Data Technology and IBM bring i2 supply chain planning to mid manufacturing market

i2 Technologies’ sophisticated manufacturing and supply chain software suites are for the first time being targeted at mid range companies in the £250—400 million turnover range by independent enterprise software services firm Data Technology with IBM Global Services. At a news conference yesterday, Data Technology and IBM announced a strategic partnership specifically for i2 implementations. The deal follows several months of project co-operation between the two this year. DT was already the sole UK distributor for i2 in the mid market, while IBM has its own world-wide pedigree of strategic alliances with i2 and competitors. So far, the two have notched up five UK projects involving several different ERP systems – in the white goods, food, paints, pharma and heavy engineering sectors. It looks like a very powerful and attractive combination – even more than at first glance. As Jonathan Young, marketing manager for IBM’s European supply chain planning practice, says, although IBM has an immense supply chain practice spanning both large corporates and the mid market, “What Data Technology gives us is arms and legs. We’re working in partnership to get as much coverage as possible” On the one hand there’s DT’s independent and in-depth understanding of i2 and mid range manufacturers – the firm has 15 years experience of implementing and supporting SSA, Computer Associates and JDE ERP systems, supply chain systems and EDI. And on the other, there’s IBM’s world-leading hardware, middleware, databases, and change management, consulting and implementation services and – just as important – its extremely significant financial packages. DT also offers Application Manager – fixed fee outsourced help and support desk IT services (typically £150,000—250,000 per annum). Recent independent research shows this kind of service delivering greater efficiencies over totally in-house run alternatives and higher stock market prices – and DT says these are now extended to multi-site, disparate system supply chain IT projects. Like others, the pair insist that most users have most to gain from this level of supply chain IT initiative which, although far from cheap or easy in business terms, can deliver very substantial profitability, customer service and inventory improvements. Brian Hynes, DT’s supply chain solutions manager, manes several key aspects of i2’s IT specifically for mid market manufacturers. Demand Management, he says, is the number one application, because it’s aimed at making serious supply chain improvements by balancing forecasts with capability and inventory constraints, and involves business change to the proven sales and operations planning (S&OP) model. Beyond this he cites i2’s Factory Planner (with simulation, Theory of Constraints and the rest); Inventory Management (with automatic historical evaluation of stock needs against supplier performance and usage criteria); and top level Supply Chain Planning (balancing supply and demand with client and fulfilment management). Gus Machado, chairman and founder of DT, says: “i2 is a huge opportunity. In recessionary times, mid market manufacturers have the same problems as large corporates. These guys have to become more agile, reduce their inventory costs.” And when asked why i2, he adds: “i2 is the market leader. It spends more on R&D than the whole turnover of Manugistics or anyone else in the market.” Young, while more circumspect about i2 over his other alliance partners, says: “Supply chain management and e-business technologies are merging… This solutions is a robust, scalable and powerful offering that will help our customers streamline their processes and maintain their competitive advantage… “We’re after those that see recession as not just a time for stripping out costs, but being a little more sophisticated and getting themselves ready for when we come out of it.” Machado: “With IBM on side we can offer an end-to-end solution of hardware, software, operating systems, middleware and consultancy at a strategic level and, most of all the finance. ROI comes typically within 10 or 12 months, but we can get ‘step ROI’ in six to eight week stages and make [projects] self-funding.” So users need not feel the pinch of the typically £250,000 to £1 million price tag in one hit. “With IBM finance we can tie payment to the agreed stages of business improvement that we know are there – based on key performance indicators.” Machado also makes the point that its i2 development services are applicable to companies running just about any existing ERP system or systems, since it operates above the ERP level, using active data warehouse technology and a suite of interfaces.