Category Archives: Technology

Recession? What Recession? Here’s 91M for Inventory Software

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I couldn’t help but notice this recent article in Intelligent Enterprise that noted that “SAP offered 91M for SAF”. Now, good inventory management software is extremely valuable because it can significantly reduce the 30%+ overhead (on product cost) that many organizations lose in inventory each year, but SAF is a little company of about 100 employees that only had 19M in revenue last year. That’s a 4.8 multiplier … in a down economy!

Forget the current share price, which likely skyrocketed on the rumor alone. You invest based on the likelihood of getting your money back in a reasonable time-frame. Considering that most small company sales drop considerably when they’re swallowed by an 800 lb gorilla, SAP will be lucky to get their money back in five years.

But more importantly, if that 91M had been funneled into an R&D group with some freedom, imagine what that could have built! Maybe they could even realize their Vision of the Future. Instead, as far as I can tell, they’re just spending more of their customer’s money on empty calories by paying too much of a premium. Well, at least they ain’t spending 5 Billion for Business Intelligence.

Preventing Data Loss

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With the recent introduction of the new Massachusetts Data Privacy Law, known to lawyers as 201 CMR 17.00, which is the most far-reaching state-mandated privacy law to be enacted to date, you can expect a slew of states to follow suit. That means that, shortly after Jan 1, 2010 when the Massachusetts law comes into effect, you can expect that no matter where you operate in the US, you can expect to be subject to strict information security and privacy laws as you transfer data back and forth across your supply chain channels. But are you ready?

According to RSA, the Security Provision of EMC, you need to:

  • understand what data is sensitive,
  • know where the data resides,
  • understand your risk,
  • select the appropriate controls,
  • manage security centrally, and
  • audit security to constantly improve.

But will this be enough? According to the Aberdeen Group, who recently released a white paper on “6 Best Practices to Prevent Enterprise Data Loss”, more than 262 million records have been breached since January 2005. Considering that an average data loss will cost an average company $6.6 Million per breach, this, combined with upcoming laws that will let lawyers go to town, makes this a Billion dollar problem in your supply chain.

So next time you upgrade your supply chain technology, you might want to spend extra time examining the software security controls, whether or not it can implement your policies, and whether or not it has an API that will allow you to integrate security and policy management into your data loss prevention (DLP) software platform. Just like LDAP and single-sign on was important at the beginning of this decade, DLP is going to be key as we enter the next one.

System Implementation Tips from the SSON

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Every technology implementation is a disaster waiting to happen (and many actually end up that way in practice) — and this goes double in supply chain where millions of dollars could be riding on every transaction. Success requires good project management, good change management, and eternal vigilance. And a few tips every now and again don’t hurt. Here are “ten tips for system implementation”, courtesy of the SSON.

  • Keep Focus
    Avoid scope-creep like the plague. While it’s important to keep track of good ideas that arise and, if time permits once the base implementation is complete, implement a few of them, scope-creep can kill a project within weeks of its start.
  • Optimize from the Beginning
    What’s the primary task for the system? And how do you make that task as quick and easy to do as possible?
  • Get Buy-In
    A system that no one uses isn’t useful. Make sure your users are on board with respect to utilization and training.
  • Get the Right Team for the Job
    Would you hire a plumber to wire your house? A lawyer to diagnose a health problem? So why would you hire a consumer Web 2.0 expert to implement your ERP system?
  • Don’t Forget the Users
    Once you’ve got buy in, be sure to keep them informed and involve them in important decisions. Otherwise, that buy in might disappear by the time the system goes live.
  • Beauty is Not Truth
    Usually, you have a choice, due to time and cost constraints, between a system that looks good and a system that works good. Hopefully you know how to choose the right one.
  • Don’t Be Too Rigid in the Schedule
    You never know everything when you start a project. Some phases will take longer, some phases will finish faster. Have the necessary flexibility.
  • The Budget is Golden
    While some flexibility is required where the budget is involved, you have what you have and you need to keep that in mind at all times.
  • Communicate, Communicate, Communicate
    The best way to keep your users excited is to communicate constantly, showing that you’re not forgetting them.
  • Go All the Way
    The implementation is not complete until the goal is accomplished. Which is not a live system, but a live system that does what it was supposed to do.

Agile Goes Global (in Your Supply Chain)

As noted in a recent Baseline Magazine article on “Building an Agile Organization”, agile organizations have processes and structures that enable them to know what is going on both internally and externally, as well as to provide the mechanisms needed to act quickly on that knowledge. This agility not only helps them to respond to changing market conditions, and survive tough times, but also helps them in their global expansion and global sourcing efforts.

As per a recent article in Global Services on globalization & agile, the key principles of agile, which is not just for software development anymore, provide us with the cornerstones of global sourcing. Specifically:

  • Collaboration and CooperationAgile requires a higher level of collaboration and communication across cross-functional teams than exists in an average organization. Done right, agile drives the formation of relationships, problem resolution, decision making, consistent delivery on (global sourcing) projects, and faster time-to-market than other approaches.
  • IT & Business AlignmentIterative refinement of requirements and project plans allows the stakeholders to buy into a new system or software acquisition sooner and to adapt to changes that support market conditions and trends quicker.
  • Risk MitigationWith an agile mindset, plans and proposals are analyzed for potential problems and risks sooner, allowing them to be addressed, and mitigations to be devised (and, if necessary, incorporated into a contract) before a project is completed or a contract is signed. Risk is controlled, managed, and communicated continuously.
  • Financial ManagementAgile focusses on managing project value, continuously monitoring estimated costs and expected returns, and insuring the ratio is sensible and profitable to the business.

In other words, an agile mindset goes beyond simple software selection, development, and implementation to the core of a new global sourcing strategy that allows you to be more productive and more effective in your global sourcing efforts.

What If Your Supply Chain Software Vendor Goes Bust?

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A recent article in Logistics Viewpoints, the ARC Advisory Group Blog, asked a very important question given that many of the smaller vendors in this space are not on the solid footing they once were — What If Your Supply Chain Software Vendor Goes Out Of Business?

It’s a good question, especially since you’ll be in bad shape if you haven’t negotiated perpetual rights to not only the application but the code-base if you’re using a hosted solution and the vendor goes under or if you haven’t negotiated 24/7/365 full data access if you’re using a SaaS solution with mandatory notices before ceasing of operations, as I have noted you must do on several occasions.

In the first case, unless you happen to have an A1 development team in-house who can maintain the code base and customize it to your liking with little impact to your overall IT budget (which is likely not the case for 99% of non-IT supply chain companies), you’re going to have to migrate to another solution. If you suspect your vendor is going to go bust, and see the gradual warning signs of multiple layoffs, lack of solution updates, increased turn-around time on issue resolution, lack of insight into the roadmap, and the run-around when you try to inquire into their financial health with (what’s left of) senior management, then you need to start evaluating your options. If you start early, you can analyze your options, find the best one, and develop a staged migration plan that will minimize interruption to your day-to-day operations. If you don’t, you’ll be relying on expensive third party maintenance and prayers to keep you running until you can accomplish a stressful, organizational wide, all-at-once changeover.

In the latter case, you still have to migrate to a new solution, but if you negotiated full data access in a standard format, it’s just a matter of selecting the next best SaaS solution, loading all of your data, and then hiring a third party integrator to re-create any linkages to your current applications for automatic data exchange. You’ll have extra work while you manually export and import data until the new linkages are live, but since you’ll (again) negotiate full data access and the ability to export and import what you need, when you need it, with a bit of training and documentation, the interruption to your staff’s daily routine should be moderate at most.