From time-to-time as developments warrant throughout the year, we publish various succinct research advisories to clients and blog readers focused on specific industry, line-of-business, functional or technology trending that warrant specific attention for both management teams and supply chain management professionals. Normally our advisories are included within regular blog posts, but when significance warrants, and content length dictates that we provide deeper insights, we will now provide these advisories in our Research Center as complimentary downloads.
There have been several phases related to the ongoing explosion of online commerce and its impact on retail and B2C focused industry supply chains. Take note that 2016 marks the beginning of the newest phase, namely impacting the long-term presence of brick and mortar retail.
The watershed events have been recent Q2 financial performance results from various retailers, and more specifically, last week’s public acknowledgement by broad based merchandise retailer Macy’s that declining foot traffic makes the cost or value of real estate and physical store operations a new determinant of long-term strategy. The initial shockwave came in January with Wal-Mart’s announcement that it would close 260 stores globally, including 154 across the United States as part of comprehensive strategic alignment of strategy. By June, there is additional discernable evidence of this new phase.
In our Ferrari Consulting and Research Group Research Advisory– The Beginning of a New Phase of Online and Omni-Channel Fulfillment for B2C and Retail Supply Chains, we address background, the iteration of phases and including the tenets of this new phase, along with actions to consider.
Our only requirement for this complimentary research advisory report is that readers fill-out an electronic download form that requires some basic information. To download the report, access our Research Center from the top menu, double-click on the words Research Advisory- August 2016 on the right-hand side and complete the form.
Editors Note: This posting has been updated at Noon, August 19, to include an announcement from JDA indicating that it has completed a recapitalization of the company that involves Blackstone Group. (See my amended Comments below)
There has reportedly been a new development regarding prior Reuters and Wall Street Journal reports regarding the potential acquisition of JDA Software.
Reuters, the news agency that originally disclosed the presence of acquisition talks by Honeywell International has now reported that private equity firm Blackstone Group has appeared as an apparent white knight offering a financing bridge plan as an alternative to a Honeywell proposal. In its latest report, Reuters again cites unnamed sources that are familiar with the matter that are stressing confidentiality.
Neither of the parties involved or mentioned have responded to Reuters direct requests for comment.
Supply Chain Matters is obviously is not going to get in the middle of all of this and we have elected to just pass along awareness and web link to the published report.
According to the report, Blackstone is proposing a payment-in-kind financing plan that includes equity warrants that would give Blackstone a significant minority stake in the supply chain management technology firm. Further reported is that JDA’s current debt of more than $2 billion is within compliance to its loan covenants and does not require significant debt repayments for reportedly two years.
Given this report, JDA’s principal owners New Mountain Capital would appear to have another option on the table, namely stay the course and accelerate its turnaround with a new infusion of capital but with an added private equity partner with a voice. That implies a longer-term commitment to its 2012 investment in JDA.
It would seem that these confidentiality leaks continue while some sort of back and forth negotiation process continues among parties.
I suppose we all need to stay tuned for the next leak or announcement. For existing JDA customers, the situation must be perplexing to say the least.
Disclosure: JDA Software, while a prior sponsor of this blog, has no current client or sponsor relationship with The Ferrari Consulting and Research Group or the Supply Chain Matters© blog.
There was noteworthy acquisition news in the procurement software applications area last week with the announcement that BravoSolution had acquired privately-held procure-to-pay applications provider Puridiom. This transaction is further evidence to the growing importance of broader-based suites of applications as well customer attractiveness to purchasing technology that can manage broader procurement lifecycle needs that extend the touch points involved in supporting strategic, tactical and day-to-day operational procurement process needs.
Terms of this acquisition were not disclosed. The joint release does indicate that the acquisition is effective as of August 1, 2016 and that the integration of staff and technology resources has begun. The Puridiom technology will over the coming months be embedded into the BravoAdvantage technology platform. The founder of Puridiom, Jesus Ramos will also become a senior vise-president of procurement solutions for BravoSolution.
According to BravoSolution CEO Jim Wetekamp, the acquisition accelerates that provider’s plan to become a source-to-plan market leader with extended tactical and operational procure-to-pay capabilities. Bravo was searching for an augmentable technology provider with deep procurement domain experience, an agile software application offering both Cloud and behind-the-firewall deployment options along with proven external applications integration capability. Puridiom, founded over 30 years ago, has been supporting tactical procurement processes for private and public-sector organizations.
Supply Chain Matters had the opportunity to speak directly with CEO Wetekamp regarding this acquisition. Our focus was the perspective of the broader supply chain management business process umbrella, not solely procurement itself. From the customer lens, Wetekamp articulated Bravo’s mission in enabling strategic procurement, fulfilling an increasingly important role in today’s organizations. He acknowledged that increasingly, customers are viewing procurement technology as not so much a central point of control but rather an integration of multiple touch points across other broader supply chain business process management needs such as product lifecycle management (PLM), materials and supply chain planning, logistics and transportation, customer services and other areas. The reality is that engineers, transportation and service professionals are already directly involved in sourcing decisions and require an integrated platform for the sharing of specifications, item-masters, product catalog, contract management and compliance information.
From a broader market perspective, there is a need for abilities to support indirect as well as direct material procurement processes across a more integrated suite that includes a unified data model, as well as the ability to support different or unique industry specific needs. The acquisition of Puridiom affords the opportunity to now include integrated P2P process and decision-making support in a unified BravoAdvantage data model.
Wetekamp indicated that the decision to fully integrate Puridiom as opposed to continuance as an independent brand offering was to accelerate the integration process into the BravoAdvantage framework in respect to unified data modeling, common look and feel, average application response times as well as a common inbox for suppliers. He indicated that there is no significant overlapping functionality with Puridiom which will aide in the overall integration.
Regarding the overall Puridium timetable, the CEO indicates that phase one of the planned integration, expected for Q1-2017, will feature a harmonized user experience, Cloud and behind the firewall deployment options as well as inclusion in the overall BravoAdvantage analytics framework. Phase two which includes full integration of all master data is currently planned for Q1-2018, a year later.
One of our Supply Chain Matters takeaways from this acquisition announcement is that BravoAdvantage has the opportunity to be an alternative for broader procurement lifecycle management support option among today’s mid-market ERP customers who require broader procurement touch point or deeper vertical industry support needs. As an example, Bravo’s existing transportation services procurement tendering and procurement support capabilities are impressive and can assist mid-market and other firms in distribution sensitive manufacturing or services needs.
© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.
Acquisition interest focused on integrated supply chain planning and execution technology has indeed re-energized during this Q3 period. We previously alerted our Supply Chain Matters readership to last week’s published report indicating that Honeywell was in talks to acquire JDA Software. Also last week, mid-market ERP technology provider Plex Systems announced that it had acquired supply chain planning technology provider DemandCaster.
Last week’s blockbuster news regarding the potential acquisition of JDA Software came from an exclusive report published by Reuters which cited unnamed sources familiar with the negotiations. Today, The Wall Street Journal, further citing its own sources, reports that a deal is near among the two parties. The report further highlights JDA’s former strategy for integrating planning and execution including its prior acquisition of RedPrairie. The WSJ confirms that the deal values JDA at around $3 billion and could be announced rather shortly. The acquisition would reportedly boost Honeywell’s efforts to enter the software area with an integrated supply chain planning and execution provider.
Our Supply Chain Matters view of this latest report leads us to believe that Honeywell may be making a play to penetrate the Internet-of-Things (IoT) segment with a concentration on supply chain management and execution focused processes, We will know more once a deal is announced and consummated. Keep in-mind that another suitor could surface by the revelation of the very significant $2 billion debt burden of JDA places a high hurdle, one that only a large enterprise software vendor would undertake.
Plex’s Acquisition of DemandCaster
Plex’s acquisition, on the other hand, is focused on further enhancing its Cloud-based ERP platform with broader capabilities in supply chain and sales and operations planning support for its traditional manufacturing based customers. Since both firms are privately-held, no financial terms were disclosed.
For those unfamiliar, Plex has its original roots in support for the Automotive industry supply chain, specially multi-tier suppliers that constantly respond to changing component demand and replenishment signals from various OEM’s. The firm’s technology has had an end-to-end focus that includes a strong concentration and linkage of ERP to manufacturing execution systems (MES). The mid-market ERP provider has since branched out to other manufacturing industry verticals including after-market services and support.
DemandCaster was founded in 2004 principally by a former manufacturing operations executive who had a vision for a more user-friendly approach in supply chain and manufacturing support needs. Many former supply chain planning providers were founded by entrepreneurs with operations research or academic resumes. Its approach to the market is somewhat novel in that DemandCaster offers all of its customers the option to cancel their subscription at any time if the service is not providing expected value. The firm and its founders pride themselves in their intuitive end-user interfaces included within applications. The firm’s technology is native Microsoft Cloud multi-tenant based, providing a familiar MS Office and Microsoft Azure based look and feel. The founders additionally have shunned external financial investment partners electing a pure organic growth strategy.
Supply chain focused technology applications include support for basic forecasting and inventory planning, inventory optimization, distribution requirements planning (DRP) and capacity planning. A sales and operations application includes support for demand and supply planning. DemandCaster actually partnered with Plex about a year ago in an OEM arrangement. Earlier, the firm also partnered with Cloud-based ERP provider NetSuite as a supply chain planning focused extension application in a referral arrangement.
This author had the opportunity to directly speak with Jim Shepherd, Plex’s Vice-President of Strategy who confirmed that Plex had initiated its interest in DemandCaster prior to the recent announcement by Oracle of its intent to acquire NetSuite. Most all of Plex’s customers have global based supply chains that require more responsive capabilities to constantly changing product demand and supply needs. Plex was further attracted to the user-friendliness of various supply chain planning modules, the native Cloud based technology as well as the built-in integration to other ERP or best-of-breed SCM focused platforms. Plex having the established one-year relationship provided further awareness to the attractiveness of DemandCaster’s approach to supply chain planning and execution capabilities.
We would quickly add that from our lens, DeamndCaster has more appeal to line-of-business buyer teams who often weigh user-friendliness and time-to-technology value higher in the ultimate buying decision. Shepherd further confirmed that DemandCaster will remain an independent brand, as well as an inherent part of Plex’s future ERP capabilities. This is a similar strategy that ERP providers such as Oracle and QAD have employed in acquisitions specifically related to supply chain management focused technology. Such a strategy opens the door for cross-selling into other ERP or best-of-breed supply chain dominant environments.
Shepherd reiterated that a long list of planned additional investments is planned for DemandCaster, investments that could not be achieved without an external investor. Mentioned were building-out comprehensive analytics capabilities directly related to S&OP focused processes, and that DemandCaster would part of future supply chain focused analytics down the road.
What it Means
While both of these new developments come from somewhat different strategic motivations, they point to renewed and building market interest in integrated supply chain planning and execution capabilities that can be tied to future needs in enhanced analytics driven decision-making, more integrated business planning and abilities to support future IoT based business models that provide enhanced decision-making based on connecting physical and digital processes. By our lens, it will place additional pressures on existing best-of-breed supply chain technology players to further enhance their integration to physical supply chain execution.
© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.
From time to time, Supply Chain Matters will highlight what we believe our technology and services providers that are providing unique or differentiating technology approaches in supporting business process needs. In this commentary, we profile Powerlinx, a technology that supports the ability of companies to quickly search out potential strategic partners.
VentureBeat describes this provider as “the eHarmony of business”, providing a technology that can more quickly identify potential partners utilizing advanced data discovery methods. In essence, the technology is similar to that utilized by prominent social media sites such as Facebook or Linked-In that leverage graph data discovery methods. The twist is the application to search out potential partners such as new suppliers, advanced technology providers, industry expertise or to be discovered by other firms for specific capabilities and traits. Thus, it can avoid the need for hiring business advisers and consultants to engage in a time consuming search activities.
The firm was founded in 2012 by former Dun and Bradstreet executives and dedicated its first two years towards developing what is now described as the proprietary PowerScore platform utilizing text mining and natural language conversion techniques, This platform recently went live in March of this year, and we were informed that it is currently populated with 85 million potential partners spanning 165 countries. The technology provider is also now discovering its value to manufacturers and supply chain management teams.
To populate this data store, developers scanned available primary sources such as company web sites, news releases, media mentions and other sources. A proprietary PowerScore™ algorithm analyzes a wide variety of metrics to provide a quantitative measure of a company’s compatibility with a potential partner.
Inferences are drawn among various data store partners regarding areas such as stated objectives, current or past relationships, successful relationships or other known strategic partners. Partners further have the ability to control which matches that would like to approve or be displayed. Our briefer, Yoni Cohen, Head of Product, was quick to point out that the data store is sensitive to any proprietary information and will protect such information. Partners’ in-turn have the ability to also limit any sensitive information.
To springboard customer adoption, Powerlinx currently offers a three-tiered pricing model to appeal to various user groups. The no-cost entry level Basic plan was designed for companies looking to grow, finance or exit a business and places a defined limit on the number of searches that can be conducted while providing the opportunity to respond to inbound opportunities identified by the platform. The two other tiers, Professional and Power provide support for unlimited matches with added hands-on Powerlinx consultant services. Pricing is rather attractive; a Professional subscription is currently priced at $100 per month or $1000 pre-paid for an entire year. A Power subscription is priced at $500 per month; $5000 annual pre-paid and comes with a dedicated analyst and premium services such as advanced privacy options and active promotional services.
Overall, we had not run into this type of technology prior to our briefing, and wanted to pass on visibility to our readers. We further garnered the impression that this is an energetic start-up with a mission, passion and purpose as well as a somewhat attractive pricing model.
© Copyright 2016. The Ferrari Consulting and Research Group LLC and the Supply Chain Matters® blog. All rights reserved.
Disclosure: We have no current client of business relationship with Powerlinx or its investors.