Moving businesses processes online can help companies boost efficiency and hold down costs, PeopleSoft chief Craig Conway says.
A turn of the calendar may not bring a more upbeat economic forecast, but that doesn't mean companies can't succeed this year. Businesses that succeed in a flat economy do it by boosting efficiency and beating down cost, since the only way to gain sales is to grab market share from competitors.
How do companies do this? For many PeopleSoft customers, the answer is to move business processes online. No matter the industry, you can't be the low-cost leader if you're not extending your business processes via the Internet to your customers, partners, suppliers, and employees. This is especially relevant in a down market because operating in real time puts information directly into the hands of the key participants in the business process. The result: no intermediaries, fewer delays, greater efficiency, lower cost.
The result is usually dramatic. Even companies that have automated business processes have usually done it on a departmental basis. But real-time business takes place across different departments, and that's where the next leap in productivity can be found.
Take the sales process. Don't think of the sales organization as an end in itself. Making the sale is the first part of a long chain of events that includes fulfillment, shipping, billing, accounts receivable, and after-sales support. Now think of the software associated with selling. All the departmental applications involved in those varied processes must be linked for speed and efficiency. When you move your business processes off a proprietary network and onto the Internet, they're easier to connect. More importantly, when these independent departmental applications are tied together via the Internet, you can think holistically about the total business process. That will speed up business, make it more efficient, drive out costs, and bring the savings straight to the bottom line.
Web services is part of the underpinnings of this strategy. The promise of Web services is that these business processes can be more available and more plug-compatible with each other.
So, what's keeping companies from realizing this real-time reality? First, it's an evolutionary process, moving slowly but steadily forward. Second, all spending is under scrutiny in this difficult business climate, and improving internal business processes requires a capital investment. Third, the return on investment has to be proven very clearly.
Still, it's happening. FedEx is a real-time business because it has connected nearly all its business processes online. From the time a package is picked up and tracked to all of the associated billing, accounts receivable, and customer-support processes, the entire business process is real time. FedEx replaced the disparate systems and databases used to process more than 100 million transactions a day with an online, real-time integrated financial-management infrastructure.
The real-time enterprise is a reality today, and it represents the next great leap in productivity. With the current economy, it couldn't happen at a better time.
Craig Conway is president and CEO of PeopleSoft Inc.
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