i2 Springs Back Against ERP Giants

Once the undisputed leader in supply chain software, i2 hopes to regain ground lost in recent years to SAP and other ERP players. The company says the next edition of its Six Two software suite will include 100 to 200 new features for manufacturer and ret

Snapping back from a string of financial and legal woes, supply chain player i2 Technologies is now working on product enhancements with longtime users such as Daimler-Chrysler, while adding new customer wins such as Bed Bath & Beyond, often through integrator partners.

i2 plans to add 100 to 200 new features in the next edition of its manufacturers and retailers software suite, i2 CEO Sanjiv Sidhu said in an interview with eWEEK.com.

"The health of the company is improving rapidly, and were feeling confident," Sidhu said. "We have $280 million in cash right now, and our business is growing in terms of customer bookings."

Specifically, the next release of i2s Six Two supply chain software suite will include new allocation planning and assortment planning features for retailers, as well as new tools for manufacturers around event management and "the outsourced supply chain," according to Sidhu.

Once the undisputed leader in supply chain software, i2 fell on harder times with the crash of the dot-com boom. The Dallas-based vendor has faced rising competition from ERP (enterprise resource planning) vendors SAP, Oracle and PeopleSoft.

But analysts such as those at AMR Research agree that i2 is on the rebound now. "2001 to 2004 was a rough period for the market. It was even rougher for i2, as the company underwent multiple layoffs that resulted in a 50 percent slash of the 2001 market work force, finished an SEC investigation resulting in restated earnings and the adoption of new revenue recognition policies, and was de-listed from the Nasdaq stock market," according to a recent report from AMR Research.

"i2 is battered but not out. Financials have stabilized, the management has dealt with many of the customer issues, and the products are uniquely positioned to tackle some of todays business problems," said Lora Cecere, an AMR analyst.

Sidhu said he perceives a greater competitive threat from best-of-breed vertical market players, particularly in the retail space, than from ERP giants such as SAP.

Drawing on results of a recent, company-conducted market survey, Sidhu criticized ERP for being too broadly focused and overly vendor-specific, as well as for asking users to "rip and replace."

"ERP really isnt good enough. Customers need to be able to deal with the problems theyre trying to solve," he said.

"ERP vendors are saying, You have to buy everything from us. But what were hearing [from users] is that supply chain solutions need to integrate with the rest of the world. Theres no guarantee that your customer or supplier will be using the same ERP system you are."

/zimages/6/28571.gifIBM is working to untangle supply-chain communications. Click here to read more.

Where ERP is too broad an approach, point solutions can be too narrow and sometimes too difficult to integrate with enterprise systems, Sidhu said.

Not surprisingly, ERP companies take a different perspective on the supply chain market. "Vendors such as i2, Manugistics and Siebel are diminishing into the background—and not just because of big, bad SAP, Oracle or PeopleSoft," said Bill Wohl, a spokesperson for SAP.

"By now, chain solutions have matured to the point where they should be part of the entire infrastructure. People want to go with companies like SAP all the way. Theyre saying, I dont want integration headaches," Wohl said.

Next Page: Tailoring vertical solutions.