Category Archives: SaaS

The Best Supply Chain Security in the World is Useless …

… if you forget to lock the digital back door!

As Tim Garcia pointed out in a recent article over on Manufacturing Business Technology, “In Securing Your Supply Chain, Don’t Forget To Lock The Back Door”, because up to half of all reported company data breaches slip in through unguarded digital back doors. Just because you take all of the security precautions that are possible with your own network, this doesn’t mean that you can account for the practices of other companies your enterprise interacts with on a daily basis though digital backdoors that could be contained in every piece of enterprise technology that you use.

So what should you do? For starters, follow the advice in Tim’s article.

  1. Use up-to-date anti-virus and monitoring systems on all inbound and outbound connections.
    Whether it is between business systems at different locations, your SaaS and cloud providers, or third parties — protect all data links.
  2. Restrict all sensitive digital communications and transactions to secure, monitored, channels.
    Don’t allow sensitive data or monetary transactions to flow over unapproved, unsecured channels for any reason.
  3. Analyze every nook and cranny in your digital supply chain for vulnerability.
    Thieves and competitors will find the one digital pathway you miss or ignore in your vulnerability assessment.
  4. Communicate the Security Procedures and Protocols
    Make sure the entire C-Suite is aware, approves, and communicates them downward.
  5. Have a Recovery Plan
    Despite you best efforts, it only takes one newly discovered zero-day exploit or one employee who forgets to encrypt some critical data for thieves and spies to break into your network, steal your data (and your customers’ data), and put you in a bind. Have a plan to deal with the worst-case scenario as soon as it happens to minimize the losses to your bank account and your corporate reputation.

In addition, SI recommends

  1. Have harsh penalties for (repeat) offenders who do not follow the procedures.
    Just like some employees will continue to buy off-contract unless you have harsh penalties in place to curb this behaviour (such as no reimbursement without an approved PO signed by their supervisor and a Procurement executive, write-ups that negatively impact their performance review and maximum bonus, etc.), some employees will take shortcuts if they think its easier or quicker to do so or the security procedures are overkill.
  2. Look for systems where you can control the distribution of data seen by your suppliers.
    If the only way to restrict the data that is viewable by a user logged into one of your systems is to export it to Excel or PDF, and this is the primary mechanism used to share data with your suppliers, even if it’s sent encrypted, once the supplier decrypts it – you have no control. If, on the other hand, the system implements fine-grained security and you can create customized supplier views and restrict data exports, this limits what the supplier sees and its options for sharing that data. It’s even better if the supplier can create customized sub-views for the data it needs to share with one of its suppliers working on a part of the component it is building for you. Even though the military often goes crazy with its security measures (as anything on the public internet is not “protected” just because you print it off and put it in a binder), they have the right idea — sensitive data that is sent outside the four walls of the organization should be restricted to what is need to know.

Good SaaS vs. Bad SaaS

A recent post over on Richard Anson’s blog on “11 Crucial Tactics for SaaS Pricing”, while written for new SaaS vendors who need to know how to price their solutions, did a great job of helping to point out some of the key elements of a good SaaS solution sales process vs. a bad SaaS solution sales process as well as some key elements of a good SaaS solution from a customer’s perspective vs. a bad SaaS solution from a customer’s perspective.

In particular, it focusses in on some of the key non-functional characteristics that should be examined in your SaaS purchase process. These non-functional characteristics can easily be summarized in a quick side-by-side comparison of good SaaS vs. bad SaaS.

 

Good SaaS Bad SaaS
Value-based Cost-based
ROI-justification Process Improvement
Business Case Justification Potential Manpower Reduction
Priced According to Company Size and Utilization One Price Fits All
Competitively Priced Priced Out of the Ballpark

 

In other words, if the SaaS solution is good, it will be competitively priced, and priced according to your company size and intended utilization, come with a business case justification, deliver a proven ROI, and clearly deliver ongoing value.

And if a SaaS solution is bad (for you), it will be priced out of the ball-park with respect to its competition (and be either too expensive to deliver value or too cheap for the company to sustain over the long term, which will lead either to the provider’s failure or substantial price increases at contract renewal time), have little in the way of a solid business case justification, or have a poor ROI over the short and/or long term. SaaS is more than features, functionality, hands-off management, and a cool web experience — it’s about delivering value to your bottom line.

For insights on how to cost out the TCO of a SaaS solution, and compare that TCO to an installed solution, see SI’s classic post on Uncovering the True Cost of On-Premise Sourcing & Procurement Software. For insights on what constitutes a good SaaS contract, see SI’s classic posts on SaaS Contractual Considerations (Part I and Part II). And remember, as per SI’s recent post on Maximizing ROI from Technology, it doesn’t matter how strategic the IT Vendor is, it only matters how strategic the solution they offer is.

FREIGHTOS: Helping to Bring Freight Into the Modern Era

Freight is often the bane of the Procurement professional, especially when such professional needs a quote in a hurry. It’s not uncommon even in this day and age for a Procurement professional to call up a freight carrier for a spot quote and have to wait two or three days. It’s absurd. Quotes, or at least quotes on standard table rates, should take two or three seconds. The only time you should wait a couple of days for a quote is during a master contract negotiation for hundreds of lanes, as you will want to give the carrier some time to determine their absolute best rate in this situation.

This is the primary reason BuyTruckload.com was founded. The founders, veterans of the logistics management software industry, got fed up with both having to wait for bids on the spot market and being unable to shop the business to enough carriers to get the best rate.  But this isn’t an article about BuyTruckload.com, even though BuyTruckload.com does a wonderful job in North America. Why?  Because BuyTruckload.com it doesn’t solve the global shipping problem, doesn’t address other modes of transit, and it doesn’t account for the fact that you might have contracts in place (that the buyer might not even be aware of).

In order to address this problem and speed up the freight quote time, on or off contract, in the global market place, Zvi Schreiber and his team built FreightOS (pronounced Freight O.S., or even freigh-toss, as it is a freight operating system and not a brand of breakfast cereals), which is an technology platform that enables an on-line network of global freight carriers to provide instant spot-rate and on-contract quotes when a (potential) customer needs them.

When a carrier, or freight-forwarder / 3PL,  signs up for the FreightOS network and uploads their standard rate tables for ocean, air, and land-based shipping for all of the routes they service, customers can access the carrier’s portal on the FrieghtOS network and get almost instantaneous quotes (which, depending on the number of routing options and shipment goal — be it lowest cost, fastest delivery, etc. — could take a few seconds) for the route(s) of their choice. All the buyer has to specify is the origin, the destination, some basic load characteristics (what is being shipped [boxes, pallets, etc.], dimensions, unit weight, and quantity), the desired pick-up date, the allowable modes (land, ocean, air, or any combination), whether or not the load is hazardous, if insurance is required (and the load value if it is), the applicable HS code(s), and if a customs brokerage is being used and click a get quote button. Within 10 seconds, the buyer will get the quickest delivery quote, the cheapest quote, and, if applicable, some suggestions for nearby delivery locations that are quicker or cheaper (especially in the case of inter-continental shipments where there are multiple options that require a multi-modal delivery network that consists of air or ocean and truck or rail). Each quote returned will include the total cost, the time-in-transit, the modes of transportation required, and whether or not the carrier will work with a customs brokerage or transport hazardous material. Clicking on a quote will break it down into its constituent cost components, which may include, but are not limited to, basic freight cost, (airline) screening fees, (airline) security fees, fuel surcharges, documentation fees, (airline) handling fees, export declarations, advance manifest fees, etc. If the buying organization has a contract with the carrier, even if it only covers some lanes, they can upload the contract and all of their buyers can get on-contract quotes instantaneously and compare them to off-contract quotes. This can help the buyer discover whether a different routing can save them some money.

Also, after the buyer has requested quotes from their (preferred) carriers of choice on the FreightOS network, they can download their entire quote history to an excel spreadsheet to not only do a lowest-cost cross-carrier comparison by lane, but determine where the real (hidden) costs are. For example, it’s possible that (one of) the biggest cost(s) (in air freight in particular) is the fuel surcharge, and if the buyer can identify this and negotiate a better fuel surcharge rate with a carrier of choice, they could potentially lower their shipment costs going forward. Also, in the case of exports and imports, a buyer can see if any of the security or documentation fees imposed by one carrier are (unreasonably) higher than the market average.

Right now, the FreightOS platform has approximately 20 carriers on-board, but considering the huge cost savings this represents to a carrier that spends a considerable number of man-hours every day quoting on business for which it knows it will only see a 20% to 30% success rate at best, it shouldn’t be long before more carriers sign up. With this type of platform, no man-hours are needed to provide market-rate quotes and the carrier will know that when they do get a call based on a quote provided by the platform, the buyer has product she needs to ship, has decided that the carrier may be able to provide the service she needs in an acceptable price range, and has narrowed her pool of carrier choices down to select few. The founders of FreightOS believe that they can increase the success rate of their carriers by 10% with this tool, but SI believes that this tool could increase a carrier’s success rate by as much as 50% as most buyer’s will only call, at most, the 3 lowest quoting carriers and select the first carrier that can meet their delivery requirements at an acceptable price.

If you have global freight and need a better quoting solution than calling up a carrier who will take, on average, a day or three to get back to you, SI recommends checking out FreightOS. It’s definitely a platform to watch.

IQNavigator Navigates You Through Statement of Work Creation

Since we last covered IQNavigator and their IQ-based Navigation of Contingent Labour Sourcing in 2008, IQNavigator has been hard at work extending their platform and its capabilities to go beyond temporary and contingent labour and also handle project and SOW (Statement-of-Work) sourcing events and the full SOW life-cycle.

Project and SOW sourcing projects, even if they consist primarily of contingent labour, are different from standard contingent labour sourcing events in that a third party is managing the project, payments are (typically) on a different schedule and have to be tracked against a budget, and named resources need to be tracked. The entire process, from RFX, through contract generation and award, to project management and delivery is different.

The customizations in the IQNavigator platform start with the initial RFX creation, which begins with a wizard-based decision-tree workflow. This Decision Manager is customizable by the organization for each type of SOW project that it undertakes, that, based on a series of questions, will configure the proper RFX for the project in question. This series of questions (that can be customized by each client organization), which could be as simple as asking the user to identify the location where the services are required, the category of the work (IT, engineering, advertising, etc.), the length of the project, the expected budget (range) required, and the approvals required, will, once completed, initiate an RFX workflow that will incorporate the necessary elements of the SOW project. The Decision Manager solution was designed to focus on two things:

  1. Delivering the end user to the correct channel (or category) based on Procurement’s operational and/or vendor preferences and
  2. Placing the end user at the optimal point of the defined category workflow based on the end user’s responses

Depending on the answers given, the RFX will include sections for the definition of milestones, budgets, rate tables, (open) supplier selection, support for named resources, questionnaires, and / or required submissions (such as insurance certificates) from the supplier to be considered for the project. The user will then be walked through the definition of the RFX for the SOW project step-by-step (by way of a pre-configured RFX or SOW template).

Milestones are up to the individual who creates the project, can be tied to a budget line item, and associated with one or more deliverables. Budgets can be as simple as an overall budget for the project, or as detailed as a budget category for each deliverable associated with each milestone (if the project is being paid for on a deliverable basis) or by (named) resource if the project is being conducted on a time-and-materials basis.

Suppliers can quickly be selected from a drop-down search box if the organization has (pre)approved suppliers for the SOW project in question, and if the suppliers have provided rate tables, these rate tables can be automatically pulled in and presented back to the supplier (to verify) during their bid. In addition, if the supplier has previously specified named resources, these named resources can be pre-populated as well. Depending on the project, they buyer may also have the option to add additional suppliers (which will be invited to bid on the project as well).

Questionnaires can also be selected from a set of standard pre-existing questionnaires associated with the type of project being sourced. They can be distributed as-is or modified as required. In addition, the user can create their own questionnaire if one doesn’t exist that fits the bill.

When the RFX is complete to the user’s satisfaction, it is sent to the supplier who logs in and completes a bid to their satisfaction. If the supplier has already defined their rate tables and named resources and uploaded their insurance certificates, bidding on the project by the supplier could be as simple as identifying the resources who will complete the work, providing work estimates and proposed fees, and accepting the (automatically calculated) budget.

When all of the supplier responses have been obtained, the buyer, who can choose to analyze each response individually, can also evaluate the responses side by side in a comparison report that includes the (budget) elements of interest and then select one of the responses as the basis of a project award. At this point, the application can generate a draft contract based upon a template that pulls in all of the collected information, and includes any necessary documents in appendices. And if the supplier has signed a MSA (Master Services Agreement) with the buyer that authorizes password-based named-login approvals in the IQNavigator SOW platform as e-Signatures, the contract can be accepted online and work can begin immediately.

The entire SOW application is streamlined to make the sourcing and approval of SOW projects as easy as possible for the project manager, while incorporating as many best practices as possible, which allows the project manager to focus her time on what she does best — managing projects and not running sourcing events.

Then, once the SOW project has been awarded, the project manager can use the rest of the IQNavigator platform to track project progress against milestones, collect time sheets, approve time sheets and expenditures, make payments against project budget categories, and track overall supplier performance. The reporting engine can be used to run reports at any time and the dashboard can be used to monitor current action items and outstanding project milestones and deliverables.

The inclusion of SOW capability makes IQNavigator an end-to-end platform for managing all types of contingent labour required by your organization, whether such labour is managed in house or by a third party. The IQNaviagor approach to SOW is unique, and it is the most thorough solution for generic SOW sourcing events in a contingent labour solution that SI has seen to date.
The IQNavigator platform is a great way to get all of your labour-based spend under management in one platform.

Arena – Taking PLM Deep Into the Supply Chain Part II

In Part I we noted that Arena, since we last covered The Arena Solution in 2007, extended their PLM solution that was built around BOM (Bill-of-Material) Management, Item Management, and Change Management to support (better) Document Management, Quality Management, and Compliance Management. We also noted that they added more enterprise integration capabilities to ensure that their PLM solution integrated with all of the major ERP and MRP solutions on the market. We briefly covered these solutions before noting that, on top of these additions, they just released four new capabilities on top of their existing platform that we are going to cover in depth today.

Arena Projects
Arena Projects is a fully-functional project management solution that is fully integrated with the rest of the Arena suite which adds the dimension of product data to Project Management and allows for product-level production schedules to be defined and integrated with the master project schedule. Like every other project management solution, every project can be attached to a program, given a manager, assigned a start date, given milestones (composed of tasks) and target dates, and updated when a task is completed or milestone is reached. In addition, as it was developed on top of a PLM solution to support NPD/NPI (New Product Development / New Product Introduction), projects can be broken down into the conception, planning, development, manufacturing release, and launch phases. Statements of work and other supporting documents, can be attached and participants can leave notes on projects and issues as the project progresses. And, most importantly, all of the schedules associated with all of the projects in a program can be rolled up to provide a program manager a master view of status. In addition, there is a user view that allows a user to see all of her assignments across projects, recent notifications, documents she has access to, and actions she has to complete.

The solution was also designed to support CAPA (Corrective and Preventive Action) projects and has a built-in understanding of the process that consists of team establishment, problem definition, interim containment actions, root cause identification, corrective action identification, corrective action implementation, best practices to prevent recurrence, and project closure (with the recognition of team efforts). This built-in template makes setting up a new CAPA project, which can be linked to products already in the system, a breeze. The Project module is also integrated with their new Reporting module that can access any and all data in the system, so it is easy for a manager to get a handle on all projects under her purview or for an engineer to see the status of all projects on which he is assigned tasks and prioritize his work appropriately.

Arena Demand
Arena Demand is their demand management solution. Like other demand solutions, it allows a user to enter a forecast against multiple BOMs, aggregates the total demand for required parts or materials against multiple products, and presents the user with the total demand for each part or raw material along with any cost and sourcing information in the system. It’s an obvious feature that, for the longest time, was missing from many PLM systems. And while basic demand management capability will often exist in the MRP that the PLM provider will assume the organization has, the PRM provider is actually making two assumptions here that aren’t always true. The first assumption is that the organization has a higher-end MRP (which isn’t always the case for mid-sized manufacturers with limited IT budgets) and the second assumption is that the customer can easily get the relevant PLM data in the relevant format out of the PLM solution and into the MRP (which can require IT expertise the manufacturing organization does not have). Plus, sourcing doesn’t want to deal with an MRP — they just want a report that, for each product or raw material, presents them with total aggregated demand for the relevant time period, historical cost data, and known sources of supply.

The Arena Demand solution is quite easy to use — for each product, the manufacturing (or marketing) organization can input the expected demand by month or quarter and the solution spits out a report of demand by component part or raw material for the same time period, augmented with known supplier part matches and historical costs, if desired. In addition, since the solution is also tightly integrated with the Reporting platform, the sourcing team can filter in to specific programs, categories, or parts, or even suppliers of interest (if the sourcing team is looking to potentially aggregate volume to preferred suppliers for additional savings).

Arena EI
Arena EI, short for Arena Enterprise Integration, as we noted yesterday, is a new Open RESTful API that can be used to push data into Arena from any system and pull any and all data out of the Arena solution that needs to be pushed into other organizational systems. Supporting JSON data transport over secure https with session ID authentication, the API is flexible, powerful, and secure. And since it has access to all of the data in the Arena platform, it is a powerful, complete solution for data interchange into and out of the Arena platform.

Arena Exchange
Arena Exchange, which is the most revolutionary of the new Arena offerings, introduces the ability for real-time supply chain collaboration to include all impacted parties across multiple tiers of the supply chain during new product introduction, and the solution does so with unprecedented ease. It paves the way for a paradigm shift in the way manufacturers can manage the design and development of new products in an inclusive, but still secured and controlled, fashion.

In the Arena Exchange solution, any one can invite supple representatives to view, comment on, and approve bid packages, sub-packages, or even individual components — as each user can limit the data that the invitee sees to only the data she needs to see. In addition, if the invitee doesn’t have all of the input required for her part of the bid-package, she can carve out a chunk and send that off to someone on her team or to her supplier representative if needed. The relevant parts of the PLM can go all the way down to the tier-3 supplier shop floor for rework if need be, and the business impact of this up-front visibility and collaboration will be better DFM (Design for Manufacturing), faster TTM (Time-to-Market) due to fewer errors, less scrap and rework, lower cost, and higher quality.

The platform, which can be put on top of any PLM solution (not just Arena’s) that stores its files in standard PDX (Product Data eXchange) format (an international electronics manufacturing initiative standard), has a very simple interface that allows the user to access the specifications, bill of materials, sourcing information attached files, and (change) history by item, manufacturer item, and vendor item. The user can then add comments, send (selected portions) of the BOM to an existing (or new) user, add reviewers, define due dates, submit approvals, and ask questions. Drill-down is easy, so the user can quickly get to the appropriate sub-assembly, component, part, or raw material. At any time, the user can see the (rolled-up) status of the raw materials, parts, components, sub-assemblies, and assemblies within her purview as well as which users didn’t respond. Arena Exchange is the solution the PLM industry has been missing and should be evaluated by any manufacturing organization wanting to take their NPD and NPI processes to the next level.