Event
Summary
Demantra recently announced that it has raised $19.5 million in its second
round of venture capital funding. Formula Ventures led the investor group
that includes: The Challenge Fund, The Intel 64 Fund, Shamrock Holdings,
and Jan Baan's Vanenburg Group. A product of Boston's fertile high-tech
incubator, Demantra makes software for collaborative demand management,
sales and marketing support, and replenishment planning. The cornerstone
of its suite is a solution supporting Collaborative Planning, Forecasting
and Replenishment (CPFR) guidelines as published by the Voluntary Inter-industry
Commerce Standards organization (VICS). CPFR is a methodology by which
trading partners collaborate on building consensus forecasts for customer
orders and replenishment orders. Demantra plans to use this round of financing
to continue to expand its sales and marketing capacity and foster new
product development initiatives.
According
to Yoni Cheifetz, CEO of Demantra, "Demantra has established itself as
a global expert in collaborative demand management Solutions for the Demand-Driven
Interprise™. Successful companies have always understood the importance
of using the best tools available to help them anticipate, plan and respond
to customer demands within their marketplace. This is our core business.
Aided by this new capital, we will provide our customers with collaborative
B2B planning solutions and services, allowing them to capitalize on the
opportunities offered by the new world of e-business."
Market
Impact
The willingness of private equity firms to divert precious capital to
Demantra speaks well for the company but is also a strong vote in favor
of CPFR. CPFR stands to grow proportionally as a component of the larger
business-to-business (B2B) market, which some analysts expect will reach
$1 trillion by 2002. As the Internet continues to play an important role
in extended supply chain management among business entities, success of
initiatives like CPFR will pave the way for new standards of communication
between companies. As private investors continue to pour money into CPFR-based
companies, we expect to see more collaboration software companies appear
on the horizon in response. Tangible improvements in efficiency that have
been demonstrated by retailers like Wal-Mart Stores, Sara Lee Corporation,
and Circuit City using CPFR will further contribute to the growth of the
CPFR and broader collaboration software markets.
User
Recommendations
For users who either buy products from a supplier or sell them to customers,
adopting CPFR and the tools necessary to support it makes perfect sense.
In spite of the confidence shown by its new benefactors, Demantra is a
relative newcomer to CPFR and users should consider its along with offerings
from more experienced CPFR vendors such as Logility and Syncra Systems.
Users who are already using ERP systems from J. D. Edwards, Baan, or QAD
and are exploring possibilities in CPFR should ask about Demantra's strategic
partnerships with these vendors. As always, users need to conduct a thorough
analysis of vendor capabilities divorced from market hype, especially
in selections involving CPFR and other Internet-enabled business processes.