Simplicity

Business Infrastructure

The Internet cable story

Is the internet a potential enemy weapon? A chunk of South Asia's booming economy relies on the internet. We take a look at the role the internet is playing in these economies and how they have suffered with disrupted cables.

Yes, it could have been a ship's anchor as few unconfirmed report suggests however it maybe it's too large an incident to be a coincident. But are we taking it too far by roving our suspicious senses to miscreants that may be?

While all of that may be true, it is best for us to wake up. Us, in the countries that are building the blocks of their economy by using the internet as our magic wand to information assimilation and dissipation. What has caused people to raise question is the fact that these numerous breaks (numbers vary between four to seven) have only affected the Gulf and India and have caused sizeable commotion. Those breaks have affected more than 85 million internet users in India, Pakistan, Bahrain, Saudi Arabia, Kuwait, Qatar, Sudan, Egypt and the United Arab Emirates. But it seems to have had no effect on internet users other countries. This has raised serious questions about our intellectual strength and even security or could be an indication that we are not doing enough to protect our infrastructure.

Reports say that it was anchors of ships crossing the seas that caused the disruption. But sources also say that records of the time that the cables broke show no marine traffic in most of these regions. Since most cables cut lay next to certain specific nations, it is probably not simply a case of infrastructure or economy. More so because reports of ships' anchors cutting cables under the sea have not been established so far.

Under such a scenario, we want to be cautious about where we could be headed if an incident could disrupt business for days and if our intelligence is not equipped enough to manage a sabotage of this magnitude.

Millions of jobs are being outsourced to Indian shores and bright lads of the country are picking up opportunities with arms wide open. Is this trend creating enemies for the economy? Are there potential enemies trying to create hurdles or even pack up the systems for us to be not able to grab a bit of the global economical pie.

The biggest bearers of this threat, therefore, could be the outsourcing industry. The Indian BPO/ITeS industry depends purely on connectivity and when the support of this backbone is withdrawn at any point, the breakdown is unfathomable. I still remember the day of chaos at a UK call centre when we were informed about a connectivity outage for the entire day and the anticipated losses that were incurred. Not discounting the battering the image of company got.

Outsourcing generates streams of revenue and jobs for the Indian youth, they and the whole India shining story can be severely affected with serious repercussion an incident like this can create. With the fall of the Dollar, the struggle is poor enough. Add to it the commotion of technical faults or mishaps and we have the recipe for a collapse.

Even if we spare the outsourcing industry for a moment, there are numerous other places where cables being cut can disrupt business. The exchanges will take a definite hit, as we recently witnessed. The banking system will go for a toss and billions will be lost simply managing the damage thereof. According to Nasscom figures, Indian software and services exports could be earning $60 billion by 2009-2010. With possibilities like this, it is difficult for the industry to take such a heat over so many days.

It's best if we wake up and smell the smoke. Even if we are to believe that some natural or marine issues are to blame, all of us who depend on the internet minute-by-minute also need to secure it from all potential threats. It was a blessing that Indian companies were able to avoid the crisis using alternate land and satellite solutions. Even in the future, large companies with well-developed backup plans for disaster recovery and continuity might not get affected that much vis-à-vis companies that do not have adequate infrastructure to support. But it is a sign that is jeering us to improve or update our infrastructure. Maybe our infrastructure is not fit enough to undertake natural or manmade calamities of these kinds.

The Telecom Regulatory Authority of India is already in discussions with the three primary owners of under-sea cables in India - Bharti, Reliance Communications and Tata-managed VSNL to set up some sort of a mechanism to make our communication network more hard wearing. What companies need is to look at this issue with a microscope.

If we look at the corporate scenario that is a sufferer here and that can do with an immediate solution, one possibility emerges. What went wrong this time and needs urgent attention is the synergy that Internet Service Providers can create if they work in tandem. It would be a good idea for them to come together to create a synergy that allows them to cooperate in such times when either could be the tormented party. At the same time, the end consumer will be served better, which is the end requirements of all providers anyway.

Anything or everything, from email, instant messaging, blogging, virtual operation theater, can stop in a split of second. It is undoubtedly a "potential disaster without any war or weapon". And we cannot wait for that to happen.

www.shirazdatta.com

Posted by Shiraz Datta on March 7, 2008 at 07:58 AM in Business Infrastructure | Permalink

Top 10 Technologies for 2006

"Top Technology" lists are enticing -- who doesn't want to read about the latest gadget or learn how a new application can make our lives easier? This top 10 list is particularly noteworthy, though, because it represents the collected insights of "professionals who sit at the intersection of information technology and accounting."

The 17th annual Top Ten Technologies survey by the American Institute of Certified Public Accountants (AICPA) places information security in the top slot. The list, which was produced based on the result of votes from 2,000-plus AICPA and (for the first time, this year) Information Systems Audit and Control Association (ISACA) members, also suggests that the pace of technological change continues to quicken. Four new technologies -- assurance and compliance applications, IT governance, privacy management and spyware detection and removal -- make their debuts in the rankings. The accompanying analysis fleshes out why these technologies are important to CPAs and also defines each category.

Posted by Dale Wolf on February 14, 2006 at 02:51 PM in Business Infrastructure | Permalink | Comments (0) | TrackBack

IT Execs See Need for Less Complex Systems

In a news item published September 13, 2005 on their web site, ComputerWorld.com gave a report from its Enterprise Management World conference. The issue most discussed by attendees? The need to reduce IT complexity. Attendees of the conference gave examples of where IT complexity caused them process inefficiency or lost their company bottom-line profits. Many said IT simplification makes it easier to shift IT money and resources toward more customer-facing services.

For the full article, visit http://www.computerworld.com/managementtopics/management/story/0,10801,104599,00.html?source=NLT_PM&nid=104599.

Posted by DonnaBurns on September 14, 2005 at 10:43 AM in Business Infrastructure | Permalink | Comments (0) | TrackBack

Think Soufflé Not Instant Pancakes When It Comes to SOA

There needs to be more truth said about the reality of what SOAs are and are not.  If you read some quick-and-dirty analysis of this area you would come away thinking the best approach to delivering SOA in your company is to “…just add Web Services” and you are there.  It sounds as easy as making “just add water” pancakes – and those of us who were bachelors at one point recall those well.

The bottom line is that SOA is definitely not like making “just add water” pancakes – it’s much more like creating a soufflé than soupy pancake batter with little thought towards the end result apart from basically being edible.  And again – from my bachelor days – a soufflé was a disaster in the kitchen waiting to happen.  Better left to more capable hands, soufflés are for the patient and practiced – and in a sense SOAs and Web Services are too.

Don’t believe the hype around SOA and Web Services.  Think “soufflé” and not “just add water” pancakes. Further, think of being a chef creating soufflés – and then you have a sense of the true challenge of creating a real, honest to goodness SOA.

Check out these links to see the truth about SOAs:

http://www.cio.com/blog_view.html?CID=10591 – Interview with Hossein Moiin, vice president of technical strategy for T-Mobile International.  This guy is a true chef of SOA soufflés.

http://www.zapthink.com/report.html?id=ZAPFLASH-08052004 

Seven fallacies of Web Services

Posted by Louis Columbus on August 23, 2005 at 02:21 PM in Business Infrastructure | Permalink | Comments (0) | TrackBack

IT Business Improvement Models

An executive seeking to advance the efficiency of an IT organization has no shortage of options. There are several objective, independent improvement methodologies, including the Capability Maturity Model, the IT Infrastructure Library, and Control Objectives for IT.

While these and other approaches vary in scope and emphasis, they all offer detailed guides to implementing processes and practices designed to yield optimal performance in both operations and development environments.

Which model is best? Can they be effectively employed together? And should they be used to complement commercial consulting services? The answers are here.

Posted by Dale Wolf on August 17, 2005 at 02:33 PM in Business Infrastructure | Permalink | Comments (0) | TrackBack

Just Enough Technology

Technology should be simple, easy to use, and fit your working style.  This is true for both personal and business technology.  Unfortunately, individuals and businesses often fail to properly evaluate their needs, and they end up selecting technology for the wrong reasons.

I can illustrate this with a story from my own history with personal technology.

My Experiences with PDAs

Once again ahead of its time, Apple introduced the Newton in 1993.  Too big and too expensive, and filling a need that had not been discovered by most people, the Newton was not a market success. Production stopped in 1999.  Palm, the company that keeps renaming itself, released its first Palm Pilot in 1996.  Smaller and less expensive than the Newton, with a simpler interface, it launched the form factor that most people think of as a PDA.

I’ve owned four PDAs.  A Newton (lost in a move), a used Palm III, a new Palm IIIxe, and most recently a Sony Clie.  When I bought the Newton, my life and work situations did not lend themselves to PDA usage, and I never did much with it.  The two Palm systems were heavily used.  I bought the Palm IIIxe when the Palm III started to die.

I purchased the Sony Clie as a "going back to school" gift to myself a couple of years ago.  I thought a PDA with color, audio capabilities, and memory expansion would be more useful than the Palm IIIxe.

It wasn’t.

Most of its features went unused, and while I was disappointed to hear that Sony was getting out of the PDA business, it didn’t affect me much.  Today, my Clie sits on my desk in its charger, except for those times when I take it out to play a game while listening to the news.

The Newton didn’t fit my needs, the Palm III series was just right, and I overbought when I got the Clie.

I’ve considered getting a replacement for the Clie.  I gave the Palm IIIxe to my son; otherwise I might have dusted it off to see if it was more useful, or likely to be used, than the Clie.  I’m not willing to spend $100 US for that experiment, especially since I carry a laptop to and from the office.

On my laptop, I use Apple’s iCal program to manage my schedule, with some duplicate entries manually copied back and forth from the office PC’s Outlook calendar.  For most day to day items such as to do lists and notes, I have a small spiral notebook.  It doesn’t beep or impress anyone as a geek toy, but I use it and it helps me manage my day.

Seeking Simplicity

I’ve joined the ranks of many other technologists who finally admit that more isn’t always better.  When my current spiral notebook is full, I may just build my own Hipster PDA, a "Parietal Disgorgement Aid". If I feel a need for something that looks more professional or impressive, I might upgrade to a Moleskine notebook.

If someone comes up with a new reason to use a Palm or Windows CE device in the future, I’d be willing to get one again, but for now, I have just enough technology.

Applying the Lesson

How do you know if you’re using too much technology to solve a problem?  Answering the following questions will help you in that evaluation:

• Is it more difficult to do things when using the solution?
• Does running the solution interfere with my business?
• Do I understand the solution? Can I explain its use and value?
• And finally, how much of the solution do I really use?  Think about Microsoft Word for a minute.  How much of what you do with Word can’t be done with a smaller, lighter, editor such as Wordpad on Windows or Textedit on the Mac?

When considering a technology solution for your business, determine your needs to the best of your ability.  Question your objectivity, and that of your technologists.  Don’t buy something because it has all the right buzzwords, it’s the latest and greatest, or everyone you know uses it.

Buy the technology you really need to solve your problem.

Posted by TroyBrumley on August 8, 2005 at 02:03 PM in Business Infrastructure | Permalink | Comments (0) | TrackBack

Many CRM Systems Still Struggling

Line 56 recently reported: Only 29% of surveyed executives registered satisfaction with the integration capabilities of their customer relationship management (CRM) systems, according to a new study by Forrester Research. Going further, Forrester found that 66% of respondents were unhappy with the “ease of use” of their CRM, and under half of respondents were satisfied with CRM’s return on investment.

Posted by Dale Wolf on August 6, 2005 at 11:28 AM in Business Infrastructure | Permalink | Comments (0) | TrackBack

Weblog Technology Skyrocketing

According to a new survey by Webcraft, blogs are causing the next huge surge in Internet activity, competition for domain names and sales of blog-related technology:

• Increasing use of the Internet by small businesses as web sites and online storefronts become more affordable.
• The explosive growth of weblogs, a growing number of which are purchasing domains for branding purposes.
• Speculation in the market for domain names, buoyed by rising resale prices and the ability to generate revenue via pay-per-click advertising on parked domains.
• Strong sales of online advertising, especially keyword-based contextual ads that support business models for both domain parking and commercial weblogs.

Posted by Dale Wolf on August 5, 2005 at 07:02 PM in Business Infrastructure | Permalink | Comments (0) | TrackBack

On-Demand vs. Software-as-a-Service

The newest buzz in the software industry is all about On-Demand Hosting and Software-as-a-Service models. In AMR’s Alert eNewsletter, Robert Bois clarifies how these two delivery models each bring different business benefits -- a good bottom line summary.

Posted by Dale Wolf on August 5, 2005 at 07:49 AM in Business Infrastructure | Permalink | Comments (0) | TrackBack

CRM’s Odd Couple

By Louis Columbus

Home-grown ERP systems are the Oscar Madisons of the IT world.  Grizzled by years of service yet reluctant to change, set in their ways, and unwilling to embark on even a modest upgrade path, home-grown ERP systems are seldom changed by the revolving door of CIOs that look to attach their own legacies to these massive home-grown systems.  More often than not, the home-grown ERP system changes the CIO.  All the complexity and lack of clarity makes some CIOs yearn for hosted applications to increase responsiveness to prospects, channels, customers, and the precious installed base manufacturers are striving to capitalize on.  CIOs in search of closure are driving the adoption of hosted applications.

Hosted channel, CRM, analytics and OnDemand initiatives from Siebel and IBM are showing usability improvements, alignment of workflows to how companies work, decent analytics that actually tell you how your strategies are doing, and best of all, can be turned on and off like a utility.  Several of these applications have streamlined, efficient interfaces, forsaking the “more is better” mantra of previous CRM applications. The extreme make-over hosted CRM applications are getting would satisfy Felix Unger on even his most perfectionistic of days.

Hosted CRM and Legacy ERP: A Partnership Of Necessity

Legacy ERP systems change gradually over time, reflecting shifts in priorities at only the strategic level. There’s no sudden and dramatic changes here; only a gradual shift, over time, as the company’s business model requires extensions to support mergers & acquisitions, re-vamped production strategies, and getting back in touch with what is many times the forgotten installed base of customers.  In fact, so many people like to point out the war for ERP revenue raging between Oracle and SAP – but the alternative to do nothing at all and tweak the home-grown ERP system one more time is the most potent competitor of all.  Systems that have code structures that resemble the perfectly random and chaotic nature of the character Oscar Madison in The Odd Couple are all too commonplace. Spaghetti code with no comments saved more jobs from outsourcing in the last five years that any presidential candidate could ever promise to.

Countering this false sense of complacency brought on by “let’s tweak the old system one more time” strategy is the fact that CIOs are now called upon to be part of revenue producing strategies.  It’s becoming a higher priority than ever for CIOs to manage their organizations to goals that contribute to top-line revenue growth. The urgency to deliver results, over and above adding in new features to legacy ERP systems, pervades many industries today, manufacturing being the most prevalent. 

IT Is Creating More Oscar Madisons

Given increasing pressure CIOs are under to deliver results, a major ephinany is emerging: many customer-facing systems including CRM, quoting, pricing, and even call centers that are critical for top-line revenue growth are not integrated enough to deliver value – and worse yet, some are not working at all.  It’s too strong of a trend to ignore. Systems installed in the 1995 – 2000 timeframe to streamline and strengthen being customer driven have outlived their usefulness – already.  It’s because these customer-facing systems have slowly turned into Oscar Madisons. 

Sure, the vendor promised integration and best practices – but many companies were so quick to solve the pain they stopped short of the vision.  The result: more Oscar Madisons to take care of, which is job security for IT but crippling to top line revenue growth as executive management, sales, marketing, channel management and even operations scramble to overcome these weaknesses.

Hosted CRM Cleans Up

Too many CEOs and CIOs who just five years ago or less bought into a customer-facing sales and service applications have already seen their vendor of choice go bankrupt, be acquired, or both while at the same time discovering the systems that promised so much delivered too little.  These customer-facing system failures are making for a very fertile market for all types of customer-facing hosted applications, CRM included.

Hosted CRM is now getting used as a “clean up” strategy to get companies to the competitive position with customer-facing applications they had previously thought they had. 

Summary

Companies using legacy home-grown ERP systems continue to resist the most radical alternative of all, rip-and-replace to a vendor-based strategy.  Instead the costs of a periodic rejuvenation – a mild makeover of their ERP systems – are most cost effective and easiest to manage. 

It’s the customer-facing systems that are in need of the biggest makeover of all.  Hosted CRM, quoting, pricing and services applications have proven that delivery method is incidental to value – and their predecessors are in many cases not delivering on the committed performance from even five years ago or less paving the way for hosted CRM applications to flourish as CIOs are asked to deliver support for top-line revenue growth now.

Posted by Louis Columbus on August 2, 2005 at 12:06 PM in Business Infrastructure | Permalink | Comments (0) | TrackBack

Can CRM Avoid Commodity Hell?

By Louis Columbus

The most dangerous aspect of commoditization is illusion companies and industries have that it could never happen to them.  Somehow companies reason, they will be different – their differentiation is solid and sustainable.  CRM appears ripe for this illusion mainly due to the self-important mantra of delivering a single view to the customer and uniting demand chains – all noble causes in the name of service to the customer – but all susceptible more than ever to falling into commodity hell.

The term “commodity hell” is attributed to a quote from GE’s Chief Executive Jeffrey Immelt, who said that managing innovation better may be the only way out of the “abyss called commodity hell.”  Mr. Immelts’ quote is combustible enough to ignite more than enough arguments inside CRM vendors, system integrators and the manufacturers and service companies they hope to sell to. That quote must start more debates than any other, especially when roadmaps and future product plans are at stake.

Reality Check Please

Here’s a reality check: commoditization happens everywhere, and if it didn’t CRM would most likely not exist today.    So before you just toss aside the concept of commoditization happening to those other companies that don’t have differentiated products, stop and really think:  if your company is a CRM vendor, are you really generating anything new or just recycling R & D paid for from the IPO from several years ago?  If you’re a manufacturer, when was the last time you refreshed a product roadmap not just for the analyst and press tours but because you really had something new?  If you’re basing your future on your past you’re setting yourself to compete only on price.

Avoiding The Death Spiral

When pricing becomes the only differentiator any industry, including CRM, has entered a death spiral.  Ironically when you look across many industries, commoditization didn’t have to happen so fast – look at the InnovCenter from Eli Lilly as a case in point, or the ability of Southwest Airlines to commoditize itself.

There’s a group of researchers, analysts and authors doing some great work on how to avoid commodity hell.  One of note is Dr. Peter Keen, Professor at Technical University of Delft, University.  You can find his website here.  You’ll definitely want to catch his next book, titled Let Go to Grow, Not Just Survive, now in press.  He’s posted chapters here.   His insights into how to avoid commoditization are worth checking into.  I’ve read his latest book draft and it really got me thinking about how his concepts apply to CRM. 

CRM’s Redemption From Commodity Hell

Clearly the path for many areas of CRM is precisely mapping to what Dr. Keen’s research shows is a sure bet to bring on commoditization.  These include:

• Cost reduction has become the mantra of so many best-of-breed and platform vendors alike, hastening commoditization in the process.

• Protecting systems by making them more rigid and even proprietary-like.

• Resorting to price first and usability improvements last as a differentiator.

• Bloated, unresponsive applications that have lost touch with the business processes they were meant to streamline

Dr. Keen’s research includes many other symptoms of commoditization that map to the CRM landscape.  The good news is that in his research he’s found approaches that entire industries take to alleviate commoditization hell.  Here they are, and if you think about it, there are some aspects of CRM already on the path to these improvements:

• Commoditizing your company before the industry does it for you. Southwest Airlines is an example of this – where the company has standardized on the Boeing 737 so all training, maintenance, repair and overhaul, and pilot and crew rotation is commodity-like in approach.  The result: Southwest’s market cap as of March 31, 2005 is $11B, leading all other airlines worldwide.  To see the magnitude of their market cap strength in that industry check out theYahoo Finance Industry Center for Airlines here. Exploiting standardization is the best defense to commoditization.

• Proprietary interfaces of all kinds kill companies.  This is one of the points that Dr. Keen excels at explaining in his book, showing the costs of being proprietary relative to open.  Examples include how GSM/SMS standards commoditized the European mobile phone industry, how USB is commoditizing the digital camera markets, and how 800 number standards have made global call center outsourcing possible.

• CRM must become a coordination technology, not just a reporting and analytical one to survive.  The starkest examples in Dr. Keens’ work is that when IT infrastructure gets disconnected from business strategy – or worse when business strategy is only allowed to venture as far as IT lets it – commoditization happens fast. The implications for CRM are clear – without being a true coordination technology – commoditization is quickly around the corner.

• Componentizing CRM is critical for its future.  The era of composite applications and the platforms is already developing full-force, and it may be the best hedge to commoditization that CRM has. Siebel’s UAN, SAP’s NetWeaver, Microsoft’s .NET and IBM’s WebSphere platforms all point toward componentized applications that can resist commoditization through unique value as part of a broader value set.

Summary

It’s not enough anymore to just have CRM systems align with your core processes – that is almost a path to commoditization in and of itself.  The fact is CRM is on a collision course with being commoditized – unless the coordination aspects of these applications get stressed more than their carrot-and-stick role in so many companies they get used for instead – and componentizing their functions to align with growing areas of a company instead of being perfect systems of record for the past.  In the end CRM will have to commoditize itself to survive.

Posted by Louis Columbus on August 2, 2005 at 11:56 AM in Business Infrastructure | Permalink | Comments (0) | TrackBack

The Elusive Art of Making Processes Pay

By Louis Columbus

There’s a major disconnect between the expectations and results companies are getting when they re-align processes aimed at serving their customers. Several manufacturers spoken with have bought into the process re-design vision, but report the effort to turn the benefits into reality is much more difficult to attain than originally believed. 

There are several reasons for these unrealistic expectations taking hold.  First, nearly every manufacturer that has complained about a lack of progress didn’t really have a solid handle on the lost time, dollars and productivity attributed to a process being broken in the first place.  Take quote-to-order for example.  Manufacturers who have not seen re-designing this process take off didn’t really have a handle on the cost per order to begin with, and in the rush to automate the process of creating quotes, just sped up the mistakes the company was making to begin with.  Without the metrics in place to measure it before the process redesign, the company didn’t know where to start modifying the process to make it more efficient.  Second, many manufacturers get swept up in the tidal wave of process centric messaging, promises, and even case studies, but don’t really ever get a roadmap defined of how they can accomplish the same result.  Third, companies are failing more than ever before despite the best-intentioned guidance about best practices being the path to profitability from vendor and system integrators.  What’s missing is the concept of best practices being a benchmark instead of a roadmap that must be adhered to in lock-step precision.  There are many more failures out there of process redesign than anyone would care to admit.  Let’s take a look at how you can sidestep this problem by learning from other’s mistakes.

Culprit #1: Untrustworthy data kills every strategy it touches

Ever since line-of-business managers climbed into the driver’s seat of IT spending, process-centric messaging spread faster than Google.  Today these companies are disillusioned after having spent in some cases over $3.5M in licenses and services for channel programs and have little if anything to show for it.   When line-of-business managers started dictating how much was being spent and on what, everyone else in both the companies looking to solve problems and the people selling to them couldn’t get enough of metrics, analytics and performance management.  But in that rush to measure so many companies measured the wrong things and as a result build quoting, channel management and order management strategies on the shifting sand of incomplete and inaccurate data.   

Culprit #2: Don’t buy the process-centric hype; any lasting result requires hard work

For companies facing a crisis on the customer side of their business there’s a strong tendency to buy first and ask questions later.  The promises of quick returns from redefining processes is alluring to a company in trouble with its channels, customers and prospects.  What gets lost in the rush is the hard work of really understanding why quote-to-order is broken for example – and if the quoting process is even needed still in the order workflow.

Quickly layering on CRM, whether its hosted or licensed or both, without first cleaning up the many processes that touch a channel or customer, is a recipe for disaster.  The rationalization is that once the software is in, users will be weaned away from the manual process of entering orders, or that quotes and special pricing requests will be moved to the new system at the end of the quarter.  Too often the software is found to not be as efficient as the manual process in the first place, because the root cause of error-filled order entry or incomplete customer records never got addressed in the first place. So many companies find they do more orders, but just get to error counts earlier in the quarter.  That’s a dubious accomplishment for a $1M+ investment in license and services in many instances. 

Culprit #3: Best practices is a benchmark not a roadmap

Now saying all this was driven by making a technology-centric purchase is a copout, what really happened is that these failed CRM, channel management and order management implementations are best-practices-gone-bad poster children.  No vendor will ever admit it, but a best practice for one vendor in a specific industry doesn’t come close to fitting the requirements of the customers’ competitor in the same industry.  The fact that applications are now more modular gives vendors the chance bring selective tools to the biggest pain points that manufacturers have.  Yet it’s no excuse for selling a vision that best practices can be pumped out like Happy Meals when in fact each implementation needs the speed, strength and precision of a sushi chef.

Here’s a reality check: best practices are far more valuable as a benchmark instead of a roadmap.  There is no such thing as one-size-fits-all best practices.  That has to be a core assumption about any strategy and ensuing software implementation before a dime is spent. One-size-fits-all best practices is an oxymoron.

Creating a process Roadmap

The following steps highlight what companies are doing that do get the highest potential returns from redesigning their customer-facing, order management, and quoting processes:

1. Prioritize the processes that touch your customers and channels the most. For larger manufacturers these will be in the thousands.  Typically order capture, order management, lead management and escalation, and pricing requests are the most costly processes and the ones where improvement is most needed. 

2. Spend time redefining the processes internally first.  Before ever meeting with a vendor, integrator or consultant see if you can fix the processes internally first.  Many times order capture for example can be fixed by re-defining roles in Sales Operations or even Sales management.

3. Processes that require automation need to be prioritized on a roadmap. If the customer- and channel-facing processes you have isolated need software to automate them, first create a roadmap.  Prioritize based on the financial pain of each process, estimating the lost revenue and increase in costs associated with each.

 

Which Processes Pay?

It’s troubling to find so many companies not really getting the results they expected after spending so heavily on customer-facing strategies.  There are however processes that have proven themselves over years of research.  These include the following:

·        Automating special pricing requests.  There’s ample evidence from the results of high-tech, financial services, and discrete manufacturing companies that automating special pricing requests pays off.  Of the manufacturers I have spoken to, taking this process from being manual to automated and adding rules to approve pricing requests by reseller level pays the highest dividends of all. 

·        Quote-to-Order Processes Integrated To Manufacturing And Supply Chain Systems. There are dozens of software companies that have come and gone that just offered one aspect of this equation: some have just offered the quoting system; some just the integration; and others, just the ERP or supply chain system.  But for the company using these, when all three work in synchronization with each other, more accurate quotes are produced and cost per order is reduced.

·        Cross-selling is more than jamming as many products as possible on a website.  Many manufacturers have learned this lesson the hard way, selling related products at a loss due to the blended margin being below their company’s SG&A requirements.  Up-selling and cross-selling has everything to do with a deliberate strategy of managing margins and attach rates.

·        Service strategies are neglected yet have the greatest potential.  Get beyond the RMA process and the pile of returned products in the corner of your Operations Department.  Just getting RMAs automated has a proven payoff, and warranty reimbursements can make or break an entire channel strategy.  It’s because warranties are often the cash that gives resellers the liquidity to re-invest in their businesses.

·        Order cycle times always have room for improvement.  Going through the steps in this article could show areas for improvement for order cycle times.  This is however not a quick fix when it comes to software.  Integration between order capture, order management, supply chain and fulfillment systems is a must-have to drive order cycle times down.

 

Bottom line:  Many CRM and sell-side implementations fail, and no one wants to ever admit they have them. It’s because these companies have bought into a best practices vision that isn’t accurate or that the processes that were broken to begin with have just been accelerated.  Stop and look at the processes first and be selective about applying software to your biggest CRM and customer-facing pain points. 

Posted by Louis Columbus on August 2, 2005 at 11:50 AM in Business Infrastructure | Permalink | Comments (0) | TrackBack

How Supply Chain Disconnects Kill Channels

Summary

There’s an undercurrent that’s starting to tug at even the best manufacturer and distribution channel relationships.  It’s the ability to set and manage expectations based on supply chain visibility.  Distributors, dealers and channel partners don’t call it that, they call it vendor responsiveness when it happens, and being blown off when it doesn’t.

The ironic aspect of this topic is that while many manufacturers insist they have the ability to make and keep commitments based on visibility into multiple layers of their supply chains, their dealers and distributors report just the opposite. 

Supply Chains and The Domino Effect

Visiting with auto dealers to gauge if Available-To-Promise (ATP) and Capable-To-Promis (CTP) was important to them on fleet sales proved positive: these dealers only order from manufacturers that can deliver ATP and execute to the date.  So fundamental but so true; dealers only trust manufacturers that have supply chains in focus, making and keeping commitments based on solid knowledge of their supply chains, production scheduling and order fulfillment. 

When these dealers sell fleet vehicles, mostly to small and medium businesses to either replace or grow their own fleets, the ATP date from the manufacturer is the same date often a small business gets to expand and grow.  The Domino Effect, if you will, of an accurate ATP date means the small business now has additional revenue generating assets on the road – a critical link to their future growth.

Conversely not delivering to an ATP date kills the pipeline of new revenue the small business was betting on and forces them to repair damaged trust with their customers.  This Domino Effect of commitments in fleet sales has a lasting effect.  One manufacturer wedged into a tight rural market by having superior knowledge of and control over their ATP dates versus entrenched competitors.  The result: 30% of sales are with the new manufacturer, from offshore, due to better supply chain visibility.

Don’t be Afraid To Tell The Emperor He has No Clothes

For manufacturers that are getting beat in these fleet sales channels, the disconnect between corporate and the field is noticeable and significant.  C-level executives, insulated from the channels by consultants and system integrators that profit more when the world outside is seen as in OK shape but internal systems need massive re-working, are hesitant to tell the CEO that basically the emperor has no clothes.  Not wanting to tell them their channels are in complete disarray – or worse not knowing it – costs the companies millions in lost opportunity.  All because no one has the courage to say that for all the internal system spending the fundamental systems that matter to channels and customers are broken and need fixing now. 

Some manufacturers in this state, when you confront their C-level executives about how badly broken their supply chains really are, say “Our business model doesn’t require use to deliver Available-To-Promise…” and that the supply chain is not important to their channels.  In those words is the unraveling of a channel strategy. 

The reality is that for every manufacturer that relies on channels that ignores providing supply chain visibility on especially complex manufactured products, the greater probability their competitors are.  So it’s the choice of each manufacturer, but given how small businesses purchasing fleet vehicles to grow their own businesses key off of ATP and other commitments from channel partners, manufacturers need to realize that by enriching the channel they are enriching their customers – and that being myopic and falsely secure in corporate, away from the channels, is an illusion.  The reality is in the channels.

Time To Make Your Channels Stronger

It used to be just a matter of margins and Market Development Funds or MDF for short, to keep a distributor, dealer or channel partner satisfied and selling your products.  No more.  Competitors want your channels and will deliver advanced systems that give dealer reps the assurance that ATP, CTP and other indicators of delivery dates from your supply chain are real, and can be counted on. 

If you have invested in delivering this to your channels, great.  You just made a massive debit in your credibility account with your channels.  If you’re ignoring it, go visit your lowest performing dealers and see how many of your competitors’ products are selling there and why.  Chances are it’s because the dealers have learned to trust an emerging competitor’s visibility into their supply chains and have the track record of making and keeping commitments to prove it.

By Louis Columbus

Posted by Louis Columbus on August 2, 2005 at 11:47 AM in Business Infrastructure | Permalink | Comments (0) | TrackBack

The Truth About SAP Integration

By Louis Columbus

In discussing weight or golf scores it’s easier to exaggerate the positive than to openly share the truth.  The same holds true when it comes to sharing the truth about SAP ERP integrations.  Let’s face it, integrating to any ERP system is hard work, but SAP integration around meaningful business processes can become much more challenging than integrating to even a back-office production scheduling system.

For one global aircraft manufacturer the promise of SAP integration turned into a nightmare – and from their pain some great lessons can be learned.  At the core of this manufacturer’s problem is the need to integrate front office systems (quoting, proposals, pricing, order capture and front-end order management) by integrating to an SAP ERP system.  Big promises were made and not delivered on, leaving this manufacturer with re-work on over 70% of customized product builds.

Here are several key take-aways from this manufacturers’ experience.   If you’re looking at any front-office application that requires SAP integration, slow down and complete due diligence on these factors and then move ahead.  It’s tempting to have such a high sense of urgency to get “done”; but as this manufacturer learned, “done” never happened because SAP integration was hyped and not delivered. 

Here’s the checklist:

Qualifying SAP Integration Expertise

• SAP Internet Pricing and Configurator (IPC) Expertise Is Essential For Any Customer-Facing Strategy. Arguably the core of any complete CRM implementation on the SAP platform makes use of the IPC including mySAP.com deployment strategies in progress.  If you have IPC installed you need to ask for and get a demo with live data staged in a non-production instance of your SAP platform. 

• Create a replicated set of SAP data and qualify vendors with that test region. Replicate live SAP system data during final vendor qualifications and benchmark vendors on their ability to illustrate integration.  Manufacturers have found Gamma Enterprise Technologies’ InfoShuttle product useful for this purpose.  Check them out if you are doing much testing of SAP integrations.

• SAP integration expertise must be global. Here’s the challenge on this point: the manufacturer found their platform vendor had SAP integration references in just one country – just one – and the SAP instance did not serve business processes outside of that company.  Result: After further investigation when their own SAP integration didn’t work they found that the customer had written the adapter themselves and resold it to the vendor.

• “How did you recruit your ABAP programmers?” Ask the CTO of any vendor who is pitching SAP integration to you this question and see what you get as a response. 

  India is snatching up ABAP programmers just as fast as signing bonuses can be EFT’d to signed candidates’ checking accounts. 

• Visit the top three SAP integration references in person.  The reason you want to do this is to actually see the applications running, using SAP part numbers, interacting with SAP Bills of Materials, and most importantly, interacting with SAP’s Internet Pricing and Configurator (IPC) module.   

• Balance of references on mySAP and legacy R/3 platforms.  When you are creating your short list of CRM, channel management, order management or pricing vendors to work with, this criteria will narrow the field fast.

Manufacturers from heavy equipment to consumer products face a daunting task of trying to find out which best-of-breed vendors have true SAP integration expertise.  Sure, the core functionality of these best-of-breed vendors sometimes can’t be found in the ERP vendors’ suites – but the Achilles heal of many of these companies is their ability to handle ERP integrations.  Be sure to qualify any vendor thoroughly on the claims of SAP integration especially before going forward.

Posted by Louis Columbus on August 2, 2005 at 11:42 AM in Business Infrastructure | Permalink | Comments (0) | TrackBack

Cutting Through the Hype: Where Web Services and SOA Are Really Working

By Louis Columbus

Summary

The move by database developers to include object-oriented programming languages has changed the scope of application development and is acting as a catalyst for Web Services development. Being able to define stored-procedures in object-oriented languages is leading to an entirely new approach to creating workflows and supporting transactions in manufacturing and services industries. Despite the availability of object-oriented programming languages however, many systems still rely on file server architecture, two-tier, or n-tier architectures. Web Services, many internally developed, show what object-oriented programming tools can deliver.

For many manufacturers this starts with tying together supply chains with more than the equivalent of hand-built adapters that cannot scale across all the transactions a manufacturer needs them to. Many manufacturers are holding onto their hand-built adapter strategies to integration, just as Web Services are starting to prove themselves. The bottom line however is the Web Services work for integration today – yet are still unproven for completely replacing ERP systems that include complex distributed order management, supply chain synchronization and customer fulfillment.

What’s Really Happening In Web Services Today

Forget about the commercials and hype showing Web Services as an all-knowing and all-seeing platform that can tell any salesperson at any time, from anywhere the status of orders in a remote location of Europe for example – just the infrastructure investment to support this level of responsiveness would dwarf the entire IT budgets of many Fortune 1,000 companies.

The reality is that there is much more crawl-walk-run and testing going on than global best practices at mobilizing a single system of record for example. In the research completed for this article and in the multiple manufacturers spoken with, there’s more of a focus on test-driving Web Services today than en masse development.

Several companies spoken with are concerned more with security than time and cost efficiency savings; the fact that according to AMR Research there is less than $100,000 spent on pilot projects underscores the fact that Web Services gets used more for integrating databases together and less for transactions outside an enterprise. Despite the hype surrounding Web Services as the Next Big Thing, it’s clear from watching the adoption of companies using this approach to managing database integration that it takes on average 2 years to make Web Services fully operational, specifically including five Web Services or more.

Additional insights into the true adoption of Web Services are provided here:

• 75% of all Web Services projects are purpose-built for database and data warehouse integration projects.
• 65% are developed to support integration to legacy or mainframe applications.
• 60% are developed for internal portal integration efforts with legacy and typically three or less databases internal to the company.
• One manufacturer of complex pumps and valves focused on headcount reductions equally $500K the first year only to find that the two engineers that were going to be let go were actually needed for integration work for the Web Service aimed at streamlining complex order capture. The net result: the Web Service worked and another Application Server engineer needed to be added to the product.
• One manufacturer of computer equipment uses Web Services to integrate their order capture and pricing systems that are part of their SAP ERP instance – and the result is the ability to publish out price updates to worldwide channels within 48 hours. The Web Service will also add Oracle pricing integration – yet that will be over a year away and require months of internal development.

ROI for Web Services Is Still Elusive

Of the manufacturers who are using Web Services, ROI is proving elusive to quantify much less track over time. Because of the majority of companies developing Web Services do not do ROI analysis before starting development they often have high expectations that are often not met.

Because of the majority of Web Services adopters not defining ROI targets, the majority rely on headcount reductions for show ROI. This is clearly a cop-out because cost reductions and greater efficiencies taken together should deliver gains in revenue either directly as the result of serving customers more responsively or streamlining workflows.

Second to headcount reductions, companies are looking at reduction of the costs of integration, data entry, and reduction of Value-Added Network costs as the approaches to show positive ROI for internal Web Services developments.

Service-Oriented Architectures By Any Other Name

According to the vendor community today, their collective vision says that a grouping of Web Services actually creates a Services Oriented Architecture (SOA). Despite the fact that the concept of an SOA is met more with criticism and doubt than Web Services, it’s becoming clear that Web Services as a database integration platform are starting to pay off.  That sets the stage of an SOA platform for the early adopters. The disparity however between the best practices and clarity of the EAI vendors including BEA, Siebel and platform vendors including SAP NetWeaver are portraying and the actual results of companies adopting SOA strategies is narrowing.

Especially in services industries there is a strong focus on creating five or more Web Services to streamline integration points in financial reporting and human resources applications. The fact is many IT organizations have an SOA and do not really know it. Abandoning the concept of using hand-built connectors and adapters for more scalable platform has delivered SOA years ahead of the hype.

Databases that have programming extensions for HTML, HTTP and XML extensions have been added to these company’s platforms and today they are serving as the foundation of an SOA. Put aside the hype of SOA and start looking at your existing databases to bring in programming extensions and access points for web-based development languages. Manufacturers who have relied on ODBC either as a transport mechanism or for the basis of their adapter development, it’s critical to remember that the convergence of object oriented programming languages to include C# and J2EE is making the storing of objects – not just data – the heart of what it takes to move into Web Services that matter.

Where SOA Is Working

Just forget about the hype of SOA and see it as a platform for ensuring integration with the many systems that are toggled together with hand-build adapters and connectors that don’t scale. The IT organizations getting the best results today are doing the following:

1. Take order management trouble spots and apply integration to streamline these workflows. Web Services show the highest ROI when applied to transaction workflows – and thanks to the development of more object oriented programming tools – databases can handle this.

2. Look at how to use Web Services to create an order state engine. Being able to track an orders’ state at any point in time makes more sense as a Web Service, especially if an organization relies extensively on precise delivery dates or high levels of customization in product designs.

3. Web Services starts with time savings not headcount reductions. The fact that so many early developers on Web Services are relying on headcount reductions to provide a positive ROI is a misnomer; better to trim time from any order management process over simply automating an internal function. Making order management and transactions the center of Web Services development shows ROI.

4. Security concerns addressed. The ACID-compliance test of any Web Service is the managing of a stream of transactions. It’s not enough anymore to simply tie together content and present it in a portal; that is Web Services 101. The true test of Web Services is in automating order management and transactions.

Summary

To a large extent database architectures are additive. Don’t however let the hype surrounding Web Services or even Service-Oriented Architectures (SOA) make the concept of fixing order management for example turn into an internal project – as many projects originally defined as Web Services turn out. Use the problem areas of order management as the basis for testing Web Services development in your own organization.

Posted by Louis Columbus on August 2, 2005 at 11:30 AM in Business Infrastructure | Permalink | Comments (0) | TrackBack

Get Vendors on the Right Track

Monte Ford at CIO Magazine has a few tips on how IT can be more successful by caring and feedint is vendors with a productive relationship-building program.

Success means training your partners to be more effective. Start by sharing your IT and business goals and by educating them on how to work with your company. Let them know how they can be successful. When they have insight into your needs, your partners won't have to ask what are probably the most annoying questions in all of the business world: What keeps you up at night? What are your business drivers? Or what is your biggest problem right now?

Finally, educate partners about how they can become easy to do business with. When my company works with a partner, I don't want to have to navigate their internal bureaucracy to complete a deal. Having to deal with a vendor's red tape is one of the biggest problems standing in the way of true partnership with supplier companies, because it creates frustration for the customer.

Posted by Dale Wolf on July 15, 2005 at 12:57 PM in Business Infrastructure | Permalink | Comments (0) | TrackBack

Top 5 Technology Priorities

According to a Baseline survey of 1,227 information systems responders, No. 1 on the list of Top 5 Projects for 2005 is application integration. The other Top 5 Projects also look to the future with an eye on the past. In second place is business analytics software that finds new patterns in existing sets of data. Enterprise portals, at No. 3 are designed to present data in easily accessible and customizable Web sites for employees or customers,  in category No. 4, customer relationship management where responders say they're primarily building new ways to distribute and analyze customer information they already have. Rounding out the survey's Top 5 is intrusion detection and prevention: systems designed to protect networks from new strains of fast-moving attacks.

Posted by Dale Wolf on June 21, 2005 at 08:33 PM in Business Infrastructure | Permalink | Comments (0) | TrackBack