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By Mel Duvall

Dallas-based supply chain software specialist i2 Technologies announced this week that Sanjiv Sidhu, who co-founded the company 20 years ago, has stepped down as chairman.

The board named Jackson Wilson Jr. executive chairman and said Sidhu will remain on the company's board of directors. Wilson retired as the chief executive of Accenture's business process outsourcing division in August of 2004 and joined the i2 board of directors in April of 2005.

Sidhu said he felt the time was right to step down as chairman because the company's financial position is now on more solid ground.

Meanwhile, a strategic review committee formed in November 2007 is still considering the options available to the company to enhance shareholder value. Those options included the possible merger or sale of the company, changes to its operations, joint ventures, and actions to make better use of the company's intellectual property.

The review committee, which consists of Wilson and independent directors Richard Clemmer and Lloyd Waterhouse, reported this week that it cannot yet recommend a course of action. In a conference call, Wilson said the committee is actively pursuing talks with "at least two parties" regarding a possible sale or merger, but more time was needed to pursue those negotiations.

The company is also moving forward with a law suit it has filed against SAP in which i2 claims that SAP has infringed on seven i2 patents. An SAP spokesperson has stated that the company would not comment on ongoing litigation.

Wilson said that while the company has made progress in shoring up its finances, the review committee still believes i2 will have difficulty growing its revenues on its own. The company has managed to post three years of modest profits, but revenues have declined from $337 million in 2005 to $260 million in 2007.

"While we are demonstrating we can survive and thrive as a standalone entity, we believe our customers, our employees and our investors will be best served by a rapid addition of scale through a sale, merger, or other type of transaction," Wilson said. "Our board is unanimous on this point."

i2 has long been rumored as a potential takeover candidate for one of the big ERP vendors, partly based on its high profile customer base, which includes Toyota, General Motors, Nokia, and Anheuser-Busch. But the fact that those vendors, such as SAP and Oracle, already have significant supply chain management offerings, has been considered a stumbling block.

Sidhu says he wants to focus on new opportunities for application development in the supply chain arena. Sidhu believes companies are very much interested in being able to measure the carbon emissions associated with the products they produce, particularly in light of rising oil prices.

Through i2 he hopes to be able to offer applications to address that need.

"Efficient supply chain management is becoming more important because it not only makes businesses more profitable, but can significantly reduce a customer's carbon emission footprint," he said following the announcement of his resignation.