Will the ERP Products and Vendors survive Mobility Onslaught?

As one of the key technology trends these days, Mobility is arguably moving at the fastest pace even in the developing world and it is predicted by almost all leading analyst firms across the globe that it will be very difficult for any application to survive if they are not available in Mobile Devices by 2016-17. This puts our old war horse ERP into danger of extinction. Though, it seems very difficult to replace ERP with smaller mobile friendly applications but it will put immense pressure on this bulky application that needs large compute, memory and bandwidth.

Though the two bigger players in ERP space have started taking steps in moving at least the analytics product around their ERP, to mobile devices but they are still sluggish in developing a mobile device friendly ERP product. I have observed that users are now more mobile than ever and they do not want to keep sticking to their seats or cubicals to make transactions but want the applications to be available on the tablets or even better if on mobile phones. This enables them save their time and increases their productivity. With WiFi becoming a norm even on shop-floors, there is no reason that the users will not want this natural extension to ease pressure on them.

 

Yes, some of the transactions will need the user to be in the manufacturing facility or office building such as receiving material at gate where user has to be present at the gate for proper entry but with geo-fencing coming in, these situations can also be handled very well. Infact, there are a lot of other benefits if an ERP becomes available on Mobile Devices but I would not go into that discussion in this post.

Due to the slow response from the ERP product vendors on making the product available on Mobile Devices, a lot of mobile application organizations have mushroomed who are helping the organizations to bring critical functions as an app on mobile which will talk to the ERP and will act as an extension to your ERP. Believe me, the ERP product heavyweights are losing heavily on licenses because of this – which is another reason for them to do something about it fast. Manufacturing activities like production booking, confirming raw material consumption or procurement related activities like material receipt at gate, inspection etc. can be easily done in mobile apps which will feed the data back to the ERP backbone so that single source of truth remains in system. Similarly, organizations especially in services sector have started extending applications on mobile for their customers as well as suppliers and have created a nice bridge between these complimenting entities and the entire data flows back and forth from ERP making it a one simple application for all entities involved. The ERP vendors are on the losing side here too.   

One of the major IT advisory consultants have already predicted that ERPs will become legacy by 2016 and with the onslaught of mobility into the entire game, this seems to be getting more and more difficult for the ERP product vendors to remain ahead in their field. I would not be surprised if we see a completely android or iOS based mobile ERP that works using 3G or WiFi (when available), is hosted on cloud and needs very little compute, in near future. Let us brace ourselves for exciting things happening in Mobility.

Virtualization: It is the need of hour for IT organization today

Today there is a great buzz around the benefits of virtualization. The term “virtualization” has taken on great marketing value. However, the term has disparate definitions - suppliers of network gear, desktops, operating systems, security, and outsourced services all have assigned the term very different meanings. Even within the storage industry, there are widely differing definitions as to what constitutes virtualization. Most storage solutions support virtualized storage over and above the basic concept of Logical Unit Numbers (LUNs) and centralized management of the arrays. No two storage virtualization solutions are exactly the same, with some being widely different from the others. There is, however, a common element: storage virtualization means adding an abstraction layer of software that hides the physical devices from the user and allows all devices to be managed as a single pool. This means data is represented differently from where it physically resides and it is managed as a logical unit. As the storage virtualization market matures, the definition will narrow into a commonly accepted set of functions. The common goal for everyone is to easily manage data across multiple platforms, solutions, and technologies and allow effective allocation and reallocation of resources with no planned or unplanned downtime.

Virtualization is gaining ground and one contributing factor to this rising demand is the virtualization of servers and PCs, which increases the amount of data that needs to be stored centrally. For example each server VM (virtualized OS and application stack) has a copy of the operating system, rather than sharing one copy of the OS across multiple applications on the same server. Storage virtualization enables more efficient utilization as all forms of storage (NAS, SAN and server-based disk) by collecting and managing them together as a single unit with no stranding of storage assets.

Virtualization is a complex process and needs to be thought completely through before implementation begins. A well disciplined IT organization should have formal plans in place for every major project.

All IT organizations are under great pressure to deliver more with less. While storage virtualization is relatively new, all of us have enough information to strongly recommend a set of best practices for organizations deploying this technology:

• Make a plan. Company management needs to understand the goals and objectives of deploying this new, additional layer of technology
• Formal training on the tools. Storage virtualization adds an additional layer of software that can either enhance the performance of the datacenter or add to its complexity. Formal training can ensure that these tools are successfully installed and performing as required
• Measure the results. In concert with the plan, organizations should measure the results of any new technologies implemented. . Only by understanding the real results of deploying new technologies, corrective actions can be taken or further investments be made to enhance the performance of the IT infrastructure

So what are you waiting for? Go ahead and evaluate your virtualization needs to remain ahead of the curve.

Trend: Blend BPM with your ERP to save cost

ERP is a well known business transformational system and almost all of the best in class organizations have deployed it to conduct their business. We all know that ERP is not one of the economical solutions and takes lot of organization's resources while deploying and after deployment to maintain and continuously improve the design, data structure and configuration. These days after just concluded recession, the focus on cost is more than ever and every investment needs to go through a magnified scanner before they are approved. While continuous improvement and innovation is essential to stay ahead of the competition,  it has now become more important to come out with a ROI based approach and there is when the role of BPM or Business Performance  Management comes into picture.

BPM has multiple definitions, but if we state it simply - it is meant to manage the performance of business through a set of processes that defines goals, KPIs, metrics etc. against which a business is measured. Though the metrics decided by business can be measured by using ERP itself but lately it is seen that usinf much evolved BPM solutions have started making a considerable impact on the way these measurements are done and corrective actions are taken. The ROI of these solutions is also much improved as BPM solution deployement in most cases is economical. Till some time back, BPM solutions were being used for categories like:

• Strategy Management
• Financial planning, budgeting and forecasting
• Reporting and consolidations
• Profitability and cost management

In addition of above categories, now BPM is increasingly being considered as the essential extension of ERP in areas like Supplier payment processing, credit management, sourcing etc. and it is time that we also start looking at the positive and the negative aspects of using a BPM solution to complement our ERP deployment and take more and more benefit from it.

ERP Trend: Open Source ERP is gaining ground as FREE ERP

Recent recession has heightened interests in open source software among CIOs of world as well as ERP evangelists as a way to reduce the cost of ERP deployments. While some organizations have already begun Open Source ERP projects or at least have started evaluating the available options, the corporate cost pressures and cost cutting measures that are inevitable consequences of the economic downturn have made sure that Open Source ERP consideration is high on a CIO agenda. The most visible cost advantage of moving towards Open Source ERP is due to lack of license fee but we need to take a closer look at all the pros and cons before we take a final decision.

As we know, Open Source ERP is something that you can download from the web completely free of cost and run it in your own business environment after tweaking it as per your business needs. You do not have to pay any license fee to any ERP Vendor and this software comes to you absolutely free of cost. Other than cost, the additional benefits that an Open Source ERP offers are:

• Independence from ERP Vendors: As these software packages are available freely and there is no one vendor controlling them, you remain independent of the vendors. All the details about the implementation methodology, coding standards, table structure etc. are well documented in user manuals and other documentation which makes it easy for the implementation team – be it consulting partner of client organization’s own team – for implementing the software
• Flexibility in configuration and customization: Since Open Source ERP has completely open source code; there is 100% flexibility in configuring and customizing the software as per your own business needs
• Fast pace of implementation: Since these software packages are simple to fine tune and are far less complex than regular ERP packages, the pace with which you can implement these, is much higher than implementing traditional ERPs
• Easy training: Open source ERP packages are available not just free of cost, but also with complete licenses, comprehensive documentation and user manuals, allowing the users to learn and understand their usage on the fly. You don’t need to spend a whole lot of time and money on training your employees just to use the package, and necessary modifications can be made to the package as per your needs
• Resource availability: Since open source ERP packages are developed using popular technology which is used maximum around the globe, finding the resources who can implement, develop and test these, is a much easier task bringing down the cost of deployment further down

Like everything, Open Source ERPs are also not without their share of disadvantages and these vary from being less end to end solution for all industries to lower security and low controls on customizations. These disadvantages though can be overcome if more and more organizations move towards this side which will lead into more investments in these software packages making them far more robust and complete.

ERP Trend: Integrate clouds based applications with on premise applications

Clouds are here to say as they offer quite a bounty of benefits over on-premise enterprise applications. Cash is and will remain as one of the scarce resources with the organizations in coming days and that will remain as one of the major contributory factors to encourage these organizations towards clouds based applications. While moving all the existing applications from on premise model to cloud based SaaS model might not make sense for these organizations as the investment has already been made in licenses, hardware and internal team’s development, it makes perfect sense to go for the SaaS model for the new best of breed applications or business intelligence systems. This means that now the CIOs need to take care of two architecture models separately which is not a big issue but the major pain is that these systems are not on talking terms.

The need today is to have seamless integration between the on-premise applications and the cloud based SaaS applications. While there's a noticeable increase in application deployment in the cloud, much of the integration between on-premises and cloud is done in a point-to-point manner. Some of the connections that cloud based providers like NetSuite are now making are cloud solutions (e.g., Salesforce.com, NetSuite or OpenAir products) connecting to on-premise products. That’s a bit more challenging than the old-fashioned integration of two on-premise applications together. Those static ‘interfaces’ were gold to systems integrators. Those ‘interfaces’ consumed a lot of implementation time and, once set and tested, were hoped to last the life of the application. They rarely did as one application or another would get an upgrade that changed the interface needs. So customers and their vendors need to rethink their integration strategies and remove the artificial barriers between internal integration and B2B integration, since the hybrid deployment model will be a reality for the majority of large companies.

One of the best practices is best practice is to harmonize the Information architecture of the SaaS and on-premise applications and make sure the data formats are aligned or translated properly. One might have to deploy an MDM hub. Before that, one should verify that key processes and transactions will still work, end to end, over the distributed Cloud applications. Aggregation Cloud brokers may be used to combine multiple existing services into one, taking the burden of data and process integration from the client. A broker means both a provider and a distribution technology. The broker would also take care of revenue sharing between Cloud Providers if any. For integration between multiple Clouds and on-premise applications, a clean SOA architecture simply eliminates the internal integration fur-ball spreading in the Clouds. For a single application, outsourcing to SaaS without SOA may be still all right.

Let us look at what Open Connect is doing. It is not only connecting these very dynamic cloud based apps to on-premise apps, it is also doing cloud-to-cloud connectivity. Imagine your accounting application running on one firm’s cloud environment, interacting with another cloud’s CRM solution that’s also interacting with another services automation solution on a third cloud environment. Now, to make it more complex, imagine that all three of those cloud applications are changing, simultaneously and continuously. Each system will need the awareness of the other solution’s changes. Interfaces will become fluid and very dynamic. Finally, consider that the user may be unaware that these background changes are even occurring. Now that’s a big jump in integration. That’s a jump the on-premise vendors can’t complete.

The questions is that when many on-premise vendors cannot even create a multi-tenant version of their product line (most can only offer hosting services), how can they deliver the level of cloud-to-cloud integration that the market will demand? This means that the next ERP solution that you are evaluating, you should check for two new features:

• The solution can do on-premise to on-premise, on-premise to cloud, and, cloud-to-cloud integration
• The solution can, independent of end-user interaction, dynamically update interfaces and system-to-system integration

Check them out for sure!

6PWXGU8TT4X7

Trend: Rent a CIO for ERP Deployment or “CIO as a Service”

The idea originated from quite a few failures or ERP disasters across the world and the impact that made to the organization. ERP projects take the largest pie in the IT investments of a company and it has the power to make or break the whole growth strategy of that company. This idea turned into a new trend that is fast catching up across the world especially in growing economies like India and China. The trend that started in the United States few years ago and was keeping low and almost died down during the economic downturn, has picked up quite well in India and China. The organizations that either do not have an ERP centric IT department or have no specific skills around ERP but would not like to recruit a new CIO or an additional senior expert on ERP, got a new option these days where instead of hiring a CIO for their ambitious ERP project, they can rent a CIO on contract wherein periods vary from 6 months to 12 months. This makes sure that you are not adding a recurring cost to your balance-sheet but still getting the best talent & expertise available for this purpose.

Normally, this model works best with the milestones basis payment and not with monthly salary basis as the company which rents these high worth individuals, would like to get short term results also in addition of the long term strategic roadmap execution to justify their high payouts. On the other hand, these CIOs are an experienced lot who have managed complex ERP projects in that geographic area with similar footprint, language, industry and localizations and are well versed with not only the challenges that might come in the ERP project, they also have knowledge and expertise in leveraging prevalent best practices to make the ERP project successful. The qualities in these CIOs have to be early learning of the organization’s environment, challenges, growth vision, industry processes and they normally come up with a proposed solution which will be implemented in the organization. Ideally, the rented CIO and the organization sit together and while the organization provides the landscape, broad requirements and scope and other modalities to the individual and the CIO will understand and provides (and sells) a high level roadmap to the organization. This roadmap will obviously have the major milestones and the success criteria of the project and the contract.

 

The trend has certain pitfalls also like some organizations argue that what happens if the ERP project is over, CIO is gone and you started getting trouble in your system due to faulty design or wrong solution mapping? They also are concerned about the loyalty of the rented CIO towards the organization as it is known to both parties that it is a short term engagement and accountability model is yet to evolve completely. It is also countered by many companies on why they should not hire another vendor who can work from their side of the project and make sure that the internal objectives are met.

In my opinion, though this trend is a rage in some markets these days, we will still see this model tom evolve completely before it comes to the mainstream and much will depend on the success or failure stories that comes from the industry.

Survey Results: Biggest objectives for a Supply Chain Professional

Few weeks back, I posted a survey on this blog and as per my practice of sharing the results of the survey with the readers, I am summarizing the survey results as well as some of the comments that I got on the survey.  The objective of the surevy was to find out the most critical objectives of a supply chain professional to make their supply chain most efficient for their organization. 

A whopping 42% of the respondents mentioned "Reduction in Lead Times" as their most important and critical goal for this year as they would want to increase their responsiveness to ever changing dynamics of demand in market and at this time when going beyond SLAs is the need of the hour to stay ahead of the competition, this measure is their top priority.  The next 2 most important goals that came out from the survey are: 1) Supplier Collaboration  - To have an expanded supply chain visibility and de-risk the operations from supplier failures and 2) Improvement in forecasts - To optimize inventory and to reduce working capital as well as obsolete inventory.

The other major objectives that experts from across the globe mentioned, are:

• Enhance spend analysis capabilities
• Better auction capabilities
• Reduction in stock out frequency
• Reduction in physical and system inventory
• Improve communication with customers and suppliers

The total number of votes that I got on this survey...

Recession and Supply Chain Innovation

Current economic recession had impact on almost everything and innovation is supply chain was not something that was insulated from this. Innovation in Supply chain also has been impacted by this recession and it did in 2 ways in my view, I would say - one is negative that due to the cost reduction measures, the Supply Chain Strategies that needed sizeable investments in both technology or otherwise, were put on hold and we know that these strategies are normally the breeding grounds of innovation in the organizations; and the other factor that in-fact is a positive one in terms of its impact especially on innovation in supply chain management – this is the continued outsourcing push from organizations due to recessionary cost reduction pressures.

Few days back I had a discussion with Dustin Mattison, Founder of Logipi and the subject was same. We talked about the impact of recession, the learnings from it in the field of Supply Chain, what we will miss after it is over and how is the road looking ahead. The interview has been published on Logipi here.

I largely think that supply chain innovation will bounce back strongly and that time is not too far. The positive difference we will see this time is that we will see focus on improving micro elements of supply chain rather than looking to solve the larger pieces. As we see lot of times, executives complaining that inventory turns per annum are far from the target or their service levels are not improving even after increasing the inventory - these statements will now improve to granular statements wherein the measurement will not be done for inventory turns or service levels alone but for the root causes like stock outs, inventory obsolescence, perfect order shipments or on time delivery. This will in turn improve demand for supply chain visibility improvement systems which will evolve further due to this intelligence change.

ERP Trend: Use of Social Media for Change Management

.

The introduction and much increased popularity of social media in last few years has started opening multiple doors in different areas like just sharing your views on anything or using them for product promotion or other publicity or to garner support on a social cause etc. Another trend that has started picking up recently on the back of social media is the use of social media as real time collaborating tool for hardcore business purposes.

I intend to discuss one such use of social media specially twitter in this post that as per my view, has huge potential to handle change management while implementing ERP. Though I will be taking it up for change management during an ERP project but please note that this use can be extended to multiple business interactions for useful feedback, ideas and thoughts.

Typically, what all we want to do as part of change management? We want to:

• Make the users ready for the coming change in the way they do their daily business
• Take their feedback on the new add ons they expect from the new system
• Extract their concerns regarding the new system as well as any short sizing that might happen as a result
• Set their expectations
• Ensure that the transition is smooth
• Ensure that they are excited about the change
• Reduce the resistance to change
• Ensure their adequate training before the change takes place
• Highlight the real benefits of the new system for the organization and for the business users more importantly so that act as catalysts to change and not roadblocks to change
• Sharing tips on utilizing the new system in the best ways
• Share best practices on how they can benefit from the new system and improve their process efficiency or reduce manual work
• Ensure that customers and suppliers are in sync and they are ready for it
• Communicate to all stakeholders including business leaders, IT, super users and users, customers, suppliers, service provider, 3rd party system owners and others about the milestones of new system introduction

I understand that above list is not an exhaustive list but still includes a sizeable chunk of objectives that we want to achieve as part of our change management task as part of the ERP deployment. Almost all of the above points hover around effective communication and if we can get communication right, then more than half the job is done, in my opinion. Of-course, the content of the communication will play an important role but this post will focus on the other important part which is “mode of communication”.

One of the ideas that stuck my mind few months back, is that why not utilize twitter for the all important communication as part of the change management task during an ERP project and I bounced this off my regular professional group members during one of club parties. While most of them thought that twitter is yet to be evolved to that level before we use it that way and shared multiple concerns that they might face in using it – like their organizations might not allow using twitter in office, since we can not restrict users using twitter for non business purposes – we might lose on productivity and efficiency, the messages that can be sent using twitter are too short and conveying clear information is a challenge – the list is long. I was glad that 2 of the group members who incidentally were part of the same company somewhat showed tendency to buy this idea and requested me share the whole concept that is brewing in my mind. We met over drinks next time and came out with a strategy to use it in their organization that was going LIVE with their ERP in few months after one failed attempt due to multiple issues (change management being one as per them).

They kept working on the strategy and between more important issues, all of us moved to other topics in our further meetings – infact I could not attend the last couple of meetings due to health issues. To my surprise, I got a call from one of them yesterday that they went Live successfully with the new system and the twitter strategy was the shot in the arm for both of them as they introduced this to the organization and effectively utilized it for change management communication.

I was ecstatic (with the feeling…I told you so :-)) and could not wait for our next fortnightly meeting to get a complete download on the success story so we discussed the prelim part on phone. To summarize, their strategy was like this:

• Introduce twitter in the organization after requisite approvals
• Create a community dedicated to ERP project – They called it Pragati Communiqué, where Pragati means Progress
• Ensure that all stakeholders join this community as followers
• Restrict this community on web so that people can join by invitation only
• Create the communication capsules and the calendar
• Start sending short and crisp messages on the progress, benefits, changes etc. on the project
• Created polls, hosted them on their intranet and shared the URLs with the user population through twitter
• Sought ideas and other thoughts from users to create a feeling that everybody is taking part in implementing the new system and it is their system so a feeling of belongingness started creeping in among all users
• Also started pinging customers and suppliers with the milestones of project – though this part was not successful as these organizations did not allow twitter to be used in office
• Used it as real time chat window for sharing ideas, brainstorming and answering concerns

There were some other points that were mentioned to me but I am not able to recall now. I will surely post the complete strategy and the case study one I get the chance to meet them ion person in our next meeting.

The major factor of success for this strategy for them is that Twitter allows you to change your user name so if you do not want to be recognized after joining the community, while raising your concern – this is the best way to communicate but still remain anonymous. They encouraged users to remain anonymous while asking tricking questions so that nobody feels that there can be any sort of victimization after they go live.

Yes, they had their share of challenges too. It was not a cake walk for them to take approvals to introduce twitter for official use. Also, once they introduced it, they found people spending good amount of time in tweeting non business tweets but soon these died down and regular business took over – Yes, you are right, there are still some people who secretly use twitter for non business purpose.

Another challenge they had to conquer is that the management asked them to use email instead of twitter and it offers the same functionality with much more control on data security. The point made sense but as we know that most mails that come for “All employees” often are deleted without reading whereas twitter being a new thing in the organization made sure that everybody is glued to this waited for the updates to come or to respond to a query from a fellow user.

Overall, they were happy with the outcome. To me, this mark the beginning of a new era in communicating to a group of people with similar interests with social media and this surely will become a new trend to reckon with in coming years or shall I say months?

ERP Strategy: Implement ERP as SaaS and increase ROI

.

These days, we keep talking about the same thing again and again and that is, to reduce the cost and increase the return on investment specially return on IT investment as though IT is an enabler of growth but there is no tangible return on investment immediately after deploying a new system or upgrading a system. Coming to my favorite topic i.e. ERP - it normally requires sizeable investments and the best in class organizations expect the ERP to return its cost back to business in almost 2 years. This is important to justify continued investments in ERP in these troubled times.

.

Software as a Service or SaaS as it is popularly called, is generally gaining ground on the basis of this very logic. I tried to list down the benefits that a SaaS ERP model offers and wanted to share with the readers with two objectives - One is to make them a little more awaree of this new phenomenon that is leading the latest ERP wave even in this downturn and 2nd is to build this list with more points so that it is easier for organizations to genuinely compare the capex heavy traditional on premise ERP and service oriented SaaS model. Let's go through the list as below:

• Faster ROI: As we all know that due to today’s economic downturn, ROI is more critical than ever. SaaS ERP implementations streamline all stages of the lifecycle including requirements gathering, process mapping and improvements, Building customizations, testing and training. contrary to the belief, a SaaS implementation is a complete, prebuilt application implementation done at the providers end but with full involvement of the customer's business. It is also more cost-effective to scale to multiple locations or suppliers/customers, and keep current with the most updated version of the systemas it is the reponsibility of the provider to present a time bound roadmap to the customer for upgrading the application in future
• Capex down to minimum: Since we are buying a servcie and not the servers, we are not bothered on the the cost involved on the server acquisition and maintenance. I understand that the cost of the equipment will be inbuilt in the service cost but since it will be a staggered cost and not upfront, it is a huge benefit in today's scenarios. The pay per drink model minimizes risk because an enterprise can roll in applications based on business need (for instance implementing just the order management first, inventory management next and so on) as appropriate to the business need
• Minimized Operational costs: The costs and resources required for ongoing maintenance, support, system performance and version control all go away with SaaS implementation. Data security, globalization, feature enhancement, connectivity, and safety are the responsibility of the SaaS vendor, freeing up the manufacturer to concentrate on core tasks. In addition, true multi-tenant architecture makes every customer instantly benefit from system enhancements
• No plan needed to retain technical talent in turbulent market conditions: Since the ERP is run by your provider forever and you just based on outcome or transactions or number of users as the case may be, you are not required to keep costly technical consultants on your rolls. Please note that retaining ERP consultants after you go-live is much more difficult task than hiring them and SaaS model helps you overcome this hurdle too
• Integrations simplified: Gartner estimates that up to 35 percent of the implementation costs associated with on premise ERP applications is for integration. SaaS ERP makes integration with other applicationsor hardware faster, easier and less risky
• More choices available: SaaS has really evolved in last 3 years and there are many choices available for the customers to choose as per their specific business needs. This is contrary to the fac that still theer are just 3 or 4 major vendors for the on premise ERP that have captured most of the market
• Flexibility added to your plan: As you will be paying as you drink and anytime you can switch loyalties towards another drink if you do not like the first one, it offers magnificent flexibility in planning your business needs vis-a-vis costs, functionality available and market trends - and all this at no extra cost, no depreciation worries etc.

I will stop here as the list of benefits that I could gather, are finished. Now I will look forward to the the readers to contribute and let us know if we more benefits of SaaS over on premise ERP, and yes please highlight the down side also so that we all can get a clearer picture before we take a decision.

Finally RFID started bearing fruits and how

Back in 2005, on a sunny sunday, I was going for my weekly grocery shopping in Budapest when I saw the giant new electronic bill board getting lot more attention from people around. I found some employees of a local company using that new billboard to advertise their RFID Capabilities and they were engaging people with the help of few sets of shoes that they were offering people to wear after registering their name with them and take a round of the shops around for few minutes. When anybody wearing those shoes used to pass the bilboard, it used to flash his or her name on the billboard like: Welcome to XXXX (Company Name), Mr. XXXX. It was quite fun for people, specially for children and youth to wear those shoes and walk around to see their names on the billboard again and again. Upon enquiring, I was told that this is the pwer of RFID technology and this company offers multiple products harnessing RFID power. Though, RFID started showing head in 2003 in most markets (Largely as a result of mandates from retail market leaders, notably Wal-Mart), it was my first 1st hand experience with RFID technology and to say the least, I was impressed.

.

I wondered what is in store for this technology and how warehouses and retail markets can track the movement of goods in and out with this, reducing manual intervention and improving accuracy. RFID showed lot of promise and lot of companies started investing in providing services in this field to be ready for future explosion in demand. We saw Wal-Mart persuading (or compel) its primary suppliers to tag everything under the sun with RFID. Wal-Mart would then use RFID tag readers and ancillary hardware and software to manage supply chains, retail stocks and costs more effectively. Similar mandates were seen from the U.S. Department of Defense (DoD), which reportedly planned to use RFID to manage and deploy assets more efficiently. The future had something else in mind and till last year, the growth in this field was snail pace and it nearly became a subsiding trend where service providers were no more investing. The costs of RFID enablement were higher than anticipated, and the inability or unwillingness of companies (including Wal Mart suppliers) to bear those costs were the main reasons of trend not picking up as expected. The nail in the coffin was the strong presence of bar codes that ensured that the primary benefits of RFID are met with much less costs. Well, barcodes cannot do everything RFID can do but nor can RFID do all of the things barcodes can do so these needed to co-exist.

.

Some months back, BGN, the Netherlands' largest book retailer who was one of the early adopters of RFID, claimed that they could improve their inventory visibility from 65% to 97.5% by using an RFID Solution. Also it has increased receiving accuracy to 100% while dramatically reducing employee inventory time. Most importantly, BGN had significantly increased sales as well. Similarly, more examples of improvement in Inventory levels and accuracy started coming from aroundthe world and when the technology advances in RFID complimented it (Like tag readers are now faster and more accurate and can operate over a greater range of distance, angle and environment), the new wave of optimism started sweeping the space again. Year 2009 (April onwards) saw a spike again in the RFID demand and even the smaller warehouses are now looking for cost effective solutions in this technology to reap benefits in terms of inventory optimization. After all, RFID isn't really about tags, readers, frequencies or wavelengths, although all these things matter. RFID delivers the greatest business value when its focus is on the generation and leverage of real-time, fully integrated data that enables better business decisions and nimbler business actions. If all organizations drive their RFID deployements on above reasons instead of just wanting to utilize a trendy tagging solution that automates the stock movement tracking, this technology will go much far and will begin to realize its true potential in near future.

Results of Latest Survey

I often get queries from readers that how can they get to see the results of the older surveys that are run on this site and as a result I have decided to post the results of each survey in this site so that these can be referenced by everybody at a later time also.

.

To startwith, here is the result of the last survey that was to find out how many releases away are companies, from their ERP vendor's latest release. The results are:

.

• 14% companies are at par with ERP Vendor latest release
• 38% organizations are only one release behind
• 19% of them are 2 to 3 releases behind
• Again 19% are 3 to 5 releases behind
• And just 9% are more than 5 releases behind

The total number of votes we got on this survey was 221.

This means that though more than 50% organizations that are using ERP, are either upto date or are only 1 release behind, which is a startling fact. On the other hand, rest of them which is also close to about 50%, are more than 2 releases behind and sooner than later they need to move to the next release. Hmmmm, so we all see some business there, right?

Oracle getting ready for next De-ERP-izing drive

In last few years, we all saw how Oracle is acquiring new companies and products only to stack them around their core ERP eBusiness Suite and not only integrate them with EBS but also give a look and feel of a single product - which they love to call Fusion Products.

.

There is a lot of commercial sense in what Oracle did and is still doing as all of the acquired companies were either doing well or had a great potential to do well. Some of them were either the best of breed niche product companies and some of them were products that complemented EBS in many ways. Be it Siebel for CRM or Peoplesoft for HRMS or Agile for PLM or that matter Demantra for Planning - All were acquired with the same thinking in mind. In addition of the commercial gains, the other major reason by Lary Elison is planning these acquisitions is a well thought strategy of planning to face next wave of, what I call as, De-ERP-izing the application landscape of large organizations.

.

The trend has already started to show face and increasingly it is highly likely that organizations will have the tendency to move towards best of breed technology products in critical areas like Planning, PLM, Project Management, Service Parts Planning, Business Intelligence, Master Data Management etc. and keep the ERP as the spinal cord which interacts with all these systems and remain as one source of truth for everybody - so the ERP might be relegated as just the transactional system that facilitates reporting and can receive and send data from the best of breed systems that are best in one or other niche area and offer much more flexibility and enhanced functionality to the customers.

.

Oracle, through its acquisitions, identified some of these niche systems and targeted them to integrate with the EBS so that they are ready to reap the benefits rather than suffering as a result, of the next De-ERP-izing drive.

Why ERP upgrades lost momentum in H1 2009

.

We saw that in first half of 2009, the numbers of ERP upgrades were much less than the same period last year for obvious reasons of ongoing recession. But what is more surprising is that the ratio of upgrades to new implementations also went down...Does this means, while the ERPless organizations are going ahead with their plans to introduce ERPs but the ERPpowered organizations are exercising caution in upgrading to the latest release??

.

Let me gather some first hand data using an opinion poll (provided above) before jumping to any conclusion on new trends.

.

All ERP users & consultants are welcome to cast their votes.

.

Future trends in Supply Chain - Can we identify?

Recently, I was reading a magazine on supply chain and saw that the whole world wants to know the trends in supply chain and infact the larger players are experimenting with newer practices to either start a trend in their favor or trying to gauge if those can be game changes for them. Well, if we follow a scientific approach, it is highly likely that we can go close to identifying the trends and their impact. In fact, there is some project going on in MIT on "Future focussed Supply Chains" that is using an approach that is used the new product development experts in supply chain ot identify trends.

.

One of the methods which is used to make a roadmap of possible domilnant technologies and trends in innovation area is Scenario Planning. The method was originally invented by the oil company Shell (I believe around 30 years ago) and now is used extensively by innovation managers in global companies. In the scenario planning process, companies try to identify the possible trends in the market and new product (e.g. Children are spending more time working and playing with PC), the impact of such trends (They do less physical exercise and become fat) and the associated opportunities (Gym market will be booming, there will be a need for healthy products & related medicines); the innovation and technology planners do this for various scenarios and then allocate new product budget based on the output of such exercise.

.

Their approach consists of three main steps: 1. Scenario Thinking: where they create various scenarios and simulate possible outcomes through scenario planning. The main output of this phase will be the identification of trends and market developments that the company should be monitoring. 2. Strategy Alignment: In this phase, the focus is on aligning the responses derived from the scenario thinking exercise with the company's strategic goals. 3. Implementation and Development: An at the end, Supply Chain Managers look at the nuts and bolts of implementing the strategies they have decided to follow as a result of the previous two steps.

.

The important consideration which is derived from new initiatives like this one is that supply chain professionals have to change the way they approach uncertainty. No company can be in complete control of its commercial destiny, but with a future-focused mindset that can become more adept at navigating change.