Expert Insight: On Demand Software Series

By Greg Johnsen ,
EVP Marketing & Co-Founder,

GT Nexus

Date: May 12, 2010

Supply Chain Comment: Ushering In The 2nd Generation Of

A New Wave Of Web-Based Technology For The Supply Chain

Global supply chain management isn’t about automating processes within a company; it’s about the processes between companies. In the supply chain, where the work is inherently inter-company, a new wave of Web-based technology is particularly compelling. The analysts haven’t come up with the new acronym yet, so let’s call it SaaS 2.0.

Three things had to happen to make SaaS 2.0 a reality. First, we needed a reliable inter-company communication backbone to enable the exchange of information; the Internet gave us that. Second, we needed a way of facilitating the exchange of information and business processes coordination between companies; the emergence of commercial grade, Web-based software gave us this. And finally, we needed a way to deliver that software for a fraction of the cost and risk of traditional
software; the SaaS delivery model gave us that.

The first 50 years of business software was about what could be done for a single company. First generation SaaS 1.0 is penetrating that space now, making progress primarily because of its more attractive economics and risk-avoidance benefits.

But SaaS 2.0 is doing something that traditional software and the SaaS 1.0 software vendors cannot do: Automate the processes between companies. There are hundreds of significant supply chain processes that can be automated to drive better control, visibility and value across the enterprise. Only a SaaS 2.0 approach can unlock that opportunity. Here are some reasons why:

  • SaaS 2.0 platforms are built to manage processes between companies. Architecturally they are very different from software designed to automate a process within a single company.
  • SaaS 2.0 platforms typically are industry-focused, and as a consequence have a rich library of well-used and specialized business objects that are relevant to the industry.
  • SaaS 2.0 platforms are multi-enterprise and single instance.
  • SaaS 2.0 applications are just the tip of the iceberg. Below the water line is a complex B2B integration infrastructure that taps into the proprietary systems of partners globally and standardizes the data. The “data IP” is then shared across the entire network converting objects into a universal type that can be used to drive work process between partners.
  • SaaS 2.0 platforms do not replace “inside the 4 walls” systems, they augment and extend them.
  • SaaS 2.0 platforms include and leverage a community of companies and partners. The greater the network, the greater the overall data set, and the better the quality of the data used by all.

These next generation platforms will take more time to mature, and are a lot more complex, than what we’ve seen in consumer networks like Facebook, or LinkedIn. But once a solid foundation of community traction is established they can begin to drive the same kind of “network effect” benefits into global trade that the consumer platforms have successfully cultivated.  

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About the Author

Greg Johnsen is executive vice president of marketing, and co-founder of GT Nexus. Mr. Johnsen has more than twenty years of sales, marketing and product management experience with Silicon Valley technology companies. He has spent the last ten years focused on supply chain and logistics, working with hundreds of leading companies to drive sustainable improvements in global sourcing, transportation management, inventory control and a range of international operations. Prior to GT Nexus he was with Scopus Technology, an early leader in the customer relationship management software domain. He began his career at Ingres Corporation, a pioneer in relational database technology. Mr. Johnsen has a Bachelor of Arts degree in English from the University of California at Davis.


Johnsen Says:

Global supply chain management isn’t about automating processes within a company; it’s about the processes between companies.��

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