This posting will address our final Supply Chain Matters summary impressions from the recently held IBM Impact 2011 conference.  Readers can view any of our update commentaries that occurred during the conference at the following web links:

Commentary One- Initial impressions of the conference.

Commentary Two- Highlights of the Smarter Commerce mini-tent session.

Commentary Three- Highlights of Target Stores implementation of online commerce platform in eight weeks.

Commentary Four- Product strategy implications in Smarter Commerce offerings.

Commentary Five- Joint interview with Infosys Ltd. senior executives on supply chain executive top-of-mind topics related to cloud computing and other business processes.

We attended Impact 2011 with mixed anticipation.  IBM is a fairly large, globally based technology provider and conferences of this kind, especially with over 8000 attendees, can tend to be overwhelming with not a lot of clarity in product direction and strategy.  Having previously attended the Sterling Commerce annual customer conference (Sterling has since been acquired by IBM), we were not sure of what to expect in the area of support for B2B/B2C commerce, order fulfillment and other supply chain business analytics and intelligence process needs, other than the fact that IBM has been conducting multiple acquisitions related to these areas.  We were pleasantly surprised by the level of product assimilation that has occurred thus far, as well as the longer-term direction.

We also attended Impact 2011 under the sponsorship of the Infosys Ltd. SCM practice, which has a long history as an implementation partner of Sterling applications.  Under the IBM umbrella, Infosys can possibly be viewed as a competitor for integration services.  During all of one-on-one interview sessions with IBM executives, that did not appear to be an issue and we were provided an openness of information.

Much of the IBM acquisition activity is now being assembled under the Smarter Commerce umbrella of products and services. The highlight of this activity came on the afternoon of day one in a session titled Smarter Commerce Mini Main Tent, which attracted by our unofficial count, over 500 attendees.  The session outlined IBM’s intentions to direct Smarter Commerce around Buy-Market-Sell-Service process support with on-premise and cloud type software and support offerings. (For more detailed overview, please review our Commentary Two posting).  Today, the focus of smarter Commerce lies in Retail, CP and Distribution industry support, but IBM will surely provide specialized support for additional industry sectors.

Another important observation is that even IBM has come to acknowledge that customers, while valuing the broad vision and overall support capabilities of enterprise-class technology providers, demand that deployments be provided in smaller, more manageable increments.  It was rather interesting to observe IBM Services, similar to an SAP or an Oracle, announce and speak to bundled value accelerators offerings designed to get customers up and running in a quicker manner with more manageable portions of technology with each phased increment.

As with many IBM conferences, there was multiple messaging directed at what’s on the mind of senior executives (your boss) and why you should care.  In our view, IBM would be better served in also messaging on how supply chains, and supply chain professionals can be better helped with IBM technology.

As noted in our commentaries, IBM has moved quickly and aggressively to make a renewed presence in software and Smarter Commerce will umbrella B2B/B2C commerce and supply chain intelligence capabilities.  Something big is underway and the stakes are high for existing enterprise software and best-of-breed vendors  Customers will still demand choice and independence in these areas, and IBM will need to move carefully in assuring that customers will have options in technology, database and integration partner services selection.  Then again, having the IBM name behind all of these various capabilities does provide certain comfort for customers.

Moving forward, IBM will need more industry focused offerings and additional acquisitions will follow. Smarter Commerce and supply chain analytical capabilities may well deserve their own dedicated customer conference.

Bottom-line, supply chain professionals should keep an eye toward IBM as being a significant new force in the multi-channel commerce and supply chain analytics area.  The competitive landscape is about to get much more interesting in electronic commerce, customer intelligence and social related technologies.

Bob Ferrari

I came to Impact 2011 from my previous following of Sterling Commerce and Infosys Technologies. Thus, as a supply chain blogger, I did not anticipate that an IBM technology conference would have such applicability to the long-term implications of supply chain and multi-channel commerce management.  My have events changed in such a short period of time.

In anticipating what I could expect at this conference, candidly my  expectation was that there might have been an outside mention of Sterling Commerce capabilities and its associated application integration components, let alone capabilities of ILOG in business rules, supply chain optimization and design.  To my pleasant surprise, all of these various standalone vendor technologies were mentioned by select customers in the context of a combined set of current and planned future capabilities.

A mere 15 months ago, IBM’s notion of smarter commerce did not exist. In a short period of time, by enterprise technology vendor norms, $14 billion has been invested in acquisitions of business analytics technologies.  Add to that $2.5 billion in end-to-end value chain, order fulfillment and other supply chain related applications and IBM now has the potential to make a definitive statement and presence in the B2B and B2C commerce domain. There are distinct advantages for being a cash rich, global player in enterprise IT and services, especially with the IBM name and reputation.

Five capability areas have been defined thus far:

• Advanced analytics
• Cross-channel commerce
• Cloud computing
• Supply chain planning and execution
• Social business

At today’s news conference focused on smarter commerce, as well as executive interviews, I probed for the declaration of a definitive roadmap that defines the end-state of where IBM is headed in this area.  The answer, as expected, was somewhat coy, which, in our view, reflects on the fact that this is still a work-in-process.  Existing customers, whether Sterling Commerce, ILOG, Coremetrics, Cognos, Unica and perhaps others to come, will seek and demand elements of strategic direction and business strategy.  Our sense is that the game plan is still evolving and there may well be some further acquisitions in the coming months.

IBM has moved quickly and aggressively to make its statement of capabilities in this evolving area and competitors such clearly take notice.  Something big is underway and the stakes are high for existing enterprise software and best-of-breed vendors  Customers will still demand choice and independence in these areas, and IBM will need to move carefully in assuring that customers will have options in technology, database and integration partner selection.  Then again, having the IBM name behind all of these various capabilities does provide certain comfort for customers.

Clearly missing is articulation of industry-specific capabilities, but the elements are already forming in areas such as retail.  Broader user messaging that blends the needs of supply chain operational, planning, as well as IT process needs is underway but needs more refining.

Bottom-line, supply chain professionals should keep an eye toward IBM as being a significant new force in the multi-channel commerce and supply chain analytics area.  The competitive landscape is about to get much more interesting in electronic commerce, customer intelligence and social related technologies.

Bob Ferrari

Many supply chain and IT professionals know quite well that one of the most complex and business-sensitive software systems resides within order management, fulfillment and electronic commerce support areas. The reasons are obvious, they are by mission and purpose connected and integrated with so many other supporting applications.  These systems are always characterized as mission-critical for the business, and any project directed at changing elements of the system come with high requirements in project planning, performance and scalability testing.

With that in mind, when attending technology conferences, I always seek out customer presentations directed at changing order fulfillment and commerce platforms.  This afternoon, a standing room only session at Impact 2011 highlighted retailer Target Stores recent efforts to change its online commerce platform. Meredith Jordan, Senior Group Manager for Target and her co-presenters did not disappoint in their comprehensive and well delivered presentation.

Target itself includes 1750 retail outlets in North America supported by 37 distribution centers and 355,000 team employees. The Target.com retail site, supported by 4 fulfillment centers, is the fourth most visited retail web site, and was hosted by a large-scale commerce provider.  Target decided last year that it wanted more intimate control of the online customer buying experience and launched a program to host its own commerce platform.  The most significant and profound aspect of this decision was a short timeframe for implementation, involving a mission-critical and important aspect of Target’s evolving business model. More significant, the timeframe from idea creation to initial implementation was a mere 8 months, which is somewhat profound in this area.

The project itself was pulled off by a joint implementation team consisting of Target, IBM Services, Sterling Commerce and Infosys Technologies team members. Today’s presentation spoke to a number of technical, business process and other challenges that were overcome in this implementation effort.  Noted as key success criteria were centralized program management, close cooperation among Infosys and IBM technical teams in identifying and addressing unique technology and testing challenges, and the consistent commitment of Target functional and IT teams to move through each of the key milestones. The actual cutover to the new commerce platform occurred over a weekend, with the system ready to take orders on a Monday morning.

A key component of commerce platform implementations involves the integration of real-time inventory status, and in the case of Target, that involved a few million inventory transactions flowing each day from direct ship vendors, fulfillment centers and corresponding order transactions.  Another key success criterion noted by the Target team was an initial focus on implementing the required basics of order management process and data management needs before moving to the eCommerce phase. Early involvement of the technical support teams helped to overcome technical challenges uncovered in certifying unique needs for required electronic messaging certifications (MQ6/MQ7).  As is often the case in online commerce and fulfillment systems, volume benchmark requirements are specific to the individual business model and not typically out-of-box.

As is typical for these specific applications, there was certain learning as to what could have been done better.  One area specifically noted by the Target team was the need to include data testing and add “second-ring” periphery systems in the end-to-end testing.  Also noted was the importance of team communications in commonly understood terms. An example cited was the term ‘network’, which had completely different meanings among supply chain operations and IT technical teams in project meetings.  The IT team context of networks was nodes for all systems while supply chain operations context of network was suppliers, distribution and fulfillment centers.

In the end, Target.com will be prepared to fully support upcoming needs for the 2011 holiday buying season offering customers some exciting new features.  Teamwork and competency played a rather important role in this overall effort and hats-off to the entire implementation team.

Bob Ferrari

Disclosure: Infosys Technologies is one of other sponsors of the Supply Chain Matters blog, and was one of other named Gold Sponsors of Impact 2011.

One of the promoted highlights of this afternoon’s conference agenda was a session on Smarter Commerce with the theme of the new intelligent customer as king. If there were ever an indication of which topics were most top-of-mind among attendees, it had to be this one.  My very unofficial visual estimate noted in excess of 500 attendees for this particular session with many standees in the back of the room. Multi-channel commerce and operational capabilities apparently are on the mind of IBM’s customers.

Craig Hayman, General Manager of IBM Software Industry Solutions kicked off this session by setting the stage for the new empowered and connected customer who is driving new paradigms at every phase of the commerce cycle. Mike Rodin, Senior Vice President of IBM Software Solution Group noted the billions of dollars of recent acquisitions targeted to enhance the company’s smarter commerce portfolio of technology and services.  That portfolio now includes:

On the Buy side: ILOG, Sterling Commerce

In Market support: Utica, Core Metrics, WebSphere Commerce

On the Sell side: Sterling Commerce, ILOG, WebSphere Commerce

On the Service side: Sterling Commerce, Utica

Predictive analytics: SPSS, Cognos

Data Warehousing: Natezza

Three customer panelists each noted how rapid changes in customer fulfillment and supply chain business models have driven changed requirements and an outside-in focus on the customer as the epicenter of commerce.  These requirements include accelerating use of mobile technologies.

Frank Kern, Senior Vice President of IBM Global Business Services provided an insightful observation regarding today’s unprecedented level of supply chain complexity and business change.  Businesses cannot manage their way out of this complexity, as had been the case in the past.  The new skill and process requirement is creative leadership which translates to how quickly a business knows about a situation, and how quickly and timely that business responds.  A further message should resonate specifically with supply chain management and supporting IT professionals. In this era of the ‘new normal’ of business, creative leadership translates to assessing what are the best possibilities vs. what is our biggest problem.  As the after-effects of the devastating earthquake that occurred in Japan continue to permeate through global supply chains, this tenet of creative leadership is already beginning to show among certain impacted industries.

After this afternoon’s session on smarter commerce, this author came away with an analogy of a puzzle of different shapes and contours.  In solving a puzzle, one assembles all of the required pieces and then begins to fit the pieces in-place.  In the view of Supply Chain Matters, IBM is assembling the pieces of smarter commerce, supply chain and predictive analytics capabilities.  In the messages of this conference, IBM is now transitioning into packaged technology and service offerings that it believes will assist customers in transitioning to smarter commerce in a cost effective and timely manner. The seriousness of the commitment and focus is reflected in the executive presence at this conference.

During the remainder of the conference, we hope to focus on the customer view of these Smarter Commerce capabilities.

Bob Ferrari

The following Supply Chain Matters guest commentary is contributed by Praveen Kumar Agrawal, Principal Consultant, SCM Practice, Enterprise Solutions, Infosys Technologies Ltd.

A classic but important debate concerning ERP vs. Enterprise Asset Management (EAM) systems keeps coming up in some of my client interactions within Infosys. I see this debate coming from two different types of client situations: (i) Clients currently using ERP systems but not as yet implementing any asset management functions who are now evaluating either asset management module of existing ERP or a best of breed EAM package, and (ii) Clients using a best of breed EAM package along with ERP for a considerable amount of time. Due to older versions of the technology, these clients now look for upgrading their ERP & EAM, and are considering whether to replace their EAM by ERP or upgrade EAM and ERP both.

I see this debate coming from two different functional viewpoints; IT and Business. The IT department does not want to handle multiple packages, multiple vendors, and undertake multiple system integration issues. Business, of course, needs the solution which is best suited to them in terms of meeting their business needs, usability, adaptability etc without caring much about ERP, EAM of any other jargon.

A couple of years ago, regarding this same subject, I made a presentation to a group of maintenance and IT managers from some renowned Indian government organizations and here is the gist of the articulated needs:

• Managing financials, supply chain and physical assets is a high priority for most organizations
• ERP systems were originally built to manage all of these but now have enterprise class asset management tools also built-in
• For a CIO: Single system is a tempting prospect which leads to financial savings and operational efficiencies
• For a CEO: Assets equate to a whole range of the organization’s assets; IT Assets, Fleet Assets, Building and of course production machineries

Businesses always complain about delays in getting the desired results from their ERP implementation considering the huge scope and multiple departments involved. This can often lead to a long implementation cycle. By the time that internal ERP consultants finish financials, manufacturing, inventory & procurement system functions it is time to upgrade. This leaves little time to think about overall asset management in the context of its dependencies upon inventory, manufacturing and financial modules in ERP. Then another long upgrade cycle begins and the asset management business benefits would still lag behind.

For ERP systems, asset management is just one module of very larger business problem which does get implemented only during end of ERP implementation; while for best of breed EAMs it is the area of business they are designed to address. Also, different industries have different asset management priorities and requirements:

• Oil & Gas industry has an emphasis on safety & regulatory compliance
• The Energy and Utilities industry would need GIS, Compatible Unit estimation etc
• Pharmaceutical industry has an emphasis on regulatory compliance and  auditing
• Fleet Management will emphasize mobile and quick solutions
• Governmental agencies emphasize regulations, property management and service desk

But at the same time, EAMs would not have solutions to cover all the business processes of financials, manufacturing, budgeting. Hence EAM alone is not the solution for the bigger problem.

In the end, the recommendations I provide clients would include:

• Go ahead with ERP. Take the advantage of its long implementation time by installing a best-of-breed EAM solution. This best of breed solution would give you instant benefits.
• Reap the benefits of best-of-breed Asset Management solution while your ERP is getting implemented and matured.
• Then either integrate to ERP or change over to full ERP solution.

The discussion often moves into the next mode – how to decide on the integration vs. the changeover. The most important points to consider should be:

• Business Process fit – Select the product which is best fit for the requirements.
• Usability – Should be easy to use considering not much IT savvy maintenance users.
• Product Roadmap – Product should have a long history in the market and in the domain. It should be compatible with organization’s other software solutions. The software vendor should have a clear vision on future releases/upgrades.
• Wider Scope –Managing assets simply does not mean managing some heavy production machines. An asset management solution should be able to manage all types of organizational assets like buildings, machines, IT assets, fleets etc.

If you have positive considerations about all of these above four points, then consider integrating EAM with ERP otherwise replace.

Earlier, on the Infosys SCM blog, I have written another blog on a very similar topic Will best of breed EAM packages be taken over by ERPs? Please read that as well for more insight.

About the Author: Praveen Kumar Agrawal is an Infosys SCM consultant with 13 years of experience in the IT industry. Praveen was part of the initial team which started the Maximo implementation practice within the Supply Chain Management (SCM). He is associated with Enterprise Asset Management (EAM) domain for the last decade, and has played key roles in product development and implementation for multiple EAM packages. Praveen shares his insights and viewpoints on current and future trends in asset management at www.infosysblogs.com/supply-chain

Further Disclosure: Infosys Technologies is one of other noted sponsors of the Supply Chain Matters blog.