Is it time to do a gut check? Five questions for IT and supply chain executives…

DougColbeth
  • by Doug Colbeth
  • Published

I was fortunate to have the opportunity to contribute an opinion piece to IndustryWeek last week on my favorite topic to rant about….ERP Suites.

In the article, I proposed five questions that can serve as a gut check for IT and supply chain executives to see if their ERP vendors are serving their needs with their suites of modules.

Gut check #1: Do you buy the line that because it is one product, there will be seamless integration? 

Gut check #2:  Can you use your ERP to connect with heterogeneous systems across your organization and amongst your external partners?

Gut check #3:  Is the initial price of the module too good to be true? 

Gut check #4:  Are the modules you have purchased not being used for the original intent, or worse, have ended up “on the shelf?”

Gut check #5:  Are you using spreadsheets because you can’t do everything you need to do in your ERP system?

It is time to stop facilitating a patchwork approach to achieving integrated supply chain management.   The limitations of the ERP suites are very real: 

  • you can’t get all the information (internal and external) you need for a true view of your extended operations,
  • you can’t easily or quickly make adjustments to the data (or data models) and see the impact of changing supply chain conditions in real-time;  and as a result,
  • your “integrated” ERP system doesn’t allow those on the front lines to act quickly with confidence.

Forget the point solutions and look for core technological capabilities that can provide a platform in which can be applied to many applications.  Bridge the divide between the silo’ed operations and partners with tools that truly deliver on the promise of integrating information, capabilities and people.

CIOs and supply chain executives deserve to have more confidence in the success of the solution, more accountability on the part of their vendor, and certainly better ROI – this means looking at alternatives to the “suite.”  Whatever you chose, be aware of the options, aware of the risks, and avoid being seduced by the suite.

DougColbeth

Douglas Colbeth became president and chief executive officer of Kinaxis in March 2003. As one of the true visionaries of the Internet explosion in the mid 1990's, he envisioned the opportunity to be a leader in delivering an on-demand supply chain management service. He then came across what he describes as a "gang of supply chain geniuses" in Canada, who had already developed very powerful modeling and collaboration technology. Doug understood what the Internet's influence on consumer behavior would be and how it would dramatically increase demand volatility. The problem of effectively responding to consumer demand would be further exacerbated by the dramatic market shift of outsourced manufacturing operations. Under Doug's leadership, Kinaxis developed a world-class offering which enables companies to build better supply chain plans and quickly respond to constant changes in demand, supply and product — driving breakthroughs in customer service and operations performance. Today, the Kinaxis RapidResponse® cloud service empowers front-line decision makers at brand name companies and contract manufacturers with multi-enterprise visibility and collaborative analysis tools to effectively respond to change across an entire distributed supply chain. Prior to Kinaxis, Doug was chief executive officer of Spyglass Inc., a leading provider of Internet software technologies. Spyglass technologies are utilized inside millions of products including PCs, televisions, telephones, and other hand-held devices. Most notably, Spyglass technology is the foundation of the Microsoft Internet Explorer browser. In June 1995, Spyglass became the first Internet software company to conduct a successful Initial Public Offering. In March 2000, Doug negotiated its merger with OpenTV Inc., at a value of $2.4 Billion. Outside of his work with Kinaxis, Doug and his wife Margaret are pioneer philanthropists in the area of juvenile brain diseases. Established in 2000, the Colbeth Clinic is operated by the University of Illinois Medical Center and serves inner city children in the Chicago area. This state of the art clinic employs a multidisciplinary approach to treating a wide range of brain diseases including: autism, depression, bipolar, OCD, ADHD, and post-traumatic stress disorder. Doug holds a Bachelor of Science in Economics from Siena College in Loudonville, New York, and studied Quantitative Economics at Rensselaer Polytechnic Institute (R.P.I.) in Troy, New York. While attending R.P.I., Doug was awarded a research grant from Texas Instruments Inc. to develop modeling software for various Texas Instruments products.

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Discussions

  1. Doug, I’m not convinced that using spreadsheets is necessarily a bad thing or a measure of lack of automation or integration. Spreadsheets have become a defacto method of capsulizing information that can be used for transferring information, batch interfaces, or additional analysis. Here is a good example where Google Spreadsheet was used as a input template for a rapid development of a business process utility http://itredux.com/2009/01/25/a-first-taste-of-dogfood/ There is certainly more mileage to get out of most all ERP implementations but, using spreadsheets isn’t a leading indicator.

    The “suites” exist in absence of better enterprise tools. The focus on suite evaluation is misplaced. The focus, particularly for managing supply chains, should be on business process. http://thingamy.typepad.com/sigs_blog/2009/01/beyond-the-crisis-the-importance-of-wealth-creation-and-enterprise-software.html

  2. @Mike: Spreadsheet use by itself is not a bad thing, I agree. What I do think is bad, and it ties with your emphasis on business process, is the *inability* to get off them due to constant churn of both data and practice. What I have seen in over 30 years in supply chain is a very strong correlation between the emergence of spreadsheets and the decline in plain discipline in procedure and shared data definition, and I attribute that to the ability of everyone to “tune” the data to their local perspective. An awful lot gets lost in translation in an end-to-end process, and you bake in people manning all the translation points. I enjoy saying “Excel is evil” for the shock value, so maybe that’s just my twisted view of history.

    Whether “ERP” or best-of-breed, the ability to implement automation beyond spreadsheets depends first and foremost on your company’s ability to herd all the cats back together–which is something you could, and should, demonstrate before any implementation. It’s one thing to be able to exploit spreadsheet flexibility but it’s another matter entirely to be doomed to using nothing but them because you cannot organize your process sufficiently to adhere to the imposed discipline of automation.

    @Doug: I think you have good gut checks for someone who has their process issues resolved, but I also think that places the topic in the minority zone of the companies out there. And I would have to say it’s a losing battle to challenge the integration theme, because by and large it’s seldom worse and often quite a bit better than stitching together best-of-breed architectures in a practical sense.

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