i2 Technologies, Inc. - A Case study Arunkumar Kandaswamy Hemnandan Patil Jocelyn Choo Ramanan S. Tiruvannamalai Shivasai Rengarajan

Agenda Company Background Key issues SWOT analysis Recommendations Vision & Mission i2’s product offering Key issues SWOT analysis Recommendations Questions

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)

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”

"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

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

Key issues Product strengths Talented knowledge workers i2’s marketing & sales strategy: Effective client engagement methodology

Key issues (Cont.) Sound management philosophy Demand for SCM software in dynamic marketplace Intense competition Transition to eBPO: Diversify or Specialize

Product strengths Innovative use of IT and OR techniques Object-Oriented Programming Optimization techniques Custom products Strategic acquisitions Consistent high investments in R&D 20% of total revenue in R&D(1996) to 25% in 1997 Academic research

Talented knowledge workers Highly knowledgeable and educated workforce Graduates and PhD’s Industry specific experts Backbone for delivering innovative products Bright professionals working towards strong company vision

i2’s 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

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?

Demand for SCM software in dynamic marketplace 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

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

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………………

SWOT analysis Strengths Opportunities Threats Weakness 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 Threats Shrinking market for SCM software Entry of new competitors Decreasing investors confidence Price war Global financial crisis Weakness Employees were not confident about the transition Overconfidence : In Acquisitions/Expansion

Recommendations Don’t 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

Questions 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 i2’s success?

Questions (Cont.) Do you think making schedulers as Internal Champions is a good idea? Comment from i2’s and Client’s perspective What do you think are the factors for i2 losses over the years?