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

Visibility, Agility, and Alignment – 3 capabilities powering the modern supply chain

Published April 3rd, 2013 by Trevor Miles @milesahead 0 Comments

Over the last 20 years there has been a huge shift in Operations toward outsourcing, lead primarily by High-Tech/Electronics. This, coupled with rapid globalization not only into emerging markets, but into other developed economies too, has led to very extended and dispersed supply chains, often with competing objectives and region-specific product portfolios. While this is a well discussed topic, the diagrams below bring home the extent of the outsourcing and globalization through foreign direct investment. In 2009, the amount of foreign direct investment exceeded the inward investment by $1.2T, which is the equivalent of 7.5 Apples, 26 Ciscos, or 68 Bristol-Myers Squibbs. In other words there was a huge amount of globalization taking place worldwide. The extent of the outsourcing can be seen in the Developing Economies’ values, where the net inward investment was $2.2T in 2009 alone.

Alignment

US Federal Reserve, Offshoring Bias in U.S. Manufacturing: Implications for Productivity and Value Added, Susan N. Houseman, Christopher J. Kurz, Paul Lengermann, Benjamin R. Mandel, Sept 2012 (page 71)

 

US Congress, “Outsourcing and Insourcing Jobs in the US Economy: Evidence Based upon Foreign Investment Data”, May 10, 2012 (page 9)

One of the major consequences of both outsourcing/off-shoring and globalization is a loss of visibility to global operations, and therefore a loss of control and confidence. Many companies are desperate to regain control through visibility and alignment across functions and across trading partners. While getting back to the level of control companies had over vertically integrated companies operating locally is never going to return, at least with visibility, agility, and alignment, companies can know sooner about potential risks and opportunities, and act faster to reduce the risk or capture as much of the opportunity as possible.

Alignment is key to achieving this level of operational maturity. So I am happy that Supply Chain Insights LLC is conducting a survey on Supply Chain Alignment. This survey hopes to find out how organizations align functions (sales, marketing, finance, information technology, source, make and deliver) to realize their supply chain strategy. They are also looking to learn, ‘How well do they work together to drive opportunity?’ and ‘which pieces of the organization are better aligned?’ Of course this applies equally to vertically integrated or highly outsourced supply chains.  The issue remains the same: How to best coordinate demand satisfaction in a profitable manner across the globe.

The objective of this survey is to understand how different groups within manufacturing companies view their supply chain agility, team alignment and performance against functional goals. The bonus is that if you participate, Supply Chain Insights will give you an hour and share the results freely, while of course keeping you data confidential.

You can participate in this study by clicking on this link.

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Posted in Control tower, Demand management, Inventory management, Milesahead, On-demand (SaaS), Response Management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management


SupplyChainBrain Video Series Part 6 Power of One – Collaborative Planning and Execution across the End-to-End Supply Chain

Published March 2nd, 2013 by Melissa Clow 0 Comments

In October, SupplyChainBrain attended our annual Kinexions user conference. At our event they completed a number of video interviews with some customers, analysts, and Kinaxis executives. These videos are loaded with great information and we would like to share it with our readers.

Each week for the coming weeks, we will be highlighting a clip from SupplyChainBrain. Next up, a discussion with Procter & Gamble (now retired), Supply Chain Insights; NCR Corp. and Kinaxis.

Power of One: Collaborative Planning and Execution across the End-to-End Supply Chain

Breaking down functional silos to create transparent and responsive end-to-end supply chains has long been an intractable problem, but many companies are finding success using a Control Tower concept that gets everyone working off the same plan and focused on the same outcome. Discussing this approach, and the Kinaxis solutions that pioneered it, are: Paul Bittinger, former supply chain transformation manager, Procter & Gamble (now retired); Lora Cecere, founder and CEO, Supply Chain Insights; Don Gaspari, director, global materials and inventory, NCR Corp.; and Kirk Munroe, vice president of marketing, Kinaxis.
[Run Time (Min.): 18:21]

 

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Posted in Control tower, Demand management, Inventory management, On-demand (SaaS), Response Management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain comedy, Supply chain management, Supply chain risk management


SupplyChainBrain Video Series Part 1

Published January 30th, 2013 by Melissa Clow 1 Comment

In October, SupplyChainBrain attended our annual Kinexions user conference. At our event they completed a number of video interviews with some customers, analysts, and Kinaxis executives. These videos are loaded with great information and we would like to share it with our readers.

Each week for the coming weeks, we will be highlighting a clip. First up, Prana Conuslting.

Top 3 Priorities for Multi-Enterprise Supply

At the same time that supply chains are becoming increasingly global and complex, customer are expecting faster than ever service, says Vijay Subramanian, president of Prana Consulting. He explains how people, processes and systems together create an environment where these expectations are met. [Run Time (Min.): 5:45]

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Posted in Control tower, Demand management, On-demand (SaaS), Response Management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management, Supply chain risk management


Is There a Supply Chain Cliff Looming?

Published November 22nd, 2012 by Bill DuBois 1 Comment

The term “Fiscal Cliff” is now as well known as the outcome of the US Presidential election. Don’t close your browser yet, this won’t be a political discussion. For anyone who knows me, my only political rant happened when the Ontario Government raised the beer tax. As you know the “fiscal cliff” is a warning from leading economists that given the tug-of-war between significant budget austerity and an economic recovery still hanging in the balance, there will be a double-dip recession if Washington fails to respond in time to make a difference.

Is There a Supply Chain Cliff Looming?

Given the increased risks that just didn’t seem to impact yesterday’s Supply Chains, are the Supply Chains of today facing a “cliff” similar to the financial cliff if they fail to change how they respond to these new challenges?

Take the Wall Street Journal article on Sharp, stating that Sharp’s “future is at risk”? Sharp was counting on steady growth and significantly increased capacities of liquid crystal display panels. When the growth didn’t happen, that translated into excess capacity and the company losses “ballooned”. Sharp’s President, Takashi Okuda reflected, “We lacked a sense of speed. The situation could have been different if we took steps mores more quickly”.

Sharp is not alone. Look at any company struggling with the impact of recent natural disasters, managing through a fragile global economy, or dealing with strikes, recalls, big data and extended Supply Chains. Every link and every issue pushes you closure to the edge of the cliff. The problem many of these companies are facing is that they continue to manage today’s challenges with yesterday’s tools. These are the tools where planning was good enough, just like a horse and buggy used to be good enough to tour around town. However, tools that place an equal importance to planning, monitoring and responding in time to make a difference are the new necessity. It’s not just about speed and doing the wrong things faster. It’s about modeling the data and analytics of the extended supply chain and keeping a pulse on every node so you can plan, monitor and respond to the unexpected swiftly and with confidence. Understandably though, it can be difficult for companies to make the necessary changes to their processes and toolset while in the middle of dealing with keeping the organization afloat given the challenges mentioned. In many cases these companies simply look to improve the current use of ERP or Excel and drive some incremental improvements. However, your current processes and the band-aids applied to those processes could be included on the list of supply chain risks if it means an inability to plan, monitor and respond. Supply Chain improvements are certainly a difficult puzzle to piece together for the talented individuals tasked with keeping their organizations competitive.

So, will incremental improvements be good enough or is a breakthrough required in time to navigate the next catastrophic event? Is a Supply Chain intervention required? How close is your Supply Chain to the cliff?

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Posted in Demand management, On-demand (SaaS), Response Management, Supply chain collaboration, Supply chain management, Supply chain risk management


An Interview with Kinaxis: Supply Chain Control Readiness

Published November 7th, 2012 by Melissa Clow 0 Comments

Recently we had the pleasure of reading a blog by Bob Ferrari, Supply Chain Matters where he interviewed our very own Monique Rupert, VP Customer Services.

An Interview with Kinaxis: Supply Chain Control Readiness

In the post she made some very good points about the Supply Chain Control Tower, which we wanted to share:

How would you describe the current market and/or customer interest level regarding Supply Chain Control Tower capabilities?
There is a continual and growing interest. We hear more and more customers using “Control Tower” to indicate future initiatives they are considering. Brand Owners are looking to better understand how a Control Tower could benefit them. They want to hear more about the buzz in the industry that everyone is referring to as Control Tower. Most are looking to better understand the building blocks and hi-level processes needed to assemble a CT environment, and what steps need to be taken to construct the foundation.

Are current interest levels coming from specific industries or specific supply chains?
Not specifically, it seems to be coming from all industries and supply chain. We see the biggest interest – and likely highest potential value of return – from our Brand Owner customers in the consumer electronics industry as well as other customers with high volatility and complex supply chains.
Customers and prospects in the Consumer Electronics industry are seeing that they can no longer support their rapidly moving supply chains on disconnected spreadsheets and email. They need the ability to sense and respond to their customer’s ever changing demands and consumer trends. They are also seeing that the legacy approach of “functional excellence” with best-of-breed solutions targeted at specific business problems or limited geographies as no longer working. To be competitive in the marketplace, they are seeing the need to bring all the supply chain data and decision making into a single Control Tower platform, otherwise, they find out too late and act too slowly.

Read more from Monique’s interview at the Supply Chain Matter’s blog.

Monique Rupert joined Kinaxis in March 2008. With more than 20 years of professional services experience, her primary focus is supporting the company’s expanding customer base through the development of scalable services backed by a strong partner ecosystem. To this end, Monique works closely with the Alliances group in successfully engaging strategic partners to help deliver consulting and integration services as the company continues to aggressively grow its business.

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Posted in Control tower, Control Tower Concepts, Demand management, On-demand (SaaS), Response Management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management


Innovate or die… A theme from Kinexions `12

Published November 5th, 2012 by Andrew Bell 0 Comments

It was a great event! As far as user conferences go, I think it’s safe to say that Kinexions is one of a kind.

The acknowledgement of this with a Stevie award can be used as evidence. A few great blogs have already been written summarizing the event as a whole (Reflections on Kinexions 2012 by Kirk Munroe and Thoughts from Kinexions: The Power of One by John Westerveld ) so I won’t try to re-iterate. I did however want to take a moment to touch on a theme that I noticed repeated throughout the conference both during main stage presentations and in individual conversations I had with conference attendees: Innovation is key to success.Innovate or die… A theme from Kinexions `12

It is well understood, by people in any industry, that innovation is fundamental to success. The challenge however, is not only coming up with innovative ideas, but taking the risks associated with actually implementing the innovative ideas. It’s easy to think of examples of innovative products being brought to market and the success this generated for the companies that took the risk to do it. The supply chain management industry is no different. Perhaps these innovations aren’t as obvious to those outside of the industry, but for those behind the scenes who are running these complex supply chains, the innovations and the risks associated with implementing them are real. That’s why innovating is probably one of those things that is easier said than done. With that in mind, if we needed a push to take the necessary steps to be more innovative, Kinexions and some of the main stage speakers may have provided it.

The first hint of this idea of innovation came during one of the best conference presentations I’ve seen to date. The theme of the presentation by Laura Dionne from Triquent was “Compromise” or more importantly the desire to NOT have to compromise. As she reviewed her history in the industry, the story kept coming back to the fact that at each technological step along the way, there was some need to compromise when it came to actually using a given solution. That story changed when it came to the deployment of Kinaxis RapidResponse when finally, she didn’t have to compromise. Though not explicitly stated in the presentation, this got me thinking about an important kind of innovation. The idea that a solution could be designed and deployed to allow a user to do what they want and not have to compromise in any way. Some might say that this doesn’t sound very innovative, but anyone with software development experience will tell you that actually pulling it off involves a lot of innovation and creativity.

On Day 2 of the conference, the innovation theme appeared two more times. One of them was during Roddy Martin’s Conference Wrap-Up presentation. One of the first slides of his presentation showed what he called the “5 Stages of Systemic Performance-Improvement Maturity”. As I read the description of each of the 5 stages, it became clear that as you move from one stage to the next, you become less reactive and more pro-active in the way that you approach the supply chain. But it was the description of the 5th stage that really brought it together for me. Roddy’s view that companies that had reached the 5th stage of performance-improvement maturity had a “culture of innovation and sharing”. The word culture is the key word here. Anyone can say that they are, or are going to be innovative, but as Roddy indicated, building that into the fabric and the culture of a company is what separates the leaders from the pack.

Finally, the presentation that really cemented the notion of this need for innovation was that of Don Gasperi from NCR. During his presentation, he took us through the history of the company and the examples where they have had to be innovative in order to re-invent themselves and stay relevant time and time again. He had one line in particular that resonated with me and that was “A company needs to innovate or die”. In my opinion it was right on the money and one of the highlights of his presentation, so much so that I did tweet it. In terms of their supply chain, he took it one step further referring to the need and desire for “disruptive innovations”. His description of disruptive innovation was one that reduced costs by half, doubled the quality and quadrupled the customer value. He made it clear that for NCR, the deployment of Kinaxis RapidResponse was one of these disruptive innovations.

The real theme of the conference was the Power of One. Everyone, around one view, making decisions as one team, empowered by one product. This was clearly demonstrated over the course of the conference. However for me, one of the underlying themes was the need to innovate and I liked Don Gasperi’s quote so much that I’ll say it again… “A company needs to innovate or die”.

 

Posted in Demand management, On-demand (SaaS), Sales and operations planning (S&OP), Supply chain collaboration, Supply chain management


Another One Bites the Dust: RedPrairie

Published November 1st, 2012 by Trevor Miles @milesahead 1 Comment

Another One Bites the Dust: RedPrairie

It is with great surprise that I read about the demise of yet another company focused on supply chain planning, namely the purchase of JDA by RedPrairie for $1.9B.

Of course RedPrairie does not see it in this manner.  They see this as growth, as opportunity.  Equally interesting is that it is RedPrairie, with revenues of about $300M, that has bought JDA with revenues of close to $700M. I can’t help wonder how that came about.  Of course it could be a lot more innocent.

More important is the fact that JDA has been formed through the acquisition of a number of other supply chain companies, most notably Manugistics and i2 Technologies, both pioneers in the supply chain planning space.  JDA was already struggling with rationalizing the number of software applications to reduce the cost of maintenance and bug fixes, and now RedPrairie will need to evaluate how to absorb the JDA applications. Lest we forget i2 Technologies also grew through acquisition of Think Systems, OptiMax, ITLS, Aspect, and Smart Technologies, amongst others.  So did Manugistics. And then JDA. And now RedPrairie. Same DNA, same result?

Of course roll-up is the same business model adopted by Infor. Perhaps this is the route RedPrairie, or, more correctly, New Mountain Capital, RedPrairie’s owners, has chosen. Here is the list of Infor acquisitions in Wikipedia, and I don’t even seen BaaN on this list. (The accuracy of Wikipedia is a whole other topic I won’t get into here!)

Infor Acquisitions

  • Agilisys (SCT) (2002)
  • Brain AG (2002)
  • Future Three (2003)[5]
  • Infor Business Solutions (2004)
  • Daly.commerce (2004)[6]
  • Varial Software (2004)
  • NxTrend Technology (2004)
  • Aperum (2004)
  • IncoDev Software (2004)
  • Lilly Software Associates (2004) [7]
  • Mercia Software (2005)
  • MAPICS (2005)
  • Paragon (2005)
  • Intuita Holdings (2005)
  • Alpine Systems (2005)
  • Formation Systems, Inc. (2005)
  • Datastream (2006)
  • GEAC ERP (2006)[8]
  • Extensity (2006)
  • Systems Union (2006)
  • SSA Global (2006)
  • Profuse (2007)
  • Workbrain (2007)
  • Hansen (2007)
  • Corpsoft (2007)
  • SLA Management Services (2008)
  • SoftBrands (2009)
  • Bridgelogix (2010)[9]
  • Qurius (2010)[10]
  • Hotel PMS division of Amadeus IT Group SA
  • Lawson Software (2011)
  • ENXSUITE (2011)
  • Easy RMS (2012)

Having been around in the early days of i2 Technologies, when they only had one product, Factory Planner, I have mixed emotions.  There is a lot that i2 Technologies, and Manugistics, brought to the table.  They changed the way we saw the problem; how we went about planning complex supply chain planning problems.  I am very proud of the time I spent at i2.

But there was always a major flaw in the approach of the early vendors to supply chain management as a practice.  They approached supply chain planning by addressing the needs of individual functions without giving any thought to the value of cross-functional process enablement. What they ended up with was a Rubik’s Cube of solutions.  I was at a two day conference held by the Center for Transportation and Logistics at MIT recently during which one of the participants said that they have over 200 supply chain management applications, which means that when implementing new functionality the cost of integration is greater than the cost of purchase and deployment of the new application. That is a sad state of affairs.  How are they going to innovate in that environment? But we were all – vendors, practitioners, analysts, academics – complicit in segmenting supply chain management into functional silos, divorcing demand planning from supply planning and materials planning, divorcing new product introduction from procurement and capacity management, divorcing trade promotion planning from supply allocation and distribution requirements planning.

The ERP vendors are faced with the same issues. Oracle has grown its application suite through acquisition, most notably Demantra and JD Edwards. While SAP has grown its APO suite through organic development, they too have followed the functional silo model with 7 individual APO modules with different data models, code bases, UIs, and analytics engines.  How are we ever going to be able to support horizontal cross-functional processes and even multi-enterprise commerce with these architectures? Of course Oracle has tried for several years to solve this issue with Fusion and SAP with NetWeaver. Following either of these links is to be faced with yet another list of modules and components required for Fusion or NetWeaver. And Infor has ION, i2 had Agile Business Process Platform, and RedPrairie has E2e, all of which try to accomplish the impossible. This issue of multiple functional solutions also impacts innovation in the supply chain space. With vendors so focused on integration between modules, where is the process innovation going to come from? With small groups focused on functional needs, where is the cross-functional innovation going to come from?

From attending multiple conferences and working with big customers I hear a lot about the need for horizontal process enablement and innovation.  Of course any of us can still find conferences that focus on functional excellence, and I’m not suggesting that functional excellence is not important.  The gap, though, what is missing, is the horizontal, cross-functional process enablement.  This is why there is such as buzz about what we call Supply Chain Control Towers or, what Jim Shepherd called “Multi-Enterprise Commerce” while he was at Gartner.  Unfortunately Jim’s original post on Gartner’s First Things Monday blog is no longer available, but here is what he said on Supply Chain Brain.

The real business problem that today’s manufacturers and distributors are struggling to manage takes place between companies, not within them. Planning, sourcing, production, costing, tracking and fulfillment must take place in an environment that can be accessed and updated by all the players in the value chain. This certainly suggests cloud-based services, rather than a series of on-premise systems hidden behind various firewalls. The applications themselves will also have to be redesigned to accommodate rapidly evolving supply networks and extremely fluid material ownership.

Application designers could learn a lot from today’s Web store, lsupply chain and sourcing products, but they need to extend the scope to include finance, asset management, traceability, order management and service. In a multi-enterprise environment, these activities will need all new business processes, and the expectations for control, visibility, and efficiency will be quite different.

I can envision this “multi-enterprise commerce” suite, and I can see how valuable it would be for companies in industries like electronics, life sciences, food and beverage, or fashion. Their businesses today are really based on creating and managing global value chains that may have dozens or hundreds of participating entities. I don’t think the fundamental design of ERP fits this business model very well, and I don’t think just moving it to the cloud really solves the problem.

I agree with Jim’s assertion that manufacturers are struggling to manage what takes place between companies, but I am not yet convinced that they have satisfied the need for horizontal or cross-functional processes within them. Because of outsourcing, what has happened over the past two decades is that many of the internal functions have been outsourced, validating Jim’s statement.

I was asked to comment on the merger by fellow blogger Jason Busch from Spend Matters. He shares some interesting perspectives on this industry news – you can read the article here.

So we live in interesting times.  I can’t wait to belt out that other perennial Queen favorite. Know the one I mean?

Posted in Control tower, Demand management, On-demand (SaaS), Supply chain collaboration, Supply chain management, Supply chain risk management


Has hyperbole in enterprise software marketing gone beyond the point of no return?

Published June 18th, 2012 by Kirk Munroe 2 Comments

HyperboleI was recently reading an excellent blog post from Josh Greenbaum, where he had a great take on Larry Ellison undermining Oracle’s Cloud strategy (and execution) with his outlandish statements.  Although not explicitly the point Josh was making, it did make me think that the marketing of enterprise software may have gone too far to ever come back.

Up front, at times I may have been guilty of over stating the value of software in the past … although I am confident that those cases were few and far between and certainly not intentional!

Joking aside, I think a lot of the hyperbole in enterprise software marketing is unintentional.  To be a little more cynical, maybe it is more accurate to call it “ignorant.”  Let’s face it, the people marketing the software rarely, if ever, use it at all and even more rarely have used it as intended in production.  This is also not anyone’s fault.  The majority of enterprise software is intended to solve problems and enable processes that are not relevant to the company producing the software.

Another interesting phenomenon is that so many prospects expect the software vendor they are evaluating to provide competitive intelligence on the other vendors.  Interesting in that the request is aimed at the least unbiased source on the planet, and also interesting because virtually every ethics (and legal) code would state that the software company should not even have been looking at a competitor’s product in the first place.

Another of the main drivers of the hyperbole in enterprise software marketing comes through the RFI/RFP/RFQ process and product bake-offs where features are being requested by IT that will never be used by the business users in production.  So many companies still issue RFPs and product bake-offs (e.g. POCs, customer demos, etc.) for software.  Everyone on both sides of this equation knows that the answers will likely not be a big driver in the decision (and often may not get read – sometimes the questions themselves aren’t read before issuing!), but that every vendor is expected to offer at least a “conditional yes” to each and every answer, leading to massive stretching of the truth.

Last of the drivers, at least for the sake of getting through this blog, is that big enterprise software companies keep buying so many smaller software companies that the task of messaging what each piece does on its own and as part of a greater “solution” is more complicated than creating a cold fusion reactor.

This all leads to the question posed in the title, “Has hyperbole in enterprise software marketing gone beyond the point of no return?”

I expect it will surprise no one that I have a strong opinion on this, after all, why would I have bothered with the blog in the first place.  The answer is a … drum roll please … YES.  But like every one-word answer to a complex question, there is a “but” or in this case, an “unless.”  The “unless” is “unless businesses completely change the way they purchase enterprise business software.”

Companies need to remember the reason they are buying enterprise business software in the first place.  The only reason they are – or at least should be – buying software in this category is some combination of:

a) enabling a business process that they could not do previously,
b) making an existing process better or
c) tackling new business problems in a manner that was previously impossible.

With this in mind, why would I not be buying a complete solution to the problem?  Some recent surveys that I have seen are already showing a big shift in anticipated buying behavior from the still prevalent buying “on-premises” software and skipping the logical next step of buying “on-demand” software and going all the way to outsourcing the process completely.

Let’s also be clear that I am not talking about “solution marketing” here.  This could get me on a rant that could go on for days.  The move from “product marketing” to “solution marketing” has turned out to serve no purpose other than wasting millions of hours in unnecessary meetings to end up with ….non-differentiated messaging…. software being purchased in exactly the same manner as before…. and software delivery that is identical as before this “transformation.”

The revolution that has to come in the enterprise software space is that companies have to start buying services with software embedded in them vs. buying, installing and deploying software in the hopes that it will make process better.  This change will not only shorten sales cycles and reduce time-to-value, but it will force software companies to innovate to drive better business and not to best answer the next RFP.  Innovations aimed at making business more effective vs. making IT departments happy.

What I am pointing out is more than buying software-as-a-service.  The trend that Salesforce.com capitalized on was a step in the right direction, but all the cute logos of software with a line through it does not change the fact that their customers are still buying software, albeit without the headaches of installing, deploying and administering an “on-premises” nightmare, with apologies to everyone still running Siebel.  The “Salesforce.com” that I am talking about would be selling “outsourced sales force automation” and maybe even “outsourced customer relationship management” where they become responsible for automating the whole process and not just the software that supports the process.

Where do we have examples of this working today?  An example in the consumer space is Facebook.  Yes, Facebook.  Although you probably have not thought of them this way, if you are a Facebook user, you have effectively “outsourced” the management of your personal relationships for those relationships that you are unable to have face-to-face.  (If you have also outsourced your personal relationships that you can have face-to-face, please stop.  For all the couples who communicate wall-to-wall, please trust me when I say no one wants to see that.  Your friends just are too nice to tell you.)

I realize that Facebook might be a dangerous metaphor here as the users do not pay for the service nor does Facebook take any responsibility for how well you manage your personal relationships.  However, we are starting to see this “outsourced service including software” get a foothold in the business space too.  As an example, a number of companies are popping up in the space of marketing automation, capitalizing on selling click-through type services without the need for redirects and capture forms.  These companies are not positioning themselves as selling software.   They are selling a service that is powered by software.  They take all notion of the headaches of software out of the equation.

An example of this, and there are many more, is Rocket Fuel.  They certainly still talk about products and capabilities, but they are much better positioned to deliver on real business outcomes through their model.  Customers are buying a solution, not buying software with the hope that it will provide the solution.  This model just makes so much more sense for all parties.  Customers benefit through the software company owning much more of the end-to-end problem.  The software company benefits from owning their own destiny on results, and thus customer satisfaction.

Am I saying that the current model of “on-premises” software never works?  Of course not.  It is just antiquated and ridiculously inefficient.  Thinking about it from an outsourcing perspective, in the traditional enterprise software model, the software company is effectively outsourcing its chance of success or failure to the buyer’s IT department – the same IT department that is already overwhelmed, understaffed and completely untrained in the actual business process more often than not.  The purchasing department is in the unenviable situation of paying up front for software that might not show benefits for 24-36 months or more.  If ever.  No wonder software companies are guilty of “drive by selling” and no wonder procurement departments beat up software companies for massive discounts.  The only way this model works is when the software company continues to have upside in the account after the first sale, and when the company takes the time and makes the investment in IT in terms of adequate funding and, more importantly, training on the actual business problems that will be addressed by the software.

I am suggesting that it’s time that we all  go much further – that (almost) all processes that can be automated can be outsourced as a service where the software is transparent to the process.  This is not cloud computing.  It is more than cloud, but would not be possible without cloud.

I mean big processes, like those that currently fall under ERP, CRM, SCM, HRM and so forth.  This does not suggest that it is a “one size fits all” either.  The new – or transformed – companies that provide these services should be able to tailor the services to match the specific strategies that their customers want to automate.  This is about driving innovation not locking it down.

A great metaphor of this type of transformation is how we fly today.  Human nature makes it easy to think about how much worse the experience is with security post-9/11, but think about how much easier it is to fly that when we had to get paper tickets.  You would have to go to a travel agent to pick up your ticket, or get to the airport ticket counter early.  The alternative was having the foresight to be able to have the lead time to get it mailed.   The entire process of moving from paper-only tickets to electronic-only tickets took just over 10 years.  In the big picture, these transformations can happen very quickly.  There are many more examples. Many of us have now completely outsourced our music listening needs to Apple.  “Dad, what is a record store?”

So back to the question.  Marketing of enterprise software has gone beyond the point of no return in terms of rhetoric and hyperbole, but it is OK.  Enterprise software needs to be thought of and executed in a completely new manner anyway.

Oh … and one last thing … Kinaxis has customers in 390 countries. :)

Posted in On-demand (SaaS)