What “Digital Business” Means for your Business
Q: You recently attended your 11th Gartner Supply Chain Executive Summit. This year the key theme was Digital Business, a core ingredient for supply chain transformation success. What is Digital Business?
A: Digital Business is a concept that encompasses the people, processes, and enabling technologies of the supply chain of the future. It all starts with the right data foundation, and since 80 percent of the data required to effectively manage a supply chain originates outside your company, it is also about establishing effective supply and logistics networks. These networks offer visibility that is par for the course nowadays, and increasingly support advanced collaborative processes with your partners to improve product design, address quality issues, eliminate bottlenecks, and lower cost to serve.
Collaborative applications define new business models and can unlock new sources of value in areas like agility, cost reduction and risk management. Digital Business is all about integrating the value chain to realize a constant stream of operational data and transform it into balanced, end-to-end metrics that improve decision making. Success in the future is not about applying the same old ERP batch process mentality to every new supply chain challenge. Instead, companies are leveraging cloud technologies to build the right foundation for innovation.
Q: What collaborative applications are being prioritized?
A: Companies are increasingly focused upstream—to address design and quality issues at the source and ensure alignment with supply chain segmentation models. Supply chain strategy starts with the customer and this alignment is critical to producing a product that meets customer needs, with an efficient innovation cycle and low total landed cost.
A collaborative supplier portal is a cornerstone capability that should expand far beyond visibility to goods ready to ship. Suppliers are increasingly integrated into the design process to leverage their expertise, even across multiple tiers. This ability to work across tiers is also critical in the order cycle to identify potential supply constraints or raw material shortages. Additionally, leading companies today are integrating their facility compliance efforts (social compliance and EH&S) with product testing to have a full view of their supply partner’s capabilities.
Q: Who will lead these Digital Business initiatives?
A: From many of the case studies presented at the Gartner Summit, I can see a new focus on business leadership and innovation over IT standardization and “good enough” solutions. Successful companies are looking for leaders who know their business—the operational technology—and can effectively digitize with information technology. In fact, Gartner reports that investment will shift to business-led initiatives from 38 percent to 50 percent in the next two years, and that CEOs are looking for talent that can drive innovation with the right mix of business and technology smarts.
At Amber Road, Digital Business is in our DNA. Our collaborative platform enables supply chain transformations, and I look forward to hearing from readers about your projects in the Digital Business arena.