BitLogistics - SCM category

Business networking software

Fri, 07 Dec 2007 16:42:00 GMT

Social networking software, such as Facebook, implement social applications using a network of 'contacts' or 'friends' - a kind of distributed address book. This turns out to have key advantages, not least of which is the fact that managing your own profile and a list of connections is far easier than maintaining an address book that contains a profile for every entry. It is interesting to apply the same idea to business software.

Supply Chain Initiatives Require an Iterative Approach

Sat, 17 Nov 2007 10:35:00 GMT

In a world where things are getting smaller, why are big IT projects still getting approved?

What do I mean when I say ‘things are getting smaller?’. In short, personalisation.

This manifests itself in a variety of forms such as customisation and user-defined choices. We are all expecting that when we want a product or service, we will have a number of choices as to how it is made and how we get it. In order to provide the relevant options (or choices), manufacturers and service providers have had to develop very flexible processes and partnerships with their suppliers to do so. This inherent requirement for flexibility challenges the often rigid and quite formal structures, systems and processes found in many companies. This is particularly true with regard to information services.

In many large organisations, the information systems are managed through a central IT function. They are usually charged with the development, acquisition, provision and support of information systems to the organisation. In short, they have complete control of access and use. The rationale for this is understandable, but as data and information in digital form is now pervasive across all aspects of society, this approach is rapidly becoming unsustainable.

The first casualty may well be the large IT projects that cost much and delivered little. That they have survived for so long is more due to the lengthy timeframes and vague ROI (Return on Investment) measurements. Either they are broken down into manageable chunks that can be completed quickly, or developed within a flexible framework that allows for constant iterative revision, whilst still delivering capability.

This has been recognised by the analyst firm AMR, who recently published a study analysing the issue: Supply Chain Initiatives Require an Iterative Approach. Their main conclusions are:

Rule No. 1: Big bangs don't work. This is not a matter of project management; it is a practical reality for the following reasons:

Too much integration

Data quality problems

Too long

These factors are cumulative and compounding

Rule No. 2: Iterative steps work. Use simple and practical approaches to ROI (size of potential benefit, execution risk, time to benefit) and link business process improvements and associated software functionality through operating metrics to financial impact. Factors include the following:

Limit the scope

Short timeframes

Single budget period

Rule No. 3: Incentives favor the big project-Beware. As a legacy of ERP, the structural incentives in the software and consulting businesses still foster the long-term commitment.

In other words, major software vendors and consulting houses are more comfortable with long term projects where the compensation models are based on 'time and materials' rather than value added.

As an increasing number of solutions are made available as subscription ‘services’ across the internet and people increasingly consume digital information on a variety of devices, anytime, (almost) anywhere, the challenge for the IT department is clear.

They have to either change or become irrelevant.

Simple trust, simple truth

Thu, 11 Oct 2007 17:43:24 GMT

The key determinant is trust. Developing trust can only be done in stages and is established, over time, by starting with simple tasks.

This certainly goes against the prevailing opinion held by many of the supply chain software vendors. They hold that everybody should plug into a single planning engine or adopt a common process. Many of these exercises are very complex and so are hardly appropriate for building trust. They are also very expensive due to the implementation and configuration time scales. Is it any wonder that supply chain collaboration based on this approach has only involved a couple of first tier partners?

Also the premise that everybody can effectively plug into a single instance of an application is hampered by another misconception. Suppliers often work with a number of manufacturers, each having their own unique processes. It is unrealistic to assume that they can all use the same work flow. Also, suppliers would find it impossible to configure their process flows to each individual customer, as it would go against their need to consolidate operational processes in support of high volume throughput. The more customers they gained, the greater the problem becomes.

A more effective approach is to begin sharing the information that is readily available to trading partners via more traditional methods, such as phone and fax. If this information is made available through a more accessible mechanism such as the Web, it need not require lengthy integration exercises. By ensuring that clear benefits are accrued to the participants at an early stage, a strong basis for trust and information sharing is established.

Over time, companies will begin to align their processes to support increasing collaboration between themselves and their trading partners. This will eventually reach the point where interoperability becomes straightforward and this is when the collaborative community actually becomes an applications ‘platform’. On such a platform all manner of complimentary applications and services can be provided, each providing additional value and new opportunities.

The evolution of collaborative platforms such as described above, will resemble the emergence of the telephone networks. Interconnection generated an explosion in demand, but more importantly, provided a platform that now supports all manner of services beyond the imagination of the original designers. The extent of their ambition ran to expecting that ‘every town in America will have a telephone!’. Collaborative supply chain platforms should also be charged on a similar basis to phone bills, i.e. by a transactional or subscription based monthly fee.

An effective supply chain collaboration solution should therefore be available to all members of the community as a service via the web, rather than requiring the installation of dedicated servers with each trading partner. In essence, available through any phone or network socket.

So are such services available today? What might they look like?