Spin Unspun 2By Sean Gallagher | Posted 2001-11-01 Email Print
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The fuzzy math behind i2's customer value claims.
Sometimes, a number is unprovable. Take i2's claim of having generated $29.9 billion in customer value since 1994. The purposefully precise number is based on information on 230 i2 customers collected and dissected by research firm Miller-Williams in a publicly available report.
But what does the number really mean? I2 says it represents the additional sales revenue and savings from reduced inventories created by the use of its supply chain management software. But the hard numbers underlying the research were expunged from the report for competitive reasons, so who really knows?
An i2 disclaimer on the last page of the report does little to bolster confidence. And then there's the question of why, if it's creating so much value for customers, i2 can't maintain its own revenue base (sales in the most recent quarter were down a whopping 39% from last year).
The question might seem simpleminded at a time when many i2 customers have scaled back their technology initiatives or disappeared entirely. But it's no more simpleminded than a marketing campaign that asks people to believe huge numbers without showing the proof.