Category Archives: Technology

Technology Trials 2012 – Part VI

In Part V we outlined the most critical question that needed to be addressed after you decided that you needed a BoB or FuSS solution and what the critical features of that solution was, namely, what was required for globalization.

Now that we have outlined the high-level functional requirements from a multi-faceted view, we’re ready to go to market with a supplier RFI, and, in particular, an RFI that answers the following (set of) question(s):

(06) How will you support my solution requirements as a vendor?

And, more specifically:

  (06.1)Who are your references who are comparable in size, scope, and needs to us?
  (06.2)Does your solution support the functionality we absolutely require? Explain.
  (06.3)Do you currently have customers in the (majority of) countries we need to deploy in and do you support the (majority of) languages that we require? (If you don’t currently support all the languages we need, how long does it take to add another language into your solution?)
  (06.4)What is your organizational culture?
  (06.5)How many non-critical functions on our wish-list can you address?
  (06.6)How financially stable are you? Will you open your books to us or let us speak to a reputable third party that has seen your books?
  (06.7)What is the total end-to-end cost of your solution up-front and on an annual basis? Will you guarantee this in writing?
  (06.8)What third parties can we talk to who will verify your claims

  (06.1)Who are your references who are comparable in size, scope, and needs to us? And can we speak to them?
As they say, the best proof is in the pudding, and the best pudding that a vendor can give you is references who are comparable in size, scope, and needs that they are currently serving successfully. They don’t necessarily have to be in your industry, but the industry should be similar enough that you can feel confident that the vendor could handle you. For example, electronics and component manufacturing are similar, but finance and pharmaceuticals aren’t that close.

  (06.2)Does your solution support the functionality we absolutely require? Explain.
After you’ve divided your requirements into must-haves, should-haves, and nice-to-haves, ask the vendor to describe in detail how all of your must-have requirements will be met and briefly how they will meet each should-have that is on your list.

  (06.3)Do you currently have customers in the (majority of) countries we need to deploy in and do you support the (majority of) languages that we require? (If you don’t currently support all the languages we need, how long does it take to add another language into your solution?)
If you need to deploy your solution across 20 countries and the vendor has only deployed across two countries and both were English speaking, how likely is it that the vendor will be able to meet your needs? On the other hand, if you only need to deploy across 6 countries and the vendor has deployed across 30 countries in twice as many languages, you know that you’re covered now and likely will be covered for years to come.

  (06.4)What is your organizational culture?
When all is said and done, if you have three vendors who appear equal from every other perspective, the tie breaker will be the vendor’s organizational culture and how cleanly it meshes with yours. Even if you are IT and services savvy, you’re always going to need some help from the vendor. Maybe not that much compared to its other customers, but the vendor is typically the only expert in tweaking every last bit of value out of its solution.

  (06.5)How many non-critical functions on our wish-list can you address?
Even though the functions are non-critical and wish-list, they’re on the list because someone wants them, and every wish-list item put there by a stakeholder that can be met is one less reason for resistance that you won’t have to overcome.

  (06.6)How financially stable are you? Will you open your books to us or let us speak to a reputable third party that has seen your books?
Considering the effort that goes into solution selection, the last thing you want is to select a solution from a vendor that goes bankrupt in a year. Even if the code is under escrow, and you get complete rights to it, the value of the solution will decrease rapidly once the vendor stops improving it. That’s not a situation you want to find yourself in.

  (06.7)What is the total end-to-end cost of your solution up-front and on an annual basis? Will you guarantee this in writing?
Considering that there will likely be implementation costs, integration costs, and training costs in addition to up-front license costs and annual maintenance costs, and may be costs for third-party middleware, data feeds, and other solution components, it’s important that you know all of these costs up-front and account for them accordingly. Otherwise, that 500K solution with an expected ROI of 9X return might actually be a 1.5M solution with an expected ROI of 3X – which won’t impress the CFO at all come performance evaluation time.

  (06.8)What third parties can we talk to who will verify your claims
The vendor should be willing to give you names of investors, analysts, and bloggers who can verify their claims. If these do not exist, be wary. A good vendor is open about it’s capabilities and claims. It doesn’t hide behind NDAs and embargoes.

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 …)