Live from the CPO's Summit: On-demand or behind the firewall? The debate continues
By Susan Avery -- Purchasing, 11/17/2006 11:57:00 AM
In the “On-Demand Supply Management Technologies” panel, panelists Rick Jacobs, vice president of supply chain at Eaton Corp., Dian Trosclair, vice president of supply chain and sourcing at ServiceMaster Co., and Britt Yingling of the procurement and logistics operation at Celera Genomics Group discussed the pros and cons of on demand supply management technologies.
Vance Checketts, vice president of global supply management research for Aberdeen, moderated the session and began the discussion by polling the purchasing executives attending the conference: Forty percent said they have implemented supply management technologies on demand. The majority, he said, “are still looking” at on-demand. Checkletts noted that Gartner Research found that keys to successful implementation are: conducting a pilot, writing a service level agreement and creating interfaces with back-end or on premises solutions. With that, Trosclair began the discussion by taking on the concern of integrating the technology with IT and financial systems already installed. “Do you know how Noah felt when he was building his ark?” she asked the audience. She says she answered the many questions that arose at the onset by opening discussion with users on the ways the technology would work. “We broke down barriers. It wasn’t as difficult as we thought it would be. However, IT and finance had to build interfaces to the new technology. We have 900 branches and turnover is an issue. Clean integration means a lot of happy faces.” ServiceMaster provides home and facilities management services to residential and commercial customers. Trosclair joined ServiceMaster in 2002 to help design a centralized supply chain and sourcing strategy. Yingling tackled the concern of customization. “We didn’t want to get wrapped up in it,” he said, adding that the feature set of the technology selected by Celera was the enabler that helped get buy-in from his internal clients. “If they don’t use it, it doesn’t matter what we put in front of them,” he said. His company implemented such applications as e-catalogs and e-procurement on demand at the same time it installed a new supplier relationship management (SRM) platform. In disusing security concerns, Jacobs said that Eaton had not implemented any supply management technology on-demand precisely for that reason. “It’s better to keep it inside the firewall,” he said, although he conceded that time to implement is a compelling reason for selecting on demand technology.Another poll of purchasing professionals in the audience found that 32% think rapid deployment is a good reason for selecting supply management technologies on demand. Responding to the question of whether a company should consider on-demand as a stopgap measure because of the ease of turning the technology “on” and “off.” Jacobs responded that it did not sound like a good idea and that it could cause “chaos” as 30-year employees may lose some embedded knowledge. “It would be a huge paradigm shift. People are a big driver of productivity,” he said. The debate then took a turn as panelists talked about their roles as marketing and salespeople within their companies and ways to compete for scarce IT resources with other functions, a question that arose from the audience. “We don’t have a chance when pitted against revenue growth applications,” said Trosclair. “That’s why we chose to go with on demand. Up front, IT agreed with us that we would not get the resources we needed for a behind-the-firewall system because of needs for customer relationship management (CRM) and revenue growth systems. We partnered with IT right at the beginning and let them know of the resources we needed. We placed personnel from IT in our organization to work on our legacy creating the environment we needed.” Equally important to a successful implementation is teaching users about the new system, said Yingling who explained that he tapped resources of his company’s marketing team for assistance with onsite training and media programs. To that, Trosclair added that “people don’t want to give you time for training. On-demand is more user friendly.”
Click here to read "Live from the CPO's Summit: Supply Goes Global"
View All Blogs
Now Playing:
