subscribe: Posts | Comments | Email

Oracle’s Fiscal FY17-Q4 and Full Year Financial Performance Garners Market Attention

0 comments

Oracle reported its Fiscal Q4 and full FY17 financial performance results and the Wall Street and individual investment community seemed very pleased by what was termed as a phenomenal quarter and an impressive transition towards accelerating Cloud based revenues and margins.  Investors drove Oracle stock up 10 percent in after-hours trading. Oracle OW16 sized450 300x172 Oracles Fiscal FY17 Q4 and Full Year Financial Performance Garners Market Attention

Co-CEO Safra Katz characterized a tremendous quarter in just about all business areas including Cloud, software license and earnings and declared that Cloud has now become the predominant growth engine for Oracle. Co-CEO Mark Hurd went a step further, declaring that this was the best quarter that Oracle ever had, and that the company performed very strongly in bookings, billings, and revenues, all at record levels.

Financial performance highlights for Fiscal Q4 included:

Total revenues rising 2.8 percent to $10.9 billion.

Software as a Service (SaaS) revenues up 67 percent to $964 million.

Total Cloud revenues up 58 percent to $1.4 billion.

Total on-premise software revenues of $7.5 billion, essentially unchanged from year-earlier.

Net Income rose 15 percent to $3.2 billion.

Gross deferred revenue now at $2.3 billion, up 67 percent and exceeding goal established at the beginning of the fiscal year.

 

For the full fiscal year:

Total revenues rose 2 percent to $37.7 billion.

SaaS revenues rose 70 percent to $3.4 billion.

Cloud, PaaS, and IaaS revenues up 63 percent to $1.4 billion.

Operating income up 3 percent to $16.2 billion.

 

Two Significant Takeaways

From our technology industry analyst lens, we observed two significant reader takeaways regarding Oracle’s latest quarterly and fiscal year performance.

The first is a response from Wall Street and the company’s investors that Oracle has reached the termed tipping point where customer Cloud adoption as reflected by ongoing recurring revenues are reaching a point of significant momentum. Oracle senior executives hosting the briefing with analysts and investors indicated that the company achieved its stated goal of surpassing $2 billion in annualized recurring revenues, a rather important metric for Cloud technology companies. Co-CEO Hurd pointed to a $6 billion annualized run rate which is another pertinent indication of momentum.  As we have often pointed out in our prior Oracle focused commentaries, Oracle’s business strategy of all-in for Cloud software, database, computing hardware and infrastructure was very bold, and is now paying dividends from many business perspectives.

Cloud ERP

Within the latest performance was evidence of market traction and momentum in two very important application areas, ERP, and database. In his feedback to analysts, Hurd rattled off stats as to 1575 new SaaS customers coupled with 1138 termed expansions, namely customers that acquired both Cloud software and associated platform and infrastructure technology. For ERP Cloud, Hurd noted 868 new customers (not including the recent NetSuite acquisition numbers).  Some manufacturing industry nameplates included Ball Corporation, General Electric, Kraft Heinz, Motorola, NCR, Newell Rubbermaid, and Volkswagen, among others. Of that adoption rate, almost 200 were noted as expansions, meaning adoption of extended modules, examples being either procurement, supply chain or manufacturing support. Of added significance was the statement that roughly two-thirds of new Cloud ERP customers were brand new Oracle nameplates. This adds some credence to Oracle’s messaging of faster technology adoption and customer benefits with Cloud adoption. Of course, there is a flip-side to this statistic, namely that existing Oracle on-premise customers are still undecided.

In total, Oracle now has 13,550 active SaaS customers, and when NetSuite is added, the number approaches 25,000. This is noteworthy momentum both in customer adoption and future pull for expanded technology needs, particularly supply chain related.

Database Cloud

During the quarter, Oracle announced a very significant and strategic database deal with AT&T, which according to executives operates over 10,000 Oracle databases. The company elected to move to the Cloud to gain the benefits of database provisioning along with consolidation of in-house infrastructure. Because AT&T is subject to regulatory directives for data management, the deal called for adoption of Oracle’s Cloud database on premise, where Oracle will operationally manage all databases and infrastructure, very like services performed for public Cloud. When completed, this one customer has the potential to be a key strategic customer reference for many other large Cloud database deals.

Speaking to Cloud database adoption, Chairman and CTO Larry Ellison indicated that newer versions of Oracle database technology are experiencing very rapid adoption uptick because of the needs for multi-tenancy and enhanced memory capabilities.  Oracle utilizes a design that places large amounts of flash cache memory in front of hard disk memory, along with a sophisticated storage hierarchy system. Obviously, such remarks were directed at competitors such as Amazon Web Services, Microsoft, and SAP. Ellison noted that Oracle can now provide rather high performance at a dramatically lower cost than competitors. As customers evaluate the movement of millions of Oracle databases to Oracle Cloud, Ellison anticipates that Oracle PaaS and IaaS will eventually surpass the company’s SaaS business. Here again, Oracle’s broader strategy of software and hardware has the potential to bear significant market traction. Hurd indicated to analysts:

This is an example where we have talked about before, we take our Oracle cloud machine and we are able now to do all of that with them on their premise and give them all the benefits of the cloud, we manage, we patch, we basically run the cloud for them and we help them get all of that done.”

Final Note

Oracle obviously has additional work ahead, both in making the business case for existing on-premise ERP and applications customers to initiate their path to the Cloud, along with continued focused messaging directly to line-of-business teams on the business benefits of moving to the Cloud. But, the fact remains that momentum is clearly part of Oracle’s favor at this point. We highlighted the database technology aspects for our readers, because line-of-business and supply chain focused IT groups are in various stages of evaluating whether to transition to Cloud-based databases, as well as which strategic vendors provide the more compelling business case in performance, user acceptance and lifetime cost. We still do not observe senior Oracle executives directly citing Oracle Supply Chain Cloud uptake and we will work to share those numbers with readers in a subsequent posting.

For any new enterprise or supply chain focused technologies, increased customer adoption momentum is a rather important metric. This week, Oracle’s announced performance was all about such momentum, with an indication that its broad market strategy of software, infrastructure and services is drawing attention.

Bob Ferrari

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

Disclosure: Oracle is currently a client of The Ferrari Consulting and Research Group, operators of the Supply Chain Matters blog. The author does not hold any Oracle stock holdings.


Describing an Exponential Organizational and Supply Chain Capability

Comments Off on Describing an Exponential Organizational and Supply Chain Capability

In February, this supply chain industry analyst attended the Oracle Modern Supply Chain Experience Conference held in San Jose California.  Through Supply Chain Matters, I have shared several prior observations and takeaways from this conference. We noted the extraordinary attendance, upwards of 2800 attendees at a supply chain management information technology focused conference. We further highlighted the momentum of Cloud-based technology deployments in the many different business process areas that today come under the umbrella of supply chain management along with the building interest levels surrounding Internet of Things (IoT) technology being applied to future supply chain management processes.

There was one keynote that I initially did not share in prior conference highlights, principally because I needed time to absorb the many compelling messages that were delivered. The title was Exponential Organizations and the presenter was Yuri van Geest, Co-Founder of Singularity University. Yuri Exponential Organizations sized 207x300 Describing an Exponential Organizational and Supply Chain Capabilityhas a background in organizational design and is noted as a keen observer of exponential technologies and trends.  He is a co-author of the book- Exponential Organizations- Why new organizations are ten times better, faster, and cheaper than yours (and what to do about it).

The keynote opened with van Geest recounting the dizzying exponential developments that have occurred in artificial intelligence, alternative energy, biotechnology and medicine, robotics, additive manufacturing, sensors, and drones. His primary message was that most of these exponential technology developments will eventually impact supply chains and the organizations and people that makeup this community. His takeaway message was that the best vision of the future is happening at the peripherals of such technology development.

My initial presumption was that many of the conference attendees would have a difficult time absorbing the stark nature of the messages or would dismiss this talk as that of a technology genius speaking far above an ability to absorb the real implications.  Frankly, the conference organizers should have allowed additional time to accommodate all the content as well as to allow for further audience interaction.

Since the conference, I have had the opportunity to read the book and revisit my notes from the keynote. My goal in this blog is help distill what I perceive to be some other key takeaway messages related to future supply chain management organizational purpose, design, and work activities, at least from my perspective after having time to really absorb the content.

Geest did a suberb job of translating today’s far more exponential technology trends to what he viewed as direct impacts on industry supply chains. As an example, he stated that over the next ten years, the exponential developments in 3D printing capabilities will foster the ability to print nearly everything in materials including molecular assembly. The implication is the ability for products to be produced within primary areas of consumption, with the model of contract manufacturing being one of virtual capabilities to receive electronic design information and print on-demand products. A further implication is a more localized supply chain or regional network.

The notions of machine learning or cognitive acquired deep learning technology capabilities will at some point in the future lead to autonomous supply chain planning and customer fulfillment, where algorithms and physical sensing manage supply chain needs. While on the subject of planning, the book declares traditional five-year planning as obsolete, and that in exponential organizations, there should never be more than a one-year planning cycle supplemented by continuous just-in-time learning and events.

Regarding the physical, Geest further spoke to the compelling impacts that IoT focused developments would have on supply chains.  In the book, there is a passage that is worth sharing:

In the same way that today we can no longer handle the complexities of air traffic control or supply chain management without algorithms, almost all the business insights and decisions of tomorrow will be data-driven.”

Obviously, the messages are profound and perhaps threatening to many. None the less, van Geest’s message is that we cannot ignore compelling events and individually, people need to be trained and prepared with new individual and team-based skills.

To better understand the implications, I turned back to book to ascertain what were described as the key competencies of the future Chief Operating Officer, Chief Human Resources Officer and either Chief Data or Chief Innovation Officers.

Here are just a few excerpts to ponder:

  • Digital based production and the unbundling of production steps will free the company to focus on its core competencies (customer relationships, R&D, design, and marketing)
  • The notion of a recycled materials supply chain where production materials recycled and reused multiple times.
  • Internet of Things sensors used to monitor the entire supply chain.
  • The need for long-distance transport to drop over time due to the rise of localized production and a closed-loop material supply chain.
  • Universal Cloud access to social technologies, data, and services, independent of physical location.
  • Data management systems that use methodologies, processes, architectures, and technologies to transform raw data into meaningful and useful business information, available to all teams.
  • The need for Big Data security practices.
  • The hiring of employees based on overall potential, not just past record of accomplishment, and on the premise of who can ask the right questions.
  • New notions of peer-based and continuous learning.
  • Reputation measured by contributions in communities and work teams.

 

The book addresses the obvious question regarding the impact on future jobs. The premise is that the democratization of technology will allow individuals and teams to follow their passions and create new economic opportunities and businesses, far different than work being performed today.

These are heady messages, and will cause some pause or skeptics. We applaud Oracle’s supply chain management  conference organizers for hosting such a thought-provoking presentation.

From our lens, there is no denying that the exponential changes occurring in technology and business will eventually impact how supply chains are manifested and managed. The question is in what time frames.

The other obvious question, will teams and individuals be prepared?

We encourage readers to share further thoughts and comments.

Bob Ferrari

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


Technology Addressing the Convergence of Internet of Things and Smart Manufacturing Deployments

1 comment

As a follow-up to Supply Chain Matters recent attendance and coverage of this year’s Oracle Modern Supply Chain Experience Conference, we wanted to specifically follow-up on some sessions that addressed Internet of Things (IoT) enablement of future smart manufacturing, supply chain and service management business processes.  Oracle MSCE banner Technology Addressing the Convergence of Internet of Things and Smart Manufacturing Deployments

Noted in many of our prior blog commentaries related to IoT deployment strategies, many businesses are starting to connect the dots relative to the existing wave of new advanced technologies that can literally allow connecting physical things with digitally focused applications, processes, and new business services. Included are the notions of what is commonly described as Industry 4.0, or the fourth industrial revolution, enabled by more sophisticated sensors, additive manufacturing, new iterations of analytics and data management. The common objective is convergence- a convergence of operational technologies along with data management, business applications software and decision-support technologies working together in an integrated real-time manner.

When this author presents or speaks with supply chain management focused audiences, I often describe the objective as what I once termed as the “holy grail” of supply chain management, our ability to connect the physical and the digital, now coming much closer to reality.

In Oracle’s approach to supporting customer IoT transformation, multiple speakers emphasized the importance of the overall IT architecture strategies required in addressing the different needs at the physical layer (the machines), and the digital applications layer of applications and information needs. We cannot stress how important these strategies and approaches have been addressed in multiple conferences and discussions we have been involved in. The obvious most important consideration is the management of data at each level.

At the physical layer, data is purely operational in nature. We are talking about sensor readings, alarms, state conditions, fault detection and all sorts of other operational data. As emphasized in prior highlights of a recent MIT IoT focused conference, engineers are fully aware that much of this data can be spurious, perhaps upwards of 60 percent. On the other hand, the remaining data can point to important and insightful information when placed in context with other data. The Oracle presentations cited sample classes of questions related to the era of “Smart Manufacturing”:

Are there patterns of events that tend to cause or lead to actual equipment failures?

Is there a correlation between product failures in the field and the manufacturing process originally used to manufacture that product?

Can we predict the likelihood of a product defect and avoid costly downtime?

Many developers on the front lines of current IoT initiatives will readily tell you that the challenges related to filtering and capturing the correct physical data, whether structured, unstructured or time-series in-nature are hard, but not insurmountable. A current reality is that most physical or operational assets currently reside behind a data-protected firewall, for valid reasons. As we have noted in prior commentaries, developers cite consistent and secure data management standards as well as combinations of encryption technologies as the means to unlock data discovery across various layers. Oracle emphasizes the need for a robust and scalable technology foundation supported by an open standard, in-memory, Hadoop data lake approach that supports three distinct data types in a secure manner.

A further critical aspect often includes distinct data aggregation at both the physical and digital application layers, each aggregation providing added contextualization to overall intelligence and required decision-making. Managing all this data needs to further include a more cost effective approach, and that is where the advantages of Cloud-based deployment and storage strategies play an important consideration.

Some of our functional or IT readers who experienced prior IT data warehouse approaches can well relate to the frustrations for the ability of various functional users to mine or discover data on their own without the direct assistance of IT. We were pleased to observe that Oracle’s approach is anchored to presenting of data to differing personas or business roles, ranging from that of occasional or frequent business user or domain expert, to an actual data scientist.

The Oracle presenters cited a jam or jelly manufacturing process as an example of the goal of actionable manufacturing intelligence that was developed for a pilot customer:

What most everyone has today is an operational report of what has occurred, namely descriptive analytics. For example, 68 percent of batches of strawberry jam made in July, incurred a production yield of between 78-82 percent.

The goal is actionable intelligence supported by more prescriptive or predictive data and analytics. In the same example, the 68 percent of batches of 78-82 percent production yield:

  • Occurred during the second shift and involved a common operator
  • The sugar utilized came from specific identified lots from a specific supplier(s)
  • The mixer speed variation was in a certain range and ambient humidity reading but did encounter some discernable variations.

This added context of the data provides the intelligence as well as determinants to manage higher manufacturing yields or identify potential production issues in a timelier manner.  These are the notions of mining the data, that can be applied to many other supply chain related business processes or business model support needs, many of which can save substantial amounts and open many new opportunities for equipment services.

A final observation relates to current IoT approaches and pilot efforts perhaps being investigated. In the many technology and industry perspectives we have reviewed or encountered, it is important to stress that teams evaluate prospective IoT technology vendors not only on the specific technology approaches and capabilities they provide, but also on the partner ecosystem they recruit and support, along with actions to adapt and support an open standards approach for data security as well as data maintenance.

Bob Ferrari

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

 


Supply Chain Matters Attendance at Oracle Modern Supply Chain Experience Conference- Part Five Summary Impressions

Comments Off on Supply Chain Matters Attendance at Oracle Modern Supply Chain Experience Conference- Part Five Summary Impressions

Supply Chain Matters has been attending the Oracle Modern Supply Chain Experience conference being held this week in San Jose California, drawing over 2800 attendees.  OracleSCME 2 Supply Chain Matters Attendance at Oracle Modern Supply Chain Experience Conference  Part Five Summary Impressions

In our Part One posting, we provided some highlights from the first’s day’s keynotes.

On our Part Two posting, we shared impressions of the Oracle S&OP Cloud application currently in-development.

Our Part Three posting provided highlights of the second day’s keynotes that were focused on future dimensions of transformation.

In Part Four, I shared impressions related to supply chain related transformation, and how this conference again reinforced the increased external forces of change impacting many industry supply chains.

In this final conference wrap-up commentary, we share, in no particular order, our takeaway impressions from the various sessions and conversations we were able to participate in this week.

Let’s begin with attendance, namely upwards of 2800 attendees at a supply chain management information technology focused conference. That ladies and gentlemen, is quite extraordinary and significant.  And yes, for those cynics out there, not all wore Oracle on their conference badge. Our sense from various conference Q&A and attendee indicators during sessions, many came to learn and better educate their organizations on Oracle’s evolving platform and applications strategies related to the broad umbrella of processes within supply chain management and to the implications of Cloud.

While we once were critical of Oracle regarding our perception of a slow, somewhat glacial development pace involving Oracle SCM Cloud, this week’s event demonstrated much more momentum that is underway, including the new Cloud S&OP application highlighted in our Part Two commentary. Attendees were informed that over 1300 customers are now on various transition paths involved with Oracle SCM Cloud, which is a doubling of last year’s number. Attendees further witnessed a real-time manifestation of the development release dynamic in one of the on-stage keynotes.  Oracle CEO Safra Katz was featured in a fireside chat format, and among her many remarks to the audience, she indicated that one of the company’s key strategic goals was to implement Oracle SCM Cloud within the company’s hardware manufacturing operations by the end of this calendar year. To that end, she indicated her view that development has to deliver at faster pace. That should have resonated with IT and systems implementation attendees. When joined onstage by Cindy Reese, Senior Vice President of Worldwide Operations, both acknowledged a little sweating and concern to make the December implementation milestone, but that in the end, it will get done. We highlight this since we felt attendees should have perceived that even Oracle internal operations teams are not immune to new technology implementation and change management dynamics. Reese indicated to the audience that her teams needed the Cloud based technology because they could not execute required supply chain process changes needing to get done with the existing Oracle E-Business Suite capabilities. “The architecture is so much simpler than EBS and the built-in analytics of Cloud is a huge benefit for our supply planners.  It’s a game changer.”

Supply Chain Matters will keep a keen eye on Oracle’s own implementation and hopefully have some added updates for readers.

We sat in on an Oracle Procurement solution roadmap update session and learned that Oracle will begin to partner with E2open in extending procurement process needs across a B2B network. In fact, there was another session at the conference to educate attendees on the initial phases. This is noteworthy and bears watching.

We planned our agenda to attend as many customer focused sessions as we could. Besides the theme of increased external business change that we shared in Part Four, we noted further common themes reflecting that upgrading of existing behind-the-firewall applications has indeed been determined to be too disruptive for many supply chain organizations. That has led to the motivation of customers to begin to either pilot elements of SCM Cloud, begin efforts to develop strategies for phasing into Cloud, or gather more education and feedback from Oracle customers and partners on best strategies to take advantage of what Cloud can provide over the coming months. This is different than last year’s conference in that customers appear to be more engaged in various levels of active interest. Obviously, this implies a critical phase for Oracle in assuring that pilot customers have what they need to insure successful current and future phases of SCM Cloud.

One of the albeit, indirect benefits of Oracle’s full embodiment of Cloud is the development work being performed in improving the user level productivity and interfaces of existing licensed Oracle E-Business Suite, Oracle Procurement, and Oracle Advanced Supply Chain Planning (ASCP) applications.  Most all the roadmap sessions we attended regarding these application suites made mention of improved user interfaces and user productivity enhancements. They occurred because a lot of the functionality had to be moved to Cloud instances as well, which implied needs to improve both. Such efforts were further high on the priority lists of Oracle customer advisory teams, and hopefully, will yield a win-win for both camps.

This author was impressed with Oracle’s ongoing efforts to provide deeper analytics and more predictive decision making support features in many of the Cloud based applications. This is bound to pay dividends for customers.

Before closing this Modern Supply Chain Conference impressions commentary, we would be remiss in not complimenting Oracle’s SCM conference planning team in once again, granting the opportunity for more than 120 university students majoring in supply chain management to attend and participate in a Future Supply Chain Leaders tract of sessions. This year, an invitation was also extended to select students from Design Tech High School, a free public charter high school, authorized by the San Mateo Union High School District, that includes co-sponsorship from Oracle and eventual physical presence on the Oracle headquarters campus. We declared last year that this was a great way to garner interest levels in careers in supply chain management and we again urge other tech providers to consider such efforts.

Oracle CEO Safra Katz also chaired a Woman in Supply Chain Management luncheon, and we heard some great feedback regarding the value of that event.

Conference organizers should further be complimented in taking to heart attendee feedback from previous year’s events. They asked for more customer focused educational sessions and more opportunities for peer networking and exchange. Again, from our observations, that seem to be accomplished. We were also a bit tired of previous endless sessions of a solution marketing context. This year’s sessions were more advisory and educational.

We leave the conference with upwards of 20 pages of notes, and we will continue to feature more Oracle focused blog commentaries on a monthly cadence.

Bob Ferrari

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

 


Supply Chain Matters Attendance at Oracle Modern Supply Chain Experience Conference- Part Four

Comments Off on Supply Chain Matters Attendance at Oracle Modern Supply Chain Experience Conference- Part Four

This week, Supply Chain Matters has been attending the Oracle Modern Supply Chain Experience conference being held in San Jose California, drawing over 2800 attendees. Oracle MSCE Jan 16 178x300 Supply Chain Matters Attendance at Oracle Modern Supply Chain Experience Conference  Part Four

In our Part One posting, we provided some highlights from the first’s day’s keynotes.

On our Part Two posting, we shared impressions of the Oracle S&OP Cloud application currently in-development.

Our Part Three posting provided highlights of the second day’s keynotes that were focused on future dimensions of transformation.

My goal in this update is to share my updated impressions related to current needs for supply chain related transformation.

As our Supply Chain Matters readers are probably aware, this industry analyst and Editor has be afforded the opportunity to attend many supply chain management focused conferences, either industry or technology focused. This week’s Oracle Modern Supply Chain Experience conference is no exception.

At many of such conferences, supply chain team leaders often describe various key learning derived from transformation or business change initiatives. Many exhibit very consistent and all-important themes such as insuring top-management sponsorship, a strong emphasis on change management or addressing process and data before layering advanced technology.

Of late, I have noticed a further learning, one that I can best describe as external or outside-in forces that compel the need for change at a far different pace of change.

Let me further explain.

A number of supply chain industry analysts often communicate the notions of supply chain transformation from people-process-technology dimensions at various levels of defined maturity. The so-termed phases of supply chain maturity charts are what I reference. Four or five phased, they all have common purpose. They often serve as a meaningful way for helping industry supply chain teams chart their transformation end-goal visions as well as benchmark a current state of organizational maturity. While such maturity charting can serve as a tool for change, it can sometimes transmit a message that continuous improvement is ok, or that taking pause at a given phase is acceptable. I worry aloud about such notions since some analysts, are not addressing the building external pressures within many industry settings that are now being communicated.

What’s different about today’s needs for transformation?

Read any business journal of late and the words economic and business uncertainty are stark and all too common. The global economy struggles to grow 3 percent annually, the U.S. and Europe a mere 2 percent. The Economist recently questioned whether global wide market presence and consequent global stretched supply chains may be faltering due to increased complexities and cost.

Individual businesses have shareholders demanding near-term returns and profitability for their investment and it seems that no business is immune from the force of activist investors. CEO’s have no choice but to prioritize efforts at growing top-line revenue growth, adopting new, more profitable digitally based business models while continuing to reduce business costs.  Growth is often translated to acquisition. Oracle senior executive Mark Hurd has been masterful in communicating such trends to CEO audiences.

Cost reduction motivates needs for restructuring or the flattening of organizational layers. If readers have had the opportunity to review our 2017 Predictions for Industry and Global Supply Chains, you are now aware that a whole new dimension of geopolitical uncertainty and business risk are prominent in the coming months.

What I hear of late is a new consistent theme of an external force for change. Our business has a new CEO with a mandate for transformation. Our business executed a merger and acquisition that introduced even more supply chain process and technology complexity. Regarding the latter, complexity is leading to more inefficiency and added costs. We are lacking the right data and information and our S&OP and operational decision-making processes are not keeping up with the current pace of business change.

The bottom-line is that the pace of transformation may no longer be as optional as it once was. Organizations may have little choice but to increase the pace of transformational change and supply chain leaders are expected to lead such efforts at a quicker cadence, albeit sometimes at an uncomfortable pace. That is why the notions of Cloud based applications and more leveraged use of digital advanced technologies such as analytics and IoT are gaining increased interest and senior management sponsorship. Consider that 2800 attendees are gathering at this supply chain management technology focused conference, often with needs to gain more learning and education as to new software and information management technologies.

We as analysts need to communicate supply chain transformative process maturity measures in dimensions of internal or external forces of change. The former having some timing discretion, the latter not so much. We need to remind teams that crisis is often the best motivator and mandate for an organization’s need for change. Industry supply chain teams face a building talent crisis yet beg for training resources. Our supply chain leaders of tomorrow are less tolerant for complexity and far more-savvy in the leveraged use of technology in their everyday lives and in conducting work. They embrace teamwork and team based problem solving. If your organization is laggard in talent development, your industry competitor will seize the opportunity with trained talent.

Finally, a message to technology providers. Some our communicating that now is the time for fostering innovation and new business models.  Some, such as Oracle, communicate the implications of millennial workers in their interaction with technology and decision-making. All of this is fine, but do not at all, dilute the reality that industry supply chains must continue efforts in reducing costs and complexity while increasing productivity.

External forces of change surround, and supply chain teams are now communicating those forces of external change.

Bob Ferrari

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

 

 


« Previous Entries