Archive for the ‘On-demand (SaaS)’ Category

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For most of us, we’re experiencing unprecedented economic challenges. The implications to the supply chain management profession are profound. We’ve gathered some of the industry’s brightest minds to discuss these challenges and seek innovative solutions. We hope you enjoy the Kinaxis Supply Chain Expert Series as we challenge these experts on these issues.

Mary Hayes Weier
Editor at Large

InformationWeek.com

Mary Hayes Weier joined InformationWeek in 1994. Prior to that she had reporting stints with Metro newspaper in San Jose, Calif., the Contra Costa Times, and the San Jose Business Journal. Mary enjoys both writing and editing, and has moved back and forth between those roles in recent years. She’s covered (or has managed reporters covering) nearly every key area of IT, and is the recipient of several editorial awards. She’s now back to writing, covering enterprise software, business intelligence, and RFID.

Kinaxis:  We are experiencing a rapid and perhaps long-lasting downturn in the economy.  How is the slow economy impacting software spending behaviors?  Where is the pressure being felt most?

Mary: We’re hearing of software projects that are getting canceled, and of software vendors having problems drumming up new business. Vendors that have strong, established customer bases from which they can pull a continuing stream of maintenance fees will best weather this economy.

Interestingly, the tightened IT budgets, combined with the emergence of new software and delivery models (SaaS, open source, Web 2.0 computing, etc.) have more CIOs questioning those maintenance fees. Several years ago fees were typically 17%-19%, but more vendors now charge around 22%. That means for a $1 million software license, a customer pays a yearly maintenance fee of $220,000 for the life of the license.

Software vendors are largely unapologetic about their maintenance fee structures, saying they need those fees to invest in better, more innovative software, attract great developer talent with great salaries, reward shareholders for their investments, support increasingly complex IT environments, and of course, keep the upgrades coming and pay the support staff. Vendors also say the software industry works as it is because there’s a good balance between what customers pay and what software vendors provide in return. That’s a difficult argument to poke holes in. And as a result, I think the burden of proof lies on the vendors of SaaS and other disruptive approaches to show customers that there’s a better, cheaper way.

I would like to see more evidence that the SaaS industry can thrive long term. It concerns me that so many SaaS vendors are still not reporting positive net incomes for their quarterly earnings. It may indeed take time to reach the point of profitability, but with some SaaS vendors it seems to be taking a very long time. Choices and alternatives are good, but the model must be sustainable.

Kinaxis: What lessons can be learned from the downturn that can be applied to enterprise technology adoption in the short term and in the long term?

Mary: I think it’s great that tight budgets are prompting CIOs to question, and sometimes investigate, whether there are better, cheaper, faster, and easier answers to enterprise software. When things are cozy there’s little incentive to change. But when the CEO demands, “Figure out a way to do it better and cheaper,” there’s little choice but to spend some time and effort exploring alternative options.

Kinaxis:  The adoption of software as a service (SaaS) increased dramatically in 2008 for non-core processes, and even for some core processes such as CRM and, to a lesser extent, Procurement.  What are the drivers for this adoption?

Mary: Certain types of applications lend themselves to a SaaS model. In some instances, business divisions initiate these deals and IT isn’t even called into the negotiations. It’s a pretty attractive concept to hand over the management and upgrades of software to the vendor and bypass the hefty license and maintenance fees, too. SaaS may also start to look more attractive to IT shops that are forced to cut their workforces as a result of the economy.

Kinaxis: What are the barriers to wider adoption of SaaS for core business processes, such as ERP and supply chain management?

Mary: I think there are considerable barriers to ERP adoption, particularly for large companies. Many companies view their ERP platform as the heartbeat of their business, and every new application, capability and process that they develop may, in some way, tie back to that platform, particularly in this era of Web services. So what company wants to hand over management of all that to a SaaS vendor, and is there a SaaS vendor even capable of doing that yet? That’s akin to a massive outsourcing engagement. That’s why it’s more typical to see SaaS for specific, departmental implementations.

It’s so tempting to pose the question of what’s better, on-premise software or SaaS. But I don’t think the answer is black and white; there are lots of shades of grey here, no matter what the vendors on either side of the fence would like you think. I believe SaaS will continue to grow, but on-premise software will not go away. The on-premise vendors, however, will learn from the SaaS approaches and implement the best stuff into their own offerings, or risk losing customers and market share.

For most of us, we’re experiencing unprecedented economic challenges. The implications to the supply chain management profession are profound. We’ve gathered some of the industry’s brightest minds to discuss these challenges and seek innovative solutions. We hope you enjoy the Kinaxis Supply Chain Expert Series as we challenge these experts on these issues.

Simon Ellis
Practice Director, Supply Chain Strategies
Manufacturing Insights, an IDC Company

Simon Ellis currently leads the Supply Chain Strategies practice at Manufacturing Insights, one of IDC’s industry research companies that addresses the current market gap by providing fact-based research and analysis on best practices and the use of information technology to assist clients in improving their capabilities in key process areas. Within the Supply Chain practice, Ellis specializes in advising clients on LCS (Low Cost Sourcing), Lean, Six Sigma and more.

With over 20 years experience in the industry, Ellis most recently was the Supply Chain Strategy Director/Futurist for Unilever North America, a $12 billion division of Unilever, the maker of such well-known products as Dove, Suave, Wisk, all, Q-tips and Vaseline. Simon was responsible for leading the implementation of key new technologies that impacted the future of the Unilever Supply Chain. Specifically he led the North American RFID and e-Catalog teams, and was the project leader for the new Data Management Organization.

Kinaxis:  We are experiencing a rapid and perhaps long-lasting downturn in the economy.

• What lessons can be learned from the downturn that can be applied to supply chain management in the short term and in the long term?
• What specific supply chain initiatives can be applied in the short term that will have greatest effect on a company’s financial performance and sustainability?
• How can companies balance short-term cost cutting objectives with the need to strengthen their position for an eventual recovery?

Simon:  We are seeing manufacturers really focus on capital preservation and maximization of existing assets. So, ensuring that physical plant and equipment and working capital is being used as efficiently and as completely as possible - but also leveraging intangible assets like brand reputation and ‘trust capital’.

Most of the large manufacturing firms we speak with also realize that with a downturn comes an inevitable recovery. Even the automotive industry talks about past patterns of their industry being “first in, first out” when it comes to a recession and being ready to serve the pent up demand.

Economic downturns also represent an opportunity for manufacturing companies to recalibrate their operations. Channel partners can be rationalized, inventories reduced, production assets modernized, and, most importantly, supply and demand can be rebalanced in preparation for a recovery. We also expect to see continued investment in modernization of the supply chain - particularly on the execution side where investments in physical logistics, inventory and network optimization tolls can offer quick payback.

Kinaxis:  We have seen the globalization of demand, especially in the BRIC countries

• Notwithstanding the current economic downturn, will this trend continue?
• How will this impact the supply chain, especially with respect to outsourcing, which has tended to look at the BRIC countries as cheap(er) manufacturing centers?
• How will this impact product development, and by extension the products available in the developed countries?

Simon: We have written quite extensively about the globalization of demand and its implication on manufacturers supply networks in a concept we call Profitable Proximity Sourcing. Briefly, we see manufacturers looking to balance cost and lead-time optimized networks with the growth in consumer demand. We think that a narrow focus only on low-cost country sourcing can actually lead to a sub-optimized global supply network, particularly as service implications and logistics become a bigger part of the cost equation.

We do expect to see the continued globalization of demand as countries like China and India transition from low-cost producers to emerging economies, and for certain labor-intensive categories, those countries will remain a cost-efficient place to manufacture. But as those economies mature and workers begin to demand a ‘globally fair wage’, manufacturing will have to look much more closely at a total landed ‘profitable proximity’ cost approach to global sourcing.

Kinaxis:  Outsourcing has been widely adopted in the developed world over the past two decades

• Will brand owners, in particular, continue to adopt contract manufacturing as a way to reduce overheads?
• Will the trend of using off-shore contract manufacturing continue, or will near-shoring and even local sourcing become more dominant?

Simon: This point picks up again some of the points in our research on profitable proximity sourcing.
Outsourcing continues, particularly as manufacturers increasingly narrow their definition of core competency, and we expect that to continue.

In the US, particularly, as companies feel the cost and profit squeeze, we may actually see an uptick in outsourcing over the next year or so, but eventually we expect to see leading companies move more towards a total landed cost/globally balanced supply network where manufacturing cost is just one component of the equation along with lead-times, global demand balancing, sustainability issues and risk management (including quality and IP protection).

In that context, we do expect to see a balance of off-shoring and near-shoring, with local-to-demand sourcing being an important component.

Kinaxis:  Ford a century ago used to have a fully integrated supply chain from steel manufacturing through to the sale of a car. Now other companies make the steel, most of the components are manufactured by other companies, and yet other companies sell the cars.

• Will this trend in supply chain specialization concomitant with outsourcing continue at the current pace?
• What will be the effect on the supply chain if this trend continues?
• Is there a “natural” number of actors in a supply chain which gives greatest flexibility while limiting complexity?
• What will this mean in terms of systems requirements to support supply chains with many actors?

Simon: This is what we call the ‘commoditization of the supply chain’ and it continues to blur lines between the brand owners and their contracted suppliers. The outsourcing trend seems unlikely to reverse, given the enormous cost pressures, so a return to the integrated supply chain model is unlikely.

IP and brand protection is critical and brand owners must be very careful to recognize what gives them competitive differentiation and maintain careful control over those ‘assets’. We expect to see a broadening and deepening of the brand owners supply ecosystem to the point where it will be many layers deep. In this kind of ecosystem there is a fine line between control and chaos and the brand owner must have adequate visibility into the network to be able to make the right decisions at the right time. Visibility and networking tools will be increasingly important to maintain an efficient supply network.

Kinaxis: The adoption of software as a service (SaaS) increased dramatically in 2008 for non-core processes, and even for some core processes such as CRM and, to a lesser extent, Procurement.

• What are the drivers for this adoption?
• What are the barriers to wider adoption of SaaS for core supply chain processes?
• Will this trend also lead to the outsourcing of the process itself? In other words, will we see the emergence of companies that specialize in procurement for, say, pharmaceutical manufacturers?

Simon: We expect to see pretty dramatic growth of SaaS over the next few years, particularly as manufacturers get more comfortable with the security of their information.

The movement of SaaS into supply chain analytics, for example, has been an interesting trend to watch as companies have done their fair share of hand-wringing over moving proprietary data outside their firewalls, yet, the pressure on costs and productivity makes this an almost inevitable trend. SaaS, essentially, offers manufacturers with a lower risk, more efficient way of implementing capabilities with a higher ROI and shorter payback - all things they are looking for in a tough economic climate.

The interesting side effect of this though, is a continued ‘commoditization of the supply chain’ where if everyone is using a particular SaaS capability, it cannot by definition be an area of competitive advantage. It is for this reason that we do not see a complete outsourcing of complete business processes as companies try to hold on to the bits that they believe drive their differentiated value proposition.

Bruce Richardson of AMR posed the question of whether or not cloud computing would be the next disruptive breakthrough for ERP in his latest blog post entitled “The Cloud vs. SaaS: Compiere’s Don Klaiss weighs in.”  I posted a comment at Bruce’s blog but have also included it here.

### My Comment ###

The two most interesting points are without a doubt the use of Amazon EC2 and the price point. While I agree with the bulk of your post, there are 2 areas where I must disagree:

You make the statement at the end of your article that Compiere will need to get “brand-name” companies to sign up in order to be taken seriously as a disruptive technology. I am willing to bet anyone $50 that none of SFDC’s first 100 customers, perhaps even none of their first 1,000 customers, was a brand-name. If Compiere can get significant traction in the SMB space, the brand-names will pay attention.

I think the much bigger barrier to broad adoption of Compiere will be the insecurity around support and maintenance with open source based solutions, not core functionality or price point. I have a personal bias against open source for these reasons so I would be interested to hear what others say about this issue.

I think open source and cloud computing are at odds. As Don Klaiss states, “And [the customer] has complete freedom to customize the solution as it sees fit and complete control over upgrade cycles and all other aspects of its IT environment.” Much of the attraction of cloud computing is the lower TCO, much of that achieved by reduced headcount in IT and reduced cost of maintaining highly customized or custom-built applications. In the current economic climate specifically, but in the long term too, I believe the TCO argument will prevail.

There are several other open source ERP companies, most of which are based in Europe. A comprehensive comparison of several of these was made by Smile in France, which is in French. (http://www.smile.fr/publications/livres-blancs/erp-open-source__1). I presume this comparison does not include Compiere Cloud. None of the ERP systems they compared has, to the best of my knowledge, gained any significant traction. One reason I believe to be the issues around support and maintenance. The other is one you bring up, namely direct sales. My experience of open source companies is that they are replete with technology people, with very little focus on sales and marketing, and somewhat short on people with deep operations knowledge and experience.

For most of us, we’re experiencing unprecedented economic challenges. The implications to the supply chain management profession are profound. We’ve gathered some of the industry’s brightest minds to discuss these challenges and seek innovative solutions. We hope you enjoy the Kinaxis Supply Chain Expert Series as we challenge these experts on these issues.

Bruce Richardson
Chief Research Officer
AMR Research

Bruce Richardson brings more than 27 years of experience to his current role as chief research officer at AMR Research. Bruce has spent most of his career analyzing the software industry with a distinct emphasis on ERP and supply chain. Since joining AMR Research in 1988, he has been responsible for spearheading new market coverage and contributing to the company’s analysis of leading market trends in areas such as ERP, supply chain management, service-oriented architectures, software-as-a-service, software appliances, and virtualization and visualization.

You can follow Bruce’s blog at The Future of Enterprisese Software.

Kinaxis: We are experiencing a rapid and perhaps long-lasting downturn in the economy.  What specific supply chain initiatives can be applied in the short term that will have greatest effect on a company’s financial performance and sustainability?

Bruce:  Given the sorry state of the economy one of the top priorities is to get a 360 degree view of demand.  If you sell your products through channels, the data that you get on consumption may be 6 to 13 weeks old.  That’s unacceptable.  You need to move closer to real-time.

Smart companies are also building pipeline management dashboards to manage changes to forecast.  They are a looking at the data across multiple dimensions – products, geographies, customers and reps to sense any changes that may require immediate intervention.

Kinaxis:  We have seen the globalization of demand, especially in the BRIC  (Brazil, Russia, India, China) countries.  Notwithstanding the current economic downturn, will this trend continue?

Bruce:  I wish I could be more optimistic about manufacturing jobs returning back to North America.  The only case would be for products where the cost of logistics exceeds the cost of manufacturing.  In those cases, though, the primary benefactor in North America might be Mexico.

What’s more likely is that every few years we will evaluate our manufacturing partners on the basis of costs and risks against new opportunities (i.e., shifting from China to India or Vietnam.

Kinaxis: How will this impact product development, and by extension the products available in the developed countries?

Bruce:  Follow-the-sun product and software development will continue to be the norm.  The one question is whether any country can challenge Taiwan for product design/manufacturing leadership, especially in consumer electronics.  Indian companies have been threatening to do so.  There are new schools starting up, but we have yet to see a shift to India.

Kinaxis: As companies have outsourced, much to their consternation, their direct control of the supply chain has decreased.  They now need to participate in multi-enterprise supply networks.

Bruce:  We have seen an uptick in interest in multi-enterprise supply networks.  Manufacturers would love to have one low cost,  industry “standard” for dealing with suppliers – and customers, too.  Ironically, despite all the promise of XML, it’s still an EDI world.

Kinaxis: The adoption of on-demand or software as a service (SaaS) increased dramatically in 2008 for non-core processes, and even for some core processes such as CRM and, to a lesser extent, Procurement.  What are the drivers for this adoption?

Bruce:  While my peers at other research firms may dispute the cost advantage that SaaS has over on-premise, I think they are crazy.  SaaS deployments have no servers or data centers, require minimal IT attention, foster continuous innovation (through quarterly or semi-annual upgrades), and use less energy.  Compared to most ERP applications, SaaS looks more like a consumer application.  They are much easier to use.

Kinaxis: What are the barriers to wider adoption of on-demand services for core supply chain processes?

Bruce:  The barrier is often the CIO, aided and abetted by the large ERP vendors.  The primary concerns are Sarbox compliance (i.e., concerns over “where’s my data?”) security, governance, data management, and integration.  So far, security has not been an issue.

Kinaxis: Will this trend also lead to the outsourcing of the process itself?  In other words, will we see the emergence of companies that specialize in procurement for, say, pharmaceutical manufacturers?

Bruce:  Pharma is pretty conservative.  I could take you to a large semiconductor company who’s using a combination of open source, SaaS, business process outsourcing, and cloud applications (e.g., he replaced Microsoft Office with Google apps) to drive down the cost of non-core processes.  Ironically, the CIO there argues that IT fits into the non-core side of the equation.

Kinaxis:  “Cloud” computing is the hot topic in the IT world, and is a superset of SaaS.  Will there be a wide adoption of “cloud” computing in the supply chain management (SCM) world?

Bruce:  Today, the only people talking about cloud computing are analysts, journalists, and vendors operating in the 650, 415, and 408 area codes.  That’s changing quickly.  I think in the not-too-distant future we will have all of our supply chain data available in the cloud.  It will be real-time and available in 3D.  For example, I recently visited Zappos, the $1B online shoe retailer based outside of Las Vegas.  As we walked through the hallways, I saw a flat panel display showing web visitors mapped against the map of the U.S.  Every new visit resulted in a new “footprint.”   In the future, we’ll turn to the cloud to look at real-time data for all facets of our supply chain.  Wouldn’t it be nice to not have to lug your laptop when you travel?  Wouldn’t it be great to use that 42-inch television in your hotel room as your laptop screen?  Imagine having email and your individual dashboards on display on one side and the Red Sox game on the other!

New research from Aberdeen points to a growing adoption of on-demand (SaaS) services for supply chain management (SCM) software capabilities. The research points to strong ROI as the main reason. According to an article at MSNBC detailed the report, 75% of Best-in-Class companies view their use or planned migration to SaaS as a long-term solution.  According to the reports author, “SaaS solutions offer a viable approach for enabling rapid business ROI with minimized Total Cost of Ownership in key areas of supply chain management such as supply chain execution, procurement and sourcing as well as supplier/customer collaboration.”

A complimentary copy of the report is available here.

I wish that this on-demand model was available when I was a customer (see our new white paper entitled “Four essential requirements for today’s supply chain management solutions“).  Let me quickly add my perspective as a long time user and (current Kinaxis employee).

As someone who experienced first-hand what it was like to go through the process of purchasing RapidResponse, I can only imagine how much easier the decision making process would have been if an on-demand subscription option had existed.

It would have been significantly easier for us to ‘sell’ RapidResponse to our inherently risk-adverse finance department if we were able to trade off capital and human resource investment for a subscription fee.

With multiple sites, suppliers, and customers,  why pick an arbitrary location to host your instance of RapidResponse when you can have the security of 24/7 coverage supervised by people whose job it is to protect your data (when was your last fire drill?).   In fact, data security probably ranks up there as one of the primary reasons I would recommend an on-demand approach.

I also like the idea of letting ‘someone else’ handle the version upgrades.  Staying current cannot always be a priority for a maxed out IT department.  In the end, there is much more continuity for the user community if upgrades happen regularly.

The current economic uncertainty facing many companies in the world will likely be the accelerant needed to push the on-demand (or SaaS) model further into mainstream. The result will be a win-win for both consumer of the service, and service provider. Indeed, the on-demand industry has the potential for significant and positive growth in these trying times while legacy perpetual software companies may see threat to survival.

As the white paper “Four essential requirements for today’s supply chain management solutions” articulates, global supply chains have never been more complex, or more volatile. Regardless of size or tenure, companies are outsourcing all or most of their manufacturing operations to regions often outside their target markets. The velocity of innovation has never been faster (and it is accelerating still). And there’s my personal favorite, the nuvo-art of selling in a world undergoing a major “Groundswell” (a must read book by Charlene Li and Josh Bernoff, Harvard Business Press).

The business challenges are undeniable, and companies will find it difficult, if not unbearable, to leave their current supply chain condition untreated. Existing within a distributed supply chain model means the information about a company’s ‘true’ overall health is equally distributed. What could be more natural than an outsourced solution which reconsolidates your supply chain visibility into a single point? With large scale, large capital projects facing unprecedented scrutiny, or postponement, organizations will look to lower cost solutions where their investment closely coincides with their return. On-demand service based offerings are in the rather unique position to accomplish just that where one can expect, among other things, the following:

• No capital investment in hardware
• No software license investment
• No infrastructure foot-print
• No software maintenance tasks
• Monthly subscription fee over perpetual fully paid up license
• Variable contract terms
• Lower cost of deployment
• 24×365 monitoring and support
• >99% or greater service level agreements
• Lower IT support requirements (usually focused on user/group account management)
• Try & Buy programs
• Optimized data center for high-availability, security, redundancy, bandwidth consistency, and business continuity

For the first time in history, small to medium sized enterprises are able to afford the same rich and sophisticated solutions as the multi-billion dollar enterprises. There is also a surge in coverage from the respected analyst community, the most recent I read was an article by the Aberdeen Group entitled “SaaS in Supply Chain: Boon or Boondoggle” where they state their hypothesis:

“While there are many drivers today forcing companies to evaluate and implement SaaS-based SCM solutions, our hypothesis is that the predominant pressure faced by the enterprise is the cost to purchase and deploy traditional on-premise SCM solutions.”

I believe adoption of on-demand service-based solutions for supply chain will see significant adoption through 2009 and beyond, giving it the same potential growth witnessed as Salesforce.com entered the CRM space.

I had the opportunity last week to sit down with Rob Bell, director of service operations at Kinaxis, to talk about our new white paper entitled “Four Essential Requirements for Today’s Supply Chain Management Solutions: On-demand Services Uniquely Qualified to Deliver.”  Rob has an interesting role relative to this topic.  He’s been supporting global manufacturers and their supply chain management processes for years, he runs IT at Kinaxis and he manages our on-demand service operations.

If you’re unable to view the above view, try this link: Essential requirements for today’s SCM solutions.

This morning we announced that we have successfully completed the SAS 70 Type II examination.  For those of you not familiar with SAS 70, it is the “gold standard” in determining if you have the proper controls and auditing processes in place to run an on-demand service.  Completion of the examination indicates that the processes, procedures and controls for the Kinaxis on-demand RapidResponse service have been formally evaluated and tested by an independent accounting and auditing firm.

Lori Smith sat down with Rob Bell, who runs our on-demand service to talk about the importance of this announcement.

If you’re having trouble viewing the above video, try this link: Rob Bell, Kinaxis, discusses SAS 70 examination

######

Kinaxis Successfully Completes SAS 70 Type II Examination
On-demand Supply Chain Management Service Helps Customers Succeed in Complying with Sarbanes-Oxley

Ottawa, Canada, December 9, 2008 – Kinaxis™ Inc., provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities required in today’s complex and dynamic world, today announced that it recently completed its first examination in conformity with Statement on Auditing Standards No. 70 (SAS 70), for the period May 1, 2008 through October 31, 2008. This widely recognized audit standard can help Kinaxis customers and their auditors to address the requirements of Sarbanes-Oxley.

Completion of the SAS 70 Type II examination indicates that selected Kinaxis processes, procedures and controls for its on-demand RapidResponse service have been formally evaluated and tested by an independent accounting and auditing firm.  The examination included controls related to organization and administration, logical and physical access, backup controls, change management and incident management. 

SAS 70 is designated by the U.S. Securities and Exchange Commission (SEC) as an acceptable method for a user organization’s management to obtain assurance about service organization internal controls without conducting separate assessments.  A SAS 70 examination is widely recognized, because it represents that a service organization has been through an evaluation of their control activities as they relate to an audit of the financial statements of its customers.  A Type II report not only includes the service organization’s description of controls, but also includes detailed testing of the design and operating effectiveness of the those controls.

“Kinaxis is committed to developing and refining systems that fully secure our service delivery infrastructure,” said John Sicard, executive vice president, development and service operations at Kinaxis.  “In today’s global economy with ever-increasing compliance requirements, we consider the SAS 70 examination a necessary stamp of approval that most sophisticated buyers will be looking for when evaluating our on-demand RapidResponse service.”

About Kinaxis
Kinaxis™ RapidResponse is a single on-demand service that empowers multi-enterprise manufacturers with collaborative and integrated demand-supply planning, monitoring, and response capabilities. RapidResponse embraces human judgment to enable planners and front-line responders to handle unpredictable changes. Global leaders such as Casio, Honeywell, Jabil, Qualcomm, and Raytheon use RapidResponse to achieve breakthroughs in sales and operations planning (S&OP), demand management, supply management, and supply chain risk management. The results are superior customer service, improved operations performance, and a competitive market advantage. For more information, visit the Kinaxis web site at www.kinaxis.com or the company’s blog at www.21stcenturysupplychain.com.

Kinaxis has just published a new white paper entitled “Four Essential Requirements for Today’s Supply Chain Management Solutions.” An abstract for the paper follows:

The continued downward pressure on IT budgets combined with the shifting dynamics of today’s supply chains has created an environment ideally suited to be addressed by on-demand service offerings. With the right capabilities, on-demand solutions for supply chain management can offer a unique combination of tangible benefits to IT (costs savings and low IT resource requirements) as well as to the business (sophisticated computing solutions designed to excel within today’s global and collaborative supply chains).

There was a recent post at Sandhill.com on a similar theme. The post, entitled SaaS reinvents the supply chain, suggests that “high-tech companies need to take advantage of SaaS-model benefits for real-time visibility into their supply chain—especially in tight economic times.” The post goes on to describe some of the business challenges and describes the unique benefits that on-demand (or SaaS) solutions have in meeting those challenges - starting with supply chain visibility.

I would argue, though, that this is not at all unique to high-tech companies. While high-tech companies have certainly been some of the first and most aggressive global supply chain outsources, they are no longer alone in this regard. Today, companies in all industries - from aerospace & defense to industrial and automotive - have globally outsourced supply networks. They too share the same challenges of seeing into their widely dispersed network of partners and of orchestrating the intricate cooperation and coordination necessary for these sophisticated networks to work efficiently and effectively. And, with the pace of change and volatility on the rise, their challenge continues to grow.