A while back, I did a proposal to help a fairly large retailer do a software and vendor selection. Because of my many years of experience with SAP, they were concerned about whether 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 differently by providing solid, verifiable, and objective methods to evaluate software fit as well as vendor fit. Although the client company was gracious, accommodating, and well-meaning, another presenter’s bias toward JDA software was painfully obvious.
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, wanted 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 wanted the very best for their company. Unfortunately, they may have not made the best decision.
During the presentation, the client peppered me with several SAP-specific questions even though I did not propose or push SAP solutions. In fact I took significant measures to ensure the presentation was as unbiased and as substantive possible. I even went so far as to provide them with a clearly objective and proven method for software and vendor evaluation that is widely accepted, reliable, and mature.
In the end, the client selected another company. I am not sure if they chose the company that proposed JDA and also slammed SAP and brought in lots of articles, but I wanted to clarify a few things here because I believe that company may have been a scam.
JDA, I2, and Software Acquisition New Customer Ramifications
Serious considerations for JDA supply chain customers include the following:
- JDA just acquired i2 Software
- i2 was ignored by Oracle in its 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 five 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 had chosen JDA based on their acquisitions of i2 and Manugistics, they likely paid a 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. However, whether we do or not, I am a disgusted by many of the software sales scams and shell games. Because of this, 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.”
Based on shareholder financial communications, they will likely not develop 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 else’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 and vendor for their company. 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 an 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
[FN2] JDA acquires i2: Oh how the world has changed
[FN3] How to Kill Your Software Selection Project in 10 Very Easy Steps
The following site was also referenced for some of this information:
