I recently read the article “Coming Dominance of On-Demand Supply Chain Software” by Dan Gilmore and it got me thinking about the history of SCM software implementations and where the industry is going. Just on a lark I Googled “failed supply chain software implementations” and got 33,000 hits. To me that is an indicator that this is a hot topic.
The past years have been a wasteland of high profile failed implementations with such companies as Nike, Waste Management and Hersey (to name a few). Obviously all the failures were for very different reasons, but a failed supply chain software implementation can have a dire impact to a manufacturing company, such as not being able to manufacture or ship new product! What could be worse than that?
Make no mistake about it, the business problems that supply chain software solve are difficult and complex, so perhaps it is time for a change. I agree with the author that the future of supply chain software is on-demand. But the real question is why? I personally think it stems from the fact that companies no longer want to risk huge, costly, time intensive implementations of software with no predictable end result.
On-demand software can offer the customer a whole new future. Low up front software costs (no huge multi-million dollar investment), no hardware cost and generally speaking the subscription pricing is user-based so customers have the ability to try the software with a few users, get some user adoption before committing to a huge roll-out across the organization. This helps to de-risk the investment. And honestly, customer executives would no longer have to potentially put their job on the line for a supply chain solution.
Also, I believe on-demand software companies have to provide better customer service than traditional on-premises licensed software because the software vendor is constantly trying to earn and retain a customer’s business. There is no perpetual forever license. The software company must listen to customer needs and adapt to them or face the customer going off subscription.
As everyone knows, the supply chain industry is dynamic so the way to solve a problem today can be different tomorrow. Wouldn’t you want to work with a vendor that would actually listen to your customer requirements and put them into the product rather than to have a bunch of custom code the vendor won’t support? I think you get more of that with an on-demand software vendor.
The author also made a very interesting comment “Increasingly, you will be able to try the software before you buy it! What a dramatic, game changing impact that will have.” Just think about that for a minute. What a huge statement.
If all those companies who had failed supply chain implementations could have just tried it before they made a huge investment would it have made a difference? For some, yes and others maybe not, but the key point is that consumers of supply chain software can be more educated prior to embarking on a software implementation. What would be even more provocative would be a company who is willing to not only let you try the software for no cost, but also perform the implementation with no initial services fees and no cost at all if you don’t like it...
That would really change the game, the customer could completely de-risk their supply chain software decision. Now that would be bold.