Two-Tier ERP: Lessons Learned At Gartner’s Supply Chain Conference

This week, Sanjiv Karani and I are attending Gartner’s Supply Chain Executive Conference in Palm Springs, California. This is the best conference of its kind in the industry, bringing together enterprise software, manufacturing, services and supply chain experts both within Gartner and across the industry. It’s encouraging to see so many areas of this industry measure the value and success that’s being delivered to customers. If you ever have a chance to attend this conference, invest the days; it’s well worth it.

Desert Springs Conference Center, location of 2012 Gartner Supply Chain Executive Conference

Sanjiv and I are seeing that the seven most critical success strategies for Cincom customers that are pursuing two-tier ERP strategies are emerging as best practices throughout the industry. The following seven strategies of market leaders, learned from our visits with Cincom customers and reinforced by lessons learned at this conference, further underscore just how effective two-tier ERP strategies are for manufacturing companies today:

1.  Relying on two-tier ERP strategies to make manufacturing strategic by aligning the market and supply chain needs. IBM, Schindler, Toshiba and many others are doing this with exceptionally strong results. This conference is rich with examples of how two-tier ERP strategies are making companies more agile and capable of responding quickly to both the pace of change and economic turbulence occurring today. In speaking with several CIOs about this strategy, a few have mentioned the Harvard Business Review article, “Making the Most of Foreign Factories” by Dr. Kasra Fedrows. Dr. Fedrows has done decades of research on what makes distributed manufacturing centers globally successful. The following figure illustrates how factories can in fact play a variety of roles in the execution of a strategic plan. “The Roles of Foreign Factories: A Strategic Matrix,” which is shown below, captures the essence of what Dr. Fedrows has found in this research of the most effective manufacturing strategies.

Reprinted with permission from “Making the Most of Foreign Factories” by Kasra Fedrows,Harvard Business Review, March/April 1997.  ©1997 by the Harvard Business Publishing Corporation; all rights reserved.  You can find the article on the HBR site:http://hbr.org/1997/03/making-the-most-of-foreign-factories/ar/1).

2.  Conquering bad complexity that can kill a company if let unchecked is a passion in high-performing companies.  The ability to discern the source of bad complexity and eradicate it from a business model is a critical survival skill of even the most resilient companies today.  We’re seeing that complex manufacturers that are attaining best practices with their two-tier ERP strategies are focused on how to simplify every phase of their value chain―taking every opportunity to replace bad complexity (high costs, confusion of goals and customer definition) with good complexity (more aligning and focus on core customer requirements; measuring performance collaboratively, not in silos). Examples of companies in this area include Cisco with its real-time updates on build-to-order production workflows, Goodrich, Greenheck Fan, Harris Corporation, Michelin and others.

3.  Developing and continually fine-tuning analytics and Business Intelligence (BI) data on their entire business model so they can be moved faster, with greater clarity and precision than competitors.  This is one of the most fascinating lessons learned at this conference. There are manufacturing companies today using analytics and BI to gain exceptional acuity, clarity and insight into their operations, looking to fine-tune them in the process.

4. Developing an innate ability to translate knowledge into competitive advantage very rapidly, often within weeks, and completely changing the competitive dynamics of their industry in the process.  The ability to capture both tacit and implicit knowledge is critical for any manufacturer to continually stay demand-driven.  Leif Erickson and Simon Jacobson’s session, “Factory of the Future: Next-Generation Manufacturing Strategy” made this point very clear, and had many outstanding points.  Leif showed how 60% of the knowledge a manufacturing company needs is tribal knowledge. Only by using enterprise systems to unleash this expertise and align them to strategic priorities can a business grow.

5. A passion for measuring results from the customers’ perspective first and continually improving is so engrained in their cultures it changes how they evaluate risk and opportunities. Both at this conference and throughout conversations with customers, it becomes clear that the greater the reliance and valuing of customer value in a supply chain, the more successful and lean it becomes.  This was clear in many of the sessions today, and is a very strong theme throughout the conference as well.  Measuring results from the customers’ standpoint is crucial for unifying and leading a manufacturing company to excellence.

6. Has defined Critical Success Factors for two-tier ERP strategies and lives by them.  Supply chain segmentation is a major area of interest at this conference.  That aspect of supply chain management is integral to how a strategic IT plan is designed and implemented as well. The following table highlights eight of the most critical success factors complex manufacturers that are attaining best practices are relying on for planning and executing two-tier ERP strategies.

7.  An urgency to lead their industries in manufacturing performance, from supply chain efficiency to perfect order performance.  One CIO of a semiconductor manufacturer told me that while visiting one of their chip foundries inAsia, they led the industry in quote-to-cash cycles at 22 days, and they could fulfill a quote for components in less than three hours. He had that IT department immersed in seeing the goal of being the best in their industry―and dashboards were on the message boards, on their Intranet sites―everywhere to reinforce the message. He said that only a two-tier ERP system flexible enough for their area in the industry would have made that possible.

Bottom line: Becoming more demand-driven, staying focused on emerging markets and attaining higher levels of performance all start by using two-tier ERP strategies as foundations of strategic growth.

For more information on a two-tier ERP strategy, read “Conquering Complexity in Real-Time Using Two-Tier ERP Strategies―Best Practices of Complex Manufacturers,” which includes in-depth analysis and review of two-tier ERP strategies and how to achieve success with these strategies. View or download the white paper here: http://ow.ly/aVA0M (no registration form is required).

References:

Fedrows, K. (1997), “Making the Most of Foreign Factories,” Harvard Business Review, 75(2), 73-88

Nah. F. & Delgado. S (2006), “Critical Success Factors for Enterprise Resource Planning Implementation and Upgrade,” The Journal of Computer Information Systems, 46(5), 99-113

Ugrin, J. (2009), “The Effect of System Characteristics, Stage of Adoption and Experience on Institutional Explanations for ERP Systems Choice,” Accounting Horizons, 23(4), 365-389

Velcu, O. (2010), “Strategic Alignment of ERP Implementation Stages: An Empirical Investigation,” Information & Management, 47(3), 158

Courtesy - Louis Columbus

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Diaries Page –Motivation and Wining

Diaries Page – Are Blog Post not related to Marketing, Strategies or an Business…Its about thoughts that I would like to share and what better place than my blog for my own consumption and for all to agree, disagree or comment…

This was one of those days where I look at external stimulus to motivate myself. Will in the pursuit of that, I stumble upon MullerOver. The blog is certainly what I would recommend read.

So, here I was walking on the net road or road of internet looking for something that can bring back me and my mind on track and help to motivate….

The Perseverance by Derek Redmond is something that may be well known to most of you. but putting again below to revisit.

Perseverance–Derek Redmond

Ok. I was bit there but then we or at least I tend to correlate motivation to winning and to a certain extend think that the only way to survive is winning…YES….I am not shy is saying that…Of course this is primarily  based on the share portion of failures that I have seen.

I usually opine that its not about how many times you have been push down….its about how many times you have got up on your feet…The below would give you a sense…

Its about the Gold…..

But then I wonder that is it all about Winning or is it something much more concrete element than a “Superficial Winning”? I can say that its definitely much more than that…Yes, I like being in the Winners group but then I need to ensure at what cost that is coming….and would I prefer to sleep as a winner who lost or a looser who won?

What do I mean??????…….The below would provide you with an answer…..

Its much more than Winning….

Motivation is about doing the Right Thing and May not necessary mean Winning

Back to Action!!!!

Social Media Revolution 2012

Don't have much to say about it.....just watch the video...

The only thing that I would like to mention- Though the social media is important for every marketer, individual or enterprise; the space is certainly more crowded than ever before. Your lack of ability to manipulate your way in and more importantly out could be a debacle. While you need to engage at Social Media, its imperative to identify the objective (you plan to achieve), chose the channel(s), and ensure communication and not dissemination.

With that, enjoy the video.....my favorite was the surprise of Wikipedia.....

Social Media

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How great leaders inspire action

Simon Sinek presents a simple but powerful model for how leaders inspire action, starting with a golden circle and the question "Why?" His examples include Apple, Martin Luther King, and the Wright brothers -- and as a counterpoint Tivo, which (until a recent court victory that tripled its stock price) appeared to be struggling.

How Leaders Inspire?

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Volkswagen - The Original Click

Innovation will never end, provided there are people out there who can pull a rabbit out of their hats over and over again. Equally, you need not necessary create the magic every time...You may would like to reinvent without actually inventing anything. So what does is mean...

The below examples shows how you can reinvent the already invented content, or let me put is this way - on how innovatively Volkswagen has packaged an old wine in a new bottle. Volkswagen has used the content already available on the net to convert that into an ad..which for me is marketing innovation in itself. Rest the Video will tell….

I hope you will enjoy!!! 

Old Wine in New Bottle

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Predicting Cloud Computing Adoption Rates

From conservative, single digit adoption rates to hockey-stick projections of exceptional growth, analyst firms, venture capitalists and government ministries are weighing in on how they see cloud adoption progressing.

While each of the adoption rate predictions vary significantly in terms of their methodologies and results, all rely on the assumption that SaaS applications including CRM will continue to gain momentum.  The user adoption rates vary on how fast the momentum is, yet all share this assumption.  Speed, increased user adoption rates, and the ability to more closely align software to business goals are cited most often as the biggest benefits.

Where the projections vary most is whether enterprises will eventually migrate the majority of their applications to the cloud or not.  Forrester, Gartner and others see a hybrid cloud architecture emerging in the enterprise and forcing the issue of legacy systems migration by 2015.  As would be expected, vendor-driven research sees an “all or nothing” world in the near future.

Sanity Check

Wanting to see how reliable the figures were showing rapid cloud adoption in the enterprise, I did a quick sanity check.  Taking the  distribution of sales by segment for Salesforce.com and their annual revenue growth rate, then normalizing it across all segments, enterprise emerges as their strongest segment by a wide margin in 2015.  It had a 15%+ compound annual growth rate (CAGR) from 2011 – 2015 just taking their current sales by segment distribution of sales and extrapolating forward.  Data points like this and the market factors behind them is why SaaS is often used in these studies as a leading indicator of broader cloud adoption.

Adoption Rate Round-Up

• CDW recently published their Cloud Computing Tracking Poll Report reporting 37% adoption in enterprises followed by higher education (34%), healthcare (30%), federal government (29%),  state & local government (23%) and SMBs (21%).Source and opt-in for research results: http://www.cdw.com/shop/tools/surveys/survey.asp?SurveyKey=D808B2971F634B5A96E452FE7E6FA165

• Japan’s Internal Affairs and Communications Ministry 2010, the cloud computing market in Japan is expected to grow to U.S.$29.2 billion in 2015. Gartner has projected cloud adoption in Japan will represent 12 percent of the global cloud services revenue. Source: http://www.biztechreport.com/story/1202-cloud-services-asia-pacific-region

• Forrester found that SaaS will outgrow all other cloud services, achieving 37% adoption in 2011 growing to 50% by 2012. In previous studies Forrester has shown that SaaS is a major growth catalyst of ongoing investment in IaaS and PaaS in enterprises. Source: Source:  Forrsights: The Software Market In Transformation, 2011 And Beyond Shifting Buying Preferences Lead To New Software Priorities by Holger Kisker, Ph.D. with Pascal Matzke, Stefan Ried, Ph.D., Miroslaw Lisserman  Link: http://bit.ly/ijJy70  The following table is from the report:

• Microsoft Global SMB Cloud Adoption Study released in March, 2011 is one of the most comprehensive done this year on this topic. Of the many findings, the study predicts  39 % of SMBs expect to be paying for one or more cloud services within three years).  One of the best studies on cloud adoptions done this year Source: Study Results Document (PDF (22 pages): http://bit.ly/gN8yTx

• North Bridge Venture Partners, GigaOM PRO and over a dozen research partners completed the study The Future of Cloud Computing 2011. The study found 13% expressed high level of confidence in cloud computing for enterprise applications, with 40% experimenting and 10% saying they will never use cloud-based platforms as they are too risky. A presentation of the results can be found here:

The Future of Cloud Computing 2011

View more presentations from Martin Walsh

Source: http://futureofcloudcomputing.drupalgardens.com/2011-future-cloud-computing-survey-results

Ovum predicts that multinational corporations (MNCs) will see cloud computing grow to 61% by the calendar end of 2011. Source:http://www.datacenterdynamics.com/focus/archive/2011/06/are-big-companies-actually-adopting-cloud-computing

• Springboard Research (Forrester) completed a study of cloud computing adoption in Asia finding 31% of companies with 50 or fewer PCs will adopt cloud-based applications in 18 months, 56% with up to 500 PCs.  The key findings are available for download from the source URL below the infographic.

                                     Microsoft Asia is making this available for download here: http://bit.ly/jWjOj1

• TechTarget published their analysis of virtualization and cloud computing adoption in the study, State of virtualization and cloud computing: 2011. Of the many findings, a few of the most significant is how pervasive VMware ESXi 4 and later (vSphere) is throughout enterprises today.  The study also shows that 7% of those interviewed had implemented cloud computing in 2010, growing to 9% in 2011 – quite conservative compared to many of the other adoption rate analyses completed.  You can find the results here:http://searchdatacenter.techtarget.com/feature/State-of-virtualization-and-cloud-computing-2011

• VMware and The Cloud Industry Forum (CIF) project UK cloud adoption being around 48% in 2011/12, growing significantly in the next three years due to anticipated SaaS adoption by SMBs.  Source: http://www.cloudindustryforum.org/uk-sme-cloud-adoption-set-to-increase-in-line-with-european-businesses opt in for the research:http://www.cloudindustryforum.org/register-your-details-to-download-our-white-papers

• Yankee Group has found that in 2011, 41 percent of very large enterprises (more than 10,000 employees) have already deployed or are considering deployment of platform as a service (PaaS) within the next 12 months, compared to just 32 percent in 2010. They have also found that mobility is most significant factor driving cloud adoption in the enterprise. Source:http://professional.wsj.com/article/TPCHWKNW0020110722e77q0004d.html\

Courtesy – Louis Columbus

After Enterprise, it was your Home…. and Now its your Bedroom…..

So what could be your next Bedroom Experience Like…Strictly from Devices Perspective

After the emergence of integrated devices; the first focus for enterprise was indeed…The Enterprise….. and then the space got cluttered with many offerings..Hence, the enterprise offering moved into your house while offering integrated experience for your home and personal device(s). With Cloud joining the party, the ability for having your content availability across multiple devices made seamless, ease for you and ease on your pocket at the same time.

By the virtue of me using SugarSync for some time, hence have incorporated them into this illustration. Of course, if you are following me on twitter, I went all out about my exploration journey with my new tech-toy – Roku, last week. And of course, have been using Apple TV from sometime and loves the experience of mirroring the iPad to the TV and sharing Audio/ Video content across devices, especially my content from iPad to TV. Then the entire experience and/or having the ability to view my Netflix movie on my phone (while having my Burger, roadside), and then start at the same point on my TV is something got me excited just like a young kid.

So now, if I Add up all the various components together…… the Result could or would be a wonderful “Bedroom/Personal integrated Device Experience”, while all device/services complimenting each other. For eg. I am was experimenting over the weekend to connect my PC and to Roku using Ro-Connect,(Need more  work on Ro-Connect end for a non-techy like me) to view/listen my content (Audio/Video) from my PC to Roku player. Further was trying to understand the usage of the additional memory Slot at Roku Player….

This exploration gave me a sense of integrating all these devices into one experience backed by seamless integration of your content over cloud – Sugarsync in this case as an example. So what it leads to is this…

Roku by the virtue of being an open and experimental platform backed by many developers/content owner is at the sweat spot of having creating an ability to view all your content across multiple devices onto your TV. So, now you can view from your pictures, to listening to your audio, or watching your store videos from the cloud directly onto your TV console.

It also provides an another element of having an ability to share your content through push notification and in peer-to-peer kind of environment mode. Use Case – I have clicked this wonderful video of my recent trip using my mobile device and by the virtue of it being connected to the cloud, I send all my content into the cloud and can share it with my friends and other across their multiple devices, while I can share the same with my mother sitting many miles away on her TV. The same goes for music, picture and /or any other shareable content that you can imagine. Much like how you can view your/friends Facebook pictures on Roku while using the Facebook app. What I am suggesting here is the amplification of same kind.

Further SugarSync could potentially act as a DVR for your content view on Roku and thus making the recorded content available again at your multiple devices.

It gives me a sense that there is something from all in this equation especially for Roku and SugarSync (in this example) to provide “personal” content sharing that was never imagined on TV. For Roku – An ability to pull content from the cloud, push recorded content to the cloud for later viewing/listening; For SugarSync -Adding another unique element in already competitive cloud market….

So its Not now about ability to “mirror” your iPad or Mac to TV using Apple TV and on being the same network. This is about having ability for user to have content availability across devices, Not necessarily on the same network and on your Bedroom TV. Not to discount that depending upon the intelligence requirement(s) the above picture could add the component of your aircon/heating by integrating Nest with the Cloud and having an ability to record/monitor/adjust every aspect of your house cooling/heating through the cloud….

Thus making it a “True Bedroom Integrated Devices Experience”.

As usual, feedbacks are welcome.

P.S. - I am not a techie to evaluate the technological possibility of this but with limited knowledge can assume that this is certainly possible. Equally, I am sure all the companies mentioned in the article on similar line…this is just an endorsement to that idea from a consumer.

Have A Good Week!!!

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