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Friday, July 27, 2007

Top companies use technology to gain a competitive advantage

By Steve Epner – Founder, BSW Consulting, Inc.

Top companies use technology to gain a competitive advantage. These companies are willing to treat it as a strategic resource instead of a simple shared process. It is integrated in what they do, not just added on as a necessary evil. Their IT leaders are part of the long range and strategic planning. IT is active in assisting the company to reach its strategic goals.

If something big is going to occur, it will affect the computer systems and their use. Without input from IT, a great deal of effort may be wasted or unplanned activities will be required at the last minute when they are most difficult to provide. Then, when the work is done under pressure, without long range planning, and it fails, the common view about how difficult it is to deal with IT is reinforced and opportunities are lost. It does not have to be that way.

The top IT person or CIO should be invited to provide input to the planning process. No other executive will have the perspective or knowledge of the systems and procedures which will be affected by any given scenario. No one else will know what is necessary for the systems to support any new initiative.

The top IT executive can tell you what new hardware, software, support, or training will be needed. They can estimate what it will cost and when it can be available. The answers may slow down or speed up a project. But, the rest of the executives will at least know the impact and can plan for (or around) it.

Given the opportunity to be part of the strategic process, the actual implementation of the plans will be much smoother. IT will be seen as a cooperating member of the tam, not some pain in the back end.

In addition, many companies find that their IT executives have a different view of the world, which if encouraged, will help them find new ways to attack old problems. By including people who have to keep systems operational, the team gets a valuable new viewpoint while deliberating the future. All of the major studies on decision making show that a diverse team makes better decisions than one with limited outside experience.

Friday, July 20, 2007

What makes the best companies the best?

By Steve Epner – Founder, BSW Consulting, Inc.

What makes the best companies the best? It is sometimes common sense. It is sometimes a competitive secret. It is always something done well. The next four entries will explore some of the ideas I have seen over the years.

The best companies all have a clear vision of who they are and what they are all about. It has nothing to do with technology, but everything to do with success. Everyone in the organization understands the mission and is ready and willing to support it. Just like the difference between light from a standard lamp and light from a laser. One is unfocused and goes everywhere. The other is extremely focused and can cut steel.

Make sure you can clearly state your strategy. Ask your managers and staff if they can explain the strategy to you? If they cannot tell you what it is, how can they implement it? Take the time to make sure it is clear – to you and everyone else. Then live by it. Use it as a filter when making decisions of what to do. An unused strategy is worse than none at all. It will give you a false sense of security.

Friday, July 13, 2007

Collaborative Technology – Part 2

By Steve Epner – Founder, BSW Consulting, Inc.

Last time I described collaborative technology. This time, I want to talk about its use in the real world. When collaborative technology is used correctly, everyone wins. A simple example is the elimination of paper invoices. In industries that use Evaluated Receipts Settlement, there are no invoices. The customer pays for product as it is received on their dock. They pay based on the agreed to price in the Purchase Order.

Think about the results. Since all payments are made electronically on receipt, there is no need for an accounts receivable department. Since we do not hold invoices for later payment, there is not need for an accounts payable department. Maybe this is why there is so much delay in making ERS work – too many companies are trying to protect jobs.

What if we take the people who are now handling paper and give them more important things to do? Can we be more effective? Can we get things done we do not have time for today? Can we improve the workplace? These are all possibilities, if we want them.

Collaborative technologies take trust that the PO system is working, that trading partners will not try to cheat each other, and that the product was accurately picked, packed, shipped, and received. Trust can be improved with proper auditing techniques, but until two partners can feel comfortable with each other, nothing can happen.Success requires a desire to make sure the trading partners are “on board.” It may be necessary to sell the idea inside and outside of the organization. Enthusiasm is contagious. If it is absent, the process is much more difficult to make work.

Success requires a commitment to implementing not only the technology applications, but the training and manual procedures that can verify the accuracy of the process. We must take the time to make sure that the systems are tested and validated.

The experience of large companies proves the value. The technology is available – and within most systems sold today. All that is required is for the top management teams in our supply chains to get together and make it a reality.

Friday, July 6, 2007

Collaborative Technology -- Part One

By Steve Epner – Founder, BSW Consulting, Inc.

Collaborative Technology describes how companies in the future will share information without human intervention. Actually, the technology is already in place and fully operational. Accountants, regulators, and even the IRS agree on how they are to be operated, how monies are reported, and how audits or tax documentation are to be completed.

Delays in usage are caused by a lack of: Trust; Desire; and Commitment. Until supply chains are able to eliminate these barriers, the hoped for benefits will remain out of reach of all but the largest companies.

Trust is a big deal. Does this sound familiar? “If I give my suppliers all of my customers’ names and addresses, what will keep them from trying to sell direct?” When we have to worry about trading partner relationships at this level, it is difficult to imagine establishing closer ties.

Collaborative technology requires trust. We must be willing to share information with our partners as it becomes available. The information must be complete – nothing can be held back.

Desire is the next issue. Based on data collected for my Master’s research, I found that the vast majority of companies who used the new technology did so only because it was required by a trading partner. They ignored the increased accuracy, speed, and cash flows. Worse, even after implementing it for a given trading partner, having put all of the technology in place, proved the value, they did not spread the use to other trading partners.

We need to want to have this technology in place. We must spread the word that it is good for us. We need to convince our own employees, trading partners, and intermediaries of the benefits. Only then will there be the critical mass so that the benefits are obvious.

Commitment is the last “leg of the stool.” We must be committed to making it work. Sure, the technology is there. The capabilities have been around for over 30 years. Business owners must decide to make it happen. Everyone is waiting for someone else to take the lead.

It is time to stop worrying about who will be the first user and commit to getting it done. We need to let our trading partners know that this will help them as well. We need to get others to join in the commitment to utilize what is already available. Then we will see the results as an industry.

When collaborative technology is used correctly, everyone wins. A simple example is the elimination of paper invoices. In industries that use Evaluated Receipts Settlement, there are no invoices. The customer pays for product as it is received on their dock. They pay based on the agreed to price in the Purchase Order.

Think about the results. Since all payments are made electronically on receipt, there is no need for an accounts receivable department. Since we do not hold invoices for later payment, there is not need for an accounts payable department. Maybe this is why there is so much delay in making ERS work – too many companies are trying to protect jobs.

What if we take the people who are now handling paper and give them more important things to do? Can we be more effective? Can we get things done we do not have time for today? Can we improve the workplace? These are all possibilities, if we want them.

Collaborative technologies take trust that the PO system is working, that trading partners will not try to cheat each other, and that the product was accurately picked, packed, shipped, and received. Trust can be improved with proper auditing techniques, but until two partners can feel comfortable with each other, nothing can happen.

Success requires a desire to make sure the trading partners are “on board.” It may be necessary to sell the idea inside and outside of the organization. Enthusiasm is contagious. If it is absent, the process is much more difficult to make work.

Success requires a commitment to implementing not only the technology applications, but the training and manual procedures that can verify the accuracy of the process. We must take the time to make sure that the systems are tested and validated.

The experience of large companies proves the value. The technology is available – and within most systems sold today. All that is required is for the top management teams in our supply chains to get together and make it a reality.
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