A Story of J.D. Edwards - An Enterprise Resource Planning (ERP) Software

J.D. Edwards, also called JDE, is a software company founded in March 1977 in Denver, Colorado by Jack Thompson, C.T.P."Chuck" Hintze, Dan Gregory and Ed McVaney. The company made its name building accounting software for IBM minicomputers, beginning with the System/34 and /36, focusing from the mid 1980s on System/38 minicomputers, switching to the AS/400 when it became available. Their main AS/400 offering was called JDEdwards WorldSoftware and is popularly called World. In 1996, J.D. Edwards also launched a client-server version of their software called OneWorld. The company's official name was J.D. Edwards World Source Company and it is located at One Technology Way, in Denver, CO 80237. JDE was bought out by PeopleSoft in 2003. PeopleSoft, in turn, was purchased by Oracle Corporation in 2005.

J.D. Edwards and The Ed McVaney Story

Ed McVaney, was originally trained as an engineer at the University of Nebraska. Upon finishing his MBA from Rutgers and taking a job with Western Electric in mid-1964, and working applied mathematics schemes theory McVaney first came into contact with both computers used for operations research using mathematical modeling programs. Self-taught in machine language, but discouraged by computer and software limitations, McVaney took a position with Peat Marwick in New York City in 1964. From NYC he was transferred to Denver, Colorado in 1968. He continued with Marwick until 1970 when he took a position with Alexander Grant of Grant Thornton. While at Grant Thornton, McVaney met Jack Thompson who was working an IBM 1130 in Billings, Montana, and he was making $630 a month. Thompson was lured to Grant Thorton for $750 a month which brought him from Billings to Denver. McVaney had worked closely with Thompson going back to the time they had spent as consultants at the Great Western Life Insurance Company. At that time McVaney also met Dan Gregory, a college MBA student from Denver University. McVaney hired him out of the MBA program at Denver University. McVaney describes that time as a period in which he was developing his personal concept of integrity from a "high school level" to a much more mature business-related notion of absolute reliability. At the same time he was coming to the realization that, in his words, "The culture of a public accounting firm is the antithesis of developing software. The idea of spending time on something that you’re not getting paid for -- software development -- they just could not stomach that." This indicated to McVaney that accounting clients at that time did not understand what was required for software development at that time. After a what McVaney described as a consulting "failure" at a client, Haviland Whitcon Company, in San Jose, California, McVaney came to the conclusion that he had to start his own firm to implement his own approach to accounting business software development. McVaney had been discussing starting his own firm with both his wife as well as Thompson and Gregory. Now it was time to make the move, telling her, "I think it’s time for me to start my own company. Look, I don’t really fit in here. The culture isn’t right. I want to get done some things that can’t be done as context. I’d like to start my own company." Soon he would have his chance.

How J.D. Edwards Came Into the World of ERP?

In 1977, unsatisfied with conventional approaches to business and accounting software development and accounting software services, McVaney started J.D. Edwards by selling co-workers, Dan Gregory and Jack Thompson on his concept of a radically different approach to accounting software development that represented for all of them a significant cultural shift from typical sales promises to total commitment to customer goals based on an integrity-based approach to customer requirements. After discarding the name, Jack Daniels & Co., the group decided that J.D. Edwards sounded better. In order to get an $8,000 loan, McVaney took a salary cut from $44,000 to $36,000 and in order to live on that salary, all optional family expenses such as piano lessons, skiing and swimming lessons were pared.

Initial Clients

Start-up clients included McCoy Sales in Denver, Colorado, a then $4-million wholesale distribution company and Cincinnati Milacron Company, a maker of machine tools. McVaney and his team received a $75,000 contract to write software to develop a wholesale distribution system. The new company also got a $50,000 contract with the Colorado Highway Department to develop a governmental accounting, construction cost accounting system. McVaney's first international client was Shell Oil Company in Cameroon, Africa. Co-founder Dan Gregory flew to Shell Oil, himself to install the company's first international, multi-national, multi-transcurrency client software system. JD Edwards's software was originally coded for the IBM System 36/38 and later upgraded to support the AS/400 and called JDEdwards World Software. Late in 1996, the software was ported to client-server systems and branded JD Edwards OneWorld. By first quarter 1998, JD Edwards had 26 OneWorld customers and was finally implementing its strategic vision of "life after AS/400" and moving its mid-sized company’s customers to the new client-server flavour of ERP. By second quarter, JDE had 48 customers.

Quality control issues with OneWorld begin to surface

Within a year of the release of OneWorld, customers and industry analysts were discussing serious reliabilty, unpredicatability and other bug-related issues. In user group meetings, these issues were raised with JDE management. So serious were these major quality issues with OneWorld that by 2000, one of JDE's founders, Ed McVaney came out of retirement specifically to get OneWorld back on track. At an internal 2000 meeting in Atlanta, Georgia with some of his Company's CNC consultants, McVaney told them he had decided that he would "wait however long it took to have OneWorld 100% reliable and had thus delayed the release of version B7333 one full year because he "wasn't going to let it go out on the street until it was "ready for prime time."

The release of B7333, branded OneWorld Xe saw a marked improvement in quality. The patching process and change management process had been markedly improved and the product was received with a collective sigh of relief by both customers and a doubtful press. Since the release of Xe, the product has gone through a brand change from OneWorld to EnterpriseOne as a result of the PeopleSoft purchase of JD Edwards in early 2004. The underlying code had not changed dramatically with the exception of a Web-based client, introduced in 2001 and finally robust for customer use with the release of E810 in 2005. Initial issues with release E811 in 200, lead to a quick service pack to E811-SP1 which salvaged the reputation of that product. By 2006, E812 was announced and by 2008, the much-anticipated B9 was being tested internally and the 8.97 system/foundation code called a Tools Release was announced.

The update to Tools Release 8.96 on top of the applications upgrade to E812 saw the replacement of often unstable proprietary object specifications (also called 'specs') with an HTML-based system which promised to be much more reliable. A linkage to the traditional Oracle Applications layer called "Oracle Fusion" was also in the offing.

Enterprise Resource Planning or ERP software concept developed

With the vast majority of JDEdwards's customers in the medium sized area, clients did not have the luxury of gigantic accounting software implementations. There was a basic business need for all accounting to be tightly integrated. As McVaney would explain in 2002, integrated systems were created precisely because "you can’t go into a moderate-sized company and just put in a payroll. You have to put in a payroll and job cost, general ledger, inventory, fixed assets and the whole thing. SAP had the same advantage that J.D. Edwards had because we worked on smaller companies, we were forced to see the whole broad picture." It was this requirement for both JDE clients in the USA and Europe as well as competitor SAP, whose typical clients were much smaller than the American fortune 500 firms. McVaney and his company, along with their European competitors developed what would be called ERP software in response to that business requirement.

3 JDE roles in ERP

As an ERP system JDE comprises 3 basic areas of expertise, functional-business, programmer/developer and technical-CNC-system administration.

1. Functional business analyst

A JDE functional person is an expert on one or more of the JDE modules, financials, manufacturing, operations, transportation, sales and other areas. This person is the business subject matter expert. Often they started as a JDE user, the super user or power user and gradually developed the skill set of being able to support the business aspects of JDE. Other times, they might have a business degree and come into JDE on the job as a business analyst. This person seldom has any programming or development experience.

2. Developer/programmer

This person is trained in the software development and programming tools that translate the business requirements as identified by the functional people above into code and programming. Sometimes these individuals simply modify existing JDE objects and in other cases, develop entire suites of applications using the OneWorld / EnterpriseOne development tools including the Report Design Aide (RDA), Table Design Aide (TDA), business function C-code design tools and others using JDE's change management system, Object Management Workbench.

3. CNC - ERP System architect, engineer and administrator

This is a catch-all function comprising all that the two positions above do not cover including, installation, upgrades, updates, change management, system administration, security, performance tuning, package build and deployment and over-all architecture. The CNC title is taken from the term Configurable Network Computing which describes the overall JDE architecture.

McVaney takes J.D. Edwards public, retires, returns and retires again

McVaney felt that in order to compete effectively, his company needed additional capital and needed to go public. Bringing in Doug Massingill in as CEO, J.D. Edwards went public on September 24, 1997, at an initial price of $23 per share and was traded on NASDAQ under the symbol JDEC. By 1998, J.D. Edwards revenue was in excess of $934.0 million when McVaney retired. McVaney came out of retirement in April 2000 as CEO, replacing Massingill, because he felt that ongoing problems with quality control of the Company's client-server OneWorld product were severely cutting into the Company's credibility as an ERP provider. McVaney stood firm that the Company waits as long as necessary to release an absolutely ironclad-reliable upgraded ERP product. After a delaying the upgrade for one year and refusing all requests by marketing for what he felt was a premature release, in the fall of 2000, J.D Edwards released B7333 which was rebranded as "OneWorld Xe." Xe proved to be the most stable release to date and went a long way towards restoring customer confidence. McVaney had also been quietly encouraging customer feedback by supporting the totally independent J.D. Edwards user group called Quest International. Confident that the company was on the right track, McVaney retired again in January 2002, bringing in Robert Dutkowsky from Teradyne as the new president and CEO. McVaney remained on the board.

Company evolution

The company had gradually been adding functions to its accounting software, evolving it into a platform-independent enterprise resource planning (ERP) application that was renamed OneWorld in 1996. This newer technology used the so-called Configurable Network Computing architecture to transparently shield business applications from the servers that ran those same applications, the databases in which the data was stored as well as the underlying operating system and server hardware.

2003 buyout of J.D. Edwards by PeopleSoft

In June 2003, the J.D. Edwards board agreed to an offer under which PeopleSoft would acquire J.D. Edwards; the takeover was completed in July. OneWorld was added to PeopleSoft’s software line and was renamed EnterpriseOne.

2004 buyout of PeopleSoft by Oracle

In December 2004, Oracle completed the acquisition of PeopleSoft and has, since then, continued to support products that were created by J.D. Edwards. The final purchase went through in January of 2005. The PeopleSoft brand names in relation to the J.D. Edwards offerings, EnterpriseOne and WorldSoftware, were retired. Today, the products are called respectively, Oracle JDEdwards EnterpriseOne and Oracle JDEdwards World.

Continued development of the J.D. Edwards ERP products

Oracle has announced a product under development called "Project Fusion" (probably will be renamed when it is closer to commercial release in 2008). This product will be designed to replace existing Oracle Applications Suite, as well as products acquired from PeopleSoft (Enterprise) and J.D. Edwards (OneWorld / EnterpriseOne and World). After the acquisition, Oracle continues to enhance the EnterpriseOne suite, with 8.12 being the latest release version of this product and World, with A9.1.

J.D. Edwards' founders involvement in philanthropy

In May 1998, Ed McVaney donated more than $32 million to the University of Nebraska-Lincoln to establish the J.D. Edwards Honors Program. This program is charged with educating the next generation of business professionals by combining computer science education with business management skills. J.D. Edwards' founder and M.I.T. graduate Hintze donated more than $28 million to the advancement and development of Massachusetts Institute of Technology. Hintze died in September of 1996 but left a continuing legacy with his gifts and education.

by: Hafadz Kamizi Mat Hassan 2007239682