The Supply Chain Matters blog provides a perspective on contrasting Cloud based supply chain management business process technology investment strategies among both SAP and Oracle communities based on two simultaneous online virtual events.
Last week, this Editor had the opportunity to view two simultaneous online events related to ERP and supply chain management applications suite technology challenges involving both Oracle and SAP SE focused communities. Whether by happenstance or coincidence, both SAPInsider and Oracle held SCM Technology Summits on the very same day, in in some cases, in overlapping parallel time slots.
Watching and taking in both events, we could not help but discern the stark contrasts that each of these constituencies face in addressing the post COVID-19 needs for added supply chain wide visibility, agility and resiliency.
Oracle SCM Summit
The Oracle event was anchored by respective SCM technology sales executives from both North America and Europe. The program consisted of executive keynote delivered by Jon Chorley, Group Vice President SCM Strategy as well as Oracle’s Chief Sustainability Officer, as well as 15 to 20-minute presentations from various customers that included tire and wheel manufacturer Titan International, floor care manufacturer Bissel, Africa based telecom services provider MTN, global logistics services provider Transworld Group and automotive components producer Alcar Ruote SA.
In his keynote, Chorley made the observation that COVID-19 accelerated global trends that were already occurring including major globalization realignments, more rapidly shifting business and market trends as well as accelerated technology innovations focused on digital technologies and the Cloud. He made the observation that what the pandemic has provided is an awareness that speed is more important than initial cost determinants in terms of overall supply chain capabilities. Outlined were key elements of more informed and context aware supply chain capabilities that include enhanced visibility, planning and higher levels of predictive, prescriptive or automated execution of strategic and tactical decisions.
Stressed was a phased approach technology strategy as to how businesses and their supply chain management teams can address transformative needs. Most important from this Editor’s perspective he stressed that Oracle has had a multi-year investment in a native SaaS based SCM suite with a design principle of pre-integration among various business process support applications. That includes pre-integration of advanced technologies such as Internet of Things (IoT) or Blockchain with the actual business process applications themselves, with a ready for use perspective. Oracle further provides its own Cloud hosting platforms engineered for Cloud based applications and enhanced data management needs including autonomous database security, tuning as well as data management scalability needs. Indeed, Chorley’s closing was that Oracle SCM Cloud is not some far off vision but rather an overall ten-year effort of design and integration in inherent and pre-integrated native SaaS capabilities.
Each of the respective customer talks outlined actual use of various Oracle ERP or SCM applications applied to either pre or post COVID-19 and the process and business benefits that were gained by such investments.
Titan International Director of Supply Chain for North America described added needs for decreasing non-value added in manufacturing activities, more enhanced post COVID-19 capabilities in proactively determining demand needs from various OEM customers, including leveraging of new IoT based product replenishment processes.
Two managers at Bissel described a need for global-wide integration in planning processes, especially since COVID-19 demand for certain cleaning appliances increased during the pandemic. There were challenges with integrating planning and forecasting across global business units, for expansion of the supply base beyond China. Noted was that the broad usage of digital-based technologies during the pandemic help to overcome immediate challenges for access to needed information.
The General Manager of planning and fulfillment for telecommunications provider MTN, the largest provider in Africa spoke to challenges in global trade management and planning and how supply chain resilience became a key C-Suite concern with the pandemic. They were able to deploy a supply chain control tower capability to overcome logistical challenges.
The CIO of global logistics services provider Transworld Group described how the pandemic’s challenges centered on remote worker connectivity and more paperless process needs. After starting a journey with Oracle, the provider soon realized the importance of inherent digital capabilities in abilities to pivot toward resolving added challenges.
The IT Manager for the Italian subsidiary of Swiss based automotive components supplier Alcar Route described an IoT enabled production monitoring process enablement effort that began in 2019, leveraging Oracle Manufacturing and Maintenance Cloud that facilitated collection of real-time information without a need for conversion. Noted was the quicker implementation time and the user friendliness of applications.
After an overall virtual event that had a duration of one-hour, it seemed clear that the focus was to allow various customers to articulate the benefits that their organizations achieved by adopting native SaaS and Cloud based applications capability which helped these companies to pivot more readily with the large scale supply chain disruptions brought about by this ongoing pandemic.
SAP Insider Supply Chain Management Virtual Summit
The SAPInsider organization is not directly affiliated with SAP but is billed as the largest worldwide SAP user membership group providing strategic guidance, research and tailored events including an annual SCM Summit.
Last week’s opening keynote featured Darcy MacClaren, SVP & Head of SAP Digital Supply Chain North America articulating the overall impacts of the COVID-19 disruption on multi-industry supply chains. She outlined four key SCM tenets required in the “new normal”, namely increased connectivity, productivity, agility and resiliency. Further outlined were SAP’s key priorities in assisting businesses toward their needs in these areas, including various SAP efforts underway to increase overall supply chain visibility, reinvent production and leverage more digital technologies.
As a backdrop, earlier this month, the Vice President of Research for SAP Insider highlighted how SAP CEO Christian Klein spoke directly with members regarding the enterprise technology provider stunning revelation to the global investment community for the need to cut overall sales and profitability outlook for this year and the next three years.
According to this research advisory write-up:
“At a high level, Klein focused on the fact that SAP is planning on staying true to the core principles of the move to SAP S/4 HANA and transformation to the cloud, but he also acknowledged that there are challenges along the way and that SAP is committed to helping customers address those challenges.”
Noted was that the number one priority for SAP coming into 2021 was that of transformation, both in SAP’s now accelerated technology movement to native Cloud and moving customers to the Cloud via SAP S/4 HANA, SAP’s digital ERP option.
Regarding S/4 HANA adoption, we found a rather important and insightful passage in this advisory:
“Talking about SAP S/HANA, Klein indicated that SAP continues to focus on expanding its core business with SAP S/4 HANA being a key growth driver. One thing that Klein mentioned more than once in the conversation was that, for many organizations, the biggest challenge in transformation is not how to apply the technology, but how to redesign business processes to use that technology. The topic of working to improve architecture and TCO is something that Klein mentioned multiple times. SAP is looking for simplification in the stack, which very much acknowledges that today’s landscape is complex and signifies that organizations need a clearer and less complex path towards deployment if that is to be successful.”
Experienced SAP enabled organizations likely already know what the above paragraph implies, that the enterprise ERP provider has once again discovered that while having astute articulation of the visions for supply chain or business digital transformation, the path in required business process and technology upgrade is indeed complex, expensive and risks added business disruption, which many SAP customers are unwilling to undertake in the current uncertain economic environment. Deployments remain highly customized with many installations in an on premise, behind the firewall configuration. That adds more challenges for remote workers in their needs to work remotely and gain access to crucial planning and customer fulfillment information. SAP Insider cites its own research indicating that less than 10 percent of those deploying S/4 HANA are running S/4 HANA Cloud.
Instead, SAP is now on a new path that involves influencing customers to upgrade to various Industry Cloud versions that promises to offer industry-specific features, but at the same time must upgrade to HANA data management, visualization and integration capabilities. The enterprise ERP provider is also accelerating efforts for enhancing SAP to SAP integrations, including its own Cloud platforms such as SAP Ariba or SAP Customer Experience. Once more, there is now added reliance on Cloud hosting partners such as Google Cloud and Microsoft to accelerate Cloud deployments but at the risk of potentially losing control of customer accounts and transformation success efforts.
That got us back to the remainder of the SAP Insider SCM presentations which essentially addressed various means for existing ECC ERP and SCM customers to be able to enable Integrated Business or Sales and Operations Planning, connecting overall supply plan planning and execution information or to enhance visibility, digital twin simulation or more advanced visualization and analytics capability.
It was stark, since the options for supply chain management and IT teams is to either continue to instill work arounds for needed agility or resilience, or continue to practice that termed “SAP Ring Fence” strategy for plugging-in best-of-breed or other Cloud based technology options that can address specific needs in the transformation of specific supply chain processes. Third-party presenters going to detailed instructions on how to modify or supplement existing SAP on premise applications but very little customer testimonials for elements of actual supply chain digital transformation.
The analogy is one of risking added complexity, islands of information and added integration requirements. Once again, customers are forced to wait out the digital transformation timetables for SAP instead of their own compelling needs. This has to be frustrating for supply chain and business process teams that actually have to instill more agility and resilience in supply chain business processes in the current SAP universe. The current economic environment and the realities of SAP’s recognition that customer are balking to attempt any larger-scale multi-year transformation is already having cascading effects on systems integration providers.
Is it no surprise that such ring fence strategies have been a boom to various SCM technology as well as systems integration services providers. The digital transformation vision remains, but the practice becomes ever more challenging.
Simultaneous online events providing both a noticeable contrast and increasingly, stark contrasts for means to transform global supply chain processes more quickly. Readers can view either event and make their own assessments.
You can access the Oracle SCM Summit by accessing this Oracle SCM web link, or the SAP Insider Supply Chain Management Virtual Summit by accessing this web link. Registration is likely required for each event.
Bob Ferrari
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