i2 Technologies, Inc. - A Case study

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i2 Technologies, Inc.- A Case study

• Arunkumar Kandaswamy
• Hemnandan Patil
• Jocelyn Choo
• Ramanan S. Tiruvannamalai
• Shivasai Rengarajan

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Agenda

• Company Background
• Vision Mission
• i2s product offering
• Key issues
• SWOT analysis
• Recommendations
• Questions

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Company Background

• Established in 1988, Irving, Texas
• Core competence SCM software (B2B)
• Public in 1996
• First project funded by Timken steel
• 1,500 employees with 65 graduates annual
  turnover of 213 million in 1997
• Ranked 8th in 100 Hot growth companies-
  Business week(1997)

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Vision Mission

• Vision
• We want to be known as an electronic
  business process optimization (e-BPO) company
• Mission
• We will add 50 billion of value in growth
  and savings for our customers by the year 2005

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Transition in 1990 from "Factory planning
company" to "Supply chain optimization company"
"Take care of the customer and everything will
take care of itself." Ken Sharma
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i2 product offering

• Focuses on supply chain planning segment
• Product RHYTHM
• Two dimensions
• Type of decisions to be made (ie Buy, make, move
  , store, or sell)
• Planning time horizon (Time from decision to task
  occurrence)
• Products of RHYTHM include
• Demand planner, Factory planner, Supply chain
  planner, Distribution planner and Transportation
  planner

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Key issues

• Product strengths
• Talented knowledge workers
• i2s marketing sales strategy
• Effective client engagement methodology

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Key issues (Cont.)

• Sound management philosophy
• Demand for SCM software in dynamic marketplace
• Intense competition
• Transition to eBPO Diversify or Specialize

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Product strengths

• Innovative use of IT and OR techniques
• Object-Oriented Programming
• Optimization techniques
• Custom products
• Strategic acquisitions
• Consistent high investments in RD
• 20 of total revenue in RD(1996) to 25 in 1997
• Academic research

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Talented knowledge workers

• Highly knowledgeable and educated workforce
• Graduates and PhDs
• Industry specific experts
• Backbone for delivering innovative products
• Bright professionals working towards strong
  company vision

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i2s marketing sales strategy

• Ability to sell ideas
• Identify opportunities and apply IT
• Strong sales philosophy
• Effective implementation technique
• Implement different products based on success of
  prior implementation
• Effective client engagement process
• Satisfied customers

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Sound management philosophy

• Vision for success
• Motivation from top management
• Diversify out of the niche market by moving
  towards eBPO - Sidhu
• Will the vision and confidence help in their
  transition to eBPO?

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Demand for SCM software in dynamic marketplace

• Demand for SCM software
• Trends in ERP implementation
• Single supplier option for ERP and SCM
• Global financial crisis
• i2 stock lost 25 of its value in a single day

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Intense competition

• Competitors - Manugistics, Inc.,Numetrix, Inc.
• Price war
• SAP offers SCP package with lower price tag
• Competition from ERP vendors

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Transition to eBPO Diversify or Specialize

• Expand beyond supply chain optimization
• Finance, Marketing and Human Resources
• Focus on domain knowledge
• Diversify or Specialize ????
• Is i2 ready to go

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SWOT analysis
Strengths
Years of sound research
Knowledge enriched workforce
Strong leadership
Satisfied customers
Ability to sell and implement ideas
Opportunities
Diversify outside of supply chain
Strike partnership / alliance with ERP vendors
Weakness
Employees were not confident about the transition
Overconfidence In Acquisitions/Expansion
Threats
Shrinking market for SCM software
Entry of new competitors
Decreasing investors confidence
Price war
Global financial crisis
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Recommendations

• Dont diversify specialize in your core area
• Acquisitions not the only solution
• Strike partnership or alliance with ERP vendors
• Regain employee confidence - change management
• Continuously fund academic research projects at
  universities

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Questions

1. Diversify or Specialize, which would you prefer
   and why?

• What should competitors do if i2
• implements e-BPO?

3. What are the key factor(s) for i2s success?
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Questions (Cont.)

1. Do you think making schedulers as Internal
   Champions is a good idea? Comment from i2s and
   Clients perspective

• What do you think are the factors for i2
• losses over the years?