Yesterday, E2open announced its acquisition of Orchestro, a Cloud based demand signal repository and analytics platform provider catering to Retail and CPG Industry Omni-channel business process fulfillment needs. Financial details of the acquisition were not disclosed, which is not a surprise since E2open was taken private in February of 2015.

This acquisition comes on the heels of the firm’s acquisition of product demand sourcing provider Terra Technology in March, and a further indication of an unfolding strategy centered on expanding technology support for specific industry related supply chain B2B and B2C business process network needs.

This author and industry analyst has had the opportunity to have been briefed by both vendors within the last nine months.

Orchestro’s concentration has been on demand-driven CPG companies requiring what that firm describes as an analytical edge. This technology provider was founded in 1999 primarily as a data harmonization services provider, and morphed to target specific CPG and Retail industry needs. The firm’s marketing message currently reads:

We harmonize, analyze, and monetize demand data across omni-channels to drive profitable actions both in-store and online.”

Orchestro’s lighthouse customer listing includes very well-known CPG and food and beverage names including Campbell’s, Coca Cola, General Mills, Kellogg’s, Kraft, Mars, PepsiCo, among others. The primary customer target has been product category managers seeking more intelligence related to product promotion execution, new product introduction effectiveness, broker effectiveness as well as inventory optimization.  In essence, Orchestro supports the needs of CPG firms to establish an enterprise-class demand signal repository which today is a more complex challenge because of the rapidly expanding focus on Omni-channel customer fulfillment. The firm’s TANGO Insights service supports needs for deeper analytics utilizing interactive dashboards and results. A complementing TANGO Science service provides support for more predictive analytics and workflow support for product promotions and on-shelf availability. Recent interest has come from various S&OP teams seeking more specific methods to be more predictive related to supporting changing product demand and in-stock requirements in an Omni-channel environment.

If reader’s have not gathered thus far, this latest acquisition has a common theme with that of the Terra Technology acquisition, that being a more concentrated focus in supporting high profile consumer product goods producer’s unique customer-facing needs as well as a deeper emphasis on providing an end-to-end platform supporting complex distribution and Omni-channel customer fulfillment. As noted in our prior commentary related to the Terra acquisition, the strategy unfolding is to augment E2open’s synchronized supply chain execution platform with augmented capabilities in supporting product demand planning and sensing. Once more, there is an obvious common thread among the customer names of both acquired vendors.

From a technology market perspective this latest E2open acquisition is from this author’s lens, signifies another shot across the bow to existing supply chain planning and demand management best-of-breed providers such as JDA Software, Kinaxis and other smaller, specialized analytics firms who have been targeting larger CPG manufacturers and their supply chain ecosystems. The augmentation of analytics with an end-to-end supply chain execution platform is a different approach that involves far more members of the overall supply chain ecosystem. Once more, E2open has gained an initial foothold in many of these stellar accounts.

We again re-iterate that the benefits of technology acquisition only come with subsequent integration of technology, people and business process expertise. In the specific case of Orchestro, the customer base is somewhat product management focused with different needs than the broad supply chain management community.

In order to be able to conduct its current wave of acquisitions, E2open made significant cuts in prior headcount resources and support budgets in order to regain profitability, thus this latest acquisition adds more speculation as to whether E2open needs to reinvest in its own business needs, beyond just a direct sales team.

We therefore advise existing customers of Orchestro and of Terra Technology to await the specific elements and timetables of the planned integration of all of this augmented technology. On paper, the strategy and the approach toward integrating customer fulfillment execution with deeper analytics and process intelligence is sound. But as with many of these efforts, the proof and the long-term success come with follow-through and without added distractions.

Bob Ferrari

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