73;-
:lir*g*'ry**:*r::":"f'.i"S:;:$'ktij1,T:.:;:;*;;""ileindus.
tw'Revenueftomnewproductsalesfell'60%andthestockpdcethatwasapproaching$60a

.iT;ntn#lTytri:1:""1'JJfr I3[:*::q:::::,::*i,l:::1ffl lT;"H#r

' are midmarket---compafles
it ,irr."i.s. \flbile its main customerc
annualreveoues-oncleandSAPweretrlngtoenterthissamemarketsegmenl
PeoPleSoft's Origins
the whole
il;-["k il;d""'Pcs to a bigger comPuter serving
DavidDuffield"formerlyasalesexecudveatlnternationalBusinessMachines,sawaooPporruilty
to develop ai"or-r"Iffi,; a"f,go"'' Ken Morris' and profited
He f"""a"a nt-"p*oft in 1987 J;;;;sofware business mao-
officp. ;;t."g. PeopdSoft pioneered to do so ustng
ftom mainftame .o*n.rorii"r"
&om the sirift *" the first comPaoy
uo-j';;;;;t' "iag1'41n
agementapplit"tioi;b1';; ooor "ntnrnr{"L 1gg4 to7 '032 in 1999'
MicrosoftWindows' The number ;;;;"t
 Model
124 Session I5 Strotegy lmplementotion Using the 7-S

Tikemostsoftwarecompanies,Peopldsoft.builtanrnforrnalandsensitivecofPorateculture.
initials' DAD'
David A. Duffield becas:e a legendary,
.t.r .J, ng*: *ie- his company' Hisand cotniPa{ty
H" schmoozed with workers'
suited him ,ppropr1a,"ty for hi-s 'olt' 'o"t-tli ^
R oing D"t"'' him as easy-going aod not a
Employees see
rock band was named ,i., t"t -*"
i* o*o .o*p*I ilg: where people ate comPany funded
tvoicai ctro. The company developed
'#."it*t^*tJ;""a'iopp"aat-thecompaoy"PeopieStore'"
..theme j-t; Nerf battles sPoataneously break
!

The offi.ce sometjmes Las a f'n, "L"rphere. employ-

ooi i"o" ,."r.'t*i"r. Giaot Posters of smiling
oul There is no dress code. Manag.* ao
.sslinethehallwaysshoutiogoutmessagessuchas'Justt'ytoe"tmetoleave!"Duf6e1d
It * abolot havrng fun and having a
sftesses that the compaoy is more
than iust;t*;;";"y
heart. He tras penoaally given over $200
mit'onio h"tp stray fogs a'd cait' At 58' Duffield
He has seven children' ofwhom fow
are adopted'
f*oily;"'
considers hitnself a Executives answer
The company h";:.;;"d, prrrr"sophy that shuss bureaucracy.
"" "letters. et!loy.., are eocouraged to say what they think
*rit their own
thejr own phones foihtlp' 'Don't ask fot per-
"odd."irioo, without A"q.r.rrtty'gol9--t9 othen
and make important belief' The staff often
go".'#oo[" is a company
mission, ask for forgiveness if something -;;;.;;.
peopleSoft also has benefits iack"ge and employee stock
wotks 7'-hour rveeks. ftet to telecommute from''
to use and
purchase plan. Employe"' '"t"it" " ""*P;;;;; "it
hOme. u^*-,, 'T!'p .^mhcrtv sDafgs nO
Duffieldsaysthecompanv,smln.soiristokeepitscustomelsh"ppy.Thecompanysp: ate dfuectly involved in
expense for thar y";;; oo.-thir6lof tl" .o.r,p*y's 1,000 .-plovt"t
wheu a Peoplesoft
mstomef sennce. >omedmes, the effon
g; ;.;"'; in: J+ or a"ry, such as Hwricane Andrew'
companr get back in business following
representarive helped a trlori&-bared The PeopleSoft tech-
The company had to u"r. ir, ,yr,"*,p
*a-ffig;y ,h"."a of the year'
smoothly'
went
nician even flew back to Miami on
chrirtt r", o"y f.irt q make-sure things of
family friendly' Ioo' Fifq'-eight percent
The company's persoonel policies *" ."".ia!ted progflrn that actively eflco'r-
oew peopleSoft hires "o*" thioogh * "-.pf"y"t
referral
"toitt Peoplesofg
ages worker, ,o ,."rL Jtir.", "ld
f"""d:.;;H"rat *tr., cheryl"helped found relatives work
;11 q/qrk tere. Dozens of
m"tied cot'pltt and
and his brother, son and daughter *t'
has a "Bting your pareots to work"
within the company ranlp' The com-P-atry --'^', their
Through it opiJ]"*nl, D.rf6^eld -
iorrio"a",lat the key challenge *us 1st'rining
he would
,il ;;;;* ;"tbusiasm of the wotkforce 'i something
corporate culture. would kill for the kind
":ft: for the u.rt po.riui. to*th. 'jotnel companies
oot sacifice in striving as
the cultue o'r tnt company'".HoweYet'
of commitrnent w'e have--and it * printanty?; l"
thecompanygewrapidlyaodthe.numb",of"*ployeesfose'.rnanynelil/comersdidaotfeelas
ru. rapid growth hurt products too' The
much a part of the family as the older .-il;;;ki. focused on their
designers fro* i,tt-to ttsources *d
d"i;'";;";; *"""r"t*?,,g became
toott atkJ and work together as well
own areas, and the products each gtoup Pt"il;A "ot
tl.y should fo, "" i"ttg'ated management software offenng' increase' and
". .There were other intemal problems. ;;;_l."pleSofiptograms !'Saf,^loperceot ayuat'
to 90
customefs started complaining of poor
,"*i.!. 'nvhen you'tt q:*i"g at 80

,you cao *"t" -i"t"U.|l O"?na.i ,rid. "Th:; g., """i*a ,,i" Wtlo gto*th slows' problems
b.go to surface'
 Port lll lmplemenfing Strotegy r25

Confinued Growth
The acquisraoas of otler sofrware companies supported PeopleSoft's growth. In 1996, Peopl.e-
Soft acquired Red Pepper Software, a specialist in advanced manufacturing planning, but many
thought that PeopleSoft had overpaid for it. Duffield, kept the two organizations separare in or-
der to protect Red Peppers brand idenaty and also due to his concern about the impact of the
acquisi.tioa oa &e compaty's corporate culture. Howevet, the communicadon between the two
cultwes \Fas v€f,v poor and at dmes an outside public relations firm acted as a go-betnreen. In
1997, &e comgaay acquued Campus Solutions Inc. as part of its strategy fot enteringthe higher
educatios applications marker In October 7999,it agteed to buy Vantive, a money-losing maker
of software used bv companies 1s improve customer service, palng a 60o/o premium. Analysts
felt that PeryieSoft aeeded to quickly integrate and tum that company around to avoid a neg -
tive impact-
In &e iadestr,r, ERP firsrs are looking to diversify. SAP has been undertaking major reor-
xgd i5 *i*ing at small clients too. Oracle Co1p., the wodd's second-largest independ-
ent softtra€ coapaay, also produces the Oracle database and a range of other software tools.
Meaaurhile,J. D. E&ards, a new' company that entered the ERP market in. 1997, has captured a
significaot shere of rhe mid-matket.
Askd about p€ststent rumors that PeopleSoft was for sale. Duffield ad:nits that selling the
comPa$y looked like a good idea six or seveo montl ago. However, as PeopleSoft's largest
shareholdec, be says that is no longer the case. He did confifln that the company was actively
seeking a ae\e CEO to lead the company in the new environment.