I2 to launch supplier relationship management solution

I2 Technologies Inc. is maneuvering to shake up the b-to-b market with a new supplier relationship management (SRM) solution designed to bypass the traditional indirect purchasing market by instead squarely targeting direct material buys.

The Dallas-based company will unveil Monday its new SRM solution, a suite of b-to-b design, sourcing and procurement capabilities designed to allow companies and their suppliers to collaborate and create products faster and cheaper. The suite is supported by the i2 TradeMatrix platform, which is designed to synchronize all procurement processes, including design, sourcing, planning and buying and by the Infinite Content Network, which enables business process collaboration and optimization.

Bruce Richardson, an analyst at AMR Research in Boston, said i2 is "completely changing the way the [b-to-b] game is played" with the suite, by focusing its efforts on the direct spend within exchanges. In addition, i2 is maneuvering to "shut off the oxygen" to other heavyweight b-to-b players like Ariba, Commerce One, SAP and Oracle, he said. The company likely will go after the high-technology market and the automotive market, including the Covisint exchange effort underway between the world's major automakers and their suppliers, he said"They've just raised the bar another six inches and are going to make their competitors jump over it," he said. "Most suppliers hate what's available in these public marketplaces because it's all auctions and their margins are getting whacked. It's all about managing the overall life-cycle relationship with those suppliers."

Dave Horne, senior vice president of SRM solutions at i2, said the new suite is designed to allow companies to reduce their costs of goods sold through more efficient negotiation with their suppliers and to provide new product volume information.

"You want to be able to have an affirmative handshake with the suppliers for the parts ...that they can actually deliver," he said. If a supplier says, 'I can't do it' ... you need to be able to find another supplier or design that part out with a substitute."

The new suite is different from other SRM offerings because of its strategic sourcing and design features, Horne said. For example, it allows a company to find out exactly what its spending for direct material purchases, even if that information is caught in disparate systems, he said.

"We're able to aggregate spending across multiple part number schemes, multiple procurement or ERP systems and multiple supplier information systems."

The suite also offers integrated workflow features so that when a supplier is downgraded because of performance problems, engineers will immediately know how a product design needing a part from that company will be affected, he said.

"If I already know what the part number is for what I want to buy and who I want to buy it from, that's not b-to-b," Horne said. "I can do that through e-mail. It's the content that really allows companies that don't know each other ...to interact in a b-to-b Internet world."

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