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JDA Portfolio: For the Retail Industry Part One: Event Summary

Written By: Predrag Jakovljevic
Published On: December 27 2004

Event Summary

JDA Software Group Inc. (NASDAQ: JDAS) is a prominent global provider of integrated software and professional services for the retail demand chain with over 4,600 customers and 33 offices spanning every major global market to service customers in over 60 nations. JDA believes its has a global sales and delivery infrastructure. Namely, the vendor markets its products and services almost exclusively through its direct sales force, which, for the Americas, is based in Scottsdale, Arizona (US), with fifteen regional sales and support offices across the US, Canada, and Latin America. JDA also has international sales representatives located in nearly twenty sales and support offices in major cities throughout Europe, Asia, Australia, and Japan.

JDA has been a leading provider of best-of-breed software solutions designed specifically to address the demand and supply chain management (SCM), business processes, decision support, e-commerce, inventory optimization, and collaborative planning and forecasting requirements of the retail industry and suppliers to the retail industry. These solutions aim to enable customers to manage and optimize their inventory flows throughout the demand chain to the consumer, and provide optimized labor scheduling for retail store operations. The vendor's software solutions business is enhanced and supported by its retail and supplier specific professional services.

JDA's customers have so far included approximately 4,600 of the world's leading retail, consumer packaged goods (CPG) manufacturers and wholesalers. The vendor might have possibly the largest retail customer installed base among its direct competitors, with more than 1,200 retail customers in over 60 countries and nearly 3,300 CPG manufacturers and wholesalers. Some marquee customers are AEON Company Ltd., Anheuser-Busch Companies, Carrefour, Colgate-Palmolive, CVS Pharmacy, Inc., Dollar General Corporation, Energizer Holdings, Inc., The Estee Lauder Companies, Inc., H. E. Butt Grocery Company, The Kroger Company, The Limited, Meijer Stores, Michaels Stores, Sodimac, Tesco, and Wal-Mart.

Further, JDA pledges to pursue emerging supply chain opportunities in all worldwide sectors of retail and manufacturing. With this new business model, JDA plans to build upon the collective JDA Portfolio to enable its combined customers to achieve a new level of operational excellence. The aim is to seamlessly combine all this information needed to drive decisions along with the sophisticated software that enables those decisions—a phenomenon called data rich. In other words, JDA wants its customers to be able to rely on one company—JDA—to combine external data with internal enterprise and customer data to ensure the most possible effective, knowledge-based decision-making. The vendor plans to establish this capability as a defining and differentiating characteristic of its next generation PortfolioEnabled solutions over the coming months and years.

This is Part One of a six-part note.

Part One presented the event summary.

Parts Two through Four detailed the components of JDA Portfolio 2004.1.

Part Five will analyze the market impact.

Part Six will look at ERP vendors and the retail market and make user recommendations.

JDA Background

Jim Armstrong, now JDA's chairman, first launched JDA Software Services in Calgary, Canada in 1978, which grew to be one of Canada's largest IBM technology-based companies for the mid-market. In 1985, Armstrong sold the Canadian business, and, with a partner, formed the Scottsdale, Arizona-based (US) JDA Software, which nowadays, has over $200 million (USD) in revenues and employs more than 1,300 associates operating from 33 offices in major cities throughout North America, South America, Europe, Asia, and Australia.

Since 1998, JDA has completed the following nine acquisitions:

  • assets of Timera Retail Solutions, a developer of integrated workforce management solutions for the retail and CPG industry, in January 2004;

  • assets of Engage, a provider of enterprise advertising, marketing and promotion (AMP) software solutions for the retail industry, in August 2003;

  • assets of Vista Software Solutions, a provider of collaborative commerce solutions for the retail and CPG industry, in May 2003;

  • assets of J Commerce, a privately held developer of Java-based point-of-sale (POS) solutions for the retailers, in April 2002;

  • E3 Corporation, the global provider of inventory optimization solutions (e.g., store-level clustering, assortment planning, replenishment, etc.), in September 2001;

  • assets of NeoVista products, including the Decision Series data mining technology, from Accrue Software, in June 2001;

  • Zapotec Software, a niche provider of the trade allowance management segment, in February 2001, with former ProMax and AdPlan products designed to integrate the execution of advertising and promotional budgets, analytics, research, media buying and merchandise content, and trade allowance tracking;

  • assets of Intactix space management solutions from Pricer AB in April 2000; and

  • assets of Arthur Retail Business Unit from former Comshare, Inc. (now part of Geac Computers), gaining its enterprise suite of strategic planning solutions, in June 1998.

JDA continues to commit significant resources to advancing JDA Portfolio, its suite of best-of-breed products that manage and optimize retail demand chain processes from finished goods to customer checkout, and which the vendor markets to retailers worldwide with annual sales of $100 million (USD) or more, whereby more than 1,200 of its existing retail customers own at least one of its multiple products, which provides a significant cross- and up-sell opportunity. Several above-mentioned acquisitions, particularly of Arthur, Intactix, E3, and Vista have enabled the vendor to further expand its client base to include nearly 3,300 suppliers to the retail industry and added software applications that enable business-to-business (B2B) collaborative planning, forecasting and replenishment (CPFR) between retailers and their suppliers.

For example, initially focused on retailers, JDA had gained a strong presence amongst CPG manufacturers through Intactix' acquisitions, while the E3's strong presence at retailer distribution centers and wholesalers had all but completed the coverage of the retail supply chain. These acquisitions, together with the investments JDA has meanwhile made to increase the scalability of its products, have enabled it to pursue emerging growth opportunities in the retail demand chain and further expand its target markets to include larger multinational retail organizations and approximately 26,000 suppliers to the retail industry worldwide with annual sales of $100 million (USD) or more.

JDA Portfolio 2004.1

In mid-May, at the Retail Systems 2004/VICS (Voluntary Inter-industry Commerce Standards) Collaborative Commerce Conference in Chicago, Illinois, (US) JDA demonstrated advancements in technology, functionality and scalability in the new JDA Portfolio 2004.1 product suite, and it also discussed the direction of the next-generation product dubbed PortfolioEnabled, as noted earlier. The unveiled product set should help retailers and their suppliers to optimally plan and execute the selection, quantification, assortment, procurement and placement of finished goods at the POS. From how to price and promote products to how to optimize profits, JDA Portfolio tries to create that perfect "moment of truth"—when the right product at the right price is at the right place and at the right time.

What JDA touts will make its next generation suite even more compelling will be advanced capabilities that should supposedly increase speed and agility such as workflow enablement, shared cross-departmental processes, seamless collaboration among internal departments and trade partners, and ease of use—all at an ever-lower total cost of ownership (TCO). During expo hours, JDA executives highlighted updates in the product set with a special focus on its new software and service offerings, including

  1. Portfolio Merchandise Management
  2. Portfolio Allocation and Replenishment
  3. Portfolio Planning and Forecasting
  4. Portfolio Store Systems
  5. Portfolio Customer Management
  6. Portfolio Revenue Management
  7. Portfolio Advanced Optimization
  8. Portfolio Business Intelligence (BI)
  9. Portfolio Infrastructure
  10. Portfolio Collaborative Solutions

This is Part One of a six-part note.

Part One presented the event summary.

Parts Two through Four detailed the components of JDA Portfolio 2004.1.

Part Five will analyze the market impact.

Part Six will look at ERP vendors and the retail market and make user recommendations.

 
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