techwatch
software without the learning curve
SOFTWARE APPLICATIONS ARE OFTEN REFERRED TO AS
“tools,” and just as with any tool—say, a hammer or table saw—you
have to use them properly to get good results. Although it’s relatively
quick to teach someone how to wield a hammer, that’s not the case
with most software applications. Sure, the vendor may provide support in the form of classes or training, but the user still has to spend
time learning how to use the software.
But in recent years, a few supply chain software vendors have begun
offering clients another option for using their apps—a service in
which the vendor runs its application on the customer’s behalf for a
fee. These arrangements are known as “managed services,” a term that
comes from the information technology (IT) sector, where this has
been common practice for years.
This past September, at the annual global conference of the Council of Supply Chain Management
Professionals, JDA Software Group Inc. of
Scottsdale, Ariz., announced plans to begin offering
managed services for its transportation and logistics
management software. In its announcement, JDA
said it was targeting its new offering to companies
that wanted to incorporate transportation management software (TMS) into their operations but
lacked the IT and capital resources to do so.
By the way, JDA’s new transportation offering is
only its latest foray into managed services. The vendor has been offering this option for some of its
other software apps for years now. In the supply chain software area,
for instance, the company has been providing managed services for
its supply chain design solution for about five years and for its carrier bid procurement application for seven, says Dawn Salvucci, a product director at JDA.
Although JDA made a splash with its recent announcement, it
isn’t unique among supply chain software vendors in taking this
route. Several other software providers have been quietly offering
managed services for some time now. GT Nexus of Oakland, Calif.,
for instance, offers managed services to clients of its trade and logistics portal. Greg Kefer, the company’s director of corporate marketing, says about a quarter of the company’s customers retain the vendor’s data services organization to manage the network for them.
For these clients, GT Nexus handles tasks like partner integration
and data standardization to ensure that data quality remains high,
which is critical for supply chain visibility. Kefer adds that GT
Nexus employees also work alongside select customers to help them
manage the freight spend process from initial bids through freight
bill auditing.
Another software vendor that provides
managed services is i2 Technologies Inc. of
Dallas, which offers this type of support to
users of its planning and forecasting apps on a
contract basis. “We provide the pilot and plane
with managed services,” says Adeel Najmi, a
vice president at i2.
For a monthly fee, i2 personnel will use the
software to develop sales
forecasts for individual stores
down to the stock-keeping
unit (SKU) level. “We take
over the day-to-day work of
maintaining the (forecast)
model, publishing the plans,
and doing the analytics,” says
Najmi. Although i2 employees develop the plan, he
notes, the client still reviews
and “blesses” it.
The service is not new; i2
has been doing this for five
years now. So it’s interesting to note that JDA,
which is now jumping into managed services
in a big way, announced last month it would
be acquiring i2 for some $396 million. Among
other benefits, the deal paves the way for the
two to work together on managed services.
It appears that JDA’s move comes at an
opportune time. Najmi says he’s seen an
uptick in interest in managed services in
recent months, particularly among consumer
packaged-goods manufacturers. As for what’s
driving the interest, he believes it’s the
prospect of speedy access to the information
his time-pressed clients need for decision
making. “The number one reason (for the current interest in managed services) is the time
to value,” he says. “We can get them seeing
results quickly.”
