The Secret to Rapid Digitisation: A Dual Platform Strategy
The new network way of thinking that digitises and maximises enterprise performance quickly
One of the industry’s biggest concerns is how to digitise and transform quickly, without starting from scratch and having to throw away your enormous investment in traditional systems. The good news is that you don’t have to—even if you have hundreds of legacy systems and ERP instances across your company. With a network technology layer in place, the key idea is that you begin moving business functions onto the network over time in a systematic way that matches your priorities—while retaining the best of your legacy systems. This unlocks enormous value as you eliminate time lags, lower costs, and slash inventory buffers across the network. You decide where to start moving capabilities onto the network, in a phased-way that lowers risk. Best of all, it will be self-funding because you’re capturing value at every step.
The Dual Platform Strategy takes into account your current operational and technology environment, and streamlines it with a business network layer that connects all trading partners and key IT systems to a single version of the truth. This enables real-time data sharing, multiparty business processes and decision-making, to optimise and automate supply chain processes. This strategy enables companies to achieve four critical objectives:
- Unlock value trapped in the supply network that is due to poor data quality and communication
- Eliminate the huge costs associated with maintaining and upgrading legacy systems
- Leverage new technologies like AI and machine learning in concert with current systems
- Identify and respond quickly to capitalise on new market opportunities
The Dual Platform approach provides complex global businesses a path to a rapid, high return digital transformation, while minimising risk.
In this article, we explain how to manage this process in an efficient and cost-effective way.
The Downfall of Enterprise-Centric Technology
The planning-to-execution workflows are typically both within the enterprise and across supply chain tiers. This typically uses multiple disconnected algorithms and optimisation engines, along with dozens of ERP instances and systems. It requires armies of planners to cover all the touch points. Planners then implement inventory buffers to cushion and absorb obvious conflicts that arise between trading partners. This then sub-optimises the supply chain.
Even worse is the stale data that is used for decision-making across trading partners. This problem is never addressed, given the technology being used isn’t capable of leveraging real time or multi-tier data anyway.
This results in a set of over-simplified, aggregate and gross average-level decision-making that generates today’s poor performance, because increased inventories, capacity, transportation and logistics costs are required to buffer all such variances. Even with costly buffers, the results are still poor, with low order fill rates and associated customer service levels.
Networks Built to OptimiSe Supply Chain Performance and Work with Your Current Setup
A network-based approach, with a purpose-built cloud-based Business Network Platform with end-to-end supply chain capabilities, is the structure for success. This enables real-time data sharing, multiparty business processes and decision-making through codified industry best practices. This will enable business process flexibility and improvements through an SDK-based developer environment—see the Multi-Party Business Network diagram above.
A Business Network Platform runs a SVOT (single version of the truth) for all parties. It provides a new business process environment across the business that federates the financials across your multiple ERP installations.
The Logic of a Dual Platform Environment
While a monolithic enterprise platform is no longer useful in today’s network-based world, it can still play an important role in aggregating and reporting the financial performance processes of the enterprise.
Meanwhile, the Business Network Platform operates, enabling planning, operations, orders, and execution processes across all trading partners. Financial related inputs and outputs of trading transactions can easily flow from the cloud to the financial modules in the enterprise ERP system. This Dual Platform approach solves the three major problems in digitalising, how to:
- Gain competitive advantage in today’s marketplace
- Eliminate the tremendous costs of maintaining and migrating the current ERP monolith
- Gain the flexibility required to take advantage of new market opportunities
Key Capability in Digitalisation: The “Tuneable” System of Control
Evolving from the current state to a Business Network Platform, the ability to tune what is being processed within each system is crucial. One Network’s unique “Tuneable System of Control” coordinates business processes across multiple parties and systems, leveraging new technology while empowering legacy systems, to deliver optimal results fast.
A tuning capability enables users to assign system-of-record responsibility to each state and action in a Network process to either (1) One Network’s NEO Platform layer; or (2) another legacy application. In other words, the NEO Platform manages the end-to-end processes, but designated steps can be processed by legacy systems, and either one can act as the system of record.
This “tuneable” environment will also run across multiple blockchains. If trading partners are using “Ethereum or Hyperledger”, the platform provides cross-chain connectivity as it runs on top of both as a multiparty ledger. The Dual Platform approach ensures that your daily/weekly/monthly work investment is focused on your organisation’s most strategic and tactical execution objectives and is done in the most efficient way.
Make a Network Platform Your Primary Platform for Supply Chain Planning and Execution
What’s different from today? Rather than looking at a Business Network Platform as a bolt-on to ERP, it actually becomes the primary multiparty platform across the silos and old ERP monoliths. Over time, these ERP systems become the bolt-ons to the Network for financial processing. With this Dual Platform construct, operating information/data is in the cloud, is real time, and flows to ERP financial modules through the standard Network API’s.
Today, the “best-of-breed” and “best-in-class”, is defined by what best maximises overall network performance—costs, time, service levels, scale, and flexibility to adapt to market changes. It is no longer defined by the level of performance within a siloed business function. Even if you have the “Rolls-Royce” of WMS systems, but run it with big inventory buffers, have poor carrier communications, long replenishment times and an inability to forecast demand—does it really matter?
The enterprise will be better served with a Network Platform where every supply chain participant and function has the same SVOT. Operations will be transparent and synchronised and near-real-time decision-making will be the norm. That’s what maximises performance in business networks today.
Rapid Returns with a Value-Based, Agile Implementation of a Network Platform
A Dual Platform Strategy delivers a number benefits in key areas. Notably, it eliminates the many burdens of current Enterprise Platforms—being overly expensive, difficult to maintain / upgrade and unable to keep pace with the current fast-paced business world. This alone is good reason for the Dual Platform to take center stage and provide a technology environment that enables rather than hinders the enterprise from reaching its full business potential.
Unlock value quickly. One Network’s NEO Platform can be implemented in a matter of months through a series of value-focused business releases with minimal disruption to the current business environment. You focus on highest value areas first, moving business capabilities onto the network layer systematically in a way that lowers risk, maximises project success, and creates momentum for the next focus area.
Get out from under ERP silos. Limiting ERP to running the financial modules and over time running more and more of your supply chain on the Network in the cloud, you reduce the need for an extensive IT team at each location to maintain and troubleshoot legacy ERP systems. In a Network architecture, trading partners can interact and collaborate at will, based on their secure permissions within the Network. With full visibility and productivity related metrics maintained at the corporate level, all levels of management have access to real-time data simultaneously, and can monitor daily operations as they happen, addressing issues or errors immediately.
Automation offers enormous value. The key opportunity benefit from moving to the Dual Platform is around process automation. With autonomous agents powered by artificial intelligence and machine learning (a topic for another time), we can automate repetitive business operations and decision-making, such as the handling of routine supply chain exceptions. Expert staff can then focus on the big impact decisions that deliver the highest value. They’ll also have advanced predictive and prescriptive analytics to spot problems early—when there are still many low-cost options—and resolve them optimally at the network level with problem-solving workbenches, optimisers, and “what-if” scenario analysis.
The potential of the business network-based approach to supply chain management, is significant as proven by recent case studies. Some companies are already achieving forecast accuracy in the 95% range, driving order fill rates/OTIF to 99% and reducing inventories by 20-30%, and in some areas even 50%. Some other radical improvements that have been achieved include:
- Reducing supplier expediting costs by 60%
- Reducing premium transportation by 50%
- Reducing COGS by 3%
- Reducing volume purchasing cost by 10 to 20%
- Reducing planning and execution effort by over 40%
In short, value and flexibility are front and center with a Dual Platform Strategy and a network-based architecture. Companies can more easily meet business demands while maintaining the flexibility to implement changes that make the business run smoothly with highest possible service levels at the lowest possible cost. Given the results to date, there is absolutely no doubt that a Dual Platform Strategy will provide the competitive edge that most companies are striving to achieve. To learn more, please visit www.onenetwork.com.