Manugistics Poses New Pitch to IT Buyers

CIOs, IT managers and other enterprise buyers are getting a new sales pitch these days from supply chain vendor Manugistics Group Inc.

Under the helm of Joe Cowan, who joined Manugistics last July as CEO, Manugistics is trying to switch from a “software” approach to a vertically focused “solutions” strategy aimed at thwarting both the lower pricing of SAP AG and the high specialization of some smaller players.

“Companies that don’t view the supply chain as a core competency might go to SAP. But companies that do view the supply chain as a core competency will come to us,” said the CEO, during an interview with CIO Insight.

Under a recently announced restructuring led by Cowan, sales is no longer a distinct division at Manugistics.

Instead, sales functions—along with products and services—have been wrapped into each of four new SBUs (Specialized Business Units): CG (Consumer Goods), Retail, Government and Revenue Management, a unit that also folds in travel and hospitality.

“Manugistics used to chase after any opportunity it could find,” Cowan told CIO Insight. “[Salespeople] would go into a [customer organization] and try to find whatever [Manugistics] software would fit. Then, they’d move on to the next customer.”

Instead, Manugistics has now begun urging salespeople to build long-term relationships with users, according to the CEO.

Through the new SBUs, supply chain technology is being touted as a “dynamic” entity—adaptable to quickly changing business needs—as opposed to a “static” system only requiring replacement every 10 or 15 years.

Although Manugistics is in cost-cutting mode, the reorg hasn’t involved massive layoffs, according to Cowan. But in February, Jeffrey L. Holmes resigned as executive vice president of sales operations. Holmes has stayed with the company as a consultant.

New personnel are in place—including Ronald Kubera, who was hired in March to oversee the new CG SBU.

Cowan is now on the lookout for someone to head up the Retail SBU. “I want someone who can ‘talk solutions,'” he said.

Plans are also in the works to hire a crop of recent college grads, and ultimately, to start grooming some of them for sales positions.

“We’ll be hiring new, lower-priced people we can train. I love young, aggressive ‘Type A’ people. We’ll bring them into support and services first, and then turn some of them loose into sales,” he told CIO Insight.

At the same time, some salespeople—viewed by Cowan as “unproductive”—have been let go.

Products based on Manugistics’ new Web-based architecture—such as IPO (Inventory Product Optimization), rolled out in March—are also key parts of the revised equation.

But beyond “out of the box” product components, Manugistics will also be working with customers on co-developed product extensions.

Some of these will be custom extensions, for specific clients, yet other deals with clients will “extend the functionality of products, [while not being] client-specific.”

During a recent Webcast, Cowan pointed to the U.S. Navy as one of the organizations in this emerging set of co-development partners.

Manugistics is also eyeing a “risk-based” scenario, in which pricing will revolve around users’ “success with the solution,” Cowan said.

Next Page: A tough job ahead.

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