Integration is a Core Competency for High Performing Supply Chains
We have all heard the saying that it takes people, process and technology to deliver great supply chain results. However, after seeing too many companies have challenges getting their desired results despite having all three elements, I have come to the conclusion that there is a fourth element – integration. Instead of integration being a “necessary evil”, it needs to be viewed as a core competency, especially for companies who compete on supply chain performance.
Here’s the problem with poor integration. It can take a “Ferrari” of a new business process or application and turn it into a “Yugo” because of the lack of timely and accurate data. For example, you attempt to deploy a new event-based solution to improve your supply chain’s real-time visibility, but your batch-based flat file updates from your existing systems turn the new technology into a historical reporting tool.
How many times have you seen integration become the critical path for a supply chain project because the CIO doesn’t have enough skilled people to correctly connect your new solution with the existing ones? So, you compromise on the integration capabilities to speed up the project or decelerate the time-to-value to the business to get what you really need. To make matters worse, integration now spans the bounds of multiple enterprises to trading partners, carriers, etc. It’s no longer a case of connecting one system to another; it could be hundreds of systems. You cannot run away from the integration competency problem.
For supply chain leaders, time-to-value and differentiating capability are paramount. They are constantly executing a portfolio play of solutions AND integration to achieve their results. They know what ERP will and won’t do for them, and that integration tools make the job easier, but don’t eliminate it.
The biggest difference for high performers is that they recognize that integration is a key enabler and a core competency required for each advance in their supply chain capabilities, not a line item cost in the CIO’s budget. Here are 5 important points to consider for integration success.
- You need domain expertise and design competency in-house. In many cases, the integration competes with “white spaces” in your business processes and is evolving as business processes evolve. Outsourcing integration strategy and design doesn’t give you the knowledge continuity you need to chart the next wave of changes, because it leaves when the project is done.
- Maintain flexible execution capacity. If time-to-value and capability are paramount, it is highly unlikely that your organization will have the right integration resources when needed. Rather than slow or dumb-down projects because of IT budget constraints, partner with systems integrators to be able to flex capacity. The key is to find the right partner and stick with them so they can build expertise in your business and integration technologies.
- Get the right integration tools for the right problem. There is no one kind of integration problem, so don’t take the “hammer” approach, especially if it is predicated on a complex integration technology. If the integration is simple, use simple tools to get a faster ROI, even if they are later deemed a throwaway. In addition, what works best within an enterprise doesn’t across multiple enterprises. In this case, integration via networks is a much better fit than point-to-point integration tools.
- Design for support. Just because it can be done, doesn’t mean anyone supporting it will understand what has been done. Consider the skills of the people supporting the production environment and design the integration for diagnosis.
- Integration is a shared problem. Fix your own issues and don’t put it all on the vendor’s shoulders. For example, if your current capabilities do not properly synchronize data and you leave that up to the vendor to address your “shot gun” approach to data, one of two scenarios will happen. The integration challenge will put the whole project at risk or the vendor will create a solution that clearly violates point #4.
High-performing supply chains view integration as an enabler of more agility and higher levels of business performance, not as a means to an end. Does your IT strategy and skill set support the business value of integration? Let me know.