Y2010 & Ahead – value chain trends in emerging economy – Part 2 (Technology Trends)
1. Customer side equations will take prominence over rest of value chain: Based on my interactions with my customers (especially in the manufacturing industry sector), I see more and new IT projects getting initiated to a) implement / upgrade / enhance sales / lead management systems – online sales with intelligent lead management engines – Unica, Epiphany, SFDC, Eloqua etc., increased focus on CPQ (configure, price, quote) tools / packages – Sterling, SFDC b) implement / upgrade /enhance customer service / case management systems – SFDC, Clarify (Amdocs), MS Dynamics c) increase in spend on Customer acquisition and retention analytics – this is going beyond the traditional customer service agent dashboards / report cards to now developing complete customer insight portals (have heard these initiatives being actually called Customer 360 degree). Another area catching up fast is the number of initiatives integrating existing CRM systems with social media – Facebook, Twitter, MySpace etc to gain rapid and comprehensive insights into customer buying patterns and feedback as well as announcing new product introduction to customers directly. Product vendors such as SFDC seem to be taking this to the next level with introduction of platforms such as Chatter – to drive growth both intra and outside customer collaboration.
2. Supply Chains will get more integrated with marketing and service chains: Looking at spend on type of new IT initiatives on supply chain my clients are making, I observe the following trends on the technology side: a) minimal / incremental spend in traditional supply chain planning tools / projects. In most cases the planning tools are already in place with more of ERPII planning tools (SAP APO, Oracle Demantra) taking over the erstwhile best of the breed packages. The focus on supply chain planning now is shifting more towards in engaging marketing & sales channels in developing demand & supply consensus b) increased spend on improving user experience and enable faster decision making - bundling of business intelligence dashboards with supply chain metrics, real time customer / market feedback, competitive analysis is evident from all the key technology players including SAP, Oracle focusing clearly on portals and metric dashboards with deep drill down capabilities. Microsoft is making big inroads into this space through advanced on the fly analytics through new MOSS offerings with bundled SQL Server and Performance point services c) boundaries between planning & execution is blurring fast – planning engines (SAP APO, Oracle ASCP) today are more interconnected with the execution world with more focus on quick regeneration of supply plans – allocations and deployment based on frequent planning runs (daily / hourly in some cases) d) need for real time visibility is on the rise - this is evident by almost all the supply chain players offering event dashboards with a basket of pre-configured KPIs, alerts and notification features for various supply chain disruptions – supply shortage, forecast over / under, order fill rate disruptions etc e) supply chain planning & execution for aftermarket / reverse logistics seems to be picking up – while in most cases these are still managed by legacy systems, a number of vendors are entering into this area fast (e.g. Sterling which offers robust multi-partner reverse logistics partner chain and returns management features).
3. Speed and responsiveness will be key drivers for spend on new initiatives: As described above, IT spend on new initiatives seems to be focusing on developing capabilities to sense and respond quickly to the customer trends and propagate the signals in almost real time to the last link of the back end supplier chain. A few technology trends on the rise to support this phenomenon include a) the sheer proliferation of visibility mechanisms in almost every new release from ERP (Oracle emphasized during Openworld 2009 on the new advanced collaboration feature enabled by the new fusion stack) as well as best of breed vendors – portals, dashboards, pre-configured KPIs and collaboration spaces b) integration of social media into the app space e.g. SFDC’s chatter, increasing number of enterprise pages on Facebook and Twitter and c) increasing focus on MDM projects – especially customer data. Market place is also getting re-organized quickly on this front fast (recent acquisition of Siperian by Informatica is clearly a signal that MDM will play an integral role in enabling real time analytics and business intelligence) d) increasing number of supplier collaboration automation projects – to cover even smaller / tier 2 suppliers who cannot afford costlier EDI solutions (SAP SNC seems to be catching up. Microsoft is also pushing the MOSS and Unified communications offering as another alternative). Another supporting trend which is not yet on the forefront but gradually catching on is the advancement of technologies like CEP (Complex Event Processing) and BAM along with rise in BPM adoption in the manufacturing sector. While BAM has been in play for some time, significant no of my clients are investigating leveraging CEP and BAM in driving faster and real time decision making in areas such as supply chain and customer service functions.
4. Cost will continue to play critical role in decision making: Cost prudence set in during 2009 is there to stay on and is a stated driver for almost every new IT initiative. A few trends highlighting continued focus on cost leadership include a) increasing number of requests for complete turnkey IT solutions – including infrastructure, hosting, ongoing support & maintenance – more and more clients are willing to move away from on-premise implementation model b) increase in adoption of SaaS models – players such as SFDC seem to be making significant inroads into this market with Force.com platform and also providing AppExchange as a means to fill in whitespaces in offerings by leveraging solutions from partners (however the skepticism around data security & privacy are still prevalent). Even established on-premise vendors have either taken a step towards providing SaaS / On-Demand (Oracle, IBM, Sterling) or are contemplating moving into SaaS c) adoption of BPM and BRMS (business Rules Management System – Pega, Lombardi, Savvion) is on the rise – BPM(S) is increasingly seen as helping in breaking the silos in multi-divisional / LOB structure and standardizing / automating processes and reduce duplication and management overheads d) rise in number of short term initiatives with well defined ROI. Even large initiatives are being chunked up into several smaller ones with average initiatives spanning 2-3 months at max.
5. Asset Management will gain more prominence and will help in accelerating “green” initiatives: As observed in my blog on Gartner’s ITAM summit in Nov 2009, the focus on Asset management is on the rise, thanks to advancements in features provided by leading tools such as Maximo (part of IBM Tivoli suite) which offer not only robust EAM (Enterprise Asset Management) functionality but also comprehensive IT asset management capabilities (inventory, remote monitoring / control, commissioning, decommissioning etc). Virtualizations seems to be on the rise in almost every enterprise now and so are “sustainability” & “green dashboards”.
Overall I am very excited by these new emerging trends as these provide significant opportunities to offer focused solutions and services to enable and support these needs through my portfolio of products & services.
What are your thoughts and comments?