“…the art of the possible, the attainable — the art of the next best” ― Otto von Bismarck
This morning I landed in Frankfurt. Keeping with my normal Sunday night ritual, I poured myself a cup of tea to pen my weekly post for the Supply Chain Shaman. I have been writing weekly posts for this blog for eight years. The length of time is hard to believe. I thank you for your support over the years. The Supply Chain Shaman blog now has over 15,000 readers. When I wrote for AMR Research and Gartner, my best reach was 2500 readers/article.
Amazing. I scratch my head how it is possible to write from a desk at a hotel in my travels and reach this number of readers. It would not have been possible a decade ago. I also could not have conceived it. In my way, I think that I am helping to transform the analyst model to the “art of the possible” through open and independent content. Here I want to use the analogy of freeing a caged bird to help you think hard about the “Art of the Possible” in planning.
I like this picture. For me it is a metaphor for the “Art of the Possible.” It is about opening a door and allowing a caged bird to fly free to new destinations.
My Focus: Helping Leaders Achieve the Art of the Possible
My passion is helping supply chain leaders. I write for business leaders, not IT teams (if the IT team wants to read the blog, no worries, but they are not my target audience). The research, share groups, training and the event services of Supply Chain Insights are all focused on helping business leaders understand the “Art of the Possible.”
Tomorrow, I will attend the European Network of Networks meeting. The goal of this Network of Networks share group is to provide an environment for business leaders and technologists to work shoulder-to-shoulder to test new technologies to redefine B2B processes in value networks. There are two groups: one in North America and one in Europe. It is open to all.
To date, supply chain processes are enterprise-centric. When companies speak of “end-to-end processes,” the walls of the enterprise define the start and the stop of the E2E vision. A limited view of the possible. To drive value, this needs to change. Together, as innovators, we are trying to define multi-tier processes to drive value networks to improve commerce. Together, we are testing use cases combining cognitive computing, blockchain, open source analytics, and Internet of Things (IoT).
The pace of technology change is faster than business user adoption. The first step is education. The second is action. In my travels, I see companies stuck in a quagmire of arguments, focused on the standardization on yesterday’s technologies versus the adoption of new approaches. In embracing the art of the possible, companies struggle. Many companies make the mistake that yesterday’s technologists—JDA, Logility, Oracle, SAP—are good business development partners to define the “art of the possible.” (On a side note, during my 15 years as an analyst, I have never seen co-development with large established technologists be successful.) The internal dissonance within the manufacturing organization is deadly.
In parallel, the consultants seeing the downturn of the ERP market are feverishly attempting to define digital supply chain practices. The race is on. The problem is that it is hard for them to make the shift. Digital innovation, to achieve the art of the possible, is all about thinking differently to drive new outcomes. In contrast, the consulting business model—designed for large deals with large companies—focuses on large projects with known ROI. As a result, while the consulting innovation center Powerpoint decks bear the words “Digital Innovation,” the sale is process incrementality using existing approaches. Take caution when you see the glib words and pretty artwork. I find there is not a lot of ‘there’ there. This is the struggle.
Following the Network of Networks meetings, I have meetings scheduled with five food/consumer/consumer durable companies to discuss digital innovation agendas. Each is struggling. Four out of the five have attempted to implement SAP HANA with discouraging results. This includes cost overruns of 2-3X the budget and completion 50% off of the timetable. It is expensive and disappointing.
Building A Cognitive Platform
So, many companies ask me, “What can I use as an enterprise platform to power the new engines of cognitive and prescriptive analytics?” The business problem is that the global supply chain—composed of increased complexity with nonlinear processes—requires the power of new engines. Most of the scientists working in Artificial Intelligence, Cognitive Computing, and Prescriptive Analytics do not understand supply chain. They bring great energy and potential, but there is tension between the art and science of analytics. The best-of-breed technologists tend to overcommit and underestimate the difficulty of putting an engine on an enterprise-class platform. They understand the engine, but not the requirements of an enterprise-class architecture with global support. This includes role-based security, user interface, and workflow. With SAP unable to meet the challenge, the question is where to turn? My answer is Anaplan.
While SAP HANA is failing to deliver on the promise of the “Art of the Possible” to embed new engines to drive insights and power the user experience, I am bullish about the potential of Anaplan. Founded in 2006, Anaplan is attempting to redefine decision support. While the message “Connected Planning” lacks definition for the supply chain leader, the Anaplan platform delivers cloud-based business planning and a performance management platform based on a single hub. A benefit is self-administration of the model by business users. The Anaplan team has more experience and knowledge in financial and customer-service planning than supply chain. As a result, in many of the companies where I work, the power of Anaplan is unknown. When I mention Anaplan to manufacturing supply chain leaders, there is no recognition of the brand. My belief is that job one for Anaplan is brand recognition and market positioning.
The second is deepening the level of supply chain understanding. Their supply chain presentations at their annual event—Hub—were some of the worst that I have seen. A supply chain leader steeped in process understanding would struggle to think twice about considering the platform.
The third is clarifying market positioning. To illustrate the point, let me share a story. I had a call last week from a client that short-listed Anaplan, o9, Kinaxis, OM Partners, and SAS DDPO to help them solve their planning problem. When I heard the list, I put the phone on mute and laughed. The solutions are so different it was clear to me that confusion reigned in the client’s team. Why would the company short-list such a dissimilar list of technology vendors with differing capabilities? The root issue was market education. However, the struggle for Anaplan is that they are very different, and they get pulled into “me-too” sales cycles. I encouraged the buyer, in this case, to think more broadly about the use of Anaplan as an overarching global platform.
This is what I shared on the call. While new at supply chain and evolving in their capabilities, the Anaplan platform supported by a Global Organization at scale offers us five exciting capabilities:
- Volume to Value. Today, the focus of planning is driving better insights on volume-based planning. The systems are blind on cost. The flexibility within the Anaplan platform enables the definition of applications to enable value-based decisions. This includes cost-to-serve, revenue-based assortment plans, customer policy, and the cost impact of Sales & Operations Planning (S&OP) decisions. I am passionate on this topic since 27 out of 28 industries are losing ground on margin.
- Redefining Planning. Planning for the Masses. Last month, I visited a company with 18,000 employees in global operations. They had 300 supply chain planners across demand, supply, production planning and transportation execution. With their margin tightly linked to the changing oil markets, the company was struggling with how to connect the decisions of their 5000 business leaders to production planning and bidirectional orchestration of price implications. This included feedstock selection/bills of materials and product assortment decisions for customers. The answer is Anaplan. While the traditional thinker tends to think about tools that are extensions of today’s planning systems—S&OP technologies from JDA, Logility, Kinaxis and SAP—as the answer, the problem is that this group of business leaders will never become good at the use of existing planning technologies. They have different needs than the core planning team. Anaplan redefines planning for a larger group of business planners, providing an easy-to-use role-based interface administered by the business user.
- Connected Planning. What-If Analysis and Collaborative Workflow. Only 1/3 of companies have what-if analysis. This is critical to understand options and drive organizational alignment. The Kinaxis model is well-designed for what-if analysis, but the limitations of the data model for process-based consumer industries along with the high cost make it difficult to justify. Anaplan offers a lower-cost, more flexible cloud-based alternative. The Anaplan platform can stretch across multiple technologies to enable what-if analysis. This is important since the average company has 5-7 ERP systems and 3-5 Advanced Planning solutions. My advice to business users is not to use Anaplan as a replacement tool of existing planning technologies; but instead, to use it as an overlay technology to improve access by business users for what-if analysis and a collaborative workflow.
- A Platform for Machine Learning/Cognitive Computing. I am passionate about the potential of cognitive computing, but the ego and arrogance of many of the decision support best-of-breed technologies frustrate me. They are So excited about the potential of their engines but so unaware of the requirements of enterprise-class software or the difficulties of supply chain processes. There is tension between art and science. The Anaplan platform helps. If we open the cage of existing thinking, with Anaplan, multiple cognitive technology engines tethered to the Anaplan platform to enable role-based decisions from multiple learning engines. The platform helps cognitive computing grow up. Since the cognitive computing players are smaller best-of-breed players without global scale and support, the use of Anaplan as a connecting engine helps to solve a number of issues.
- Self Administration by the Business Teams. I still work with a number of customers using SAP BW or Cognos. These reporting technologies are not user-friendly. The evolution of descriptive analytics—Tableau, Qlik, and Spotfire—changed this paradigm. Business users can now configure dashboards and reports easily. The same is the case with Anaplan and model tuning. In existing planning systems, model development and model tuning was the role of specialists. Today, it can become a specialized business function. So why should you care? If done right, this can ensure better output from the plans.
Imagine the bird escaping the cage. We, as supply chain leaders, are in a cage. We plan using core decision-support technologies that require a high skill level and clean data. Both are easier to say than to achieve. In the end, we get a plan that only gives us insights on volume. If we are lucky it is a good plan (I am finding that more and more are not). We are blind to value and cost implications. So, what if we could unleash the power of planning to the larger organization with easier to use models that drive new discussions on volume to value? What if the models could be more easily deployed and maintained? What if we could connect all of our planning engines in a meaningful way? I think that this is exciting.
So when you see the next Anaplan presentation that is high-level, glitzy and full of buzzwords, don’t throw the baby out with the bath water. Instead, put their capabilities to work. Fight the urge to squirm in your seat and discount the validity of the technology (their presentations are some of the worst in the industry). Instead, challenge Anaplan to help your organization get free from the cage and define the art of the possible. I think that it is worth the journey, but I would love to hear from you.
Join Our Event to Gain More Insights on the Art of the Possible
This weekend, I sent personal invites to business leaders and Supply Chains to Admire Award Winners to attend the Supply Chain Insights Global Summit on September 4-7, 2018 in Philadelphia, PA. Designed to help supply chain leaders to think differently and to drive new outcomes, the agenda is unique. Designed for extreme networking, the conference is small and intimate. Where else can you attend a conference with no sponsors, a 60/40 ratio of business users to technologists, and hand-picked presentations with a focus on driving change? There are forty seats left. We believe the event will sell out. Don’t let this opportunity slip you by.
To learn more about the Art of the Possible, check out these recent posts:
Parts Are Not Parts
Provoking the Industry to The Move Past Incrementalism
Three Reasons Why SAP is a Risk for your Business