Sourcing Innovation’s recent Illumination on Strategic Spend Visibility noted that best-in-class companies that strategically source their marketing spend save an average of 14.7% on five marketing and spend categories compared with a mere 7.8% savings for all other enterprises (as per a recent Aberdeen Group study) and that, across the board, with good visibility, an average marketing organization can easily find 20% to 25% savings with Procurement’s help (as per a recent Ariba report).
Why? Last year’s report from the Marketing Supply Chain Institute on why you need to Define Where to Streamline makes it clear. A surprising 62.9% of survey respondents admitted they had never undertaken a comprehensive audit and analysis of costs and process efficiencies in their marketing supply chain. Almost two thirds of companies have never analyzed their costs! (And yet they wonder how most of their supplier reps can afford to drive Beamers, Benzs, and Jags!) Furthermore, only 10.8% are adopting workflow or collaboration systems to reduce costs, only 11.5% have a back-end marketing platform to optimize resources and process, and only 14.2% admit that their marketing is fragmented.
In other words, Marketing is a savings gold mine. Turn your strategic spend analysis system loose and the savings opportunities you discover will be numerous indeed.
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It’s just another delivery method for multi-tenant SaaS. That’s it. Nothing more. After reading some recent articles trumping the tenets of the Cloud, and this article in World Trade in particular that asks if supply chain management [is] emerging from the clouds, I feel that I need to make this point abundantly clear. Reading this article, I get the feeling that most people think the Cloud is a fluffy magic box that will solve all their problems. It’s not. Nowhere close. It’s just another multi-tenant SaaS delivery model where a third party maintains the data centre that is used by the software / service / solution provider you buy / license / contract your supply chain management solutions from. This allows the vendor to focus on their strengths (software development & delivery) and the third party Cloud provider to focus on their strengths (on-demand data centre).
To help you better understand what the Cloud is, I’m going to point out what it is not using egregious examples from the aforementioned WT article.
- two aspects to the benefit of cloud computing … the second is … increased visibility across organizational boundaries
This has nothing to do with the delivery model, but who is given access to the platform and how many suppliers and partners buy in to the platform. If you don’t give more of your employees, partners, suppliers, and customers access or if they refuse to use the platform, it doesn’t matter if its Cloud, traditional multi-tenant vendor-hosted SaaS, or ASP.
- critical information can be analyzed by using cloud-based supply chains to see if cost efficiencies are being realized
This has nothing to do with the delivery model, but the data and analytics software at your disposal.
- Cloud-based supply chain solutions give these organizations the ability to quickly scale and compete as the global economy bounces back
So does traditional multi-tenant SaaS.
- a means to automate many standard processes while managing the exceptions more effectively
This is entirely dependent upon the capabilities of the software.
- a typical cloud supply chain solution already has all of the infrastructure in place … when a client comes to us, we are able to connect them to a rich community of partners almost instantaneously
This is true of traditional multi-tenant SaaS vendor platforms that maintain supplier communities, as well as current marketplaces and third-party exchanges. The Cloud just provides a new delivery model for the platforms.
- cloud-based supply chain solutions can improve competitive advantage
This comes down to the TCO and ROI of the solution and how it stacks up to the TCO and ROI of the other solutions under consideration.
And if this wasn’t bad enough, just before it went offline, Purchasing reached new lows in software’s future breaks through the “clouds” where it called cloud computing a killer app, which shows a complete and utter lack of understanding about what the cloud is. An app is what you run on a platform, it is not the platform. (Of course, it’s still better than calling Twitter a killer app for Purchasing, which they also did. Aargh!)
Don’t get me wrong, I think the Cloud is great because, done right, it maximizes the efficiencies of SaaS and virtualized, on-demand, data centre models. However, it’s not a magical box that will solve all your problems and hyping it like it is does more harm than good because the uninformed will buy in, and then quickly abandon it when they see it does them no more good than their current solution because they didn’t take into account that everything has to fit perfectly — software, platform, solution partners, etc. — in order to realize additional value, and this will often necessitate upgrades to systems and software and processes across the board.
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