i2 Technologies moves ahead after reaudit

Supply chain management software maker i2 Technologies is moving ahead with its turnaround plans after completing an extensive...

Supply chain management software maker i2 Technologies is moving ahead with its turnaround plans after completing an extensive reaudit of its finances dating back to 1998.

"Life is totally brighter after the reaudit," said I2 chief executive officer Sanjiv Sidhu. "We had strong support from the existing customer base. That is what has brought us here and left us standing quite strong."

He added that a number of potential customers who were waiting for the reaudit to be completed are now likely to close deals.

i2 has also achieved its 2003 goal of becoming more efficient, reducing its cost structure by 30%, while improving customer satisfaction and product quality. The next step in 2004 will be to "return to growth", said Sidhu.

As part of the plan, the company is pointing to the next iteration of its product, i2 Six.One, which will come with a series of prebuilt workflows which connect operations across a company's various departments and enterprise resource planning systems. The product should enable what Sidhu called "closed loop" supply chain management.

One of the major enhancements to i2 Six.One is an ability to monitor the execution of a supply chain management plan and make adjustments dynamically as conditions change.

"It enables real-time corrections of a plan," said Sidhu. "If my plan is to sell 10 units a day and I just sold five, I find out why did I sell five and decide what action to take to sell 10."

A number of users expressed relief that the corporate audit was over and were upbeat about i2's long-term prospects. The board of i2's user group "saw it as a distraction, but ... a necessary thing that had to happen," said Gene Hunt, chairman of the Atlanta-based i2 User Group's board of directors. "We were supportive, because we knew on a user-group level, we can't exist without i2."

He noted that, despite its troubles, the company still put money into research and development for strategic updates to future releases of the product. The board is no longer worried about i2's long-term viability and the loss of their companies' supply chain management investments.

While noting that i2 is getting the "engine fired back up in 2004 for going out and selling", Hunt said it may take a while to close deals with some customers, as supply chain management purchases often take several quarters to complete.

"Users are cautiously optimistic," said Larry Lapide, an analyst at Boston-based consultancy AMR Research. He noted that i2 got through the audit and has implemented structural changes to make sure any mistakes will not be repeated. It's important now that i2 starts making a profit, he said.

"The next piece is that customers want to see financial viability," he added.

Marc L Songini writes for Computerworld

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