April 2003 | Commentary | Checking In

Stirring the Pot

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I love making chili and am always amazed at that point in the pot where individual ingredients coalesce into something new and wonderful. While cooking up this issue, we saw the beginnings of a similar trend in logistics IT.

Business IT solutions running down functional silos to the heart of an enterprise—purchasing/SCM, TMS, WMS—are now meeting in the middle, blending the functional information flow and coalescing into something new and wonderful. Companies are moving past adopting those silo information streams to adapting them for enterprise-wide use.

If there is a continuum for adopting IT solutions, then adapting those solutions to a company's specific needs surely follows. When adaptation of functional IT solutions reaches a critical mass, the return to enterprise-wide "solutions" is inevitable. The past three years showed that many seeking IT solutions shied away from end-to-end solutions, electing instead to adopt single function solutions. Are they now moving back to the enterprise?

To find out if we are headed there, let's consider where we have been.

In the past decade, companies faced the complex task of integrating logistics IT with business strategy. In our supply-chain world, true end-to-end control and operations have been difficult to achieve, except for perhaps Wal-Martians. Why? Several reasons:

  • End-to-end solutions were imposed from above in an autocratic way. This is how systems are sold because that's how companies are organized. Complex enterprise solutions were forced upon or sold to middle managers who had operational responsibility and control of enterprise functions. Middle managers closest to the problem sometimes rebelled against the imposition of solutions from the top. They were the ones with the job on the line when things failed. In some cases, despite a top-down solution in the works, many middle managers sought functional solutions such as TMS or WMS to get their job done.
  • Solutions providers often had to hit a moving target as companies changed while undergoing implementations. There was rapid movement on the IT side as well, as we tried to keep up with a dizzying array of new developments. Newer enterprise technologies and platforms undermined newly installed solutions. Costs were high as well, both in treasure and time. Then the economy crashes and there you are.

So, given the challenges to enterprise-wide implementations these past three years, few were willing to start new enterprise initiatives. There was a shared belief that end-to-end solutions would create more wealth than functional ones, but the impediments for many were too great. The adoption of functional solutions filled that vacuum.

The convergence and adaptation of these silo IT solutions for uses outside traditional silos can create a de facto real-time enterprise IT solution; not imposed from the top down but evolving from the bottom up. If there is to be a broad-based movement back to end-to-end enterprise IT solutions, it will be a grass roots movement. That movement is already underway.


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