In the late 1990s, portals and public and private exchanges were introduced amidst much fanfare. From medical equipment to automotive parts, a variety of industries tried to create and roll out their own supplier portal and marketplace solutions. But the majority of exchanges failed; the technical and administrative costs outweighed the benefits of participating. They created casual, flimsy associations for new participants and didn’t add significant value for existing strategic relationships.
Today, while the focus on bringing companies together into collaborative communities driven by business transactions remains the same, the technology to accomplish this has matured. Cloud computing is a major new building block, bringing new levels of performance, security, availability and dynamic flexibility to multi-enterprise, multinational business networks. And as a subset of “the Cloud,” the software as a service (SAAS) model is easy to implement, customize and maintain, connecting multiple business systems to sync communication and drive collaboration.
Whether researching a new drug, designing an airplane, buying international amenities for a luxury hotel or managing offshore manufacturing of MP3 players, companies today depend on a global community of partners. SAAS applications delivered in a cloud computing environment seem like the ideal new architecture to deliver on the promise that portals and exchanges failed to live up to. However, unless companies focus on that vital detail of making sure partners actually use the solution, then the idea of communities enabled by cloud computing and SAAS will also die a slow death.
If you build it, they will come
If companies want SAAS to live up to its potential in a community-focused business model-centralizing communication, collaboration and business synchronicity across multiple, diverse companies-they need to augment technology implementation with a fresh approach to partner management.
In an extended business community, partners may not report directly to you, meaning you must manage by influence-especially if you’re not a big brand company that has the sway of Walmart, Apple or Hewlett-Packard. And even in cases where partners do report to you, you probably lack insight into who else is using up their time and capacity. As a result, one pitfall that companies too often face is partner participation: making SAAS onboarding easy, compelling and sustainable.
Does SAAS success or failure rest solely on IT’s shoulders? No. But IT should work to educate the business side of the company to create shared responsibility for effective SAAS implementations. The following are suggestions for how to make that happen.
Appoint a Community Czar
Suggestion No. 1: Appoint a “community czar”
Identify a “community czar” who can “own” the business side of a community initiative and equip partners with both the technology and the best practices to be successful. “Partner satisfaction” responsibilities may include: determining how they are using the system, specific needs or challenges, suggestions for new capabilities, and tracking and communicating community key performance indicators (KPIs).
Suggestion No. 2: Prioritize partners
Determine which partners will have the greatest impact from using a SAAS solution and being a part of the connected IT community; plan to onboard three to four of these partners first. For example, any partners who have to participate in compliance documentation and accountability are a natural fit, since the shared solution has the potential to ease a very specific pain point. Once you have identified several willing partners, you will be in a better position to subsequently fine-tune the system, its processes and your onboarding approach.
Suggestion No. 3: Understand the overriding IT infrastructure
Before selecting a cloud or SAAS solution, team with your business users (for example, CXOs dependent on project ROI, vice president-level visibility and reporting, director team management and operating-level transactions) to understand the overriding IT infrastructure of your most critical partners. While IT can control internal processes such as security and compliance, your organization may not have the sway of big brand names such as Hewlett-Packard or Walmart to dictate that partners use it. Team with the business users to help them understand the requirements for creating a successful infrastructure.
Consider how to span the levels of IT sophistication to be inclusive of your broad partner set. A sophisticated partner may need you to support electronic messaging (for example, electronic data interchange (EDI) or RosettaNet). Or, alternately, this partner may want to interact directly from their ERP system (SAP, Oracle, Axapta or the like), which would require an integration provider.
With a smaller, less sophisticated partner, you’ll want to enable them with simpler, flat file comma-separated values (CSV) uploads/downloads. With basic manual entry into a portal, you can, over time, train and encourage the less sophisticated partners to advance to electronic messaging. At the same time, larger partners will certainly have times when they’ll want to provide discreet updates by manual entry, so there is value in providing a range of options.
Be Flexible and Minimize Variables
Suggestion No. 4: Be flexible and minimize variables
Tread slowly so you don’t disrupt partners’ or customers’ existing communication methods, infrastructure and business processes. This includes:
1. Adopting customer and partner existing business practices;
2. Avoiding “rip and replace” by operating in parallel or as complementary capabilities;
3. Adapting to your largest customers’ industry and operating standards (for example, EDI and RosettaNet).
Look for SAAS solutions that can mold around your community’s needs and also expand for further collaboration down the road. Since SAAS by nature is easy to customize and implement, such accommodations for customers and partners is hassle-free for the brand-owning company.
Suggestion No. 5: Educate and train the team
In a community supply chain, the team starts with key IT and business touch points from inside the brand-owning company and extends to all partner organizations and customers. Once the partner is ready, get your IT onboarding team ready to help with evaluations, implementation and troubleshooting. For some customers, this may mean deploying someone to the partner site for a few days or hosting an Internet-based training program. After all, whether the application technically plugs into your systems or your partners’ systems, ultimate success still lies on your company’s shoulders.
But what’s education without incentives? Create community incentives that will motivate partners for initial onboarding and sustained use: Net 25 payment for SAAS users versus Net 30 payment for non-users, or passing along cost savings to contributing partners.
Suggestion No. 6: Sell the success
SAAS has a low barrier to entry and increased reward compared to traditional software, and partners need to understand how their level of effort will increase their return. The more partners that participate, the more you’ll see how a community model is self-improving and self-appreciating. Communicate usage-or lack of usage-back to business leaders. If usage is low, the company can create additional incentives for partners. If usage is high, the benefits can be shared back with the entire community.
Amar Singh is President and CEO of Amitive. Amar joined Amitive in April 2007. He brings over 17 years of supply chain management (SCM) and enterprise software experience to the company. Prior to Amitive, Amar was a senior vice president at SAP, with overall product development responsibility for SAP’s entire SCM, product life cycle and manufacturing solutions. At SAP, Amar also led the global product management organization and was the general manager of the RFID business unit. Before joining SAP, Amar spent several years in leading management positions at companies such as i2, Procter & Gamble, Warner Lambert, Logictools and Bain & Company. Amar was the founder and CEO of Simplexis, a SCM software company for the public sector.
Amar graduated with a Mechanical Engineering degree from the University of Ilorin, Nigeria, earned a Masters in Operations Research from the University of Waterloo, Canada and completed an MBA at the Harvard Business School. He can be reached at [email protected].