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3/29/2005
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CEO Moves Manugistics Back To Basics

Joe Cowan believes the troubled supply-chain software vendor will have a brighter future by focusing on vertical markets that have historically proven successful for the company.

Joe Cowan, who has served for less than a year as CEO of Manugistics Group Inc., sees a brighter future for the troubled supply-chain software maker and services provider. He says he will return the company to basics by focusing it on vertical markets that have historically proven successful. "We're going to focus in areas where we think we have the best strength to solve customer problems. The right term is focus," he says.

Manugistics soared highest during the Internet boom, when its stock reached $60 per share. A downturn in tech spending several years ago hurt supply-chain software makers. In the past year, the company's stock has ranged from $1.88 to $6.88 per share.

Cowan was named CEO in July after the company suffered 14 consecutive down quarters. To help the company rebound, Cowan recently created four dedicated business units to focus on specific markets: retail, consumer goods, government, and revenue management. "If you look at our core business, it's really supply-chain forecasting, planning, and transportation products," Cowan says. "So when I came here, I said the thing we want to do is focus where our strengths are, and that's why we're refocusing this company back into those core areas."

One of Manugistics' strongest vertical industries, retail, heated up earlier this month when enterprise-resource-planning software maker SAP's North American unit acquired retail software maker Retek for $496 million. Retek reported $174.2 million in revenue last year.

Despite the entrance of SAP into one of his company's strongest areas, Cowan sees opportunities for Manugistics. "There is always an opportunity for a best-of-breed player in the marketplace," he says. "When we walk into the door, we really have to understand their supply-chain problems and be able to solve them. I don't believe we can do that across every industry. That just spreads you too thin."

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