3 Company Background Established in 1988, Irving, Texas Core competence – SCM software (B2B)Public in 1996First project funded by Timken steel1,500 employees with 65% graduates & annual turnover of $213 million in 1997Ranked 8th in 100 “Hot growth companies”- Business week(1997)
4 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”
5 "Factory planning company" to "Supply chain optimization company" 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
6 i2 product offering Focuses on supply chain planning segment Product – RHYTHMTwo dimensionsType of decisions to be made (ie Buy, make, move , store, or sell)Planning time horizon (Time from decision to task occurrence)Products of RHYTHM includeDemand planner, Factory planner, Supply chain planner, Distribution planner and Transportation planner
8 Key issues (Cont.) Sound management philosophy Demand for SCM software in dynamic marketplaceIntense competitionTransition to eBPO: Diversify or Specialize
9 Product strengths Innovative use of IT and OR techniques Object-Oriented ProgrammingOptimization techniquesCustom productsStrategic acquisitionsConsistent high investments in R&D20% of total revenue in R&D(1996) to 25% in 1997Academic research
11 Talented knowledge workers Highly knowledgeable and educated workforceGraduates and PhD’sIndustry specific expertsBackbone for delivering innovative productsBright professionals working towards strong company vision
12 i2’s marketing & sales strategy Ability to sell ideasIdentify opportunities and apply ITStrong sales philosophyEffective implementation techniqueImplement different products based on success of prior implementationEffective client engagement processSatisfied customers
13 Sound management philosophy Vision for successMotivation from top managementDiversify out of the niche market by moving towards eBPO - SidhuWill the vision and confidence help in their transition to eBPO?
14 Demand for SCM software in dynamic marketplace Trends in ERP implementationSingle supplier option for ERP and SCMGlobal financial crisisi2 stock lost 25% of its value in a single day
15 Intense competition Competitors - Manugistics, Inc.,Numetrix, Inc. Price warSAP offers SCP package with lower price tagCompetition from ERP vendors
16 Transition to eBPO: Diversify or Specialize Expand beyond supply chain optimizationFinance, Marketing and Human ResourcesFocus on domain knowledgeDiversify or Specialize ????Is i2 ready to go………………
17 SWOT analysis Strengths Opportunities Threats Weakness Years of sound researchKnowledge enriched workforceStrong leadershipSatisfied customersAbility to sell and implement ideasOpportunitiesDiversify outside of supply chainStrike partnership / alliance with ERP vendorsThreatsShrinking market for SCM softwareEntry of new competitorsDecreasing investors confidencePrice warGlobal financial crisisWeaknessEmployees were not confident about the transitionOverconfidence : In Acquisitions/Expansion
18 Recommendations Don’t diversify – specialize in your core area Acquisitions not the only solutionStrike partnership or alliance with ERP vendorsRegain employee confidence - change managementContinuously fund academic research projects at universities
19 Questions Diversify or Specialize, which would you prefer and why? What should competitors do if i2implements e-BPO?3. What are the key factor(s) for i2’s success?
20 Questions (Cont.)Do you think making schedulers as Internal Champions is a good idea? Comment from i2’s and Client’s perspectiveWhat do you think are the factors for i2losses over the years?