The supply chain is a very critical part of business, a strategic tool to drive new high-level revenue opportunities. But in today’s environment, it’s even more critical to the growth of the company, believes Peter Edlund, chief solutions evangelist at Dicentral.
We are all aware that data drives modern business, and from this perspective, data is required to drive the modern business paradigm of automation. The supply chain is inherently expensive to operate but becomes more efficient as you develop new tools and capabilities.
In an efficient application programming interface (API) economy, a scenario where applications are publishing their methods for communicating with each other, data can be leveraged across applications. An API economy could be significant value due to companies investing in a variety of new applications in the cloud and on-premise. Businesses are optimizing the supply chain with these capabilities, and they want these applications to talk to each other in real-time securely.
However, the biggest challenge for organizations that want to leverage this technology is to be able to bring them up to scale. This also refers to the ability to scale the integration capabilities of these applications and connect a number of applications together in order to create value in the supply chain. Each application adds a certain value to the technology stack. The resulting challenge is that every application is written differently, so a well-published API is needed. Companies need tools to manage thirty or forty integrations to securely connect these applications. When a company can do that well, they will thrive.
This is the year of reckoning for the digital transformation challenges that didn’t work well due to integration issues. Technology implementation can be a quick process, but if applications don’t communicate with one another, it’s hard to see where value is added.
The Last Mile
Companies have the right intentions on data integration, but the speed is directly proportionate to the ability of the data to traverse the multiple applications that are required to run a supply chain. And this is directly related to the success of the digital transformation initiative.
Supply chains require 50-60 applications for extended partners to be integrated efficiently. So, you are looking at application integration and supply chain partner integration. These are third-party partners- for logistics firms to sourcing firms, with each one having a silo of applications. But if they don’t talk to each other, it’s a loss. This is precisely the last mile challenge with respect to data and has been faced by companies over the last three to five years when creating a digital transformation strategy.
Change is difficult, it’s risky, takes time, and in some cases, it could repeat past mistakes. There are also people who are risk-averse. Various industries work at different paces. Obviously the financial sector will move much slower because of a low -risk tolerance. But there is a definitive movement to the cloud, which is one of the only options from a competitive perspective. The cloud offers businesses scale, and legacy applications have to be rewritten and need to re-platform to be used in the cloud. There is a lot of rechannelling happening that is transforming industries.
Next few years
Today, there is very little left to the imagination in digital transformation. It will continue to stay the course as it is now. At this point, there will be a push towards creating more value by pointing to what has already been built. Investments have gone into digital transformations, but now it is time to get value from that.
However, CIOs need to be aware of their readiness for a digitally enhanced supply chain platform. Businesses need to ensure that their technology partners can provide well-documented application programming interfaces. This is important when building a technology stack, and if that is to grow, you need to pick your partners that ensure quality management tools to manage the APIs.
There is a movement towards a plug and play environment where technologies can be swapped out. Businesses need to be able to bring technologies in and remove them very quickly, as unique opportunities come up. If you don’t have an API management tool, the ability to scale back is an issue.
As CIOs are increasingly becoming a part of the business decisions within the boardroom, they are responsible for innovation as well. It’s not just merely IT activities now; it’s about bringing in technology and acquisitions to help their business become more competitive.
They need to leverage the core platforms. The transformation journey will continue, and they will need to harness available data and derive new value for the company.