Category Archives: Technology

Technology Trials 2012 – Part V

In Part IV, after we determined in Part III that you needed to find a new supply management solution, we outlined the critical (set of) question(s) that you needed to answer before you selected a BoB (Best-of-Breed) or FuSS (Full Supply Suite) solution.

Now that we know the critical questions that need to be asked in the selection of a BoB or FuSS solution, we will move on to the next (set) of question(s) that you need to answer before you can start to narrow in on a solution.

(05) What are the globalization requirements?

In particular,

  (05.1)Who are my stakeholders and what do they need??
  (05.2)How many countries will the solution be used in?
  (05.3)How many languages does the solution need to support?
  (05.4)How much support from the vendor will be required?
  (05.5)How much support for the suppliers will be required?

  (05.1)Who are my stakeholders and what do they need??
No solution exists in a vacuum. And you won’t be the only one depending on it. Executives will be depending on the reporting capabilities for insights and compliance purposes. Procurement will be depending on the contract details generated by a sourcing platform. Warehouse Management Systems will require the orders created in the Procurement Systems for m-way matching and inventory planning. Risk management will require compliance and performance information. Finance will require orders. Etc.

  (05.2)How many countries will the solution be used in?
If the organization is a global multi-national, then the solution will probably need to deployed across multiple countries, especially if services are shared across multiple locations. And if the solution is a sourcing solution, and services are sourced from a dozen countries, then the solution may need to be (partially) deployed in that many countries.

  (05.3)How many languages does the solution need to support?
Again, if services are shared across the globe or the solution needs to be used by suppliers across the globe, the solution could need to support a dozen, or more, languages.

  (05.4)How much support from the vendor will be required?
Do you have a cracker-jack IT and/or services support team, or was your solution cobbled together from the trinkets in boxes of cracker jacks? In the first case, your organization might not need too much support from the vendor. In the second, your organization might require extensive support from the vendor.

  (05.5)How much support for the suppliers will be required?
None, some, or quite a bit? In the former case, just about any solution could fit the bill. In the latter case, there might only be a few solutions with extensive supplier support capabilities that could even be considered. In between, there could be any number of suppliers with solution on a sliding scale.

In other words, there are a lot of questions that need to be answered before you even consider sending out that first RFI.

Technology Trials 2012 – Part IV.ii

In Part III, where we assumed that you needed to find a new solution, be it a partial best-of-breed (BoB) or a full supply suite (FuSS), we discussed the critical question that you needed to answer – do you need a point solution to fill a gap or do you need suite to modernize your process and capabilities?

In yesterday’s post, we assumed that you answered the question and determined that you needed a point best-of-breed (BoB) solution to fill a gap in your solution foot-print. In today’s post, we assume that you determined that you need an end-to-end full supply suite (FuSS) to deal with your supply issues.

(04) What are the critical functions that the solution must have?

In particular, as we are dealing with FuSS, we need to ask:

  (04.1)Are there any integration points?
  (04.2)If integration is required, who can do the integration and what is the timeframe?
  (04.3)What data formats need to be supported for supplier collaboration?
  (04.4)Is the solution a foundation for another solution? Can it be extended / integrated as needed?
  (04.5)Are there any known advantages or disadvantages to hosted or SaaS?
  (04.6)Who should support the solution?
  (04.7)What are the training and support options?
  (04.8)What are the normal use-cases that cover normal, and 80% of, expected usage?
  (04.9)Is the vendor likely to be around supporting this solution in the long term?

  (04.1)Are there any integration points?
Do we need to integrate with an ERP, MRP, or suite solution for another supply chain process? E.g. A sourcing platform may need to suck in the transactional data from an e-Procurement platform for spend analysis and spit the contracts out into the platform so that m-way matching can occur against each requisition before it is made and each invoice before it is paid. Similarly, a logistics platform may need to suck in requisitions and spit out inventory levels / goods receipts.

  (04.2)If integration is required, who can do the integration and what is the timeframe?
Can it be done in-house, by a vendor, or will a third-party be required? How long is it likely to take? (If integration will take 3 months, then a solution MUST be selected 3 months before the suite is needed.)

  (04.3)What data formats need to be supported for supplier collaboration?
What formats are you currently accepting supplier data in? What formats do you need to accept to get more suppliers online? Where is the electronic marketplace going?

  (04.4)Is the solution a foundation for another solution? Can it be extended / integrated as needed?
Are you on the market for a procurement suite with the intention that you will be supplementing it with a sourcing suite at a later time, or vice versa? Are you planning to build your entire supply chain foot around a market-leading e-Sourcing platform? Know the answers to these questions up front — don’t be asking them after the fact!

  (04.5)Are there any known advantages or disadvantages to hosted or SaaS?
As with the BoB discussion, if your organization employes enhanced security protocols, does not have the resources to support a system in-house, etc., these restrictions should be known in advance of system selection.

  (04.6)Who should support the solution?
You? The vendor? A third-party? Or does it not matter?

  (04.7)What training and support options are availble to you or will be required?
If there is no in-house expertise on the type of solution the organization is searching for, expertise on the process and the platform will be required. If there is in-house expertise on the process, then only expertise on the solution will be required. In addition, are there individuals who can be trained as trainers, or will external resources be required to train new users on a regular basis? If the latter case, you will need a vendor with a consulting/training team, or one that is big enough that third parties offer that trainig.

  (04.8)What are the normal use-cases that cover normal, and 80% of, expected usage? And what are the abnormal use-cases that cover high-ROI scenarios in the remaining 20% of scenarios?
Just like you should never go to market for BoB solution without knowing the typical and atypical use cases you need to support, you should never, ever go to market for a FuSS solution without knowing the typical and atypical use cases you need to support! Otherwise, the ROI that you expected may not materialize.

  (04.9)Is the vendor likely to be around supporting this solution in the long term?
Whereas this is not that critical for a BoB solution, as you can always replace it in a few years if need be, this is very critical for a platform solution as you know you will be stuck with the solution for at least 5 years, if not 7 or 10 — even if it’s SaaS, because the bigger the solution footprint, the longer it takes to get it replaced in an organization. So you better make sure that the vendor is stable and likely to be for years to come.

Technology Trials 2012 – Part IV.i

In our last post, where we assumed that you needed to find a new solution, be it a partial best-of-breed (BoB) or a full supply suite (FuSS), we discussed the critical question that you needed to answer – do you need a point solution to fill a gap or do you need suite to modernize your process and capabilities?

In this post, we’re going to assume that you answered the question and have determined that you need a point best-of-breed (BoB) solution to fill a gap in your solution foot-print. In tomorrow’s post, we will assume that you determined that you need an end-to-end full supply suite (FuSS) to deal with your issues.

Once you’ve decided that you need BoB to help you fill a critical issue, because the need was contained and the ROI analysis indicated it was the best approach, the next (set) of question(s) you need to answer is:

(04) What are the critical functions that the solution must have?

In particular, as we are dealing with BoB, we need to ask:

  (04.1)What are the integration points?
  (04.2)What data formats need to be supported?
  (04.3)Are we limited to hosted or SaaS?
  (04.4)Can the solution be supported in-house?
  (04.5)What additional training will be required?
  (04.6)What are the use-cases? What is the expected ROI??

  (04.1)What are the integration points?
Specifically, what data do you need to get into the best-of-breed point solution from your existing platform / suite, and what data needs to be pumped back into the platform / suite when you are done with the best-of-breed solution?

  (04.2)What data formats need to be supported?
In particular,
    (04.2.1)What data formats are used by the platform / suite you need to suck data out of and spit data into?
    (04.2.2)What data formats are used by your suppliers / partners / third parties that provide data you want to get into the best-of-breed solution?
This is typically all of the data formats that you need to support for BoB.

  (04.3)Are we limited to hosted or SaaS?
If the current platform is hosted, and strict security requirements would make a SaaS solution almost impossible to deliver, or if the current platform is SaaS, and the integration or support requirements would make a hosted solution unnecessarily expensive, or if there is an edict from above that all solutions must be hosted for security or control reasons or must be SaaS due to lack of technical support, this must be known before potential solutions (and vendors) are selected.

  (04.4)Can the solution be supported in-house?
If it can’t, then the organization will either have to go SaaS (if it has the option), or contract a third-party to maintain a hosted solution.

  (04.5)What additional training will be required?
Even if the selected solution is “plug-and-play”, there’s no guarantee that your talent will have the training required to “play” with the solution as soon as it is available. You can’t just give a man a hammer and a chisel and expect him to magically transform into a master artisan.

  (04.6)What are the use-cases? What is the expected ROI of each use-case??

Before you go looking for a solution, and more importantly, vendors to support that solution, you have to know what the typical daily needs are and the atypical use-cases that you need to support (because they have high ROI) are. Software isn’t about features (and selection is not about feature check-lists, and any vendor who insists they are should be transported back to the middle ages and given free accommodations in the Tower of London where they knew what to do with people who preached blasphemy) – it’s about functionality. Any vendor can add a dozen new features into the next release, but if they don’t enable your process and save you money, what’s the point?

Technology Trials 2012 – Part III

In our last post, we assumed that you need to find a new solution, either partial or full, for one or more of your supply management functions (procurement, sourcing, logistics, inventory management, etc.) and discussed the second (set) of question(s) you need to ask when initiating the process to find a new solution. Today, after determining that you need a new solution and have time to find (and implement/integrate) one, and that you know what the critical functionality of that solution needs to be, we are going to discuss the next (set) of question(s), which is:

(03) Do you go with an end-to-end solution (suite) or best-of-breed point solution(s)?

In order to make this determination, you need to answer:

  (03.1) What are the relative costs?
  (03.2) What are the relative benefits?
  (03.3) What is the ROI?

and look at the answers over multiple time-frames, with 3 years, 5 years, and 7 years being common (especially if there are solutions with significant up-front license, implementation, integration, and/or training costs or long term benefits, such as support for upcoming regulations or standards).

When looking at the costs, you need to do a detailed cost analysis (such as the one outlined in SI’s post on How Much Does That Enterprise Supply Management Solution Really Cost) and take into account every cost.

When looking at the benefits, you need to look at the ability to reduce hard costs (by freeing up resources for other activities or by providing you the ability to strategically source more and get more costs under control), reduce soft costs (by facilitating SRM, minimizing support or third party system costs, etc.), and generate value (through better support for New Product Development, an open system that can be used by the entire enterprise for Contract Management [for example], or significant analytic capabilities).

When calculating the ROI, you need to assign each benefit an associated dollar value for the time period in question, and then calculate the expected ROI of an end-to-end solution for the target timeframe(s) and the expected ROI of (a) best-of-breed solution(s) for the target timeframe(s). If one is clearly greater than the other, then that is the path you should take. If they are about equal, you generally sway towards the solution with the quicker implementation timeline. After all, given the choice between generating an ROI in 3 months or an ROI in 12 months, which is going to make your CFO and CEO happier (and allow you to get more of the technology and talent you need to succeed)?

And now the real trial begins! (More to come …)

Technology Trials 2012 – Part II

Yesterday, we began our Technology Trials 2012 series with a post that indicated that in order to get to the right decision, you have to start with the right question. And the first question you needed to answer is whether or not, if you have a current solution, was it supporting the process you need. If the answer was Yes, or No, but not enough time to get a new solution in place, then you stick with the current solution for the time being, and if the answer was No or Yes and No, you look for a new (partial) solution. (And if the answer was, we don’t currently have a solution, then, by default, the answer is an emphatic No.)

At this point, we’re going to assume that the answer is (at least partially) No, as the series would be over otherwise, so the next question you need to ask is:

(02) What part(s) of the process is not being supported?
This is critical to understand, because you can not select an appropriate solution unless you know what it has to do, and you typically can’t justify a new solution unless you have a gap analysis between what you have now and what you need. But you have to do more than just this. You also need to answer

(02.1) Which part(s) of the process must be supported by the system?
The system doesn’t necessarily need to do everything. For example, while it might be necessary to have a real-time conversation with multiple parties to resolve an issue, it doesn’t have to be through the system. As long as there is a way to import and record the solution determined after the fact, many of the “social media” features of consumer platforms are not necessary. For example, given the choice between “real time problem resolution” and “3-way match” in an e-Procurement system, I’d choose the latter. The first may be cool, but it isn’t going to prevent millions of dollars in over-spending (like the second will).

(02.2) Will any of the target functionality interfere or conflict with any other solution(s) currently in use by the organization?
This is often overlooked during a gap analysis, but can greatly impact how long it takes to get a new solution approved. If, for example, your problem is that your sourcing/procurement solution doesn’t store contracts (and associated meta-data), and you want to fix this, and there is a(n incompatible) contract management solution being used by Legal, you might get push-back from IT as they would have to support two CM systems (that they are unable to distinguish between) or the CFO who doesn’t want to spend more money (as he thinks you should just use the other system). While this should not deter you from identifying the right solution, if you don’t have all the facts, and the counter-arguments, up front, you could be considerably delayed in your quest for purchasing fire.

(02.3) Can the process requirements be integrated with the requirements for the existing system that are still current?
Don’t overlook that you are looking for an end-to-end process solution, and the RFP should specify the functionality required by the end-to-end solution, including that functionality, existing and not existing, that is critical.

In our next post, we’ll discuss what comes next.