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Report of More Job Cuts at IBM

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In March Supply Chain Matters highlighted for readers certain reports indicating that enterprise technology provider IBM was conducting workforce restructuring that included a large amount of layoffs. That series of job cuts was believed to impact about 5000 employees.

Today under its Business Watch column, The Wall Street Journal reported that IBM has once again quietly laid-off employees in a continuing wave of job cuts.

As with standard practice, IBM declined to indicate the number of job cuts involved. However the WSJ cites an earlier March estimate by a Sanford Bernstein equity analyst indicating that the total layoffs could impact more than 14,000 job cuts in Q1.

The move comes after four straight years of declining revenues for IBM.

The report further indicates that these actions are considered part of a global workforce rebalancing that places more emphasis on Cloud and analytical computing products and services.

It still remains unclear as to how, if any of these job cuts will impact IBM’s current or future supply chain, B2B and procurement product efforts. We will at some point, seek additional clarity.

Once again we know these words are not going to be of comfort to the thousands of IBM employees currently impacted and for that, we openly and sincerely, apologize.

 


The New Era of Responsiveness and Attention to Enterprise and Supply Chain Software Customer Needs

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In our prior Supply Chain Matters briefing, this author provided initial highlights and takeaways regarding important shifts in strategy that came out of this week’s SAP Sapphire customer conference. In this particular posting I want to briefly contrast recent enterprise software conference we have covered to highlight contrasting messages regarding customer needs.

As was noted regarding SAP 2016 Sapphire, the primary message delivered was Empathy for customer needs along with yet another commitment toward simplicity and openness to customer needs for faster and far more affordable technology deployment. SAP was forced into this posture because customer’s are making their voice heard and our demanding more attention to their particular needs and requirements for technology deployment.

At Oracle’s 2015 Open World customer conference held in October, Co-CEO Mark Hurd’s keynote address reflected solely on the current challenges and needs of today’s business leaders. Hurd noted the average CEO tenure is 4.5 years, and the overwhelming emphasis is performing quickly to survive. The pressures to take out costs, grown revenues and profitability is constant and that is translated across lines of business and supporting operations such as the supply chain. Further noted is that the average ERP application is 22 years old, namely pre-Internet, pre-Cloud, and pre-social applications.  Businesses are frustrated in their ability to update such scope of technology because of the concern for business disruption and added costs, what Hurd described as “ERP Fatigue.” Because of that, the majority of IT budgets today are consumed by maintaining existing technology vs. investing in new technology.  All of this is translated into by Hurd into Oracle’s ongoing ten year transition into becoming a predominant Cloud based applications, database and IT infrastructure provider dedicated to supporting the widest variety of customer technology adoption, deployment and ongoing support needs up to and including consuming IT needs in public utility type model. Founder and CTO Larry Ellison described the new era of utility computing as big as when PC’s arrived in the IT landscape, with more and more workloads destined to the Cloud. He also acknowledged that Oracle’s Fusion deployment took upwards of ten years because of the engineering efforts required, but at the same time, during this transition, all existing Oracle applications both legacy and acquired were supported by Oracle to assure a continuity of responsive support.

QAD which is focused on mid-market manufacturing and multi-tier ERP support needs conducted its Explore 2016 customer conference in May. Since 2012, QAD has been investing a hefty R&D budget directed at a major revamp of the firm’s ERP applications and technology deployment strategy which includes emphasis on enabling what this technology provider terms a more effective organization with more connected business processes. The emphasis articulated was listening to customer needs for providing more standardized solutions, a more flexible platform that included suite-wide analytics, along with product enhancements directed at  augmenting program/project management, manufacturing automation and customer engagement needs. Another major emphasis requested by customers was in enhancing the user experience and in providing more flexible Cloud ERP and Cloud EDI deployment options.  What impressed this analyst was the flexibility of options that QAD is providing its customers. Instead of a forced march approach compelling customers to move to the Cloud, QAD has fostered options to both maintain existing behind-the-firewall applications and deploy extensions of Cloud based applications within an overall cohesive systems architecture framework. The strategy extends through additional years with multiple on-ramps and deployment options.

And so it continues with many other new or existing behind the firewall and now Cloud based technology disruptors today, large or small. The emphasis is clearly focused on addressing customer needs and business requirements for faster, far less disruptive and more cost affordable technology enablement.

The days of a software customer conference focused on marketing buzz, the latest cool new technology or service are no longer being tolerated. Customers demand and insist on responsiveness to their needs, support and ever changing business need requirements. While IT remains influential, lines-of-business and senior operational executives are now the prime buyer influence and there are no legacy allegiances to enterprise software vendor lock-up. The focus is clearly what you can do for my business, when will you get it done and how will you save our business additional money and resources.

Most important of all, the notion of ongoing trust and business partnership has once again renewed itself, especially when it includes placing computing and decision-support needs in the Cloud.

The notion for never trusting what a software salesperson communicates or promises has transcended to seeking technology partners that completely understand the customer’s business needs and are willing to be a continuous responsive partner to those needs.

Bob Ferrari

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


SAP’s 2016 Sapphire Customer Conference- Important Shifts in Strategy and a Clear Response to Voice of Customers

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May represents the height of the spring conference season and these past two weeks have featured many, including SAP’s annual Sapphire and ASUG customer conference held in Orlando. Due to scheduling and other client commitments, this author did not travel to Orlando but did have the opportunity to view most of this year’s Sapphire keynotes.

As a supply chain and B2B industry analyst, as well as a former SAP supply chain management marketing director, I have attended and participated in many Sapphire events over the years. Each year brings a new set of messaging and often different personas related to SAP and its efforts to support customers as well as sell more technology and applications. In this posting I am going to share my first impressions from what I heard this year which I believe represent important shifts in strategy and a reflection that SAP customers are now the focal point for driving changes in ongoing technology strategies and not the other way around. The open question is whether such a shift will have a lasting presence.

The opening keynote address from SAP CEO Bill McDermott provided its usual surprises. The CEO openly admitted that he ditched his original keynote content 15 days before Sapphire. The reason cited was some pointed feedback received from customer CIO’s as well as from SAP Board members. Instead, the message was one of acknowledgement that SAP was not listening and responding to customer feedback. McDermott therefore declared that empathy would be the number one message delivered at Sapphire, “Empathy” for customer needs in technology adoption and to clearer roadmaps for the adoption of SAP’s newest business suite, SAP S4/HANA and other Cloud based applications and technologies.  In fact, this and later keynotes provided some admission that SAP might have rushed SAP S4/HANA to market without deeper consideration on the overall impacts to customers from a number of dimensions. That is uncharacteristic of the SAP of ten years ago. In our Supply Chain Matters commentary in February of 2015, we reflected on the stated risks and implications of S4/HANA.

This analyst has experienced a similar frustration in that depending on who you talk to at SAP, you tend to often receive a different interpretation of an application’s support capabilities and roadmap. Finding the right person with specific knowledge remains a challenge and indeed, SAP employees are just as confused as customers- at least that act that way. An overall focus on revenue and profitability attainment has outdistanced sensitivity to the voice of customers.

Even more dramatic from my lens, McDermott flatly stated that he takes the issue of accountability personally and urged customers to email him directly if they were “not feeling the love from SAP.” A subsequent panel consisting of SAP line-of-business executives featured actions each executive is taking to assist customers in technology transformation, but this observer found such statements unconvincing and more related to marketing speak. McDermott declared that every major SAP engagement will have an executive sponsor accountable for customer results. Further declared was that SAP’s partners need to get on the bus as well, declaring that SAP requires that such partners will be required to adhere to a newly outlined value assurance pledge.

The takeaway is obviously a reflection that SAP and its partner ecosystem executives should now expect to be measured or rewarded on market responsiveness and meeting broader and more specific needs of customers. It is accountability time at SAP and that includes a delicate shifting from what SAP has desired in business outcomes to what it should have been, what SAP customers require and demand in their business process support needs and in supporting required outcomes in IT cost, adoption and flexibility.

In his 2015 book, SAP Nation-A Runaway Software Economy, Vinnie Mirchandani masterfully addressed his belief in what SAP needed to address to make its customers successful in their business and technology deployment goals.  Included were specific observations on why other Cloud-based technology competitors have been able to gain attraction among the existing SAP customer base because of the building business pressures and frustrations over elongated development timelines, burdensome software and ongoing support costs. The consequence was described as a ring fence of applications that more and more, are surrounding SAP applications and that definitely includes technology supporting various procurement, manufacturing, supply chain and product management business process needs. As the adoption of Cloud computing continues to increase, the book opined that SAP runs the risk of becoming even more distant in understanding its customer business needs.

We again cite this reference because that is indeed what came to mind in listening to this year’s Sapphire keynotes. SAP customers are themselves making SAP change.

In a recent deal architect blog commentary, Vinnie has since opined: “… I am becoming more convinced the turnaround will not come from SAP or its partners, but from actions SAP’s customers take over the next few years.

From my lens, what transpired this week at Sapphire was indeed the voice and influence of SAP’s customers in demanding that their business needs must be accommodated and that SAP will need to step-up its overall responsiveness to such needs.  That is by far the most important takeaway of the 2016 Sapphire event.

Supply Chain Matters will feature some additional insights regarding the messaging and implications of this year’s Sapphire in subsequent postings.

Bob Ferrari

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


Supply Chain Matters Impressions of QAD Explore- Part Three

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Last week, this industry analyst attended and spoke at mid-market focused ERP provider’s QAD Explore 2016 conference. In a prior Part One Supply Chain Matters commentary, I shared overall impressions regarding QAD’s current applications software and technology activities along, and in a Part Two posting I shared additional impressions related to interactions.

During Explore 2016, I have the opportunity to contribute to a panel discussion. The Manufacturing Skills Gap in the Gig Economy.  In addition to this author, the panel further consisted of:

Nick Castellina, Research Director, Aberdeen

Kaye Swanson, Chief People Officer, QAD

Sharon Ward, Senior Director Marketing, QAD

Our panel began with Nick Castellina sharing recent Aberdeen research pointing to an aging workforce in manufacturing. According to recent survey data, 67 percent of the manufacturing work force is between the ages of 31 to 50 years old. An additional 11 percent is between the ages of 51 to 60 years old. Nick summarized the findings by indicating that manufacturing expertise is at a premium and top performers continuously recruit and utilize best-in-class technology to help train and retain needed talent. What struck this author was survey data indicating that 69 percent of respondents felt that new graduates lacked practical skills, i.e. their skills were considered too academic. As a contrast, 34 percent of respondents indicated that their employers were not willing to invest in additional training of new employees. Somewhat of a dichotomy.

I was addressed to highlight some root causes. I pointed to far faster clock speed of business today coupled with an era of industry digital transformation and disruption. While senior management awareness to availability and retention of needed skills is a universal concern, approaches tend to vary. Meanwhile, today industry supply chains have moved into an era of high complexity, increased risk, and the need for faster, more-informed and timely decision making capabilities. This is where advanced technology is increasingly playing a role, but new advances in technology are outdistancing current organizational skill levels.

Kaye Swanson of QAD addressed the steps that should be included in strategic workforce planning and described example of how QAD is addressing its skill requirement needs. What was interesting as well as informative was Kaye’s description of global based workforce recruiting that factors different business cultural and geographic considerations. Kaye later addressed the notions of today’s Gig Economy, where many people now exist as independent contractors and specialists in given business processes or technologies.

I was asked if there is really a skills gap or is it actually a training gap? My response is that it is both, in terms of sheer numbers of Baby Boomers retiring over the next decade as well as the need for existing people to be able to constantly upgrade their skills in the use of newer technology enabled processes. There remains a perception problem for careers in manufacturing and supply chain processes which comes from a full understanding of roles and contributions, as well as how supply chain teams are making a difference in enabling required business outcomes.  In terms of other factors, we all have to keep in-mind that many jobs being created did not exist 1-2 years ago. The majority did not exist 5-10 years ago. Thus, when creating a job requisition, rather than past years of experience and deep functional knowledge, it may be far better to express needs in relation to required hard and soft skill sets, both currently and in future growth dimensions. Many leading-edge employers are finding better results with skills-based requirement with an understanding that certain people can be recruited on the basis of adaptability to changing business and process needs.

In an earlier Explore keynote titled The Future of Manufacturing, Lean thought leader and author Jim Womack addressed the future as the ability to manage and leverage information flowing across the product value-chain and to be able to manage collaborative decisions regarding that information. That certainly applies in the context of skill needs.

Sharon Ward addressed how QAD’s ERP technology is being channeled to address training and skills gap needs.  She noted that an ERP system should be focused on user productivity and ultimate ease-of-use that new users can quickly adapt to, along with the ability to attach work instructions such as videos, motion graphics or drawings to steps in workflow routing. If should further provide mechanisms to document when and why prior decisions were made and provide collaborative interaction tools, beyond just social media, to support joint decision-making with contextual and pertinent information.

Questions from our audience were direct and astute, reinforcing how difficult it is to retain skilled employees when demand exceeds available supply. One specifically inquired into whether apprentice-type programs were pertinent to address manufacturing skill needs. Another raised the issue of access to training opportunities especially related to independent contractors.

I would like to once again take this opportunity to thank QAD for the invitation to participate in such a diverse panel discussion. For those readers who are QAD customers, my understanding is that the panel session was recorded and will be made available for convenient playback.

Bob Ferrari

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

 


Supply Chain Matters Impressions of QAD Explore 2016- Part Two

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Last week, this industry analyst attended and spoke at mid-market focused ERP provider’s QAD Explore 2016 conference. In a prior Part One Supply Chain Matters commentary, I shared overall impressions regarding QAD’s current applications software and technology activities along with various Cloud based application software extensions that have been added. In this part two commentary, I will share additional impressions garnered from my attendance.

As our Supply Chain Matters readers are likely aware, this Editor and independent supply chain industry analyst has attended many technology conferences over the years, often highlighted on this blog.  Thus, I have developed a high bar threshold in differentiating marketing and PowerPoint centered spin from impressions that are rooted in positive currents.

QAD and its customers impressed me with such positive currents.

An impression that I walked away with after having the opportunity to attend various keynotes and other attendee breakout sessions is that QAD and its customer community understand the importance that manufacturing and supply chain business process and decision-making capabilities play in supporting expected business outcomes. They reflect language and actions that manufacturing and supply chain capabilities do matter. If one were not aware that Explore was an ERP technology focused conference, you would have thought it was a high caliper manufacturing and supply chain industry conference.

For me, that led to the impression that QAD as a vendor truly understands the unique needs of mid-market manufacturers that often reside in supply chain value-chains dominated by larger global manufacturers. Within lower tiers of a larger supply chain, the emphasis is on responsiveness and resiliency to ever changing needs, and in joint collaboration related to integrated information flow and decision-making. In my view, QAD understands and is responding to such needs. As noted in our prior posting, QAD’s customer base further includes operating divisions or lines of business associated with corporate names often associated with larger ERP providers, thus one gets a true sense of living two-tiered ERP deployment strategies that are producing positive outcomes.

One striking and overreaching observation is the positive energy that is manifested by customer’s and end users towards QAD. The three days of sessions reflected mutual admiration among both parties. Attendees exhibited enthusiasm for technology and business process requirements and various QAD presenters reflected passion in addressing such needs. Sessions were genuinely applauded by attendees and two-way interaction was the norm. It is no wonder that QAD consistently receives high customer satisfaction rankings. It is demonstrated in culture and actions.

As an example, customers have sought help supporting changing industry regulatory requirements. QAD is responding with specific functionality needed to support ASC 606/IFRS Revenue Reporting requirements mandated for January 2018.  Similarly, the medical device industry is moving toward Unique Device Identification requirements which QAD development teams are addressing. During this year’s conference, customers were invited to participate with developers in hands-on labs to work on smarter navigation, data-driven user-interfaces and other personalization needs that will most likely be implemented in upcoming “Channel Islands” product releases.

Finally, this author would recommend that other technology providers, who desire to make their customer conferences more meaningful, speak to QAD’s marketing team and conference organizers. Explore attendees were offered attractive prizes for attending the most sessions, turning in session evaluations, visiting Solution Expo partner booths or filling in and submitting overall conference evaluation inputs. On state, QAD CMO Carter Lloyds initiated a cool real-time program that predicted in phases, which specific attendees had the closest odds of winning a prize based on current inputs and activities.  That drove individual and team enthusiasm.

In the final posting of this series, I will highlight the panel discussion that addressed the ongoing challenges and root causes of skill and training gaps related to today’s manufacturing and supply chain industry environments.

 

Bob Ferrari

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

 


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