Looking to boost customer satisfaction and loyalty, JDA Software Group Inc. is launching a major restructuring of its operations, which will include laying off 170 employees.
The Scottsdale, Ariz.-based maker of retail and consumer packaged good software Tuesday announced it would be launching a "Customer Value Program" to streamline and improve internal processes, which will include "the redirection of many associates in management to client-facing activities." The plan also includes cross-training employees to "increase resources for clients."
Additionally, JDA will consolidate sales and implementation organizations, CEO Jim Armstrong said in a statement. "By combining these formerly separate groups, we will ensure that our clients receive full life-cycle attention from the same JDA associates throughout all of their dealings with JDA," he said.
The planned consolidation is expected to save the company up to US$12 million annually.
The initiative comes after last month's third-quarter earnings announcements, when the company reported a 31 percent decline in new license revenue year over year -- from $15.5 million in 2001 to $10.8 million in 2002.
To speed up product development lead times, the company plans to relocate some of its development personnel to Scottdale, which will cost about $2.6 million. It will also take a $4.5 million restructuring charge through layoffs, and merge its U.S., Canada and Latin America operations. That means the company will now operate in three regions: the Americas, Europe and Asia Pacific.
"We'll emerge from this initiative competitively and uniquely positioned as a secure, profitable and growing solutions provider in time for the market recovery," Armstrong said.
"This is not an unintelligent response to JDA's problems," said David Dobrin, an analyst at Cambridge, Mass.-based B2B Analysts Inc. "In the current environment, where most sales are coming from existing customers, putting more resources into client-facing activities not only helps with customer satisfaction, but also may be a more effective way of selling."