Magic Pill

First, let me say that I find “news marketing” kind of cheesy. A company makes a sale to a customer, and publishes it as “news” by providing small quotes, and then giving details of the company sold and themselves. Usually there are some key phrases and buzz words in the article to get the attention of people and to advertise in a news space. If you are going to advertise, advertise.

There are things I like about this, mostly from a marketing aspect, but then the reality sets in that this isn’t really a news item, but a marketing method. There is an element of news. As Malcolm Muggeridge states, “News is just old things happening to new people.” A company buying a software package to help their business is not so much news because there is nothing new about it. It is news to the companies involved, but that is about all it is….but that is not the real topic.

On another rabbit trail, but coming back to the main point, I love to take advertisements and pluck them apart. Mostly I look for the humorous fallacies that the advertiser tries to create to sell a product. It is in this mode, that I take one of these cheesy news articles and pluck it apart to not show the problems that exist in the logistics IT space. One of my favorite classes in college was a study in advertising where we did just this. We were told to watch TV for advertisements, write down the copy as best we could (oh what a boon a DVR would have been back then, but VCRs were just becoming vogue).

The “news” article is titled “Total Logistic Control Selects RedPrairie Warehouse Management” was published by Business Wire. That title by itself makes this little feux article a tune-out-item for most people. Unless you deal with Total Logistics Control, compete against TLC, or are interested in RedPrairie, the title of the article is not what this article should be about. This is not the fault of either of these companies, but the ad editor for picking such a non-descript title. My guess is that Business Wire fell down on the job here.

A better title for this article would be, “Another company making technology decision to fix business process problems”, but that wouldn’t sound like news either. It wouldn’t have helped either company, but it would be closer to a true news title. It would be better if the writer on this acted as a journalist, learned something about the decision, evaluated this with an expert, and shown the overwhelming ways in which companies waste money in an attempt to save money. I am not saying I would make a great editor, I wouldn’t. Truth gets in the way of selling journalism.

Let me be clear, RedPrairie is some very good, expensive software. I would not place them in the “excellent for 3PL business” category, but I would put them in the “excellent in general logistics” category. If RedPrairie were more affordable, I may lose my system agnostic position, and go over to them as a RedPrairie consultant. However, the same can be said for I2 or SAP if the implementation price were better. This is not to say, they are not valid candidates for implementation. For some companies dealing, they are perfect fit because they align better with the company’s process. More on this topic later.

The fourth paragraph tells a good part of the story:

“We saw our market changing. Customer requirements were becoming more complex and we needed to align ourselves with the technology to meet that change. The RedPrairie solutions will help us provide more value to our customers, such as continuous improvement in facilities where we operate, and driving out cost of ownership and operation,” continued (Pete) Westermann (President, TLC).”

I agree, the market in the logistics area is rapidly changing, and most of that is dealing with costs. We have been able to get by without strong processes in this industry for decades, and now it is catching up.

In order to stay competitive, every company is looking for that unique service/product for their customer. They are trying to differentiate themselves by any and all means possible. For many companies, this means everything right down to the delivery and packaging they place on their product. Some are going fancier, and others are looking to reduce costs. Each of these changes causes problems in logistics, because lower cost packaging posses transportation problems, as does the presentation of custom packaging on the other end of the scale.

The next phrase is the problem phrase, “we needed to align ourselves with the technology to meet that change”. Ouch. Well I hope that you do gain something from the project, but this is not the correct approach. We should be seeking to align ourselves with a better process to meet the change and align technology to meet the process changes.

This is the magic pill. The magic pill is that pill that if we just swallow it, will heal all our aliments. It may be a huge horse pill, and may take gallons of water to swallow it, but we can do it. It may be so big, that it kills the patient, but it is a magic pill. Technology is often marketed as the magic pill.

If you are looking to save money in the logistics arena, first look at processes, then find the technology solutions which match that process. Software is not very good at “continuous improvement”, “driving out costs of ownership or operations”. People are good at these things. If Henry Ford proved one thing, it was people need processes that help them be efficient and consistent. Then, and only then, do you identify technology which automates the process, making things more consistent and faster.

Let me say this again, technology makes processes more consistent and faster. If I implement technology over the top of bad processes, I only have more consistent bad things occurring at a faster rate. I frustrate my people and cause problems for my customers. Like I tell my kids, “You can have a good day or a bad day. It is your choice. I will help you with either direction you wish to take. If you want a bad day, then let’s make it a bad day, but if you want it a good day, choose that, and I will help you make it good.” This is exactly the same with technology. Your processes make or break your company. Which direction you choose is your choice. Technology will help you in either direction. If you want to lose money, let your processes run free and try to shove technology on top of it. If you want to make money, control your processes and place technology on top to control it and speed it up.

I am not saying that TLC didn’t do this, but this is not the message given to the president of the company. If the guy on top doesn’t understand this, the message failed in transit. If TLC evaluated their processes and found that RedPrairie is easier to customize than a less costly player like DaVinci (who focus on the 3PL market), then this is great. However, this isn’t the message given to the world through this news article

In fact, there is not much in this “news article” to really give you an idea of the true path the company is taking. It could be they are doing the right thing, have evaluated their process and chose the software to enhance these processes, but then, someone should tell the president and the writer. If this is the case, they missed the point. If this is the case, TLC competitors should be concerned because TLC is going to be better competition because of this process alignment. However, the article does say this.

I wish them good luck, and when they decide to fix the processes, and implement RedPrairie correctly, I do hope they call me. Until then, we can all learn from this. We can benefit by those publishing feux news articles about software purchases.

SAP is having problems

IBD put out a very interesting article about SAP today relating to problems the software giant is having.

As they state, customers are unhappy, Oracle (SAP’s predominate DB platform) is unhappy, I2 is now unhappy with them, investors are unhappy and the company is now doing something which has never occurred. It is promoting a Salesman to the CEO slot. Prior to this the CEO always had a software engineering background, keeping the software company very technical.

A sales person at the helm may do the company good, and give a much needed appreciation in the ranks for the plight of their customers. SAP is known for its multi-year implementations. In my opinion is due in part because most companies do have a handle on their processes and sometimes make them needlessly complex, but also because the software tries to be everything to everyone through heavy customization.

This customization is at the core of the BusinessByDesign product’s problems which has been starting in fits for years now. The concept is great and would allow smaller companies to leverage the power of the software, but small businesses cannot deal with bugs like larger companies.

Having been in the IT industry for years, I know people who both swear by SAP software and those who swear at it. Those who love it, like the orderliness of data and interfaces. Those who do not, struggle with their own processes and the time and money it takes to implement the product.

By its very nature, SAP is a traditional consultants dream. Not only is there money in the process documentation aspect, but the process reorder, the software customization, the vendor integration, the data mining, the training and the implementation. All of these add up to a large quantity of billable hours.

But like most software, don’t be a sap about SAP. Do not just put SAP into your company just because it is the biggest in the industry or because their demonstration is so nice. There are many players out there. If your company has SAP, I do know some people who can help you short circuit the implementation time. Of course, they will need your permission to shake some things up in your company. Some of the best people you need are not SAP converts but software agnostic people who know not only software, but also proper process.

If you are going to put SAP into a company, do it because after you are finished, you will have a product that matches your business process. You will have invested in a very solid way, in business process models that sustain your current and future process. Yes, you will need to maintain these processes and the interface to the software, but you will know that these processes are being achieved with reduced management.

Is there real money to be had by seeing your process from end to end… yes. But SAP is not the only ERP solution in the marketplace. Sometimes, companies don’t need ERP as much as they need transparent processes.

Sometimes you need to just scrap “the way we always have done it” for the better way. Sometimes you need to change the staff to find people who are not as interested in keeping that Excel bookkeeping because they might lose their job if they do, for someone who are a team player.

Bottom line, right now, I would stay clear of SAP. They are a bit distracted right now, and any phrase like “substantial recurring maintenance services revenue” which IBD commented about SAP should raise some red flags about what kind of recurring maintenance services are needed for this software we are considering.