By Doug Bartholomew Let's face it, there's nothing sexy or exciting about integration -- technology's term for the way two different pieces of software work together. But when they don't work together, as is often the case, things get downright troublesome. In recent years, as many companies installed enterprise-resource-planning (ERP) systems and supply-chain management (SCM) software, they often incurred lengthy implementations whose cost took years to recover. That's why i2 Technologies Inc., the leader in advanced planning and scheduling and SCM software, is betting big on the integration features of its latest release, i2 Five.Two. The new package is designed to integrate easily with existing applications, including various ERP systems. I2's application programming interface (API) has been expanded to include full support for XML to help simplify integration. Among the other new features of i2 Five.Two is a new module for distributed order management called OMX, part of i2's CRM. This system is aimed at solving the problem of end-to-end order fulfillment by aggregating, managing, and brokering orders across multiple applications, divisions and enterprises. Other new pieces include an inventory visibility and execution module, and a procurement addition to i2's supplier-relationship-management system. I2 also redesigned its user interface with help from frog design, which also helped SAP AG revamp the look of its software package. I2 also has added vertical industry-focused templates that are pre-developed to support the unique needs of specific industries. This approach is becoming increasingly common among enterprise software firms; SAP adopted it more than five years ago. Speaking of SAP, i2 is starting to feel the heat from the ERP giant's competing Advanced Planning and Optimization (APO) module. Writes Jennifer Kemmeter, an analyst for AMR Research, "APO has received very good initial reviews and will likely steal market share from i2 in the coming months." Overall, i2 continues to face tough times, as the market for supply-chain management software remains becalmed. I2's third-quarter revenues were $194 million, down from $324 million a year ago. Still, year-to-date revenues were up slightly, at $792 million for the first nine months of this year, versus $748 million for the first nine months of 2000. "We're certainly finding that the market has slowed down a great bit, but we're continuing to do planning and supply-chain deals," says John West, executive vice president for transaction development and chief technology officer at i2, based in Dallas.