Enterprise resource planning (ERP) specialist JD Edwards made 45%
of its income from supply chain management (SCM) software in its
last financial quarter.
The shift into SCM enabled the company to meet its financial
targets for the three months until 31 January – targets that had
been revised downwards at the beginning of last month.
Richard Allen, chief financial officer at JD Edwards, said, “We
are continuing to expand our focus on the supply chain. The benefit
to us is that these are high-dollar, high-margin sales.”
He added, “The good news is we have an opportunity to sell into
our installed base. We’ve not really had the focus on that in the
past. We have well over 6,000 customers to leverage and this is one
of the areas we see where we’re going to have a quick win to drive
some quick revenue.”
Revenue for the company’s first quarter was $217.7m compared to
$231.7m for the same period last year. Net income was $191,000
compared to a loss of $31,000. In February, JD Edwards reported
that it would be lowering its financial expectations and expected
to post revenues of between $208m and $218m.
JD Edwards’ announcement that its sales of SCM software are
growing follows reports of two high-profile SCM implementation
disasters.
Nike has blamed problems with its SCM software, supplied by i2
Technologies, for having to lower profit forecasts, and UK-based
distribution company Grocery Logistics is suing Manugistics for
more than £7m in damages in a dispute over a supply chain
package.
Gartner Group analysts and industry vendors are predicting that
many companies will begin to experience problems implementing SCM
software since the technology is immature and most companies fail
to understand the reality of supply chain planning
implementations.