Monday, August 10, 2009

Finding New ROIs in Old Technology and Adding Intelligence

Over the weekend I read an interview with Thomas Siebel, the founder of Siebel software. He stated something like, "all the exciting times in IT ended by the year 2000." Since that time changes have been incremental and small. I have been pondering that statement and I just can't agree.

I spent nearly 5 years in the mobile computing space and can tell you that mobility is still in its infancy. I am working in the EDI/B2B space now and can tell you that this old technology is in the midst of an exciting revolution. I will provide details in a moment.

Let me provide an analogy - A naked man puts on a robe. Later he learns the benefits of wearing under garments. He is now clothed. It is good. However, soon he realizes that the robe is not the ideal outfit to wear when climbing a tree, riding a horse, running a race or skiing down a mountain. He soon finds, that different shirts, pants, shoes, hats and socks seem to work better for different activities. Yes, each involves the basic concept of being clothed, but once being clothed is accepted, improvements are sought and the original robe may even be discarded. I best leave that analogy now before it gets any sillier.

Companies have all made the decision that ERPs are good and serve to provide a standardized framework in which to operate a company. However, the original IT strategies, architectures and ERPs purchased and implemented 20 years ago may be ill suited for today's activities. There remains the constant need to re-evaluate the decisions you made in the past for their relevance today. In addition, many important aspects of a company's business processes still remain to be automated.

  • Event management
  • Business Intelligence
  • Mobilization of software applications and remote business processes
  • Real-time dashboards that provide minute-by-minute and long range views into operations
  • e-Invoicing
  • AP optimization
  • Financial supply chain optimization
  • Conversion of inbound and outbound paper documents to electronic documents
  • EDI/B2B connectivity with the remaining 80% of their trading partners
  • Standardizing disparate systems onto one global instance of an ERP
  • Standardizing data syntax and semantics across the enterprise to ease integrations
  • Integrating the benefits of social networking to capture, store and and distribute enterprise's intellectual assets

Companies today must analyze their current IT inventory and strategic direction and ask themselves if their current IT infrastructure is good, flexible and extensible and is it able to promote future growth and efficiency. In these times of limited IT budgets, it is a good time to look at current IT inventory and maximize and optimize its use. We all know that often only the minimum functionality of an application has been used. Often 80% of the ROI still remains to be captured by extending and expanding the use of existing systems.

Many decisions that were made in the past were good and wise based upon the state of the enterprise and technology at the time. However, it may not be the best decision today. Let me provide an example from the world of EDI/B2B.

Ten years ago, a large manufacturer needed to connect via EDI to their suppliers. They quickly came to the conclusion that they needed to support EDI and the way to do that was to hire the following people:

1 EDI Manager (full-time)
5 EDI specialists (full-time)
1 Database Administrator (part-time)
1 IT standards team (part-time)
2 IT software engineers working on integration projects (part-time)
3 SAP solutions specialist defining business process and data integration requirements (part-time)
1 Communication/Security specialists (part-time)
1 IT Business Analyst (full-time)
1 IT Systems Analysts (part-time)
6 Business Process Specialists (part-time owners of business processes and different database applications)
1 IT Help Desk person (part-time)
3 IT Managers (part-time)
1 IT Network Administrator (part-time)
1 IT Data Center/Server Manager (part-time)
1 IT Web Portal Specialists (part-time)
2 IT Project Managers (part-time)
3 Directors of Business Units (part-time)

Now that the company had the required resources in place, they invested large amounts of money into internal EDI applications, mapping tools, EDI standards libraries, communication servers, hardware, etc. Once that was in place they began EDI implementation projects. First they needed to gather a great deal of information:

  • Who is this EDI/B2B message for and when does it need to be in production?
  • What is the data exchange testing schedule
  • What is the data exchange production schedule
  • What is your Trading Partner's contact information -EDI Manager, Phone, Email, EDI Technical Lead, Phone, Email , Business Unit Project Owner, Phone, Email
  • EDI Transaction Set / Name Information,Inbound or Outbound, EDI Standard and Version
  • EDI Implementation Guide
  • EDI test data file to match the Implementation Guide
  • Communications/Transmission Information
  • VAN Name,VAN Phone, Email, VAN account information, Duns ID, ISA ID, GS ID
  • Transactions schedule - batch, scheduled or real-time
  • Production Qualifiers, Test Qualifiers
  • FTP Site information, user names, passwords
  • IP Address (Production) -User ID, Password, Directory
  • Timing of transaction (batch, scheduled or real-time)
  • IP Address (Test) -User ID, Password, Directory
  • Frame Relay Subscription Information
  • SAP IDoc used, is the IDoc standard or custom
  • SAP Database Administrator, Name, Phone, Email
  • Is there a separate Application Interface for different non-SAP solutions in the system
  • Application Interface Location
  • Application Interface Contact and Contact Manager - Name, Phone, Email
  • Application data file location
  • Inbound application data mapping specification
  • Application Data format (delimited, fixed length?)
  • Outbound application data mapping specification
  • Application test data source
  • Application Implementation Guideline
  • Transaction Set/Name, Inbound/Outbound, Standard/Version
  • Implementation Guide Location and owner
  • XML Schema/DTD Location and owner
  • Acknowledgments required y/n - Are 997 functional acknowledgments required?
Ten years ago that was the process. Today, EDI and B2B connectivity is available as a SaaS/IaaS or cloud computing utility. If you are an SAP customer, you can simply subscribe and plug into their EDI/B2B exchange. There is no longer the need to pay the huge VAN fees, purchase expensive EDI software tools, mapping tools, EDI standards libraries, hire specialized EDI staff, pay large maintenance fees. In the new world of IT, these functions are available to be activated on-demand. Often the service levels will be much higher and the on-going costs much lower. If you would like to discuss in more detail send me an email.

In summary - In today's world, IT strategists need to be reviewing their existing inventory of software applications and systems to see if there are uncaptured ROIs. They need to be reviewing every aspect of their IT infrastructure to see if old and expensive models can be replaced by less expensive, faster and better solutions in cloud computing environments that may even provide higher service levels and far less on-going costs.

Mr. Siebel's days of excitement may have ended by the year 2000, but innovation is very much alive and well. Now that much of the basic IT infrastructure and databases are in place, the future is all about using systems more intelligently and building intelligence into existing business processes.


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