How Should You Implement Your SCM Software?
Brian Hoey - May 26, 2020
Let’s say you’ve just chosen a vendor for your supply chain management software. It’s been a long journey, full of careful research, sales calls, and soul searching, but you’ve finally chosen the solution that you believe will make a real difference in your organization’s ability to stay resilient amid a complex and changeable global supply chain. Congrats! Now the question becomes, how do you actually implement that software?
Sure, this question includes the technical nitty-gritty, like how the software will actually be installed and what early stages of administration and setup you'll need to carry out—but we’re hoping that whatever vendor you’ve chosen does their best to make those things as painless as possible. The bigger question is how you manage the implementation to maximize your chances of ROI. To that end, here are a few tactics to employ:
1. Conduct an Internal IT Audit
According to Deloitte, nearly 80% of “supply chain leaders” (i.e. businesses that have exceptional supply chain management infrastructure and capabilities) achieve revenue growth that’s well above average. This should give you a decent sense of the kind of stakes we’re playing with here: a successful supply chain management software implementation can be a huge boon to your bottom line, while a less successful implementation is likely to have effects that are much more muted. To get things off on the right foot, the first thing you’ll need is an internal IT audit. This will involve taking stock of all of the ways that disparate teams across touchpoints (e.g. sales and operations planning, inventory planning, production, logistics, etc.) are gathering, storing, analyzing, and acting upon digital data. As you go through all of this info, there are a few things you should look out for:
- Which sources of data will you connect to your SCM software during implementation? This might be the ones that are updated the most frequently, or the ones that have the neatest data structures, or the ones that the most stakeholders can update, depending on your operational goals and the specifics of your software deployment.
- Are there any planning/data silos or instances of shadow IT that need to be rooted out? This will inform both your choice of integrations and your trainings for stakeholders who may be using the new IT.
- Will any existing systems require refactors or updates in order to integrate nicely with the new solution? If, for instance, your inventory planning system has some legacy code that needs an update before it can send data to the new software solution, this is the time to figure that out.
Once you’ve got a handle on your existing infrastructure, you’re almost ready to roll out your new software.
2. Choose Cloud vs On-Premise
This step will only apply to a subset of readers, but if the vendor you’ve chosen offers both cloud-based and on-premise hosting options for your supply chain management software, you’ll need to take stock of your current business and IT needs to figure out which is the better option. From a cost perspective, the cloud tends to offer a quicker return on investment (since you don’t have to spend a lot on infrastructure up front), with the potential for higher total cost of ownership. Conversely, you might have specific compliance reasons why the cloud is a worse options (though, it’s worth noting that for most businesses without robust dedicated security infrastructure, the cloud is actually more secure). You may also want to consider scalability (i.e. how much will your data usage needs change from month to month), as well as integration with other apps. This is a fairly complex topic, so you can read a more in-depth run-down of cloud vs. on-premise here.
3. Get Software Users Excited
Though it might not seem like it when you’re in the midst of a highly-technical process, the biggest potential hurdle to success in SCM software integration is getting buy-in from your users. They’re the ones who will either use the software as intended—or use some other, unsanctioned method of conducting business instead. Too often, operations managers and IT personnel think that software trainings are enough to get users invested; in point of fact, you’ll need a larger internal communications strategy to help answer the question that’s most pressing to most of your personnel: Why? Why are you implementing this software in particular? What business areas does it pertain to, and what are your goals for those areas? How will this software ultimately make life easier for your users? The initial efforts that go into adopting a new way of doing things make serious headaches for users in the short term, so it’s important to be open about your long term plan and offer support wherever needed.
4. Create an Integration Roadmap
Assuming you choose your vendor well, your SCM software deployment will put you in a position to more carefully track and analyze the entire supply chain end-to-end. Like we noted above, this has the potential to put you in a strong market position. How? By empowering you to weather obstacles more effectively and carry out optimized supply chain plans more efficiently. For a true end-to-end view of your ongoing efforts, however, your SCM system is going to have to integrate with the systems in use by your vendors and clients, and at other touchpoints on the supply chain like smart ports or logistics providers. This means that you need to do for your partners what you did for your employees—explain to them how you’ll be using your new system and how they’ll fit in. This should include a clear timeline and a plan of action for integrating your systems with theirs wherever possible. Data is power, and the more data you’re able to extract from your supply chain partners the more value you’ll be able to extract out of your own SCM systems—whether that’s through increased visibility, advanced analytics usage, or data-driven forecast improvements. With these capabilities in place, you’re positioned to craft smarter, more resilient plans in the short, medium, and long term, and your supply chain is poised to become a key driver of increased value.