Saas/Cloud and Demand Forecasting |

The 4^th of July ranks as one of my favorite US Holidays – on equal footing with Thanksgiving. Both commemorate uniquely American experiences and events and fundamentally celebrate what makes this a great country.

Coincidentally, I was reading an interesting article from Niall Ferguson, the Scottish Historian who is a professor at Harvard and fulfills fellowships at Stanford and Oxford (yes I know, you are hugely interested – here is the link): http://www.thedailybeast.com/newsweek/2013/06/26/niall-ferguson-on-the-end-of-the-american-dream.html

While there are political undertones to the article, what struck me was the importance of remembering the fundamentals; not forgetting the critical focus points and capabilities that formed the basis of success for each of you. Mr. Ferguson was focused on the United States as a country, but I am extending the key message to apply to individuals, associations and companies.

Huh? How is relevant to demand forecasting? To S&OP? To anything involved with this blog or this industry or the people who may be so wise as to associate with Demand Foresight?

Well, it is a bit round about but here is my thinking. Back in 2010, I wrote a piece about cloud computing. The takeaway was that cloud computing would have an impact but real competitive advantage would go to those companies that utilized the cloud within the context of how it enabled their business strategy. Even more relevant today, the benefit of the cloud emerges through its application to the specific capabilities that make your company different, special and competitive: for example, collaborating in real time with key customers on new product introductions. These new product introductions have traditionally presented a challenge to demand forecasting, but are also critical to being a differentiator between companies and their competition.

However, the cloud as a technology disruptor is now joined by other disruptive concepts such as big data, in memory computing and causal analytics. On the surface, each of these technologies can seem overwhelming and something that deserves huge attention and resources. And they do, but only within the context of your vision and strategy for your company. You want the power of these technologies for when it’s appropriate, but be sure not to limit your enterprise and its ability to compete and thrive in a wholesale chase of technology for technology’s sake. The companies that outperform the competition over time are the ones that embrace their vision and ensure that everything in the enterprise, including technology, focuses on achieving that vision. At this particular point in time, with the advent of so many new technologies, what your company needs more than ever is a clear vision of what your competitive advantage is: decide what makes your company better, and find the right mix of technology (and ongoing adaptation/evolution, culture and people) that’s going to preserve and enhance that advantage.

And, in what should be no surprise to you at all, we maintain that those companies that designate demand forecasting and S&OP as a strategic capability will outperform their competition.

All of which brings me full circle to the start of this blog. It is remarkable that we have the environment and the setting in which our focus can be topics such as the impact of big data on our ability to gain market share or fulfill a 5 year strategy. We have the freedom and the opportunity to concentrate on marshalling resources to compete and innovate and do good. That is fantastic and is the result of the fundamentals on which this great country was founded – the land of opportunity and the land the free. Happy 4^th of July!

Ferguson, N. (2013, June 26). General format. Retrieved from http://www.thedailybeast.com/newsweek/2013/06/26/niall-ferguson-on-the-end-of-the-american-dream.html

Cloud computing/SaaS ascendancy — used as interchangeable terms in some conversations — picked up lots of media steam last year and continues to be the hot topic of 2010. While this entry is not intended to be an exhaustive dissertation, there are couple of points that resonate with me – what do you think?

BI in the cloud could be the next killer application. That word — “next” — is important. Because we must look at the cloud not only for its current limitations and capabilities, but through the filter of what technology means to your business strategy, your identity, and those capabilities that make your company different and special and competitive. Because cloud or no, ultimately you need technological solutions that enable your business success. Altering your business model to fit the platform might fundamentally damage your ability to compete.

Can the cloud do heavy lifting?
I have no doubt that magnificent things are possible in the cloud, but many of the current advances seem more suitable to CRM and the like: collaborative applications like Salesforce let companies offload the cost of ownership of hosting the app, and everybody knows who talked to which customer, about what, and when.

But what happens when a company needs to know what a 10% reduction in their product price during Christmas would mean in terms of increased demand, impact on other products, and their industry as a whole? Heavy demand planning and forecasting/modelling functions like this can’t be easily or reliably done in the cloud right now.

Could all this change in the next few years? Absolutely. But computationally demanding, mission-critical practices that require rapid response on massive amounts of data are on the other side of the wall, as it currently stands. So as we rhapsodize over the cloud, it’s important to remember that the cloud can’t solve everything, at least not yet.

Getting your feet off the ground: the leap of trust required to get over the cultural barrier
One of the biggest pros for the cloud is the power of intra-enterprise collaboration — bring enterprises and professionals together to help improve all participants of the value chain. But what we face here is a cultural obstacle rather than a technological one: companies have the technology right now to collaborate across company boundaries. But can we come to grips with security issues and not owning our data? Can we trust our informational lifeblood to other companies, even our customers?

In order for the cloud to reach its potential, these are the cultural questions that every company will have to solve. We have to trust that the information is secure, and that customers or channel partners won’t take advantage of the information. The real power of SaaS is almost beside the point: the real issues are culture, trust and acceptance.

When Marco Polo and the Italians began opening up new trade routes, cultural differences had to be overcome, new relationships built. Now companies and the professionals who give them voice are standing in front of another huge opportunity, with only mistrust and fear of the unknown in between them and the new possibilities. Seems like the world’s repeating itself all over again.

The dangers of fitting your company to a platform
There are subtle but profound dangers in trying to apply the cloud correctly for your company. Human nature leans towards the comforts of standardization, and it’s no less true in the technology strategy of most companies. Having uniform processes and knowing what to expect every time eases our minds. But there’s an ironic downside to this: the more you standardize, the easier it is for your tech department to be outsourced. And the more you standardize, the less you focus on competitive advantage. Too many companies fit themselves to the tool, and not vice versa.

You want the power of the Cloud for when it’s appropriate, but be sure not to limit your enterprise in how you can compete and build on your strengths. The ones who stand out over time are the ones who agree their vision and ensure that everything in the enterprise, including technology,focuses on achieving that vision. At this particular point in time, with the advent of the Cloud, SaaS 1.0 and the legacy of ERP, what your company needs more than ever is a clear vision of what your competitive advantage is: decide what makes your company better, and find the right mix of technology (and ongoing adaptation/evolution) that’s going to preserve and enhance that advantage.

Category Archives: Saas/Cloud and Demand Forecasting

Happy 4th of July: What demand forecasting and the land of the free have in common