Choosing a Supply Chain Execution Software: A Web-Based Solution is Superior
You have your reasons for wanting to invest in a supply chain execution solution.
They likely include one or more of the following:
• To achieve greater operational efficiency
• To provide visibility to, and facilitate better collaboration with employees,
suppliers, customers, and partners
• To strengthen your ability to make better and quicker decisions
• To increase productivity
Your competitors likely have the same objectives in mind. In the never-ending quest to achieve and sustain competitive advantage, history repeatedly demonstrates that the winners make the right decisions before the others. Your people, your processes, your vision, and your timing will set you apart as long as you make the right decisions.
Four Dimensions of Evaluation
Selecting a vendor for an enterprise-level software package is serious business. It is a long-term commitment that has financial and operational ramifications. Choosing the "best" solution among the myriad of choices provides you with the greatest chance to operate with competitive advantage and achieve your primary objectives. Your evaluation and selection should be based on the following:
• Features and Functionality—a good fit
• Technology—flexibility while working within your constraints
• Scope of Services—cover all the bases with proven success
• Vendor Reputation and Viability—a vendor who is trustworthy
Features and Functionality
Imagine you've identified a vendor that offers the right technology, a wide range of services, and backs it all up with a strong reputation. At the same time, you learn that the product functionality only addresses half of your needs. Clearly, the other dimensions are meaningless without a good fit between functionality and application requirements.
This burden of capabilities puts upstart vendors at a disadvantage. Such vendors count almost exclusively on cutting-edge technology and market hype. While this may get attention and be appealing, it could be prohibitively expensive over time, since custom modifications will be needed to achieve functionality. A robust SCE application takes years to develop and incorporates the actual needs of hundreds or thousands of customers.
As with most decisions, this evaluation involves a trade-off. You will need to reach a balance between technology and functionality. Do not choose a legacy application merely because it offers a rich feature set. How many of the features are meaningful to your operation? Will the technology limitations inhibit future business opportunities? You would be better off with the right technology, so long as your core feature/functionality requirements are met; even if that means some "nice to have" features are not available.
To determine the degree of fit, identify your key requirements to address today's problems as well as the functionality you expect to need in the near future. Make sure to identify requirements for integration with existing business applications. This will require involvement from the various groups in your organization (IT, operations, inventory, shipping and order fulfillment, customer service and sales) that play a role in order fulfillment. Set limits. Which processes must remain unchanged? Are you willing to change some processes for greater efficiency?
Provide potential vendors with a list of key requirements and ask them to present an overview of the product that identifies how it can specifically address each of your key requirements. If it sounds promising, move on to a demonstration configured around your environment. Ask to see how to change the configuration as your processes change over time. Consider the core capabilities you need from the various modules.
For assessing TMS capabilities, for example, make sure the system supports the carriers and services you use. Likewise, in assessing WMS capabilities make sure that the system is flexible enough to support all of your critical processes and industry requirements (e.g., kitting, cross-docking, allocation strategies, expiration date and lot control, etc.) and supports newer technologies to meet your emerging needs (e.g., RF, wireless appliances, voice recognition, etc.). If you spend some time up front in this fashion you will know which vendors deserve to be considered on the other dimensions.
Technology
If a software solution fits your core requirements, the technology upon which it is based should become one of the deciding factors. IT philosophies vary among companies. The spectrum runs from early adopters that are comfortable riding on the cutting edge to those finding solace in knowing a technology has been used in the market for many years. Most IT groups prefer to operate in between these two extremes.
Over the past decade, platform and networking technologies have advanced at an accelerated rate. Concurrently, after years of decentralization and acquisitions, companies find disparate platforms and operating systems throughout the enterprise. No company can afford a rapid, enterprise-wide replacement of the legacy systems that have accumulated over the years. Such a change would require years of transition. As if that were not enough, companies must integrate their supply chains in order to achieve or sustain competitive advantage.
These are the constraints that companies face today and into the future. Fortunately, the Internet and its complementary technologies have matured to the point where enterprise-class applications are available that allow companies to take advantage of the software despite countless disparate systems within and beyond the enterprise. This means maximum flexibility within the framework of today's constraints.
Look at the technologies available from the various vendors that made the first cut. Which will allow you to deploy the application across the enterprise without major changes to hardware, operating systems, or databases? Which will allow you to install, manage, and support the application at a central site and deliver it to browser-based thin clients? What about leveraging technologies like voice recognition and wireless? Only Web-based enterprise-class applications make this possible.
Scope of Services
If a software solution fits your application and is Web-based, the scope of services allows you to compare the remaining prospective vendors. Here you are looking for things like the availability, quality, and relative cost of project management, installation and implementation services, technical support, and onsite service. Does the vendor offer a turnkey solution and service plans in which there is single source responsibility? Does the vendor offer a range of financing options to best fit your product acquisition standards? Does the vendor have the geographic range to support your current and future needs? Consider the effect of acquisitions and mergers. Even if you operate from a single location today, tomorrow you may have facilities in different countries. Make sure you are guaranteed the proper level of post-implementation support.
Vendors with the broadest set of services that can demonstrate an ability to deliver evidenced through a substantial customer base and supporting references, represent the best investment value. Overlooking any of these elements greatly increases the likelihood that the solution won't serve its purpose over time.
Vendor Reputation and Viability
The final dimension is vendor reputation and viability. The odds are that a vendor will be eliminated from consideration early in the process if its viability is in question. However, during a recent two or three year stretch, vendors so new that the ink on their business licenses was still wet were beneficiaries of multi-million dollar orders for mission-critical applications. Unfortunately many of these vendors vanished as quickly as they appeared and their customers paid a heavy price.
Remember that implementing a SCE solution requires a significant investment of time, resources, and money. You certainly do not want to make the investment only to discover that your vendor is shutting its doors. What is the true value of a solution if the vendor is not around to support it or lacks the financial strength to provide ongoing maintenance and enhancements? More than ever, as IT budgets are flat or have been cut back, it is critical that vendor reputation and viability be a key factor when selecting a solution.
Spotlight on Technology
As you consider supply chain execution software vendors you have an important choice to make with respect to technology. Do you make a new investment in old client/server technology by going with a Web-enabled solution or do you take a leap forward and leverage the unique capabilities and compelling advantages of a Web-based solution?
The choice should be obvious. There are only a couple reasons today why anyone would deliberately choose a Web-enabled solution over a Web-based one: either to extend the life of an existing legacy application, or because the desired functionality is not yet available in a Web-based solution.
Web-enabled applications involve adding a browser interface to a legacy application, be it client/server or mainframe. The user only has access to functionality that has been rewritten to interact with the Web. While this approach may make the application available to more users, the legacy application is fundamentally unchanged and still lacks the advantages of a Web-based solution.
Why is Web-based superior? The advantages are both numerous and significant. Above all, Web-based solutions are, by design, fully compatible with the Internet architecture. The leading Web-based technologies are Java and Microsoft .NET. Applications built using these technologies can deliver true collaboration and real-time visibility across your supply chain.
Advantages of Web-Based SCE Applications
Visibility—anytime, anywhere access to real-time supply chain information for use within your organization and to share with business partners or customers. Greater visibility allows for better inventory management. By knowing the status of inventory in real time, you are in a position to stock as little as possible. Turns are faster. Customers have immediate access to information about their orders. Suppliers have immediate access to information about inventory levels by location. The net effect is reduced cost, faster order fulfillment, improved customer satisfaction, collectively producing competitive advantage.
Access—viewing information provides insight, but the ability to transact on that real-time information provides true strategic advantage. The ability to transact should not be limited by the scope of the user interface—all functions should be accessible. In contrast to Web-enabled applications, Web-based applications provide users with full access to the functionality of the system. Transactions can be processed where they make the most sense. Instead of simply viewing information, authorized customer service personnel can make changes during the order fulfillment process to accommodate customer needs.
Likewise, warehouse managers can modify plans regardless of warehouse location and know that the information is up-to-date. The net effect is to empower users to have more control to achieve order accuracy and improve customer satisfaction. This, in turn, allows employees to be more productive.
Improved Data Integrity—A centrally deployed Web-based solution does not need multiple systems at each of your distribution centers to integrate data for a global view. Because it is deployed on a single system operating from a single database, the margin for error is reduced, thereby significantly enhancing data integrity.
Better data impacts the entire order fulfillment process and customer experience. Studies show that inconsistent data across disparate systems in an enterprise is responsible for implementation delays and negative perceptions of new applications. Although a Web-based application using consolidated data cannot change the fact that various databases were used in the past, it can prevent the problem from continuing. Reductions in error rates due to poor data reduce the cost of order fulfillment and increase the probability that customers receive what they ordered, in the quantity they ordered, at the desired location, using the appropriate carrier.
Improved data integrity will improve both revenue through better customer experience and bottom-line profit (fewer returns, duplicates, lower shipping costs, etc.). Web-based applications used throughout the enterprise make it possible.
Scalability—Maximum flexibility to support changing workloads and numbers of users. Unlimited but authorized Web access to all users throughout the organization and distribution network allows the system to support the enterprise as it grows. Web-based applications, by design, are more scalable than other applications. Scalability has never been more important as the supply chain becomes more integrated and organizations change.
And since most organizations have already deployed desktop technology with browsers and Internet/Intranet connections, the necessary infrastructure is already in place. This means your new application is available to employees, customers, suppliers, and other partners as you see fit, regardless of how your business grows.
Cost—Because Web-based applications require only browsers, and the servers are centrally deployed, maintained, and updated, the cost of deployment and support is naturally less. Ask your IT department how it feels about applications being installed on countless PCs throughout the enterprise. These folks have always objected to it.
A Web-based application allows IT to push the software solution out to users yet avoid the headaches associated with decentralized computing. These same advantages mean you are more likely to move to new releases sooner, thereby gaining any benefits from new features and functionality sooner.
Innovation—If your SCE application is not based on Java or .NET, chances are that little noteworthy development is taking place—soon it will be considered legacy. Enterprise applications vendors have to make choices about where to focus limited resources. Be careful not to invest today's money in yesterday's technology. You will sacrifice both the inherent advantages of the new technology and are unlikely to see much in the way of product enhancements or innovations.
Flexibility—Java achieved initial prominence with handheld devices. The utilization of handheld devices throughout and beyond the enterprise will only increase over time. Web-based technologies provide you with maximum flexibility in terms of which devices may be used to support your operations and supply chain.
Java has come a long way in its first five years, and recent developments have been particularly notable. Not only is Java capable of supporting mission-critical, enterprise-level applications, in a survey of major companies, the Standish Group found that Java beat out C++ for the first time as the language of choice for critical applications. Web-based applications built using Java have the added advantage of platform independence. A platform-independent application is built using a common code base that is able to execute on a variety of hardware platforms, operating systems, and databases like LINUX, Solaris, UNIX, NT and OS/400, Oracle, and SQL. This provides you with the ability to deliver consolidated solutions across a variety of disparate IT systems and keeps your IT options open for the future.
Advantages of Java platform independence include:
• Same code on all platforms, not several different versions to reconcile/integrate
• Integration/compatibility across diverse platforms—Aids easy
integration across disparate IT systems throughout your organization today,
as well as with partners or future acquisitions
• Data security—Compared to other technology platforms, Java is
immune to viruses. Computer viruses consume IT resources and interrupt operations
• Future flexibility in technology deployment options—you won't
get locked into a particular platform
• Its design offers you a comprehensive solution to view, manage and
optimize your entire order fulfillment and distribution network for improved
strategic management and decision-making.
If you are in the market for a supply chain execution solution to manage your orders, your warehouses, and your transportation needs, think strategic. Choose a Web-based solution that was developed specifically to leverage the Internet. Your company's employees, suppliers, partners, and customers will be glad you did.
