Lowering TCO for JDE Customers

Posted by Andy Klee

June 30, 2015 | 10:21 AM

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Total Cost of Ownership (TCO) is a common yardstick that clients (and prospective clients) use to measure success of their JD Edwards projects. 

You don’t have to look far to find ERP software companies bragging about how low their TCO is. In fact, one big reason why third party hosting and “the Cloud” has become so popular is the emphasis on the total cost of ownership being lower using these alternatives to on-premise hosting.

TCO Drivers

Figure 1: TCO Drivers

Figure 1, above, shows what ERP vendors typically say about TCO with off-premise hosting. Note the reductions in the last two categories—Implementation and Hardware/Software.

There are even TCO calculators out there:

TCO Calculator

Figure 2: TCO Calculator

Note the cloud in Figure 2, above. Some subliminal advertising, perhaps?

TCO Case Study

Figure 3: TCO Case Study

Gotta love Figure 3, right? Click here check it out in detail.

On page 2 of the above report, there’s an interesting estimate of personnel costs:

Personnel Costs

Hmm, $150K for the fully loaded cost of each of 14 full-time IT staff?

Very interesting! And by the way, recent salary surveys by Dice.com confirm this estimate. Subtract 30% for benefits and the employer share of payroll taxes, and that means the average base salary of IT support staff for a JDE implementation is about $100K.

Now, before everyone rushes to their managers, and says “Where’s mine?” let’s remember that this is an average, and perhaps those clients in big markets are paying this amount (or more), and those of you in Podunk City might be making less.

Well, I tried!

Here’s the problem, as I see it, based on my personal view of reality, which happens to involve 25+ years of JDE training: This report was written in 2011, so the actual costs today are probably at least 10% higher than $150K each (fully loaded). And not helping things at all is the fact that it is about impossible to find any JDE experienced resources with less than 10 years experience. That drives up the cost of payroll and the Total Cost of Ownership.

That’s where JDE101 comes in. JDE101 is intended to address the lack of less-experienced JDE talent.

Recently, I decided to do something about this, and started JDE101—a nonprofit organization dedicated to creating a JDE training and certification program for students and recent graduates.

You, Mr. Client and Ms. Business Partner, will be able to hire JDE101 graduates at salaries that will not break your bank account and will lower your JDE TCO.

Some clients and business partners have already started their own programs to train new hires, and I applaud that. There’s no way that JDE101 will be able to satisfy all the demand out there for new talent to replace all of us 20+ year veterans that are starting to retire. To say nothing of the demand from all the new JDE accounts that Oracle and JDE Business Partners are selling.

I estimate there are 800-1,000 openings right now just in the US and Canada, for new JDE talent. How does one solve a big problem like this?

I suspect one simply starts. Starting small will lead to more and perhaps bigger solutions for the JDE ecosystem.

I invite you to explore the JDE101 website to learn more.  

Our first group of students and recent graduates begins August 3rd in Denver.

JDE101 students can be from anywhere. Help us fill the class with 20 future JDE business analysts and application consultants.

Together. We are. JDE.

JDE101

 

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Topics: JD Edwards, Guest Blog

About Andy Klee

From starting out as an elementary school teacher, to his 2008-2010 enrollment in Harvard's Owner/President executive education program, Andy knows firsthand the impact that great teachers and learning experiences have on one's career. Mix in his 25 years of JD Edwards experience, and the result is someone who is passionate about serving the JDE community with services that make a difference in the lives of those who must make use of (and fully understand) JD Edwards software. It is this passion for education that prompted Andy to create the company called Klee Associates, now JDEtips, in 1998.

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