Cloudy is good, it seems, with software as a service moving into an increasing range of logistics applications, even so it’s not all plain sailing.
The role of IT within organisations is increasing, according to a study by business intelligence group Gartner. Hardly a ground-breaking finding in itself, but what Gartner’s global CIO survey also revealed was that IT budgets are flat. And in Europe and North America, IT budgets are actually expected to decline.
So organisations are going to be looking for ever more cost effective ways of accessing the latest technology – and that has to be good news for the burgeoning cloud computing market.
Suppliers are moving into the market rapidly. SAP, for example, has just unveiled an accelerated cloud strategy by announcing cloud solutions for four lines of business to manage people, money, customers and suppliers. These are planned to be offered in a consistent way and seamlessly integrated into ERP business software.
Becky Clark, CEO of NetDespatch, says: “SaaS is particularly suitable for applications with global / enterprise-wide use – that is your own company, your customers and your suppliers. Typical instances would be accounting software, CRM and shipping software.
And Denis O’Sullivan, managing director of Deltion, says: “Currently there are applications that are being developed both to be delivered as SaaS via the cloud and also as on-premises solutions, however most on-premises applications are being delivered as in-house developments. Software vendors are mostly concentrating on cloud applications and these will usually be delivered as SaaS. Already we are seeing more and more in-house developments being developed for private cloud (a cloud infrastructure operated solely for a single organisation).
O’Sullivan believes that the current generation of on-premises application development will also be the last.
“There will be fewer and fewer developed, and within a decade these developments will cease for a number of key reasons including: the growing economic advantages of web services and applications; developments in web development architecture and tools; it will be more and more difficult to recruit young development staff for traditional development because they will not have learned the ‘old’ programming languages.”
In principle, he says, there is no restriction on what can be delivered as SaaS. “Because these services are delivered via the cloud it is important to ask: which applications will most benefit from SaaS delivery via the cloud using latest web development architecture? The answer is: those applications that can deliver significant benefits in terms of real time information and alerts.”
Becky Clark sees the take-up of SaaS by parcel and postal carriers accelerating sharply in line with increasing use of online shopping as well.
And Sergio Barata, head of EMEA at Telogis, which produces an SaaS system for fleet management, navigation, routeing and mobile resource management, says: “We expect the growth of organisations moving to a SaaS model to continue. As more enterprises look to upgrade their existing systems to something more flexible and cost effective, SaaS enables them to do this quickly to achieve a fast return on investment.”
Not only is the technology developing rapidly, there also appears to be a growing acceptance of that critical data can exist safely in the cloud. Mark Breeden, general manager of Qurius UK, says: “Acceptance of data security through personal use of internet banking and other personal applications has removed many of the earlier emotional obstacles preventing SaaS take up.
“Virtualisation has enabled a cost effective way of delivering a ‘cloud’ based solution by leveraging the full potential of a given piece of hardware,” he says.
“Where in the past you would have had multiple physical servers for a particular environment, you can now reduce this number significantly with virtualisation. Improved communications is also key as your ‘cloud’ system is only as good as the connection to it and the resiliency and redundancy based around that.”
Barata says: “As storing data in the cloud becomes more acceptable and access to a faster more reliable internet widens, there are fewer barriers preventing organisations using SaaS solutions. Also, better mobile phone coverage also means that field workers can also benefit from systems.”
Steve Keifer, vice president of global marketing at B2B e-commerce specialist GXS, recently published a book on the information supply chain entitled “Herding Geese”.
He points out that only 50 per cent of the world’s B2B transactions are automated today, leaving tremendous opportunity to improve on the performance of physical and financial supply chains.
And he believes that a renewed emphasis on B2B e-commerce technologies is now needed to improve the competitiveness of individual corporations and to solve many of the world’s political and economic challenges.
However, the path is not entirely free of problems. Keifer points out that one of the feature of software as a service is the ability to distribute costs across the supply chain. In the traditional software model, a retailer might buy a package or develop a system in-house – so the cost has to be met by that organisation.
With SaaS it is much easier to push an element of that cost back onto suppliers, and, not surprisingly, there is some debate on what is equitable in this situation.
Arguably, sharing stock data is beneficial for both a retailer and its supplier, so it is only reasonable to expect both parties to take a share of the costs. But, Keifer points out that conflict can arise if the supplier believes it is being asked to pay for something that provides no benefit. “You are going to see a push back,” he says.
Looking ahead, O’Sullivan, sees increased integration with other internal and external systems to deliver a true single source of information related to supply chains.
“This has been referred to as the elimination of the ‘swivel chair syndrome’ where to get a complete picture an operator or planner needs to swivel between multiple systems screens on their desk.”
Other developments include coupling of the main application linked to mobile devices, including Smart Phones and Tablet PCs. The power of these devices and the standard applications available are growing exponentially and already smart phones exceed the computing power of PCs a decade ago, says O’Sullivan. “The web and web-related applications can deliver real time visibility and help identify collaboration opportunities. These are already part of leading edge SaaS and cloud computing applications.”
Breeden believes that there will always be some exceptions as the requirement for a local application or device dictates but what will happen more often is that these local applications that are tied to the location will feed into the cloud system for seamless working.
“This has and still will be a stumbling block for a full scale ‘cloud’ based service but with proper knowledge and careful planning most, if not all integration problems can be overcome.”
Case study- SaaSy fashions for George
Asda’s fashion brand George has started using ediTRACK’s software as a service to give franchise partners across the Middle East and Channel Islands the ability to track and manage the ordering and shipment of the latest clothing ranges.
The system shows how and when products will be delivered to their distribution hubs and container freight stations covering areas from the UK to China and the Middle East. It also updates them on each product’s progress through quality control checks.
A George at Asda spokesperson said, “Working with ediTRACK means our franchise partners can simply log onto one system and share definitive up-to-date information with their supply chain partners. This is going to save a huge amount of time, which is very important in the fast-changing fashion business.”
Over 237 million garments are made a year for George and the company operates a permanent 100 day quality guarantee on all of its clothing.
The software developed by ediTRACK is one component of a broader supply chain management solution, integrating an online ordering system developed by Momentis and software from other suppliers, including SAP.
Once franchisees have viewed and selected products, the ediTRACK system takes the purchase order information and helps them to establish what they need from each supplier. It then provides complete visibility of supply chain processes to everyone involved, so they can manage authorisations and the movement of goods through the supply chain.
Blue sky computing- Where is the cloud?
A key player in the development of cloud computing has been online retailer Amazon. Its web services business is one of the major global providers of IT infrastructure that makes up the “cloud”.
It has hundreds of thousands of customers in 190 countries around the world and is expanding its range of services. It recently launched AWS Marketplace, an online store for Software as a Service products.
Products currently available include databases and application servers, developer tools, and business applications – available from vendors such as 10gen, CA, Canonical, Couchbase, Check Point Software, IBM, Microsoft, and SAP.
Case study- Warehouse management in the cloud
Sci-MX, which makes nutritional products for athletes and gym users, has been building its business through a variety of channels, including e-commerce.
To meet the requirement for a warehouse management system it turned to Snapfulfil, The SaaS WMS system from Synergy Logistics. The system went live in February.
Snapfulfil was one of the first WMS systems developed specifically for SaaS deployment. Synergy points to a number of benefits – no capital expenditure, a one-year contract minimum, and rapid implementation – the system can be up and running in 30 days.
The system offers automated goods receipt; RF directed put away; automated replenishment; RF picking; dispatch management; audit and inventory control; and simple data integration.
Last year, Snapfulfil added integration to the SAP ERP system by providing its range of interface files in the SAP Approved IDocs format, along with a flexible integration layer for sophisticated mapping via XML, the preferred format for the SAP middleware, XI.
Case study- ERP in the cloud
Epicor has set up a strategic alliance with Microsoft to use Windows Azure, Microsoft’s cloud platform, to expand on-demand delivery of its ERP suite.
Epicor ERP was launched in 2008 and is designed for growing companies in domestic and global markets, Epicor says it offers high levels of flexibility, usability, and agility in support of application-to-application integration and business-to-business collaboration.
The Epicor ICE Business Architecture will also benefit from Windows Azure and SQL Azure.
The third major release of Epicor ICE will provide platform as a service (PaaS) and infrastructure as a service (IaaS) offerings using Windows Azure. It provides connectivity across a wide range of Epicor business software solutions for the manufacturing, distribution, and services industries.
ERP provider Lakeview has launched LV ERP as a cloud-based product targeted at small and medium sized enterprises looking to benefit from the low up-front investment. It incorporates an option for a web-based front-end interface, which enables remote users to access the LV ERP using a browser via any device. Customers can choose to buy the software or rent the software as a service.
– ToolsGroup has launched an outsourced service that feeds optimised inventory targets to companies, allowing them to manage and respond to demand volatility.
Inventory target setting delivered as an outsourced service allows companies to avoid implementing expensive systems and processes. Instead, users take advantage of ToolsGroup’s inventory modelling and optimisation engine through a secure cloud-based portal.
Users get SKU-location level inventory targets, such as safety stocks and reorder points, for a low monthly cost. This approach allows companies to deploy optimised inventory targets using their current systems and processes.
ToolsGroup points to one North American FMCG company which is optimising 800 unique SKUs in a network of four plants and 60 distribution centres. Its challenges include seasonal capacity constraints and high demand volatility driven by promotions, media events and competition’s activities.
– Deltion is has released version 6 of its CarrierNet SaaS transport management system which has a new real-time dashboard to give full visibility of what is going on in the transport operation with a live feed to events at depots and on trailers as they happen.
– Transwide has consolidated its entire SaaS product portfolio into a single Transwide brand including a collaboration platform used by shippers to source, plan, execute, settle and analyse transport operations.
It also includes TMS for carriers, formerly known as TAS; an on-demand planning and optimisation system; and a sourcing and procurement platform for shippers.
Case study- SaaS key for Shore Logistics
Suffolk based Shore Logistics was founded by Natalie Caraccio, left, earlier this year, and so going down the SaaS route for a transport management system was an obvious option.
Caraccio chose Hosted Tops provided by Fargo Systems to meet the requirement for a cost effective, easy to use, flexible transport management system that would help her manage jobs efficiently without being constantly on the phone to drivers.
She says: “I was able to react to the supply and demand opportunities that arose to form Shore Logistics and Fargo Systems provided a management system that has proved invaluable in maintaining a fluid supply chain for my clients. As a new company and single user, it was important that I chose a transport management system that was cost effective, scalable and could easily report on scheduled jobs, completed jobs and the status of current jobs instantly and with up to date information.”