SaaS predicted to Overtake Traditional Software Delivery

"As a result, a permanent change in software licensing regime will occur" according to an IDC source.

Pretty interesting findings and some compelling numbers behind this story based on research by IDC.  Further, IDC expects a number of industry changing shifts as a result of the emergence of the SaaS (software-as-a-service) model including:

• SaaS market for enterprise applications and other software will reach $40.5B in 2014 up from $13.1B in 2009
• By 2012, nearly 85% of new software firms will offer their products based on the SaaS model
• Manufacturing software including logistics management, transportation and warehousing is expected to be among the leading application areas fueling the growth of the SaaS market

Think about the implications across the market, for vendors and customers alike. No doubt this shift will have a dramatic impact on software sales processes and certainly will have an impact on software sales commission plans.  IDC states that this shift toward SaaS software purchases will result in "a nearly $7 billion decline in worldwide software license revenue in 2010". 

How this will impact support contracts, service level agreements (SLA) and buying behavior will be hard to predict but it seems pretty clear that we will all be facing a paradigm shift in terms of software licensing and purchases.

What is your experience with SaaS purchases?  What new obstacles did you have to overcome vs. traditional software licensing purchases?

WMS - good to the last byte...

We started this blog series a few weeks ago talking about how organizations can make sure their WMS is ‘good to the last byte’, and how some do.  We talked about the importance of several key factors in extending the useful life of your WMS including:

 

• People – encouraging you to assess your WMS team (users, IT, vendor) and make sure that proper training has occurred over the years to ensure:
• Proper knowledge transfer so you are not caught short one day if and when you need your “WMS gurus” to bail you out of a sticky situation, or to make significant improvements in the WMS to meet changing business requirements; and that all of your managers, supervisors and associates are properly trained in best practices as it relates to your process flows.  If not, you could be wasting precious labor resources and money.
• Process – challenging you to create, review, and update current business process flows and check to see if on-the-floor operations match your documented flows and whether the WMS informational flows match as well.  We believe there is a significant opportunity for improvement and savings by continuing to synchronize these components of your operation and WMS.
• Technology – asking you if you have done a proper technology risk assessment lately.  Are your database and operating system within striking distance of the latest supported version?  How about your WMS itself…have you kept current with new releases/patches?  What would it really take to restore your WMS in the event of a catastrophic hardware or software failure?  Clearly, BP did not think that they would have an oil leak, or that it would take 70+ days to stop an oil leak?  What is your real exposure?  Have you created, communicated, trained and tested your disaster recovery plan?

 

We recognized in our initial blog in this series, that everyone is trying to do more with less in this economy, and extending the useful life of a WMS is one of the things we see more and more companies doing these days.  Following some of the guidance we have offered could help you extend the life of your WMS for another year or more. 

 

On the flip side, we know that there are experienced consulting services available aimed at helping you achieve even greater value from your existing WMS, and to define requirements, select and implement a new WMS to accomplish even more for your company.

 

If you’ve done all of these things, and finally reached the end of the road with your WMS, the good news is that the latest generation WMS solutions in the market today are generally 2^nd or 3^rd generation technology built by people with tremendous WMS experience.  The result – you can count on better technology, better configuration tools like integrated workflow, web-based/on-demand architecture all designed to give you greater WMS capabilities at a lower total cost of ownership than previous WMS solutions.

 

As my co-contributor, Don Benson, www.wmsupport.com, points out:  “The power of a WMS is not to turn it on and forget it.  The true power of a WMS is acting as a foundation for continuous improvement”.  Thus we are all challenged to keep our people, our processes and technology current in the pursuit of continuous improvement. 

 

We have enjoyed interacting with several of the DC Velocity readers throughout this blog series, and hope that we have encouraged you to pursue a few of the ideas we have suggested in order to keep your WMS good to the last byte.

WMS - Good to the last byte... (Part 3 - Technology)

We’ve talked about the People and Process factors with regard to making your WMS “good to the last byte”, but let’s explore the Technology angle a bit.  As my co-contributor, Don Benson (http://www.wmssupport.com/) and I discussed a few weeks ago when we kicked off this series of blogs, technology seems to be one of the key drivers behind upgrades or replacement of older WMS systems.  While many WMS systems seem to have a useful life of 7-10 years (or more in many cases), the reality is that they are running with some really old, and usually unsupported technology.  It could be hardware, operating system, database, peripherals – yet companies continue to run these systems.  Nothing wrong with being frugal, but frugality has to be weighed against risks to your supply chain execution operations.  I’ve seen companies scour the market for replacement parts and spares for their aging RF and buy whatever they could find – I’ve seen the same thing for AGV’s in automated facilities.  Sure you need to carry an inventory of spares for older devices…but there is a tipping point.

 

There must be an operational or economic benefit behind technology upgrades or replacements.  These benefits could be in terms of reduced maintenance costs, improved productivity and even risk reduction to the operation in the event of a failure.  If your database is unsupported and it crashes…what would you do?  Can you afford to be down for 2-4 hours, or worse, perhaps a day or two?  How many technology ‘fire drills’ have you really prepared for?

 

Lest any of us need a stark reminder of how important backup plans are for accidents and failed technology – no need to look any further than the BP oil spill in the Gulf of Mexico.  A recent “google” for “Tony Hayward” (CEO of British Petroleum) resulted in 2,160,000 results in .24 seconds – way more attention than any of us would like to receive.  A recent “google” for the “Gulf Oil Spill" resulted in 38,800,000 in .51 seconds – that’s right, 38 MILLION!

 

We’ve seen companies running WMS systems that are running on unsupported versions of operating systems, databases – even running on WMS software that has been de-supported by the vendor.  It’s a tribute to those aging technologies that they can still run but there comes a time when they must be upgraded or replaced.

 

How often does your WMS team do a risk assessment of the various technology components behind your WMS?  Do you even do a risk assessment?  Have you really fully stressed and tested your backup plans in the case of an extended system outage?  Back to our earlier blogs, are your People and Processes really current in the event of a major technology failure?  Have you developed a simple and complete communication plan for your organization if disaster strikes?  How many phone calls, text messages and emails would you receive if your WMS was down for a significant period of time?  It’s a delicate balance, but risk assessment relative to aging technology is a reality that we must all face.  Better to be prepared…just ask Tony Hayward.

 

We'll be back next week to wrap up our People, Process and Technology series.  We hope we were able to shed some light on helping your organization make your WMS "good to the last byte".

WMS - Good to the last byte...(Part 2 - Process)

 It was great seeing many of you at the recent WERC Conference in Anaheim this week.  Attendance was fantastic.  There were plenty of opportunities to network, learn and exchange ideas.  Thank you WERC and DC Velocity for putting on an excellent industry event!  We are all looking forward to WERC 2011 in Orlando - (www.werc.org).

Let’s pick up on our discussion about making your WMS good to the last byte. In this blog we'll talk about the process side of a WMS system. In our last blog entry we looked at the people side of a WMS – we hope we provided you some food for thought and caused you to take action with regard to the people aspect of your WMS.  At the WERC Conference, I attended a standing room only session given by Al Gagnon of enVista (www.envistacorp.com).  Al’s session was about Labor Management, but he talked about processes, standard operating procedures and how important it is to document them.  Obviously having well documented (and current) warehouse processes apply to both your WMS and LMS.  The amazing thing was when he asked the audience how many people actually had documented processes or SOP’s – only about half raised their hands.  Which begs the question – assuming you have documented processes, how current are they and how have they changed over the life of your WMS?  Do your current process documents and WMS processes align?  If not, how are you managing to have a consistent and quality WMS environment and work result?

Don Benson (http://www.wmssupport.com), my co-contributor on this series of blogs very accurately points out that “too many times, we are just too busy to take the time to systematically review and update our processes or SOP documents”.  As Don notes, “It’s certainly NOT easy, and we are all guilty of putting off tough jobs from time to time, but the payback from reviewing warehouse processes and looking for improvements, no matter how small, can be tremendous”.   Realizing some benefits is not as hard as you think. You can start out in one area, let’s say receiving.  Pull out your latest version of process documents and spend a little time on the floor observing and talking to your associates?  Has anything changed?  Are there things we should do slightly differently?  Does the WMS make your job easier or do you have to perform manual workarounds (worksheets, Post-It notes, spreadsheets, etc.) to get the job done.  If you don’t have process documents, you can start with simple sketches and process flows to start to define them, and see if your WMS information flows match the operations and material flow.  Don went on to say “that the people that do the work actually appreciate that a documented process exists, for several reasons”.  Don gives us some very good examples:

1.    demonstrates that someone, at some point in time (higher in the organization) really knew what the work of the task required

2.     suggests that the steps in the task have been thought through and were appropriate

3.     provides a foundation for standardization and minimizing the variation of performance and evaluation among those that do the work

4.     becomes a basis for discussion when requirements change (as they always do) or when new technology is considered (critical when considering a new WMS)

We’re guessing you may have some processes that are out of sync.  Perhaps a little review and fine tuning can help you make your WMS good to the last byte.  Who knows, you may have functionality buried inside your WMS that was forgotten or never turned on to begin with that may help you.  These are just a few simple ideas to help you improve your operations, save time and money.  Let us know what you have done with regard to process review…just like the WERC Conference, there are lots of us out there that would like to learn from your experience.

WMS - Good to the last byte...(Part 1 - People)

We continue our discussion on making your WMS good to the last byte - let’s consider the people involved with your WMS.  Take a look around your organization.  How many people that were originally involved in the WMS implementation are still with your company, or are still involved with the WMS?   Employee turnover, new hires, promotions, transfers to other parts of the organization, acquisitions, consolidations, outsourcing are some pretty common causes behind the changes to WMS user community.  We’re not just talking about users either… how about the user relationships with company management, vendors, customers and carriers that were developed and contributed to the effective management of warehouse operations. 

Don Benson (http://www.wmssupport.com/), my co-contributor on this series of blogs very accurately points out that “These changes can develop slowly over time.  We notice bigger changes like when a new manager is brought in”.  As Don notes, “It’s the small changes that occur over time that sneak up on us and we really don’t realize the impact until one day we look around and realize that people are bypassing the WMS, with a decreasing level of performance, not developing new capabilities or sustaining capabilities to optimize performance each day”.  If the right people are not in the right place at the right time (sounds like a basic supply chain mantra to us) to support, improve and sponsor your WMS, you may be more at risk than you think.

I know of one situation where there was one person, yes one person that really knew the inner workings of a WMS.  The original vendor had announced ‘end of life’ of the WMS and was moving in another direction.  The customer loved the WMS.  In fact they loved it so much they contracted directly with the one person that knew the WMS and actually took out an insurance policy on that person as a risk mitigation strategy.  Now I know this is an extreme example, but if you are running an older WMS, how risky is your situation.  Take a census of your user, support and vendor community – how many people really understand the information, the patterns of daily demand, the workflow, the database and technology?  What steps have you taken to ensure that you have proper training, process documentation and system documentation to make sure that personnel changes don’t suddenly sneak up on you one day and you find yourself exposed to some unplanned risk?

We’re all pretty good at planning technology upgrades, but how many organizations truly assess their user and support community on a regular basis?  What training and transition plans does your organization have that are documented and reviewed on a regular basis to ensure that you maximize your aging WMS from a ‘people’ perspective?  How risky is the ‘people’ component of your WMS environment?  It’s worth taking a look.  We’ll look at the process and technology components in the next few blogs.

For now, we hope we’ve shed some light on the ‘people’ side of things.  We’d like to hear about your experiences with support and use of your WMS over the years as it relates to people…we’re guessing there are some pretty good stories out there…

WMS – Good to the last byte…

There seems to be a lot of activity in the WMS market these days including stories and discussions about the potential increase in WMS upgrade/replacement projects.  In a recent conversation with Don Benson (http://www.wmssupport.com/ ), a long-time colleague in the WMS market, we discussed some of these developments.  Maxwell House coffee has advertised its coffee to be “good to the last drop” since 1917.  My discussion with Don centered on how your WMS can be “good to the last byte”.  Now I realize that many of you may feel that your WMS dates back to 1917, but we seriously doubt this is the case.  The WMS market has been a very robust market dating back to the late 1970’s/early 1980’s and believe it or not, some of the original WMS providers (and software) are still very active in the market today.  Maxwell House recently upgraded their slogan to “Good Just Got Great”.  While many installed WMS systems are good and the upgrade/replacement movement to a “great” WMS may be gaining some steam, we see many companies out there looking for ways to make sure their current WMS is “good to the last byte”.  WMS practitioners for years have talked about the importance of “people, process and technology” with regard to WMS implementation success, and most of the attention has been focused on the technology side of this dynamic triangle.

In these tough economic times, everyone is searching for ways to do more with less and to extend the life of any useful asset.  A WMS is no different.  Don and I discussed the “people, process, technology” angle on how to squeeze the last drop out of a WMS.  We’ll explore each of these three areas in a series of blogs over the next few weeks and take a look at how changes in these areas are affecting the success, returns and future of existing WMS systems.  We see many companies getting very creative in their ability to extend the life of their WMS in this economy.  Similarly, we are beginning to see an increase in professional service offerings from consulting and support organizations aimed at helping clients extend the useful life of a WMS.  So stay tuned, grab another cup of coffee and relax.  We’ll be back next time with a perspective on the “people” side of WMS and how people impact the life of a WMS.

ipad and Supply Chain?

Certainly the ipad is an extremely innovative product, but how will it influence the supply chain market?  Will it influence application development?  Will users want an ipad interface?  How can an ipad help your supply chain team better collaborate with internal and external trading partners and give you a competitive edge?

Mark Cuban, entrepreneur and owner of the Dallas Mavericks, said in a recent msnbc contribution ( http://www.msnbc.msn.com/id/35161216/ns/technology_and_science-tech_and_gadgets/) - "You can book it right now that it will be the product that kids of this generation grow up with and look back on with affection just like we did with the first video games. Video games changed how we grew up. The iPad will change how kids today grow up."

The entire user interface experience is altering the way we live.  Google maps, web-based mobile phones, personal GPS devices, HDTV news/sports programming are all changing the way we see, search, interpret and expect complex data to be presented to us.  The next generation supply chain managers, supervisors and operational associates are growing up with an entirely new expectation of how to interact with 'systems'.

Are your supply chain applications providing the same level of visualization and granularity and drill down capability?  Let us know what you think lies around the corner for supply chain applications. How can you manage, control and collaborate better with hardware/software capabilities like that of the ipad and other recent technology developments?  The trend is a reality and it's happening faster than any of us are willing to admit.  What are your supply chain application vendors telling you?  How are they reacting to these trends, or is it "business as usual"?

We welcome your thoughts on the future of supply chain applications and user experiences...let us know what you think.

The devil is in the data...

Technology seems to get more than its fair share of headlines when you are considering new systems.  SaaS, SOA, cloud computing and workflow are all exciting things to talk about, but when it comes to successfully implementing any new technology the devil is in the data.  After recently participating in nearly a week's worth of meetings for a new WMS project I was really struck by the amount of time that the project team spent on organizing, collecting and reviewing data. Yes, data.  Not technology, not slick hardware devices, but data.  Sound boring, it is.  Sound tedious, it is.  Critical to a project like a new WMS, it is.  All too often we get hung up in the technology side of things and build tremendously detailed project plans, but my recent experience was like walking out of a building in downtown Chicago in the winter and getting hit with a really cold blast of air.  Project plans seem to focus on technology, getting the network, the servers, the database all primed and ready to go, but rarely do project teams spend enough time on carefully planning the collection, review and cleansing of data.  It was refreshing to see this project team spending the amount of time they did on careful data collection and analysis.  The downstream benefits in terms of system testing, training and ultimately system performance will all benefit from this investment in good, clean data.  I'm sure you have experienced some project in your professional career that has been severely impacted by bad data.  I'd love to hear about some of your encounters with the devil in the data. Pay attention to the data for your next project, or the devil may do it for you.

Getting Cold? Visit Arizona on November 11th

If you're traveling through Arizona or live in the area be sure to mark your calendar to attend the 3rd Annual CSCMP Arizona Supply Chain Symposium at ASU Skysong Innovation Center in Scottsdale.

Featured speakers include:

• James Kellso, Senior Supply Chain Master at Intel Corporation
• Andrew Reese, Editor - Supply & Demand Chain Executive magazine

A great event featuring 15+ sponsor companies; break out sessions covering "Inside the Four Walls" and "Outside the Four Walls".

Great sessions, great speakers, great networking and the group 'guarantees' no snow that day!

For more information and to register please visit CSCMP-AZ

Proceeds will be used to support our scholarship fund for Supply Chain students at Thunderbird School of Global Management and Arizona State University.

SOA...Where can I buy one?

If it was only that easy! How is it that we went from a world a few years ago where virtually no software vendors spoke of SOA (Service Oriented Architecture), to a world where nearly every software vendor out there hypes an SOA message today?  Is it buzzword compliance at work?  Did everyone finally catch the latest software marketing wave and decide to ride it?  Did they fear getting left behind?  If only there was a CARFAX ® for software.

 

Let’s face it; most applications marketed today have been around for some time since they were originally written.  Like a pre-owned car, no matter how good it looks on the outside, you need to look carefully under the hood.  Sure a new paint job, or new stereo make the car look better, just like many software enhancements.  But has the underlying frame (architecture) really been re-built with today’s standards in mind?  Wouldn’t it be great to buy a CARFAX ® - like report for a software application and know its complete history?  How many owners it has had?  What the service records have to say about it?  Who the original owners were and why they sold it?  Is this the last year for this model before a new, re-styled, re-engineered model is announced next year?

 

SOA is an approach, an architecture; it is not something you buy in a box.  As with a car purchase, when you are looking to purchase software that “is SOA” - make sure you look under the hood, do your homework, take it for a

test drive.  Have your technicians really dig into the engine and transmission.

 

There are tremendous benefits to be realized with SOA, make no doubt about that.  Arming your team with some research on SOA is a great way to start.  David Linthicum ( http://davidlinthicum.sys-con.com) writes an excellent blog on SOA and has some terrific advice and lessons learned on all aspects of SOA.  Check out his blog regarding SOA myths - http://www.infoworld.com/d/architecture/4-soa-myths-busted-715.  There are a lot of great supply chain applications out there, and many of the newer ones are truly SOA – that’s the good news.  When buying applications with SOA in mind, remind yourself to really look under the hood and ask the tough questions - you'll be glad you did in the long run.

 

What is your experience regarding SOA hype versus the reality of SOA?  Have you realized your SOA objectives?  Did you achieve your ROI?  I’d love get your feedback and experience on SOA.  Feel free to comment on this blog or send me an email at steve.simmerman@nextviewsoftware.com.

Omaha and technology?

Solid foundations required as a basis for the future

Omaha, Nebraska?  Technology?  Supply Chain? This seems like an odd mix when you first consider it.  However, on a recent trip through Omaha I was struck by the images and patterns of development in that city and how they can be applied to many of the projects that we face in supply chain, particularly technology-based projects. Omaha is the 40th largest city in the US and is the headquarters of several Fortune 500 firms including ConAgra Foods, Berkshire Hathaway, Mutual of Omaha Companies, Union Pacific Corporation and Peter Kiewit and Sons, Inc.  Omaha is a city with a long and interesting history.  Many of you sports fans, particularly baseball fans, may know Omaha as the home of the NCAA Collegiate Men's Baseball World Series.  In fact, Omaha has been hosting this event since 1950.  This brings me to the parallel to technology-based projects in our supply-chain centric lives.

We are constantly bombarded with SaaS, cloud computing, SOA, Web 2.0, even Supply Chain 2.0 stories and development announcements every day.  I don't think many of us have totally comprehended or even begun to adapt Web 2.0 into our daily lives or our businesses and Web 3.0 is already buzzing in the background.  All these developments promise to take our supply chain initiatives to the next level.  While this may be true, it's important to keep in mind where we have been and how we can leverage that experience going forward - just like Omaha did.

We have seen countless examples of where technology is viewed as the panacea.  But without a solid plan and foundation for the implementation of these technology breakthroughs it may all be for naught.  Back to Omaha.  Some wonderful developments have occurred over the past few years.  The development and expansion of the Qwest Center Omaha along a beautiful riverfront setting is one example.  The center is a very eye-catching building set along the Missouri river, leveraging a very unique facet of Omaha's landscape.  Another development currently underway is the construction of the new College World Series stadium.  In 2008 , the NCAA and the local non-profit organization that runs the College World Series agreed to keep the tournament in Omaha for the next 25 years through 2035.  A  testament to past success with the tournament, as well as a huge economic win for Omaha.  How many of us have ever experienced contract extensions that involve 25 year commitments?

The new stadium is well underway.  While today it is basically a rough construction site, with a large hole in the earth and some steel structure starting to go up. The future for this new venue looks very promising.  I sense this because I saw the construction site from the new hotel I stayed at which happens to be directly across the street from the new stadium.  Mine was not the only new hotel in the area.  In fact, the next morning I noticed several new hotels already operating in the area. 

The stadium is strategically placed to leverage the existing downtown area, the marketplace, the parking facilities already in place for the Qwest Center and more.  The scene surrounding this new stadium really impressed me.  How many times have we seen projects that race to get to the finish line, but never take the time to make sure the basic foundations are in place?  How many times do we race to embrace and deploy technology without taking the time to ensure that the underlying processes have been evaluated, that the people involved have been educated and trained, that the existing infrastructure is leveraged properly or that we have taken the time to improve the existing infrastructure to ensure our long-term success with technology-based projects?

Perhaps we all need to learn lessons from my visit to Omaha.  Before your build your next state-of-the art stadium that will be used for 25 years, make sure the hotels, the parking, the roads and the supporting infrastructure are in place first.  There are no short cuts in life.  Careful planning and building a solid foundation is vital to the long-term success of any technology-based project.  Next time you start an important technology-based project for your supply chain ask your project team - "How can we learn from Omaha?"  I'm sure you'll get some very puzzling looks, yet I'm sure you'll discover some key paths forward toward the success of your new stadium.