VENDOR NOTE

.JDA Software

A New Rejuvenated Company Cateringto the Entire Omnichannel Supply Chain

By P.J. Jakovljevic, TEC Principal Analystwww.technologyevaluation.com

Technology Evaluation Centers

JDA Software—A New Rejuvenated Company Catering to the Entire Omnichannel Supply Chain www.technologyevaluation.com 2

JDA Software—A New Rejuvenated Company Catering to the

Entire Omnichannel Supply Chain

The recent JDA FOCUS 2015 was a refreshing event, where the leading retail and

supply chain management (SCM) software vendor JDA revealed a drastic change

in company culture and continued to reinforce its unified platform for helping its

customers take a holistic approach to managing their supply chain needs. JDA,

with 400 active and granted patents and 4,000 customers to date, celebrated its

30th anniversary together with 2,000 attendees at the event. Headed by a new

CEO, JDA is looking to change its image from a vendor which had traditionally

carved out its future without much regard for the opinions of industry analysts

and market observers to a company that closely caters to changes in the market

and to its clients’ SCM needs during an age of omnichannel commerce and

digitalization.

Expanding Software Capabilities Through Acquisitions Founded in the US in 1985, the company initially focused in the 1980s on offering

IBM hardware–based software and services to retailers (JDA actually started in

Canada in 1978 as an IBM mid-range systems reseller. Having been one of the first

business software companies to focus solely on retailers’ needs such as

merchandize and assortment planning, it quickly garnered an impressive global

retail install base. In 1998, JDA made the first major acquisition, Arthur Retail,

a provider of retail planning and allocation software. In 2000, JDA acquired

Intactix, a provider of solutions for retail space management, and in 2001, it

acquired E3 Corporation for its retail and wholesale distribution software.

Most of those acquired products were best-of-breed retail software solutions,

which JDA did not integrate or converge into a coherent strategy and platform.

In fact, JDA system implementations and integrations with enterprise resource

planning (ERP) systems comprised lengthy engagements and hefty professional

services revenues.

Still, the competition in the retail space intensified with some astute acquisitions

in the 2000s by SAP, Microsoft, and Oracle. JDA then acquired Manugistics in 2006

and i2 Technologies in 2010, expanding its product set with demand and supply

management, pricing optimization, and transportation and logistics solutions.

These acquisitions brought an ample SCM functional footprint to JDA, as well as

many suppliers and manufacturers customers to its fold (mostly food consumer

goods manufacturers from Manugistics and discrete manufacturers such as hi-

tech and automotive from i2). In fact, 79 of 100 CPG manufacturers are JDA

customers, and one of three cars are reportedly planned via JDA.

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The company merged with RedPrairie in 2012, and gained leading warehouse

management and workforce management (WFM) capabilities. JDA now had

arguably the best retail merchandizing solution in the market, at least the top

two supply chain planning (SCP) and sales & operations planning (S&OP) solutions,

as well as the best transportation management system (TMS), warehouse

management system (WMS), and WFM solutions. Transportation strategic

modeling and optimization capabilities are still second to none. But the company

was reactive to the market trends and customer requirements, such as offering

software hosting and managed cloud service, rather than visionary and proactive.

Developing a Unified Platform But in 2013, JDA announced the release of JDA eight, a unified cloud-based SCP,

optimization, and business analytics software product that reflects the global

software trend of multi-product offerings on a single platform. The offering

contained more than 30 different products in an effort to connect critical supply

chain functions, from forecasting to transportation, with built-in business

analytics. But, while touting convergence, JDA eight did not include the former

RedPrairie’s products. JDA’s “platformization” really took shape in 2006 with the

scalability and configurability of the Java platform from the acquired Manugistics

and, in 2010, with the concepts of service-oriented architecture (SOA) and

orchestration from i2’s platform (see figure 1).

Figure 1. JDA Platform Evolution

New CEO, New Company Culture The company underwent a profound cultural change under new CEO and

Chairman Bal Dail, who took over in mid-2014. Dail came from the vendor’s new

owner New Mountain Capital, which had already done a decent job with Deltek

and RedPrairie.

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Figure 2. JDA CEO Bal Dail at JDA FOCUS 15

At the event, Dail candidly admitted JDA’s past arrogance and current promise

to engage customers, partners, and analysts. In late 2014, the vendor changed its

unexciting “JDA – the Supply Chain Company” mantra to “JDA – Plan to Deliver.”

The new branding had a bifurcated meaning: one denoting the software’s ability

to cater to the entire supply chain planning and execution cycle and the other

referring to the vendor’s intent to deliver its brand promise to its customers

and partners.

According to Dail, integrating the JDA products is high on the priority list, thus

making them easy to use. The new ambitious upcoming platform called JDA Flex

promises to integrate all of the JDA products, and provide a friendlier user

interface (UI) (see figures 1 and 3). It is based on various open source tools and

will have social, mobile, in-memory computing, big data, and other traits—it is

quite similar to what the competitor Infor has doing of late (ION, Ming.le,

CloudSuites, etc.). JDA Flex will be based on the concepts of enterprise service

bus (ESB), business process management (BPM)/process orchestration, business

activity monitoring (BAM), and others.

All new JDA products will be developed on the Google Cloud Platform, which was

picked as the preferred platform as a service (PaaS), while existing products will

be hosted in the IBM Cloud infrastructure as a service (IaaS) offering. JDA has had

its own in-memory capabilities since the launch of the aforementioned JDA eight

platform. However, given that many JDA customers are also SAP customers, JDA

FLEX will integrate with the SAP HANA platform for some shared big data analysis.

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Figure 3. JDA FLEX Architecture Layers

Along the lines of new UI and user experience (UX), there are new WMS

applications that are persona based and mobile enabled. The new prescriptive

configuration tool takes much of the complexity out of WMS implementations by

automatically configuring the WMS based on a series of simple questions asked of

the user. The new WMS UX is a series of role-based apps that contains workflows

for task completion in a user-friendly manner—even if the workflows extend

between systems.

Offering JDA Intelligent Fulfillment Another major strategic endeavor for JDA is to be the “leader” in the broadest

meaning of supply chain. The company will focus on three major verticals:

manufacturing and distribution, retail and services, and logistics providers. Its vast

portfolio has been logically grouped into five major suites: retail planning,

manufacturing planning, intelligent fulfillment, category management, and store

operations. As one example of leadership and solving customers’ problems,

according to Dail, the vendor will offer intelligent stores and fulfillment, with the

goal of providing retailers with profitable omnichannel deliveries and helping

them better satisfy their customers.

The new reality is that the connected and empowered consumer is the new boss

of each retailer. Thus, retailers and their suppliers must have a next-generation of

SCM solutions that have the look and feel of consumer apps (on mobile devices

with simple apps and intuitive analytics), connectedness (via cloud, mobility,

social networks), and that can handle the convergence of the digital and physical

worlds. They need to shift from a product-centric to a customer-centric approach.

Instead of the linear supply chains of the past (plan, source, make, deliver), today

we all work in a networked way, with many of those roles changing over time

JDA Software—A New Rejuvenated Company Catering to the Entire Omnichannel Supply Chain www.technologyevaluation.com 6

(e.g., manufacturers being retailers as well). Thus, the entire network (i.e., all the

participants and trading partners) must execute against the single plan in an

extended enterprise due to the consumer demand volatility. The concept of

Flowcasting can help in that regard, i.e., why forecast what you can calculate? In

other words, retailers will still forecast based on their point of sales (POS) data,

but their suppliers should know the actual demand at the retail store.

Research shows that while 90 percent of retail sales still occur in the store and

65 percent of shoppers use digital means for their purchases, only 30 percent of

retailers offer the same data in-store and online and have inventory visibility over

their entire supply network. This type of visibility will help retailers conduct

profitable omnichannel customer commerce.

Figure 4. JDA Intelligent Fulfillment

But what about returns, which is a huge expense item? To provide intelligent

fulfillment as well as to better engage partners and ecosystem, JDA has recently

partnered with IBM, and will thereby supplement the JDA Intelligent Fulfillment

suite with e-commerce and distributed order management (DOM) capabilities.

The IBM partnership is progressing nicely, with a lot of work being done on the

integration using the aforementioned JDA FLEX platform (see figure 4). Intelligent

Fulfillment will enable the concepts of click and collect, destination-driven

planning (understanding the place of demand vs. the place of fulfillment, which

are often not the same in omnichannel), dynamic order splitting, and more.

Flowcasting, a key initiative of this year, which comes from former RedPrairie,

is being blended into the JDA Intelligent Fulfillment suite as the forecasting engine

that drives all of the planning decisions. Within the Intelligent Fulfillment suite,

Flowcasting feeds the replenishment and fulfillment planning process.

JDA Software—A New Rejuvenated Company Catering to the Entire Omnichannel Supply Chain www.technologyevaluation.com 7

Flowcasting also serves as an input to the Planning suite, of which supply chain

and operations planning (S&OP) is a key process.

Other Noteworthy SCM Capabilities While the digital and physical worlds are converging, we should never neglect

the importance of labor in today’s omnichannel world, with retail stores becoming

fulfillment centers and light warehouses. In the WFM realm, JDA is bringing the

many advanced forecasting and scheduling capabilities of the store to the

distribution center (DC), such that the entire organization can optimize the

workforce across all upstream supply chain and store operations. With very

strong WFM capabilities in retail scheduling and forecasting and budgeting

(down to 15-minute granularity), JDA is increasingly competitive with the likes

of Kronos, Infor, Ceridian Dayforce, and Reflexis. JDA has also recently developed

a dozen or so mobile apps in WFM and WMS, which were another major

attraction at the conference.

Conclusion The main message of the JDA FOCUS 2015 conference was that JDA is now a

different company with a different drive—trying to no longer innovate within silos,

but rather innovating in a coherent and synergistic manner for the benefit of the

entire organization. JDA aims to promptly respond to emerging market trends in

this age of digitalization and omnichannel commerce. The software vendor also

aims to holistically cater to its customers’ supply chain needs, from planning to

execution and delivery—and this is no small matter. Still, the company must

continue to solve its customers’ unique problems but without getting entangled in

endless special “one-off” projects that cannot be duplicated for other customers.

Retail.Me, the recently unveiled consulting service that leverages intelligent

customer analytics for retail assortments, may be able to help the vendor in this

regard. Retail.Me would be one good example of helping retailers with their

perennial problem—proper assortments and allocations to stores, without

engaging an army of consultants for years.

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