Report questions i2 customer satisfaction over ROI

After spending years of effort and millions of dollars, some users believe they're not getting their money's worth on their...

After spending years of effort and millions of dollars, some users believe they're not getting their money's worth on their software from supply chain management specialist i2 Technologies, a soon-to-be-released report indicates.

A survey by analyst group Nucleus Research of 22 companies that have deployed i2 products showed 55% said they had not yet achieved a positive return on investment from their supply-chain-related applications after an average of 2.2 years of use.

The major problem, according to the report, is the length of time required to deploy the applications. Nearly 70%of the rollouts took longer than planned, said Nucleus.

Users, who were touted by i2 on its Web site, showed a lot of frustration over software that cost more, took longer to implement and did less than they had expected, said Rebecca Wettemann, an analyst at Nucleus. Two other analysts said the report was consistent with what they have heard anecdotally.

"I2's solutions are complex, as are the problems that they endeavor to solve," said Karen Peterson, an analyst at Gartner. And until a year ago, the different modules were too heterogeneous to be configured and deployed in a standard way, she said. And in some cases, companies got rid of planning staff to accommodate i2's complex software.

"You don't typically take the software and drop it in place and have it run," said i2 chief marketing officer Janet Eden-Harris. She said the findings of the report are difficult to refute because there are so many ways to calculate ROI or even the average cost of an implementation. I2 does provide metrics to customers as part of its rollout methodology, and most users are able to achieve ROI, she said.

Four users asked about the findings said that i2 software isn't exceptionally difficult to install and that they're achieving their desired results.

"I think an advanced planning solution implementation is harder than an ERP [enterprise resource planning] implementation," said John Mallon, director of supply chain management at chip-maker On Semiconductor, which has been using i2 planning and fulfillment software for the past three years. "I'm a little bit of the opinion that some people who fail at it underestimate the difficulty of what they are getting into. Contrary to popular opinion, it's rocket science."

However, On Semiconductor has saved $20m (£12.5m) through improvements in productivity and inventory management enabled by i2, he said. "It comes down to the corporation and understanding what they are getting into and the strength of the implementation team," Mallon said.

On the other hand, a user at a Fortune 500 company said the report reflected his experience with i2. In fact, it took two attempts to finally succeed with installing i2's transportation management software, and it required the write-off of millions of dollars that hasn't yet been fully recouped, he said.

"It was the most difficult rollout we've ever done, from our standpoint," said the user. He added that i2 salespeople "had more vision than the ability to deliver on the vision".

Eden-Harris said i2 has been changing its approach from the "zealous years of a couple of years ago. I2 recognized that to accomplish long-term customer satisfaction, we wanted to change our approach and overdeliver [capabilities]."

In addition, she said, the i2 Six set of applications has been tailored for simplicity.

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