Archive for the ‘On-demand’ Category

In case you didn’t see, we formally introduced a new on-demand service today called RapidResponse for Demand Management (you can see the press release here and learn about the product here).  This is very exciting for us on a couple of fronts.

For years we’ve gained success selling our Response Management solutions into the manufaturing/supply chain (the “supply-side”) groups within manufacturers.  These groups struggle with daily changes in demand, supply and product inside the sales and operations planning horizon and have to be able to alter supply plans to profitably respond to these changes.  Our users typically end up being planners, schedulers, materials managers, outsourcing managers, etc.

For some time now, we’ve been getting “pull” from the demand management/fulfillment (the “demand-side”) groups within these companies.  They too are struggling with volatile demand and supply.  In their case, they own demand and are struggling to sense true demand quick enough and see an increasing need to collaborate with their customers around demand.  Likewise, they are responsible for allocating finished goods inventory to ensure that the right products are in the right place at the right time.  What we’ve continued to hear is that demand managers, customer service reps and sales operations staff are struggling.  They lack the needed visibility and exception notification systems to understand what the current state of demand and supply is across an increasingly distributed fulfillment network, and they lack the tools to collaborate with their customers on demand and internally with colleagues to resolve problems.

Enter RapidResponse for Demand Management.  We’ve designed this solution with these user communities in mind.  This new service empowers them to sense demand more quickly, to shape demand and to more profitably respond to demand and supply changes to drive greater levels of customer satisfaction and revenue for the company.  They get an integrated view of demand and finished goods inventory so they can quickly spot misalignments and then leverage tools to determine the most profitable response.

And, when combined with our existing RapidResponse for Manufacturing into an integrated on-demand service, you’re able to see from end-to-end, from customer demand all the way down through component supplies in an outsourced supply chain.  Each group is individually empowered to solve problems within their domain of influence, but can now uniquely collaborate amongst the groups to find the best response to changing conditions.

Our on-demand RapidResponse service supports another key trend I continue to see, and that’s an increasing emphasis on the sales and operations planning (S&OP) process.  Interestingly, while we certainly see a focus on improving the planning process, the more urgent need is at an operational level.  Companies are struggling with how they deliver to the metrics and plans agreed upon in the S&OP meeting given how many things are constantly changing.  Response Management solutions like RapidResponse are designed to empower front-line decision makers with tools for risk tradeoff and response to daily changes inside the sales and operations planning horizon.  This is critical since more and more companies are operating in an environment when many of the assumptions taken into the planning process are proven wrong as soon as you complete that process.

Supplychainer.com has a new post talking about supply chain solutions offered as on-demand (software-as-a-service) services.  The ultimate conclusion is that the market will mature for such solutions, but the prediction is it will take about 10 years.  I’m much more bullish than that based on what we see for our on-demand service.  My comment to the blog post below.

** My comment **

Our Response Management solution - which empowers people to respond to supply chain changes - is delivered as an on-demand service today.

We sell to large manufacturers across a variety of verticals.  We’re seeing extremely strong interest in on-demand as companies continue to outsource much of their IT infrastructure.

Very importantly, our on-demand service provides exactly the same full functionality as our prior on-premises offering.  It is not a first generation solution with limited capabilities - so we don’t encounter that obstacle.

You are correct in that some people are initially concerned about data - but when they stop and think about how much data is already outside their walls because of the pervasive outsourcing they’ve done, they get much more comfortable with an on-demand service.  In fact, a huge value that we provide is the ability to actually regain visibility into that outsourced data because that is critical to enabling effective response to change.

I don’t disagree that some vendors will take a different approach to offering an on-demand service and run into issues - but it doesn’t have to be that way.

I think the market will be “mature” much sooner than 10 years, I think we’re at the early stages of a very strong demand that will become mainstream inside of 5 years.

Technology Evaluation Centers (TEC) has a series of articles (Part I, Part II, Part III, Part IV - free registration required) talking about Software as a Service (SaaS), including specific information on supply chain management solutions that are available as the SaaS model. There’s also specific information on Kinaxis here.

Nicolas Carr’s blog has a post highlighting new research from McKinsey that says SaaS adoption is set to explode. The research, with large company CIOs, found that 61% of North American companies with sales over $1 billion plan to adopt one or more SaaS applications over the next year, a dramatic increase from the 38% who were planning to install SaaS apps in 2005.

This is consistent with our findings. Our new on-demand RapidResponse service is seeing excellent reception in the market place.

Here’s a post entitled “Software as a Service driving faster implementations and ROI across the enterprise” that hlighlights research from the AberdeenGroup. You can actually download a copy of the report here.

Of particular note is that Aberdeen found that Software as a Service Supply Chain Management applications see an implementation in less than 3 months and ROI in less than 1 year. This is very consistent with the value that we’re able to deliver via our on-demand offering - although we’re able to exceed these numbers in many cases.

Here’s a report by McKinsey describing two tools that CIOs want. One of them is Software-as-a-Service (SaaS). The report says “IT executives are shifting to the software-as-a-service model for some applications not only for lower licensing and maintenance fees but also because implementation is usually quicker and companies don’t have to maintain special skills in software-specific areas.”

We’re seeing tremendous interest in our on-demand offering (I’m biased, but I think our folks have done a great job in delivering a superb service) for the reasons stated here. So many companies are looking to outsource not only their manufacturing, but also their IT operations. SaaS offers compelling benefits in this regard.

According to a new report by Merrill Lynch, on-demand and service oriented architectures (SOA) will reshape the enterprise applications market. In the report, detailed here in this IndustryWeek article, Merrill Lynch says “the percentage of IT budgets allocated toward software on an average is estimated to increase from 30% this year to 35% in 2008, driven in part by software on demand and Web services.”

Merrill Lynch goes on to say that applications must be designed for the masses. We agree and believe Response Management, by its very nature, is an application for the masses. It is used today by hundreds and thousands of users in many organizations. This is just another reason we chose to embrace on-demand and Web Services technologies to further the adoption of Response Management capabilities by the masses. Doing so enables Response Management to support initiatives like lean manufacturing, demand management, supply chain agility, supply chain collaboration and supply chain visibility–which all help organizations become more responsive to change.

Today, we announced a new on-demand RapidResponse service. As we talk to prospects in the marketplace, we continue to enjoy great success with business users who see tremendous value in Response Management capabilities. We also announced that we’re partnering with IBM Global Services to provide the secure, high-availability hosting environment.

By making RapidResponse an on-demand service, we provide customers several significant benefits:

• Lower Total Cost of Ownership and No Capital Investment
• Global Access, Any Time, Anywhere
• Rapid Time-to-Value
• World Class Security and Availability

Many of the leading analysts have done research showing the strong interest in on-demand solutions. Why? Because IT organizations continue to look for ways to outsource operations and reduce their overall costs, and on-demand provides such an avenue. It offers companies the opportunity to solve critical business problems without taking on additional software applications that require setup, ongoing management, upgrade management, etc. All of this is included in the service.