Software // Enterprise Applications
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5/13/2005
06:11 PM
Bob Evans
Bob Evans
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Business Technology: What's The Curve On Your Time To Change?

IT was first focused on time to financial transparency, then on time to product. Today, Bob Evans says, a SAP executive says it's all about time to change.

One of the world's leading technology companies recently hosted about 120 customers for a day and a half to share with them the best practices that company had developed in IT, business processes, and innovation. In one of the sessions, the speaker asked, "How many of you are in the manufacturing business?" About 40% of the customers raised their hands. The speaker then asked, "Of those of you in manufacturing, how many go to work each morning not knowing what you'll be making that day?" And the number of hands fell from about 50 to two.

One of those two was from Karsten Manufacturing, maker of Ping golf clubs, and he described how each day was an unscripted adventure because Ping's customers and prospects expect and demand a certain level of customization with their equipment. As he explained the challenges such a business model requires, I could see some of the other guests around the room shaking their heads in wonder: Could my company do that? Are we that agile and nimble? Are we that attuned to what our customers want, and to what our suppliers can deliver? If my competitors started down such a path, could I keep pace or would they put tire tracks down the middle of my back?

I would suspect that over the next several years, lots more companies will develop the capabilities to perform that daily alchemy of turning what in the morning is the unknown into what by 5 p.m. are finished products and services. And that will be an enormous step forward for those companies and their customers.

But it won't be enough. Because the rules always change, don't they? And I think that one day last week at lunch, I heard one of the new rules. It's in the form of one of those "event to resolution" chains, and it came from SAP executive board member Shai Agassi. He calls it "availability to sale." If you're playing with any sharp instruments, I suggest you put them down because grasping this concept requires more than a little concentration.

Agassi said SAP has a customer in Europe that has turned the old model (gee, it just got new---can it really be "old" already??) on its head. Instead of saying, "This is what we're going to build today, so go find the suppliers who can get us the best materials at the lowest price," Agassi said that this highly tuned company instead says, "Let's call up our best suppliers, find out what they might be selling today that's really, really cheap, and then figure out what we can build with that while simultaneously investigating if there's enough demand for that whatever-it-is for us to go ahead with the purchase." If the market-demand inquiries show enough hunger for the product, then this company buys the stuff that today is really, really cheap and begins to make stuff that is either better or cheaper than what any competitor can offer.

This, Agassi said, is a perfect example of how process innovation is totally overwhelming technical integration as a value driver for CIOs and their employers. This type of approach allows companies to compete on speed, to compete on unique competitive advantage, and to interlace more tightly the bond between buyer and seller.


OTHER VOICES

Oracle is making an announcement May 16 that it will incorporate use of PHP into developing Oracle database applications. I don't know the details. But I do know that spells the end of an era for 10-year-old Java. PHP was once known as Personal Home Page, an easy-to-use scripting language that amateur site builders could use to pull together Web-site elements. So what's an amateur's tool doing inside Oracle? Well, it's already inside IBM.

-- Charles Babcock, InformationWeek blog, May 12

Now, clearly, this type of approach isn't for everybody. In fact, it might turn out that only a tiny percentage of companies have either the capability or the market opportunity for such quirky approaches. The key point isn't so much this particular "availability to sale" sequence (although I think there are many reasons to believe it will have a substantial impact on many industries), but rather the idea that a company's ability to capture and analyze information faster and more fluidly than anyone else continues to be an enormous competitive advantage because it gives them the power to model themselves in the image of market demand. It lets them move beyond the static models of transactions and efficiency to the fluid model of customer-driven innovation and experiences.

Agassi positioned this unfolding approach as vital evidence behind one of his theories on what enterprise software today is all about. Over time, he said, technology's focus has shifted across accomplishing certain tasks more quickly. At first, it was "time to [financial] transparency," and not so long ago it could take a company months to close its quarterly financial records; then it was "time to product," where IT was essential in reducing development times. Today, Agassi says, it's about "time to change" -- helping us move faster than our competitors and at least as fast as our customers.

So even if the "availability to sale" strikes you as a tad too outre, look at the bigger picture: How would your "time to change" curve stack up against your competitors?


To discuss this column with other readers, please visit Bob Evans's forum on the Listening Post.

To find out more about Bob Evans, please visit his page on the Listening Post.

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