Concord, Mass.-based Welch Foods Inc., the international fruit-juice company with annual sales exceeding $550 million, is considering competitors SAP and Oracle Corp. for a large-scale enterprise resource planning (ERP) implementation, a Welch's executive confirmed today.
The leader of Welch's ERP selection committee, Larry Rencken, said yesterday that Welch's has narrowed its choices to SAP and Oracle, two companies whose recent rivalry has been more intense than ever. Oracle CEO Larry Ellison has declared war on SAP, saying his attempts to acquire PeopleSoft Inc. are part of a plan to build an ERP empire.
Both SAP and Oracle recently wrapped up their presentations at Welch's, and now the selection committee is conducting site visits to determine how clients of both companies rate the vendors, said Rencken, director of customer support and ERP at Welch's.
"We feel as if the products are very competitive," Rencken said. "At this point in the process, it is clearly a head-to-head battle. We felt as if our current processes are not the most efficient or effective way to get where we want to be."
Rencken said Welch's will go with either a full Oracle E-Business suite or SAP's most elaborate ERP offering, mySAP. "We felt that buying the entire product was the best way for us to really move our processes to where our vision needs us to be," he said.
The selection team will present its final decision to the company's corporate board for approval this fall, he said. He declined to put a price tag on the project. However, it is an enterprise-wide undertaking.
Currently, Welch's is using a proprietary order entry system, J.D. Edwards & Co. tools for financials and a Prism system for MRP. Rencken said the company wants to make a complete move to either Oracle or SAP, with the exception of a couple of "bolt-ons."
Oracle could not be reached for comment this morning. SAP spokesman Bill Wohl declined to comment, citing company policy regarding any inquiries about potential clients. However, Wohl said, "The marketplace clearly does see SAP as a leader [in] consumer packaged goods (CPG)." Recently, SAP made a splash when it secured a $35 million deal with Dial Corp., beating out Oracle in a heated competition.
"If you look at the rest of the vendors that are out there, they are currently focused on things other than customers," said Wohl, referring to the ongoing controversy over Oracle's attempted takeover of PeopleSoft. In recent weeks, SAP has been hammering home the theme that it is the only major ERP vendor staying above the fray.
Rencken said the negotiations have not reached the point of pricing.
"We haven't entered into the aggressive negotiation stage," he said. "Right now, we're focused on functionality."
Welch's is likely in a strong position to negotiate, given the current animosity between the vendors.
"Both made it clear to us that they understand that the Welch's name is a strong name, in both the eyes of the consumer and their eyes," Rencken said.
"There's a lot of equity associated with the brand, and it would be a big name for either of them. They've made that clear."
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