As this and other blogs noted last week, Bruce Richardson, an icon in the world of industry analysts has joined ERP provider Infor in the role of Chief Strategy Officer.  To state that this announcement is quite significant to the industry analyst world, and to AMR Research and Gartner, would be an understatement.  It is literally the “earthquake that rocked” the industry analyst landscape in 2010.

I have personally known and admired Bruce for many years.  As a veteran in the software and information technology industry, I often looked forward to hearing Bruce’s predictions and summations of industry trends and developments.  His interviews of industry executives always garnered the interest of competitors, and having Bruce write or mention your firm or software application was highly sought after. Bruce’s First Thing Monday was required reading every Monday morning for information technology executives.  AMR’s salespeople could always count on the mention of Bruce as the catalyst to close a research services deal, especially the world of ERP and supply chain technology.

When I joined AMR Research as an industry analyst, I came to enjoy the other side of Bruce, his quirky ability to be the literal rock star of any industry event.  Bruce has many gifts, but the most important in my view was his ability to gain access to all levels of the executive suite, or to literally be able to work any room to garner key information.   Bruce was the essence and fabric of AMR Research, and no AMR or other major vendor conference or event was complete without having his presence. I sincerely wish Bruce all the best in this new chapter of his career. Bruce has already launched into a new View From the Inside Newsletter which is published on the Infor web site.

Now that Bruce has decided to move over to “the dark side”, many technology marketing professionals have asked my opinion on this move. 

Well, here it is. 

Bruce was not going to conform to the culture and mannerisms of a Gartner, and he obviously knew that.  Bruce is a freestyle, he says what he thinks and is often not shy about calling out something for what it is.  Existing AMR Research clients, especially those with supply chain interest, will now have to figure out the implications of this move to their needs in research and advisory services.  Kevin O’Marah seems to be the chosen executive to fill in the void.

Kevin is an able analyst and industry observer. Kevin’s management attention will be torn between insuring a smooth transition as a boutique research arm of Gartner, while trying to fill the void of industry geru and desired speaker.  Just rationalizing and overseeing the AMR Research Top 25 Supply Chains research process is a task unto itself.

Bottom line, AMR Research will not be the same without Bruce Richardson.  Its like the Boston Red Sox losing David Ortiz, “Big Papi“.  Regardless of how he plays or what he does, he fills the seats.

 Bob Ferrari

No sooner had the dust begin to settle on the December blockbuster announcement that Gartner would acquire supply chain industry analyst firm AMR Research, (you can read all about it at this Supply Chain Matters link) the word comes forth that Gartner has also acquired industry analyst firm Burton Group for the tidy sum of $56 million.

As you can note from the Gartner press release, Burton is a well respected research and advisory firm that provided in-depth technical advice to front-line IT professionals.  Somewhat different than the AMR announcement, Gartner has actually completed the acquisition of Burton, and apparently chose not to announce the deal when originally consummated.  I suppose one could speculate that Gartner did not want to take away from the news on the AMR Acquisition.

You can view some interesting perspectives on the Burton acquisition on both Carter Lusher’s Sage Circle and Phil Fersht’s Horses for Sources blogs.   The bottom line consensuses on the implications for these series of announcements are further consolidation of the industry analyst world and limited choices for alternative opinions.  Phil Fersht’s also hits the nail on the head with his statement: “While Big G has picked up some superlative minds from its latest acquisitions, its new challenge is going to be maintaining those edgy opinions, and not having them toned down under the glossy corporate veneer of the billion-dollar brand.”

As for AMR Research, I learned today that Gartner completed the acquisition just before Christmas, ahead of its original schedule.  Gartner is obviously moving rather quickly to solidify the new AMR business model.  Kevin O’Marah, former Chief Strategy Officer will now report directly to Peter Sondergaard, Senior Vice president of Research for Gartner, and direct all AMR research activities under the Gartner umbrella.  Contrary to what was announced in December, Gartner supply chain analysts Dwight Klappich and Tim Payne have moved over to be part of the AMR research team, which in-effect leaves limited supply chain research coverage if you are an existing Gartner supply chain research customer.

From my perspective, Gartner’s strategy and motivation in these moves is to expand its reach and make a major push towards dominating more end-user and practitioner advisory needs.  So far, these efforts indicate coverage for supply chain and IT communities.  Of course, if you seek all of these services, be prepared to pay-up for all three.  No doubt, the Fortune 100 types will have the clout to negotiate their own deals, but not so for others.

As far as I’m concerned, I am more than willing to fill the existing supply chain advisory void and provide a second supply chain voice when needed.  If you are in need of such services, you can check out my consulting website, since we just added advisory services package options.

Bob Ferrari

The biggest news in the industry analyst community this year came with this morning’s announcement that Gartner has agreed to acquire AMR Research for approximately $64 million in cash, subject to certain closing adjustments.

Many in the supply chain community would agree that AMR Research had assumed the role as the most influential research and advisory firm in many areas of both supply chain business process and information technology.  Being cited in the annual AMR Research Top 25 Supply Chains report was highly sought out by many global firms, and technology providers spent high amounts of executive level efforts in trying to influence AMR’s individual analysts. (Author’s note: I was a former supply chain industry analyst at AMR Research)

 I must candidly admit that I was not totally surprised by an announcement that AMR was acquired, since there have been annual rumors that AMR was “preening itself” for an eventual suitor.  There were only two logical suitor firms, that being Gartner and Forrester, and we obviously now know of the winner of the prize.

No doubt, the biggest winners from this acquisition will be the original founders and current senior management team at AMR.  My personal congratulations go out to Tony Friscia, Bruce Richardson, Kevin O’Marah and Mike DiPetro.

The big open question in terms of the continuation of broad and specialized supply chain industry analyst coverage lies in what plans Gartner has for future research efforts under either the AMR Research or Gartner brands.  The press release specifically notes that Gartner expects to generate substantial synergies by selling AMR Research products to existing Gartner clients and Gartner research products to AMR clients.  While the press release also notes 40 AMR analysts and 45 sales executives will be added to the Gartner team, it also states that the combination of both firms is expected to drive operational efficiencies and cost savings.  More details will certainly be shared in the coming days, and Gartner has scheduled a specific briefing for its clients later this week.

Existing AMR Research clients should stay abreast of the overall timetable of integration as well as any specific changes, if any, to individual analyst coverage areas.  My initial suspicion is that changes will be forthcoming in industry related coverage since there is overlap among both firms.

 Supply Chain Matters readers can check back for additional commentary in the coming days.

 Bob Ferrari

Disclaimer: This author and the Ferrari Consulting and Research Group LLC are not an existing client of either AMR Research or Gartner Inc. and have received no compensation in relationship to the above posting.

My former employer, AMR Research, is wrapping up its supply chain executive conference in Phoenix this week.  One of the highlights of this conference is the annual announcement of AMR’s Top 25 Supply Chains.  Consultants and industry bloggers are precluded from the voting, so penning this entry is my way of weighing in.

Well-known and respected IT blogger Vinnie Mirchandani offered his observations of this year’s listing on his Deal Architect blog, and I must admit that I, too was scratching my head when I read of some of the 2009 selections.

First, I echo Vinnie’s observation that AMR has made a name for itself with consistently good supply chain research.  Much of this began with some of the original and gifted analysts such as my former mentor, Dr. Larry Lapide, along with the late John Fontanella, and others.  But having been in the industry analyst world for five years, I sometimes understand how research methodologies can go astray.

Vinnie’s observations note that not a single Chinese company, e-tailor, or utility have appeared on the list.  Perhaps the reason lies in the overall selection methodology, which tends to eliminate these companies from ever entering the selection process. 

AMR appropriately places higher weighting criteria on consistent financial performance metrics, one of which is a three year moving average of Return-On-Assets. In my view, high ROA can be a bias toward companies that have outsourced major supply chain inventory and operations, or reside in less asset intensive industries. Case in point, IBM is rated number 4, but has outsourced a vast majority of its manufacturing, including laptop production to Lenovo, and is quickly transforming itself to a services company. 

We further don’t see the presence of major contract manufacturers like Foxcon, probably because these companies have to monetize global manufacturing assets for their OEM customers.  Companies like Dow Chemical, BASF, or even TSMC are also hindered because of their asset intensity. Yet these same companies are constantly required to be more agile and responsive to their upstream customers, many appearing on the Top 25 list. Does this preclude organizations that reside downstream in the value-chain from ever being considered?

How can Dell move from the number three position last year, to number two this year, ahead of rival HP in the number 17 position?  What’s up with that! I’ve posted a number of commentaries, the latest being Reflection on Dell’s Latest Reorganization, that pointed to Dell’s decision to move from a previous centralized supply chain structure, to one of de-centralized supply chain functions residing within global business units, which is how HP currently manages supply chain.  Dell’s recent announcement of 63% drop in profits, continued flat demand, and restructuring charges doesn’t seem to fit with a number two rating.  AMR’s Supply Chain Reaction blog praises HP for building a more distinctive brand operational excellence and comprehensive risk management.

On a slightly more positive note, I was however really pleased to see Intel finally appear on the Top 25 after so many years of non-appearance.  AMR points to Intel’s efforts of being more demand-driven, moving beyond its former notions of technology push.  Unmentioned, but probably contributing to this recognition is a movement toward a more centralized supply chain management structure, corporate-wide efforts toward standardization on SAP ERP and supply chain applications, as well as leveraged use of some best-of-breed supply chain analytics, visibility and intelligence tools.

It seems that win at all costs is becoming our new form of competitive culture.  Television programs like American Idol, Dancing with the Stars and others play upon the influence of viewers who have the ultimate power to influence the final vote.  I sincerely hope that recognition of the Top 25 Supply Chains does not adopt this model.

What’s your reaction to this year’s Top 25?

 Bob Ferrari

Last week I provided initial observations on the acquisition of i2 Technologies by JDA Software Group. In that post I reflected on yet another brand name departing the supply chain technology landscape, and my counsel to existing i2 customers to be cautious, and do your homework.

Since that time, others have provided commentary, to include Dan Gilmore’s End of Supply Chain Era commentary within Supply Chain Digest. Influential industry analyst firms AMR Research, IDC Manufacturing Insights and Gartner have all initially weighed-in on the acquisition, and I would urge readers to especially take note of the combined AMR Research commentary (available to non-clients for a limited time) as well as the August 18^th edition of Manufacturing-Insights Theory and Practice newsletter.. 

(Note of full disclosure- I was previously a contributor to both of these firms).

The consensus view seems to fall around the following observations:

- This acquisition represents the end of an era for both the original innovators and noted icons in the supply chain planning arena, both i2 and former Manugistics.

- Dan Gilmore cited the fact that an industry analyst had written that “When i2 goes off the cliff, there won’t be any skid marks”.  That quote actually came from my former mentor and manager at AMR Research, Larry Lapide, who insightfully observed back in 2000-2001 that while i2 was articulating the real needs for advanced supply chain planning and collaboration, the overall pace of the company was beyond its ability to ground users in the reality of the complexity of the overall process change and technology capability at that time.  A lot of course has changed since that time. Supply chain technology best-of-breed as well as ERP providers are much more grounded today in the capabilities of the technology.

- AMR Research observes that the model of a consolidator such as JDA Software typically leads to lower levels of product innovation in favor of recurring rates of maintenance revenues, but cautions users to wait and make their own individual assessments.  Bob Parker of IDC concludes – “There is some hope that the consolidation of one time market leaders, Manugistics and i2, will provide a viable alternative to the SAP/Oracle duopoly, but JDA will have to show a conviction to spending development dollars to maintain functional advantages, and marketing dollars to stretch beyond its retail comfort zone”.  Keep in mind that industry analyst firms have the both technology firms as clients, as well as end users, so they have to walk a fine line in their published recommendations. It is therefore best to conduct your own individual assessment or speak with a seasoned industry observer.

- Most all of the commentary and conversations that I have since this announcement has further pointed to the fact that i2′s model of shifting more towards a custom supply chain software development and services provider is a more important concern for what remains of existing i2 customers.

- AMR Research’s Bruce Richardson commentary in this week’s First Monday newsletter (sign-up required) raises a broader set of observations as to whether this event presents a new opportunity for custom supply chain software integration firms, especially the India-based firms- Bruce comments- “While employee retention is a concern in every acquisition, it may be a very real concern in terms of keeping the account teams for the Top 30 customers (at i2 Technologies). I’ve spoken at enough i2 events to understand the volatility and mood swings of its largest accounts. It’s not hard to imagine a customer approaching one of the large Indian services firms and suggesting it takes over the i2 work. This could result in a minor bidding war for development and account management talent.

The bottom line for readers and users of supply chain technology is to continue to demand continuous innovation and responsive product support from your existing or future supply chain technology or services provider. There are good examples of technology vendors who can both acquire and continue to add to product innovation.  An example would be Oracle Corporation, with their previous acquisitions of Demantra or G-Log.

Managing global supply chain processes is as complex as ever, and demands even more quality and responsiveness from the community of technology providers. Manufacturers need to continue to do their homework and be diligent. Supply chain technology providers need to first and foremost seize the moment and communicate their ongoing value to enabling supply chain process and information integration needs, while also fulfilling the financial business model.

Bob Ferrari