Nine Technologies Transforming the Supply Chain, Part 1
October 03, 2012
Gartner analyst Tim Payne writes, “After years of a cost-cutting focus, SCM continues its rise up the corporate agenda.” [“Hype Cycle for Supply Chain Management, 2012,” Gartner, 27 July 2012] The “Hype Cycle” report is an annual offering by Gartner. This year’s report outlines 61 Supply Chain Management technologies at different stages of development. Commenting on the report, the staff at Supply Chain Standard writes, “There are nine technologies that will transform supply chain management with ten years, according to Gartner. And three of them will have an impact in the next two to five years.” [“Nine technologies will transform supply chain over coming decade,” 5 September 2012] Payne identifies these nine technologies as being “At the Peak” of their hype. They are:
- Integration PaaS
- MDM of Supplier Data Solutions
- Multienterprise Business Process Platform
- Price Optimization
- Process Templates
- Software-as-a-Service Supply Chain Planning
- Analytical In-Memory DBMS
- Demand Signal Repository
- Geographic Information Systems for Mapping, Visualization and Analytics
In this post, I discuss the first three technologies (Integration PaaS, MDM of Supplier Data Solutions, and Multienterprise Business Process Platform). I will discuss the remaining six technologies in the following two posts.
Integration Platform as a Service
Software as a Service (SaaS) if a fairly well-known term associated with cloud computing. Although Integration Platform as a Service (iPaaS) is not a term that is as widely used as SaaS, Gartner analysts obviously believe it could be in the future. The folks at MuleSoft report, “As companies move their applications en masse to the cloud, they are hitting a major roadblock for success, namely integration.” [“iPaaS: Integration for the Cloud Era“] The article continues:
“While these same organizations have spent the last 15 years integrating their enterprise applications to break down the silos of information, they are now seeing a renewed problem of ‘cloud silos,’ which is becoming a major barrier for adoption. This problem is not only impacting end-user organizations, but also for the providers of SaaS and cloud services as well. … This new set of integration problems requires a new platform for solving them. A new category is emerging called integration platform as a service (iPaaS). An iPaaS is a cloud integration platform, enabling connectivity to SaaS and cloud services and providing a secure method of accessing on-premise applications behind a firewall. iPaaS can solve the problem of cloud silos by providing businesses a way to integrate cloud-based services with each other as well as with on-premise enterprise applications. An iPaaS also offers a platform for SaaS and cloud vendors to build and host packaged integration solutions for their customers. Best of all, as a cloud service, these integrations can be deployed quickly, easily and with elastic capacity.”
MuleSoft indicates that “the emerging IT software stack has three layers, each delivered on demand as a cloud service.” The three layers are:
- “Infrastructure as a Service (IaaS): A virtualized environment on which systems can be deployed. This provides the underlying computing resources for the deployment of enterprise systems.
- “Platform as a Service (PaaS): Application infrastructure, both for the development of single applications and integration between multiple applications. The middleware that enables the development of advanced applications.
- “Software as a Service (SaaS): Application software. This provides the user-facing applications that enable business.”
They note that SaaS was the first layer of this stack to emerge with the second layer being IaaS. They state, “The piece of the puzzle that remains missing is a way to integrate across applications.” It should be fairly obvious why iPaaS holds the potential to transform supply chain management. By making the cloud function better, companies can make better use of big data.
Master Data Management of Supplier Data Solutions
Several years ago, Andy Hayler, CEO of The Information Difference, predicted that Master Data Management (MDM) would be a growth market. [“Supplier Master Data – An Emerging Market?” IT-Director.com, 12 May 2009] Hayler wrote:
“Master data management solutions have mostly evolved from the need of large organisations to better manage either customer data or product data, both of which tend to be in a poor state in most companies (a 2008 Information Difference study found that large companies had a median of six applications generating customer data, and nine applications generating product data; some companies had more than 100 competing systems). However master data goes beyond product and customer, including information such as location, organisation, financial information etc. One specific area that has emerged recently is companies specialising in dealing with supplier (or ‘vendor’) data in particular. Now of course many generic MDM technologies are perfectly capable of handling supplier data; they may treat a supplier as a ‘party’ and can treat it in a similar way to customer. However, there are aspects of supplier data that mean that some more specific attention is required. Companies do not just want to know that they have a supplier, they may have an elaborate process to ‘on-board’ a new supplier, including at least running a credit check, but perhaps also determining a deeper analysis of supplier risk, including geo-political risk.”
In other words, MDM refers to a company’s goal of having “one version of the truth” shared between disparate systems containing its core information such as, data relating to customers, vendors, products (materials), pricing, employees, and so on. In a large enterprise, this is a substantial challenge. For example, one large Fortune 500 company investigated by Enterra Solutions, LLC (Enterra), has over 200 systems that consume some elements of master data and over 50 systems that create or modify some subset of the master data. Ideally, any change made in any of these 50+ systems would be updated instantaneously in all 50+ systems and all 200+ consuming systems would view the updated information. Although there are tremendous challenges involved in managing master data, the payoff to the organization is also substantial. The inefficiency of maintaining multiple repositories of substantially similar information, and the problems that can occur due to differences, can consume exorbitant human and fiscal capital. If data integrity challenges aren’t resolved, they can impede the automated flow of information within the enterprise – information that is critical for competitive business processes. Enterra’s MDM offering is its Master Data Intelligence™ Solution and is built upon its Sense, Think/Learn, Act™ Platform.
Multienterprise Business Process Platform
According to Gartner, “a multi-enterprise business process platform [is] a platform that supports the delivery, operation, monitoring and decision [making capabilities] required to optimize business processes that span multiple enterprises. … A Multienterprise Business Process Platform consists of a combined set of shared IT and business models that enables enterprises to accommodate rapid but controlled business process change through the use of an integrated composition environment and reusable software services in a shared, multienterprise managed environment.” In past posts, I have discussed the importance of supply chain collaboration. As I understand the concept, a Multienterprise Business Process Platform is the next step in achieving better collaboration. Jon Hansen writes:
“Buzz terminology such as ‘a single version of truth’ and ‘multi-enterprise execution that extends supply chain collaboration’ fails to capture the true potential of the Multi-Enterpise Platform. With the necessary and long overdue realization that an indigenous, monolithic end-to-end solution from a single vendor is about as viable as the computer industry’s attempt to create a proprietary PC technology, MEBPPs have become the critical linchpins of the processes and technologies that inhabit the increasingly complex global supply chain practice. … In a world of real-time synchronization in which modular adoption reflects an embrace versus replace mindset – say goodbye to single solution conversion and compliance myopia – E2open has become particularly adept at leveraging existing deployments through the increased cognitive functionality of their Multi-Enterprise Platform.” [“E2open: The Critical Linchpin of Enterprise Integration and Synchronization,” Procurement Insights, 21 June 2009]
The thread that runs through each of the transformative technologies discussed above is that their goal is to help an organization maintain a single version of the truth from which its employees can draw upon. Tomorrow I’ll discuss Payne’s next three transformative technologies: Price Optimization, Process Templates, and Software-as-a-Service Supply Chain Planning.