Category Archives: SaaS

Remember, You Can’t Control the Clouds!

Even though futurists have been predicting weather control for well over half a century, and even though the US Government tried to control the weather for over 20 years (primarily with respect to storm prevention), the reality is that we still can not control the weather, or the clouds.

Thus, the clouds, which are not fluffy magic boxes and not omniscient magic mirrors, and which are, in fact, filled with hail despite your sweet fluffy dreams to the contrary, are perfect metaphors for the new breed of virtual hosting solutions being offered by countless vendors.

As per a recent Ponemon Institute study, as summarized by this recent CFO article on “Cloud Control”, a significant majority of 127 cloud-computing service providers surveyed believe it is their customers’ responsibility to secure the cloud, not theirs!

When Bruce Lynne, managing partner of Financial Executives Consulting Group, said Cloud is just a fancy word for outsourcing, he was right and, as a smart CFO knows, when a company outsources, it sheds work, not responsibility. And the Cloud is inherently insecure. Heck, even Amazon has “no liability … for any unauthorized access or use, corruption, deletion, destruction or loss of any of Your Content or Applications”.

And private clouds are no more secure than public clouds, because your data is still on a virtualized platform and this means that when a hacker accesses one server, he accesses them all! Almost instantaneously!

Plus, you have no idea how long your data hangs around if the service doesn’t fail. 90 days? 1 year? For as long as the service exists? Maybe the provider deletes your archived e-mails after 90 days as per the contract and your corporate data retention policies. Maybe the provider doesn’t. And you might not find out until you get sued and have to turn over 3 year old e-mails that weren’t supposed to be kept. And more importantly, how quickly can the provider retrieve all of your corporate e-mails for the past 90 days from the 10,000 employee data store that you have to turn over for discovery?

And then there’s the problem that it doesn’t matter how secure you are or how secure the provider is if even one of the cloud provider’s customers is insecure. Remember, it only takes one hacker to penetrate one server and … boom … game over.

Can SaaS Solutions Improve Supply Chain Network Quality?

A recent article over on Supply & Demand Chain Executive on a holistic view of quality described the four steps to applying a cloud-based solution to establish a quality supply network. In this post, we’ll review the four steps presented and then discuss whether or not SaaS (Software as a Service), because “cloud” is undefined and irrelevant, can really improve your network quality.

The author is correct in that a number of trends (including a greater reliance on component suppliers, outsourcing of subassemblies and offshore manufacturing) are dramatically changing the supply base and challenging the ability of brand owners to manage their supply chains and ensure quality. And the author is also correct when he states that access to data is unpredictable across the supply chain and this is a problem. If all you get is a number of reports that are incomplete, inconsistent formats after the fact, that’s just not good enough — especially if you need to interpret the data in real time to take effective, corrective, actions.

And he’s also right in that, when outsourcing (to far-flung locales), intermittent inspections are not enough. A quality trend analysis, built from the continuous monitoring of quality, is required. However, retesting after you get a delivery does nothing to insure quality of supply — it only prevents defects from reaching the consumer. And if this results in a stock out six weeks before Christmas, this could be devastating.

That’s why a quality supply network, which insures quality before product leaves the manufacturer, is required. According to the author, this is achieved by:

  1. Capturing the Data
    Extract as much data as you can from suppliers’ manufacturing execution systems and/or spreadsheets into a common format.
  2. Uploading the Data
    Aggregate, synchronize, and retain the data on common servers where the supplier and brand owner have secure access.
  3. Analyzing the Data
    to gain insight into quality issues and trends (in real-time)
  4. Gathering Insight from the Data
    by way of an intelligent, multidimensional pattern recognition tool that identifies the data clusters where anomalies and issues are

And, at least according to the author, the best way to do this is a cloud-based solution because manufacturers do not need to make significant IT investments to build a quality network and you can quickly bring alternate manufacturers online and monitor their product quality, ensuring the results you need and minimizing the impact to delivery schedules.

This is true, but he is making / implying a couple of incorrect assumptions.

  • Cloud offers no advantages over SaaS
    and, furthermore, you don’t even need to have a true SaaS application or have it externally hosted! You could have a traditional web-based solution in your data centre. As long as suppliers can easily upload their data or provide you web access to their data feeds, it doesn’t matter if it’s cloud, SaaS, or just web-enabled. As long as everyone who needs the data can get it when, and how, they need it, problem solved.
  • You don’t need a multidimensional pattern recognition tool.
    All you need is a good data analysis tool and a smart analyst — because no tool will ever be smarter than the analyst driving it. As long as she can build the cubes she needs, create the appropriate multi-dimensional reports, and capture trends — she’ll spot the issues.

In short, SaaS doesn’t improve supply network quality — real-time data sharing and analysis improves supply network quality. A SaaS solution can enable this, but it’s not always necessary and not a complete solution in and of itself (as you will always need a smart brand owner and smart analyst driving the solution).

Thank You Brian! Building Apps IS Wrong!

In a recent post over on Software & Services Safari, Mr. Brian Sommer tells us that Building Apps is Wrong! and, as far as the doctor is concerned, he couldn’t be more right!

According to Brian:

      Software application development has been going on for decades. In the old world of software, applications took a (usually accounting) business event and then validated, stored and reported it. These were internal usage utilities that dealt with internal data. That’s the wrong perspective to have today. Businesses don’t want apps – they need ‘capabilities’. Moreover, they need capabilities that serve different kinds of information to different kinds of smart devices to mobile, interconnected workers.

And, as Brian points out, not only do interconnected workers that want to access information whenever and wherever they are, they want one user interface no matter how many solutions are serving up information on their device.

This means that a Desktop App, an iOS App, an Android App, a Windows App, each customized to the browser or platform, is not the way to go. When you customize to the platform, you tend to drift away from the current UI to the new UI until you have a hodge-podge of interfaces across a dozen platforms. Unless you want to develop your own extensions to the default development libraries on each platform, and alter your UI to be observant of the limitations of each library, you need to focus on a platform-independent delivery method (such as mobile-compatible HTML 5) and focus on what the user really wants — a slick, information-rich, user experience, and not a solution exclusively oriented around the data and the capabilities of the platform.

After all, as Brian points out, what the user really wants is:

  • Context to enrich and complete transactions, customer interactions, etc.
  • Information served up at point of need
  • Information designed to answer the worker’s or customer’s needs
  • Information beyond transactional data
  • A solution that makes the most of data, voice and video

and not flash. If they want HD graphics, they’ll fire up a HD game.

Lavante Recovery – A Risk-Free Way to Segue Into SIM

Yesterday, I was the first to get a sneak peak into the live-beta of Lavante’s new Recovery Audit solution that is being built on top of the brand-spanking-new Supplier Information Management solution that they released earlier this year (as showcased in this February post). Given it’s unique foundation, and the decade of recovery audit experience that has been baked into it, it is no surprise that Lavante is finding ten (10) times the savings of an average recovery audit, and up to fifty (50) times for select clients — even though the product is still in Private Beta and full (seamless) integration (with SIM) won’t be available until next year.

The great thing about the solution is that the first thing it does is identify omissions, errors, and inconsistencies in your supplier data. Using phone number, fax, address, web site, e-mail, and TIN checks, the software is able to find duplicate, erroneous, or incomplete records that need attention. Once these are fixed — either through automated import of up-to-date data from it’s network of over 2 Million companies, or from a multi-channel reach-out that seamlessly integrates telephone, fax, and snail-mail reach-out as well as e-mail reach-out — the software automatically applies a suite of rules and checks to find duplicate payments, overpayments, and potentially fraudulent payments that you have not yet identified. And once these are verified as accurate, provided you have a decent agreement/contract in place, you can go after the vendor for credits.

The benefits of good supplier data and multi-channel reach-out cannot be underestimated where recovery audits are concerned. For the latter, they have average reach-out response rates of over 50% (and as high as 80% for some customers), which are eight (8) to ten (10) times the response rates of providers who just do e-mail / web-based reach-outs. With respect to the former, cleaner supplier data makes for more complete transaction data, which not only increases the chance of finding a duplicate, incorrect, or fraudulent transaction — but improves your follow-on spend analysis efforts (and results). As a result of its supplier data cleansing effort, Lavante is typically able to process at least 95% of spend through its recovery audit solution, which maximizes the chances that it will find the majority of your recovery opportunities.

The SaaS solution is quite simple to use — consisting of four main components: the dashboard, claims management, invoice management, and reporting. The claims management section allows you to review each claim found by the system, which includes complete information about the claim — type, reason, organization, supplier, status, supporting documentation, etc, and take appropriate actions, which can include additional review, processing, or reassignment. The invoice section lets you manage your invoices from Lavante for recovery services. If you choose the fixed fee option, you will get one invoice on the agreed upon invoicing cycle for access to the software. If you choose the risk-free contingency model, then you will get an invoice for each valid claim made to a supplier that results in a credit or repayment. The reporting section consists of a suite of audit, cash-flow, claims, invoice, non-compliance, OFAC-SDN, and Vendor reports that give you pretty much any piece of information correlated with any other piece of information any way you want to look at it. The dashboard allows you to see your claim and invoice summary data at a glance, and to select the four most important reports to you — which can be viewed in (multiple) chart form(s) or in tabular form, and exported to csv or pdf. And while it’s a basic solution at this point, the only obvious weakness, given that the one goal of the platform at this point is to find all payments eligible for recovery, is that they do not yet have a custom report builder.

I’m sure they’ll get there. They shared with me their 2012+ roadmap for the solution, and it’s quite impressive. They have a vision to build on the solution to extend it first to a contract compliance solution, then to a fraud prevention solution, and finally to a risk management platform that will also integrate with their supplier management platform which will include compliance management. They understand that, done right, recovery is a one-trick pony (because, if you do it right, you also identify the source problem and fix it) and that the real value is not in recovery, but duplicate, overpayment, and fraud prevention — and monitoring transactions in such a way that they can be used to judge supplier, and supply chain, risk. I expect it will take them a few years to get there, but it will also take an average company one to two years to identify the majority of reasons for duplicate and over-payments and fix their processes, so Lavante should be able to grow in lock-step with their customer base. Regardless, Lavante is a company to watch and a solution to investigate for any Fortune 500/Global 3000 (want-to-be) that has never done a recovery audit. At the very least the included supplier data analysis service will add value. And when your data is in order, you can take your transaction analysis to the next level. And given that good data enables good spend analysis, and that a spend analysis will typically uncover 10% savings opportunities, what have you got to lose?