B2B Integration

Hybrid isn’t just for cars. Why not in B2B?

We’ve been discussing a hybrid approach to B2B integration strategies here recently. The official definition of hybrid is a something containing mixed elements (or for the animal lovers amongst you, a “cross breed”). The reason for choosing a hybrid approach, in my mind, is to get the best of each of these mixed elements. If we consider the car example, if I buy a hybrid car should I get two power units, an electric and a petrol one? The quiet and smoothness of an electric motor combined with the flexibility offered by a traditional, but perhaps smaller, petrol engine seems to be the real benefit. Yet, the conclusion on the discussions here seems to agree that a hybrid approach always brings with it compromise, and often controversy. After all, back to the car example, the weight of the batteries reduces fuel consumption and hybrid cars are pretty expensive. So do you and the environment really benefit from driving a Prius? I think the answer is… it depends. This got me thinking on B2B. Could a hybrid approach fuel not just our cars but also the world of B2B integration? Where is the value in a hybrid approach to B2B? Well, let’s look at it – if we think of a combination of “on-premise” (software) and “cloud” (service), that’s just the battery and petrol engine argument again. On-premise and cloud are merely the power units or delivery mechanisms. Where do we get the B2B equivalent of quiet, smooth and flexible? At a generic level, I guess most people in B2B would want something like this. Speed, security, reliability, ease of implementation, resilience, robustness, accuracy, best of breed, industry proven and, cheap, now please! So, as you’re probably realising, finding the best hybrid B2B solution set (in the real world) is a little more complicated, with compromise and likely controversy along the way. If a hybrid B2B strategy is your chosen path, via the different worlds of “on-premise” and “cloud or managed service”, what does this really mean? My initial thought was to list the B2B characteristics outlined above, such as speed and security and score each for “on premise” or “cloud”. But the more I discussed and debated this with colleagues, the harder it became. Can it really be faster to develop an on-premise solution versus Software as a Service? Is “on-premise” more resilient than “cloud”? And is “best of breed” better behind the firewall or outside it? What is for sure is everyone has an opinion – we all had examples of slow, insecure, and unreliable that we could quote, as well as fast and secure to suit our stance. And then, it dawned on us. This wasn’t just about our attempts to rationalise the pros and cons of the different elements of a hybrid B2B strategy. The interesting thing was the fact that we were actually having the debate. And, what was becoming clear in our debate was that a hybrid B2B approach has great potential, offers choices and flexibility, and depending on your B2B integration needs it can be deployed in different ways. So, we managed to agree on something. A hybrid approach is a meaningful solution for B2B and should be considered. Clearly, this isn’t enough of a conclusion for you, so in my next blog I will put some more fat on the bones of this debate. But, in the meantime, please chip in with your comments and experiences?

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SWIFT Latin American Regional Conference: Globalization, Modernization & Interoperability

I recently attended the inaugural SWIFT Latin American Regional Conference (LARC) held in Rio de Janeiro, Brazil. Almost 300 delegates representing central banks, market infrastructures, clearing systems, payment networks, financial services firms, corporate treasuries and technology providers attended the two-day conference sponsored by SWIFT.  The conference theme “Going for growth in a borderless world,” explored how Latin American financial services organizations are adapting to challenging global economic conditions, numerous regulatory changes and the need to interoperate across the region. I apologize in advance for the number of new acronyms introduced here. I learned a lot about the various Latin American payment networks, clearing systems and regulatory agencies while attending the conference and am introducing some of them below. Attending the plenary and work sessions, globalization was certainly the primary theme, but I came away with a key secondary theme, interoperability. Panelists in the opening plenary “Market Infrastructures in Latin America’s Emerging Markets” talked about the rapid evolution of payment and securities systems, especially in Brazil, in the face of runaway inflation (6821% in April 1990) and 230% credit card interest. Market infrastructures such as CIP (Brazil’s interbank funds transfer system), Combanc (Chile’s high-value payments systems), and ACH Colombia discussed projects underway to modernize their systems. For example, several Latin American countries signed a letter of intent to form a cross-border ACH association, removing barriers to clearing low-value payments. To bring its systems up to industry standards, ACH Colombia is seeking ISO 20071 information security certification. The Latin America ACHs are looking at moving toward SWIFT MT and ISO 20022 compliant payments. One example is the SWIFT User Group at FEBRABAN, the Brazilian Federation of Bank Associations, working with SWIFT to map domestic payment formats into the SWIFT MT 101 format.  There is also work underway to create IBAN (international bank account number) codes for the Brazilian market. In a work session titled “Market Infrastructure Integration”, representatives from BNP Paribas Securities Services, DCV (Chile’s central securities depository) and SWIFT discussed their efforts to make Latin America securities market infrastructures more competitive on a global scale. One project, likened to the beginnings of Euronext, was the creation of the Integrated Latin America Market (MILA), integrating exchanges from Chile, Colombia and Peru. Through a FIX protocol messaging service, brokers in the three countries can trade shares through agreements with local brokers within the markets. The end goal is to have a fully integrated market infrastructure encompassing the four steps of the value chain: trading, clearing, settlement and cash. Another securities session, “Impact of regulation and new principles on financial markets”, discussed the implications of the FSB (Financial Stability Board) and updated principles of the CPSS-IOSCO (Committee on the Payment and Settlement Systems and International Organization of Securities Commissions). An executive from CETIP, Brazil’s largest central depository for custody, trading and settlement of private and OTC securities, outlined the need for updated regulations for issuers, depositories and custodians. The Brazilian securities sector is also trying to increase interoperability between CETIP, Selic (central depository of securities issued by the National Treasury and the Banco Central do Brasil), and BM&FBOVESPA (the Brazilian securities, commodities and futures exchange. Making interoperability more difficult is the plethora of global standards bodies–BCBS, CPSS, IASB, IAIS and IOSCO (Basel Committee on Banking Supervision, Committee on Payment and Settlement Systems, International Accounting Standards Board, and International Association of Insurance Supervisors.) Last but not least, SWIFT for Corporates was highlighted in a presentation called “Corporates are a catalyst for change in the financial sector.” There were two key takeaways in this session. The first is that global corporates doing business in Brazil are demanding the same level of transparency that they currently have worldwide.  The second is that Brazilian corporates are going global and want straight-through-processing for their international payments and receivables, improving working capital management. There are still a number of barriers to overcome for corporates in Brazil such as overcoming cash pooling barriers, foreign exchange controls, restrictions and a high corporate tax burden, but that is not stopping corporates from improving their treasury processes. At the end of the two-day conference, I am convinced that there are significant opportunities in Latin America for technology providers to help banks, corporates and securities firms to globalize, modernize and interoperate across the region and worldwide.  In fact, I had conversations with treasury staff from a Brazilian conglomerate, a global diversified high tech company headquartered in North America, and a global energy and petrochemical firm headquartered in The Netherlands. All of the conversations centered on challenges with efficiently getting information and data from their banks.

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Financial Services and Mobile: What Next?

The past twelve months has been full of market announcements and technology roll-outs in mobile-based Financial Services. I don’t think that I am alone in struggling to keep up with all of the different use case examples, business models and technologies – mobile banking, mobile payments, contactless near-field communications, QR codes, e-wallets, mobile wallets, card reader dongles, apps, mobile invoicing, M-Pesa.  Apart from mobile banking, you probably don’t even remember many of them, and in my opinion this is because they are all fighting against each other to impose themselves in your smartphone. Each one is supposedly designed to be a “game changer” for consumers, merchants, banks or mobile network operators, each offering slightly different benefits and functionality, but with a lot of overlap in functionality. So, it’s maybe not surprising why none of them has been widely adopted yet. The UK Payments Council is overseeing an Olympian project that may, I think, be a game changer for mobile Financial Services consolidation: the UK-wide Mobile Payments project. This top down industry approach is driving the creation of a central database that links UK mobile phone numbers to bank account details. The overall aim is to maintain a bank-neutral proxy framework that will hold mobile phone number and associated banking details. The database will allow UK banks connected to LINK or Faster Payments to launch a mobile payment service, utilising the UK Payments Council database. Personally, I am convinced that an industry-wide technical foundation with a common framework for mobile payments will drive high adoption. Yet, even with the best thought through and widely adopted industry governance, I still wonder if we are ready to drop the habit of visiting bank branches or doing internet banking? And, will the expectation of “always on availability” mean customers are deterred from mobile banking services? Mobile-based Financial Services are built on three key components: a smartphone handset, a mobile network operator and a bank (or closed-loop payment facilitator).  If any of these components is not working or suffering disruptions on a regular basis how patient will customers be? The mobile banking concept is as weak as its weakest point and the last few months may be an indication of what could lie ahead: Point of failure #1: Last week, O2, one of the largest UK’s Mobile Network Operators, had a severe outage across its network for 24 hours, preventing many clients from using either their data or regular 2G/GSM voice service. Of course, everyone has a few hiccups now and then but SME companies couldn’t conclude transactions over the phone or on their mobile banking apps and as a result claimed they had lost business. Point of failure #2: A few days before that, the Royal Bank of Scotland and NatWest had well publicised outage that prevented clients’ current accounts from being updated, and payments weren’t made or received. This is a pretty rare occurrence in the banking industry, but nevertheless, it impacted consumers and companies. Some customers couldn’t complete on house purchases so weren’t able to move house, many Finance and Treasury departments couldn’t submit their payrolls, customers couldn’t check their account balances, or meet standing orders or direct debit commitments. Point of failure #3: A while ago, RIM had a 4-day service interruption on most of their infrastructure, leaving customers without network access, so couldn’t send and receive emails and calls or do instant messaging. Many users were limited to just playing games on their mobile handsets. So, in conclusion, my view is that adoption of Financial Services mobile services is much more likely to get high adoption if the industry players including technology vendors, mobile network operators and Financial Institutions, work together. The example of the UK Payments Council driving a UK-wide foundation layer around mobile phone/bank account database is a good example, and leaves plenty of room for Banks, technology vendors and mobile network operators to create their own value proposition, but one that is based on common standards. Some element of service disruption is a fact of life, of course, and we live with that, but it seems to me that the Financial Services mobile market as it stands today is made of a number of totally independent building blocks stacked on top of each other. I leave you with these thoughts – is this a good ecosystem to execute critical business transactions, to submit or to receive high value instructions?  And, is this something we would want to rely on to drive sector-wide or even nationwide adoption?

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2012 B2B Predictions – So far so good..?

Earlier in the year the GXS team offered their 2012 predictions in the world of B2B and I was asked for my perspective on e-Invoicing and trade finance adoption. We are past the middle of the year now, so let’s take a look at how these predictions are progressing… E-Invoicing Adoption So far 2012 has seen an increase in government mandates. Any companies doing business with the public sector will be required to issue their invoices electronically. The following countries have made announcements this year and will be joining Denmark, Italy, Spain, Brazil, Mexico, etc. Austria 2014 Ireland (PEPPOL pilot) France (PEPPOL pilot) Kazakhstan 2012 Macedonia 2012 Norway 2013 Greece 2012 United States 2013 Both the E-Invoicing Platform and The Accounts Payable Network have produced excellent articles summarising government initiatives. Sadly lacking however is any information from India, which is still undergoing widespread tax reform… so I may perhaps have to wait on that one..! One of my colleagues also predicted an increase in mergers and acquisition activity within the e-Invoicing marketplace. This is certainly playing out with the following key acquisitions so far: Basware’s acquisition of First Business Post SAP’s acquisition of Ariba Trade Finance Adoption There are now over 30 corporates live or implementing the bank payment obligation using SWIFT’s Trade Services Utility (TSU). These companies are spread across a wide industry sector base including manufacturing, retail, raw materials, technology and automotive. 36 banks have also adopted the BPO and a wider 94 banks have adopted the TSU, spread across 34 countries in the Americas, Europe and the Middle East and the Asia Pacific regions. This is a huge increase from 2011 and the trend looks set to continue upward. The initial implementations are predicted to capture multi-millions in savings just through process efficiencies and reduced fees. Talking with SWIFT, they are predicting different business models for the BPO that will make the electronic trade offering more attractive to large corporates. As an example, it has been argued that the majority of BPO benefits are with the supplier and one scenario suggests that the BPO will follow past Letter of Credit trends and be paid for by the supplier. So all in all, it looks like these GXS predictions for 2012 are on track… and with the cost savings and process efficiencies offered by these B2B solutions, it can only be good for businesses and government.

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Benefits of using ASNs (Advanced Shipment Notices)

I continue to be surprised by at how many companies are still not requiring Advanced Shipment Notices (ASNs) from their suppliers.  Advanced shipment notices provide details on the timing, contents and packaging of forthcoming deliveries.  Although ASNs have been around for decades the benefits of these EDI documents are still not widely understood.  In this post, I will examine the benefits to a retailer’s distribution center operations.

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3 Considerations when Upgrading Your B2B Software — A Software-based Approach versus a Managed Services Model

Are you considering another update or version of your B2B integration software?  Is an important customer demanding a new business process that your current software does not support?  If so,… read more → The post 3 Considerations when Upgrading Your B2B Software — A Software-based Approach versus a Managed Services Model appeared first on All About B2B.

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Top 10 B2B e-Commerce Announcements in the First Half of 2012

Although we are only half way through 2012, it has already been a big year for B2B.  There has been more activity in the B2B e-commerce sector in the past six months than there has in the last six years.  There have been two new standards introduced for the automotive and high tech sectors.  Two B2B e-marketplaces and dot com survivors have announced intentions for IPOs.  And two of the larger B2B vendors – Ariba and EasyLink – have been acquired.  Below are the top 10 announcements in the B2B e-commerce sector so far this year.

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Banking on Big Data: So Big, it is in the Cloud.

I came across a joke a couple of days ago, “You know when you really have big data, when if you pile it all up, it is so high that it disappears into the #Cloud”.  I immediately pictured the London skyline, thinking of a few landmarks like Canary Wharf, the Square Mile and the new and latest addition, the Shard. Some of those buildings are already reaching into the clouds and I am pretty sure that the data from the Financial Institutions would too, albeit in a somewhat different dimension.  This set me thinking, what is Big Data really about? Is it just another marketing buzzword adding to the cloud hype that is everywhere? So, here is my take on Big Data.  Let me know if you agree with me or not. The essence of Big Data is to combine more data to make better, more accurate decisions. Data can be sourced within the Bank or from external sources (e.g. a Cloud). The various applications and uses of Big Data may mean very different things in different industries and sectors. For example, logistics organisations may seek to decrease their marginal costs by identifying what to optimise in their business processes at macro or micro level. A retailer may want to better understand consumer behaviour, predict or influence buying behaviours and measure overall client opinion. A wholesaler or supplier may want to limit its exposure to supply chain disruption by running “real time” analytics on various indicators. What are the real applications for Big Data? In the Financial Services industry, Big Data is being seen as a tool in two key areas: to increase the ability to detect and tackle fraud and to identify indicators of market behaviour. Overall I think that the goal is to enable organisations to harness new and more diverse data types, to discover previously unseen opportunities. As a bank, delivering Big Data services to Corporates or a Financial Institution customers would show them better ways to do business, for example, leveraging intra-day analytics of supply chain finance flows across the globe, matching best FX rates opportunities against weekly cash management profiles and offering custom-made sector indicators. Some Hedge Funds are already running Twitter “Big Data” analytics that feed information into their trading algorithms.  The applications are limitless, whether they benefit the bank directly or are embedded within a commercial value proposition from that bank. How does Big Data work? The idea is that new types of information and processing of that new information is now possible.  Information can be derived from much larger sets of data, creating new value when processed and matched, all of which needs “bigger” processing and management capability.  An example of data could be the actual content of business transactions (depending on the applicable data privacy laws), technical logs of communications, infrastructure usage, metadata (e.g. counting the number of data flows against a set criteria), traffic profile variations per region or industry, etc. Big Data is a vision that can simply bring together “local” or “point to point” structured data into meaningful business information. The initial business outcomes as I see it are along the lines of more informed decision-making processes (such as understanding your customer behaviours), which can be verified and correlated against market trends (market intelligence). Where should a Bank begin? Big Data is not necessarily a major step change in any bank’s strategy or product offering; in fact there are plenty of low hanging fruit out there already, in my opinion.  If you look at the amount of data available internally and externally, like any bank’s current processing capabilities or the front-end channels that could support the need for “Big Data”,  I recommend that the first step should be to focus on the targeted business outcomes for the bank or its customers, and then reverse-engineered, one step at the time: What Big Data deliverables could be a game changer for our customer segments? How should the Big Data deliverables be presented to our customer? How could a bank monetize a Big Data value proposition? Which channels are going to deliver the information? Can you derive information out of existing analytics processes and systems? Do you have the data, should you partner with an external source? To what granularity am I allowed to slice and dice such data? To conclude, I would like to acknowledge a few challenges that are barriers to a Big Data strategy. First and foremost, Big Data requires a level of creativity in approach. It requires you to overcome preconceptions about your information assets and technology. Big Data does not necessarily mean “more data” and “more noise” and it shouldn’t be considered only from a technology perspective. Think of Big Data as having been around for years, often derived out of existing business processes or IT systems under the names of Management Information,   Business Intelligence or Analytics – now does it sound a little more familiar?  Have I brought you back down to earth, instead of in the Cloud?

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Top 10 EDInomics Posts for the 1st Half of 2012

Having just passed the halfway point for 2012, I thought I would provide a recap of the top EDInomics posts I have written this year.  The ranking is based upon information gathered from Google Analytics about end-user visits to new posts published in 2012. 

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Will the INOVAR AUTO Directive Increase B2B Adoption Across the Brazilian Automotive Industry?

In my previous blog entry I discussed the current state of the automotive industry in Brazil and how the Brazilian government was keen to develop its own industry once again, whilst at the same time trying to control the level of imported cars to the country.  This blog entry discusses the new INOVAR AUTO Directive in more detail and how this is likely to help stimulate growth and how it will inevitably lead to wider adoption of B2B solutions across the Brazilian automotive industry over the next few years. Curtailing the Increase in Chinese Imported Vehicles The rapid growth of the Chinese automotive industry has led to Chinese car manufacturers looking to expand their operations around the world.  The Brazilian market is a key growth area for them and whereas some companies such as JAC Motors are investing in a new plant, other Chinese manufacturers  prefer to just flood the market with their imported cars.  This is one of the main reasons why the INOVAR AUTO Directive was introduced by the Brazilian Government, namely to protect their domestic automotive industry and the investments being placed into the country by other car manufacturers such as Renault-Nissan and GM/PSA. I will discuss this new directive in a moment. The automotive industry in Brazil has traditionally centred around Sao Paulo however most vehicles are imported/exported via the deep water sea port at Rio de Janeiro. Many of the foreign manufacturers who have established a presence in Brazil have traditionally focused on selling their vehicles into the Brazilian market. Now however other manufacturers are seeing Brazil as a stepping stone into the lucrative North American market as well. This new group of manufacturers includes some Chinese companies who are keen to leverage automotive manufacturing skills in the region. (A new trend seems to be developing here, a BRIC country looking to establish a manufacturing presence in another BRIC country). In addition to Brazil, Mexico has been increasing its marketing activities to the global car manufacturers over the past twelve months and this has resulted in Nissan, Audi and Daimler all announcing that they will be establishing new plants in Mexico with a view to exporting these vehicles across the border into North America.  These three brands sell well in the North American market already however the Chinese brands remain an unknown quantity.  What would happen if the Chinese companies setup plants in Mexico and they didn’t end up getting the sales volumes they were hoping for in North America?  So in this context it makes sense for the Chinese manufacturers to set up plants in Brazil because if their North American sales fail they can then focus their efforts on the South American markets where I believe the consumers will be more receptive to low cost cars such as those produced by the Chinese car companies. Increasing wage rises in the Chinese economy combined with the potential growth in the Brazilian automotive industry makes this an attractive market for Chinese automotive companies. Brazil’s automotive industry had seen strong double digit growth over the last few years and total revenues for the sector amounted to $100billion in 2010.  These figures secured Brazil the fourth position amongst the larger car markets in the world with around 25% of vehicles being imported into the country. Over the last couple of years the automotive industry has started to slip into decline and for this reason the Brazilian government has been very quick to take action by introducing new incentives and more protectionism. The industry in Brazil contributes 5.2% of GDP and this is strongly fuelled by heavy incentives however tighter controls on loans and credit card spending is making it more difficult for consumers to get credit to fund their car purchases. So What is the INOVAR AUTO Directive? The Brazilian government is paranoid about an influx of imported low cost Chinese car brands and in order to introduce stronger levels of protectionism the government now says that 65% of a car’s content should be locally sourced in order for it to be considered ‘locally produced’. If not locally produced then it is taxable as an imported vehicle adding another 30% on the top of the IPI tax rate. The chart to the left from PWC highlights the import/export problem that Brazil now faces. This additional rate of 30% is part of a recently introduced automotive policy called Law7716/2012 (Decree No 7.716, April 3rd 2012) which establishes the “Program of incentive to the technological innovation and densification of the automotive supply chain”, more commonly known as INOVAR AUTO. This policy establishes the 30% point increase in IPI for vehicles sold in Brazil and outlines the requirements for automakers to enter into the program, which will in turn grant them IPI tax credits. This new tax rate is seen as key to having more cars manufactured in country and developing local suppliers which in turn will help develop a long term future and growth for the automotive industry in Brazil. The structure of the INOVAR AUTO Directive and how it will be applied is shown in the table below which was sourced from PWC. From January 2013, the government will be trying to encourage further inward investment by providing a discount in the IPI rate if car manufacturers show that they are investing a portion of their revenues on local R&D. This is crucial for up-skilling the engineers across the Brazilian automotive industry and is key to driving innovation and competitive advantage against the other BRIC countries. In terms of production, it is expected that by 2017, 10 out of 12 production steps must happen within Brazil. Many North American and European based car manufacturers are starting to de-centralise their R&D centres, for example setting up R&D centres in China and India so it only seems natural that they should also look to establish new R&D facilities in Brazil to cater for consumers in this market. To stimulate growth in the automotive sector, the Brazilian government introduced temporary tax cuts in May this year which are worth nearly $1billion. This initiative was also driven in part by investors nervousness about the economy at home and abroad and by Brazil’s currency closing at its weakest level in three years in mid-May. The measures would include a reduction until 31st August in the IPI industrial tax on some cars.  The central bank also agreed to free up 18billion reais in bank deposits in order to boost car financing.  In exchange, banks agreed to increase lending and sweeten terms for automotive financing. In Brazil around 60% of vehicles are purchased with financing. Brazil was regarded until recently as one of the world’s most dynamic emerging market economies, with annual growth of 5%.  But excitement has vanished over the past year as high taxes and the increased cost of labour and other inputs made the country’s industries increasingly uncompetitive. What Does the Future Hold? Based on what is going on in the other BRIC countries, even Russia which I will discuss in a future blog entry, I think the Brazilian government is taking the right steps to encourage growth whilst at the same time protect their industry from other ‘new market entrants’ such as the Chinese car manufacturers. It is inevitable that more Chinese car companies will follow JAC Motors lead and setup plants in Brazil but as with the Chinese government’s strict rules on how foreign car companies can setup plants in their country, so Chinese car companies will have to adhere to the INOVAR AUTO guidelines. If the government is successful at encouraging growth in Brazil then we will inevitably see an increase in consumer wealth as the wider economy picks up as well which in turn will fuel the consumer interest in the premium cars offered by Daimler, Audi and Mercedes. Perhaps this initiative by the Brazilian government is the reason why BMW and Daimler have expressed an interest in entering the market BEFORE the market starts to pick up once again. As the INOVAR AUTO directive starts to takehold across the industry then indirectly it should mean that B2B solutions start to be deployed across more domestic suppliers. So not only does the directive help to develop the domestic automotive supply chain, B2B technologies start to become more pervasive across the industry as well. As many of the domestic suppliers will be relatively new to B2B tecnologies they will need simple to use B2B tools if they are to be encouraged to participate in their customer’s B2B programs. They will also need these solutions to be in local language and any implementation and ongoing support should be in local language as well. As discussed in my earlier blog entry on this subject, GXS has a strong presence in Brazil and we can certainly help companies onboard their suppliers, no matter what their level of B2B expertise may be. Over the past few months GXS has started to work on on-boarding projects for a few Tier 1 suppliers who need to support their customers in Brazil and I would expect this trend to continue in the future. In order to understand some of the challenges with entering a new market, particularly with respect to deploying a B2B platform then you may find the following two part blog of interest, click HERE. If you would like more information on how GXS can assist your B2B project in Brazil, then you can visit our local language website by clicking HERE. So with all this investment in the BRICs, is the automotive industry likely to enter a DOTCOM style bubble? Where over capacity becomes the norm?, this will be the subject of a future blog entry.

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Re-shored, re-shaped and re-emergent B2B?

High Tech, as I’m sure you are aware, is all about the latest cool device. In fact I’m sitting on a plane (again) writing this on just such a device. You are also probably aware that high value electronic devices such as phones and music devices have been the cause of supply chain consternation for some years. Typically they were designed in the West and assembled in the East. As a result all sorts of issues arose, including: demand and supply mismatches, balance of payments issues, cheap labour, child labour, long lead times, exposure to rare earths, copyright, pirate stores, court cases and litigation. Yet despite all of these issues, the Far Eastern production machine appears to power on. Over time supply chains have been redesigned to accommodate this off shoring approach. Purchasing offices have been established in Hong Kong, shipping lines have increased the size of ships as they struggled to provide enough capacity, US ports have expanded and double decker trans-continental trains have been introduced. In addition, distribution centres have been built to accommodate the forward or bulk buy inventory required by the long lead times. In my world of B2B, it created a need for visibility into remote manufacturing and logistics systems so that buyers can see where their stuff is. Or, as it often happens, where it isn’t. So, it would seem obvious that anyone wishing to develop and assemble a new device such as home media player would do so in the Far East. Yet the latest hot device from Google has a curious message stamped on the back. It says, “Designed and Manufactured in the USA”. This new Google wireless home media player, named the Nexus Q, is made in a factory just down the road from Google’s US headquarters. With labour costs having risen tenfold in parts of China, the faster time to market and the close collaboration available by being in the US means “right shoring or re-shoring” is more attractive, and starting to make an impact. I also discovered recently that one of the main reasons for keeping production in China isn’t cost after all, the component supplier network there is simply much better, a well-established network of component suppliers in Shenzhen vs. Sunnyvale. But re-shoring is going to change things. There are clear signs of this change. Caterpillar has pulled production of some models back into the US. A niche luggage manufacturer has established a small plant in the UK rather than ship small empty plastic boxes half way round the world. Lobbying groups in the US are actively counting the jobs that have been re-shored. Recent surveys, particularly by Boston Consulting, have suggested that nearly half of companies with more than $10Bn of revenues are actively considering re-shoring now. Further analysis has shown how re-shoring could change the balance of opportunity within a decade for some goods, possibly creating around two million new US jobs. And they are re-shoring because overseas costs are increasing, the total supply chain costs of Far Eastern sourcing are underestimated, product quality is not as good as it could be and flexibility and proximity to customers are much better if you’re local. So, it would seem that speed and flexibility are the key to the new re-shored, on- shored manufacturing. So that means B2B integration is required. In truth B2B integration has been slow in China because low labour costs help overcome supply chain issues. In high cost North America and Europe much greater level of automation will be required to compete. So hopefully, as we re-shore manufacturing we can on-board the trading partners, such as those Shenzhen based component suppliers I mentioned earlier, and thus maintain connected competitive advantage through B2B integration. We will still need visibility, but let’s have visibility of the parts not just the finished goods. Oh, and wouldn’t a B2B Managed Services solution work well here? Just a thought.

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Replay of the Top 25 Supply Chain Webinar

Two weeks ago I had the opportunity to host a Question and Answer session on the Gartner Top 25 Supply Chains. The questions were developed by a group of 200 supply chain professionals around the world.  The answers were provided by the two analysts responsible for managing the Top 25 selection process – Debra Hofman and Stan Aronow of Gartner.  During the session there was lots of great debate about whether high tech or consumer products will dominate the list going and forward and whether industrial and automotive companies will make a comeback.  The importance of corporate social responsibility, product innovation and brand equity in the rankings were debated as well. 

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How the Brazilian Government Plans to Stimulate Growth Across Their Automotive Industry

Over the past few years I have spent some considerable time looking at automotive industry developments in the BRIC countries. China certainly comes top of mind whenever you mention automotive industry and BRIC in the same sentence and over the past ten years there has been considerable investment in China to make it the automotive powerhouse that it is today. In India it is much the same story with global car companies keen to leverage low cost production with a very skilled base of engineers and production workers located in the country. I discussed the Indian automotive industry in another recent blog entry. Consumer wealth in both China and India has grown exponentially over the past few years and more and more consumers in these countries are demanding premium level vehicles such as BMW, Audi and Mercedes cars.  In fact China represents the fastest growing premium market in the world at the moment.  But what about Brazil and Russia, how are these countries fairing at the moment?  For the purpose of this blog entry I will take a quick look at what is going on in Brazil. The Automotive Market in Brazil Brazil is unique in the automotive industry as its domestic manufacturers have come and gone over the years and its entire automotive industry, from a car production perspective, is more or less based on foreign owned car manufacturers. The reason for the demise of the domestic automotive industry in Brazil is due to the consumer’s interest for foreign brands which they perceived as being higher quality than those offered by the local car manufacturers. In the past, Brazil’s domestic manufacturers have included Romi, Miura, Puma, Gurgel, TAC Motors and Troller. Troller, a 4×4 SUV manufacturer, was widely regarded as one of the last Brazilian based vehicle manufacturers and they were acquired by Ford in 2007, this gave Ford a valuable foothold into the Brazilian market. The Brazilian automotive market can be broadly split into three tiers of car manufacturers – Tier 1 – VW, Fiat, GM and Ford with 74% market share Tier 2 – Renault, Honda, Hyundai, Toyota, PSA with 20% market share Tier 3 – Remaining 6% market share across other car brands In 2011 the market share of the Tier 1 car manufacturers were as follows:- Fiat at 22.56%, VW at 22.13%, GM at 19.97% and Ford at 9.21%.  Toyota and Nissan meanwhile have just over 2% each of the total car market.  I took a quick look through the Top75 cars sold in Brazil during 2011 and there were no premium cars such as Mercedes, Audi or BMW being sold at all, apart of course from those few which were specially imported.  The best selling cars in Brazil are small/compact size cars and even though these models are basic in design, they are still relatively expensive, even if they do only have engines ranging from 1.0 to 1.4 litres in size. The Tier1 car manufacturers were some of the first foreign owned car manufacturers to enter the Brazilian market and this has certainly given these companies significant market share, in fact Brazil represents one of Fiat’s strongest markets outside of Italy. There is always a fine balance of making sure production levels are in line with sales levels and Brazil is no different. However as with any other country Brazil needs to control the expansion of its automotive industry to try and minimise excess capacity and ensure efficient plant utilisation. The consultancy firm PWC undertakes a number of regional analysis of the automotive industry and last month they released their latest forecast for Brazil which are shown in the graphs below. Recent Inward Investments Across the Brazilian Automotive Industry Over the last couple of years Brazil has seen significant interest from many manufacturing companies who want to establish a presence in the country. As there are no domestic manufacturers left in Brazil and unlike in China where the government insists that all western companies looking to setup a plant in China must form a joint venture with a domestic manufacturer, foreign companies entering Brazil are able to establish a wholly owned plant in the country. To encourage the development of the automotive supply chain in Brazil, the government has introduced a new directive which highlights the amount of tax credits that can be obtained by increasing local parts sourcing. I will discuss the new INOVAR AUTO Directive in more detail in my next blog entry. In addition to foreign owned car manufacturers entering Brazil, their key tier 1 suppliers are having to follow them into the country as well, putting added pressure on the supply chain in terms of suppliers being able to support their customers anywhere in the world. The introduction of the INOVAR AUTO directive is widely seen as being the main reason why there has been a flood of inward investment into the Brazilian automotive market in order to avoid the expensive 30% import tax.  There have been some long established investments in Brazil and in recent months there have been a number of announcements from the major automotive manufacturers. For example BMW and PSA have a joint venture in Brazil to manufacture engines for their respective brands and this partnership has been running successfully for many years.  At the moment BMW does not have their own plant in Brazil but with the market expected to grow significantly over the coming years and consumer wealth likely to increase, BMW is now contemplating building a plant in Brazil. The news that BMW is thinking of establishing a manufacturing a plant in Brazil was announced on 2nd July 2012. Perhaps given BMW and Toyota’s strengthening partnership, announced last week, they should consider building a plant together in Brazil. GM’s recent stake in PSA may well put an end to the BMW/PSA partnership and GM has recently announced that they plan to build a new $1.5billion factory with PSA to build small cars for the domestic market. The plans to build the new plant in Minas Gerais or Rio de Janeiro were announced in May, CLICK HERE, and the plans are expected to be confirmed shortly. GM also announced in April this year that they would be building a new transmission plant with 50% of production going towards locally built GM cars and the remainder would be exported to support their plants in Europe. Last November the Chinese car manufacturer JAC Motors confirmed their plans to build a new plant in the North East Bahia state of Brazil. JAC Motors is one of the top ten manufacturers in China and assuming JAC can produce at least 65% of JAC models sold in the country then they will be in a position to avoid the 30% import duty once the plant opens in 2014. More information on JAC’s plans can be found HERE In October last year Renault-Nissan announced that they would be building a new plant in Resende about 56 miles from Rio de Janeiro.  This new $1.5 billion plant will manufacture Nissan branded vehicles and the group will also expand its main factory in Sao Jose dos Pinhais where Renault branded vehicles have been manufactured since 1998. Renault expects Brazil to become their number two market outside of France.  More interestingly, if BMW moves into the market then Daimler will be able to use their alliance with Renault-Nissan to enter the market as well at a later date. Also last October, VW announced they would be investing in a new $2billion factory in the North East town of Cabo de Santo Agostinho.  The factory will produce more than 200,000 vehicles a year and once again this will help VW to get a stronger position in the Brazilian market and contribute towards their overall goal of becoming the world’s largest car producer. Even the South Korean car manufacturers are entering the market with Hyundai  announcing  that their new plant in Brazil would be operational by September 2012.  Hyundai plan to manufacture compact cars with one litre engines at the new plant in Piracicaba near Sao Paulo. South America is the last big region where Hyundai, the world’s fourth best selling car making group, do not have a plant. So as you can see from these few announcements the automotive industry in Brazil is at the start of an exciting period of growth. Extending supply chains and B2B platforms to support trading partners and operations in Brazil can be a daunting challenge for many companies. However partnering with a global provider such as GXS who have a strong footprint in Brazil can certainly remove the complexities of conducting business in this particular market. Late last year I wrote two blogs about what to take into consideration when expanding a B2B platform into an emerging market and you can read the first of the two part blog entry by clicking HERE. In my next blog entry I will discuss what the INOVAR AUTO Directive actually is and why it was recently  introduced by the Brazilian government.  

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CIAB FEBRABAN: More Differences than Similarities in Brazilian Banking Technology?

I recently attended CIAB FEBRABAN (roughly translated as Congress and Expo of Information Technology) sponsored by FEBRABAN, the Brazilian Federation of Bank Associations, in Sao Paulo Brazil. The theme for the 22nd edition of the conference was “The Connected Society.” Like many conferences, the event consisted of educational sessions along with an exhibition hall. As I can barely say “good morning” (bon dia) and “thank you” (for a woman, obrigada) in Brazil’s national language, Portuguese, I did not attend any of the educational sessions. But the session themes were similar to those from recent US financial services events—innovation, cloud computing, information security, mobile technologies, social media and big data. Just about every technology solution used by commercial banks was represented in the exhibit hall. Hardware vendors displayed ATMs, cash counting machines, card readers, image capture scanners, data centers “in a box” and security devices. Software providers presented integration services, core banking systems, mobile online banking, ATM driving software, business intelligence and payment hubs. Service providers discussed business process outsourcing (BPO), data center operations, application development and call center outsourcing. Many of the vendors were leading global providers such as IBM, Microsoft, HP, EMC, SAS, SAP and GXS. But in talking with Brazilian bankers and service providers, they stress the uniqueness of the Brazilian financial services landscape. Looking across the solution set, I believe there are more technology similarities than differences. One example is integration services. When GXS expanded its presence in Brazil with the 2009 acquisition of Interchange Serviços S.A., GXS already had a market presence with its business-to-business (B2B) e-commerce solutions. Interchange was one of the largest in-country providers of electronic data interchange (EDI) services and its customers included more than 50 banks. GXS Brazil banking clients use the same types of managed integration solutions that GXS provides to more than 250 financial services firms around the globe. The technology differences in Brazil evolved from a period of hyperinflation driving improvements in transaction processing speed, standardization of consumer invoicing (Boleto Bancário) and payment processing, and a need to support social welfare programs. In response, companies like GXS developed financial portals that manage collections, payment receipts and payment file validation for corporate clients. We were also a pioneer in the development of a “Correspondente Bancário” (CORBAN) solution for capturing, processing, authorizing and managing consumer payments made at banks, merchants and post offices. The key take-away from attending my second CIAB FEBRABAN conference is that the Brazilian financial services sector is well-served by established hardware, software and services offerings from global providers. However, providers also need to take into consideration some of the unique characteristics of the Brazilian financial system when developing solutions for this increasingly important geographic region.

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Can Anyone Dethrone Apple from its #1 Ranking in the Supply Chain Top 25?

Last week I had the privilege of moderating a webinar with two of the key Gartner analysts – Debra Hofman and Stan Aronow – responsible for the Top 25 Supply Chain rankings.  As you have probably heard by now, Apple was ranked #1 on the Top 25 list for the fifth year in a row.  This should not be surprising given Apple’s product innovation, brand strength and supply chain prowess.  But it does beg the question – Can anyone dethrone Apple from its position atop the rankings?  Even the likes of P+G, Walmart, Dell and Cisco, each long admired for their supply chain excellence, seem unable to overcome Apple’s lead.  During the webinar there was some interesting debate about Apple’s position and how long it could retain its advantage.  Below are the notes that I captured from the discussion.  These statements are paraphrased (versus exact quotations), but will give you a sense of the issues.

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HMRC Clarify UK e-Invoicing Guidelines

Last week HMRC released a technical note that explains the proposed forthcoming modifications to the existing UK VAT invoicing rules, reflecting the changes introduced by the EU Council Directive 2010/45/EU. Before I give my perspective, perhaps a little paraphrased pre-amble from HMRC will establish their position; “ The changes assist business by removing or largely reducing current VAT obstacles to the use of electronic invoices, simplifying a number of existing VAT invoicing requirements and removing some existing administrative burdens associated with VAT invoices… …The aim is now to have a consistent set of rules that will be uniformly applied across the EU, making things simpler and removing uncertainty for businesses. “ So far, so good. “ …the existing EU rules for electronic invoicing allowed individual member states to impose additional conditions on taxpayers wishing to use electronic invoicing to those imposed on taxpayers using paper invoices. This includes the requirement to use specific technologies such as electronic signatures and Electronic Data Interchange (EDI) as a means of ensuring the authenticity of origin and integrity of content of the invoice… The UK has not opted to impose any of these additional conditions for electronic invoicing of goods or services supplied in the UK…,” Ok, so the new EU rules do not allow the UK to impose a specific method for guaranteeing the authenticity and integrity of an electronic invoice. In truth, the existing UK rules are flexible as they indicate that digital signatures and EDI are two compliant methods and that a third option, ‘any other means’ was also possible; an advanced electronic signature; electronic data interchange (EDI); or any other means for supplies within the UK. What exactly is ‘any other means’? As described by HMRC… “ …the authenticity of the origin and integrity of the invoice data are guaranteed… as long as you are able to impose a satisfactory level of control over the authenticity and integrity of your invoice data… “ OK, I digress. Let us continue. “ …but such a requirement remains a possibility in the case of intra-Community transactions, where another member state may require an electronic signature or EDI as a condition of accepting the invoice. For this reason the current UK law includes the options of electronic signature and EDI…” Well this is smart, as some countries have different thoughts on compliance, and France for example has clear rules for electronic signatures and EDI. “ …The fact that many member states do impose the requirement to use electronic signatures and EDI has the potential to make the use of electronic invoicing less attractive to business and the differing requirements and rules across the EU is a recognised obstacle to the wider use of electronic invoicing…” Maybe – maybe not. Spain, Germany and France (and the UK) all use these methods and seem to be doing ok. The Nordic countries are the most successful, but it is not clear if the liberal tax regulations there have provided impetus for adoption, or government mandates or B2C adoption by banks. “ …Under the new simplified rules individual member states can no longer impose conditions in relation to the use of electronic invoices. Instead, it is for an individual business to determine the method used and the only condition imposed is that the customer must agree to the use of electronic invoicing. In this sense, paper and electronic invoices are now treated equally… ” Great! e-Invoices are now treated the same as paper and business now get to determine which method they want to use (didn’t they already?). This is really going to help increase adoption! Ok, what are the methods from which a company can choose? “ …The method used to ensure the authenticity of origin, the integrity of content and legibility of the invoices is a business choice and can be achieved by any business controls which create a reliable audit trail between an invoice and a supply of goods or services. ‘Authenticity of origin’ of an invoice means the assurance of either the identity of the supplier or the issuer of the invoice. ‘Integrity of content’ of an invoice means that the content required to be shown on an invoice has not been altered… ” Brilliant! What are the common methods for achieving this..!!? “ …UK legislation will be amended to remove the electronic invoicing and EDI requirements and make it clear that the choice is one for business to make… ” Wha..? Hang on a minute… So, to make things clear for businesses HMRC is removing the two most established methods of guaranteeing authenticity and integrity from its guidelines? Ok, Wait a minute, let’s step back a statement or two… how do I now prove authenticity & integrity? “ …any business controls which create a reliable audit trail between an invoice and a supply of goods or services… “ Alright! That seems pretty straightforward… but what are ‘business controls’? I checked through the technical note, only to find a single reference to the word ‘controls’, and that is in the sentence above. Maybe I should check the existing UK regulations and see what they say; “ In order to establish the authenticity and integrity of your electronic invoicing you will need to be able to demonstrate that you have control over the: completeness and accuracy of the invoice data; timeliness of processing; prevention or detection of, possible corruption of data during transmission; prevention of duplication of processing (by the recipient); and prevention of the automatic processing, by the recipient, of certain types of invoice on which VAT may not be recoverable – for example, “margin scheme” invoices. Additionally you must: be able to demonstrate that you have a recovery plan in case of a system failure or loss of data; and maintain an audit trail between your electronic invoicing system(s) and the internal application system(s) that are used to process the electronic invoices. “ Seems pretty straightforward… So, if I am ever audited, what e-Invoicing method can I use that guarantees my company will not be penalised? Well, I can think of two… EDI and electronic signatures… OK, so I am being facetious an perhaps a bit too hard on HMRC as their intentions are honourable, but by removing the two most commonly used methods from the rules, even as examples, they have described less tangible evidence as to what constitutes authenticity and integrity. Section 4.8 of the existing UK rules already referenced HMRC’s desire to not be too overly prescriptive and a preference for ‘good business practice or businesses’ own controls’, so unfortunately, without providing examples of solutions such as EDI that do provide compliance, how are companies ever going to be 100% sure? It seems to me the new changes clarify the UK rules to the point of translucence… …and just to add insult to injury, section 2 of article 233 of the new EU directive states; 2. Other than by way of the type of business controls described in paragraph 1, the following are examples of technologies that ensure the authenticity of the origin and the integrity of the content of an electronic invoice: (a) an advanced electronic signature within the meaning of point (2) of Article 2 of Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures*, based on a qualified certificate and created by a secure signature creation device, within the meaning of points (6) and (10) of Article 2 of Directive 1999/93/EC; (b) electronic data interchange (EDI), as defined in Article 2 of Commission Recommendation 1994/820/EC of 19 October 1994 relating to the legal aspects of electronic data interchange, where the agreement relating to the exchange provides for the use of procedures guaranteeing the authenticity of the origin and integrity of the data.

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Circles for B2B

One of the features I like most about Google+ is the concept of circles.  Unfortunately, although millions of people have joined Google+ the activity levels are still very low as compared to other social networks.  Even though the concept of circles has not been successful in the consumer space, I think there is a great applicability for the concept in the Business-to-Business (B2B) e-commerce sector.  If companies segmented their various business partners into “circles,” it would then be much easier to apply policies to govern the business processes and service levels for each group. 

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Why Would You Use a Cloud Service Brokerage?

The advent of cloud computing has led to a number of new, innovative business models being introduced to the B2B integration sector.  In earlier posts, I described the concept of Integration Platform as a Service or iPaaS.  In this post, I will discuss the concept of a Cloud Service Brokerage.  The term is widely misunderstood, but the concept is actually quite simple.  I have found the best way to understand the value of a Cloud Service Brokerage is to discuss what life would be like without one.

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What is Fuelling the Growth in Next Generation Cloud B2B Environments?

Over the last few years the growth in internet based e-Commerce and development of cloud based services and social networks has really been driven by four companies, Google, Amazon, Apple and Facebook.  Sure, there have been a whole raft of other companies who have developed consumer friendly websites and ‘Apps’ that helped to exploit the growing consumer interest in using social networking type tools, but these four companies did all the original ‘groundwork’ and laid the foundation for platform based environments. In fact you could argue that the afore mentioned ‘platforms’ have helped to drive enterprise adoption of the platform concept as more and more employees bring their own tablets for to work and request to connect their devices to corporate network resources. The Bring Your Own Device (BYOD) approach to enterprise IT, is literally starting to change the IT infrastructure strategies of CIOs all around the world.  In fact Apple expects to see significant revenue growth in 2012 from the BYOD movement and this has potentially opened up a lucrative new revenue stream for Apple.  Not bad for a company that has hardly spent any money on promoting their devices to Corporates, they have simply allowed the BYOD movement to the talking on their behalf! BYOD does bring some problems, namely how do you ensure security of your network based assets, well Cisco and others are starting to layout their plans for how companies should be embracing BYOD on their networks, here is Cisco’s view of the world. You could argue that consumer based IT is moving at a much faster rate than enterprise IT at the moment and it is surprising what spec of PC or tablet device you can pick up today from your local PC store, you can almost be certain that due to the IT buying cycles of companies, many of the devices found in PC shops will be way ahead, in terms of spec, of PCs waiting to be deployed across countless companies around the world.  Sign of progress I guess! So the one thing that has made Apple’s approach a success and more recently Facebook, Amazon and Google is their focus on building out a platform based environment, on to which developers are then able to build countless apps that can do a multitude of different tasks. iTunes could potentially offer the future model that Corporate IT departments will be looking to take with the design of their future IT environments, or should I say enterprise platform environments.  Apple’s App store has been a resounding success, offering thousands of apps at relatively low cost.  Does this really provide the template for developing future enterprise IT environments?, I certainly believe so, especially bearing in mind the sheer number of PC, mobile and tablet type devices that will need to be supported in future IT environments. Being able to login to a ‘Corporate App Store’ is something that I discussed briefly in an earlier blog entry. In fact looking back through my older blog posts it was back in July 2007 that I posted a blog on how the Apple iPhone could change the way in which EDI was conducted. My colleague Steve Keifer also posted a blog along similar lines. Since then the emergence of the platform environment has changed the way in which we not only deploy applications but how we can use them as a foundation for building a bespoke IT or potential B2B environment from a series of apps. Some of these apps being standalone and others being interconnected to provide the business functionality that a company will require. Facebook, Apple, Amazon and Google have developed consumer focused platforms for deploying their services but what is happening in the enterprise space?  Of the four platforms mentioned earlier, Google seems to have made more traction than the others with deploying their platform into business environments. In fact Google Mail and Google Docs is used by many corporates already, so it is only a matter of time before Google gets a stronger hold on the market.  Apple, through BYOD, will gain traction as CIOs become more curious as to how they can embed their devices and iTunes app store functionality into their business environments.  But what about the more traditional enterprise software and services vendors such as SAP, Oracle and GXS? Well there has been no shortage of press releases in recent months from SAP who continue to build out their cloud strategy, the latest being their proposed acquisition of Ariba to help improve connectivity with external business networks. Oracle recently started to retaliate to SAP’s Cloud marketing activities by outlining their own Cloud intentions, but so far I have not seen anything that clearly defines how these companies will create a truly enterprise worthy ‘platform’, in the mould of the four I mentioned earlier. Well GXS has one of the world’s largest cloud integration platforms already, called Trading Grid and as it was introduced in 2004, it is more established than some of the more consumer focused platforms that I mentioned earlier.  We certainly regard Trading Grid, in cloud terms, as a Platform as a Service based environment, but it is a lot more than that.  Our platform is not only used for exchanging electronic business transactions, it also plays host to numerous instances or examples of hosted integration services. Whether integrating to a back office ERP environments such as SAP or Oracle or providing integration to other business applications. A new term called iPaaS, Integration Platform as a Service, is providing much excitement for many CIOs around the world as it will potentially help to provide the enterprise equivalent of the consumer platforms that I mentioned earlier in this blog entry.  The ability to host a corporate app store, where employees, based on their role in the business, could download business focused apps to allow them to go about their work on a laptop, tablet or other form of mobile device. Alternatively being able to take a number of apps and use these as building blocks to developing more powerful business applications.  All integration mapping etc or external comms requirements would be preconfigured within the apps, you would simply download and use the platform to host these apps. So for example a company may need to develop a new logistics platform for connecting to trading partners in China.  You could download the Inventory Management App, 3PL App with preconfigured customs and border control integration and a Shipment Tracking App that will provide true end to end visibility via a graphically illustrated, possibly Google Earth based, supply chain map. These three apps would be seamlessly connected already, you simply download and then undertake some brief configuration or setup procedure to link with your own logistics providers. As the platform is hosted in the cloud it means that you can get access to your apps anytime, anyplace and anywhere, which is important if you want to ensure full supply chain participation from your Chinese based suppliers. More importantly, as you have had to spend less time building the environment you help to free up internal resources, both people and hardware, which can then be redirected onto other more meaningful projects. I believe this enterprise platform approach will be of interest to many CIOs and Supply Chain Directors in the future but the big four platforms mentioned earlier is driving interest amongst CIOs NOW!  Trading Grid already allows over 400,000 businesses to exchange business documents electronically each year, imagine how an iPasS approach could change the way in which these companies work together in the future. More on the iPaaS concept in a future blog entry.

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