Monthly Archives: July 2007

The Arena Solution

The effectiveness of your Product Lifecycle Management (PLM) solution and its ability to manage the information associated with the entire lifecycle of a product from conception, through design and manufacture, to service and disposal, can be the difference between costly inefficiency and profitable efficiency. However, the complexity and cost associated with many traditional PLM solutions often puts these solutions out of reach of most small and mid-size companies. That’s why the on-demand PLM solution from Arena deserves due consideration from any product manufacturer looking to increase their efficiency and productivity and why sourcing and procurement professionals should be familiar with it, and its benefits, since the greatest cost reductions result when sourcing is involved in product development from day one.

Arena, founded in 2000 by ex-manufacturing executives who needed an easy to use, affordable, and quick-to-implement PLM solution that could take advantage of the internet as a delivery mechanism to allow for collaboration both within and beyond their four walls, is different from traditional PLM providers in that it is easy to implement, easier to use, and accessible to all of your partners, to whatever extent you want it to be.

Whereas a typical behind-the-firewall PLM solution is often challenging even for trained power-users, as expensive as SAP (comparative speaking), and significantly complex and time-consuming to implement (with implementation and configuration cycles of six months to two years not uncommon – and sometimes only for basic functionality), small to mid-size users of Arena can often be up and running in a day, with the most complex implementation maxing out at about a month.

Arena also has all the traditional benefits of an on-demand solution – including no large up front cash outlay, economies of scale, free upgrades, rapid responsiveness, and collaboration in addition to an ultra-configurable fine-grained security model, cirriculum-based on-demand training, and multiple role support to allow you to buy just the capabilities you need for each user. This makes the application very secure as you can control, right down to the domain and IP address, who has access to what and when the information expires and ultra-deletes, very useable as a user can access just the training resources she needs when she needs them, and makes the application very affordable as a company only has to pay for full access for the users that need it.

Furthermore, Arena is a very stable company with over 300 customers from garage shop operations all the way up to entire divisions of companies like Xerox. Many of these companies use the application across departments and with suppliers and partners distributed all over the globe. And when you factor in that they do a quarterly analysis on application usage on a customer-by-customer basis to determine not only what customers are using what features but what customers are not using the capabilities they paid for, so that they can contact those customers and find out what they need to improve either in the application, the training materials, or the customer support, you know that they’re not going anywhere.

Arena is particularly suited to the mid-market that they’re focussed on. Their on-demand model allows them to offer a flexible pricing model that can support three guys in a garage all the way up to large mid-market companies and their focus on the Product Information Management (PIM) aspect of PLM allows them to offer a PLM for mere mortals solution that anyone can (learn to) use. So if your mid-market company is looking for a PLM solution, make sure that the candidate solutions are those that can also be used by sourcing professionals like you and consider pushing to have Arena added to that list. After all, when it comes to on-demand, there just aren’t that many PLM providers, and fewer still that built their solution on-demand from the ground up. In the former category, I believe there’s PTC’s Windchill solution, which is resold by IBM, and Oracle‘s hosted Agile solution (which isn’t really true SaaS), but in the latter category, and I’ll admit I’m not an expert in the PLM space, I don’t know of any other on-demand PLM solutions that were built to be on-demand SaaS from the ground up.

Global Trade Metrics Benchmarking

Have you ever wondered …?

  • How effective are your global trade operations?
  • Is there a way to effectively measure its performance?
  • How much does it contribute to the company’s bottom line?
  • What are your competitors doing?
  • Are others using global trade to a competitive advantage?

If so, then Global Data Mining would like you to join them for a webinar on Thursday, July 26, 2007 11:00 AM – 12:00 PM EDT to discuss one of the last frontiers where upgrading and optimizing business systems can create very significant financial and operational gains, giving corporations an additional strategy to create competitive advantage.

Wired Crowdsourcing

Last week, Wired was on a Crowdsourcing kick that was pretty hard to miss if you were even a casual reader. Crowdsourcing, a topic I first tackled in Purchasing Innovation VI, then in Cambrian House: Crowdsourced Software, and more recently Democratizing Innovation Vs. Crowdsourcing is the process of delegating various tasks for which you do not have the manpower or expertise from internal production to external entities or affiliations of networked persons with the expertise, access to, or raw capabilities that you require.

Wired’s crowdsourcing kick consisted of a series of articles that included Kristin Gorski’s Creative Crowdwriting: The Open Book, J. Jack Unrau’s The Experts at the Periphery, Derek Powazek’s Exploring the Dark Side of Crowdsourcing, Patrick Crawford’s News the Crowed Can Use, Sarah Cove’s What Does Crowdsourcing Really Mean?, Randy Burge’s Using Crowd Power for R&D, and Johannes Kuhn’s Crowdsourcing Soccer in the U.K..

In What Does Crowdsourcing Really Mean?, Sarah Cove interviews Douglas Rushkoff, the New York based writer, columnist, and lecturer on technology, media, and popular culture, on crowdsourcing and related subjects.

Douglas Rushkoff, who is rubbed the wrong way by the term crowdsourcing, defines crowdsourcing as the corporatist framing of a cultural phenomenon. Crowdsourcing is a word. A company can look at [crowdsourcing] as either a threat – to their copyrights and intellectual property or as some unwanted form of competition – or, if they see it positively, as almost this new affinity group population to be exploited as a resource. When you call an open source, bottom-up effort crowdsourcing, clearly you are understanding it in a different way than open source communities might understand it.

In Exploring the Dark Side of Crowdsourcing, Derek Powazek interviews Ragnar Danneskjold of Subvert & Profit. Subvert and Profit is a web site that makes a business out of gaming the social media site Digg for paying advertisers – it serves the nice market for ‘darker’ crowdsourced actions.

In the article, Ragnar Danneskjold (an alias, of course) notes that the business is made possible by mixing the two quickly rising paradigms of crowdsourcing and undercover marketing and taking advantage of the fact that most Digg users understand that their community is a wild anarchy.

In The Experts at the Periphery, J Jack Unrau interviews Karim Lakhani of Harvard Business School’s Technology and Operations Management Unit.

In the article, Karim Lakhani notes that crowdsourcing is a great mechanism for knowledge transfer, or that, in certain cases, crowdsourcing helps connect people who have ideas and knowledge about certain ways to solve a problem to those people who need a problem solved but don’t have the knowledge and ideas. It allows us to enable experts on the periphery at the intersections of disciplines to come together and innovate in more of a systematic manner.

However, according to Karim, we on’t know what the limits are yet, i.e. under what circumstances do they work, under what circumstances will they not work, when is it more efficient and effective to do a distributed model versus a closed or centralized model. Maybe that’s why he believes that we do not want to think of crowdsourcing as a model by which someone can, or many people, can earn a living.

In News the Crowed Can Use, Patrick Crawford asks if social news sites can survive the very openness that makes them thrive.

According to the author, devotees of “crowdsourced” media sites love to equate social editing with democracy, and they’ve got at least one part of the comparison right: social editing is every bit as raucous, messy and enthralling as the electoral process. Social editing web sites allow users to source, debate and prioritize content without intervention from an editorial staff. And, more importantly, it appears, at least in some form, that they are hear to stay.

In Using Crowd Power for R&D, Rndy Burge interviews Alpheus Bingham, co-founder of Innocentive, about crowdsourced R&D.

Alpheus notes that crowdsourcing can often be used to address the aspects of your business that feel most broken, to help deal with risks. For example, if you had a core research group that consisted of only five scientists trying to completely cover the four primary disciplines you needed to adequately manage internal research, you might find that your researches are stretched, especially on key aspects of diversity. That’s where crowdsourcing can help you.

In other words, although it would appear that the definition of crowdsourcing is not yet completely understood or agreed upon, it seems that the experts agree that crowdsourcing – which can be positively used to tackle problems that can not be solved in house, or to socially select and edit news-worthy stories, or to find experts at the periphery – is, in some way, here to stay and those that find ways to take advantage of it could be in a better position to survive in this strange new distributed economy than those who do not.

Nextance: Next Generation Contract Management

In our last post, we tackled the subject of Enterprise Contract (Lifecycle) Management. In this post, we are going to discuss Nextance – one of the more innovative players in the contract management space and one of the few players trying to tackle the breadth and depth of Enterprise Contract Management. With the recent release of their new Proposal Management Software, Nextance is extending their enterprise footprint – which is quite respectable. This module complements their contract authoring, contract management, and business management modules which provide solutions for sales, procurement, legal, and intellectual property.

Nextance, which is bound to have some cool new announcements and campaigns in the near future (since July starts their fiscal year), recognizes that there is a large gap between contracts and financial processes in many companies, and specifically between contract creation and revenue tracking, and is endeavoring to close that gap. Its contract management solution allows you to define event triggers around milestones, orders, and invoices for compliance purposes and its business management solution allows you to determine all of your contractual spend for the current or coming quarter.

That’s why Nextance is currently focussed on contract lifetime value optimization. Most companies have significant value locked up in their contracts, and without the tools to track, manage, and extract the value, it will go untapped. In order to obtain the savings you negotiated in a supplier contract, you need to make sure you’re paying the contracted rates and not a penny more. In order to keep your profit levels up, you need to insure that your customers are paying you at contracted rates, and not at an unauthorized discount. In order to maximize the value of your IP, you need to be able to keep on top of the IP assets you have and effectively market and license the technology.

However, the greatest benefit a well-defined and well-managed contract can provide is risk mitigation. If you’re competing in an open marketplace, you can usually get a good price – especially if your supplier knows you can switch (or you threaten to). If supply exceeds demand, you don’t have to worry about supply availability. If you have a relationship built on trust and collaboration, chances are you’ll never need to refer back to the contract to settle a debate. But if you’re in a closed marketplace, if demand exceeds supply, or if there is the potential for distrust on either end of the relationship, then risk becomes an issue – and the way to prevent against it is to mitigate those risks up front in a contract.

And now that Nextance tackles pretty much every major business function except HR, and handles the contract process from the proposal stage all they way through to active compliance management, they are in a prime position to start tackling contract-based risk management. And when you factor in their strong XML foundations, Microsoft Word integration, advanced search, and strong reporting capability, it becomes a solid foundation for building contracts that tackle risk and determining whether or not your current contracts leave you exposed to newly identified risks.

And considering that most of Nextance’s implementations are large deployments throughout multiple departments, if not the entire enterprise, on a national, international, or global scale with thousands of users, and in some cases hundreds of thousands and users, you know they can support the scalability needed to capture all of the information needed to make risk mining a possibility. There are very few other companies that can claim the size and breadth of the deployments they have and it should be interesting to see how they fare against the other niche best-of-breed vendors, such as the Emptoris Dicarta solution, iMany, and Upside Software. I think that they’ll definitely be a very interesting company to watch this year and I am a little anxious to see what they announce first.

Enterprise Contract Management

Contract Management (CM), sometimes known as Contract Lifecycle Management (CLM), can be simply defined as the management of contracts made with customers, vendors, or employees. (Wikipedia) From procurement’s perspective, contract management is the process of tracking contracts to determine who you should be ordering from, when, and at what price;

and ensuring that your suppliers are adhering to the agreed upon terms. From a legal perspective, contract management is the process of ensuring that you are using standard terms, that risks are mitigated, and that contracts are in place for at least all key relationships. From a sales perspective, contract management is the process of dotting the i’s, crossing the t’s, and making sure payment terms and dates are clearly specified.

In my first post on contract management, I overviewed some basic features of a C(L)M system, including searchable centralized contract repository, collaborative capabilities, workflow capabilities, monitors, alerts, reporting, and template and clause-based contract creation capabilities. In my second post, I noted that Enterprise Contract (Lifecycle) Management (EC(L)M) offers advanced features beyond basic contract tracking, including collaborative capabilities, workflow capabilities, monitors, alerts, reporting, and template and clause-based contract creation capabilities.

However, I feel I’ve yet to capture the essence of Enterprise Contract Management. An Enterprise Contract (Lifecycle) Management solution is one that captures the holistic view of contract management from the enterprise perspective. It’s a solution that lets you do full Contract Information Management (CIM). Just like a true Supplier Information Management (SIM) solution lets you capture, manage, query, and create initiatives around your supplier information, a Contract Information Management (CIM) solution lets you capture, manage, query, and create initiatives around your contracts and all of the information that pertains to them.

With a true Enterprise Contract (Lifecycle) Management solution, you’re not only managing your contracts, but you’re managing the information that is within the contracts and related to the contracts. It’s being able to not only find the contract for the part you need, but share that information with your sourcing and procurement systems for automated compliance verification of invoices. It’s about being able to not only create standard terms and conditions in your contract templates but being able to annotate them with the reasons therefore. It’s about being able to determine not only what contracts are about to expire, but what risks you are open to with respect to your current contract base with respect to liability, supply stability, and corporate social responsibility. It’s about being able to drill down from a supplier contract into relevant supplier data and performance metrics to determine compliance. It’s about being able to drill down from your customer contracts to your delivery information to determine delivery statistics. It’s about being able to determine whether or not you are violating any labor regulations with respect to your temporary labor or out of compliance with International Labor Organization standards or Corporate Social Responsibility policies. Its about being able to truly manage your operations off of your contracts, and not just about being able to determine compliance and performance after the fact. After all, you can’t be defined by your contracts if you cannot effectively execute against them.

In our next post, we’ll examine Nextance, one of the pioneers in the Enterprise Contract Management movement.