Blue Yonder’s Corey Tollefson - ‘We have the capital to invest and we will compete on service excellence’
Tollefson has a long history in the B2B software industry and recently joined a new executive team at Blue Yonder to focus the company’s supply chain ambitions.
Supply chain vendor Blue Yonder, formally JDA Software, is under new leadership and is going through a serious change programme, one which is focused on innovation investment and customer service excellence. The newly appointed leadership team, which have been in situ for approximately four months now, have extensive experience in the B2B software industry - at companies that include Oracle and Infor.
We recently spoke with Blue Yonder CEO Duncan Angove about how he wants to make the company the SaaS supply chain vendor of choice for buyers, at a time when supply chain disruption is front of mind for companies around the world.
But last week I got the chance to follow up on this discussion and sit down with Corey Tollefson, President of Worldwide Field Operations at Blue Yonder, to dive deeper into what the newly appointed team has learnt since it joined and what their plans are over the coming months.
Tollefson and Angove have a history working together in the industry and this isn’t their first rodeo when it comes to transitioning a company to becoming truly SaaS-focused. The pair started their time at Blue Yonder by diving deep into product, with a focus on understanding where the value is. Tollefson said:
For the first three weeks, we had product meetings from 8am till 8pm every night. Duncan, myself and a couple of other folks, we would then digest what we had just learned.
We went deep on everything. And what we found was that the vast majority of our revenue comes from a finite number of products. And so we looked at that and thought why doesn’t this company get laser focused on what they're really good at?
We just realized that there wasn't a lot of focus. So we're bringing focus to the business.
That focus is essentially on creating an integrated cloud-based platform of supply chain essentials (warehouse management, transportation management, supply chain planning, logistics, etc.), as well as the inclusion of commerce (more on that later). The key really is the integration of these essential elements and how they can work for a customer within the context of their broader technology landscape. Tollefson explained:
Back in the mid 2000s, every customer was switching to ‘suites’, because they didn't want to own the integration. They didn't want to have to integrate warehouse management, transportation management. They didn’t want to have to integrate demand planning into their forecasts, into replenishment.
But now with APIs being so inexpensive, we can own the integration to their ERP, whether it's SAP, Oracle, or Infor. We can own that integration to our solution. It's not insurmountable, like it was in the past.
We're best of breed in the areas that we are, but now we're going to start integrating those solutions onto a common technology platform. And that's the part that's been missing, the integration piece.
And a better job will be done on the company’s side to communicate the benefits of this integration to customers. Tollefson added:
Blue Yonder in the past had not done a great job of explaining to retail customers that are on warehouse management, for example, the benefit of deploying our transportation management system - and how that's integrated into warehouse management. That's something we're gonna do a better job of. And we're going to cut out a lot of the silos within Blue Yonder.
Becoming experience-led to win
But, as Tollefson and the leadership team know, product isn’t enough to win big in this industry anymore. B2B software has moved on from a time when all the effort was placed on pre-sale activities and implementation programmes, towards a model of continued customer success in the cloud. Well, that’s the case for the most successful enterprise software companies in the market today.
This is the other area that Tollefson and Angove are now also investing in at Blue Yonder. Tollefson said;
We want to compete on service excellence. We want to become the company that differentiates around service, because the lines are blurring between selling software and delivering software. What you're doing is you're really just providing a service, and you're operating it for a customer. And so they're expecting a white glove service. And that's the goal: we want to become the gold standard.
Tollefson explained that there are two ways of defining success. One being software consumption - are customers actually using the software? That can be quite a blunt metric. The other way to think about success is through the lens of value realization. Tollefson said:
We have a team that's fully dedicated to do value realization. So this team comes in - it depends if the customer wants it quarterly or annually - and makes sure that they're actually getting the results that they're looking for. This isn't a pre-sales function.
One of the byproducts could be, maybe you're not using the application as designed. So if we come in and help train you, then you're gonna get better results.
Or maybe the science is slightly off, so we come and bring in one of our data scientists from the original Blue Yonder team that helps fix or fine tune one of the algorithms. And then what happens is you get better forecast accuracy.
You don’t just sell something and go away when the service begins.
And this isn’t just going to be for buyers that have signed on the dotted line. Tollefson added:
One of Duncan's mandates is: how do we put the product and that experience at the beginning of a cycle with the customer? So, giving them access to our software, giving them access to references upfront?
I don't want to say death to the RFP, but an RFP is such a 1990s process. It's like ‘here's a bunch of requirements, we don't know if they're industry standard or not, but you vendors go look at this and tell us if your solution aligns to what we think we want to do’.
Every one of our customers is looking at us and saying: why don't you provide us with the thought leadership? You're the one that has 3,100 customers that are running their businesses with Blue Yonder.
Shifting to a true model of customer success - or service excellence - isn’t easy, however. And Blue Yonder is having to do work internally to align its operating model to being customer-centric. Three years ago the company established ‘Journey to Cloud’, which is a programme focused on getting its on premise customers to the cloud. But the vendor is now building on this, and in the first three months under the new leadership, it pivoted approximately one million people days of internal work to focus only on customer experience. Tollefson said:
The results have been great already. You can't get complacent.
Aligning product with customers
Over the past three or four months, Blue Yonder has also been reaching out to every single one of its customers to better understand what it is that they need from the supply chain vendor. Tollefson said that the company is listening, being thoughtful and trying to understand what's working for them and what isn’t.
And one of the key learnings, is that Blue Yonder needs to become less siloed itself - not just from a product integration perspective - but from an operations point of view. Tollefson said:
One of the surprises that we learned is that in retail in particular, the vast majority of retailers own, and are running, a Blue Yonder solution - but just one solution. There's so many more solutions that they haven't even considered from us.
Because the way that this company has been set up, it has been very siloed. You had the warehouse management team, you had the transportation management team. And now we're cutting out those silos and running it like a true end-to-end integrated suite company. In the cloud, cloud infrastructure, cloud architecture, the whole API economy, it means best of breed wins again.
Given the nature of supply chain and its criticality to running a business, Blue Yonder is also finding that increasingly its relationship is with the CEO - rather than the CIO or someone further down the chain. And what Tollefson is hearing time and time again is that customers want Blue Yonder to engage proactively in delivering solutions, with excellent service. He said:
I'll answer it in the simplest way. They're looking for people that are more on the consultative side. How can you manage my account, without it feeling like a transaction? That's the first thing. All the customers want to feel like they're a key account. And so we're putting money in and investing to make our customers feel that they're special.
The other thing is they're asking for a cloud experience where we are less reactionary. I think the vast majority of our customers, at the end of the day, just want to make sure that we're proactive, and they're not in the lurch.
Investing in innovation
It’s worth highlighting that Blue Yonder was acquired by Panasonic at the beginning of last year for approximately $7 billion. Since then it has been suggested that the company could be headed for an IPO to help scale it even further. Blue Yonder has been investing heavily in its SaaS capabilities, driven by its Luminate Platform, and via partnerships with Microsoft Azure and Snowflake. The end goal is a highly scalable, industry-focused supply chain management suite that utilizes data to predict and fulfill customer demand.
But, what of the potential IPO now under the leadership of the new team? Tollefson wasn’t willing to be drawn too far into this, but did point to benefits of remaining private for the time being. He said:
I’m not at liberty to say. But what I will say, as it pertains to that is, is that we have access to the capital we need. And we're going to leverage the balance sheet.
And if you look at our track record, we've been really good at putting money into innovation. And the cool thing is we don't have 300,000 products, or 150,000 products, we're gonna be laser focused on what we're good at.
And Panasonic, according to Tollefson, is fully behind the new team’s vision. He said:
We've also spent a great deal of time in Tokyo, with Panasonic, to help them understand our point of view. And coming out of those sessions in Tokyo, they're all in on this. That’s one of the great benefits of being private, because now we can make significant investments. We have access to capital.
It’s also worth pointing out one final element of Blue Yonder’s strategy, which may well play a more central role in the company’s future - and that’s commerce. Angove pointed to this in our conversation a few weeks ago, where he said that Blue Yonder’s acquisition of SaaS company Yantriks in July 2020 provided an opportunity for the vendor to build a brand around order management and omni-channel fulfillment too. Tollefson echoed these sentiments and said:
We were blown away by Yantriks. Here's why we were blown away: this is growing at 400% a year. And some of the largest customers in the world are deploying this. They re-architected the whole OMS process around what we call blade services or microservices.
You don't need to rip and replace your OMS system. You can do that with us, or you can just use one of our services. So if you want to buy online pick-up in the store, it literally takes like four weeks to install now. So we're not talking six months to a year, we're talking about weeks.
I’ve known Tollefson and Angove for many years and watched what they achieved at Infor - to much success. Infor, prior to their joining (alongside CEO Charles Phillips), was an archaic ERP vendor that was struggling to stay afloat. A few years later that company was acquired by Koch, for what was thought to be close to $13 billion.
Of course, that doesn’t mean the success seen at Infor will be replicated at Blue Yonder - it’s a different time and there’s other macro factors at play. But that being said, this leadership team knows what’s required to build a true SaaS player that has a cogent strategy on customer value. It’s early days but I’m looking forward to seeing how this story develops, particularly how Blue Yonder brings commerce into the fold - that could be quite a compelling proposition.