Monthly Archives: August 2009

SaaS Integration Is Not a Challenge …

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… provided, as this article on SaaS Integration in Intelligent Enterprises astutely notes, it’s a forethought and not an afterthought. As the author notes, SaaS, like any other software delivery model, is still a sub-pattern of enterprise architecture. This means that you have to account for the architectural requirements in your selection of a SaaS solution. Just like it’s hard to fit a square peg in a round hole, it’s hard to fit a SaaS solution that only communicates in XML with an old on-premise application that only communicates in EDI (unless you have a middleware mapping tool and are prepared to hire an expert architect who understands both products and can define the appropriate mappings for you).

Since the ultimate goal of your supply chain organization is to put together a “suite” of applications that allow you to analyze, monitor, and execute the supply chain end-to-end in a seamless fashion, you need to insure all of your applications synch up through a central data store (which could be on the Cloud). Thus, you have to insure that any SaaS product you buy is capable of exporting and importing the required data from your central data store in one of the formats you can support. You also need to insure that the mappings and integration to other modules that the application needs to synch with can be done in a reasonable time frame at a reasonable price. And if you do this work up front, integration will not be a challenge. In fact, since most modern SaaS applications were built with the understanding that they will have to suck data in from internal sources and spit processed data back out again, as long as you select the right SaaS application for your needs, integration won’t be hard at all.

Get Your Head in The Clouds!

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A fundamental shift is happening in IT, and that shift is the Cloud. Those organizations that embrace the Cloud early are going to be the first to realize its advantages. If you analyze it logically, the Cloud is the next logical step in the web-enabled technology revolution, but that’s not the reason you should consider moving to the Cloud sooner rather than later. The reason is that, like each previous generation of technology, the Cloud will enable businesses, and IT departments, to do things that were not practical in the past.

The Cloud, which is going to create a universal information and computational resource that is both more powerful and easier to use by greater numbers of people than previous generations of technology, is finally going to deliver Web 3.0. It’s going to deliver virtualized and standardized infrastructures and service components that can be bundled, unbundled, and rebundled to create new and innovative business platforms on-demand and, in short, make Service Oriented Architecture (SOA) useful. You’ll be able to get the services and infrastructure you need to build your applications, not just services that you have to integrate yourself in your own data centers.

This is important in the new world economy where business processes that were once tightly confined within single, vertically integrated companies now stretch across multiple companies in your supply chain and where a typical value chain consist of more than 20 different entities. Furthermore, your average company needs to manage multiple, and sometimes dozens, of individual value chains. Optimal business processes that drive each chain must be lightweight, connected, and tailored with the right degree of granularity. A service chain requires different information to be tracked than a product chain. When the Clouds emerge, you’ll be able to build your own end-to-end value chain platform by selecting just the software components you need to manage each business and supply chain process required by the value chain. Instead of having to select one or two dozen different software products from half a dozen or more different providers which then have to be integrated through an expensive custom development effort that uses third party middleware to route all data through a central data warehouse in your (managed) data center, you’ll select a couple of dozen modules and then “integrate” them through the BPM (business process management) component simply by defining the process flow and the data stores. What now takes months, or years, of effort will be accomplished in weeks, or even days. And since the Cloud is the logical extension and integration of SaaS and pay-as-you-go web-based storage, you won’t have to every worry about expensive up-front capital cost license acquisitions (for seats that you might never take full advantage of) because your technology will simply be a pay-per-use service.

And even though there is currently more hullabaloo about why Clouds will fail than why SaaS will fail, which primarily originates from those providers that have a lot to lose when the shift happens, the Cloud is coming. As the author of this fine article on Cloud Computing and the Promise of On-Demand Business Innovation notes, just ask any survivors of the retail book industry about the “non-secure, unreliable, poorly-governed” Internet and Amazon.com. (Let’s just say things were very different 15 years ago.)

Short story … not only should you be looking for SaaS providers when you acquire your new supply chain platforms, you should be looking for those that are Cloud friendly. They don’t have to be on the Cloud today, but those SaaS providers that are preparing for the shift will be the first to realize the advantages, and thus the first to provide you with the advantages the Cloud will offer.

Also, CRM Buyer ran a good article on Monetizing the Cloud 101 that is a good starting point as well and Vinnie Mirchandani has a number of great posts on cloud computing.

Four Rules of Global Sourcing Excellence

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In Introduction to Sourcing Transformation by Houston, Schwarting, Spieker, and Turner, published in Booz & Co’s Sourcing Reloaded, the authors put forward four rules of the road in global sourcing that should not be forgotten in your current quest to lower costs:

  • Pick Your Spots
    Start your sourcing transformation by redesigning procurement procedures in simple, concrete ways that can produce measurable and significant value.
  • Create Total Transparency in Purchasing Costs and Trade-Offs
    Make-vs-Buy decisions, supply chain re-design, and the ramifications of sourcing changes should be clearly articulated so the organization understands the reasoning and buys in.
  • Collaborate Fully with Internal and External Stakeholders
    A robust sourcing process depends on participation throughout the product life cycle, from the concept stage in R&D to the final disposal or salvage of the product.
  • Become an Influential Corporate Leader
    Successful CPOs build confidence by leveraging their position in the executive suite.

Whether times are good or bad, the basics don’t change.

A Procurement Professional’s Guide to International Assignments

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The experience and perspective gained through an international assignment is ever-more valuable in today’s global supply chains and increases a procurement executive’s marketability in the long run. But making an international assignment work requires a well-thought out plan and a lot of flexibility from everyone involved-employer, employee and family.

So what should you do if you are thinking of making such a move? A recent article in Purchasing, which attempted to be a procurement professional’s guide to international assignments, had some good starting tips.

  • Does your company have a support structure in place for the region being relocated to?
    For example, IBM has had an established program since the 1980s where employees considering an international assignment were sent to an orientation session that addressed tax implication issues, handling your house in the US, school and church options, etc. Then, there was a look-see trip for those still serious about the idea.
  • Will your family be able to integrate into the community?
    Will there be support groups to help your family when you’re at work and traveling for work?
  • Will you be close to your suppliers?
    Not only should that be the primary benefit to the company, but it should be the primary benefit for you … you should be able to visit your suppliers regularly and develop real relationships on a professional and personal level that will help both your company and you.
  • Is the language you speak spoken there?
    It doesn’t have to be the primary language of the region, but at least a subset of people should speak it commonly as a second language.
  • Are you interested in learning a new language?
    While it may not be a necessity, it will certainly make your life easier if you are willing to learn the basics and soak it in.
  • Can you talk to people who have made the move?
    Find out about their daily lives and if you will be able to relate to their experiences.

It also had a list of do’s from Associates for International Research:

  • ensure that your company has a formal set of policies and practices
  • visit the location prior to accepting the assignment
  • have a clear understanding of the financial implications
  • understand how daily living will be different
  • obtain a proper and complete Letter of Understanding
  • read the relocation policy in advance
  • take care of any major medical or dental needs beforehand
  • get an idea of the expected outcomes of the assignment
  • obtain details on the type of security and medical services that will be offered
  • have an understanding of the tax implications and your compliance responsibilities

If the US Implements Cap and Trade Instead Of Carbon Tariffs, Are You Ready?

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As my long-time readers will recall, green and sustainability were major foci of this blog before they became popular topics among other bloggers. As a result, I’ve been following, and occasionally blogging about, carbon tariffs for years, which I expected to see more of in the (near) future as some states and provinces have already implemented a carbon tax (like California and British Columbia) and a bill was introduced into US Congress.

But recently I’ve been seeing references to cap and trade, which disturbed me for reasons I couldn’t quite pinpoint, mainly because I never saw a good definition of what it was, how it might be implemented, or what impacts it will have on your (global) supply chain. Needless to say, I was glad to see this recent article on the supply chain and cap and trade by Supply Chain Digest Editor-in-Chief Dan Gilmore and find out that I’m not alone. Seems Dan was in the same boat too.

So he did some research, and a few calculations, and arrived at some conclusions which are even more disturbing than you might expect. Not only will cap and trade, which would dole out carbon permits for so many tons of CO2 to your company, cost you and be more complicated than a carbon policy needs to be, but it will add volatility and risk into your supply chain … and that’s not good. You see, if cap and trade comes into play, we have the following unknowns to deal with:

  • the details
    depending on the implementation of cap and trade, the impact on your supply chain could be anywhere on the scale from minor nuisance through major burden
  • the complexity
    any scheme will necessarily be more complex than a straight carbon tariff (per ton) and will take years to implement
  • the global impact
    how will offshore carbon production be addressed, will it result in a move back to near-shore or home production, and will it result in more telecommuting to reduce office space?
  • the cost
    if your emissions are capped, you either have to reduce them or buy permits from your competitors, who will be auctioning them to the highest bidder … so you have no way to plan for the potential cost in advance

Policies should reduce the risk and volatility of your supply chain, not add to them … which is precisely what a cap and trade approach will do. So be sure to support your local trade association in lobbying for a straight carbon tariff. At least you can plan for that.