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Deep Dive on 2017 Prediction Seven: Enhanced Supply Chain Intelligence Capabilities Among B2B Network Platform and Managed Services Providers Will Pay Dividends for Industry Supply Chains

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The following Supply Chain Matters blog is part of our ongoing series of deep dives into each of our previously unveiled ten 2017 Predictions for Industry and Global Supply Chains.

At the start of the New Year, our parent, the Ferrari Consulting and Research Group along with our Supply Chain Matters blog as a broadcast medium, provide a series of predictions for the coming year. These predictions are shared in the spirit of assisting industry specific and global supply chain cross-functional teams in helping to set management objectives for the year ahead. Our further goal is helping our readers and clients to prepare supply chain management and line-of-business teams in establishing impactful programs, initiatives, and educational agendas.  holding-the-future

The context for these predictions includes a broad cross-functional umbrella of supply chain strategy, planning, execution, product lifecycle management, procurement, manufacturing, transportation, logistics and customer service management.

In an earlier Supply Chain Matters blog postings, we provided deep dives related to:

Prediction One- Subdued World Economic Outlook and Heighted Uncertainty to Test Industry Supply Chain Agility.

Prediction Two- A Challenging Year in Procurement

Prediction Three- A Supply Chain Talent Perfect Storm

Prediction Four- Increased Anti-Trade Geo-Political Forces Provide Added Global Sourcing Challenges

Prediction Five- Continued Global Transportation Industry-wide Turbulence

Prediction Six- A Renaissance in Supply Chain Focused Business Services and Technology Investments

In this deep-dive series posting, we drill down on our next prediction.

2017 Prediction Seven- Enhanced Supply Chain Intelligence Capabilities Among B2B Network Platform and Managed Services Providers Will Pay Dividends for Customers

In 2017 and beyond, there will exist increased industry specific needs for deeper and wider levels of customer, product, physical object and supply network focused information visibility, capture and analysis.  This need is coupled to building multi-industry supply chain requirements for more predictive, analytics data-driven decision making competencies that involve outside-in insights. The objective is a literal 360-degree view of supply chain wide data and information, horizontally spanning the end-to-end supply and vertically coupling high level enterprise to shop-floor decision-support needs.  Enhanced business intelligence and overall process improvements further enhances the ability of industry supply chains to support new, more innovative business models that can leverage digital technologies in areas of product or customer related services.

A means to achieve such capabilities are analytics and business intelligence engines that are now being embedded across supply chain focused B2B network platforms, edge systems and production shop floor transactional and information transfer flows. B2B business networks and edge platforms are today the prime opportunity for digitizing the horizontal and vertical flow of information and analytics across end-to-end supply chains. Whereas predominantly EDI messaging platforms were viewed as required external messaging utilities to transfer and receive transaction and electronic messaging information across disparate systems, there is now collective movement by network providers to transform these platforms to business intelligence and analytics based information repositories available to support broader supply chain and product focused decision support needs. As noted in Prediction Six, this an area where blockchain technology can have a profound long-term impact, but beyond that, many existing B2B technology platform vendors such as Ariba, an SAP Company, E2Open, GT Nexus, IBM, OpenText are already moving in the direction of blending supply chain wide planning and execution related transactional data with analytics, cognitive and business intelligence capture. Such analytics and trending information can then be moved to and from various existing business application systems related to planning and customer fulfillment.

Similarly, the vertical notions of what is being often described as either Industrial Networks, Industrial Internet and edge systems, are various physical devices communicating via IoT enabled technology, within their respective operational and performance status data streams. Here again, emerging IoT network technology providers are similarly incorporating cognitive and analytics based capabilities to synthesize the streaming levels of data being captured into information and required decision-making alerts.

An Evolving New Challenge

The evolving new challenge for industry supply chains will be the ability to exchange information and insights among various existing Cloud-based B2B networks and resident business software applications focused on either customer, product, supply, production, service or fulfillment process needs.  This is a challenge that must be addressed in order to gain the full benefits of the Cloud. Ideally, supply chain teams will seek the ability to have a virtual information utility or data lake, but that could be expensive and many industry supply chain teams are not necessarily ready to manage such capabilities at this point. Today, such challenges fuel an evolving need for managed services providers or systems integrators to tie-together such structured and unstructured information and analytics in virtual streaming information and analytics data pools or zones available to all enterprise and supply chain business applications and systems.

Technology vendors now recognize this problem. For instance, Oracle recently released a Hybrid and Multi-Cloud Services utility as part of its Platform-as-a-Service (PaaS) Cloud infrastructure services. Oracle’s intent with this service is to support the needs of data movement, data transformation, data quality and applications integration among multiple Cloud platforms and applications.

Focus on a Networked Cloud Strategy

All the above stated, industry supply chain and line-of-business teams should strive to prioritize and scope certain business process decision need areas, for example customer fulfillment and logistics, or an initial supply chain control tower capability, and work with an individual platform vendor or focused systems integrator to start the journey towards streaming analytics and insights from external Cloud-based platforms.  We view this as a prime process and business support opportunity for supply chain teams in 2017.

B2B or B2B-to-B2C business network platforms related to process needs in areas such as procurement, product management, planning, logistics or customer fulfillment should no longer be viewed as solely messaging or transactional platforms. Over time, they will serve as sources of analytics, insights and alerts related to process, suppliers, and customers. Business, functional and sales and operations planning teams can gain more real-time insights by broadening their perspectives beyond messaging to messaging and trending.

This concludes our Prediction Seven drill-down. In our next posting of this series, we will explore Prediction Eight reflecting on how Alibaba and Amazon will continue to battle for global online platform dominance.

Stay tuned.

Bob Ferrari

© Copyright 2017. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.


Wal-Mart, IBM and Tsinghua University Announce Joint Collaboration on Food Safety Tracking Technology

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This week, global retailer Wal-Mart along with IBM and Tsinghua University announced a joint effort to improve the tracking and movement of food products across China in an effort to improve overall food safety.  The government of China has identified food authentication and supply chain tracking as a critical concern to quickly find and eliminate sources of food contamination within the country.

This announcement bears watching among consumer goods focused supply chains since this new effort will be leveraging what is termed as blockchain technology. This form of technology is increasingly being identified by supply chain focused technology providers for applicability in providing higher levels of intelligence regarding the movement of materials across a supply chain or B2B network. In essence, it fosters the sharing of data and information across a network of computers and as noted in the announcement, is gaining broader recognition due to its applicability in recording and keeping track of assets and materials. This form of technology currently powers digital bitcoin currency use.

According to IBM, when applied to the food supply chain, product information such as farm origin details, batch numbers, processing data, expiration dates, storage temperatures and shipping details can be digitally connected to food items, and the information is entered on the blockchain at every step of the process.

The technology can further aide retailers such as Wal-Mart in managing the shelf-life of products within individual stores and in having access to the traceability aspects of the product’s supply chain. In the specific applicability to Wal-Mart, the announcement indicates that the retailer plans to utilize IBM Blockchain based on Linux Foundation’s Hyperledger Project, which is an open source software project approach that builds on blockchain tools.

Obviously, the closest applicability for the leveraged use of blockchain technology is in current B2B EDI messaging networks that record various movement and transactions among various supply chain trading partners. While attending the recent IBM Empower 2016 conference, executives made mention of upcoming announcements related to IBM’s Sterling Commerce B2B technology and future applicability for this technology.

OpenText, another major B2B technology network provider has also indicated a development direction that augments existing EDI and transactional messaging with broader analytics capabilities.

The takeaway for readers is to begin to consider the possibilities for utilizing EDI messaging and other transactional, content, and unstructured data passing along B2B trading networks as sources of broader supply chain intelligence and analytics related to needs in regulatory compliance, traceability and reduction of waste.

We believe there will be more initiative announcements forthcoming such as the one from retailer Wal-Mart, initiatives that will leverage B2B trading network information towards efforts to integrate value-chain physical flows with needs for broader intelligence and analytics related to more-informed and timely decision-making.

Stay tuned.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.

 


Look to the Cloud to Support the Modern B2B Network

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Through this blog, I’ve worked to raise awareness about the critical importance of integrating information and business processes across a business-to-business (B2B), or supply chain, network. It’s important because more supply chain business processes and information flows occur and reside throughout the external supply chain network, and needs to be integrated into internal systems, applications and decision-making.

Interoperability and exchanging information is especially critical – in some cases, a necessity –for manufacturers supporting direct materials and product value-chain needs across a global network. Interoperability should not be considered as supporting a singular functional process need, but rather an electronic connection that integrates all information flows among suppliers, customers, trading partners, financial institutions, logistics providers or any valued supply chain ecosystem partner, across the globe.

What’s more, B2B integration technology must be adaptable to today’s rapid pace of business. And it must enable the journey toward supply chain process maturity and more informed and timely decision-making. The longer-term requirement is often the ability to seamlessly support not only P2P and order-to-cash, but also broader B2B decision-making process needs leveraging near real-time information exchange.

More and more, analytics and timely decision-making capabilities are now network considerations. Information visibility must be more than static in nature; it must be dynamic (for instance, how much on-hand inventory currently exists across the network) and contextual (such as associated inventory coupled to customer orders).

The B2B network must further be seamless, non-disruptive to the current systems landscape, and it must support a transformation beyond just two-way electronic transactional flows to more interactive forms of business process collaboration, electronic workflow, information exchange, and supply chain business intelligence requirements, today and in the future.

The emerging choice for supporting that journey is cloud technology. Cloud can bring together data management, analytics and connectivity to integrate key information about customers, suppliers, trading partners and other support partners and create a modern B2B network.

Importance of Cloud-Based Technology

In our view, an organization’s journey toward mature B2B integration is made possible by today’s advanced cloud-based platforms, applications and infrastructure.

Cloud-based technology is seen as a response to growing industry frustrations with rising IT technology costs and service challenges. All corporate functions are under enormous pressure to reduce costs. That includes IT; studies consistently show that up to 75 percent of IT costs stem from maintaining existing IT infrastructures or business software applications, particularly those that are external.

Throw in ongoing line-of-business and supply-chain frustrations with on-premise ERP and legacy business applications — those designed before the emergence of modern business and supply chain frameworks — and the pressure to change is even more compelling. Processes are continually being created, changed or incorporated into broader network-focused needs and requirements.

Businesses must avoid the costly time and expense of upgrading their IT systems. This has spurred major enterprise system vendors to bring cloud-based technologies to market to provide technology optimization with minimal cost and disruption. Another benefit to cloud-based systems is their ability to be continually updated to reflect changing business needs. Why settle for innovation every one to two years when every six months or less is an option — and with lower capital and overhead costs?

It is no surprise that many of today’s supply chain network providers have elected to develop their solutions on, or transition to, cloud platforms, because they clearly understand that the network is inherently cloud-based.

Conclusions and Recommendations

When considering an investment in an integrated B2B network, or expanding the scope of an existing platform, a cloud-based platform can minimize disruption to existing systems while supporting short and longer-term needs for business growth, process and external partnerships. Consider a cloud-based platform that can support multiple supply chain business process needs, while adhering to the varied data security standards and practices that exist around the world. And look for a service provider that can deliver leadership and expertise, as well as the services needed to support quick, efficient growth and enhanced capabilities to deliver innovation.

There is no question that analytics and broader, more predictive business insight capabilities are opportunities to transform B2B business and supply chain business networks. The opportunity — and indeed the necessity — is to leverage an end-to-end business network to synchronize planning, execution, customer fulfillment and more predictive decision-making needs.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.

Disclosure: This blog is sponsored by OpenText.


Supply Chain Matters Impressions of the OpenText Enterprise World 2016 Conference

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In providing our Supply Chain Matters readership with market landscape education regarding technology supporting B2B business networks process needs, we have provided prior visibility to Canadian based technology services provider OpenText.

Last week, this analyst and executive editor had the opportunity to attend OpenText Enterprise World 2016, this vendor’s annual customer conference and we walked away with rather positive impressions regarding direction and services.  OpenText EW 2016 Banner

OpenText has now assimilated technology centered on three focused strategic areas which CEO and CTO Mark Barrenechea addressed in the conference opening keynote:

OpenText Enterprise Information Management (EIM) which is just about everything related to document and content management. Many SAP ERP users may or may not be familiar with the brand, but much of the document content exchanged within SAP applications is powered by OpenText including new iterations of SAP HANA and SAP S4HANA applications.  Likewise, the vendor supports EIM needs for other ERP systems as well.

OpenText Business Network which is a B2B business network platform that supports EDI messaging, supplier and customer onboarding, purchase-to-pay transactional support and other growing managed services. The gem of this network is the 2013 acquisition of the GXS Trading Grid network with its genesis as the prior General Electric Information Services. In June of 2012 this author declared that GXS was the hidden gem in B2B information transfer and software services and that prediction continues to manifest itself.

OpenText Analytics which is the new evolving area for this provider, one that promises to harness insights and business decision support related to both EIM and Business Network operational and business information flows. This capability has become a new strategic thrust for the company, one that by our view can present a more visible player to the analytics and enterprise technology market.

 

Regarding the latter, Barrenechea provided two major product announcements in conjunction with the conference. The first was Project Bandaroo, a technology to be focused on the changing nature of work. It was described as bringing together OpenText Core, the vendor’s core Cloud platform for everything related to EIM, with other elements of social communities, channels, bots and project management. An on-stage demo outlined a scenario of working group interactions and discussion forums centered on specific information needs. From our lens, the concept seems interesting but needs more specifics related to actual business challenges. Timetable communicated was the second-half of 2017.

The second announcement related to Project Magellan which is described as a next generation cognitive platform being designed to integrate voice, video, natural language processing and other content. It was outlined as an open systems based platform that would leverage both the Spark Apache platform along with the analytics capabilities of Actuate, OpenText’s most recent acquisition focused on advanced analytics. Barrenechea was not shy in making a direct head-to-head technology comparison with the IBM Watson Cognitive platform and that his company will compete directly as an alternative platform in the market. From this author’s lens, this was a far more newsworthy announcement and one to keep an eye on in the coming months, especially since such technology can be applied to the OpenText Business Network.  This capability is also planned for introduction in the second-half of 2017.

Regarding the Business Network, much more strategy and information was shared with conference attendees, information that we garnered from an April industry analyst event. Product managers declared that upwards of $7.4 trillion in commerce, the equivalent of 10 percent of world GDP, along with connections to 65,000 partners are currently supported by this network.  Support encompasses 37 data centers across 18 countries and 25 satellites.

In addition to electronic transactional messaging (EDI), support is provided in the process areas of purchase-to-pay (P2P), order and shipment visibility and other business process areas. Evolved capabilities in a series of managed services for specific industries and customers continues to expand with an increase of over 200 customers in this segment alone since the acquisition of GXS. The audience was reminded that OpenText Business Network is currently positioned by Gartner in the Leaders Quadrant for B2B Business Networks.

Our on-site executive briefings not only provided more background to new functionality and services that are enabled by the latest OpenText Suite 16 product release but future capabilities being planned in the all-important area of supply chain wide analytics.  Of further interest is the introduction of what is termed as Supply Chain Activity Index, an analytical based aggregate view of the B2B network, with forms of Business Process Management (BPM) support for processes that span the supply and value chain network. These two areas should really peak interest, depending on eventual design and functionality.

There was additional validation that support for SAP Ariba’s efforts to move beyond indirect procurement and support more direct materials procurement processes such as electronic invoicing and messaging will stem from OpenText Managed Network Services.

Our other impressions from this event include:

OpenText is indeed well on the road towards addressing the complex and fast-changing requirements for supporting globally-extended B2B networks beyond electronic messaging and EDI. Unfolding support in specific managed services and analytics areas are very promising as is the unfolding strategy of leveraging analytical capabilities to support network-wide decision-making.

An open question acknowledged by senior management is whether OpenText remains an infrastructure and Cloud services provider or moves more boldly into applications. This will be an area we keep an eye to in the coming months since there are pros and cons to either.

We are of the impression that OpenText senior management now understands the stand-alone nature and business value of OpenText Business Network in terms of an independent marketing persona of that of EIM that includes need for brand recognition within broader supply chain management functional audiences. Anticipate more concentrated efforts and visibility in this area.

Having the opportunity to attend many vendor conferences in any given year, this author can quickly extract a sense of overall management culture. Having now had direct 1:1 interaction with a number of OpenText senior executives at multiple events, we are impressed with their openness, sensitivity to customer and market needs and desire to make good on commitments. That was supported by some select customer interviews conducted. Once more, the company continues to reach out and hire and retain additional experienced talent. As an example, we were impressed with the technical savvy and communication skills of Actuate executives brought forward from that most recent acquisition.

As always, this analyst will provide continued assessment commentaries related to both Open Text and the broader B2B supply chain business network technology landscape. In the meantime, if readers have specific questions, send us an email or call.

Bob Ferrari

© Copyright 2016. The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.

 


Next Week- Supply Chain Matters Attends Open Text Enterprise World 2016

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We alert our readers that next week Supply Chain Matters is traveling to Nashville to attend the OpenText Enterprise World 2016 Conference.

Some of our readers that may not be directly familiar with Open Text which categories itself as an Enterprise Information Management (EIM) technology support provider. However, they may be supporting their supply chain messaging and transactional needs from this vendor’s B2B technology network. We last updated readers on this technology vendor’s capability in April, after attending an industry analyst briefing event.

In November of 2013, B2B VAN platform GXS was acquired by Open Text for an estimated $1.2 billion, roughly 2.4 times GXS Fiscal 2012 revenues. The stated goal of the acquisition was to combine Open Text’s Information Exchange capabilities with GXS’s portfolio of B2B managed and integration services.  Since that time, Open Text has been executing a strategy that brings together the tenets of EIM in the dimensions of supply chain messaging, managed services, business process management and deeper network-focused analytics.

Recently launched was OpenText Release 16, what the vendor describes as the most comprehensive, integrated digital information platform and next week’s conference provides the opportunity for the broader customer base to learn more about this vendor’s two separate offerings, Open Text Suite 16 and Open Text Cloud 16, combined within a single Cloud based platform that manages and analyzes the entire flow of information.

Stay tuned for our impressions of this conference most likely appearing during the week of July 18.

 


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