Q&A: New i2 CEO talks about resizing the company

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February 28, 2005 (Computerworld) -- After a seven-month search, ailing supply chain software manufacturer i2 Technologies Inc. today appointed a new CEO and president, Michael McGrath. He replaces company co-founder Sanjiv Sidhu, who will remain as chairman of the board. McGrath, a member of the i2 board of directors since August, is a co-founder of high-tech consulting firm Pittiglio Rabin Todd & McGrath and served as chairman and CEO of that company's Atlantic region until his retirement last July.
"We expect Michael to refocus and resize i2, while at the same time establishing a strong foundation for future growth," Sidhu said in a statement. Sidhu also said that after creating "a strong foundation for future growth," McGrath will replace him as chairman of the board and yield his CEO slot to a successor.
I2's finances have been shaky for the past few years, the Dallas-based company was delisted from the Nasdaq Stock Exchange, and earlier this month, it posted a $2 million loss. McGrath, in an interview with Computerworld, said he plans to keep the company independent, predicted layoffs of up to 20% of the workforce of 2,000 employees, pledged to make i2 profitable and promised a new focus on consulting services to help customers get more out of their investments.
What makes you qualified to run i2? I joined the board this summer after following i2 for many years. I've been in the software industry since its beginnings and created and ran one of the major consulting firms in the world.
Can you give your plans for i2? I can't give you specifics, as I've had the job for less than 24 hours. We have to regain the respect of our investors and show them i2 is, in fact, a profitable business. We need to get the resizing of the company to happen. One has to expect layoffs, and we've told people internally that's a part of cost reduction.

Michael McGrath, CEO and president of i2 Technologies Inc.

The second objective is to provide a strong foundation for the company. For example, we need to improve the way we deliver consulting services to be more efficient. Third, we need to refocus our strategy to make sure we have solutions to deliver big results to clients.
How radical will the changes be? Pretty radical. I'm somebody who likes to move quickly and make dramatic changes and get big results. The first milestone will be in 30 to 40 days, and we'd like to give the demonstration we can be profitable and show the changes I'm talking about. I2 has the potential to be a profitable company. Our commitment to our customers is to give them solutions, and these require not just applications but appropriate middleware and applications integration. It includes best practices and process changes. It means making our consulting services more robust and working with consulting partners.
What is your specific technology vision? It's a little premature for me to say. The big thing is that we're dedicated to big results for our customers and that's going to be the theme behind all our software and services. We're not going to be happy just selling something and not getting results for customers. We have to have the courage and maybe even sell them less.
Can you give an update on your relisting efforts? We're continuing to do that. We had a stock split. We [next] need to work with Sanjiv to bring on a couple of independent directors. It's important a company like ours be listed on Nasdaq. We have to instill confidence in the customer who makes a major investment in us and needs to know we're going to be around.
In recent years, I2 has been through a lot, including the stock exchange delisting and a U.S. Securities and Exchange Commission investigation. Is that going to be a problem for you to overcome? It's potentially an obstacle. It's something we're hoping we can put behind us. We've got a fresh start here, and we're building something new at i2.

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