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Taking Aim

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Talking Points (Q3, 2005)

Welcome to Talking Points.

In Talking Points we address topical developments which can potentially be exploited to to help our clients make their business more competitive.

In this issue, we look at the resurgence of a business driven demand for B2B services, and the issues facing IT Resourcing.

B2B - This time a business lead initiative

Many of our subscribers will remember the promise and the hype of B2B (Business to Business electronic commerce) in the late 90's, and how B2B and the Internet were going to revolutionise the way we did business.

The problem was, we did not truly understand what the real business drivers were, with the conseuqence that technology entrepreneurs were attempting to sell a solution to a problem that our companies did not really understand. We were also focusing on the safer(and much less complex) internal administrative MRO (Maintenance Repair & Operations) type purchasing operation, rather than the "main game" around provisioning to support the supply chain.

It is in automating the Supply Chain - providing an infrastructure to support electronic trading, that the main efficiencies are for an organisation, but unfortunately, this is also where the complications and expensive infrastructure needs are.

For B2B to work effectively, it is not sufficient to provide the purchasing department with a link into the supplier catalogue, and tell them to start ordering, because of course this is not the way the business process works. No - for B2B to truly work, it is necessary to first understand how the business functions, and then to define a process which will allow the efficencies associated with automating the "procure to cash" cycle associated with that. This means that the following areas need to be examined:
  • Understanding the current business process flows from how orders are placed upto the time the supplier receives payment;
  • Synchronisation with the supplier's catalogue
  • The Purchase Order placement and negotiation process;
  • The Order matching and Receiving process;
  • Taking merchandise into stock
  • Dispute resolution and Quality Control; and finally
  • The settlement process
While these are the main business processes that need to be taken into account, there are also a range of infrastructure issues that need to be addressed:
  • Do you have network security systems in place that allow third parties to establish connection with your internal systems
  • Do you have a supplier logon and authenitcation process in place?
  • Do you have a message gateway in place that can transform messages using a number of different standards, e.g. EDIFACT or ANSI EDI messages, AS1 and AS2 Internet protocols
  • Do you offer your suppliers a "Track & Trace" capability;
  • How will you receive merchandise - "Scan Receive Barcodes"? RFID Tags?
As you can see, while the benefits are considerable, the process is not straight-forward, and requires considerable thought and investment.

GS1 Australia (formerly EAN Australia) is leading the way in providing standards based supplier catalogues with automated download capabilities for organisations to be able to download their supplier's catalogue information into their own systems. Kevin Hanvey has spent the past 12 months addressing these issues with a major Australian company. If this is an area of interest to you, give him a call today.

IT Resourcing

Over the past 3-4 years while the IT industry has been in a significant period of decline, there has been little investment in IT skills for the future. Regrettably, this was an area a number of us in the industry recognised and wrote about back in 2001, warning that in 3-4 years we would return to the position where we had a shortage of skilled IT professionals. Despite these warnings, the cut-backs in graduate placements continued, and ironically, now as the demand for IT professionals picks up, we are starting to see a shortage of experienced professionals emerge, and an ongoing reluctance for young under graduates to specialise in IT.

While this is going to cause some short term pain, it is imperative that the IT community are making plans now for increased graduate intakes, and that they are out now in the tertiary institutes speaking to this years graduating classes.

>The other challenge in recruiting future IT professionals, is to identify what skills will be required in the future. There is no doubt that we are part of a Global community, and we need to recognise that selective outsourcing is with us to stay. Rather than bemoan the loss of jobs to to India, China and other low-cost areas, we need to recongise that we all have different strengths, and ensure that the Australian IT community works to identify those areas where we can offer a valuable contribution, and then work with our educationalists to ensure we are providing the right training to meet this need.  

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