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This year marks the 10th anniversary of PeopleSoft's acquisition by Oracle and it's been two years since the release of PeopleSoft 9.2, likely to be the last version released. Many of the thousands of customers still running their human resources operations on this platform are wondering what to do next, especially as the move to the cloud gathers momentum. Let's look at where the PeopleSoft product line stands today and at customers' prospects.
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Taking stock of Oracle PeopleSoft is a case of looking at the proverbial glass: half empty or half full? Proponents of the glass half-full will point out that a majority of PeopleSoft customers have not decamped and are still using the product. Observers of the glass half-empty will notice that every year since the acquisition has seen a steady erosion of the customer base, with Oracle losing many PeopleSoft customers but gaining almost none which, in the long run, will be bad for the software vendor.
Both camps are right, although I tend to think that the glass half-empty proponents are more right. Enterprise software is particularly sticky. Companies don't change their HR systems as fast or as often as consumers switch smartphones because the number of enterprise users are in the thousands, requirements are complex, implementation takes longer and costs are much higher. Therefore, expecting hundreds of large global companies to switch overnight to a new HR system was never realistic.
However, the fact that a majority of PeopleSoft customers have remained with Oracle is by no means an indication of their strong loyalty to that vendor. Their reasons are many: happiness with status quo, resistance to change, ignorance of alternatives. In 2015 the alternatives are becoming increasingly more viable, which should lead to many migration projects getting the go-ahead.
Weighing PeopleSoft migration options
Many PeopleSoft customers will make the cut-the-umbilical-cord decision by looking at what functionality the latest PeopleSoft version brings, to decide whether there is enough business value to justify the cost of an upgrade. Peoplesoft 9.2, released in early 2013, brought some improvements with features such as the related actions framework and faceted search capability, both clearly copied from Workday. However, these improvements, smaller in quantity and quality than previous releases, and the support extension provided by Oracle through 2020, cannot hide the fact that PeopleSoft is mainly based on an architecture developed a couple of decades ago. The large number of PeopleSoft customers still on a pre-9 version will have to determine whether they are well served by a product whose data design harks back to the mainframe.
Once that decision is made, customers will face two choices: stay with Oracle or move to a third-party system.
Staying with Oracle means "upgrading" to Fusion, in reality a full-fledged implementation because Fusion was built on a completely different technological stack than PeopleSoft. The decision becomes even more complex when looking under the covers at what Oracle offers: Fusion for HR processes such as HR administration, Taleo for talent, Learn.com for learning, a "co-existence" with PeopleSoft 9.2. The financial incentives from the vendor have to be particularly appealing to obviate problems with a solution made up of bits and pieces built on different technologies and not yet integrated into a coherent set of applications. The implementation costs for a 30,000-employee company, the typical size for a PeopleSoft customer, can vary from $10 million to $20 million depending on the product mix selected.
If the Oracle option is not seen as a palatable one, customers can move to true software as a service (SaaS) alternatives. Oracle Fusion being offered as a private cloud and a public one is by definition not SaaS because it precludes all customers being live on a single version at any one time. The best SaaS alternative is Workday, which has been adopted by a majority of PeopleSoft customers moving to the cloud. To clarify: Although a majority of PeopleSoft customers are still on a version of PeopleSoft, of those who have moved to the cloud, an overwhelming majority have done it with Workday and not Fusion. This has prompted many observers to dub Workday as PeopleSoft 2.0, a somewhat inaccurate statement because the two are based on radically different architectures and deployment models. Hence the popular misconception that PeopleSoft customers will find it particularly easy to implement Workday. Simply not true.
It is also worth mentioning that a large portion of PeopleSoft customers are global and will need a replacement product that can accommodate all the various legal requirements of the countries they operate in. In Europe, for instance, PeopleSoft offers several payroll localizations; Workday offers none. (However, Workday plans to release payroll localizations for the UK this year and for France in 2016.)
A large number of PeopleSoft HR customers use SAP for financials and will, naturally, be particularly interested in evaluating the increasingly viable cloud HR option offered by SAP -- SuccessFactors -- especially if they already use it for their talent-management needs. Although less robust than Workday, but adding good functionality rapidly, SuccessFactors becomes a credible SaaS alternative to Workday. Two concerns need to be kept in mind, though: SuccessFactors has integration problems; its learning offering is based on another product, Plateau, and is yet to be fully integrated and as for payroll, a key component of any HR information system, it only offers an interface to SAP's on-premises system.
Because it is likely that Release 9.2 will be the last version of PeopleSoft, customers will have no choice but to move to whatever construct Oracle offers, or to a competing cloud alternative. But one thing is clear: doing nothing will become increasingly costly and adversely affect their business.
About the author:
Ahmed Limam’s 20 years of experience includes working as an HR practitioner, as an administrator with the United Nations, and in a variety of positions with HR software vendors Oracle, Fidelity Investments' HR Access, Wipro and PeopleSoft. Since 2009, he has run his own consulting business advising global companies on their HR systems. Based in Paris, he is also a blogger, lecturer, and author of a business novel set in the software world, High-Tech Planet. He can be reached at contact@AhmedLimam.com.
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