J D Edwards is to acquire Youcentric, a US provider of Java-based customer relationship management software with a growing customer base in the financial services sector. Terms of the deal were not disclosed.
Youcentric's software includes applications for sales force automation, campaign management, contact centre management, and partner relationship management. In February the company released Yourelate Financial Services, a package geared specifically to meet the needs of the wholesale banking and investment markets.
J D Edwards says the addition of Youcentric's applications will result in the delivery of an integrated set of software that enable companies to electronically manage their business relationships from supply chain planning all the way to customer services.
The company says the acqusition will position it to capture demand in the high-growth CRM applications market, which AMR Research estimates will expand over the next five years by a 29% compound annual growth rate. J D Edwards’ research shows limited penetration of CRM applications among its customer base with at least one third of its customers expressing intent to purchase CRM technology within two years.
"There is a clear propensity for organisations to utilise the CRM capabilities of their ERP backbone providers due to the inherent benefits of pre-integration," says Steve Bonadio, senior program director, Meta Group. “In fact, our research reveals that CRM integration costs can amount to 60% of the total implementation cost associated with the average CRM project. Furthermore, organisations must look to application vendors that provide flexible, standards-based architectures to more readily integrate third-party data and systems.”
Consolidation of the two companies’ applications is expected to proceed rapidly, based on complementary component-based technology architectures. The first phase of integration is scheduled for the end of 2001.
The acquisition was welcomed by Dave Weaver, a senior vice president, CRM services at Youcentric customer Bank of America. "We are delighted to hear of the deal between Youcentric and J D Edwards. We believe it makes good sense for both companies.”