When thinking about creating a collaborative supply chain, imagine that you are a conductor for an orchestra and are raising your arms, preparing the group to begin.

But when they group begins to play, you can’t make sense of the tune because each member of the orchestra is playing from a different sheet of music.

In this scenario, we learn that you have to do more than pull a group together and signal them to begin. You need to be prepared and make sure everyone is on the same page.

This is also true when in the process of a supply chain collaborative system selection or when implementing a collaborative supply chain: Having accurate information that can be viewed by all parties is ideal for good collaboration.

And for many organizations, an IT system may be exactly what they need to achieve a collaborative supply chain.

However, as with any IT systems-supported initiative that involves multiple viewpoints, there are risks that should be realistically formulated before casting the visibility and collaboration net wide for all to take part.

Before we take a look at the risks, let’s run through some core elements of the collaborative supply chain:

• Forecasts – Sales forecasts at the stocking unit and stocking location are valuable information for suppliers providing materials or finished goods. Visibility into the sales forecast is a great place to start. Ultimately, and depending on your own forecasting capabilities, involvement with suppliers in collaborative forecast updates is sure to yield future improvements in forecast accuracy.
• Sales History – This information is similar to forecasts in its value to suppliers. Sales history provides a basis for understanding how forecasts are developed and insight into past activity, which can further secure the supplier’s commitment to your forecast. Sources for sales history may be detailed point-of-sale data or may be a refined version that supports the forecasting process.
• Inventory on Hand – Visibility into inventory on hand provides yet another validation point for suppliers in understanding where their inventory lies within your supply chain. Understanding and managing inventory over time gives additional insight into typical product movement, which may not be evident in the sales forecast or sales history.
• Replenishment Needs – Communicating the replenishment needs to suppliers is central to any supply chain operation, and the need to collaborate in this area is ages old. Typically the transmission of the PO and the acknowledgement from the supplier are the key elements. Email, fax and paper-based operations are the lowest common denominator for many organizations, and moving toward electronic systems is often met with resistance. The more advanced offering that supports collaborative replenishment involves real-time communication of replenishment needs based on the supplier’s order quantity capabilities, followed by a timely acknowledgement that includes any adjustments and later provides an advanced ship notification which represents the shipment(s) that will arrive at your doorstep.

One important factor in acceptance of the meaningful collaborative supply chain is that the relevant, available information is accessible to the appropriate parties involved.

As an example, sending a supplier your sales forecast to a production scheduler via email is a positive step toward collaboration.

However, making that forecast available on a single platform that can be viewed by the supplier’s finance group, sales group, distribution center operations, and transportation providers ensures that they’re all referencing the same version and are planning or operating based on more than delayed or distilled information.

This type of open visibility and collaboration with the right channels is a tricky balance, but the downside of delayed point-to-point communications and related inaccuracies makes the more thoughtful balance worthwhile.

When opening up visibility to your suppliers and leveraging trading partners’ capabilities, there are also risks. These key risk factors include:

• Security of Information – Opening up to suppliers and logistics partners relies on IT systems that provide for data security. In addition, agreements to recognize the data as proprietary for parties involved in the collaborative process should be evaluated.
• Stability and Data Availability – Once the supply chain evolves into the collaborative model, reverting back to manual methods in the event of system downtime could be a considerable disruption. Ensuring system uptime and redundancy of processes is a must.
• Single Version of the Truth – Consolidating all of the elements of the collaborative relationship in a synchronized manner ensures suppliers and logistics partners are reading from the same sheet of music. The flip side of this in terms of multiple point-to-point communications can lead to chaos.

We’re interested in knowing your thoughts on these risks and benefits, as well as what you might be doing to further the collaborative supply chain. Looking forward to your input and comments.

- Matt

Photo credit: Monica Liu

By Kevin Hume 

Recently, I had the opportunity to interview a wide range of supply chain professionals engaged in the design, deployment and end use of Supply Chain Execution software (WMS/TMS/LMS).

I spoke with "in the trenches" practitioners who manage day-to-day operational challenges and execute the strategic mandates passed down from executive leadership.

I also spoke with industry analysts, third-party integrators and supply chain software executives. All this was done in an effort to compile a broad perspective of opinions relating to the emerging trends in Supply Chain Execution (SCE) software. My mission was to identify key emerging trends in the SCE software market over the next 3-5 years.

Considering the broad range of feature-function requirements in the SCE market, I received opinions across multiple perspectives (supplier, integrator and end user) and insight within different industries.

Despite the diverse group and backgrounds, a few issues consistently floated to the top of the list, irrespective of perspective or industry.

The most prevalent themes across all the discussions included:

Software as a Service (SaaS) offerings – This was easily the most common refrain from discussions with SCE software end users.

SCE practitioners’ view SaaS offerings as an emerging opportunity to provide the quickest speed to market at the lowest possible price point. Practitioners are clamoring to meet executives demand for cost effective solutions that can be quickly deployed with minimal investment in software applications and supporting hardware stacks.

Considering that a typical Best of Breed (BoB) WMS deployment runs 4-6 months at best from contract signing to go-live, there is an expectation that SaaS offerings will steadily grow feature-function capabilities and become catalysts to meet practitioners’ demands for quicker deployment timelines, flexible hosting options and lower Total Cost of Ownership (TCO).

From the SCE supplier side, a number of emerging SaaS applications have brought some innovative products into the market. As the next few years unfold, expect to see an increasingly robust SaaS feature-function set coming into the market.

Look for more details on the existing and emerging state of SaaS feature-functions in our upcoming blog posts.

Planning & Execution Integration – The rapid changes in the global economic climate over the last 18 months have highlighted the need for end-to-end visibility and the need for adaptability within the supply chain planning and execution processes.

The ability to provide planning capabilities that reach from the point of supply to the point of distribution have been a primary driver in the growing acceptance of SCM-ERP suites over the past few years.

The BoB players have also recognized this need and have been working hard through the integration of acquired products and core feature-function improvements matching the visibility and functionality of the SCM-ERP offerings.

It’s taken the BoB suppliers significant investment-development effort over the last several years to reach this point.

In the next few years, it should be revealed if the investment in end-to-end integration will pay off and which market’s organizational complexities will generate traction within the BoB view of Planning and Execution integration.

Look for further discussions related to the SCM-ERP versus the BoB model in upcoming blog posts. In fact, if you have a particular idea or question related to this topic, drop me a note and let’s discuss it.

Model Driven Functionality – Similar to SaaS offerings, Model Driven Functionality meets the dual requirements of "speed to market" at the lowest possible TCO.

The ability for SCE software to quickly adapt to emerging fulfillment demands within a zero modification environment continues to be a key desire for both current and future customers, as well as a critical path to capture increased market share for both BoB and ERP suppliers alike.

The Model Driven Configuration capabilities of the leading BoB and SCM-ERP offerings vary widely by supplier today.

The offerings that successfully ‘close the gap’ between robust functional configuration options within an intuitive, graphical tool set will become the industry leaders in the near future.

Now, take a step back and look at the three topics we just discussed – what are some of the external factors that really enhance the value of these emerging trends? My own thought process works something like this:

a) Current-emerging economic climate is driving a need for

b) robust, quick-to-market business requirement support; and

c) the limited access to capitol dictates lowest possible investment and TCO needed to support supply chain execution.

In a nutshell, I think these external factors are driving SaaS offerings, Planning-Execution Integration and Model Driven Capability to the top of the 3-5 year wish list.

Are these the topics that resonate with you and within your industry? Drop me a line! What do you think the emerging trends will be over the next 3-5 years within the supply chain execution market?

Kevin Hume

On my way into the office this morning, I stopped at my local convenience store for a cup of coffee. During the past year, I stopped going to the "premium" coffee shops as a way to save money. Charging more than $2 for coffee should be a crime anyway. And I’m not talking about buying the sissy coffee type either; I’m talking just plain old coffee – black.

I’ve heard people say, "You could save a lot more money by making it yourself at home." It’s probably true, but that is beside the point. Buying it at the store is convenient (hence the term convenience store) and fast, and they actually have pretty darn good coffee.

Anyway, I know how much a 16 oz. cup costs at this place since I buy it there almost every day. So, this morning I grabbed the exact amount – 65 cents – from my change jar on the way out the door. I made the pit stop, went in and poured the coffee, and while I was standing in line, I reached into my pocket – two quarters, one nickel, and no dime – no dime in any pocket. So I put the change back in my pocket and pulled out a buck.

On the drive in, as I sipped my coffee, I thought that my premium coffee "boycott" and needing 10 cents more was very analogous to what has happened in most businesses and distribution operations over the past year or so.

Organizations have been forced to look at their budgets, cut out the premium stuff (as I did with my coffee), reduce waste, and trim costs wherever they can. And even now, they are still trying to find that last "10 cents."

So, how does that relate to Supply Chain Information Technology?

When supply chain systems are not configured or technologies are not used to their full potential, supply chain costs may remain inflated and service levels can be more difficult and costly to achieve.

You need to do an analysis of your organization's supply chain technologies to uncover cost reduction opportunities – both in terms of the overall supply chain performance as well as in technologies’ administrative costs.

Here are some questions you can ask of your own organization:

- How can existing systems’ functionality be better used to streamline operations?

- What performance metrics and tools best support the overall corporate objectives at the appropriate management levels for them to make better decisions?

- Are there practical opportunities to improve trading partner integration for timeliness and accuracy, thereby decreasing costs?

- Do the technologies effectively support corporate objectives for inventory levels?

- Are there opportunities to reduce technology administrative costs and overhead costs?

Today's business environment demands that companies optimize their technology investments and examine every opportunity to improve operating expenses while sustaining customer service.

You need to dig to find the hidden costs often buried in current systems’ configuration and processes.

Where is your dime coming from?

David Meyers

The ends of decades aren’t quite as good for reflection as millennium milestones.

But they’ll do in a pinch.

Remember the Y2K craze? Computer systems across the planet were going to crash and burn one second past midnight on December 31, 1999, plunging the world into chaos. Power grids would go black. Airplanes would drop out of the sky. Companies would fail as their core IT infrastructure became worthless piles of junk.

Well, it didn’t quite turn out this way.

Y2K made great press. It also gave software vendors a boost in making new sales. But as a disaster, it pretty much turned out to be a major bust.

One could attribute this to the foresight and diligence of countless IT departments and professionals who addressed a known problem in a measured manner with plenty of time to spare. But the normal replacement and upgrade of obsolete systems had something to do with it too.

Y2K’s roots were in an older generation of software and data structures. As the old gave way to the new, the magnitude of the problem diminished.

This doesn’t mean that some folks weren’t working right up to the stroke of midnight on vintage 1970s code. However, Y2K is still a great example of how flexible and adaptable the IT world is at addressing the known.

It’s the unknown that really tests the mettle of businesses and IT.

Roll back the clock to January 1, 2000. Who foresaw what the first decade of the 21st century would bring? We now worry about airplanes dropping out of the sky and companies failing for reasons that weren’t apparent in anyone’s crystal ball back then.

So as I wait to shout Happy New Year, I can’t help but wonder what’s next.

The prospect of the unknown doesn’t mean we are all flying blind. As anyone involved in demand forecasting can attest, the past and present can help predict the future.

We tend to view progress as a linear function, with some justification. What’s next in the supply chain information technology integration world can be discerned from the events of the past decade.

Despite the past worldwide recession, globalization is here to stay. The world will continue to get flatter and smaller from a supply chain perspective. Visibility, global trade management, and trading partner integration will play an increasingly important roll in successful supply chains.

Moore’s law as applied to the computing industry as a whole is still very much alive and well. The Internet, service-oriented architecture, mobile computing, voice recognition, and RFID all have made their mark on supply chain systems in the past decade.

But you ain’t seen nothing yet. The recession of 2008-2009 put quite a crimp in supply chain IT investments.

As the world recovers from the recession, IT as a strategic weapon that drives efficiencies in supply chains will be very much back in vogue.

I realize that I am being a bit light on details. But I don’t think I’ll find too many people disagreeing with these rather vague predictions. Given another 10 years, I’m not sure that any of us will be that shocked on how these trends play out.

But what about other developments? Sustainability for businesses, carbon footprint, and energy costs will matter to supply chains in the coming decade. How will supply chain systems respond?

Recent events drive home the importance of security in our highly interconnected world. What impact will this have on supply chain IT?

What else is lurking out there?

So as we count down the minutes to the New Year, let’s collectively wonder what’s next and party like IT’s 2009.

Happy New Year!

Tom Singer

Photo credit: hyperscholar

What are the most disruptive elements to supply chain effectiveness? With up to 80% of supply chain tied to external forces, it is external trading partners’ activities that often leave you highly exposed. 

In order to meld your partner’s activities into your supply chain management practices, a hosted trading partner management platform may be the quickest answer. Of course, this doesn’t apply if all of your processes are synchronized and you have full visibility and control. But I know very few to whom that statement actually applies.

If you’ve been thinking about opening up supply chain communications with your trading partners, the marketplace has broad and robust supply chain IT solutions that provide a valuable platform for securely exchanging the following key information: 

• Forecast;
• Order management;
• Inbound transportation and import/export considerations;
• Domestic distribution practices;
• Transportation to customer; and
• Performance measurement and improvement.

Linking partners in the supply chain can yield the highest level of improvement. It can also highlight the elements of the supply chain that truly need to be improved. Transparency begets understanding; understanding begets improvement. There is nothing like a comprehensive exchange among all of your trading partners (and your internal processes) to gain transparency to where the pains lie and where improvements are needed.

What makes hosted solutions, or SaaS (software-as-a-service), attractive in general is that they offer a solution set to a broad base and limit deployment headaches. They also make simultaneous application updates to a broad population, insulating the user from system upgrade risks.

In addition, SaaS is particularly attractive to the supply chain because it allows for modular deployment of ERP updates and supply chain execution systems updates with minimal risk to trading partner and product flow. When applied to data exchange with trading partners, SaaS is extremely attractive because it typically offers a flexible set of data integration standards (including web form data entry for the less sophisticated).

With the diversity of partners involved and the constantly-evolving maturity of data synchronization capabilities, we believe SaaS is a solid play for supply chain partner integration.

Tis the season to explore your hosting options. Let us know what you think about hosted solutions.

Happy Holidays!

Matt Wilkerson

Photo Credit: izik

The recent roll-out of Microsoft Windows 7, Apple OS-X "Snow Leopard," and three major Linux releases (Fedora, Ubuntu, and openSUSE) within two months of each other gave me an opportunity to step back and assess the state of personal-computer technology.

We have all become so accustomed to rapid changes in technology that I have not seen much written about a quite remarkable development; namely, that 64-bit operating systems have become a normal consumer-level product.

Each of the operating systems released in the past few months have a 64-bit version that can be installed as an option or, in the case of new hardware, comes as the default installation.

In addition, with the introduction of Windows 7 Professional and its "Windows XP Mode," the formerly business-class technology of virtualization has gone mainstream for the consumer.

I’ll use this week’s blog entry to explore the implications of these developments for the near future of the PC market.

For some perspective, I’ll take you back to the first time I encountered a 64-bit machine. The year was 1986 and I was working on computational aerodynamics at Grumman Aerospace.

We were given classroom training on how to program for the Cray supercomputer, which used a custom version of Unix as its operating system. The machine had a 2GB disk pack (a mind-boggling amount of storage back then) which was the size of two four-drawer vertical file cabinets stacked next to each other.

Now, of course, you can hang 2GB of storage off your keychain in a USB stick. But until quite recently, 64-bit machines were still the province of scientific research labs and other specialized applications, just as it was in the heyday of the Cray supercomputer.

The term "64-bit" refers to the size of the data registers and communications bus within the computer hardware. The advantage of 64-bit computing is in moving and processing large amounts of data efficiently within the computer. For most users this boils down to the simple concept of "much more memory."

Depending on the OS used, most older 32-bit machines can handle no more than 2GB or 3GB of RAM. On 64-bit machines the practical limit is your ability to pay for more memory – up to 64GB of memory can be easily supported by the current CPU and OS versions, with the theoretical limit set at 16 exabytes (two orders of magnitude more than terabytes).

For a sense of the scale of those numbers, consider that some studies cited on Wikipedia show that the entire Internet moves five to eight exabytes of information per month. So we are talking quite literally about consumer desktop PC operating systems with more theoretical RAM capacity than the total data-usage of the planet.

Clearly no home-user currently "needs" more than 3GB of RAM for even the most intensive video-editing or HD Blu-ray video processing.

So the natural question is, how will this extra hardware capacity be used? Because we know that if 64GB of RAM becomes inexpensive in the near future, someone will figure out a way to use it.

As it happens, the commercial server market has been using 64-bit operating systems and large amounts of RAM for several years. The servers deployed in these configurations support traditional "supercomputer" uses such as scientific computing and Hollywood special-effects video rendering, but the dominant application over the past several years has been virtual machines.

In this application, one physical server runs software that makes it appear to be several independent "virtual" servers (up to ten or more virtual machines on one physical machine). Each virtual server has its own OS and set of applications, which can be different from each other virtual server. The technology is used to reduce the hardware, energy, and administrative costs within an IT datacenter.

As mentioned above, Windows 7 Pro brings this technology to the home user who wants to run older Windows XP applications on a new Windows 7 computer. For example, my son plays a popular online game that has never worked well with Vista. Using Windows 7 Pro, I can set up a virtual Windows XP session for him to use.

The "Windows XP Mode" is actually a complete virtual machine running an independent copy of Windows XP. This development brings technology that was once the province of IT specialists and Linux hobbyists into the mainstream for the benefit, in this example, of peace between a 12-year-old and his XP-hating dad.

Even under that scenario, current new-model PCs have more processing power and RAM than even the most demanding consumer needs.

The commercial experience with virtualization points toward the possible end-user applications of all this excess hardware capacity. The "roadmap" for players such as Microsoft and Google is to use the new capabilities of 64-bit PCs to deliver robust, secure online applications within virtual machines hosted by a user’s own PC.

The first company to make this explicit was Google. In their roadmap for their Chrome OS, they describe a platform that will allow them to push services (such as Google Office) as downloads over the web in a much more robust and high-performance way than is currently possible with current web-browser technology. In fact, the plan is for the Chrome "browser" to be a set of virtual-machine environments that coincidentally look like a web page.

Not to be outdone, Microsoft has announced a "cloud computing" initiative named Azure. Currently aimed at businesses, you can be sure that Windows 7 factors heavily into the as-yet-unannounced desktop roadmap for Azure.

So in looking at the trends in computing, I can predict that the near future for desktop PCs will include end-user services that build on virtualization as a foundation, whether this is apparent to the user or not.

In a future blog posting, I’ll explore ways this might play out in the supply chain technology computing space.

Until then, tell us what benefits you have found by using a 64-bit operating system.

Paul Faber

Having spent the last 22 years working within the supply chain logistics arena and helping clients work through the strategy, selection and implementation aspects of supply chain software, I’m frequently asked:

"What do companies often do wrong when evaluating and selecting supply chain logistics technology software?"

This is an interesting question, because although it has been consistently asked over the years, the answer has changed, as both the software and underlying technology have matured.

Ten years ago, software selection required significant effort, looking into functional gap analysis, vertical market penetration, scalability, extensibility, etc.

The typical product offering was, for example, warehouse management with an alliance offering for transportation management or other supply chain execution systems – times have changed.

Don’t get me wrong. You still need to sweat the details in the traditional areas of software evaluation-selection.

However, software providers have done an admirable job of building best-practice driven, configurable products, significantly reducing the need to modify support for most warehouse operations.

As a result, you may find yourself at the end of gap analysis with little difference between competing software products.

In many cases today, an evaluation strategy that relies upon functional fit as a solution differentiator can result in a futile exercise of picking a specific gray cat in the dark.

Your evaluation-selection strategy must adapt to the maturity of the market and identify key criteria beyond the traditional gap analysis in order to shed more light and discover the real color behind those gray cats.

Two areas that will help differentiate offerings beyond functional fit include:

1. Clearly define the scope of the solution.

The footprint of the traditional Tier 1 WMS vendor has evolved far beyond the four walls of a distribution center over the last 10 years. The expanded reach/footprint of supply chain logistics technology providers now ranges from demand planning/forecasting from the enterprise side all the way down to last mile visibility to confirm a shipment at the customer’s doorstep.

As a result, the perceived value of a particular software offering can be dependent upon the perspective or background of the person/team providing input to the evaluation.

Thus, it’s critical to define and engage a steering committee that represents cross-functional leadership and make sure the steering committee has a clear understanding of the elements that drive the underlying business case for the software selection.

Also, be sure the team clearly defines the elements of each supplier’s product that are in play or out of play before you begin the evaluation process.

The rub here is to clearly define how much of a software vendor’s footprint you intend to leverage over the life of the software product. Most importantly, ensure the steering committee’s vision is consistent with that of the executives who will ultimately approve the investment and resources needed to implement this system.

2. Perform a cultural comparison.

Consider the cultural aspects of your organization and compare them to the traits of the software providers under consideration. In essence, find a DNA match between your organization and the software provider.

For example, does your organization have stable logistics business process requirements, or are they dynamically driven by customer service demands and/or the needs to grow the business? The answer to these questions will drive the magnitude of value behind aspects like functional fit and product adaptability or scalability.

Are the skill sets and staffing levels of your IT organization more characterized as a maintenance group, development staff, or both?

The answer to this question is critical to understanding your reliance upon the software supplier in the future if/when needs arise to support new business requirements. How will this be reflected in the comparison of projected total operating costs for each supplier?

Recognizing the underlying characteristics of your business processes and IT staffing-strategy is a key component to a successful supply chain logistics technology selection. Mismatches between the customer and software provider in these areas typically result in poor implementation performance, unfulfilled expectations of efficiencies, and ultimately higher than expected total operating costs.

Today, a successful evaluation-selection process requires:

• A clear, consistent view of the solution footprint and evaluation criteria;
• A diverse, multi-disciplinary team that is capable of evaluating the entire footprint; and
• Recognition and comparison of company and software provider cultures.

Focus effort in these areas and you will begin to shed some light on those gray cats, as well as improve your ability to differentiate the ‘real’ value proposition across competing supply chain software products!

Kevin Hume

Photo credit: Larry Page

I was doing some catch-up reading on a plane recently and came across a thought-provoking piece by Gartner, a top industry research firm. My mind started to wander after I read and thought about the firm’s 2009 special report, Hype Cycle for Supply Chain Management.

The comment from the report that really had my mind spinning was:

"The common characteristics from the traditional focus of supply chain have been around the portfolio of business processes that make up SCM (Supply Chain Management). ... However, the key learning that has recently come out of this era of economic volatility is the increasing value of information in a supply chain context (for example, the use of Six Sigma in the supply chain has highlighted to companies the need for data to support improvement efforts, as well as the general lack of readily available relevant information)."

I think the report is trying to say that if you want to run a good supply chain, you need to design good processes, and you also need good information about what is happening. Well, of course, that makes perfect sense.

But just in case you’re not into research speak, or if you’re new to the IT and supply chain software game, let me break it down for you.

The "portfolio of business processes that make up SCM" is just a fancy way to describe the variety of methods that you allow you to do the required things to move your product and information through the various steps in the supply chain.

The reference to the "increasing value of information in a supply chain context" just means that in good times and in bad times supply chain information is important. In volatile times – up or down – it is even more important.

When I saw the comment regarding the "general lack of readily available relevant information" it made me think: Do most companies have a good supply of irrelevant data? Probably so.

And the mention of Six Sigma suggested, to me, that without it, most folks wouldn’t know they needed data to support improvement efforts. Six Sigma is definitely a great strategy and objective. But you shouldn’t have to be a black belt to employ common sense or self-defense, should you?

In reflection of Gartner’s research, I came back to a recurring theme that I’ve found in many of my projects: It’s not brain surgery or rocket science; it’s mostly basic blocking and tackling.

So, having good information is not the answer - only the beginning of the answer. To have real value, the information must be able to be applied to processes that allow us to respond and make good decisions. It is not just about information. It is about good processes and good information working together.

You might say, "Well, OK, but what are good processes and good information?"

Good Supply Chain processes (Plan-Buy-Make-Move-Store-Sell) allow you to operate with a supply chain strategy that provides for great customer satisfaction at a minimal total delivered cost.

Good information consists of accurate supply chain visibility into supply and demand and the related costs. This includes knowing the answers to the following questions:

Supply (or Inventory) Data – How much do I have on hand? How much is in transit? When will it arrive so that I can ship to my customers? What method of transportation is utilized to get it here? How much is backordered? And what is needed/planned/forecasted for future periods?

Demand (or Customer Order/Shipping) Data – What have my customers already ordered? What do I plan to ship to my customers in the future? How much of it? When should they expect to get it, and by what method of transportation?

Supply Chain Costs - What are the costs as product moves through the "Plan" to the "Sell" processes (purchase price, transportation charges, customs, duty, taxes, etc.)?

This is it, simple. Why do folks try to make this so difficult? Let me know what you think.

David

Photo credit: mansionwb

Rate your collective experience with software sales reps. How honest have they been on a scale of 1-10, with 10 being absolutely honest and 1 being a total sleaze bag? Think of the used car sales rep and "We’re dealing" when you think of a 1.

In all fairness, this exercise is not intended to prove that the average software sales rep has the scruples of a politician.

Many enterprises view their key software vendors as strategic partners and the vendors’ account managers as integral to the relationship. As a general rule, I don’t believe that supply chain software firms engage in deception as a sales strategy.

The potential fallout from sub-performing implementations is just too great of a risk. Personally, I think that supply chain software reps are more honest as a category than most other sales professionals.

However, I won’t be surprised if a fair number of folks rated TV pitch ads as more believable. Some of this negativity is due to circumstances beyond the control of the salesperson.

For example, a project may go south due to poor vendor delivery or client execution. And, although the sales rep played it straight during the sales cycle, he or she may be considered guilty by association.

But I have to believe that a lot of this skepticism would come from people who felt they were sold a false bill of goods during the sales process. I have seen too many vendor proposals and responses that promised more than they could deliver.

Of course, any successful sales professional plays to win. Would you really want to buy a mission-critical application from a vendor that employed only brutally honest sales reps? I don’t think so.

Viability typically matters too much when selecting a software vendor. If a vendor isn’t willing to occasionally stretch the truth in pursuing sales, how successful will they be?

I’m not suggesting that it makes sense to seek vendors who employ pathological liars as sales representative. I’m only stating the obvious.

We expect software sales reps to aggressively spin their wares and package their message in pursuit of the ultimate prize. We realize that the truth may get twisted as part of this process.

This is why it is an accepted best practice to put structure around software selections. We document requirements, issue RFPs, rate vendor responses, conduct scripted demos, do site visits, and check references.

This helps, but it can’t guarantee complete honesty. It doesn’t eliminate the potential for over-promising and under-delivering.

At the end of the day, our selection process relies on words. And words are always open to interpretation.

We set up processes to validate vendors’ responses, but we also provide incentives that can implicitly encourage vendors to play loose with the truth.

The best we can do is to minimize the risk by doing a good job on our due diligence.

Solid contracts, project management and project teams are principle weapons to combat sub-performing projects.

But if we accept an offer that is really too good to be true during the sales process, then we have huge problems that will haunt us throughout the delivery phase.

Skepticism and disbelief cannot be the basis for any successful software procurement process. Trust must come into play as you proceed toward signing a contract.

However, trust needs to be accompanied by verification. So, how do you keep your vendors honest?

I think we all have a lot to learn in this area, so let the comments roll.

Tom

Photo credit: Emilio Labrador