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core supply chain activities to work well as a unit.
People are the greatest assets for an organisation and
matching people with the right skill set for the right
tasks is also what differentiates the leaders here.
Several important themes from the top
performers emerged:
Supply Chain Management: it is crucial for
companies to understand when to stop focusing on
reducing the cost of the supply chain at the expense
of supply chain functional integration and to focus
on developing a customer service ethos.
Strategy & Governance: the free flow and
usability of information with suppliers, customers
and internal functions appears to be one of the
most important differences that separates the top
ten from the rest of the group.
IT Systems: IT systems should be integrated and a
core part of the SCM process. However, IT systems are
only one of the pillars for success – getting the
process right and aligning cross functional objectives
using a simple system seems far more important
than the deployment of the latest technology.
Capabilities: the typical learning and
development programmes of the top ten
organisations far outperformed the rest. Spending
at least six weeks per year in SCM-related training
Companies that distinguish
between the skill sets required
from their employees for idea
generation vs. idea execution
and target employees
accordingly, also fit in the
high performance category.
and maintaining a knowledge repository has helped
build key supply chain capabilities for the best
organisations. Rotating and matching people with
the right skill set with the right supply chain role is
also essential for superior performance.
The performance of the best organisations have
three things in common: 1) a strong, identifiable
culture (or ethos) and fast decision making
capabilities 2) alignment across functions – both in
behaviours and objectives and 3) little dependence
on the type of IT systems implemented.
Companies that distinguish between the skill sets
required from their employees for idea generation vs
idea execution and target employees accordingly,
also fit in the high performance category.
The link between the SCM objectives, strategy
and vision also lays the foundation of the work
culture of the company. Many of the attributes of
the top performing companies are directly
connected with the organisations culture and ways
of working. Programmes to develop the right
culture and management style have proved
fundamental to support the development of high
business performance.
BILL BRONSKY IS THE MANAGING DIRECTOR OF OBA.
THINK SERVICE FOR SOFTWARE
User friendly interfaces, rapid deployment, lower initial
investment in capital and staffing, plus a reduction in software
management responsibility all make SaaS an attractive
alternative.
JOHN LAMB
The way that logistics software is bought and run is
going through big changes as companies that
provide applications switch from programmes
installed on computers in their customers’ premises
to ones that are sold as a service via the web.
Software as a Service (SaaS) or on-demand
computing is a new model that is gaining rapid
traction among software users. Research firm
Gartner Group forecasts that over a third of all
software will be delivered in this way within
three years.
Simplicity is the big appeal of SaaS. Instead of
having to maintain in-house hardware and employ
IT specialists to do it, users rely on hosting
companies to take care of the housekeeping.
Upgrades, security patches and other changes are
carried out by the supplier.
User friendly interfaces, rapid deployment, lower
initial investment in capital and staffing, plus a
reduction in software management responsibility
all make SaaS an attractive alternative to software
on a user’s premises.
In theory, SaaS is cheaper than buying a licence
because customers only pay for the features they
use. And they do not pay for hardware that is only
part used. However, there are additional
management overheads which reduce the
potential price advantage.
“Going on demand or SaaS means that lots of
knowledge, information, and connectivity can
be leveraged across multiple users, customers,
and partners,” observes Josh Greenbaum, from
Enterprise Applications Consulting. “That
leverage is enhanced by the entirely new things
you can do once all that data and process have
been organised under a single roof - things,
such as sophisticated goods tracking and
landed cost calculations that were either
impossible or done poorly using pre-SaaS
approaches. That's innovation that the
customers take right to the bank.”
Logistics is a business particularly suited to SaaS,
because many concerns are small and lack the
resources to invest in on-premises IT. Supply chains
consist of a constantly changing cast of
manufacturers, agents, logistics companies and
freight firms that have very different IT capabilities
and approaches to industry standards.
“We are entering an exciting new age where
there will be no need to constantly descend to the
basement with an oily rag,” says Greg Johnsen, vice
president of sales and marketing at GT Nexus,
which runs a trade and logistics portal.
“Instead, enterprise technology now comes
out of a modem DSL or fibre optic cable, tended
DECEMBER 2008 SUPPLY CHAIN STANDARD
www.supplychainstandard.com
by an unseen team of expert mechanics, always
making it hum.”
The increasing popularity of on-demand
computing has created a new group of SaaS
companies that are growing rapidly.
SalesForce.com, a pioneer of SaaS, recently joined
the Fortune 500 list of companies.
And established firms such as Oracle, SAP and
HP have all joined the SaaS trend with varying
degrees of success. Some well known names such
as Microsoft are keeping a watching brief. It calls its
hybrid approach “software plus service”.
However, smaller SaaS suppliers are beginning
to flex their financial muscle. Descartes Systems
Group, a Canadian SaaS company specialising in
logistics software stumped up €1.4m last month
for Dexx, a Belgian customs filing and logistics
messaging provider.
The deal, which gives Descartes an entré into
Europe, came ahead of new EU regulations
Logistics is particularly suited
to SaaS, because many
concerns lack the resources
to invest in on-premises IT.
requiring advance notification of the arrival and
contents of shipments to customs authorities.
GXS is starting to build a suite of SaaS-based
applications that sit on top of the company’s
Trading Grid, which consists of a network of data
centres originally developed to provide electronic
data interchange services.
“Because SaaS is simpler and easier to use, it
encourages greater use (of electronic data
exchange),” says Mark Morley, industry marketing
director for GXS.
One of the SaaS applications GXS has
developed is a hosted service for managing spare
parts shipments.
“What we try to do is provide a web-based
solution that has an end-to-end route, so that
when a container goes through a customs or
border post we handle all the shipping
documentation,” says Morley.
Most people seem agreed that SaaS is a better
bet than the DIY approach to IT. The question
now is, just how far can this new way of delivering
software go?
JOHN LAMB IS A FORMER EDITOR OF COMPUTER
WEEKLY, INFORMATION WEEK UK AND
INFORMATION ECONOMICS JOURNAL.
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