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i2 TECHNOLOGIES: Back to Basics

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DQI Bureau
New Update

Singapore is a beautiful city, so long as you stick to its urban limits; the

suburbs are not as easy on the eye. Similarly, the success of e-business

initiatives in enterprises make for beautiful case studies, so long as you stick

to the ones that succeed; stories of millions gone to waste in countless others

don’t quite make for inspiring reading. These were the two driving lessons

learnt at Planet Singapore, one of the world’s largest e-biz events.

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The i2 Forecast

  • Marketshare will shift to companies that adopt a high-velocity organizational structure and mindset
  • Successful e-business strategy and implementation will double revenues in quick time
  • Collaboration across the value chain will become the requirement, not the exception, for all veins of enterprises
  • Leading organizations will increasingly and aggressively use content in the solutions
  • Next-generation e-business will leverage services from the network over the Internet
  • Inter-enterprise knowledge management will become a core competency
  • Successful CEOs will use 



    e-business solutions as a competitive weapon
  • Those who maintain perspective in changing business environments will lead by turning variability into an opportunity
  • Tomorrow’s winners will go back  to the basics
  • Characteristics of a winning organization–desire, value, first steps

Also

driven home at Planet Singapore was an eye-opener–out of all corporate

spending, as much as 50% goes into inefficiencies. "Making a business

venture successful is not so much about creating new profit avenues as it is

about removing existing inefficiencies. Across the world, most companies have as

much as 50% of inefficiency built into every product and service. Of every $100

you spend on any purchase, about $50 is the cost of in-built inefficiency. What

companies need to do is embrace the new B2B maxim–back to basics–for that is

what will help them survive," says Sanjiv Sidhu, CEO and founder of i2

Technologies.

In other words, what Sidhu is saying is most goods can potentially be

purchased at half the price, it is the inefficiency of the producing company

that jacks up the costs!

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What about ERP?

Sidhu surprises with a view opposed to most other tech-heads. During most of

the nineties, large manufacturing units, even service organizations, poured in

pots of money into automating enterprise-processes–installing what are

popularly called ERP systems. "The ERP era was one involving the new

economy look, Y2K, fledgling IT initiatives–there is no reason that ERP should

be adhered with anymore, ERP is dead," says Sidhu.

According to him, ERP has a host of faults. "ERP packages are

accounting-driven, meant to allow faster closure of accounting books. They

ignore customers and focus only on history. It is a bit like driving looking at

rear-view mirrors," the i2 Ceo says, highlighting the case of Dell, which

abandoned an ERP implementation after spending over $50 million.

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"After the ERP phase, we had the e-craze of the last two years, aimed at

garnering the highest possible valuation, leading to market capitalization. We

call it e-lipstick," he says. According to him, companies invested in

adding a customer interface through the Net, without bothering about critical

issues like availability and pricing flexibility, which the customer really

wants. "Now that is dying out. Everyone thought e-commerce was the

get-rich-quick mantra. What no one realized is that e-commerce can never be the

answer to corporate success; strong planning resting on an e-commerce platform

is the only workable methodology. So 80% of IT budgets were spent on what the

customers didn’t really care about. In an ideal situation, the ratio will get

reversed, as 80% of tech-spend should be customer-centric.

So, is the picture as dismal as it sounds? No, if Sidhu’s conviction and

optimism are anything to go by. "Executive sensitivity to what technology

can do has gone up in the last two years. Worldwide, and especially in the

Asia-Pacific region, hi-tech is emerging as the most important contributor to

business success and turnaround. Cutting costs is the answer to creating greater

profits and streamlining the functioning of any organization," says Sidhu.

Customers ride on TradeMatrix

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The i2 Tradematrix Promise

  • Ordering products from enterprises over the web will be more accurate, convenient and efficient than any other method
  • Enterprises can provide customers with an online shopping experience tailored to their needs
  • Enterprises can enhance trading relationships with both suppliers 



    and customers
  • Enterprises will have better forecasting capabilities, dramatically increasing responsiveness to customer demand
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Toward this end, i2 propounds the use of Trade—Matrix solutions to

transform and optimize the supply chain process. The complete suite of

TradeMatrix solutions is targeted at addressing enterprise needs in the supplier

relationship management, supply chain management and customer relationship

management, along with a content and technology platform that enables

enterprises to make decisions faster in every phase of business, regardless of

how far they have progressed with an e-business strategy.

"Three years ago, we started our commitment-to-customers drive. We set

ourselves a target of creating $50 billion in customer wealth–through savings

arising out of rooted-out inefficiencies–by 2005. A year ago, we upped the

scales as we were doing far better than we thought. Having achieved over $16

billion in customer savings already, we pushed the target up to $75 billion. We

have focussed so far on horizontal industry segments, but now we will also push

into vertical sectors like banking, construction and insurance," Sidhu

says.

Customers appear to vindicate the bullishness. At Planet Singapore–an

e-business event organized by i2 Technologies and co-sponsored by many of i2’s

partners–were a host of companies that have been using TradeMatrix solutions

for some time, with tangible dollar savings. While most companies desisted from

putting their finger on investments made or returns therefrom, all admitted that

investments were being realized as savings of equal denomination within a year’s

time. "i2’s solutions combine B2B exchange technology with proven

best-of-breed supply chain planning tools. The result is a highly intelligent

B2B exchange where buyers and suppliers can procure indirect and direct goods,

collaborate on the design of products, automate the order fulfillment process,

and anticipate shifts in market demand," according to JP Morgan.

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What TradeMatrix does?

An observation made at Planet was "the TradeMatrix model of supply chain

management is collaboration taken to its absolute extreme". Nothing could

explain it better. The software is aimed at transforming and optimizing the

supply chain process, buoying bottomlines and resulting in better value for both

suppliers and customers. It connects an enterprise with suppliers (SRM) at one

end and with the market (CRM) on the other in an integrated value chain. This

helps deliver customized services to customers and source customized services

from suppliers with great speed and efficiency by squeezing out the wastage.

Pallab Chatterjee, executive vice-president of i2 Technologies, says this

solution package should work strategically in the Asian region, especially in

India. "The global market for SCM solutions is worth $5.4 billion and is

set to grow rapidly in the years to come, especially in the Asia-Pacific region,

including India. Asia-Pacific is the region that was hit badly by the meltdown

and cost-cutting and delivering value will form the core of a makeover. The fact

that Planet has moved out of the US for the first time and to Singapore

signifies the growing importance of Asia as a market for e-business

products," he adds.

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According to Chatterjee, the market should be worth $100-150 million in three

to four years’ time. "The growth rate in Asia is two-three times that in

the US. The driving force for manufacturing companies in Asia is visibility and

velocity. Multiply the two and what you have is extreme velocity with clear

vision. Admittedly, there is a blip in investment at the moment. But look at it

historically, these conditions always go away in two-to-three quarters.

Inventories have piled up, let them squeeze them out and you will see a

resurgence."

Asked about competition, Chatterjee chuckles and insists that all i2 is

concerned about is partnerships, because it is teams that will power i2’s

march towards its dream. His CEO is more candid when asked about rivals. Says

Sidhu, "The only competition I see is the lethargy of those chaps at

companies’ IS departments who take months to decide and move files. They are

our number one and only competition!"

Rajeev Narayan in Singapore

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