CEO: PeopleSoft Has Changed for the Better

When Craig Conway took over as CEO of PeopleSoft Inc. last September, the business applications vendor was facing major challenges. Among them was a weakening demand for its enterprise resource planning (ERP) software – as well as that of bigger rivals such as SAP AG and Oracle Corp. – that helped saddle the company with a $177.8 million loss for last year.

Key members of PeopleSoft’s management team defected, and the once fast-growing company laid off more than 400 employees. Conway also was in the unenviable position of taking over for PeopleSoft founder Dave Duffield, who was popular with users of the Pleasanton, Calif.-based vendor’s software.

A year later, PeopleSoft has finally released its Web-based PeopleSoft 8 applications upgrade after pushing the shipment date back from the middle of last year. And for the first half of this year, PeopleSoft reported a $32.7 million profit. Conway spoke with Computerworld about his company’s fortunes.

Q: How is the response to the initial release of PeopleSoft 8? Did the delay hurt?

A: What delay? You may be confusing us with Oracle. At our user conference [last] October, we indicated we would [ship] PeopleSoft 8 by Sept. 1, and we did. The reaction has been phenomenal.

Q: Is the future of PeopleSoft in ERP, customer relationship management (CRM) or a mix of the two?

A: CRM has become the largest-selling product line. [But] any enterprise applications company almost by definition is going to provide both front-office and back-office applications. And we feel that is the definition of e-business: the integration of customer, supplier and employee.

Q: We’ve heard a lot about the softening of the ERP market. What’s the key to success there?

A: That’s very old information. The news on the street today is that over the last three to four months, the enterprise [applications] market is coming back. It was temporarily subdued in 1999 – Y2k caused a lot of companies to stop spending on very large enterprise systems. [But] every analyst on the street in the last 30 days has been reporting that the market is making a strong rebound.

Q: Do you have plans to address the difficulty of ERP and CRM installations for users?

A: In the last 12 months, all [enterprise application] implementations have improved. The average PeopleSoft implementation is now less than five months. That’s been the result of rapid implementation tools. Large global systems can be done in less than six months. That’s the state of the industry now.

Q: How much has the company changed since you came on board, and how do you think you guided that change?

A: It’s a very, very different company. We’ve retooled our management team and business processes, so we’re a better-run company. And I think the company’s morale and confidence is at an all-time high. PeopleSoft was certainly hardworking but also a place where the culture was very casual. When customers visited, they were likely to see dogs and cats in the office because it was a family atmosphere. I didn’t come in a draconian way to try to change the company overnight. [But] I think I added an ingredient of intensity and accountability and competition to the corporate culture.

Q: You recently dropped about 70% of the outside consultants that worked with PeopleSoft on application projects. Why did you do that, and how has it played out?

A: About a year ago, we met with our consulting partners. There was a large component of [them] that really didn’t offer great value to PeopleSoft. We culled our partners down to concentrate only on ones that really returned a lot of value. Our partners are now more committed than ever.