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                                                                    EXHIBIT 10.2





October 16, 2000




Mr. Gregory C. Cudahy
4921 Karls Gate Drive
Marietta, GA  30068

Dear Greg:

On behalf of Manugistics, Inc., as well as its parent company, Manugistics
Group, Inc. and the Board of Directors of both, we are very pleased to confirm
our verbal offer for the position of Executive Vice President, Pricing and
Revenue Management, as of October 16, 2000, reporting to the President or Chief
Operating Officer, and serving as a member of the Executive Committee.

CASH COMPENSATION. As Executive Vice President, your annual base salary is
$200,000 payable semi-monthly. In addition, you are eligible to receive an
annual incentive bonus of up to 100% of your annual base salary payable
quarterly. The incentive bonus is payable as follows: 50% based on the financial
performance of the Company which will be defined by the Executive Committee and
approved by the Board and 50% based upon management objectives. The management
objectives based bonuses will be payable under the plan submitted by you within
the first ninety (90) days of your employment and approved by the President or
Chief Operating Officer. During the first twelve (12) months of your employment
with the Company, you will earn a minimum of fifty percent (50%) of the bonuses,
payable to you on a quarterly basis.

SALES INCENTIVE. In addition to the foregoing, Manugistics will pay you an
additional quarterly bonus (annualized at $200,000 per year) based on
significant participation in revenue generation as follows:

Manugistics Quarter 3       $1.0 million in either Talus Solutions, Inc. or
                            Manugistics' license revenue to Manugistics = a
                            bonus of $50,000

Manugistics Quarter 4       $2.5 million in Talus Solutions, Inc. or
                            Manugistics' license revenue to Manugistics = a
                            bonus of $50,000

New revenue targets will be set at the beginning of each fiscal year.

STOCK OPTIONS. We are also pleased to offer you a Stock Option package as
follows:

An option, granted as of your date of hire, to purchase 235,000 shares of
Manugistics Group, Inc. common stock ("Manugistics Stock") in accordance with an
applicable stock option plan. The vesting period for the stock options under
this first option shall commence on the date of grant and vest over a four (4)
year period, in equal monthly increments.


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Mr. Gregory C. Cudahy
October 16, 2000
Page Two


ADDITIONAL STOCK AWARD. In addition, you will receive an option to purchase
additional shares of Manugistics Stock, under the terms of the then-current
Manugistics stock option plan, as follows:

-      If the Talus Solutions, Inc. revenue for Manugistics' Fiscal Quarter 1
       ("Q1") Fiscal Year ("FY") 02 increases by 50% over Q1 FY01, you have the
       option to purchase a minimum of 30,000 shares of Manugistics Stock at a
       price equal to the fair market value of Manugistics Stock on the last day
       of Q1 FY02. The vesting period for the stock options under this option
       shall commence, if applicable, on the date of grant (the last day of the
       Manugistics' Q1 FY02) and vest over the period set forth in the
       then-current Manugistics stock option plan, in equal monthly increments.

-      If the Talus Solutions, Inc. license revenue for Manugistics' FY02 is $25
       million or greater, you have the option to purchase a minimum of 35,000
       shares of Manugistics Stock at a price equal to the fair market value of
       Manugistics Stock on the last day of the Manugistics' fiscal year of
       FY02. The vesting period for the stock options under this option shall
       commence, if applicable, on the date of grant (the last day of the
       Manugistics' fiscal year of FY02) and vest over the period set forth in
       the then-current Manugistics stock option plan, in equal monthly
       increments.


BENEFITS. Effective on your first day of employment and as a key executive in
the Company, you shall receive the comprehensive Manugistics benefits program in
accordance with the Company's written plans and which includes:

-      Stock Options - as set forth above
-      Employee Stock Purchase Plan
-      401(k) Retirement Plan
-      Comprehensive Medical Care
-      Dental Care
-      Employee Vision Care
-      Life/Accidental Death and Dismemberment Insurance
-      Long-Term Disability Insurance

Manugistics will obtain a supplemental life insurance policy of $700,000 on your
behalf. With the standard employee benefit and the supplemental policy, your
life insurance amount will be $1,000,000. The supplemental life benefit is
effective within three months of your hire date. Additional information on these
and other valuable benefits is enclosed for your reference.

TERMINATION. If the Company terminates your employment for reasons other than
cause, you will receive your base salary, corresponding management objectives
bonus, and benefits in accordance with the Company's payroll practices for the
equivalent of a six (6) month period commencing on your termination date
("severance period"). The foregoing salary and benefits payments will cease if
you secure alternative employment during the severance period. In addition, if
the Company terminates your employment for reasons other than cause, the Company
will continue the monthly vesting of the options granted to you pursuant to this
letter for a period of six (6) months following your termination date.

CHANGE OF CONTROL. In the event that the Company has a change of control, which
is defined as fifty one percent (51%) of the Company's voting stock having a
change in ownership: (a) if your responsibilities are not affected, fifty
percent (50%) of your outstanding options set out above shall immediately vest;
(b) if your responsibilities are significantly diminished or you are
constructively terminated, i.e., your


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Mr. Gregory C. Cudahy
October 16, 2000
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responsibilities no longer consist of those reasonably associated with the
position of Executive Vice President, one hundred percent (100%) of the
outstanding options set out above shall immediately vest.

FINAL DETERMINATION BY BOARD. This offer is subject to approval by the
Compensation Committee of the Board of Directors of Manugistics Group, Inc.
Furthermore, all compensation and benefits included as part of this offer will
conform to the Company's standard policies, practices and plans. In the event of
any question with regard to the compensation and benefits described in this
letter, the Compensation Committee of the Board of Directors will make the final
determination with regard to any interpretation relating to the elements of your
compensation package.

In keeping with Manugistics policy, all offers are contingent upon your
execution of Manugistics, Inc.'s Conditions of Employment.

ARBITRATION. In the event of a dispute concerning the terms and conditions of
employment, the parties agree to binding arbitration by and under the rules of
the American Arbitration Association, and each party shall pay its own fees and
expenses.

As required by the Immigration Reform and Control Act of 1986, on your first day
of employment, you must provide Manugistics with documentation verifying your
eligibility to work in the United States. Acceptable forms of documentation are
described on the enclosed Employment Eligibility Verification form. Please read
this and the enclosed "Manugistics, Inc. Conditions of Employment."

Please signify your acceptance by signing and dating this letter, the two copies
of the "Manugistics, Inc. Conditions of Employment" and the top portion of the
enclosed New Employee Information Sheet and returning these documents to Human
Resources. Please keep one copy of the signed Manugistics, Inc. Conditions of
Employment for your records.

We look forward to your joining Manugistics as Executive Vice President and we
are confident that the association will be mutually rewarding.

Sincerely,

/s/ GREGORY J. OWENS

Gregory J. Owens
President and
Chief Executive Officer

Enclosures

Accepted by:

/s/ GREGORY C. CUDAHY
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Gregory C. Cudahy
       10/16/00
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Date