To compete in the future it is important to consider how compatible the underlying technology platform is with all internal and external systems. ERP systems have a distinct advantage over the others because of their underlying architecture in platform integration — often the most underestimated and underappreciated part of a software implementation and rollout. In addition, the ERP solutions have a fully integrated back-office suite that complements supply chain planning and execution. However, supply chain offerings are being made more robust by building service-oriented architectures (SOAs) into the various suites. In addition, best-of-breed and supply chain suite solutions, as mentioned, have built "hooks" and links into other supply chain point solutions, supply chain suites and ERP systems to increase their viability. To be viable, all best-of-breed solutions and supply chain suite companies that sell subset solutions have to be able to link into all possible complementary solutions.
Using software that has its own "backbone," or integration architecture, will also make this task easier. Integrating into a single platform significantly reduces the time and cost of implementation. Software with service-based architectures that use a Web platform as an integration point allows total integration to occur more quickly.
Service Oriented Architecture: A Key Decision Maker?
A way to ease the pain of integration is the use of service-oriented architecture. SOA allows "plug and play" of various applications into a central "backbone" without the traditional issues of significant hard coding to enable data transfer between applications. SOA is a form of distributed architecture with emphasis on "loose coupling" and business semantics for interfaces.
There are two SOA options to help ease supply chain solution integration. The first option is to build your own SOA and then select specific applications to "plug" into your system. This obviously requires a skilled IT staff to plan and implement an internal SOA. For those companies that would prefer to keep the size and fixed investment in technology and people to a minimum, purchasing a supply chain suite solution or ERP with an existing SOA is the second and most likely the best option.
Considerations for Executives Overseeing the Supply Chain Solution Decision
There is no best solution across all companies; since each company has different core business competencies, hardware and software platforms, levels of software automation desires and budget priorities, a separate analysis really is needed for each company. However, the following are issues that all executives should consider when their organization is selecting software solutions:
1. Have your team improve the processes before looking at technology — This is not an IT issue, but it will allow any IT implementation the potential to be successful. Although it seems trite, it can't be emphasized enough: don't speed up inefficiency by automating current processes. Without fixing the processes first, it is almost impossible to successfully implement a supply chain software solution. Remember: Technology is only an enabler, not a cure-all. In addition, it is important that the solution you select has processes that mirror the way you execute operational processes.
2. Ensure that business folks are teamed with IT folks on the solution selection team — Many times the availability and accuracy of data are assumed by executives and business folks, but data capabilities should be understood by working with the IT people. a. There needs to be an understanding of how all the current and desired systems do/will work together. b. Make sure the executive team is aware of the current system's drawbacks.
3. Decide which type(s) of solution you might want to investigate — Best-of-breed versus supply chain suite versus ERP with supply chain applications. In fact, you might choose two or even all three depending on your current internal IT and operational capabilities and future needs. a. This might require you to work with other IT users in the organization, like finance or accounting, who also might benefit from improved back-office solutions that supply data to supply chain solutions, including order management.
4. Determine your desired functionality prior to meeting with representatives from the software companies.
5. When you do bring in software companies to "show their wares," definitely ask for a demonstration using some of your data. In addition, ask the software company to let someone from your team "drive" the demonstration by inputting data into the various parts of the screens. This ensures that the demo is "flushed out" and keeps only specific inputs and their results from being viewed.
6. Make sure your systems align with those of your supply chain partners to ensure the easiest implementation. a. This will require you to share your IT plans with your business partners.