Supply chain management vendor i2 Technologies has linked front and back office planning and profit management systems, but is trying to steer a course that avoids conflict with key CRM and 'e-procurement' vendors.
Following a year of intensive development of a sales configuration tool that provides the base functionality needed to create a customer interface for demand planning and order fulfilment systems, i2 has launched a series of products under the banner of 'Intelligent eBusiness'. These are the first tangible results of i2's ebusiness process optimisation initiative, first announced in Dallas last September.
The suite consists of three core components tied together through a Web interface. eCustomer is i2's front end customer interaction mechanism that feeds information back to Rhythm Exchange and Rhythm Internet Fulfillment Server is what Sanjiv Sidhu, i2's chief executive, describes as, "a way of creating supply chain collaborations."
In Sidhu's view, the ability to intelligently interact with the end customer so that demand and supply are optimised leads to a position where profitability is maximised for everyone in the supply chain.
"We have undertaken a number of strategic opportunity assessments and are certain we have identified billions of dollars of opportunity for customers," he said.
The real benefits, though, will depend on which business sector is being addressed: "High tech looks for very fast returns on investment because it is a high risk business. Others, like paper and metals, are not so fast moving so they can accept lower returns, but still enjoy a substantial return," said Sidhu.
However, i2 understands it cannot deliver everything in the same way one would expect an enterprise resource planning vendor like SAP or Oracle.
Win de Waele, vice president of industries at I2, said: "Change within the supply chain will be integrated but we can't do it all ourselves. We will collaborate with existing vendors, partner for change management and won't expect customers to throw out what they've already done."
In this context, i2 has a strategic relationship with IBM's supply chain division that it regards as "critical".
But i2's strategy creates a conflict with customer relationship management (CRM) and e-procurement vendors. The front office components are designed to provide the end user and immediate supplier a way to build and sustain an interactive relationship of the type CRM vendors want to own.
Sidhu said: "This is virgin territory. There are lots of parts of the relationship the Siebels and Vantives don't tackle. We're filling the gaps."
Ariba is a competitor in the e-procurement market that recently partnered with J D Edwards and in terms of functionality, i2 may be coming from behind in this area.
Steve Weller, UK marketing director, admitted that both Siebel Systems in CRM and Ariba would be thought of as competitors, but added: "We're bringing a number of elements together that should not conflict completely."
Commenting on the launch, Larry Lapide, vice president of supply chain strategies, at analysts AMR Research, said: "As it did with eBPO, i2 appears to being driving its product strategy in response to the demands of its high tech customers. Leveraging and selling these applications into other vertical industries will be a challenge."
Lapide was also doubtful whether i2 can successfully cross its products over to service industries like insurance or financing – an essential component in industries like motor manufacture.
"There is also some question whether i2, as a software vendor, can move into the service business by running trading exchanges for transaction based service fees," he said.
Sidhu acknowledges that the level of integration needed to make i2’s products deliver will be an issue, but stresses his company’s comittment to working at this over that of its competitors. He is scathing of SAP's recent announcement’s of customer focus in this area.
"We recognise the need for business process optimisation but also data level integration will be needed. It won't be easy but there are harder things to do. Quite frankly I am appalled at SAP's treatment of its customers. To say they care about their customers is unbelievable. We're demonstrating a willingness to collaborate – do they?" he said.
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