Stratoserve LLC

Input-process-output and the supply-firm-marketing chain

The input-process-output (see ICT model) is a way of looking at the firm's value chain. Supply managers handle the input coming in and the marketing folks handle the output coming out.

Like:                  

   global suppliers ->supply chain->[firm-]->marketing->global customers

Supply and Marketing folks are people who sit at either end of the firm and look at the world outside in the firm's value chain. The marketing manager reaches out to customers and supply chain managers reaches out to suppliers and also need to reach "in"to internal firm users.Both off course don't formally talk to one another - organizations are not set up to encourage the talking.  Unless there are operations review meetings, that can become mindless and boring. ERP systems can help but ERP speaks to only data and not the gut feel of these important folks.

If you look at the firm as just a processor - focused on creating superior value for its customers-you start realizing how much firms miss out in tapping on to the combined knowledge and expertise of their input and output side teams.

CRM on iPhone

The new iPhone 3G is great, although being tied down to one carrier (AT&T) might be constraining for some as are the extra charges for Internet access. However, it is really a great device particularly for those who need to get onto the web while on the go. And now CRM vendors like Salesforce.com and biggies in the ERP business Oracle and SAP are getting into top gear to provide access via the iPhone 3G. Check out the scoop on all of this in the article here.

Driving the CRM application to the iPhone or Blackberry will certainly improve adoption of CRM software. More so, in these challenging economic times when new business is difficult to get and existing customers might have needs that businesses might find less costly to service.

Booming choices in CRM,SCM,ERP- executing "benefit of the benefit"

When I walked through the exhibitor booths at the ISM conference, I was struck by the rather large number of software vendors who were trying to explain how their software would "solve" the problems of procurement,bidding,contract,supplier relationship and add "visibility" to the supply chain. Many of these solutions could speak to your legacy systems and most of them were web based and did not involve buying software and all the challenges that are involved in getting a system started. This was a sudden but clear change from earlier exhibitions I have been attending where "mega" ERP companies would be intimidating visitors by the daunting task and budgets involved in actually getting these systems to work and realizing the benefits that the system promised.

And now I saw that there is one more CRM system launched. This one is from Sage Software and is aimed at the small and medium enterprise and does many ERP functions as well.

The question is : where does all this lead the manager of a large enterprise or the owner of a small one in these tight economic times ? Adoption of these systems should be much easier than the early ERP systems but a clear and compelling articulation, for every customer that adopts these systems, would help the customer in quickly capturing the cost savings or revenue growth that these systems promise. Does this happen during the sales cycle for the system? It probably does  in the presentation slides of the software sales teams - but the challenge for the buyer is to capture the "benefit of the benefit" during the sales and buy process of the software and try to articulate  it to the  functional goals of the "owner" department. The luxury of the disconnect between why you acquire a system and what you can do with it might be somewhat reduced this way.

e-Sourcing Workshop by Jim Kelly

The e-Sourcing Workshop  by Jim Kelly (of JVKG  )  turned out to be brilliant (check out the photos above).Here was someone who had worked for many years in procurement  and was able to bring out the practicalities of technology adoption in the automation of requisition to procure and pay in a variety of industries.

Later, I had a quick discussion with Jim about how B2B research looks at the e-procurement problem. B2B researchers look at buy tasks as a new task or modified re-buy or straight re-buy with major implications for B2B marketers. Similarly, procurement folks, being key members of buying centers have an urgent need to convert products and services to "straight rebuys" that allows the buying process to really reach out globally for suppliers. And naturally, it is far more easier on e-procurement when requirements are standardized.

A great insight from Jim's talk was, for me, a better understanding of  the nature of the organizational e-procurement process. Consider a three year contract that is negotiated using an e-procurement system. The buyer who works on the system would typically move out of her/his role in three years when time comes to  put out an RFP for the new contract. Institutional knowledge  of the RFP process for the commodity in question is lost and the new buyer has to start all over again.

Mature Global design Strategies improve profits

I was rather happy to read the Aberdeen report's summary which highlights that global product design and development leads to reduction in product development time and time to market while allowing the protection of intellectual property through Digital Rights Management.

This blog and my research has been investigating these issues for some time and I am glad that the data is now available. The question is how do you make it work in practice, particularly if you are not a gigantic organization that can afford to open offices worldwide and actually place your person to work with the supplier in another country. That is an interesting question .....

From supply chain to "global value chain" a report from NECON 2007

I returned from NECON 2007 and was struck by a major change in the supply profession from 2006. In three  words "global value chain," in contrast to the narrower "savings" theme of the previous year.

While in 2006 there was some talk about managing the global supply organization and global suppliers - this time I found a distinct shift in the way speakers addressed these two issues. Large corporations like Pfizer are clearly thinking globally for both managing the supply organization and suppliers. The ISM Chair Lisa Martin's talk was just superb and covered the global value chain imperative succinctly.

Stephen Slade's  talk explained how software today can help with making the entire value chain more visible across global operations.Similarly the panel discussion on outsourcing clinical trials had a star panel of both buy and supply side experts and the panel brought out the complexities of the global contract research process.

I was motivated by all the exciting sessions to add slides to talk some more about the "low cost country" aspects rather than only focus only on the difference between business processes and knowledge processes. I too emphasized the "value" chain perspective in the context of low-cost country sourcing.

Overall, a great conference !

So what is the big deal with "Sterling Service Contracts" ?

Well for one,  the new Sterling Service Contracts , gets linked to many of the categories that I blog about! And that is a lot of categories...

Some of the things that Sterling Service Contracts will do includes, and I quote from Sterling's press release:

START QUOTE:

• Storefront capabilities that provide customers and partners with a personalized and branded buying experience increasing loyalty.
• Intelligent order orchestration that determines the most efficient and least costly location to fulfill an order.
• A 7000+ member logistics network that reduces the cost of inbound and outbound shipments through optimization, automation, and collaboration with carriers.
• Network-centric WMS that reduces inventory levels at each stocking location by managing inventory across all locations as a single inventory pool.
• Supply Chain Visibility capabilities that balance supply and demand by collecting, summarizing and displaying inbound supply information in a usable, understandable and actionable format.

END QUOTE

Sterling is probably not the only supplier offering this bundle though Forrester Research does think that the product is a step closer to the "perfect order". What's "perfect" about the concept and so fascinating is that it brings alive a lot of organizational theory that was developed for years and years before IT and the Internet made all this a reality.

Collaborative Product Definition Management (cPDm)

After a very nice Easter weekend, I found myself stuck like an old record on my April 1,post about how SFA happens outside the company and does not depend on existing customer data or processes, particularly when you are looking for new customers. Applications that can be quickly deployed,used and benefits seen make obvious sense for folks who want to sell more units of the same old widget.Therefore the Gartner report for CRM does not come as a great surprise. But enough!

What happens when you want to handle the front end of New Product Development?  This phase involves ideas, idea screening,concept and perhaps prototype development and concept testing. With global teams working simultaneously on projects web based PLM applications are a big hit. This Collaborative Product Definition Management (cPDm-interesting  abbreviation) )  segment is doing great and fore casted at almost 14% growth and will have 13B$ sales in the 30B$ PLM market in 2011 according to this report  -UGS corp is leading in this segment.

Once again, just as the SFA front end of CRM can be stand alone it makes sense that the cPDm front end of PLM  is also  finding a good market in stand alone SaaS  applications.

CRM -the front end of the Supply Chain

Today is April 1 and I wanted readers not to think of this post as some kind of a gag, at least not in it's entirety!I find that the media including the Internet has been rather quiet on this "April Fool's day". For example, while Google had a great search picture in 2000 on "Fool's day (check here) this year was quiet. In any event,I thought, I 'd start a new topic on this blog. This is the topic of CRM, the front end of the supply chain.

On the academic front I have been working for actually several years on some theory on how Sales Force Automation can be better adopted in organizations. In Supply Chain terms , the  front end of the supply chain includes distribution and customer relationships. According to me, the acquisition of new customers, with no previous transaction history  is- sales. If you truly want to mine your old customer data , you need to have past data in the first place. Ideally, a pretty solid data base of past dealings and interactions with the customer.  There is an explosion of activity in the CRM space going by the number of companies doing something or the other. For example, Sugar CRM has come out with a Project management suite ; Sales Force.com has added a customer collaboration piece; Oracle's Seibel is offering on-demand CRM as is Microsoft. I have been having a challenging  time explaining to a segment of my audience- viz. academics; that true CRM rests on the base of keeping track of financial transactions. Something must be sold and payment received to allow an entire back end of production, accounting, delivery, quality and satisfaction data to develop. If the customer has no prior "transaction" history, the prospect is that - a prospect and needs  a  Sales Force Automation  (SFA) approach. It was only today that I checked Wikipedia for CRM and felt somewhat comforted that Wikipedia has declared the CRM pages as "This article or section appears to contain a large number of buzzwords and may require cleanup.". I thought I needed to put a screen shot of CRM from Wikipedia today- just to say that CRM , it's conceptual definition and connection to SFA and the integration to the upstream Supply Chain will keep lot's of people busy in technology and business for years to come. No kidding!

Return from Vancouver and the tension between Web 2.0 and ERP

This is the 100th or centennial post of this blog and I thought I should write something hopefully in the "centennial" league! But first about my trip to Vancouver. The trip was great as was the in-depth exposure to SAP and the various Universities that have included SAP in the curriculum. On my way back I had the 11.20 pm flight to Montreal from where I was supposed to get onto the Hartford flight. But Air Canada canceled the flight due to non-arrival of the crew and I found myself on standby for the Toronto flight that finally left at 1.30 am and could get to New York La Guardia. My travels over the past one year have been always interesting with such changes coming up quite unexpectedly. This time, I thought positive and thought of the great scenery  at Vancouver and felt that I was far better off than the poor Jet Blue Passengers who were stranded on the iced runway!

Coming to the centennial bit of this post I have been thinking about how different the assumptions of Web 2.0 and the ERP world is. Web 2.0 is about open source, collaboration volunteerism and a certain element of uncertainty that can be tough if you are running a business and have to be accountable to customers,suppliers,employees and other stakeholders. That's where ERP systems like SAP come in. Every transaction is recorded for posterity and links to every other part of the organization and it's processes and therefore become more SOX compliant. Going forward global suppliers and customers would probably combine elements of the wonderful flexibility of Web 2.0 and the comforting rigidity of sound ERP systems and this blog will be watching the evolving "balance" with interest. ....