Category Archives: Technology

Get Your Head in The Clouds!

Share This on Linked In

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.

Will This Recession Yield The Return of the R&D Lab?

Share This on Linked In

If you listen to the doom and gloom economists, this recession, despite Obama’s many stimulus packages, is still going to be worse than the Great Depression. As such, as noted in a McKinsey Quarterly article from late last year, it might be useful to derive “innovation lessons from the 1930’s”. Despite the usual executive behavior of acting “cautiously” and delaying investments until the economy returned, some companies made deep investments in R&D and innovation in the 1930s. DuPont boosted R&D and developed neoprene (synthetic rubber) which was in every automobile and airplane manufactured in the US by 1939. Hewlett-Packard and Polaroid were established. Radio Corporation of America returned to profitability as it shifted towards the television market. At least 400 in-house R&D labs were established between 1929 and 1936. And many of these companies, who were able to attract skilled workers upon the destruction of their un-innovative counterparts, flourished.

For almost fifty years, the R&D labs were the center of innovation, and, arguably, of economic growth until the outsourcing, offshoring, down-sizing and right-sizing crazes hit us. Now they are almost non-existent … and the economy is floundering. Maybe I’m imagining it … but I think there’s a correlation.

Besides, think of the new innovations that might appear if the R&D lab returned. New computational models and architectures for cloud computing that will enable the creation of customized true end-to-end supply chain applications in weeks and not years. New low-energy cooling technologies that would dramatically decrease the costs of refrigeration. Better, cheaper high-efficiency solar panels that can be installed on your hybrid fleets. Cheap 3-d model creators and portable fabrication labs for new product design (like the Sun Modular DataCenter or the Google Container Data Center, but for engineers!). And I’m not even being imaginative yet …

Anyway, long story short, there are three things you should take away:

  1. Only acquire IT from solution providers who are still spending on innovation
    A lot of the smaller solution vendors aren’t doing so well now, and they’ll be hard pressed to compete when the rebound occurs and the innovative providers are releasing new solutions and they are still selling the same solution they had five years ago.
  2. Only source critical, custom components from manufacturers investing in new production technology and process improvement.
    The global decline in consumption has resulted in a significant drop in new production. The manufacturers being hit hardest are those unable to offer lower prices or added value. These manufacturers are generally those running old technology and utilizing inefficient and out-of-date processes. Like the IT providers who are not innovating, some won’t survive. Those manufacturers who have been investing in new technology to create higher quality products faster and cheaper and in lean & six sigma process improvements are generally more stable and more likely to be around for the long haul.
  3. Create a Center-of-Excellence
    Do your own R&D on best practices, market trends, and emerging technology. Then share that knowledge across your global operations. You’ll outperform your competition and become organizational superstars.

Earn Your Customer’s Loyalty … And Maybe You’ll Keep Them

Share This on Linked In

Customer acquisition is an investment, but customer retention delivers profitability, so you should do what you can to keep your current customers, as per a recent article on “how to earn your customers’ loyalty” in CRM News.

The article delivered seven strategies to keep your customers loyal which is worth a review, especially if you are a supply chain department whose survival depends on keeping your internal customers happy.

  • Provide Stellar Customer Service
    It’s a key differentiator in the retail world and in the boardroom.
  • Make your Web Site a Customer Self-Service Center
    And open your applications up to the company, at least for status reporting.
  • Use e-mail to communicate with customers.
    It’s great for keeping them up to date.
  • Pick Up the Phone
    Call your customers regularly to see how they are doing or if they need anything.
  • Solicit Customer Feedback
    Listen, and Respond. Customers want to feel valued.
  • Reward Customer Retention
    Share the success. There’ll be enough to go around.
  • Establish Customer-Friendly Policies.
    Your job is to get them what they need at the best price.

Does Your Software Come With A Bill of Rights?

Share This on Linked In

Ray Wang of Forrester recently released Version 2 of their “Enterprise Software License Bill of Rights” and Vinnie Mirchandani did an excellent revision over on Deal Architect that not only outlines what your rights should be but identifies some key issues you need to be aware of if your vendor does not provide you with a bill of rights as part of their textbook thick contract.

In particular, watch out for:

  • 40%+ SG&A
    that money should be going to R&D to give you a better product for the 22% to 30%+ maintenance you’ll be paying
  • no support/defect stats
    your provider should be measuring them, actively working on improving them, and be willing to provide them on request
  • certified service partners
    if they don’t have any, or won’t certify any, that’s a problem
  • an inability to flex-up / flex-down at each quarter
    you don’t want to be paying for shelf-ware
  • confusing SLAs
    you want clear, concise, and to the point

And be sure to check out Vinnie’s Version. If you going to invest seven, eight, and even nine figures (over the long term), you better make sure up front that you can get what you pay for.

High Tech = High Value = High Performance

Share This on Linked In

A recent article in i2’s Supply Chain Leader by Kevin O’Marah of AMR on “how [do] you design a supply chain organization to achieve maximum value” did a great job recounting dozens of statistics that we already know about how great supply chains make great companies, but unlike many of the AMR write-ups, it included one key point that often gets overlooked.

Ownership of technology solutions really does empower the entire supply chain organization, taking it to the next level of performance.

While only 41% of overall participants saw technology enablement as a supply chain organization responsibility, 56% of the AMR Research Top 25 saw the importance of technological responsibility in the supply chain organization. Considering that this is a select group that, in 2007, delivered a total return of 17.89% compared to the Dow Jones Industrial Average of 6.43% and the Standford & Poor’s 500 Average of 3.53%, I’m glad to see that these leaders are stepping up and acknowledging the value of good supply chain technology.

What other technology can identify millions of dollars of savings? Streamline payment processing costs by 90% AND insure you are paying against contracted rates? Enable visibility across your organization? None. In your average organization, no other information technology can deliver returns that come close to the returns supply chain information technology can deliver. So if you don’t have an end-to-end supply chain information technology solution, go out and get one!