Supply Chain Shaman

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Some Flowers may be Perennials

I am a gardener. I love to spend Saturday afternoons with my shovel and trowel.  Having a neighbor stop by to comment on its beauty, gives me pleasure. To get the accolades, I need to have the right mix of annuals and perennials.  Annuals have bigger, brighter flowers, but they only last a season.  Perennials have less flair, but are the dependable contributors season after season.  It dawned on me this week, that my garden has some parallels with the  Supply Chain Management (SCM) market.  My recent post, Where have all the Flowers gone?, I describe the brightly blooming software start-ups that could not last the season.  In this post, I want to celebrate the companies, that like perennials, have lived to see the new season.   
What do Kinaxis, Logility, WAM Systems have in common? Despite turbulence in the SCM market, over the past fifteen years, they have achieved growth and profitability.  They are small.  They are not headline news, but each is thriving and will see the new season.

What can we learn?

Why did these three companies survive when over fifty competitors succumbed to less than optimal take-over strategies? I offer three thoughts:  

  •  Solve an industry-specific problem.  Focus on serving this user group. Don’t stray.  Each of the suvivors focused on solving an industryspecific problem. Kinaxis for high-tech, Logility for consumer products and WAM Systems in the chemical market.   They have focused on serving their user group through networking, conferences, and steering committees. For companies that spun out of control, a common characteristic was trying to serve to wide of a market.  Let’s face it.  SCM is industry-specific.  When a company’s focus strays to beating competitors versus serving customers, the game will soon be over.
  • Over-hyping leads to under-delivering.  Each has stayed the course.  While their roadmap’s are not the most exciting and don’t garner the highest rankings on analyst frameworks like Forrester’s Wave Diagram, or Gartner’s Magic Quadrant, they have provided consistent, reliable solutions for their target market. While these high-flyers pander to analyst community, Line-of-Business buyers are less willing today to buy promises.
  • It’s the balance sheet stupid.  Revenue recognition issues put AspenTech, i2 Technologies, and Manugistics into uncontrolled tailspins. A healthy balance sheet is necessary to survive the season.

 What do Ortec, OM Partners, ModelN, Terra Technology, Retail Solutions, SmartOps have in common? They are promising, and relatively recent newcomers (since the e-commerce bubble) to the SCM market.  Each is adding their version of market innovation.  However, the jury is still out on whether they are perennials or annuals. What do you think?
The jury is still out on whether the 40% of the market that has been acquired by existing entities will be milked for their maintenance stream or melded into a new solution to help supply chain leaders drive value.  Follow my blog to get the latest news and updates on what this market coalescence means for  you.

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