JDA Elaborates on Supply Chain Strategy, But Questions Remain

Published: September 12, 2006

by Alex Woodie

As promised, JDA Software Group delivered a product roadmap document that outlines the types of capabilities that users can expect following its July acquisition of supply chain planning vendor Manugistics. The company is clear in its roadmap concerning its strategic goal of providing the software for building what it calls a "customer-driven value chain." However, the product roadmap glosses over the nitty-gritty details about how it will move hundreds of satisfied iSeries-using customers to Windows-based products.

JDA, which is expanding its expertise up the supply chain from merchandise management systems used by retailers into the planning systems used by those in the distribution and manufacturing disciplines, is very clear in describing, at a high level, what it needs to do to make its dream of a customer-driven value chain a reality. "The key driver for enabling the customer-driven value chain is the ability to provide a single view of demand . . . ," the company says in its new product roadmap "micro-site," which you can visit at www.jda.com/roadmap/default.asp (some personal contact information may be required).

JDA's roadmap--delivered August 31, in the third quarter, as promised--is full of details related to the specific capabilities the company plans to deliver in the wake of the Manugistics acquisition, such as a workflow-driven planning solution that synchronizes all metrics and helps maximize profitability and sales per square foot; new demand-based forecasting capabilities that reduce pre-season forecast error; the use of multiple forecasting algorithms and methodologies to improve forecasts across all types of products, "including fast-moving, slow-moving, lumpy, short life-cycle, trending, steady, highly seasonal, and causal driven" products; and demand-driven manufacturing planning and scheduling solutions for process and discrete manufacturers that blend best practices such as Lean, Six Sigma, and Agile Manufacturing strategies.

There are many other capabilities described in this document that show JDA is on top of its game when it comes to developing next-generation supply chain solutions. In fact, the company and its current and future products are being heralded for their breadth of capabilities, which some are saying can't even be matched by industry giants like Oracle and SAP for completeness. For example, AMR Research, the analyst group respected for its research in the ERP and related product markets, is very bullish on the enterprise software vendor from Scottsdale Arizona, and sees JDA having a big chance at filling a large gap in current demand-driven supply chain solutions.

But what is less clear in JDA's roadmap are the tactical decisions the company will have to make to achieve its value chain strategy. Most importantly for readers of this newsletter, the roadmap says nothing about how JDA will deal with its significant IBM iSeries installed base as it executes a Microsoft .NET-based development plan. On a more basic level, the roadmap is also missing key details that you would expect to find in a product roadmap, such as the names of products, and forecasts of when such capability will be delivered in these products.

JDA is planning an extensive overhaul to its core products, but you wouldn't know it from looking at the roadmap available on its Web site. Concerning platforms, the "product roadmap" from JDA--one of the early devotees and beneficiaries of the AS/400's success--only says that its strategy moving forward is a "joint .NET- and J2EE-optimized common framework," and that it will use a service oriented architecture (SOA) to "drive alignment across all JDA products, providing a common user experience and navigation, and delivering a truly integrated solution to the market."

What this means, and what the roadmap doesn't say, is that it wants to migrate 300 to 400 users of its core OS/400-based Merchandise Management System (MMS-i), and another 100 or so users of its OS/400-based planning system acquired from E3, to new solutions that will be written in .NET, so that they won't have to undertake expensive and unnatural integration projects. (While it is planning at some point to start pushing this migration, it committed in 2005 to supporting the old OS/400 applications for at least 10 years.) Company officials have said they are considering supporting the DB2/400 database. However, the company hasn't yet made a decision whether DB2/400 will be supported with its new Strategic Demand Management (SDM) solutions, which are due to start arriving in the first quarter of 2007. Supporting DB2/400 could help pacify migration resistance among its influential MMS-i user base, but it raises its own batch of ugly integration problems, which was one of the main reasons for moving whole-hog to .NET in the first place.

Perhaps if you clicked on the "view more roadmap details" button in the JDA roadmap and are taken to the page with the button that eventually leads you to a phone number for calling a JDA representative, the company would tell you all this. But this info isn't in the roadmap, which means it's not a roadmap at all, but a marketing and referral vehicle, and that's too bad. In JDA's defense, the company says to check back with the micro site often. Perhaps that is why there is currently so little actual product information or dates in the document.

While it skips over the dirty details in the new product roadmap, the company is painfully honest about its prospects and the risks of hitching its horse to Microsoft's .NET wagon in its most recent quarterly statement filed with the SEC. While the company acknowledges that its new .NET-based PortfolioEnabled solutions "may not offer every capability of their predecessor products [which it's referring to as its Portfolio Synchronized solutions], but [the new products] will offer other advantages such as an advanced technology platform." You would think that iSeries users would be thankful to finally have the chance to utilize an advanced technology platform. (Sarcasm intended.)

Other possibilities that JDA acknowledges may put a hitch in its .NET giddyup are: greater than anticipated difficulties and costs in developing for .NET; confusion among salespeople about pushing the Portfolio Synchronized or the PortfolioEnabled products; the possibility that .NET platform beta customers "will not become favorable reference sites;" questions about scalability of the .NET platform for JDA's largest customers; and whether Microsoft itself can achieve market acceptance with .NET and potential delays on the part of Microsoft to release key infrastructure components that JDA needs.

As you can tell, this is a high stakes game. Not only is JDA, which has a market capitalization of about $475 million, gambling its own business on .NET, but many of its big-name retailer customers are also betting, by proxy, whether they want to or not. Perhaps one day vendors like JDA won't have to make such excruciating decisions, but in this day and age--what will likely be known as the early stages of the SOA era--platforms and platform decisions are still very important.

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