Reaching Outside the Enterprise

The shift to growth-oriented initiatives is causing companies to reach outside the enterprise to collaborate with others in their supply ecosystem. This multi-enterprise collaboration (MEC) is the technique by which organizations are able to progress along the path toward visible business. Its components involve the availability, analysis, and application of information to generate worth. In recent articles, we provided examples of MEC in action in the supply chain. Here, we turn our attention to the challenges of making MEC a reality for your organization.



MEC ISN’T ALWAYS POSSIBLE

As promising as MEC is, and as many MEC opportunities as there are, there are a corresponding number of obstacles. The reality is that some information that is needed by one enterprise is considered highly confidential by its source. This is easily understandable.

However, there will be cases where the information that is needed has no associated security concerns, and yet, the source will still not provide it to the enterprise that needs/wants it. There are two logical explanations. First, the source of the information may not receive any benefit from providing the information to the “needy” recipient. Because the effort to make information available has some opportunity cost associated with it for the source, there is no incentive for them to allocate resources to this effort because there’s nothing in it for them.

The second occurs if the “needy” enterprise has no leverage over the source—in order to incline them to provide the desired information. If both conditions exist, the MEC opportunity will never be realized.

Below is a MEC Likelihood Assessment Table [Figure 1] that can be used to determine the viability of a MEC opportunity. We begin with the question “Is there information that if (1) made available in a timely manner, (2) analyzed efficiently, and (3) applied effectively would benefit you and/or others in your supply ecosystem?” This identifies the initial MEC opportunity.

For the information identified, we then enter it in the table and complete the remaining entries. Who has the information? Who needs it? Who benefits from the information being made available, analyzed, and applied effectively to the business? Who has leverage in the trading relationship? In situations where the company that has the information will benefit from providing it and/or the company needing the information has some degree of leverage over the source, the MEC opportunity is more likely to occur.

The absence of one or both of these should cast serious question on whether or not the source could be convinced to participate in the collaboration. In such cases, ponder how else the information might be analyzed and applied to the trading relationship in such a way that it might generate worth for the source. By highlighting a compelling value proposition for the source, the recipient increases its likelihood of getting buy-in and participation from the source.

If you find a potential opportunity that suffers from lack of leverage or a compelling value proposition, let it go. There are plenty of additional areas where MEC practices can be applied where you will find sources that are more than willing to participate.

FUNCTIONAL IMPLICATIONS OF MEC

Of course, visible business doesn’t just happen. It requires the ongoing application of MEC techniques to key opportunity areas within your supply ecosystem. As we’ve seen, sometimes those areas of opportunity involve your customers, service partners, multiple external entities, and other units within your own company.

But, unlike internal improvement initiatives, MEC has its challenges because it involves multiple disparate entities—not just those within a single unit. For example, practicing MEC means that you will encounter variations in partner:

  • Company types, sizes, preferences, inclinations
  • Capabilities, business practices, requirements, goals
  • Connectivity, formats, information requirements, and systems with which to interact
  • Business rules, processes, policies, etc.

But, as varied as each circumstance will be—and as many variables as there will be to address within each circumstance—there is consistency in any MEC initiative. It involves making the right information available, efficiently analyzing it, and then, effectively applying the results of that analysis to deliver the benefits you seek. By positioning yourself to effectively address a wide variety of situations when trying to facilitate the availability, analysis, and application of critical information, you set the stage for widespread, successful MEC.

Of course, there are many ways that you can make information available, analyze it, and apply the results of that analysis as business actions. So, let’s look at each of MEC’s components and explore these variations, because every company wanting to launch MEC initiatives will need a toolset capable of addressing the many variations they’ll encounter along the way.

At the highest level, there are three possibilities when it comes to making information available, analyzing it, or applying the outcome of the analysis to the business. You can accomplish it with humans, technology, or a combination thereof. Of course, we’ve long known that humans are slower, more error-prone, and more expensive than technology in the handling of information if (1) the steps to be executed can be defined and are repeated enough to warrant automation and, (2) the information to be handled can be made available in a form that technology can use.

However, in most cases, there will come a time in the process where the analysis to be performed or the actions to be taken can only be handled by a human. For example:

  • The analysis of the information requires subjective analysis based on the experience that can only be provided by a human.
  • A decision about what action to take requires the judgment call of a qualified authorized individual.
  • The action(s) to be taken require human-to-human contact.
  • The analysis has uncovered a condition that had not been previously defined. It will take a human to determine what actions should be taken.

As a result, every effective MEC solution will provide both technological and human interfaces to best accommodate the predictable need to involve both elements in the process. Looking at each of the components of MEC with respect to the variations you will encounter and keeping in mind the need for both human and technological interfaces, we see the following challenges for any MEC toolset:

Availability

This component speaks to those aspects of MEC that obtain the information from its source and present it to the point of use. Your MEC solution(s) must be able to accommodate the many variations that will surface in answering the following questions:

  • From what or whom will the information be obtained?
  • How will we interact with the source to obtain the information?
  • In what form/format will it be obtained?
  • From where and to where must it be moved?
  • How fast, secure, cost-effective must that information movement be?
  • What are the technical requirements for communicating with the source of the information and the next destination for the information?
  • To what or whom must the information be made available for use?
  • In what form/format must the information be presented to the next point of use?
  • How will we interact with the point of use to provide the input it needs?

Analysis

This component speaks to those aspects of MEC that ask questions of the information being provided. These questions can include comparisons, evaluations, calculations, validations, etc. The component also includes timing, order, resources involved, and the conditions governing all of the preceding. The MEC solution(s) you select must be able to accommodate the many variations that will surface in answering the following questions:

  • What worth-generating actions do you intend to trigger as a result of the analysis?
  • Therefore, what questions must be asked of the information that needs to be analyzed?
  • In what order must these questions be asked?
  • What resource will ask these questions?
  • Are there conditions that will alter the order of questions to be asked and/or the resource to ask them?

Application

This component speaks to those aspects of MEC that trigger and perform the actions that apply the results of the analysis in such a way that they generate value. The component also includes timing, order, resources involved, and conditions governing all of the preceding. The MEC solution(s) you select must be able to accommodate the many variations that will surface in answering the following questions:

  • Which conditions will trigger which actions?
  • Are there timing facets to each action (e.g., must be performed by…; should not be performed after…; etc.)?
  • In what order should the actions be performed?
  • What resource(s) must perform the action?
  • Are there conditions that will alter the order of actions to be taken and/or the resource to execute them?

ACKNOWLEDGING THE COMPLEXITIES

In contemplating the many variables in your supply ecosystem, recognize that there are—and will continue to be—many variations that you will encounter. The different organization sizes and types with which you’ll need/want to collaborate will influence how you’re able to do so. Different systems, capabilities, processes, procedures, policies, preferences, requirements, etc. will make it nearly impossible to interact with all of the partners in your supply ecosystem in the same way.

The challenges (discussed in the previous section) that are associated with the functional questions tied to each MEC component are amplified by the many variations you will encounter as you venture further and further into your supply ecosystem. These will require that your MEC solution be very robust in its ability to address and adapt to many varied requirements and approaches.

But, flexibility of initial configuration is not the only area where flexibility is important with MEC. Ongoing changes in the world in which you must successfully operate will require that the most appropriate solution also be one that can be changed as the world around you changes. Consider the following areas where we can be confident that the future will bring new surprises with which we will have to deal:

  • Changing business environment (industry consolidation, regulations, off-shore outsourcing….)
  • Changing customer requirements
  • Changing competitive landscape/practices
  • Changing business processes
  • Changing internal strategies/tactics
  • New industry initiatives
  • New standards
  • New technologies

From this, we can surmise that what we know and do today will have to continue to morph over time to adapt to the world in which we’ll have to conduct business tomorrow. This means that the toolset we choose today must be flexible, agile, modular, scalable, and customizable enough to see us through the rollercoaster ride that we know will be our future. The reality is that this ongoing competitive evolution is essential if we hope to remain relevant to our customers. Consequently, the tools we put in place today to enable our MEC initiatives will need to be able to evolve with us.

ADDRESSING THE COMPLEXITIES

So, then, what are the implications for an MEC solution that one might use to effectively address these many variations? Clearly, the solution will need to be:

  • Flexible, to address many varied approaches/requirements
  • Agile, to allow us to respond in a timely manner to opportunities and/or demands
  • Modular, to allow us to (1) reuse prior work and generate economies of scale and (2) add the required functionality when it’s needed rather than having to acquire an entire strategic package containing more than is needed right now
  • Customizable, to go beyond the capabilities of traditional packaged software
  • Scalable, to grow with you and provide the future bandwidth that will be needed as your approaches become more sophisticated and involved and you begin to collaborate with more of the partners in your ecosystem.

The most appropriate MEC solution will allow you to:

  • Personalize interfaces to information to meet the needs of individuals.
  • Tailor processes and functions so you can use your particular approach to MEC as a strategic differentiator.
  • Modify processes to adjust to a changing world of competition and unique customer requirements.
  • Expand to include additional users, business units, partners, functionality, etc.
  • Secure the information and user access at the levels that are most appropriate…providing you with conditional options for setting security.
  • Integrate with existing applications, data stores, user interfaces, other technologies, etc.
  • Control functions, their execution, the order of execution, the conditions under which an event occurs, etc.
  • Audit any desired functions to identify failures, log activity, provide reporting, etc.
  • Support the solution on a single architecture, with a single management dashboard, without the complexity and inefficiency of having to manage numerous, non-integrated point solutions.

IN SUMMARY

Making the right information available at the right place at the right time in the right form, analyzing it to identify actionable conditions, and triggering and executing worth-generating actions carries with it many challenges when you consider the myriad of different entities with which you will find yourself collaborating. The answers to the questions raised under each of the MEC component categories carry with them a host of variations to be addressed. In Part IX, we’ll look at how an MEC solution can most efficiently handle these complexities while still achieving economies of scale and lowering total cost of ownership.

About the Author

John Stelzer is Director of Industry Development for Sterling Commerce. Since 1984, he has been providing education and consulting on electronic commerce—to date, educating more than 27,000 professionals from over 16,000 companies. For more information on electronic commerce in the retail industry or data synchronization specifically, John can be reached at 614.793.7046 or john_stelzer@stercomm.com

More by John Stelzer

About Sterling Commerce

Sterling Commerce is one of the world’s largest providers of business integration solutions. For more than 25 years, thousands of companies have depended on Sterling Commerce expertise to optimize collaborative relationships through the integration of applications, external partners, suppliers and customers. With more than 25,000 customers worldwide, Sterling Commerce is the dominant business integration solutions provider in retail, consumer packaged goods, manufacturing, financial services and telecommunications.