Modernization, Digitalization, and Empowerment. The Evolution of Your Supply Chain Ecosystem.
The promise of supply chain digitalization extends well beyond the confines of an isolated organization. Through collaborative networks and data sharing, digitalization will evolve trading relationships and communities as these signals can be leveraged to drive more predictability and efficiency into end to end supply chains.
But it’s not just the trading partners that must evolve in order to deliver the promise of digitalization.
The IT landscape, often dotted with numerous providers and tactically segmented across vendors, services providers, and consultancies, will also evolve. The roles of these providers will in many cases converge, and the value proposition of specialized partnerships will increase.
The trend towards strategic partnerships will allow companies to focus on their core capabilities. It will provide options to outsource the care and feeding of your solutions and infrastructure while collaboratively nurturing those solution areas and extending the value realization of your investments.
If the promise of digitalization is to be achieved, firms must rely on a network of specialists focused on freeing them from capital-intensive projects and delivering insights and innovation to address the challenges of their industry. This must be achieved through a collaboration culture and with a strategic partnership mindset and ecosystem.
A Modernized Architecture
It all begins with an idea.
The software industry has long recognized the value of SaaS solutions, and while the maturity of even some large software providers has advanced relative to SaaS development and deployment, few of those have reached the extensive functional breadth or depth of traditional best of breed and ERP solutions, nor are they expected to in the near future.
Therein lies the opportunity for those traditional vendors, capable of working with their existing client base who has a clear incentive to converge their existing architectures to a hybrid SaaS environment – capable of repeated updates and upgrades to stay current, with minimal disruption to a hyper-connected platform of increasing complexity. The challenge lies with establishing the toolset and processes that can deliver confidence that changes will not have disruptive impacts upstream or downstream.
Achieving this confidence will require rigor, but recent technology advances are now ready to justify the investment required. Automated testing tools, focused on integrated business processes and capable of following data flows across applications, offer promise of simulating a day in the life and vetting typical data anomalies and process exceptions so that repeated updates and changes to configuration or code can be vetted across your supply chain ecosystem and validated for readiness.
The link to templatized solutions cannot be ignored, as canned scripts are tailored specific to systems capabilities (perhaps even across multiple systems). This encourages pre-configuration of those solutions to meet specific environments. Vendors are currently promoting and experimenting with the SaaS-like pre-configured templates. The packages will extend into supporting testing materials, training materials, and trouble-shooting aides.
In more complex environments, where levels of specialization extend beyond what can be expected by the typical user, the role of maintaining these toolkits will shift to the more nimble players in the market. Customized templates, test scripts, training materials, and extensions to the applications themselves (from micro-services to supporting applications) will converge to industry-standard templates. The net result is inspiring - Low cost maintenance of modern solutions, infused with operational expertise specific to an industry segment.
The advantages will be pervasive and will usher in a new paradigm for maintaining solution areas and capturing the value available throughout patching release cycles (no more major upgrades!).
The Evolving Partner Ecosystem
It all begins with an idea.
Importantly, this agility fosters extensibility of the application as well, initiating a new approach towards hyper-innovation as the consumption of services-based value add improvements can be vetted, subscribed to, and maintained without overhead or risk. This will in turn usher in a more hyper-connected, dynamic, innovative culture and environment up and down the supply chain.
Personalized services will play a critical role in bringing scale across industries that help their customers consume and benefit from these advances. As cloud platforms, vendors, and specialized services providers test the boundaries of their ability to maintain complex solutions and add personalized capabilities in this ecosystem, a new landscape will emerge.
Cloud platform diagnostics and optimization tools will become intertwined with vendor development strategies. ERP and best of suite vendors will transition towards platforms where a comprehensive supply chain data model can be exposed for valuable insights and real time optimization.
SaaS providers will drive personalization into their offerings, while best of breed vendors will deliver robust upgrade validation capabilities and toolsets.
Specialized services providers will increasingly expand beyond support models to offer business process outsourcing like services – extending standard templates provided by the core solution vendors with an eye towards upgradeability, and delivering innovations on top of these templates for industry or customer specific use cases not yet addressed by the core solutions providers.
A deep familiarity with the industry solutions will differentiate these vendors both through their support levels, their ability to vet updates at scale, and the focused attention on margin attainment for their client base.
A successful partnership will allow them to drive continuous improvement and encourage them to experiment and measure impacts, while an extended customer base provide them a market allowing them to scale investments in innovative solutions.In this modern, digital ecosystem, these solutions will be available for rapid consumption, likely to be positioned as a subscription where the ROI can be measured and reported out to justify continued investment.
The Importance of Strategic Relationships
It all begins with an idea.
The trend towards commitment to core competencies will continue – both for financial reasons but also for competitive reasons. The acceleration of innovation across landscapes will force typical practitioners and even 3PLs to exploit the intellectual property being developed in order to remain competitive and relevant. In doing so, a re-evaluation of supply chain ecosystems and strategic partnerships will be critical.
For basic needs in areas of isolated functionality (ie fairly self-contained processes), ERPs are often the preferred approach. Emerging SaaS providers, however, often offer strong alternatives, and while ERPs will tout the ease of integration, this is often over-stated. Evaluating the total cost of ownership over an extended lifecycle may align with a simplified architecture where SaaS applications are removed from major upgrade efforts of ERPs.
In more complex environments, vendors of the software themselves, and for those customers that have opted for aggressive ERP-first strategies or best of suite providers for more holistic engagement, the interconnectivity across applications and intelligence driven by it will be sure to provide benefits. A focus on ML and AI from these providers may develop cross-functional optimization and advanced alerting and issue remediation capabilities. For larger customers, opportunities for co-innovation of productized capabilities is highly compelling.
Elsewhere, the ability of specialized services providers to familiarize themselves with your environment will drive supportability and customer satisfaction (you and yours). More importantly, they offer opportunities to finely tune your solutions to your business. The relationship begins at implementation and if delivered with the appropriate strategy and planned levels of governance, incentivization, and communication, will provide value throughout an extended product lifecycle. When considering candidates, be sure to vet industry experience and commitment as it will not only reduce risk but will increase the opportunities for supplemental benchmarking and innovation.
Many new startups join large legacy consultancies with a focus on machine learning, AI, and specialized IOT insights.These will round out the partner ecosystem. Again, industry focused solutions will accelerate fit for purpose innovation.
Getting Started
It all begins with an idea.
Finally, embedding outside expertise into your organization can pay tremendous dividends as it pertains to staying current on industry trends, understanding performance relative to the industry and addressing key problem or opportunity areas.
Most importantly, advisors that understand the complex ecosystems of providers and partners can help to navigate the ecosystem, develop strong relationships, and establish governance processes that fully leverage the intellectual capital and expertise of the broader partner community.This is the role of SCT Advisory and our associates, but whether engaging ourselves or competing services, we encourage you to drive your programs forward leveraging the available community, expertise, and all the capabilities they offer