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  Supply Chain Trends and Issues: Our Weekly Feature Article on Important Trends and Developments in Supply Chain Strategy, Research, Best Practices, Technology and Other Supply Chain and Logistics Issues  
 
 
  - June 18, 2014 -  

Supply Chain News: Interim JDA CEO Bal Dail on Where the Company is Headed in 2014 and Beyond (Part 1)

 

This is a "New JDA," Dail Says, While Promising Sharper R&D Focus on Fewer Products will Deliver More Value

 
     
     
  by SCDigest Editorial Staff  
     
 

SCDigest editor Dan Gilmore had the chance last week to do a phone interview with interim JDA Software CEO Bal Dail, who replaced long-time CEO Hamish Brewer in May over concerns that company wasn't moving fast enough relative to a new strategic plan.

Bail is a partner at New Mountain Capital, a private equity company that now owns JDA after orchestrating a merger in late 2012 between JDA and RedPrairie, which New Mountain controlled at the time of the deal.

Bail and a few key executives spent nearly an hour on the phone responding to Gilmore's questions.

SCDigest Says:

At some point, customer facing solutions, omni-channel, etc. work their way back into the supply chain. So we already are seeing signs that some of the budget money is flowing back into both supply chain planning and execution.

 

Bal Dail, JDA CEO


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Below is a modestly abridged version of the first half of that discussion, which covered a lot of ground.

Due to space reasons, we'll publish the second half of the interview next week. If you want to know where JDA is headed, you will certainly be interested in this discussion.

Gilmore: You went through a major strategic exercise at the end of 2013. We come into 2014, a few months into the year you decide you aren't moving fast enough with executing against those strategies, and you make a change at the top - a very serious move. To what extent should we think of all this as you are building a "new JDA?"

Dail: I think it really is a new JDA. At the end of 2013, we got senior leadership together, and we mapped out what the strategy should look like over the next 5 to 10 years.

So what's new? We really reorganized our go-to-market model and how we service customers, frankly based on what we heard from them through Voice of the Customer surveys. So what we've done is made it easier for customers to interact with JDA, because candidly in the past there was some confusion by customers about who was on point for JDA and championing that customer within the company.

Second we aligned around five integrated solution suites, and that was done to increase the value of JDA and what JDA does for the customer. When you had 130 products, which we did, that's just a lot, and we decided there is just really a core set of products we need to focus on. We found we were working on stuff that was outside really of the supply chain space, for example.

So we picked the products we really wanted to focus on, and organized them into five integrated solution suites.

We also see some short term opportunities in a few specific areas. One of them is in one of the solution suites, what we call "distribution-centric" supply chains, another in a solution we call Flowcasting, and also in the third-party logistics sector.

So consider the distribution-centric supply chain suite. We think that's a huge opportunity because we would be the first to market with an integrated planning and execution solution. And that is where the synergy is in the merger with RedPrairie, as we can now offer planning and execution.

Flowcasting is another major opportunity. When we merged with RedPrairie we inherited part of the Flowcasting solution. Now we own all of it. We think Flowcasting will really change the way manufacturers and retailers will work with each other. We think it will lead companies to go past just investing in the sort of modestly successful CPFR model to something that's much more strategic across enterprises.

Beyond that, we're continuing to invest in what we call the "2.0" versions of the distribution-centric supply chain suite and our retail planning solutions.

We are also continuing to invest in the Cloud. Before it was more just around managed services. Now it will be more SaaS-based, and more dynamic.

In summary, we are evolving significantly from where the company was last year.

Gilmore: Put yourself in the customer's shoes. How is he or she going to perceive this is as a new JDA?

Dail: First, when I have spoken to the customers about the new strategies, they have really resonated with them.

Beyond that, this notion that you will have one customer executive who oversees the entire customer relationship, supported by people across JDA - experts in the solution suites, folks in our services organization, our Cloud group, people in product development - that customer executive can access our entire organization to serve the customer. But the customer will see that one customer executive as the sort of quarterback for everything, and that will be a rather major change in how JDA has historically operated.


We used to have multiple people pinging the customer all the time, and the customer was never quite sure who was on point for what.

Now, all that is a work in progress, because we are still rolling it out, but the customers will definitely see a difference.

I think customers will also see and appreciate the solution suite approach. We spend north of $140 million on R&D, but when you're investing peanut butter style across 130 products, that's probably not delivering the most value to the customer, as opposed to focusing the investment in a smaller set of products across five solution suites. Customers will notice that.

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That too though is a work in progress. We've only recently announced the five solutions suites, and we have to do the heavy lifting around that, but the R&D is already much more focused.

Gilmore: On the customer executive approach, my perspective is that this can be a great strategy, but it will succeed or fail based on the talent of the people you put into those roles. You really have to be a skilled person to manage the relationship at that level and understand all the solutions you have, different industry requirements, etc.

Dail: You're absolutely right. It is about making sure you have the right person in the right spot. That's a big reason why it is really a work in progress, because we are really working to line up the right customer executive to the right customers.

I think the concept itself makes a lot of sense, but getting the right person in the right slot is critical, as you've said.

Gilmore: On the solutions suites, in addition to simplicity, R&D leverage and the other points you made, it seems to me the suite concept is a lot more prescriptive than you were in the past, when you sort of said "Here are 130 products, which ones do you need?" With the suites, you're instead laying out a path for customers to reach certain levels of performance.

Dail: You're right again. A big part of the solution suites is to make it more clear to customers how JDA can bring value to them, and where JDA can play in their overall technical environment. It's much harder to do that when you have 130 products. With that approach, you are in a sense putting the onus on the customer to figure out what fits where.

Gilmore: By most accounts, 2013 was a somewhat down year for the supply chain planning market. You felt it, as did others. Do you have any explanation for that, and do you expect things to change any soon?

Dail: I think frankly what we've seen over the last couple of years across manufacturers, distributors and retailers is that a larger portion of their IT budgets went to customer facing technologies - omni-channel commerce, mobility applications, big data for customer insights, etc.

And that took some of the budget away from more traditional planning solutions.

But I don't think that trend can continue forever. At some point, customer facing solutions, omni-channel, etc., work their way back into the supply chain. So we already are seeing signs that some of the budget money is flowing back into both supply chain planning and execution.

For example, at first it was just "we have to grow our e-commerce business." Now, it's a realization that you have to achieve that growth profitably. And to do that, you have to get your supply chain solutions lined up to what you are doing on the customer side.

The more advanced customers are saying "We can't just keep selling products through these new channels in a way that's not profitable or that lowers our overall margins."

And keep in mind, a customer doesn't really think in terms of channels, they think in terms of brand experience. So you have to both be able to meet the expectations a customer has regardless of channel, and to be able to do it profitably. And the supply chain is directly connected to that experience.

So the supply chain planning dollars will definitely come back, and we're seeing signs of that already.

The second half of our interview with Dail will be published next week.


Any reaction to the comments from JDA's CEO? Let us know your thoughts at the Feedback section below.


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