IT budgets for Supply Chain Inventory Management investments have shrunk considerably during the most recent economic downturn. This is true of both Government and commercial enterprises. Industry research shows that appetites for large scale projects have all but disappeared as enterprises look for targeted and cost-effective solutions that will provide immediate value. Instead of throwing large amounts of money up front at expensive and often excessive SCMS and ERP systems, enterprises are now looking at alternative methods to solve their most pressing supply chain challenges.
One alternative strategy that is receiving a lot of attention is Software as a Service (SaaS). While this software model provides some benefits, including the reduction of upfront costs, it also has some disadvantages that enterprises should consider. These include the loss of control over data, limited customization options, and an inability to integrate with additional services. Furthermore, this delivery model requires ongoing payments for the service, often times prolonging the budget shortfall by committing future IT dollars to an unproven solution.
A second strategy being taken by enterprises is to purchase lightweight and highly targeted off-the-shelf applications that can be easily plugged in and configured to address a specific Supply Chain Inventory Management problem. This class of application normally incorporates Service Oriented Architecture (SOA) principles, thereby enabling them to be extended, scaled, and incorporated into a larger IT vision at some point in the future—once more funding is made available.
Partnet sees great potential in leveraging this second strategy. Government, as well as commercial enterprises, need to look at smarter IT solutions—not necessarily larger, more comprehensive ones. Simple integration tools—targeting critical data sets within the supply chain—often bring more value than cumbersome enterprise systems.
DOD EMALL, which currently employs an enterprise integration application called Partnet ePort™, provides a prime case study for this approach. ePort is an inexpensive yet powerful integration and messaging tool that provides secure, real-time connections between enterprises and their trading partners. ePort improves supply chain performance and lowers program overhead by enabling the DOD EMALL trading partner network to quickly and efficiently establish electronic links for the exchange of catalog, order, financial, demand, and forecast information. ePort also supports multiple document formats and communication protocols, such as ebXML, HTTPS, SFTP, AS2, and AS3.
ePort is just one example demonstrating how lightweight and flexible COTS applications are stretching Supply Chain Inventory Management budgets. Given the current economic climate and the fiscal restraints being enforced on government agencies, its vital to consider all available options.