Expert Insight: Guest Contribution

By Greg Johnsen ,
EVP Marketing & Co-Founder,

GT Nexus

Date: July 22, 2010

Supply Chain Comment: How to Make Your Cloud Supply Chain Go? Community is Key.

How Do Companies Transform Themselves Into Agile Business Networks?

No supply chain software solution, however complete, can, on its own, give a company the low-cost, convenient, and secure platform it needs to transform itself into an agile business network of collaborating partners.  A platform needs a community:  an in-place, ready and connected community of trading partners and service providers.  Only when these two things – the platform and the community – combine together in a single, industry-wide instance, will companies find the utility they need to become truly, and sustainably, agile.


Remember the adage?  “In the future the best companies won’t be competing company to company but value chain to value chain?”  We know enough to know now that it will indeed be the companies who collaborate and share information exceptionally well with their partners who zoom to the top of their industry ladders and lead their markets. These companies leverage the power of their broader networks to see things much sooner, react much faster, and execute far more efficiently.  They don’t operate with just two eyes.  They operate with thousands.  They change the shape of their networks when they need to, nearly instantaneously, without ripping out their nervous systems.  They avoid risk, and seize new opportunities better than their peers.  They’re good at change.  They thrive when there’s change.  In other words, they’re agile. 


How do they do this?   How do they transform themselves into agile business networks?  If you’re reading software ads, you’d think it was all about deploying better business software.  But companies have been buying better business software for more than three decades now.  For the vast majority of them the “dream of the agile network” is still just a dream.  For even the most fortified companies the vision of a highly synchronized and agile business network – is exceptionally elusive, exceptionally difficult to pull off. 


Enter cloud computing.  The better economics of Cloud are now well known, and proven.  But when it comes to your supply chain, with its focus on inter-company collaboration and information sharing, Cloud does something else.  It enables new information models.  Information models that could not be accomplished “on the ground” using traditional software designed for the single enterprise.  With Cloud, information models founded on the requirements of community collaboration around common, highly transacted business objects – such as purchase orders, shipments, inventory items, invoices, payments –suddenly become possible.  A single, community system at the center of the crowd, holding the common information the community must access and repurpose sometimes hundreds of times a day, becomes an especially powerful new information model. 


But it requires a different kind of technology. It’s more than just software applications delivered “on demand”.  It’s a network platform with business-to-business relationship logic and community management tools; it’s data acquisition and synchronization infrastructure connecting thousands of partner systems.  And these core elements are fused together and deployed as a single industry instance in the Cloud.  But without a community the platform is like a well-constructed but empty city – full of promise but an impossible place to buy bread, or service your car. 


One of the wisest things I’ve heard somebody say about cloud platforms for supply chain is that you must reverse the typical IT criteria order.  You don’t look at functionality first.  You look at the strength and depth of the community around the platform first.  And you look not just at the “breadth” of partners (the sheer numbers) but the “depth” (the degree) of connectedness for them.  How central and strategic is the platform to partners?  Are category leaders committed to the platform?  And – this part is crucial – what will it look like in 2 years?  In 5 years?


It took broadcast radio 38 years to reach an audience of 50 million listeners.  It took TV 13 years.  It took the Internet 4 years.  It took Facebook 2 years.  If Facebook were a nation it would be the third largest nation in the world, with over 400 million members today.  They’ll add another 100 million in the next 9 months. 


The secret of their success?  Community.  


Same thing for supply chain. 


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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:

You look at the strength and depth of the community around the (cloud) platform first.

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