A recent article in The McKinsey Quarterly elucidated their three top strategic planning tips for 2009. In brief, they were:
- Be realistic about scenario planning
Recognize that several different futures are equally plausible, develop plans accordingly, and try to focus on the underlying drivers of the uncertainty.
- Intensify Monitoring
That’s the only way you’ll be able to detect which way the marketing is shifting and bring the appropriate plan to bear. And be sure to carefully monitor suppliers and competitors as well as customers. A single supplier bankruptcy could derail all of your plans.
- Look Beyond the Crisis
Regardless of how devastating the downturn may be, it cannot hold back fundamental market trends forever — such as the aging customer base in Europe and North America and the fact that every downturn must eventually stabilize and give way to an upturn on the market sine wave.
Besides, if you can’t see beyond the crisis, how can you possibly expect to get out of it? So identify your post-downturn market, start marketing to it, and ramp up R&D to make sure you have the products ready that your market wants when it’s ready to buy them.
In our last post, we overviewed the basic eight-step process that should be followed whenever you embark on acquiring a new piece of enterprise software. In today’s post, we start our deep dive into the process steps, starting with the issue of cross-functional team formation.
1. Form a Cross Functional Team
The starting point is to form a selection team that consists of representative stakeholders from each group that will be using the system, each group that will be paying for the system, and each group that will be supporting the system. This will help fully define your needs and requirements and ultimately insure that no solution is shortlisted that doesn’t meet a basic need of one or more parties (and minimize the chance that you buy a(nother) multi-million dollar “shelfware” product). It’s also necessary to insure you don’t buy a product that one or more intended users will boycott (which could result in your selection being a failure and a money-pit from day one).
In supply management, the following stakeholders will need to be represented in every purchase:
Buyers, or a subset thereof, will be the primary users of the system.
- Procurement Managers
Supervisors, Directors, and the CPO will need to track the activity of their buyers, track spending, and, most importantly, track productivity increases and cost avoidance.
- Accounts Payable and/or Accounts Receivable
Supply management is all about buying and realizing savings, especially those that take the form of discounts, rebates, warranty claims, and returned overpayments. Even if AP and/or AR doesn’t need to use the system directly, they will still need the data from the system.
Even if it’s SaaS, IT is still going to have to support the system one way or another. If it’s on-premise, IT will likely be responsible for the installation, maintenance and upgrades. If it’s hosted ASP, IT will need to manage the remote integration with the other systems that need to push data into and pull data from the new system — and, no doubt, run security checks and audits to ensure that the hosted software passes basic security checks. And even if it’s SaaS, IT will still have to support the requisite environment as most software is only certified for specific browser-based environments (such as IE 7 and/or Safari 3 on Win XP SP2+, Vista SP1+, or Mac OS X 10.4+) if it’s thin client, or specific operating system configurations if it’s fat client (such as Win XP SP2+ with Cisco VPN software).
Furthermore, the following departments will be affected by certain types of supply management software acquisition:
- Risk Management
If your organization has a dedicated risk management function, since every aspect of supply chain involves risk, you’ll need to involve risk management.
- Strategic Planning
If you have a long-term strategic planning division, and you’re buying software that supports scenario planning, what-if modeling, or (network and/or market) simulations (like strategic sourcing or supply chain network optimization), you’ll likely have to consult with strategic planning.
If you’re buying a contract management system with contract authoring support, for example, legal may end up being a primary user.
- Human Resources
If you’re buying software to support the procurement of temporary labor, you’ll need a sign-off from HR.
- Regulatory Compliance
If you’re buying a global trade management system, a carbon emissions tracking system, or a SOX compliance system, you’ll likely need to make your selection under the guidance of regulatory compliance.
If you’re buying software that impacts forecasts and production plans, you’ll need to work closely with production.
- R&D / Engineering
If you’re buying software that impacts or supports PLM (Product Lifecycle Management), you’ll also need to involve R&D and/or Engineering as it will critically impact their operations.
In our next post, we will discuss need identification and documentation.