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9/9/2004
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SmartAdvice: Sarbanes-Oxley Compliance Is Ongoing, So Prepare For Now And In Future

Getting ready for Sarbanes-Oxley will test whether your company can meet the act's compliance guidelines for financial and IT controls, The Advisory Council says. Also, look for a general collaboration app when you decide to implement supply-chain forecasts; and use dashboard tools to manage outsourcing contracts for more control and greater ROI.

Question B: We're beginning to look at collaborative supply-chain forecasting solutions. Are there architectural principles we should consider?

Our advice: Treat "collaboration" as a discipline all its own, not as a subset of forecasting. You want to end up with a generalized methodology you can use for forecasting, planning, replenishment, promotions, and even budgeting and new product business planning.

The History
Collaboration did indeed get its start as a way to improve the quality of demand forecasts by adding human judgment from several points in the supply chain to multiple statistical forecasts. (Comparing and reconciling forecasts made by suppliers, forecasts made by distributors, and forecasts made by end-users did, in fact, improve the forecasts.) Unfortunately, early offerings tended to be "front-end" add-ons to existing forecasting engines (i.e., they were "features" of forecasting.) As industry organizations such as the VICS (Voluntary Interindustry Commerce Standards) Association became active, the vision broadened. There's now a widespread understanding that a generalized collaboration facility should serve a range of interpartner activities across the value chain. TAC suggests that the facility should be flexible enough to handle collaboration around internal applications as well (budgeting and new-product business planning being obvious examples).

Unfortunately, there are still offerings in the market that are add-ons to forecasting, planning, or replenishment products, not generalized facilities. Be wary.


Related Links

VICS Collaborative Planning, Forecasting and Replenishment

Syncra Systems


The Architecture
A generalized collaboration facility is always Web based, and starts with a client package. Some are simple browser-based packages, and some are portal-based (and appear slicker). Bear in mind that collaborators (the humans who collaborate) are selected and authorized by their respective companies. They're usually trained on the collaboration process, and there's often a front-end investment in establishing trust and interpersonal familiarity cross-company. The result is that the client software doesn't have to be a lowest common denominator, but can be a quite heavy element, complete with firewall, encryption, and rigorous security, installed as part of the training and team-building process.

Clients communicate through Web servers to collaboration software on an application server; that software deals with data imported from other applications (e.g., forecasting models, planning models, manual budget processes). The process of collaboration isn't dependent on the application(s) that produced the data, or on the content of those data sets, though obviously the collaboration software must have a generalized facility for understanding data formats, and must offer powerful options for aggregation and dis-aggregation of data.

The requirement that collaboration software be application independent isn't a "computer science purity" issue, although from an IT perspective, having multiple collaboration infrastructures clearly would raise support costs. The requirement stems from the fact that the same personnel often are involved in the demand forecasting, production planning, and inventory-replenishment processes, and the same is often true for the budgeting and product-business-planning processes.

Testing A Vendor's Architecture
To make sure a vendor on your short list is truly offering a generalized facility, ask for an explanation of how the collaboration software described would be used with data from an application not in the vendor's brochure. For example, if the vendor focuses on collaborative planning, forecasting, and replenishment, ask about using the facility for collaborative new-product business planning.

-- Wes Melling

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