Supply Chain Shaman

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Supply Chain Software Circle Jerk

Circle Jerk:  A group discussion or activity between like-minded individuals that validates mutual biases or goals in a non-confrontational environment. 
Source:  Urban Dictionary
(Now that I have your attention, let’s get our mind’s out of the gutter and talk about a problem in the software industry.)
In the software technology world, there are two launch periods for new products:   the spring and the fall conference sessions.  In both, technology providers bring thought leaders together to tout their version of NEW.  In many ways, the vendors’ events are a coming-out party to launch their big ideas amid lights and fanfare on big stages.  This month, as I traveled the country listening to technology presentations, I saw big stages, lots of fanfare, but I did not see Big IDEAS.  As I attend the spring 2012 edition of NEW for supply chain management at vendor events, my mind keeps repeating the phrase from the Apollo 13 mission in 1970, “Houston, we have a problem.”  It is shortly followed by another phrase.  One that I learned while living in Texas, “What I see is Big Hat, and no Cattle.”
In short, I do not see NEW.  In this world of mobility, social and big data with the compelling potential impacts on supply chain, I find this SAD.  So, as I travel to vendor conferences, I have to report that I do not see anything COMPELLING, or RELEVANT.  What I do see is a pattern of software providers re-wrapping license software with additional feature function capabilities.  In the main stage presentations, they may reference the new trends, but then I find them doing  “a bait and switch” of what they are launching in this year’s feature and function debut on slightly tweaked architectures.  I define this here as  “Supply Chain Software Circle Jerk.” It is a pattern that I do not know how to break.
As outlined in the figure above, a software circle jerk happens when a software company starts with a good idea, but over the course of time becomes less innovative and less relevant because they “lose touch” with innovators and early adopters.  As software becomes more and more a discussion of feature function with IT directors and managers, there is a lower likelihood that the software can keep pace with the more promising trends in technology.

Tales from the Road

There were a few bright spots for me in this spring edition of supply chain software news. My most exciting moments came mainly from briefings. I am excited about the work that Llamasoft is doing for network design, the use of Enterra Solutions for Digital Path to Purchase, Kinaxis’ work on S&OP visualization, Terra Technology’s work on the redefinition of demand planning, and the use of Intelleflex for streaming RFID in cold chain environments.
Here is my “take” of the events that I have attended:

  • SAP Insider used to be a must-attend event for me.  I will not attend another one.  The SAP Insider event has become so productized –manufacturing in one room, procurement in another, transportation in another and planning in a fourth room–that it is hard to remember that our goal is to build a supply chain system from the customer’s customer to the supplier’s supplier.  The main stage presentations are also classic examples of bait and switch.  The executives talk about the big trends of big data, cloud, social, mobile and advancements in predictive analytics and then show the next version of Customer Relationship Management (CRM).  It makes me laugh. (One of those deep belly hoots.)  However, there was one outstanding moment.  I loved the manufacturing mobility challenge workshop.  It was a bake-off by four system integrators building mobile applications on SAP Mobile Platform 2.  My vote was tied between the work that was done by Converge or Neoris.  It was great work by four system integrators in that one hour that drove home to me that we need to be redesigning supply chain systems to use REAL-TIME, not near real-time data.
  • I had a good discussion on supplier networks at AribaLive with a number of executives.  The Ariba event was attended by 1900 procurement executives.  The event was expertly executed and the speakers were wonderful, but I left the event unexcited. Under the tutelage of CEO and Chairman and Chief Executive Officer, Bob Calderoni,  Ariba has successfully  and conservatively navigated a very safe path through several turbulent markets.  I like Bob.  I think that he has done a good job.  However, as Vivek Kundra, former United States CIO and now Executive Vice President of Emerging Markets at, spoke of the convergence of cloud, mobile and social and the future potential of the next generation of applications, I was excited. It was the Ariba I wanted to see.  The Ariba that I found was walking down a more conservative path.  Ariba’s launch is largely a more effective network for more efficient procurement transactions designed based on user feedback on a conservative architecture.  The contrast between Vivek’s message and the Ariba reality found me wanting.
  • I then went to the Teradata Influencer’s session in San Diego.  The Teradata event is also well executed.  They do a great job with influencers, and I am excited about their purchase of Aster Data.  In this audience of BI analysts, I always feel like an outcast– they all know SO much more about BI than I ever will–but, I always leave stimulated and wanting more.  However, as I listened to Teradata discuss their differentiation and foray into Big Data architectures, I wanted to get past the data layer to the semantic layer to redesign package applications.  I have so little patience to talk about data architectures for the sake of architecture.  The use cases were financial services, eCommerce and hospitality services.  I gave each of the Teradata executives supply chain use cases and begged for investments in manufacturing and supply chain.  Let’s see how it goes.  I struggle with how to get the technology providers excited about supply chain.
  • I am now at Inforum 2012.  As I sit in the audience, I watch people trying to figure it out.  Infor now has so many bits and pieces of stuff that they have acquired over the years.  The executive message on stage was all about products and industry solutions.  On stage, Infor speaks of their new middleware termed ION and the introduction of mobility and a social layer. I like the sound of all of this, but what about cloud and advanced analytics?  It was a very traditional set of presentations that was not received well on twitter.   Infor is taking a pragmatic approach.  I like some of their stuff.  For example, their food and beverage solution has many jewels hidden in the covers.  For example, I think that there is promise in combining the Intentia application that was acquired with Lawson with the Fygir application for tank scheduling.  I like the fact that they now have a Sales and Operations Planning Solution, but it will take time for it to get traction.  I see them struggling to execute in the field.

So what do you think?  Do you think that we are in a circle jerk? Or have you seen something cool? Please share.

Current State

In our Voice of Supply Chain survey in March 2012, we surveyed 62 supply chain executives.  When we asked for current state of satisfaction on current software applications, we found a surprising gap.  I attribute most of it to “Supply Chain Circle Jerk.”  
Q16. How important are each of your current  IT systems to your supply chain organization? SCALE: 7=Extremely important – 1=Not at all important
Q17. How satisfied are you with each of  your current IT systems shown below?
SCALE:  7=Extremely satisfied – 1=Extremely

The Shaman’s Take

The gap is the largest that I have ever seen. (I have been doing this type of analysis as an analyst for over nine years.)  I think that we have lost our way.  I think that three things have happened:
1) Supply Chain Circle Jerk.  Software innovation has largely died in traditional vendors.  Innovation is fleeting.  The road map for the future of supply chain management needs to be about more than feature/function enhancements. …or a new middleware for a vendor to integrate acquired software.  …or columnar architectures. …or cloud for the sake of cloud.  We need to be using new forms of technologies to solve new problems.
2) Extended ERP.  I left the Gartner Group (the first time) when they launched ERP II.  I strongly believed then, as I do now, that it was wrong.  I felt that it was bad advice.  I believed that we were confusing the governance models of systems of record and systems of differentiation.  Tight integration of supply chain applications with ERP has taken us backwards, not forward.  For a software vendor, it is hard to innovate in decision support when developers are busy with mission critical ERP upgrades. Likewise, for a manufacturer, it is hard to innovate on decision support analytics when you cannot pay the bills.
3) Definitive ROI.  When companies are investing in software, there is a big whip to drive an immediate ROI.  When software companies are investing in new enhancements, there is also a ROI imperative or threshold to be met.  Very seldom do I meet someone that has an appreciation or understands that there is also a need for software innovation investments.  I don’t understand how we can invest dollars in R&D without a mandated ROI, but cannot apply the same standard to software for process innovation.  It reminds me of a couple of quotes that I collected while writing the book Bricks Matter.

“If there was a mandatory ROI, we would never have invested in email or personal computers,” Randy Benz, then CIO of Energizer. 

“If we had not invested in supply chain planning, we would have never been able to scale our business seven-fold in three years.  We did not know it then, but we know it now, ”  CIO of a meat packer.

Calls to Action

At Supply Chain Insights, we have successfully completed our first two quantitative studies. Five chapters of the book are written. I am 1/2 way through the last chapter.  Our new website is up.  I am officially back in the research business.  Reports to follow next week.
We are continuing our work to build research for supply chain leaders wanting to drive early mover advantage.  If you are interested in the redefinition of supply chains based on big data, we would love your help in filling out our next survey.
If you would like to hear some of our new research, please sign up for the two upcoming webinars:
April 25th
Voice of the Supply Chain Leader
May 15th
What is Supply Chain Agility?

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