Business Technology: One Question Remains: Will You Be Ready?
Would you be ready if an absolutely strategic customer told you it wants you to be a major supplier for an enormous new product-development project, but you'll have to switch immediately and completely to the customers' software for planning, purchasing, design, review, and manufacturing? Not to mention some new customized features that will be rolled out for the very first time with this project?
If you wouldn't be ready, why not? Because your corporate policy doesn't allow it? Your key employees aren't up to such acrobatics? There's not enough time for training? Your infrastructure won't support it? Too risky? Too radical? Not factored into your 3-year IT plans? Too complex? Or maybe you've got a key decision-maker who always reacts in such situations like the doctor in Star Trek with responses like "Jim, it'll kill him!" or "I'm a doctor, not a contortionist!!"
If any of those roadblocks exist in your company, then I think you better beam up some fresh thinking, Scotty. Because this is, I think, unmistakably the shape of things to come: Technology standards--right down to specified applications--will be set by large and market-leading companies whose disproportionate impact in their sectors will give them the leverage to mandate among suppliers and partners the adoption of not only common IT products and services but also business processes. About a year ago, this idea was first raised in this space--I called these emergent powerhouses "hubs of commerce." And we now see that it's starting to happen: Boeing's planned development of a new flagship commercial aircraft, the 7E7 Dreamliner, will require that its key suppliers use product-life-cycle management software from Boeing software vendor Dassault Systémes. Boeing isn't just hoping its suppliers will comply; it's absolutely requiring them to do so.
Former Enron Corp. CEO Jeffrey Skilling, taken to court in handcuffs Thursday, was charged with nearly three dozen counts of fraud, insider trading, and other crimes. ... Prosecutors said Skilling, 50, faces up to 325 years in prison and more than $80 million in fines if convicted on all counts.
-- Associated Press, Feb. 19
As my colleague Beth Bacheldor wrote in last week's issue, Boeing's dependence upon this software partner goes even deeper: Dassault has agreed to add customized features to its planning and design software to accommodate the staggering requirements of the aircraft-maker's global supply chain (see "Boeing's Flight Plan," Feb. 16, 2004). So the already-daunting task before Boeing takes on an even greater challenge: Pulling off this unprecedented collaborative effort with applications that include some brand-new releases. Hey, give Boeing a ton of credit for vision and guts. If Dassault can uphold its end of the deal, Boeing has a pretty good chance of cashing in on this audacious bet that will force the reconsideration of just about every business process across its massive network of in-house employees, plus suppliers, plus other partners. Oh, yeah, and in the meantime, Boeing expects to shift seamlessly from designing and building most of the aircraft in- house to outsourcing 70% of that.
Whether we like it or not, these types of arrangements will probably soon become the norm, and once again the dividing line between companies that will thrive and those that will struggle to survive will be their ability to innovate rapidly, to leverage skills and knowledge instantly and ubiquitously, to recognize that their future is based on what their customers want rather than on what they themselves did last year, and to embrace constant and often-wrenching change as a competitive advantage.
We've all heard at length about the mandates from Wal-Mart and the Department of Defense for RFID, and last week the Food & Drug Administration said it will start pushing pharmaceutical companies to get aggressive on it as well. And as global supply chains and their related information streams become vastly more sophisticated and dispersed, isn't it certain that security and privacy service-level agreements will become mandatory as well? Into that mix, Boeing has added enterprise-applications adaptability. Only one question remains: Are you ready?
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