13 May 2005 The new CEO of supply chain management specialist i2 has insisted that resizing and refocusing measures will ensure that its viability is no longer in doubt following two years of “very difficult transition”.
“I would not be here today, and have come out of retirement, if there was any chance that i2 was going to go out of business,” Mike McGrath told hundreds of customers, partners and employees in the opening address of this year’s i2 Planet conference.
McGrath acknowledged that i2 had previously been “seduced” by oversized deals and fads such as B2B marketplaces, which had undermined the company. “These problems are not fatal,” he added.
i2 still has some ground to make up: its first quarter of fiscal 2005 showed revenues of $88 million but an operating expenditure of $106 million. New licence revenues were just $13 million.
But McGrath said that 300 job cuts – 15% of i2’s workforce – made just 30 days after his appointment, were “more than sufficient to return i2 to profitability”. The cuts were “disproportionately” among higher paid employees. He also promised to reduce the cost of bringing products to market and to have the company reinstated on the Nasdaq stock market. It was delisted in 2004.
Meanwhile, i2 also unveiled a deal with Microsoft, which would enable customers to use Excel as an interface for i2 applications. Executives at i2 admit that end users frequently prefer to use Excel as entry point to supply chain planning because of unfamiliarity with its own tools; integrating i2 applications with Excel should lower barriers to adoption.
Other announcements included the launch of a new “Agile Business Platform”, a services-oriented architecture which allows simpler integration with other applications. i2 is also revamping its sales structure, placing a greater emphasis on consulting and pre-built application aiming to reduce the complexity of deploying its applications.
This “Customer Results Program”, which will not be fully launched until early 2006 following testing by 20-25 customers, will also include pre-purchase piloting, a library of pre-defined workflows and ongoing reporting on projects’ progress to customer management and to i2 itself. McGrath claimed that i2 deployments would aim to generate returns within months rather than the typical years.