Business Technology: Fighting For Survival, Or Global Opportunity? - InformationWeek

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Commentary
4/30/2004
08:52 PM
Bob Evans
Bob Evans
Commentary
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Business Technology: Fighting For Survival, Or Global Opportunity?

How will Wal-Mart's secondary and tertiary suppliers handle its 2005 RFID mandate for the mega-retailer's top 100 suppliers? Opportunities abound for those willing to take the leap into a global supply network, where innovation and flexibility are indispensable.

Every hour: $25 million in revenue, which is $600 million per day. What if every hour of every day of every week of every month, all year long--24/7/31 /12--your business generated $25 million in revenue? That's $25 million per hour and $600 million per day?

Well, then, you'd be Wal-Mart. And you'd have not just lots of money and lots of clout, but also lots of options to figure out how to move your business forward not only through what you do within your own company, but also through what you require your suppliers and other partners to do. And if you're doing that almost incomprehensible amount of business every single day, then you're engaging not just a few dozen or even a few hundred suppliers, but rather many thousands of companies that are either suppliers, or suppliers' suppliers, or even suppliers' suppliers' suppliers. And when massive technology and process-inflection points like the January 2005 RFID mandate are established, then those changes affect not just Wal-Mart's top 100 suppliers or top 500 suppliers, but also the many, many thousands of companies that buy and create and assemble all that stuff that's exchanged each and every day at Wal-Mart for $600 million. But how in the world are these small businesses going to get up to speed with a technology as unknown, untested, and unpredictable as RFID? Many discussions of RFID spark talk about the staggering volumes of data that pour out of even simple projects--are these small businesses going to become experts in storage, data management, security, business continuity, and real-time operations? Where do they start? Where do they get the money? What sort of help or guidance can they expect from Wal-Mart?

OTHER VOICES

I have lived through the numbing sadness of going to Dover to pick up my son, and have experienced the body-shaking pain of having to lay to his final rest a member of the U.S. Military ... My son, [Army] Specialist Kyle Andrew Griffin, was a hero as a soldier and as a son. He died loving what he was doing with those he loved and respected. He will be forever remembered by those who knew him.

-- Ronald R. Griffin, whose son Kyle was killed May 30 in Iraq, as noted in a guest column in the april 26 issue of the The Wall Street Journal


I don't mean to make this sound like some sort of oppressive servitude; quite the contrary. Since the free market came into existence, businesses have had to hustle and innovate to be successful, and there's no reason that should change now. Consider the rewards that will accrue to those that can meet the demands of Wal-Mart: They become essential threads woven into the global fabric of the largest company in the world.

The opportunity extends beyond these companies to their suppliers and their distributors, which can leverage out their own expertise to such high-potential partners, and also to the technology vendors that are beginning to recognize that while these prospects will never replace the wacky $100 million deals of the '90s, they represent a vibrant new category of customers that need to move decisively and rapidly. In addition, these initial projects represent a beginning rather than an end to the potential these companies have as they integrate their operations with global powerhouses such as Wal-Mart and its top several hundred suppliers.

On the other hand, if Wal-Mart can't convince or persuade these thousands of relatively small businesses to comply with the RFID mandates, it's hard to imagine that anyone will consider the project to be a success. In that scenario, the gaps toward the middle and far end of the supply network will prevent Wal-Mart from developing a truly end-to-end value chain, and the great promise of seamless links tying customer desires to suppliers' capabilities won't be realized. So there's never been a better opportunity for technology companies--software vendors, networking companies, server makers, and service providers--to step forward aggressively and attempt to help these companies meet the mandates. And for you--the business-technology managers charged with defining the strategies and executing the projects that will allow your companies to become fully engaged in such global value chains--the opportunities are even richer. Because the stakes are nothing short of the survival of your company.

Bob Evans,
Editorial director
[email protected]


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