JDA Portfolio: For the Retail Industry Part Three: JDA Portfolio 2004.1 Continued

JDA Portfolio 2004.1 Components

JDA Software Group Inc. (NASDAQ: JDAS), a prominent global provider of integrated software and professional services for the retail demand chain and over 4,600 customers, plans to build upon the collective JDA Portfolio to enable its customers to achieve a new level of operational excellence. 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. JDA Portfolio 2004.1 software and service offerings will include the following:

1. Portfolio Merchandise Management (see Part Two)
2. Portfolio Allocation and Replenishment (see Part Two)
3. Portfolio Planning and Forecasting (see Part Two)
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 Solution

This is Part Three 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.

4. Portfolio Store Systems

Portfolio Store Systems, also referred to as In-Store Systems are specific to retailers and provide point of sale (POS) tilling and checkout functions, in-store inventory management functions such as receiving, transfers, price management, and physical inventory. JDA in-store systems now also include a workforce management solution to optimize in-store labor scheduling and back-office and customer data tracking solutions. To this end, the vendor demonstrated the new Portfolio POS (PPOS), a Java-based store solution that combines a next-generation architecture with years of POS expertise. The PPOS functions demonstrated were Java 2 Enterprise Edition (J2EE) technology; real-time enterprise-wide inventory visibility; more powerful pricing engine; high-speed payment card authorization; thin-client back-of-store (BOS) operations, improved product and customer look up, Java Message Service (JMS)-based store-to-host communications, extensible markup language (XML) data interchange formats and user-friendly GUI.

The product, which is based on intellectual property JDA acquired from J Commerce in 2002, was commercially released in 2003. It features a modular architecture that provides advanced POS and cash register management which, when combined with the Portfolio Store Portal product (explained shortly), offers a complementary product strategy with the WIN/DSS product (also explained shortly) for larger customers with annual sales of $5 billion (USD) and a large number of stores, or registers per store.

Portfolio Store Portal is a web-based interface that provides retailers with real-time access to enterprise information on their host merchandise management systems, via the Internet. It enables retailers to immediately initiate associated store level processes such as shipment inquiries, transfer requests, store orders, purchase orders, and return to vendor shipments rather than waiting for a nightly polling batch process, and to provide for greater visibility into enterprise merchandising information at the store level. WIN/DSS is a Microsoft Windows-based in-store system that provides register operations in-store, as well as back-office processes such as sales orders, receiving, store inventory, and returns, and real-time hand-held radio frequency -based (RF) data collection and processing. It is also integrated with Portfolio Store Portal and Portfolio Customer Relationship Management (CRM) (explained below) offerings to provide enterprise-wide inventory and customer management.

Portfolio Pervasive Store System for WIN/DSS (PPS), formerly PRISMJ is an automated data collection and processing system that enables store-level personnel to execute procedures from anywhere in the store using a hand-held RF device. With PPS, store-level personnel can handle item ticketing while receiving merchandise, handle POS functions and print receipts. JDA has also developed Portfolio Mobile Access for PDA or PDT, a browser-based connectivity application with functionality similar to PPS, which operates on personal digital assistant (PDA) and portable data terminal (PDT) devices.

Portfolio Workforce Management (PWM) is the enterprise workforce management solution recently acquired from Timera Retail Solutions that provides web-based functionality for the retail and CPG industry in the areas of labor scheduling and budgeting, time and attendance, demand forecasting, labor tracking, operations management, corporate reporting and workforce interaction via Web portals, and other key processes for proactive store level labor management. The product aims at enabling companies to reduce over- and under-staffing, enhance operational performance, and increase customer service. Given that over 20 million people were employed in the retail trade in 2002 in North America, labor costs are the second largest controllable expense after inventory, which retailers have to meticulously manage.

5. Portfolio Customer Management

Portfolio Customer Management solutions allow the management of large numbers of consumer relationships through loyalty programs. These solutions are distinct in nature from typical one-to-one selling solutions and focus explicitly on the management of large numbers of consumers. To that end, JDA showed the latest enhancements to JDA Affinity, which is a CRM solution that enables retailers to support and proactively manage customer information from multiple channels and targeted e-mail and mail campaigns. It currently consists of three modular, open client/server applications:

1. the Base Customer Data module provides retailers with a single point for collecting, querying, analyzing, and managing basic customer data such as "name" and "address", as well as transaction history, tracking, and multiple customer attributes, including number of visits, products purchased and returned, size, and demographic information;
   
   
2. the Target Marketing module enables retailers to identify targeted lists of customers that are most likely to respond to a given promotional event, and
   
   
3. the Customer Scorecard module provides a retailer's sales associates with quick access to the customer transaction history that enables them to guide customers to merchandise matching their preferences and recommends opportunities for additional products related to previous purchases. The Customer Loyalty module, scheduled for commercial release late in 2004, will supposedly enable retailers to define and maintain a marketing strategy that rewards repeat or volume customers with financial incentives.

Also belonging to the Portfolio Customer Management is the Customer Order Management-i, formerly MMS Multi-Channel Order Processing, which is an integrated e-commerce software application that works in tandem with the above-mentioned MMS merchandizing product and provides retailers with an Internet-based sales and delivery system. The product integrates all back-end processing and allows retailers to automate their product catalogs, manage inventory and prices, interface with credit providers, fulfill and ship orders, track customer information, and process returns.

6. Portfolio Revenue Management

Portfolio Revenue Management solutions are designed to optimize pricing and margin, and incorporate the management of advertising and marketing functions. With promotional spending occupying a large share of retailers' and suppliers' operational expenses, JDA gladly presented its solution for strategic advertising and promotion management with its recently enhanced Engage suite, and the vendor also demonstrated products for retail and consumer packaged goods (CPG) trade funds management. Vista CPG is web-based trade funds management software that contains a series of modules that enable consumer goods manufacturers to manage trade promotions, minimize trade deductions costs, and forecast product demand more accurately. Engage is a series of enterprise advertising, marketing, and promotion software applications for retailers, which, through the advance digital asset, content management and ad layout capabilities of these applications, should improve their promotional planning process and their delivery of marketing and advertising content, and streamline the communication and collaboration among their merchandising, promotions, production and store operation teams. Versions of these applications are also available for advertising agencies, newspaper, and marketing organizations.

Further, Vendor Incentive Management (VIM) is a Microsoft Windows-based software application acquired from Zapotec in 2001, which enables retailers, suppliers, and distributors to manage their trade allowance and promotional programs by automating the contract fulfillment, claim generation, and accounts receivable (AR) processes. Finally, Marketing Expense Management (MEM) is a Windows-based solution that enables retailers, wholesalers, and manufacturers to automate advertising and promotional practices to improve efficiencies and bottom-line benefits by managing multiple budgets, accruals, and actual expenses on a single solution. The product also automates the entire media procurement process, including issuing purchase orders and insertion orders, as well as tracking invoices and revisions, to increase accuracy and associate productivity.

7. Portfolio Advanced Optimization

Portfolio Advanced Optimization solutions are predictive and descriptive mathematical modeling applications that should help customers dealing with increased pressure to localize assortments and offer a more unique store-level identity. To that end, by blending the science of advanced data mining with the art of merchant savvy and intuition, the JDA Intellect suite enables companies to better execute several competitive and data-intensive practices. In addition to showing the latest capabilities in Seasonal Profiling by Intellect, Channel Clustering by Intellect, and Demand Planning by Intellect, at the conference, JDA debuted Size Scaling by Intellect, which delivers an automated, more cost effective process to determine the most profitable sizes on a store-by-store basis.

JDA Intellect is a series of advanced analytic modules that are designed to optimize and better execute specific business problems through the use of data mining, analytic, and clustering techniques. These are competitive and data-intensive practices as event lift forecasting, size scaling, seasonal profiling, demand planning, and more. As indicated above, the current series of modules include

• Demand Planning by Intellect, which enables retailers to create accurate pre-season demand forecasts for planning purposes and the ability to create in-season forecasts that utilize the current season trend, sales to date, and planned inventory position;
  
  
• Seasonal Profiling by Intellect, which allows retailers to optimize their creation and management of seasonal replenishment profiles using clustering techniques;
  
  
• Channel Clustering by Intellect, which enables retailers to group stores together for planning and assortment planning purposes, or allocation and replenishment modeling, using detailed sales level data to indicate customer preference patterns by department, category, product, price points, and brands
  
  
• Size Scaling by Intellect, which is targeted primarily to fashion retailers and will determine a best-fit size template for ordering, allocation, and replenishment by style, class, or department.

JDA also anticipates the development of an Event Lift Forecasting by Intellect module that will also use sophisticated data mining engines to provide forecasts of promotional sales uplifts.

8. Portfolio Business Intelligence

Portfolio Business Intelligence (BI) has solutions for actionable decision support and enterprise data warehousing. To that end, Performance Analysis by IDEAS is a data warehouse system developed jointly with Silvon Software that provides a comprehensive set of tools for analyzing business results, monitoring strategic plans, and enabling tactical decisions. The product is currently available on the IBM iSeries, Windows NT/2000/XP, and Unix/Oracle platforms, and is designed as a packaged offering that enables retailers to monitor vendor performance; promotional effectiveness and distribution center productivity; and to analyze financial measurements related to sales and inventory; margins and profitability; merchandise categories; open and suggested orders; and promotional and pricing events. JDA also offers the IDEAS for Advanced Warehouse Replenishment application that provides access to current information on key performance indicators (KPI) such as inventory position, service levels, vendor performance, forecasts and shipments. Also, the above-mentioned Performance Analysis by Arthur product can sometimes be considered a part of this BI portfolio.

This concludes Part Three 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.