In a recent study by industry analyst firm Nucleus Research Inc., 80 percent of Manugistics users said they had achieved positive return on investment from their supply chain deployments.

The customers pointed to gains in five areas: reduced inventory costs; reduced order-to-fulfillment time; increased productivity; increased revenue; and savings in operational costs.

But other analysts think that Cowan has a tough job ahead, citing factors ranging from increased competition to continued lackluster demand for supply chain solutions.

Cowan told CIO Insight that, out of the four verticals targeted by the new SBUs, government is the most volatile, due to its longer sales cycles.

Manugistics' C&G SBU is the one that faces the strongest competition from SAP, according to the CEO.

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"But SAP doesn't 'own' C&G, even though they might think they do," he contended.

Manugistics' list of C&G supply chain customers includes Coca-Cola Bottling Company, H.J. Heinz Company, The Scott's Company and Coty International.

Other enterprise users range from John Deere and Harley-Davidson Inc. to retailers such as Circuit City Stores Inc. and LL Bean, for instance.

Meanwhile, SAP's attempts to play in the retail space have been largely muffled by Oracle Corp.'s acquisition of Retek Inc., Cowan said.

Cowan does expect Oracle to land as a big competitor in retail, but not right away. "At first, [Oracle] will have trouble bringing together the PeopleSoft and Retek acquisitions," he told CIO Insight.

Cowan said he views i2 Technologies Inc., another leading best-of-breed supply chain firm, as most successful with high-tech manufacturing firms.

"But we also do run into them here and there in other places, including retail," he added.

Last week, i2 announced plans to expand its supply chain solutions into other application areas.

Cowan also cited some smaller competitors—including Manhattan Associates, which has been moving into transportation management—but he dismissed this crew as "anklebiters."

Analysts disagree over how Manugistics ought to handle potential competition for decision-makers' dollars.

"To significantly improve the top line, Manugistics must focus on sustainable growth beyond its CPG [consumer products goods] base," wrote Noha Tohamy, an analyst at Forester Research, in a report published last August.

"To do that, the vendor must try to block competitors out of new growth markets—for example, by stopping SAP's progress in pharmaceuticals or i2 in retail. By more aggressively promoting its customer successes in these high-growth verticals, Manugistics can make it tougher for competitors to gain traction."

But Lora Cecere, an analyst at AMR Research, said she believes the supply chain market is finally on the rebound—and that both Manugistics and i2 have been missing the boat on some opportunities with customers.

"While companies renew the focus on their supply chains, the number and intensity of deals are increasing, but Manugistics and i2 Technologies are not capitalizing on the opportunity," according to Cecere.

"Smaller niche vendors are reporting robust business by targeting specific programs for improving demand-driven supply chains and providing real solutions," she said, in a report issued in February.

Manugistics unveiled its reorganization in March.

Last week, Manugistics announced total revenues of $45.2 million for the fourth quarter of fiscal 2005, down 22 percent from the $57.8 million the company reported for the same quarter the previous year.

But during a Webcast, Cowan cast these results in an optimistic light, comparing them instead to the third quarter of fiscal 2005, when Manugistics tallied $45.0 million in revenues.

Also during the Webcast, Cowan told financial analysts and journalists that some of the sales completed during the fourth quarter of fiscal 2005 won't be counted until subsequent quarters.