Category Archives: Technology

Want a Successful Supply Chain Enterprise? Architect It!

As per Wikipedia, an enterprise architecture is a rigorous description of the structure of an enterprise that describes the terminology, the composition of the subsystems, their relationships with the external environment, and the guiding principles for the design and evolution of an enterprise. The goal of an enterprise architecture exercise is an operational description of the organization that is comprehensive and includes enterprise goals, business functions, business processes, roles, organizational structures, business information, software applications, and computer systems that are in alignment.

Done right, an enterprise architecture provides the logical framework that establishes the links between business strategy and organizational structures, processes, databases, and technologies and improves organizational performance by decreasing organizational cost, reducing complexity, reducing risk, and increasing organizational agility — keys to success in today’s tough economic climate.

Furthermore, the integrated view of business and IT architectures not only allows for improved performance, but limits operational risk by allowing for the controlled coexistence of old and new processes. It’s a great recipe for success as it allows for the controlled evolution of the supply chain function from good to great.

As proof that it works, consider this recent article in Startegy + Business on Strategy by Design which discussed how even a large (UK) government agency, which had been largely paper-based with fragmented workflow processes and outdated IT systems, was able to reduce the average time to process claims by more than 70% while slashing the number of processing centers by 60% by adopting the discipline of the EA process.

So how does one master Enterprise Architecture and build a successful supply chain enterprise? According to the article, the organization focusses on the dimensions of:

  • Strategic Alignment

    that focusses on achieving real business results

  • Leadership & Staff Development

    where top management communicates the intended value throughout the organization

  • Performance Measurement

    that accurately captures the impact of the EA initiative on a regular basis is critical to strengthen the message

  • Organizational Structure and Formal Processes

    that provide a strong foundation

It’s a good message, and a good plan.

Share This on Linked In

Empower? Or Incitement?

It’s that time of year when Emptoris holds their annual conference, invites all the bloggers (but me) to their peace pipe pow-wow, and somehow stirs them into a blogging frenzy which results in the temporary flooding of the bitstream with post after post about Emptoris. It wouldn’t be so bad if we got good information out of it. However, possibly due to the “selective reporting” favored by members of the previous management team, this hasn’t been the case historically.

And while it does look like the new team is working harder at being open and communicating (except where financials are concerned, but it’s certainly better to share nothing at all then inflate the numbers by 20M), despite the flurry of activity over the last few days (which likely isn’t the end), we haven’t received much in the way of useful information yet, and, more importantly, it looks like most of the bloggers (except Bob) have missed the only point that matters. But first, a recap of the stories to date:

Spend Matters

  • “Emptoris Empower Kicks Off — What’s on My Mind to Focus on?”What to ask? What to ask?
  • “Emptoris Empower Dispatch: Emptoris is Thriving — But What’s Behind the Numbers?”They claimed 91% “booking sales” growth in the first half of this year, and that a lot of new business is from “channel partners”.
  • “Friday Rant: Emptoris Echos — Cloudy With a Chance of Software”Emptoris takes to the clouds with echOS — is a cloud-based delivery system built to streamline the deployment and management of Emptoris solutions.

Procurement Leaders

  • “Emptoris Empower: procurement’s moments of engagement”Geoffrey Moore’s keynote got everyone excited.
  • “Emptoris Empower: beating the benefits drop-off”Patrick Echkhert’s presentation (on behalf of Cardinal Health) made a great point, implementations have to revolve around a sustainable savings/benefits plan.
  • “Emptoris Empower: the case for mastering risk”Accenture’s Randall Moore explained how becoming a risk master leads to real returns and that technology and talent investments can pay for themselves 8-fold when you reach a level of mastery.

Gartner (Debbie Wilson)

  • Dispatch From Emptoris Empower 2010$2 million investment in its data center infrastructure. Some procurement friends expressed frustration with gaps in functionality that aren’t being addresses quickly enough.

Supply Chain Matters

  • “Emptoris 2010 Customer Event- An Anticipated Report of Glowing Progress”The management team has been clearly focused on getting closer to customer needs, while making implementation of its technology easier for customer to navigate and manage.
  • “Emptoris Empower 2010 Customer Event- Summary Impressions”Over 100 customers went live with Emptoris applications this year. Emptoris signed a global agreement with SAP regarding the use of SAP Business Objects technology for business intelligence reporting and analysis needs across the Emptoris suite of applications. A new and transformed management team.

That last point is key, if you happened to catch one of Wednesday’s press releases, you’ll see that Emptoris added three new senior executives. Add this to the number of new executives the new CEO has brought in since his arrival, and you’ll see that the current management team is almost entirely new. At this point, he’s only a few executives away from an entirely new management team (and I will be thrilled the day it’s entirely new). This will be the key to their success (or failure) in the future.

In my view, Emptoris’ biggest problem historically has been their management team, which appeared to be hand-picked by the former CEO to mirror his corporate philosophy (and never challenge his way of doing things) — which obviously wasn’t the right one for Emptoris (because, if it was, why did they never truly make profitability and need yet another funding round last year just to stay afloat, almost 9 years after formation?). I hope the new team maintains the “get close to the customer and figure out what they need” strategy. In this economy, I think that’s your only chance of success.

Should the Force(.com) be With You?

These days, it seems that everyone wants a piece of the Force. I’m not sure why. Maybe they think that they’ll be able to jump 20 feet high, survive a thousand meter fall, and move spaceships with their minds. Who Knows? All I know is that vendor after vendor in the e-Procurement space are following the lead of vendors such as Coupa, SupplierSoft, and CVM Solutions and (re)building their application on Force.com.

And I’m not sure it’s the right thing to do. First of all, as I’ve told you many times, the cloud is not a fluffy magic box. It’s just another delivery model, with it’s own advantages and disadvantages (and the biggest disadvantage being that you have zero control over performance).

Secondly, the convenience of having all of your applications and data in one place is just as convenient from a hacker’s point of view as it is from yours — especially if his primary line of employment is corporate espionage. One weakness in the security layer and BAM! … all of your data belongs to him. Plus, he doesn’t even have to social engineer an account from your users to social engineer legitimate platform access … if there’s a weakness in the data access protocols, any account from any customer will do.

Thirdly, what happens when the whole thing goes down, as it recently did for the Virginia Department of Motor Vehicles when “a breakdown in the data storage system” (Boston.com) caused them to go offline for days? If the black swan sinks his teeth into the Force, and takes down a primary data center, do you really think there’s enough spare capacity in the system for them to failover without interruption and data loss? And even if they do, will performance be tolerable?

I’m not saying that your vendor shouldn’t do it, or that you shouldn’t do it either, but that you should think about it. Remember, there are two sides to the force — and if you forget about the dark side, you won’t be prepared when it rises up against you.

Share This on Linked In

Maybe Coupa Should Build a Coupe

I recently gave Coupa a bit of a chastising in a recent series (Part I, Part II, and Part III) for failing to impress me with the rate of innovation ever since Dave Stephens left, as it looks like they’ve spent most of the last year developing flash (UI) and not substance (functionality).

But maybe that would be the right strategy for Coupa. Let’s look at the reality. There’s a large market out there consisting of companies (mostly mid-size, but some large and small) that have never used anything resembling a (modern) e-Sourcing or e-Procurement solution. At most of these companies, they don’t even know the difference between e-Sourcing and e-Procurement. All they know is Google and Amazon, which we all know are not the F-350’s of the B2B world.

At these companies, something that looks like an Amazon, searches like a Google, and connects like a Facebook goes over well. (After all, they’re not cricketers, and don’t know the perfect recipe for B2B canard a l’orange.) They don’t know that real e-Sourcing involves sophisticated analysis and negotiation techniques or that real e-Procurement is actually a nine-step process built around time-tested best practices to insure that the organization orders the right product at the right time in the right quantity off the right contract at the right price. They still think that ordering office suppliers and commodity electronics online is B2B e-Procurement. Forget about the fact that some of the old-time sourcing pros are claiming that strategic sourcing is dead, these companies haven’t even progressed far enough along the commerce curve to know what strategic sourcing is!

In other words, this market has no idea why it needs an F-350 work horse, and would thrilled to be getting a Chevy Cobalt. If Coupa adopts a keep-it-simple strategy, instances of their platform will sell like hot cakes, and Coupa will do great, as long as they don’t discover that there’s a major fault in the power steering five years down the road after almost one million (1M) seats have been sold.

Share This on Linked In