Posts Tagged ‘On-demand (SaaS)’

SupplyChainBrain Video Series Part 5: How An Integrated Supply Chain Enables First Solar’s Business Goals

Published February 25th, 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. Next up, First Solar

How An Integrated Supply Chain Enables First Solar’s Business Goals

When integrating its two major business units, First Solar partnered with Kinaxis to provide supply and demand planning capabilities, says Shellie Molina, vice president-global supply chain at First Solar. She explains how the Kinaxis RapidResponse solution enabled First Solar to set common goals and objectives around planning, operational excellence and global expansion.

[Run Time (Min.): 10:43]

 

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Posted in Control tower, Control Tower Concepts, Demand management, Response Management, Sales and operations planning (S&OP), Supply chain collaboration, Supply chain expert series, 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


The Late Late Supply Chain Show’s Panel Discussion At The Gartner Supply Chain Conference

Published July 4th, 2012 by Melissa Clow 0 Comments

Gartner held their 2012 Supply Chain Executive Conference in Palm Desert, California a few weeks ago. We were lucky enough to host our “LATE LATE SUPPLY CHAIN SHOW” and record the panel discussion to share with our readers.

We had a special host for the program, renowned supply chain thought leader Roddy Martin, Sr. VP Global Supply Chain at Competitive Capabilities Int.  The expert panelists included, Shellie Molina, VP Global Supply Chain at First Solar, Robert Reinckens, Sr. Partner at Business 1st and Trevor Miles, VP Thought Leadership at Kinaxis.

During the session the panel discussed the emerging trend of supply chain management control towers. In particular, focusing on concepts, components and consequences of investing in these control towers to ensure complete visibility and orchestration across all demand and supply initiatives.

Hear first hand how First Solar’s Shellie Molina discusses how the visibility across their extended supply chain is crucial to the ability to effectively plan, monitor and respond to continuous changes across key processes in the supply chain.

Check out the LATE LATE SUPPLY CHAIN SHOW below or download the presentation slides.

late late supply chain show

 

 

 

 

 

 

 

Posted in Control tower, Control Tower Concepts, Demand 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)


Do you need to perform data backups on a SaaS provided service?

Published April 6th, 2011 by Rob Bell 3 Comments

After you go through all the effort of assessing the reliability of a SaaS (software as a service) provider, do you need to implement your own data backups too? This is a question that I’ve pondered about more than once. Isn’t one of the principle value propositions of SaaS the fact that all the worries about administrative task like backups have been outsourced?

The brutal reality is that IT organizations are still on the hook to provide mission critical data to the business, whether the SaaS provider has failed to deliver, or whatever the reason. The challenge is identifying what is mission critical data, and then, what level of risk it is exposed to, and finally, how quickly will the business need access to it when there’s an issue.

What is mission critical data? Practically speaking, some critical attributes are: system of record and operationally critical. Data can have either attribute or in some cases, both. Examples:

  1. System of Record: Last month’s sales receipts.
  2. Operationally Critical: Urgent customer support tickets.

Although last month’s sales receipts are very important data, critical for financial reporting and needs to be preserved for years, if the system that stores this information goes offline, chances are that business can survive for a 48 hour period without access to this information. In contrast, an urgent support ticket is information that is needed immediately. There may be Service Level Agreement at stake. What do you do if your SaaS provider tells you that access to this information won’t be possible for a couple of days. What do you tell the business?

We have made the decision to back up both types of our data nightly to our own corporate databases. Great SaaS vendors make it easy to access this data… it’s OUR data. But if the worst happens, we will be able to create ad hoc reports to satisfy immediate needs.

If you have engaged a quality SaaS provider it’s unlikely they would be off the air for more than 12-24 hours. And failures like that shouldn’t occur often. Make sure you ask about Recovery Time Objectives for disaster recovery when you are shopping for SaaS services. Your prospective SaaS provider should be prepared with an answer!

Posted in On-demand (SaaS)


Head in the ‘cloud’ or feet on the ground?

Published December 9th, 2010 by Trevor Miles @milesahead 0 Comments
Clouds
Image via Wikipedia

There is an interesting debate taking place amongst the commentators of IT trends and enterprise applications, particularly ERP and supply chain management applications, about the suitability and adoption of cloud or software-as-a-service (SaaS) solution to this space.  This is exemplified by the article from Todd Morrison at SearchSap.com that appeared on Dec 01, ’10 in which contrasts opinions by Liz Herbert of Forrester and Ray Wang, principal analyst and CEO of Constellation Research Group.  This debate is nothing new in that it has been raging since the advent of SaaS some years ago.

On the one side Forrester repeats the usual arguments against broad adoption of SaaS for enterprise applications, which, according the article with my emphasis, state that:

Organizations can also benefit from the Software as a Service (Saas) products that complement the core SAP applications they’re running, according to Forrester.
…  In addition, some organizations are also reluctant to put mission-critical operations, such as supply chain management workloads, into the cloud.

Ray Wang, on the other hand is quoted as stating that…

what’s holding back the adoption of SAP’s on-demand/SaaS offerings is a “lack of ease of use” and cutting-edge functionality such as offered by Kinaxis and Plex.

Liz Herbert’s opinion is these applications…

don’t offer the breadth of capabilities that SAP does and that companies are reluctant to deploy software from Plex and Kinaxis because they don’t have the established reputation that SAP does, and certain functions like SCM don’t lend themselves to on-demand applications.

There is no doubt that SAP has a much greater market share than Kinaxis, but I challenge anyone to call on our customers to evaluate our ‘established reputation’.  And these customers include the likes of RIM, Flextronics, Lockheed Martin, and Amgen, all of whom use an SAP ERP backbone.

And, by the way, they are all very large multi-billion dollar companies with operations around the world.  I state this because the other usual pushback against the adoption of enterprise on-demand solution is that they are fine for the ‘little guys’ but don’t play in the ‘big boys’.

Let me also state that while many of our larger customers initially chose an on-premise deployment, many have either converted or are in discussion with us about converting to on-demand.  More significantly, the majority of new customers are choosing to go on-demand.  This trend is also being observed by SAP as announced at their SAP Influencer Summit yesterday.  While I have to agree that Business ByDesign is aimed at small to medium enterprises (so the ‘little guys’, not the big boys’) SAP stated that on-demand inquiries have gone from 1 in 10 last year to 1 in 2 this year.

Let me also concede that for many ERP functions the only incentive for putting things in the ‘cloud’ is one of cost effectiveness because many of the core ERP functions do not stretch outside the organizational boundaries.  And yet two of the functional areas that are seeing huge increases in adoption of on-demand solutions are customer relation management (CRM), or sales force automation (SFA), and human capital management (HCM) or human resources management (HRM).  I don’t know what could be more confidential than a company’s sales order pipeline or their employee records, including employee evaluations.  OK, maybe I will concede that the core financials are more confidential.

But I do find it interesting that Herbert considers the core ERP capabilities to be most applicable inside the four walls of a company. What surprises me is that she considers supply chain management to be restricted to inside the four walls of a company.  Our observation is that that for most of our customers outsourcing has meant that increasingly little of the supply chain is owned by the companies, especially the brand owners.  If these companies had the myopic view of the supply chain being only that part of the process in which they own the materials or product they wouldn’t need any of the SAP supply chain management suite because they outsource most of their manufacturing, in many cases never touching the product.

It is our observation that leading brand owners in high-tech electronics, consumer electronics, aerospace and defense, and life sciences need greater visibility and control of the end-to-end supply chain in order to provide reliable promise dates and to be able to deliver according to the promises made.  As inventories have been squeezed out of the retail and supply chains locations, the need for greater responsiveness and agility has increased enormously.  Ask any electronics manufacturer about the availability of key components over the past 12-18 months and you will hear stories about commodity items that could be purchased with a 2 week lead time as little as 2 years ago that now has 13 week lead times if you can find a supplier.  Given the buy-sell relationship many electronics OEM’s have with component suppliers (in which they buy items from the component suppliers and sell these items to the contract manufacturers) it is clear that they need a lot more visibility into and control over the supply chain than is provided in ERP systems, which is the core reason for their increased interest in on-demand SCM solutions.

What about your company?  What sort of ‘cloud’ strategy are they adopting?  What sort of applications will they be most interested in deploying on-demand?

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Posted in Milesahead, On-demand (SaaS), Supply chain management


Onsite vs. Offsite – can a project be successful if all team members aren’t together onsite 100% of the time?

Published December 6th, 2010 by Monique Rupert 1 Comment

This blog post is the third in a series of implementation best practices.

The way projects are run have changed significantly since I started consulting 19 years ago.  In those days, it was unheard of not to be onsite at the client Monday through Friday working on a project.  Even though during that time you may only spend a few hours directly with the client.  Of course with the advances in technology (laptops issued to everyone, VPN, mobile/smart phones, VOIP, etc.) the consulting world has evolved.  While we once had to be onsite 100%, that then changed to 75-80% (7-10 years ago).  Clients sometimes let the consultants work from home one day a week.  The clients still had the mindset that they wanted to see the people who were doing work for them to ensure that the work was being done and they got what they paid for.

Fast forward a few more years to implementing Software as a Service (Saas).  The world changed again.  Most Saas vendors have an implementation approach that has much less onsite activities than a traditional software implementation.  Consultants typically will be onsite for specific activities or milestones while the remainder of the work will be performed remotely.  With access to servers in the cloud, web conferencing products, and more standard implementations due to less customizations, the need to be onsite is less critical. 

I certainly do believe there is less need for onsite work for a Saas project; however, there are critical activities which I do believe should be performed onsite:

  1. Project Kick-off – the entire team should be onsite to set and hear expectations for the project.  Also to build rapport amongst the team and document how the team will work together during the project.
  2. Requirements and Design – all requirement review and design sessions should be performed onsite so the teams can ensure both sides have an accurate understanding of the requirement and how it will be satisfied.
  3. Testing – during end-to-end and acceptance testing the teams should be together to provide knowledge transfer of the solution, answer questions and troubleshoot and resolve issues quickly.
  4. Production – during production cut over it is important for the teams to be together to resolve any production issues quickly and answer questions.

These may not be the only times when the teams should be together, but I believe these are the most critical.  If the client is struggling with understanding the solution and taking ownership of the solution, then more onsite work may be required.  Consultants need to watch for this and be flexible to change the schedule to best meet customer needs.

In order to make this model work, it is critical to set the appropriate expectations in the sales cycle.  Most clients will agree with the approach once they understand how it will work.  Clients are also increasingly budget challenged and the cost savings of not having all consultants onsite every week will be attractive.  Although, cost concerns should not outweigh whatever is required to make the project successful.

What are your thoughts and experience with performing remote work?

Posted in Best practices, On-demand (SaaS)


Where is supply chain software going?

Published May 18th, 2010 by Monique Rupert 2 Comments

I recently read the article “Coming Dominance of On-Demand Supply Chain Software” by Dan Gilmore and it got me thinking about the history of SCM software implementations and where the industry is going.  Just on a lark I Googled “failed supply chain software implementations” and got 33,000 hits.  To me that is an indicator that this is a hot topic.  The past years have been a wasteland of high profile failed implementations with such companies as Nike, Waste Management and Hersey (to name a few).  Obviously all the failures were for very different reasons, but a failed supply chain software implementation can have a dire impact to a manufacturing company, such as not being able to manufacture or ship new product!  What could be worse than that?  Make no mistake about it, the business problems that supply chain software solve are difficult and complex, so perhaps it is time for a change.

I agree with the author that the future of supply chain software is on-demand.  But the real question is why? 

I personally think it stems from the fact that companies no longer want to risk huge, costly, time intensive implementations of software with no predictable end result.  On-demand software can offer the customer a whole new future. 

Low up front software costs (no huge multi-million dollar investment), no hardware cost and generally speaking the subscription pricing is user-based so customers have the ability to try the software with a few users, get some user adoption before committing to a huge roll-out across the organization.  This helps to de-risk the investment.  And honestly, customer executives would no longer have to potentially put their job on the line for a supply chain solution. 

Also, I believe on-demand software companies have to provide better customer service than traditional on-premises licensed software because the software vendor is constantly trying to earn and retain a customer’s business.  There is no perpetual forever license. The software company must listen to customer needs and adapt to them or face the customer going off subscription.  As everyone knows, the supply chain industry is dynamic so the way to solve a problem today can be different tomorrow.  Wouldn’t you want to work with a vendor that would actually listen to your customer requirements and put them into the product rather than to have a bunch of custom code the vendor won’t support?  I think you get more of that with an on-demand software vendor.

The author also made a very interesting comment “Increasingly, you will be able to try the software before you buy it! What a dramatic, game changing impact that will have.”  Just think about that for a minute.  What a huge statement.  If all those companies who had failed supply chain implementations could have just tried it before they made a huge investment would it have made a difference?  For some, yes and others maybe not, but the key point is that consumers of supply chain software can be more educated prior to embarking on a software implementation. 

What would be even more provocative would be a company who is willing to not only let you try the software for no cost, but also perform the implementation with no initial services fees and no cost at all if you don’t like it…  That would really change the game, the customer could completely de-risk their supply chain software decision.  Now that would be bold.

Posted in Products, Supply chain management