Event
Summary
i2 Technologies recently signed an agreement with Hi-Spec Solutions, a
software division of IT conglomerate Honeywell International, Inc., to
deliver a combined solution for process manufacturing companies to optimize
their extended supply chains and collaborate with suppliers and customers.
Honeywell
will place its Unified Manufacturing Solutions for production management
and manufacturing execution systems atop i2's TradeMatrix platform. The
solution will combine strategic planning, production planning and scheduling,
real-time manufacturing execution, distribution management, demand management,
and Internet marketplace capabilities.
News of the alliance follows shortly after Honeywell, i2, and United Technologies
Corporation announced a joint venture to develop and operate a comprehensive
open electronic marketplace for aerospace products and services called
MyAircraft.com. Both moves have the potential to greatly enhance i2's
currently thin presence in the process manufacturing industry segment.
Market
Impact
The decline in i2's revenue growth over the last few years is an inevitable
result of its successful penetration of the complex, discrete manufacturing
market, especially that of high tech electronics. i2 has attempted to
deliver solutions for the process industries but has yet to persuade a
significant portion of the market that these are viable alternatives to
established offerings. In Honeywell, i2 finds an opportunity to reverse
this perception.
Honeywell brings a wealth of process industry expertise and a set of mature
software products with a large install base comprised of companies in
chemicals, oil & gas, and petroleum refining. Though i2 lists many companies
in food & beverage, chemicals, and other traditional process manufacturing
industries among its clients, the majority of these use i2 for discrete
portions of their supply chains, such as distribution, packaging, and
transportation activities.
Provided
that i2 makes sufficient investments of capital and manpower in the alliance,
and finds the right way to market the joint solutions, it can expect to
capture a significant number of process manufacturing clients and even
wrest market share from Aspen Technology, the leader and a competitor
of Honeywell on the process control solutions side. In addition to Aspen,
i2 faces competition from ERP giant SAP, which has made large strides
into the chemicals and oil & gas markets and can boast the ability to
provide an end-to-end solution from a single, unified suite devoid of
external interfaces.
User
Recommendations
Despite the glowing press release and seemingly boundless potential it
suggests, users should set realistic expectations on the outcome of the
partnership. Both i2 and Honeywell are successful companies in their respective
domains but face a host of challenges ahead as they hammer out the best
way to integrate their solutions.
For companies with complex manufacturing requirements spanning multiple
enterprises where flexibility is important, i2 has a proven solution and
is willing to take on large, multi-phase projects. Users in markets targeted
by the new alliance including chemical, energy, pharmaceutical companies,
should probably opt for solutions with demonstrated success such as those
of Aspen Technology, at least until i2 and Honeywell can fully define
the architectural details of the joint solution and demonstrate that it
works.