What we haven’t seen is apps that are directed at manufacturing and the supply chain…yet. I saw an article in Industry Week several days ago talking about mobile technology being used in manufacturing.  Two apps are discussed in the article; one is an app that allows sales representatives to view pictures and specifications of complex products.  The other is a plant floor app that can be used for material flow analysis.   These are interesting and in some cases necessary, but there is another area where mobile apps can be really exciting.

Let’s play a little scenario out in our minds; imagine the typical in-person sales meeting.  You are visiting with a prospective client trying to get orders placed for one of your high-profit products. Your customer is interested but they have an immediate need which requires delivery inside of lead time.  To add to the stress, they will place the order if you can confirm it today; otherwise they will place the order with a competitor.  So how do you respond in this situation?  The optimist (or perhaps the cynic) might say that you take the order and pray that you can deliver.  The pessimist might say that you don’t take the order and hope that you can do business next time (because you haven’t antagonized the customer by not delivering on a promise).  Either way, you are put in a difficult situation because you don’t have the information you need at hand.

Now let’s imagine the same scenario but this time you are carrying a tablet connected to your supply chain software. Using the tablet, you create a scenario (a safe environment where you can do “what-if” analysis without impacting actual production) and simply add your customer’s order. The analytics in the supply chain software evaluate the new order in the context of the existing customer orders, and the current supply, and capacity information and then determines an available date. It turns out that the available date (when the order can be shipped) is acceptable to the customer and you can accept the order with confidence. You are happy, the customer is happy, and your supply chain is happy because you haven’t promised something that may not be delivered.  This is where the true power of mobile computing shines for manufacturing and the supply chain.

Manufacturing apps are here.  Those that embrace these new capabilities will have a distinct advantage over those are stuck in the old paradigms. But the journey is only beginning; how do you see mobile applications changing your job? Comment back and let us know!

I got to thinking about this as an analogy for traditional supplier collaboration. Many manufacturing companies have implemented supplier collaboration solutions to pull in data in a more real-time fashion with suppliers. Traditionally, supplier collaboration involves the sharing of information between an OEM and a supplier related to component forecasts, purchase orders, Kanban signals and inventory positions. It’s important to share the information because of its direct impact on the ability to build product. And it’s important to share the information often because events in the supply chain can impact delivery schedules on a day-by-day and hour-by-hour basis. Many companies have implemented EDI (Electronic Data Interchange) and supplier portals to facilitate the systematic, high-frequency sharing of data. The unfortunate reality of traditional approaches to supplier collaboration is that the information that is collected goes into an information ‘dead-zone’ (i.e. ERP system) just like the mail stack. Sure, a buyer knows that a purchase order is going to be late but what is the impact of that? Buyers, on their own, typically don’t have the background nor the tools to understand the relative impact of exceptions (i.e. uncommitted forecast, purchase order receipt variance) on operations. How is a buyer supposed to know that an inability for a supplier to make a full commitment to a forecast could result in significant performance penalties on a large project, or that a partial delivery will mean a high-value order for a key customer will slip beyond a promise date?

What’s needed is the ability to collect the information and provide real-time impact determination and alerting to all roles in the organization including planners, customer service representatives, sales, project teams and executives so they can collaborate to solve problems while there is the opportunity to make a real difference to the business. This is the hallmark of the RapidResponse Control Tower and how using RapidResponse to support supplier collaboration initiatives can help you to achieve superior corporate and operations performance.

The difficulty often lies in minimizing the risk of the outsourcing decision. One sure fire way to reduce the risk is by treating your partner as an extension of your business,, whereby, information is shared freely without latency. A company cannot make good decisions based on data that is a week old. Supply chain executives will often challenge receiving data related to the outsourcing process since managing that part of the business is what they are paying their partner for. That is true, but if you are accountable to your customer, you need to have some level of understanding of your business including (and especially) the outsourced pieces. Be selective on what you need to see, but see it often! Let your systems monitor the business and alert you when you need to take action.

The article refers to the due diligence that must be performed when selecting the right partner, aligning strategies, and considering more than cost when making your selection. This is very true – you can pull the trigger on an outsourcing partner relatively quickly, but pulling out work and moving to another partner can have serious consequences, affecting fulfillment and cost.

Service level agreements (SLA’s) are critical along with creating the appropriate key performance indicators (KPI’s) to track performance and project future performance. For example, if your partner is manufacturing for you, and you provide them with a new forecast, you need to understand the implications of that forecast before execution commences. You may have just created an obsolescence issue worth millions of dollars that could have been mitigated if you knew sooner. This is why visibility into your partner’s operations is so important in this example. Often when things go wrong in an outsourcing model, there is considerable finger pointing, and resources are wasted tracing back to root cause. The end result is non-value added activity. Understanding how your actions today will impact all of your KPI’s now and in the future eliminates this waste. Look forward rather than backward.

An important aspect of any outsourcing relationship is trust. Progress is being made. However, this will continue to be a challenge as both parties are so focused on their own profit and loss. My colleague, Trevor Miles, has made some excellent points on this topic in his post: Do you trust yourself to collaborate? The real barrier to collaboration is not technology, but trust.

Companies that have struggled with outsourcing or are considering it as a new strategy will benefit from the referenced article.

What are your thoughts on outsourcing?

I would like to expand on a couple of these points, focusing on optimizing the supply chain through the use of collaboration, simulation, and scenario comparison utilizing modeling tools.

The supply chain network is composed of many different components acting in concert to deliver the required goods and services at the right time. The better these interdependent relationships are understood, the better the supply chain can be optimized. This raises the question how best to optimize such a complex set of data points.

In order to get an accurate simulation, you must be able to obtain accurate data about each node in the network, and then utilize software to model it. These nodes can include, but are not limited to:

• manufacturing plants,
• supplier plants,
• sub contractor plants,
• warehouses, and
• transportation routes.

This requirement would suggest that any simulation model must be able to incorporate multiple disparate data sources in a relatively easy and timely manner. Important data to obtain would be:

• lead times,
• inventory levels,
• in transit times,
• associated costs,
• quality levels, and
• service levels.

There are many others that could also be included to give a more accurate picture of the network.

Once this data has been obtained (which may require some effort, especially with off shore suppliers), the next question then becomes, what do we do with the data? This is where the requirement for multiple scenarios becomes critical.

Because these networks can be extremely complex with many factors influencing outcomes, we must have the ability to compare many different scenarios in order to determine a path forward. One scenario may give us a lower overall cost, but poorer customer service. Another may result in cheaper raw material costs, but lower quality levels and increased transportation costs. All these outcomes must be weighted in order to determine the most optimal design, -this requires some way to be able to compare multiple scenarios in a clear and efficient manner.

The next step would then be to examine each scenario, and determine if the best parts of each can be combined into one ‘super’ scenario. As an example, one scenario may have a supplier with lower cost, but higher transportation costs. What if sourcing is split between a low cost/high transportation supplier and a higher cost/low transportation supplier? By managing the sourcing between the 2, an optimal outcome may be achieved (happy medium). This can only be determined by developing a complex model with multi-sourcing.

If you take this case and apply it across the network, the number and complexity of the inter-relationships can soon become mind boggling. This is why a multi scenario engine which can rapidly calculate the various outputs of the model from its inputs is so vital. In order to implement the optimal supply chain network, it must first be designed as a whole to deliver the optimal results.

Once the supply chain network has been successfully modeled, a powerful tool is now available for what if analysis. The maximal use of this tool can be realized by incorporating continuous improvement into the business development cycle and optimizing the network on a regular basis. But in order to make this an effective tool for continuous improvement, a plan must be generated quickly and easily analyzed, as time and resource constraints limit the amount of time to turn around the results and push improvements to the network. This is why speed and performance matter when implementing complex modeling solutions.

Because the only way to realize the benefits of an optimal network model is to implement it, collaboration among all the players in the network (inside and outside the enterprise), is vital. This leads us to another key criteria for a simulation system - the ability of many users to access and collaborate on the development of the network model.

Once the simulation, model, and collaboration pieces are in place, it raises the question: Can this environment be used to model other complex systems as well as the supply chain? What about the ‘sales chain’, the complex relationship between you and your customers? What about the complex network of relationships that exist between an enterprise’s internal resources (employees) and the enterprise? Financial models? As can be seen, there are a myriad number of networks in the modern world that can be modeled for the purposes of increasing efficiency, and thereby reducing costs or improving service levels.

• Let’s start from the perspective that a control tower is a decision making tool, not merely a visibility tool. Visibility is a precursor, a building block. In optimization parlance, visibility is an adequate but not sufficient definition of a control tower.
• A key requirement of a control tower is that several simulations can be performed to test high level hypotheses at a granular level to determine the potential effect on operational and financial metrics, as well as identify any constraints.
• A control tower by definition must cross functional and/or organizational boundaries. I think we can all agree that the term implies a view across a fairly broad span of operations, not a narrow functional perspective.
• Because a control tower crosses function and/or organizational boundaries it must support collaboration in order for people to be able to share perspectives and arrive at consensus and compromise that balances competing objectives and performance measures.
• Direct people to what is important and alert then to what is critical, and of course within their span of control.
• Identify consequences to underlying events, as well as the people who are responsible for both the events and the consequences, so that they can arrive at a joint resolution.

The analogy of the airport control tower has great deal applicability to supply chains. All of the systems required to manage airplane departures and arrivals, airplane cargo management, bookings, maintenance etc. are interwoven into a real-time mesh of information and decision making in addition to the visibility that an elevated position and radar afford. In contrast company supply chains, by and large, are separate, isolated, data ‘islands.’ The very best of these typically have ‘batch’ type connections to each other. When things go wrong the signals are late to arrive and impacts difficult to estimate. Imagine a supply chain world that is run like the world’s airports, with common standards (like pilot/tower communication always in English) and systems designed to communicate with each other in real-time. This is a very instructive model with standards and collaboration at its heart.

Below is what Sameer Patel wrote earlier this year in a blog titled “2011 Business and Technology Forecast,” with my emphasis:

As organizations increasingly start to see the benefits of deploying social and collaborative initiatives to improve employee, customer and partner engagement, they will soon begin to realize that the decade old notion of streamlining repeatable processes made popular by ERP and CRM system-of-record deployments was largely over promised. In practice, customers and prospects have unique questions not answerable in the knowledge base or by marketing; employees living in rigid ERP systems need to constantly find experts who have the best answers and to collaborate with them. And reseller partners are constantly spending time looking for the right answers not available on asynchronous partner portals to keep end customers happy. Silo’d but open collaboration initiatives on activity streams and other enterprise social networking utilities currently being deployed will expose such engagement not historically possible in an ERP or CRM laden design. Consequently, LOB and IT leadership will realize that traditional process approaches and fluid collaborative constructs need to come together to truly accelerate business outcomes.

My definition above focuses on the process and organizational requirements, but also on some key functional capabilities. What is clear from Sameer’s perspective is that by definition the solution will not be coming out of ERP or CRM systems. I think his observation that;

… they will soon begin to realize that the decade old notion of streamlining repeatable processes made popular by ERP and CRM system-of-record deployments was largely over promised.

is particularly important because for years these systems have been sold on the promise that they encapsulate best practice processes. If a process is repeatable isn’t it by definition a standard process and not a best practice process? OK, I concede that the process may be best practice and repeatable in a few organizations, but if everyone deploys a standardized best practice process, is it still best practice? I could go on forever on this topic, but I will leave it to Sameer’s devastating observation that;

In practice, customers and prospects have unique questions not answerable in the knowledge base or by marketing; employees living in rigid ERP systems need to constantly find experts who have the best answers and to collaborate with them.

And I will go further to state that not only should a control tower identify the experts for the employees, but in addition a control tower should allow an employee to suggest a resolution and to test its efficacy against operational and financial objectives. By all means get an expert to validate the assumptions and results, but all too often it will take too long to get expert feedback, especially if the expert must be identified, the problem described to the expert, and then have the expert investigate resolution in a separate system. The customer or prospect will have moved on to other problems by then.

In other words a thin collaboration capability that is little more than sharing ideas without the capability of evaluating the impact of the ideas is not likely to be of much value and is only a slight improvement on using phone, FAX, and Excel attachments. The issue isn’t that humans don’t have ideas, but rather that they don’t have a timely and effective manner of testing their ideas at a sufficiently granular level to ensure both feasibility and value. This is the key to having an effective control tower.

Gartner has also being weighing in on the topic of control towers, although nearly all the article focus on logistics visibility, hardly a ground breaking areas.  (Any references I make will require access to Gartner materials for full viewing.)  In an article titled “Supply Chain and Manufacturing Outsourcing Discussion with Supply Chain Leaders” published on (Michael Dominy, Hussain Mooraj; Nov 22, 2010), the authors define a control tower, that goes beyond logistics, as follows:

a “control tower” or centralized shared service organization to manage relationships and information between the company and its outsourced manufacturing, logistics and other service providers.

Unfortunately they don’t include a mention of collaborative decision making, but they do go on to state in the same article that;

Even if a partner delivers the supply chain visibility and events across the ecosystem of supply chain partners, the enterprise must control and direct the response across the supply network.

I can only presume that being able to control and direct the response across the supply network implies the ability to reach
a timely and consensus decision on what that response will be.

What I do like about this Gartner article is that it includes a maturity model. I am often guilty of describing nirvana without painting a picture of how to get there and the steps between. Something else that is brought out by the Gartner diagram and article is the applicability of control towers to outsourced environments. In other words when key operational activities are outsourced it is necessary to get on overview of the operations in order to provide the control and direction to the extended supply chain.

So far I have focused very much on the definition of an “operational” control tower. In my next blog I will weigh in on a “corporate” control tower that focuses more on the needs of the executive level. In the meantime please give me some feedback. I’d love to hear your ideas about control towers and the convergence of consumer-led social networks concepts, enterprise 2.0 ideas, and control towers.

The same keynote also described the foundation that today’s supply chains are built on. In particular, there were two analogies that stood out and challenged the audience to think about their own supply chains. The first analogy was having your supply chain foundation built on technology that resembles that of a “picket fence.” In this case, there are gaps where key information may “slip through the cracks” and it becomes difficult to do any meaningful supply chain analysis. If you use Excel this may sound familiar. Supply chain analysis is difficult because those that need to participate are looking at different data, missing data, and there are gaps in the analytics. If your supply chain analytics are built around Excel spreadsheets then you may be bound by the “picket fence.” Excel may be sufficient in an environment where there is little “VUCA,” but when managing today’s supply chain challenges, Excel is not a scalable solution.

The second analogy of interest used to describe the technology a supply chain foundation may be built on was that of “bricks and mortar.” In this case, the analytics required to respond to “VUCA” are just not flexible enough. Old processes that are cast in stone, long analytic run times, and user interfaces that are far from being user friendly are just a few reasons to describe this technology as “bricks and mortar.” If you are trying to get your supply chain analytics from your ERP system, which for the most part is the transaction system, this may sound familiar. In keeping with the analogy it would be like getting blood from a stone. This is the reason many people continue to turn to Excel for supply chain analytics but soon run into the “picket fence” problems.

This is where the “T” in VUCAT comes from, Technology that does not support today’s “VUCA”.

So what is one to do with “VUCAT”? Some analysts were talking about “best of breed.” This may mean abandoning your Excel spreadsheets or getting rid of ERP components that are either difficult to deploy or are not doing the job. In these cases “VUCAT” is actually a verb. For example, if somebody asks, “What are we going to do with all these Excel spreadsheets?” You might say, “We just have to VUCAT and replace them.”  Look for this new word in the next APICS dictionary

If you are going to replace the “picket fences” or “bricks and mortar,” what characteristics will allow you to manage “VUCA”? Here are three key requirements for today’s supply chain analytics;

• “Know sooner” by being able to continuously monitor plan versus actual and alert participants not only of the event but of the consequences.
• “Collaborate now” by automatically identifying not only the consequences of change but those individuals impacted by it and thtat can contribute to its resolution.
• “Respond immediately” by evaluating any number of resolution scenarios in seconds with anyone in any place and compare alternative actions against operational and financial metrics.

This means you can embrace “VUCA” and create a competitive advantage by being a “first mover.”

Did you hear the term “VUCA” used at the Gartner conference or anywhere else? What is your take? Is it a new more descriptive term for today’s supply chain or more of the same?

Although there may be no such thing as a perfect forecast, there are plenty of opportunities for improvement and managing demand in support of a more cost-effective supply response. Better collaboration between trading partners is the necessary next step toward waste elimination in the value chain.

Maximizing value from the supply chain won’t be reached without improved collaboration between trading partners.

In fact, Mike identifies the lack of collaboration between trading partners as the primary cause of demand volatility. (I agree that the lack of demand visibility increases demand volatility, but there are other industry dynamics that are increasing demand variability.)  Of course, visibility and collaboration are the key messages behind The Beer Game (or beer distribution game) which was originally invented in the 1960s by Jay Forrester at MIT as a result of his work on system dynamics to illustrate the bull-whip effect.  Absolutely critical to a smoother functioning supply chain is demand visibility across the entire supply chain.  Of course visibility isn’t a very mature form of collaboration, but it is at least a start and a necessary precursor to more mature forms of collaboration. And let’s be honest, after 50 years we still haven’t really got to effective demand visibility, although there have been improvements.  To get some estimate of how well your company is performing in this regard you can take the Gartner Demand-Driven Value Network (DDVN) maturity self-assessment.(Registration or Gartner membership required.)

But it isn’t just so-called Easy-West collaboration between customers and suppliers that is required.  I would be happy to start with the so-called North-South collaboration between strategic and financial plans, usually the focal area of the executive suite and Finance, and operational plans. Some analysts and commentators have called this integrated business planning, which also dates in concept from the 1960’s. I’d even settle for East-West collaboration between demand and supply functions within one organization, including Gartner’s stage 4 Sales & Operations Planning (S&OP) maturity. There is no inter-company process that is a better measure of collaboration than S&OP done well.  According to Jane Barrett of Gartner, most companies are stuck in stage 2 maturity.  This is largely due to the inertia and resistance to change so prevalent in many companies.

But how is it that 50 years on from Jay Forrester’s work we are still struggling with this issue? My opinion is expressed in a blog titled “Do you trust yourself to collaborate? The real barrier to collaboration is not technology, but trust”.  Let’s face it, technology can always be improved, especially the user experience. But the capabilities of the technology available for inter-company and intra-company collaboration exceeds the willingness of organizations to share information at the moment.  As Mike Burkett points out, huge gains can be achieved by collaboration, so why don’t companies try to capture these benefits?  My opinion is that the issue is the same that is preventing them moving from stage 2 to stage 3 S&OP process maturity, namely that they simply want to automate their existing manual processes and don’t realize that effective collaboration requires both new ways of working and supporting technology capabilities. 

Nothing captures this better than a Henry Ford quote that “If I had asked my customers what they wanted, they would have said faster horses.”  There is a strong synergy, even symbiosis, between technology and process.  In a great slide show titled “What if Peter Drucker taught Enterprise 2.0?”, Mark Fidelman states that

Neither technology nor people determines the other, but each shapes the other.

But let us recognize that the financial and operational risks of collaboration are tangible and can be high.  There is a good series on collaboration in the Harvard Business Review.  The one I like best dates from June 7, 2011 and is titled “Collaboration is risky.  Now get on with it.”  The author, Whitney Johnson, writes that

Why is teamwork so difficult?

Because collaboration is actually a pretty risky business. Perhaps, like me, you are generally of the mindset that two heads are better than one. But because your ideas frequently get co-opted, there’s a risk-reward imbalance that makes you reluctant to engage. Or maybe you’ve reached out to a potential collaborator only to have your lack of expertise exploited. So, rather than ever again experiencing the one-two punch of ignorance and vulnerability, you’d prefer to soldier on alone. In both instances, the fundamental barrier to collaboration is a lack of trust.

While writing about individuals within a group, clearly Whitney’s observations and opinions are very applicable to collaboration between functions and organizations.  Her prescription is to

1. Start with simple exchanges where the cost of betrayal is low.
2. Remember that our collaborators are competent.
3. Don’t take advantage of our collaborators’ deficiencies.
4. Give others their due, and expect yours in return.

Sound advice.  Yet so difficult to put into practice.  The comments section is well worth a read too, including links to some interesting materials.

Mike Burkett concludes his First Things Monday contribution with the observation that

By closing gaps between partner nodes in the supply chain, there’s an opportunity to address the unnecessary waste across the value chain.

These are the hard benefits of supply chain collaboration.  They are real and they are achievable.  Yes, the risks are real, but the rewards are equally real.

The presentation is an expansion of a blog post I wrote the other month.  Here is the abstract:

Collaboration can bring tremendous value to outsourced supply chains, such as we see in electronics and apparel.  But what is collaboration? All too often collaboration is viewed in the context of exchanging data.  Visibility to data is important, but collaboration is ultimately about teams of people working together to achieve a shared objective (but perhaps not a common goal). The potential value of collaboration in the supply chain is enormous in terms of both reduced inventory and increased supply chain agility, not to mention the reduced cost of ”policing” supply chain relationships. Visibility is a start. Collaboration is the goal.

Follow me on Twitter at @Milesahead or on the 21st Century Supply Chain Blog to get updates from the event.

For more information on the Extended Supply Chain 2011 conference, visit: http://www.centaurconferences.co.uk/brands/theawarenessgroup/events/extendedsupplychain2011/Overview.aspx

Also, don’t forget to enter our New Kinexions contest for an XBox 360 and Kinect! The winner will be the person who best completes this sentence:

Bad software is like an annoying ex because…

Visit the contest page for details, to enter, and to view other hilarious entries.

This week’s episode focuses on collaboration, which according to Google is defined as: A recursive process where two or more people or organizations work together in an intersection of common goals. Unfortunately, this is not a concept that Ari Cole can understand as he continues to do what he thinks is ‘best’ for the relationship.

On a serious note, to learn more about supply chain collaboration check out this research report by Aberdeen Group titled: Enabling Supply Chain Visibility and Collaboration in the Cloud.

In a recent Aberdeen paper titled “Enabling Supply Chain Visibility and Collaboration in the Cloud”, Nari Viswanathan places B2B integration into “Visibility”, a necessary precursor to collaboration.  The Aberdeen maturity model for building integrated demand-supply networks between trading partners, which is published in the paper and captured in the diagram below, can be boiled down to:

• Getting connected (B2B Integration)
• Making sure the data is right (Data Management)
• Working together (Process Collaboration)
• Working together on the right things (Network Intelligence/Performance Management)

Perhaps more interesting is the distinction Nari makes between Visibility and Responsiveness.  Without a doubt in today’s outsourced and off-shored supply chains, knowing where items are is a major challenge and is a necessary first step in being able to determine the “health” of the supply chain.  But knowing that something is not right (Visibility) and being able to correct it in a consistent and timely manner (Responsiveness) are two very different levels of maturity.  Relying on phone/FAX/email to devise a response to an issue in the supply chain is simply too slow and too error prone, the greatest drawback being the lack of ability to evaluate the financial and operational consequences of any proposed changes in a timely and effective manner, let alone reach a consensus and compromise on the course of action.  Social networks can already play a role in the Visibility stages of maturity.  So much of the data transferred between trading partners has nuance and meaning that is lost in EDI, which is where the use of social networks/media can play a strong role.  And not only as a replacement for phone/FAX/email, but also as a way of capturing the information for governance and corporate learning.

While I see social network technologies playing a role at all levels of the maturity model, though it is really in the Network Intelligence/Performance Management stage that they will be most widely adopted.  As we can see from the Aberdeen diagram, the benefits will be highest, as will be the supply chain responsiveness or agility.  The interplay of visibility and agility is brought out very well in a blog by Bill Dubois titled “Supply chain visibility is vital, but the larger business goal is agility”, especially the value of agility brought about by the collaboration between trading partners.  Collaboration is a lot more than the exchange of data: It is the exchange of information that is helpful in identifying opportunities, and compromise to achieve joint value.  Hard facts play a huge role in response management and agility, but so do “soft” facts. Especially as it is the “soft” facts that will lead to consensus and compromise.  As I point out in my earlier blog, the decision processes of enquiry-to-quote–to-order often take as long as the physical order-to-delivery process, which is not only more difficult to reduce, but will likely extend with the continued increase in off-shoring and outsourcing.  Why not focus on the decision processes and use social network technologies not only to speed up the process, but also to enhance governance and organizational learning?  These are much easier to change than the “poured concrete” of the physical supply chain.

I suspect much of the early adoption of social networking technology for business processes, other than social media marketing, will be across functions inside of an organization, initially automating manual processes that require interaction between functions and translation between different function specific applications.  Two extracts from a blog by Ray Wang titled “Organizations Seek Measurable Results In Disruptive Tech, Next Gen Business, And Legacy Optimization Projects For 2011” bring this out very clearly, though Ray believes that the biggest changes will come from interactions outside the organization.

• Organizations will put business back into social business (@sameerpatel).
  As organizations increasingly start to see the benefits of deploying social and collaborative initiatives to improve employee, customer and partner engagement, they will soon begin to realize that the decade old notion of streamlining repeatable processes made popular by ERP and CRM system-of-record deployments was largely over promised.  In practice, customers and prospects have unique questions not answerable in the knowledge base or by marketing; employees living in rigid ERP systems need to constantly find experts who have the best answers and to collaborate with them.  And reseller partners are constantly spending time looking for the right answers not available on asynchronous partner portals to keep end customers happy.  Silo’d but open collaboration initiatives on activity streams and other enterprise social networking utilities currently being deployed will expose such engagement not historically possible in an ERP or CRM laden design.  Consequently, LOB and IT leadership will realize that traditional process approaches and fluid collaborative constructs need to come together to truly accelerate business outcomes.
• P2P will displace the old notions of B2B and B2C in social business (@rwang0).
  B2B and B2C will cease to exist in 2011.  Organizations will conduct social business through Peer-to-peer (P2P) relationships. Attempts to stove pipe individuals into forced-fit, artificial market segmentations will fail because each individual brings multiple roles to the community.  Each role brings a new perspective and a set of expectations in customer experience.  Organizations will have to retool to the new rules of business and also move beyond social.

One of the trickiest aspects that will need to be addressed in order to get a broader adoption of social network technologies in business processes is the concept of “responsibility”.  Existing social networks such as Facebook are principally about sharing or “pushing” information, but most business processes require an interaction between at least two people, each of which is responsible for an aspect of the decision and who need to reach a consensus and compromise in order to take action.  Often these interactions require input from as many as 5-10 people.  Identifying who needs to know can often be an insurmountable barrier to reaching a timely decision.  I want to draw the distinction here between the people who need to know, which implies responsibility to take action, and the people who want to know, which implies an interest but not a responsibility.  Existing social technologies address the want to know, but not the need to know aspect.  To illustrate the difference, Angel Mendez, SVP of Customer Value Chain Management at Cisco, commented during a talk he gave at a conference in 2008 that there are over 20,000 people in Cisco’s value chain, only 2,000 of whom work for Cisco.  Knowing specifically what person at which component supplier is responsible for the delivery of a specific item by a specific date to a specific contract manufacturer and the specific person at the contract manufacturer who can commit to a scheduled delivery change in order to meet an order change request for a specific end item …, is crucial to being able to make a timely decision on whether or not the requested delivery date can be met.  Responsibilities are of course related to security issues, but security deals more with who has access to certain information, not who is responsible for taking action if that information changes by an amount that exceeds a certain tolerance.  For example, a customer service representative will need to act on any new order enquiry from a customer, but may only need to know of the existing orders that will be delivered late because of a change in supply.  On the other hand a VP of Sales will not need to know of each order, but may need to take action on any orders that, say, exceed $100,000 in value and a 10% discount on the full order.

Value chains by their very nature require huge amounts negotiation and collaboration between trading partners, which has up to now been carried out largely by phone, FAX, and email.  Social network technologies are a natural extension of these existing technology enablers that brings much greater agility through speed of decision making and levels of governance and conformance not available with existing technologies.