January 8, 2003 4:42 PM PST

Report questions i2 customer satisfaction

Several companies touted by i2 Technologies as successful users of its supply-chain applications say their investments in the software haven't actually paid off, according to a new study.

Nucleus Research, which specializes in measuring satisfaction among IT buyers and conducted the study, said that of 22 companies the firm surveyed, about a dozen indicated the costs of their i2 projects outweighed the benefits. The unnamed companies in the survey, which will be released Monday, had been using the applications for an average of more than two years.

i2, which sells software designed to help manufacturers cut inventory costs and operate more efficiently, responded that the survey size was too small to be valid. i2 has more than 1,000 customers.

However, Nucleus noted that all 22 survey participants have been profiled on i2's Web site for their successful projects.

"In certain cases, Nucleus found that i2 had overstated the scope of the benefits in its customer profiles," the report states.

Among the companies surveyed, Nucleus found that getting i2's software installed and running took an average of about 18 months. In some cases the cost for hardware, consulting, maintenance and training exceeded $7 million.

Executives at i2 haven't yet seen the Nucleus report, according to Melanie Ofenloch, vice president of corporate communications at i2. But she issued a statement in response to questions Wednesday.

"i2 was surprised by the findings in this report because we have implemented an ongoing process to communicate with our customers regularly and work with an independent research firm to measure customer satisfaction on a quarterly basis," Ofenloch said in her statement.

Nucleus in September issued a similarly unflattering report about satisfaction among Siebel Systems customers. In that survey, half of about two-dozen Siebel customers reported that their investments in Siebel's software had not paid off. Again, Nucleus had surveyed customers purported by Siebel to be success cases.

Siebel, which has more than 3,500 customers, also disputed the survey results. Siebel is the largest maker of customer relationship management software.

The latest Nucleus report comes nearly two years after public complaints by Nike that its i2 project had bungled its handling of orders and inventory.


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