Seven Roadblocks to Global Data Synchronization

Study reveals pitfalls and problems most likely to slow down GDS projects

Mountain View, CA — October 28, 2003 — Global Data Synchronization (GDS) projects are put at risk by seven factors, according to findings by product information software provider Velosel Corp. The company added that the industry-wide drive between manufacturers and retailers to streamline product information could be derailed if these challenges are not addressed.

By analyzing feedback gathered from over 50 Global 1000 manufacturers and retailers over the past two months, Velosel said it has identified the most common mistakes made in Global Data Synchronization projects. It found most projects that fall short of expectations or fail to meet deadlines do so because the scope or impact of GDS has been underestimated from the outset.

"Achieving complete Global Data Synchronization is not a simple task. Execution on this front requires that companies be aware as early as possible of the scope of opportunities and challenges that may lie ahead," said Kent Allen, research director at Aberdeen Group. "Firms that lack an organization-wide, business process-centric approach to Global Data Synchronization projects will find that these initiatives devolve into an exercise in redundant, cross-divisional frustration."

According to the study, the common pitfalls are:

Lack of a senior sponsor: The main reason for a GDS project to fail is if it lacks a high-level sponsor within the organization. If GDS is treated as a technical initiative alone, the broader business implications will not be considered and the potential benefits will not be realized. For manufacturers, Velosel said GDS could help differentiate the company by making it easier for retailers to buy from them. For retailers, where efficiency is an integral part of profitability, GDS offers the potential to streamline the supply chain and internal operations still further. Unless the project encompasses these implications, it will simply provide a technical solution to a technical problem, rather than a paradigm shift in supply chain efficiency.

Ignoring the customer interaction implications: At its full extent, GDS becomes the platform for interaction between manufacturers and retailers by providing a unified "language" for them to trade efficiently. If it is viewed simply as a data project, ignoring the potential for a closer working relationship, the project will fail since GDS fundamentally changes the way retailers and suppliers interact. It's important that customer-facing teams are involved in GDS in order to take full advantage, and to ensure interactions are clearly understood.

Seeing synchronization as a one-time project: Manufacturers and retailers can view GDS as a one-off project rather than an ongoing program. Uploading data into trading hubs or product registries does not constitute the completion of a GDS project. New products are constantly introduced, updated or discontinued, authorized product lists are revised, customer requirements evolve, and standards change, meaning GDS should be a scalable and repeatable process to be successful.

Underestimating the time required to create and maintain accurate product information: The product information for a GDS project is rarely stored in one place and requires an extensive collation exercise to create a central product information repository. Much of the data needed must be drawn from a variety of departments across the enterprise, such as research, manufacturing and logistics. Once collated and centralized, the information needs to be interrogated for accuracy and frequently enhanced to provide additional information which may not have been required to date, such as package dimensions, storage temperatures etc. A common pitfall is that organizations embarking on GDS underestimate the stringency of these product information requirements or the time required to fulfill them correctly.

Viewing GDS as a connectivity problem: GDS enables product information to flow between manufacturers and retailers. As a result, it can be viewed simply as a connectivity challenge. However, this ignores the volume of messages that will be exchanged between the parties and overlooks the value of those messages. For instance, if a retailer rejects a new product that is being introduced, the manufacturer must not only recognize that rejection but also find the causes behind it. If the message choreography is wrong and the right people aren't alerted, this valuable feedback cannot be used. Workflow is an integral part of operational GDS, bringing manufacturers and retailers closer together. But unless the messages are correctly managed, manufacturers and retailers will each be broadcasting feedback that won't be actioned.

Stopping short of full synchronization: Given the potential scope of a GDS project, some manufacturers and retailers only become 'partially synchronized'. For instance, a manufacturer only uploads part of its product catalog or only a subset of the available information, such as physical dimensions but not price information. Alternatively, the manufacturer only allows synchronization through a single channel but does not build connectivity to other data pools or proprietary routes. This can restrict the number of partners with which the manufacturer can communicate.

On the demand side, a retailer might only synchronize with a handful of key suppliers, ignoring the smaller vendors. This results in a dual system, which yields some of the benefits of GDS but maintains the chronic problems inherent in having inaccurate product information and different interaction approaches with each supplier.

The pitfall of adopting 'partial synchronization' is that, by restricting the project parameters to encompass only a few products or suppliers, the resulting solution is not scalable or comprehensive once the project rolls out further. Unless the broad parameters are built in from the start, the investment in GDS will be misplaced, laying problems for the future if the solution has to be re-engineered.

GDS mandates alone disenchant adoption: GDS benefits both retailers and manufacturers. Many retailers have introduced mandates and deadlines for key suppliers to trade via GDS in order to incentivize adoption. However, smaller manufacturers do not have the resources to implement a GDS project immediately, despite being willing to do so. Retailers should also consider offering incentives to smaller suppliers to join the GDS initiative. Many of these suppliers provide high quality, niche products, which give the retailer depth of offering and high margin stock, so they need to be carried along with the GDS wave. It will be detrimental to the entire industry if the smaller vendors are ignored or overly penalized.