Recently I went on a sales call to propose for helping a fairly large retailer do a software selection and then a vendor selection. Because of my many years of experience with SAP one of the initial concerns they raised was whether or not I could be objective and unbiased. That is not only a fair question but a critically important question.
I decided to approach this sales presentation effort in a very different manner by providing solid, verifiable, and objective methods to evaluate software fit as well as vendor fit. Although the proposed client company was very gracious, accommodating, and well-meaning it was painfully obvious that another presenter’s bias toward JDA software was apparent.
Because of what I perceived (possibly wrongly so) as a previous sales “snow job,” I decided to begin a series on software selection.
Every Company Wants to Make the Right Software and Vendor Selections
I know for a certainty that this prospective client, like so many others, want to make the right decision for their company. I also have no doubt that the CIO, the Supply Chain VP, and all of the others present want the very best for their company. Frankly I’m not so sure they are making the best decision and only time will tell.
During the presentation I was peppered with several SAP specific questions although I was clearly not coming in to propose or push SAP solutions. In fact I went to significant measures to ensure the presentation was as unbiased and as substantive as I could possibly make it. I even went so far as to provide them with a clearly objective and proven method for software and vendor evaluation which is widely accepted, reliable, and fairly mature.
In the end the selection went to another company. I am not sure if it was the company who proposed JDA who also slammed SAP and brought in lots of articles but I thought it was important to clarify a few things here because of the slimy sales scams that appeared to be presented.
JDA, i2, and Software Acquisition New Customer Ramifications
Serious considerations for JDA “supply chain” customers:
- JDA just acquired i2 Software
- i2 was ignored by Oracle in it acquisition bender [FN1]
- In terms of financial payments the purchase price was barely above the company’s annual revenue [FN1]
- i2 internal development and investment has been dormant for about 5 years
- On top of that, with an active R&D development plan and funding it would take at least a couple of years to integrate i2 into the JDA application
For the client I just visited that last item on the bullet point list above should be frightening. Translated into practical application, if this company chooses JDA based on their acquisitions of i2 and Manugistics they will likely be paying a whole lot more for development and implementation than they ever planned for or budgeted.
I wish this company the very best in their efforts, and I hope that we might be able to do business at some point in the future. But whether we do or not I am a little disgusted with many of the software sales scams and shell games. So, I am going to begin a series of posts to help companies everywhere understand software selection workings, the sales scams, and the methods to prevent them.
Dennis Howlett at ZDNET notes of JDA’s acquisition [FN2] that:
“[T]he combined company expects to ramp up EBITDA to 23.9%, in part based upon $20 million near terms savings but also combined maintenance revenues of 46.9% total revenue. I’d prefer to see JDA invest more heavily in innovation for the vertical markets in which it has successfully focused.”
So, based on shareholder financial communications it would appear that no development will occur to i2 without JDA sales efforts being able to find customers to fund the development. Good luck to any customer undertaking JDA / i2 supply chain projects, these companies often find those “development dollars” in someone’s pockets when they won’t directly fund their own R&D initiatives.
After I left I provided this prospective client with a clearly defined selection methodology and followed up the meeting with more solid, substantive information on how to ensure that they select both the very best software for their company, and the very best vendor to implement that software. To that end I sincerely hope they do not make the mistakes that many companies do when embarking on these selection activities [FN3].
Upcoming Series on Using the AHP Method for Software Selection
I have decided to fully develop and provide freely over the next several weeks and entire selection methodology that anyone can follow. I will lay out much of the key academic research as well as key templates, considerations, approaches, and guidance on performing useful software selection efforts.
Stay tuned for this software selection series over the next several weeks.
[FN1] i2: The Software Company Even Oracle Didn’t Want http://www.typepad.com/services/trackback/6a00e55185411c883300e553f9317b8834
[FN2] JDA acquires i2: Oh how the world has changed http://blogs.zdnet.com/Howlett/?p=454
[FN3] How to Kill Your Software Selection Project in 10 Very Easy Steps
The following site was also referenced for some of this information.
JDA to acquire i2, creating major SCM player