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Tuesday, February 27, 2007

Wal-Mart pulls back from RFID push in its distribution centers

Wal-Mart, under scrutiny for not meeting its goal of installing RFID in 12 of its distribution centers, is now shifting its focus for RFID to the store level, away from its distribution centers.

Two years ago, the world's largest retailer set a goal for 12 of its warehouses to be RFID-enabled by the end of 2006. But it only reached this objective in five of those centers.

Now Walmart is claiming that its focus for RFID isn't at the warehouse level--it's the store level. In a Computerworld article, Simon Langford, head of Walmart's RFID program comments on the retailer's current efforts:
"We’re focused on the store level," said Langford. "If we focused internally [at the distribution centers], it would provide no value to our suppliers. When we set out on this journey, we really focused on the collaborative benefits; we wanted what was going to drive sales for our suppliers and to get product on the shelf, where it needs to be for our customers to buy."

Langford credited the use of RFID technology with cutting the incidence of out-of-stock products by 30% while improving the efficiency of moving products from backrooms to store shelves by 60%.

"RFID in our stores is going to drive the initial value," he said. "We see distribution centers as coming onstream a bit later."
It would be nice if, somewhere in his comments, Langford would admit that RFID has been more costly, less reliable, and more difficult to implement than Wal-mart originally planned. The 600 Wal-Mart suppliers who were forced to adopt RFID technology under the gun of Wal-Mart's mandate, know this all too well.

Wal-Mart's shift in strategy is symptomatic of a larger slow-down in the adoption rate for RFID in supply chain applications, although the technology appears to be gaining ground in selected uses, such as asset management. For more on this subject, see our recent analysis at Computer Economics on the RFID implementation slowdown.

Saturday, February 24, 2007

RFID adoption rates slow

Over at Computer Economics, we've completed our analysis of the current stalling of RFID adoption rates. Thanks to those that answered our call for feedback on this issue. This feedback is consistent with our own survey results.

The good news is that, although RFID implementation is having a slow go in many applications, there are several industries and environments where it is quite successful.

The full analysis is on the Computer Economics website. There is also a free executive summary.

Friday, February 16, 2007

Former i2 CEO learns crime does not pay

Actually, it's worse than that. Former CEO Greg Brady will have to pay $8.3 million in SEC fines to settle charges that from approximately 1998 to 2002 he plotted to overstate i2's revenue by $1 billion. Former CFO William M. Beecher has already agreed to pay more than $2.1 million in a similar settlement. i2 itself paid $10 million in fines back in 2004.

CFO.com has the full story and background on Brady's penalty.

Update, Feb. 18: In the comments, George points out that i2's situation today is entirely different than it was in its dark years early this decade. To be fair, I should point out this recent post where I comment on i2's business today.

i2 innovates with hosted vendor-managed inventory services

Saturday, February 03, 2007

Rumor mill: Oracle to acquire SAP

Apparently, the investor community has been abuzz all this week with the idea that Oracle is about to launch a takeover bid for SAP. The gossip even comes with an offer price: 38.5 euros/share ($49.78). The whispers led to some see-sawing of SAP's stock price, though it ended the week lower than it started.

The speculation was fueled by SAP's disappointing financial results earlier this month, though the disappointment was with SAP's failure to meet its own aggressive plans, not with any fall off in its business. SAP's license sales are still growing: last year they rose by 11%.

So, I wouldn't put any credence in the story. Oracle had to fight hard enough to get its PeopleSoft acquisition past the antitrust division of the U.S. Justice department. A bid for SAP would give the combined entity more than 70% of the worldwide enterprise systems market, depending on how you define it. It wouldn't fly in U.S. courts, and it certainly wouldn't be approved in the EU.

Related posts
SAP license sales grow, but short of target
Rumor mill: Oracle looking at JDA/Manugistics?

Thursday, February 01, 2007

Lawson and IBM team for ERP sales to mid-market

Lawson and IBM announced an agreement today whereby IBM will co-develop, sell and implement Lawson's products specifically for small and mid-size companies in the banking, insurance, fashion/apparel, and food/beverage sectors. Read Lawson's press release for more details.

This is not the first partnership between the two firms. Lawson already has significant connections to IBM in Lawson's Landmark development platform, which relies heavily on IBM's Websphere. The new arrangement brings IBM's services arm into the mix to promote Lawson in these key industries. If embraced by IBM's sales force, it will greatly increase the number of feet on the street pushing Lawson's products.

What's in it for IBM? Pull-through revenue from hardware, tools, and services.

The market is reacting positively to this announcement, with Lawson's stock price up over 5% today. I would wait a few months, however, to see whether this agreement amounts to anything. IBM has made similar arrangements with other software vendors in the past. For example, I recall a partnership between IBM and J.D. Edwards in the late 1990s, where IBM's resellers were authorized to sell JDE to the mid-market. I may be wrong, but I don't believe the program was terribly successful. In a more recent example, IBM and Intentia (coincidentally, now merged with Lawson) formed a similar arrangement in 2003. The press release is still on Lawson's website. But that relationship didn't seem to kick start Intentia sales.

So, I think the partnership is a good idea, but it will take more than an announcement to make it productive. It will be interesting to follow up in a few months to see what percentage of deals in Lawson's pipeline are connected to IBM's sales efforts.

Related Posts
New faces at Lawson
Lawson's performance better than it appears: CEO
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