Merger Creates Food Supply Chain Network

iTradeNetwork, which makes software-as-a-service technology for the food industry, has merged with Instill, which provides spend intelligence solutions for food service companies.

Under terms of the agreement, which was announced April 21, Instill will operate as a separate division of iTradeNetwork.

Rob Bonavito, founder and CEO of iTradeNetwork, said the two companies complement each other with little overlap of functionality and will provide significant benefits to the food supply chain with their combined breadth of products.

“iTrade has historically focused on on-demand collaborative workflow, and has gotten major business from retailers during the last four years,” Bonavito said. “We saw Instill as a company with food-service expertise, especially in the spend intelligence area.”

He said Instill’s recently released Sales Insight tool, which allows food suppliers visibility into their sales programs to improve compliance and discover new growth opportunities, is an example of the kind of value Instill brings to the merger.

“We will be able to better manage our products and business with retail- and food-service customers,” Bonavito said. “The two companies combined will expand the breadth of their product offerings and offer more options and value, taking advantage of a full suite of tools.”

He said the newly created food supply chain network will help users solve business challenges including obtaining visibility across the supply chain, gathering real-time supply chain data, and tracking and planning product movement more effectively.

“Retailers want closer collaboration with suppliers and better management of the supply chain going forward,” he said.

According to Bonavito, the network’s SAAS capabilities will also benefit users.

“Feedback from our customers indicates that the more products we can offer [on a SAAS platform], the more economic value going SAAS provides them. The combined companies’ technology offering will allow our customers to not have to rip out systems they have already spent millions and billions of dollars implementing,” he said.

Ken Morris, president of retail management consulting firm LakeWest Group, said solutions built on a SAAS architecture can provide real value to retailers, but they must be designed for “one-to-many” use.

“One-to-many means having the same copy or version of software working for many different retailers,” Morris said. “This affords a much cheaper price point and retailers can leverage the cost of software across many users. You should have separate file structures, but the software should be the same.”

In contrast, he said most SAAS solutions offered by ERP (enterprise resource planning) vendors are built on a “one-to-one” model that requires each retailer to use their own individualized software.

“It takes a big infrastructure to run a one-to-one SAAS environment,” he said.

Dan Berthiaume covers the retail space for eWEEK. For more industry news, check out eWEEK.com’s Retail Site.