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Significant Announcements from SAP

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There has been some noteworthy news regarding enterprise technology provider SAP.

Yesterday, the business software provider made a significant announcement regarding its marketing leadership.  SAP appointed Maggie Chan Jones, a former Level 3 Communications and Microsoft marketing executive as Chief Marketing Officer (CMO). The news release cites her extensive cloud technology marketing experience as important for the renewed emphasis of SAP’s marketing efforts. Ms. Jones will be based in SAP’s Global Marketing office in New York City.

Former CMO Jonathan Becher has been appointed to the new role of Chief Digital Officer.  Becher will lead a new business unit to expand entry into new areas of digital content and data.  With this change, SAP will combine its existing online stores into one SAP Store where prospective buyers can discover, buy, download or upgrade software, services and content.

By our Supply Chain Matters lens, these moves indicate a far more aggressive SAP stance for leveraging cloud applications and cloud-based customer technology delivery.  The new role of Chief Digital Officer will be especially challenging since it foretells of less influence and touch points for SAP’s direct sales and system implementation partner teams, who have garnered considerable influence these past years.  SAP’s current CEO, Bill McDermott’s background is direct sales, and his active sponsorship of this new effort will be something for SAP customers to monitor in the coming months.  One thing is certain for the short-term, we do not foresee SAP customers downloading mission critical business software from a storefront.

On an entirely different front, both SAP and Oracle recently agreed to settle their long-standing legal battle regarding alleged software copyright infringements from SAP’s prior acquisition of now defunct TomorrowNow. Under the settlement, SAP will pay Oracle $359 million to settle this case. In August, an Appeals court overturned a previous $1.3B jury award against SAP, instead identifying true damages as $356.7 million. SAP has now agreed to pay Oracle that amount and added interest charges, plus a previous payment of $120 million for legal and dismissal fees.

In early September, Supply Chain Matters opined that it was time for both SAP and Oracle to move on from their four year legal bitter legal battle. TomorrowNow, has obviously turned out to be not one of SAP’s most astute acquisitions and was time to put aside the egos from both sides. Both technology providers have suffered public embarrassments in the eyes of each’s individual customers and both have other pressing needs in terms of investments and services for supply chain, manufacturing, procurement and B2B network customers.

Bob Ferrari


Aceelerating Productivity Needs of Supply Chain Reference Model Initiatives

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As many of our readers may be aware, the Supply-Chain Operations Reference Model (SCOR) was developed by the Supply Chain Council (now APICS Supply Chain Council) to assist multi-industry and organizational supply chain organizations make meaningful and rapid improvements in supply chain business processes. This model’s methodologies describe the Plan, Source, Make, Deliver and Return activities associated with supporting customer and business fulfillment needs and have become a common language to articulate industry supply chain capabilities.

We all know that today, industry supply chains are driven by customer requirements and service needs, and the SCOR model is a tool that helps organization’s with a single standard reference upon which to understand the processes that make-up the supply chain along with their relationships to performance metrics. The power of SCOR is that it does not document the supply chain in the lens of functions (planning, procurement, manufacturing, logistics, etc.) but rather that of business process inputs and outcomes.

This author has been both trained in SCOR methodologies and has volunteered in various positions of the Supply Chain Council, including being a prior member of that organization’s North America Leadership Team. I can therefore attest that SCOR is a rather versatile tool that has assisted many industry and service focused supply chain teams to describe the depth and breadth of their supply chains as well as provide the basis for supply chain improvement or transformational initiatives.

The multi-level SCOR framework maps all customer interactions, all physical and informational transactions, planning and fulfillment processes. SCOR is a hierarchical and highly defined model which can capture the detail of supply chain processes with their relationships to the all-important performance attributes of responsiveness, agility, cost or assets associated to a supply chain. Those teams that have had experience with SCOR know that the real power of the tool is in understanding how all processes relate to one another and where processes need to be adjusted or modified to meet changing business or customer requirements. SCOR is an important tool that brings detailed understanding of the entire makeup of a supply chain, including best practices derived from other multi-industry supply chains.

The power of a comprehensive process definition tool is in providing common taxonomy and detailed cross-organizational and management understanding of the many supply chains that can exist within a particular company. Too often, teams get bogged down in documenting and updating the SCOR framework models which takes away from broad cross-functional support and from the timeliness or effectiveness of the framework as a reference to support decision-making. This is where technology can provide needed assistance.

Supply Chain Matters has previously called attention to highly focused system integrators, such as Bristlecone, who have developed self-contained service offerings that address very specific business needs. These are fixed-cost, managed scope application accelerators developed from prior successful implementations and industry best practices.

To assist firms that utilize SAP’s supply chain management applications the BristleconeStore offers ProcessesNow, a series of pre-built process maps based on the SCOR framework. ProcessesNow provides a central repository of process maps that extend the SCOR model by additional three levels .  It uniquely links these processes to the various transactions within SAP’s APO or Oracle’s Demantra planning application helping teams to better align the process maps with the transactions that enable them, hence, enhancing user adoption of the related planning solutions. Teams can interact with SCOR models both online and offline utilizing an easy to navigate expand and collapse structure.

Another neat feature is that Bristlecone has augmented ProcessesNow to support certain industry unique process needs. According to Bristlecone, this tool can typically save 4-8 months of framework documentation efforts, allowing teams to more productive time to analyze and iterate their SCOR models, and the tool itself typically can be installed in about a week. As with DemandPlanningNow which has previously highlighted, this application is built upon acquired knowledge, best practices and technical expertise acquired from prior supply chain implementations.

Bob Ferrari

Disclosure: Bristlecone is a client of the Ferrari Consulting and Research Group


A Month of Noteworthy Enterprise, Supply Chain and B2B Business Network Technology Announcements

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September is a unique month.  Folks return from summer vacations, outings and getting closer to family, and then, the marketing juices ramp-up.  These past two week alone have featured non-stop significant announcements concerning enterprise, B2B and supply chain management focused technology which we will capsule.

On the enterprise and ERP software front, the blockbuster news is the announcement that the founder of Oracle, Larry Ellison, is stepping aside, but alas, he is instead assuming a different role.

Larry Ellison to Step Aside

Business and social media is buzzing with today’s stunning announcement that Oracle founder Larry Ellison will step aside from his CEO role in favor of two Co-CEO’s.  The Wall Street Journal’s alert story termed the announcement as: “one of the momentous corporate handovers in the history of Silicon Valley.”  Well stated!

Other publications equate the significance to when Bill Gates gave-up the CEO role at Microsoft in favor of Steve Ballmer.

Both Safra Catz and Mark Hurd, two other senior leadership executives will assume the role of Co-CEO’s.  But there’s more.  Ellison will supposedly assume the role of Oracle’s Chief Technology Officer (CTO). Isn’t that interesting?

Twitter is lit-up with all forms of reactions, one tweet equates Ellison stepping down to assume the CTO position the equivalent of Vladimir Putin stepping down to become Prime Minister of Russia. Somewhat humorous but perhaps insightful.

Obviously, there is more to this announcement which is timed just before the kickoff of Oracle’s annual OpenWorld customer conference that begins this weekend.

Supply Chain Matters has been on-record of not inclined toward the Co-CEO model at technology companies. We did not see it as productive when it was previously practiced at SAP, AspenTech and other firms.  The broader organization plays favorites as to whom will prevail as the ultimate successor and strategic initiatives suffer from internal political maneuvering and jousting. Just make a frikkin decision on whom is the top dog and let the chips fall.

Look for lots more buzz emanating from San Francisco and Redwood Shores in the coming days.

 

SAP Announces Next Iteration of Collaborative Supply Chain Management

The latest significant announcement from Walldorf concerns SAP Supply Chain Orchestration, an initial significant milestone from SAP’s prior acquisition of sourcing and procurement provider, Ariba.  The application is described as integrating functionality of SAP Supply Chain Network Collaboration (SNC) and Ariba’s Collaborative Supply Chain application. The combined application will be made available as a private cloud-based delivery platform which includes the SAP HANA Enterprise Cloud service.

For existing customers utilizing either SAP SNP or Ariba Collaborative Supply Chain, the obvious questions will be on depth of support for both indirect and direct materials procurement collaboration, along with license pricing structures incorporated in this new application. There are obvious implications regarding other SAP applications supporting supplier network connectivity.

Supply Chain Matters is in the process of gathering additional data and will provide a follow-up commentary.

 

Infor Announces Updated Release Supporting Sales and Operations Planning

ERP provider Infor announced Infor Sales and Operations Planning 10x. The 10.4 version of the application is reported to feature Infor’s 10x technology platform and includes a built-in social collaboration engine, Infor Ming.le, to aide in facilitating and recording internal discussions across all process participants.  The enhanced application reportedly features a single point to review planning alerts, exceptions, tasks and workflows along with enabling escalations from process stakeholders.  

A rather neat feature is a termed playbook component to assist in organizing those time-consuming pre-S&OP meeting reports into structured chapters along with generating formatted Microsoft PowerPoint presentations.  A built-in GIS capability provides users with a visualization of where various product demands are occurring, along with other data.

 

SPS Commerce and Bristlecone Partner for Cloud Transaction Automation

SPS Commerce, a technology provider with a focus on retail industry cloud services has partnered with specialty SI firm Bristlecone in expanded support for Oracle Applications to the SPS Universal Network, a broad retail industry trading partner network consisting of 55,000 members.

The announcement indicates that joint customer, Fruit of the Loom, recently deployed the Cloud Transaction Automation offering for Oracle. The Cloud Transaction Automation Solution is the latest addition to SPS Commerce’s portfolio of services.

 

Oracle Introduced Cloud Support for Transportation and Global Trade Management

Finally, we conclude our technology capsule commentary with news that Oracle has released Oracle Transportation Management Cloud and Oracle Global Trade Management Cloud applications.  According to the announcement, Oracle has now made the functionality of its applications in this segment available for either on premise or cloud deployment. Both applications are noted to be designed for phased, rapid deployment from either Oracle Consulting or other Oracle specialized partners.  

Readers may recall that the basis of Oracle’s transportation management support offerings is from the former acquisition of G-Log.  These cloud-based deployment options were part of the multi-year product roadmap involving support in supply chain transportation, trade and supply chain execution areas.

Bob Ferrari

Disclosure: Bristlecone is a current client of the Ferrari Consulting and Research Group


Oracle and SAP Legal Wrangling Reaches Another Milestone- Time to Move On

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We all tend to have our favorite sports teams and we often come to enjoy the classic rivalry among certain teams.  Regardless of the season’s record, the game between two noted rivals is often an event to itself. 

So it is among certain businesses as well as large enterprise software firms where bitter rivalries seem to transcend other needs.  One such longstanding rivalry has been SAP and Oracle where a contentious legal battle continues to unfold to what Supply Chain Matters views as a public embarrassment for both of these firms.

A prior SAP subsidiary, TomorrowNow, which turned out to be not one of SAP’s most astute acquisitions, had been performing software maintenance support for Oracle clients. Oracle sued SAP in 2007 after discovering thousands of suspicious downloads of its software. SAP later admitted that its subsidiary had violated Oracle’s copyright protections leaving a jury to resolve the level of damages to be paid. Oracle sought damages in excess of $1 billion, and indeed a jury found in favor of Oracle in a 2010 trial proceeding. However, a U.S. District Judge determined that Oracle’s claim was excessive and revised the damage award to $272 million. Both firms then agreed that SAP would pay Oracle $306 million in damages plus substantial legal costs to settle the matter. Oracle then elected to pursue the case before the 9th U.S. Circuit Court of Appeals in an attempt to recover the original $1 billion claim.

Last week, the 9th U.S. Circuit Court of Appeals court ruled on this matter. Media reports indicate that for the most part, the appeals court rejected Oracle’s $1.3 billion damage claim, in essence ruling that Oracle must either accept a lower amount or face a new trial. The three judge panel instructed the lower court to offer Oracle a choice of $356.7 million in damages or seek a second trial. Thus far, Oracle has declined to publically comment as to which action it will take.

After four years of legal wrangling, it is time for both firms to move on.  Both have suffered public embarrassments in the eyes of each’s individual customers. From our lens, both firms have other pressing needs in terms of investments and services for supply chain, manufacturing, procurement and B2B network customers.

Bob Ferrari


Supply Chain Matters News Capsule-August 29; McDonalds, Boeing, Oracle E-Business Suite

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It’s the end of the calendar work week and the prelude to the Labor Day Holiday weekend in the U.S… This commentary is our running news capsule of developments related to previous Supply Chain Matters posted commentaries or news developments.

In this capsule commentary, we include the following updates:

Report that McDonalds is Reevaluating its China Supplier

Boeing and a Major Supply Chain Partner Land a Big Order

Oracle Announces Release of E-Business Suite 12.2.4

 

Report that McDonalds is Reevaluating its China Supplier

A few weeks ago, Supply Chain Matters highlighted a Wall Street Journal report that indicated that in the light of China’s food regulators finding the existence of certain expired meat products within the McDonalds supply chain in China that the restaurant chain was going to give the benefit of doubt to its long-time supply chain supplier of 59 years, OSI Group, who’s China based subsidiary, Shanghai Husi Food Company was allegedly implicated in the expired meat mis-labeling investigation.

This week, the WSJ published a follow-up report that now indicates that McDonalds is reconsidering its prior relationship with OSI Group. The report quotes a corporate spokesperson as indicating that in the past six weeks, the OSI partnership for supply of China outlets has been suspended. After due-diligence investigation by McDonalds, the chain suspended all cooperation with Shanghai Husi as of July 20th, which precipitated a near three week shortage of meat products for outlets in China and Hong Kong. The chain is instead positioning alternative suppliers Cargill and Keystone Foods to increase supply capacity within China.

Considering both WSJ reports spanning a month, its somewhat confusing to ascertain if McDonald’s has indeed been standing by a loyal supplier. We can only speculate that due diligence either uncovered troubling labeling practices or the restaurant chain feels an entirely new supplier slate is needed for China and other Asia outlets.

 

Boeing and a Major Supply Chain Partner Land a Big Order

In our ongoing Supply Chain Matters commentaries directed at commercial aerospace supply chains, we have echoed the new buying influence of airlines and leasing operators supporting emerging market regions such as China and greater Asia.

This week, Boeing and Singapore based BOC Aviation, a leading aircraft lessor in Asia, announced a near $9 billion order, at list prices, for a total of 82 new aircraft. The order includes 50 of Boeing’s 737 MAX 8s, 30 Next-Generation 737-800’s and two 777-300 Extended Range aircraft. These new aircraft are destined for expansion or replacement needs for a number of unnamed airline operators across Asia with deliveries spanning the time period from 2016 to 2021. According to a published report by Bloomberg and The Seattle Times, the estimated order is more likely to be $4.2 billion when discounting is factored. That is obviously a reflection of buyer power.

The Boeing order follows a mid-July announcement from BOC Aviation of an order from Airbus consisting of an additional 43 A320 and A321 series aircraft with deliveries extending through 2019. Airbus had additionally landed a sale of $11.8 billion of new aircraft from Japan based lessor SMBC Aviation. The Bloomberg report quotes a spokesperson as indicating that BOC Aviation projects receiving an average 27 planes a year starting in 2015, while also disposing of 20 to 30 annually.

In the adage that a rising tide raises all supply chain boats, another major beneficiary of the bulk BOC Aviation order involves the aircraft engine consortium of CFM International, the joint venture between General Electric and Safran.  CFM was the recipient for orders involving 100 LEAP-1B and 60 CFM56-7BE engines that is valued at $2 billion at list prices.  The engine orders additionally include longer-term, multi-year service and maintenance considerations.

 

Oracle Announces Release of E-Business Suite 12.2.4

Oracle recently announced the release of Oracle E-Business Suite 12.2.4. According to the announcement, this latest release provides an updated user experience, significant customer-driven enhancements across the applications suite, with added integrations to Oracle Cloud Solutions.

This particular release has many enhancements related to the support of various supply chain procurement and customer fulfillment technology enhancements. Highlights include:

Oracle Procurement: Web ADI–enabled spreadsheet creation and modification of purchase order lines, schedules, and distributions to improve buyer productivity when dealing with large orders.

Oracle iProcurement: A streamlined single-step checkout flow allowing employees to quickly complete shopping activities and initiate the requisition approval process.

Oracle Procurement Contracts: Improved buyer efficiency from auditing of contract documents by reviewing details of policy deviations and net clause additions.

Oracle Services Procurement: Enhanced capabilities provide buyers with greater flexibility to support a broad range of complex order scenarios.

Oracle Channel Revenue Management: Improved volume offer capabilities and a streamlined user interface enable users to quickly adapt to changing business conditions.

Oracle Order Management: A long overdue new HTML user interface addressing improved usability, greater flexibility, and a more modern user experience.

Oracle Yard Management: A new solution enables manufacturing, distribution, and asset-intensive organizations to manage and track the flow of trailers and their contents into, within, and out of the yards of distribution centers, production campuses, transportation terminals, and other facilities.

Oracle Manufacturing: Significant usability improvements in the Oracle Manufacturing Execution System (MES) help improve operator productivity by simplifying time entry and quality collection. New capabilities to manage the auto-de-kit (disassembly) of serialized products supports customer returns and internal reuse of component parts.

Oracle Enterprise Asset Management: Enhancements to support linear assets in industries, such as oil and gas, utilities, and public sector, help improve productivity and retire costly integrations and custom code.

Oracle Service: Enhanced spare parts planner’s dashboard provides rich user interaction to improve planner productivity.

Oracle Value Chain Planning: Numerous enhancements across multiple products include deeper industry functionality, such as minimum remaining shelf-life enhancements for the pharmaceutical and consumer goods industries, multistage production synchronization for process industries, and integration between Oracle Service Parts Planning and Oracle Enterprise Asset Management for asset-intensive industries. New promotions planning analytics in Oracle Advanced Planning Command Center improve business insight.

 

 


Supply Chain Matters Attendance at 2014 Oracle Industry Connect Conference

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Supply Chain Matters was invited to attend Oracle’s Industry Connect Conference held in Boston at the latter part of March. The conference drew a large compliment of attendees, featured three industry tracts, along with a focus on program management.  We enjoy attending industry focused events because they provide a keener sense of industry-specific challenges, viewpoints and perspectives.  We encourage technology and services providers to host more such events.

Due to a commitment to attend another event, we devoted the majority of our limited time focused on the Retail industry tract of speakers, but did manage to catch a cross-industry panel discussion featuring the theme of the Customer Experience. One clear theme brought out by this panel was that nearly every industry sector is adjusting to more demanding and more personalized experience factors concerning customers. Healthcare consumers now have many more choices for an healthcare provider and with a new emphasis on wellness, consumers have higher expectations as to the healthcare experience. Retailers are of course, continuing to deal with the shift of information power to the side of online and mobile-based consumers. Fellow blogger and panelist Vinnie Mirchandani pointed to the trend of mass customization of products as the antidote to commoditization.

We attended a Retail focused panel discussion of executives representing Deckers Outdoors and Scheels moderated by Susan Reda, Editor-In-Chief of Retail Stores Magazine. One statistic shared was that 73 percent of shoppers want an empowered shopping experience. A retail presence provides the opportunity to connect the passion of consumers with the passion for brands. Both retail executives provided clear examples of how their retail brands concentrate on the consumer experience, community outreach and provide a focused destination for consumers. As an example, Scheel’s is a sporting goods chain that features a ferris wheel, deli restaurant or fudge in any one of its 25 retail outlets. Community outreach includes sponsorship of local athletic or recreation events. A further common theme was a recognized need for the creation of a singular leader for Omni-Channel operations that span both brick and mortar and the online customer fulfillment experience.

Another insightful session titled How to Counterbalance Instinct with Data-Driven Insights, delivered by John Bible, Senior Director of Retail Data Sciences at Oracle, contrasted two distinctly different approaches to retail.  Bible contrasted Amazon’s retail strategy initiatives as those posed as a software engineering problem contrasted to brick and mortar retail brands whose retail strategy focuses on the retail experience and destination. We found that comparison rather insightful. Consumers have tendencies toward cognitive biases and have tendencies shop based on existing beliefs and group dynamics such as consumer feedback on products. The notion of the “wisdom of crowds” is a rather real consideration. An important conclusion was that decisions supported by time-series forecasting and planning can no longer keep-up with constantly changing buying trends. Instead, decisions need to be supported by more-informed insights

Bob Ferrari


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