I Was Wrong

April 8, 2010
9:56 pm

I LOVE it when a reader takes me to task.
Recently, Kirsten Watson, Director of Marketing at Kinaxis, did just that! She took issue with my post om my post on the Innovators Dilemma (http://www.supplychainshaman.com/2010/02/innovators-dilemma/). She felt that Kinaxis had successfully made the transition from a licensed software provider to selling in a Software as a Service (SaaS) model. So I asked her to set up some time for me to talk to Doug Colbeth, the President and Chief Executive Officer (CEO) of Kinaxis. Kirsten was right, and I was wrong. Kinaxis had successfully made the transition. In this post, I share some insights from a company that did successfully make the transition from a licensed software offering to an SaaS solution.

Insights from a SaaS Leader

It was great to reconnect with Doug. I remember when he took the helm of Kinaxis in March 2003. I admire his leadership. Under his guidance, Kinaxis successfully navigated through the land mines that havebeen pervasive in the Supply Chain Management (SCM) market. Kinaxis, Logility, and WAM Systems are three solutions that havebeen able to maintain profitability and power growth in the SCM market during the last five years while the market consolidated and sunk from user abandonment and financial misses (http://www.supplychainshaman.com/2010/02/some-flowers-may-be-perennials/).
Doug felt that 99% of my article was right and to the point. He liked the content; but like Kirsten, felt that Kinaxis had successfully made the transition from selling a licensed solution to a SaaS solution. He continued, “Most people that we talked to told us that it would take three years for us to get back to the revenue numbers we saw before we switched to the subscription model; however, our experience was different. We switched to a subscription model in late 2005 for both new customers and existing customers. We launched our new on-demand service in April 2006). In year 1 (2006) we saw a dip. In the second year (2007), we surpassed our 2005 revenues (the last year as perpetual licensing) and by year three (2008) we had doubled our subscription revenues. I think that we met your test.” I agreed.
Doug continued,“Since switching to SaaS/subscription, we’ve had an overall revenue CAGR of over 20%, and over the past three years, our subscription CAGR has been over 40%. In addition, we’vebeen cash flow positive every year since we made the transition, and are running our business with profit.” In the conversation, Doug commented that over twenty companies had contacted him to get guidance on how to make a similar transition. Doug commented that “Not one company that called had the stomach to make the transition.” I then asked Doug what gave him the stomach to make the transition. Doug’s response was that “it is the right thing to do in the long-run to improve customer relationships and organizational capabilities within Kinaxis.”

Do You Have the Stomach?

The day after the interview with Doug, I had a briefing with Deposco. Deposco is a new SaaS offering in the Warehouse Management Market (WMS) under the leadership of Chris Clark. Chris was one of the founders of Procuri, an early adopter of e SaaS in the procurement market. Bottom line, I think that SaaS models require a different type of leadership. It is right for the both the provider of the software and the business user. However, to do this, we need more leaders like Chris and Doug. Leaders that have the right stomachs; because, the user adoption for these solutions is growing.
What do you think? Do you see SaaS as the new trend in SCM? If so, what do believe that it takes to deliver on the SaaS promise?
A special thanks to Kirsten for keeping me honest.

Lead Time: A Broken Gossamer

July 16, 2026 6:38 pm

If you are struggling with supply chain planning, dancing in the light of shiny objects, and scratching your head, please read on. My goal is to help you.

Please do not AI Stupid. What do I mean? AI Stupid is putting agents and agentics on top of existing architectures believing that making them faster and hands free add value. To me, this is fools play.

I love AI. I am excited about new technologies. To this end, I want to shine a light on how new technologies can help address the black holes and inconsistencies in today’s supply chain, which largely stem from the limitations of the first generation of supply chain planning and execution technologies. In this blog, I give you three places to start.

Do You Need a Supply Chain Coach?

July 9, 2026 5:27 pm

Supply chain is where the rubber hits the road. For a public company, over 40% of market capitalization is tied to the trade-offs between growth, operating margin, inventory management, and Return on Capital Employed.

The road for supply chain improvement is fraught with issues. Here we share some and offer some advice.

Is your Supply Chain AI Ready?

June 11, 2026 2:39 pm

A simple quiz to assess an organization’s AI readiness.

The pace of change is fast and furious. Every day, technology advances faster than we can digest. A great challenge to have.

Determining whether a supply chain is “AI-ready” is less about technology and more about the gray matter between the ears of supply chain leaders. Leadership, alignment, and clarity of goals matter.

Too few companies are clear on the definition of supply chain excellence. Measuring and rewarding functional metrics reduces the firm’s value. Putting agentics on top of today’s processes can make bad practices run faster, reducing value.

The toughest job for the supply chain leader is challenging existing supply chain paradigms that were defined by the limitations of decades of supply chain technologies. As the curtain lifts on the potential of new forms of technology, process redefinition is our opportunity, but only if we are clear on what drives value. (Here, I link to the Supply Chains to Admire reports to help you define value. The next report will be published on June 23rd, along with my Dynamic Benchmarking Product, to help you define value in the face of your AI readiness. More information about the launch is at the bottom of this blog.)

Case Study: A Scrappy Demand Management Approach

June 9, 2026 5:37 pm

This study of Franklin Sports shines a light on the work that needs to be done at the sales account level to challenge a retail forecast, and also highlights the importance of a new technique for a forecast engine — reinforcement learning.

Artificial intelligence comes in many forms — large language models, generative AI, machine learning, unstructured text mining, deep learning, neural networks, reinforcement learning, agents, and agentics. While the industry is wigging out about agentics, I think reinforcement learning is a great step forward in the journey of Artificial Intelligence.

Can We Side-Step the AI Spin Cycle?

June 7, 2026 3:44 pm

When it comes to combining tech, 1+1+1 should equal more than 1. The impact should be exponential. Unfortunately, today, the answer is 0.

What do I mean? Let me explain.

I find that the supply chain technology market moves slowly along traditional technology lines. Conferences are usually focused on the use of technology, not on redefining work. This bothers me. I want it to bother you as well.

Here I share some insights to drive change.

Supply Chain Health Check: The Power of an Orbit Chart

May 27, 2026 9:49 pm

An orbit chart is a powerful tool for understanding the “health” of a supply chain and its potential for improvement. The supply chain is a complex, non-linear system with limited trade-offs. The relationship between trade-offs varies by industry, region, and size. The orbit chart is a diagnostic we use in the Supply Chains to Admire work. Here I explain the use case.

Supply Chain Shaman