CEO’s want to survive!
Shareholders, however, want value. The average tenure of CEOs is < 5
years, so they are very focused on wanting to make the top line numbers.
They can't do this by simply pursuing a strategy of doing nothing,
they have to innovate -and Supply Chain is a key driver for innovation!
But Market forces are driving disruption! We have to
state that Market Forces are Driving Disruption, such as data
explosion, sophisticated consumers, the social nature of business, the
rise of mobility, and on the other hand the old infrastructure that is
in place in many companies.
- The volume of data has exploded – more data will
be created in 2015 than in all previous years combined. A lot of that
data originates from the supply chain. Consumers are becoming
increasingly sophisticated. The millennials now entering the workplace
have never known life without the internet, they’ve never read a user
manual, never known life without mobile phones. It’s not just
millenials, though. The Silver Surfers are also adopting technology at a
rate hitherto unseen. Companies can no longer segment their customers
into broad groups – they have to treat each customer as an individual.
- Social is business – Previously, the limit of
knowledge was very small, now things are different. The buying
relationship used to be a 1:1 relationship between company and
consumer. Now the consumer goes onto Facebook, Amazon, Yelp, etc. The
power of the business to control its brand reputation has been lost and
all of our corporate problems are now transparent. In days gone by it
used to be said that 95% customer satisfaction was fine and that it
wasn’t economic to pursue an extra 1 or 2 %. This is no longer the case
– delivering 100% customer satisfaction is what consumers demand and
- Rise of mobility: Many of us here will remember
when mobile phones were just that – mobile phones. Now they are mobile
devices, where making a phone call is almost secondary. People both
demand and consume information across multiple devices and expect
instantaneous gratification. This is not just for B2C, though.
Businesses increasingly expect their enterprise applications to be
available on laptops, tablets and smartphones. Supply Chains are
becoming increasingly reliant on real-time data, and mobility is often
the ideal way to do this.
- What does this mean for IT? Most legacy applications
that companies use are now 20 years old and not built for the
internet, mobile, or social. This can’t continue, particularly as the
millenials come into the job markets. As Oracle, of course, we’ve
invested heavily in enabling social, mobile and cloud capabilities in
our applications, so that for example Agile PLM and OTM are still up to
date and modern – but many other legacy applications appear as
dinosaurs compared to the new cloud applications available on the
- Companies need to modernise to survive! 75% of
existing apps used by businesses are highly customised. Over 80% of IT
spend is keeping the lights on leaving a small residue to meet the
CEO’s requirement for innovation. Imagine having a $trillion budget and
83% of it is gone before you started – you’re left with 17% to chase
the innovation and do heart-lung transplant of IT to make it attractive
to next-generation employees. A tough situation indeed!
- IT budgets are increasing by only 2-3% – you can see this in the
financial results of IT companies themselves. CIO’s are often resistant
to change their existing IT systems because of pressure from CEO to
control costs. Therefore to innovate they need to shift the cost of IT
and development back onto the IT companies. This means that the future
IT will need to be standard, easily provisioned, mobile, social
integrated and with real time data and decision-making.
But companies should look at SCM as a means to drive growth. Many
companies see supply chain as the primary way to differentiate
themselves in the market – whether in terms of product innovation,
targeted promotions or perfect fulfillment. CEO’s look to their supply
chains to drive growth, but supply chain practitioners face some
significant challenges with legacy disconnected IT systems. So where
are we seeing investment in supply chain? Current SCM trends include
Product innovation, Supply Chain Visibility, Order Fulfilment and
Management, Transportation Visibility, and enhanced BI to make more
rapid informed decisions.
Cloud is the modern buzzword, and it’s predicted that 60-65% of the apps business will be Cloud within 5 years. The move to Cloud is accelerating.
Why? First of all: It is simple – all the work is done for the
customers by the IT company, information is accessible anywhere. With
Innovation Management Cloud for example, there is more Innovation –
greater business agility, faster time to market. Now you have the
business application immediately with 3-4 releases per year, each
containing lots of enhancements. An in-house IT department simply can’t
match this high speed (no modifications, provisioned immediately) and
low cost lowers TCO with no costly upgrades.
The effect is to move IT costs to the IT companies and bring
commercial agility. Companies need a disruptor to bring innovation into
your businesses – Cloud can be it! Oracle Cloud
is an enterprise cloud for business. Oracle Cloud offers self-service
business applications delivered on an integrated development and
deployment platform with tools to Read More
Source:: NPR Business