Synching Up with Uccnet
The word "collaboration" conjures up images of working together for a common goal. Undoubtedly, the past year saw consumer goods firms and retailers seeking ways to improve how they work together. Both parties have focused on inventory management and have moved from push to pull models. Now it is time to focus on the digitized data and content related to the products being sold. On the surface, this approach seems unusual -- it's akin to correcting employee data after the payroll has run. However, to those enterprises that suffer the problems of invoice errors, deductions and other product data related problems, this issue is one that is being taken very seriously, especially by Wal-Mart who wants the problem fixed from its Top 100 customers by 2005. Wal-mart's solution lies in UCCnet, which enables enterprises to synchronize key product data with each other to avoid the loss of sales and other supply chain inefficiencies created by the "bad data" enigma.
The Sounds of Simple
The data synchronization concept sounds simple: One enterprise sends data to another and the other accepts the new data or updates and notifies the other of the receipt. Yet, it has taken a mandate to increase the interest in this initiative due to the high cost that is associated with the location, cleansing of product data and the creation of a product catalog for synchronization. If your organization, for example, is running multiple ERP instances from the same vendor or different vendors such as SAP, PeopleSoft, or Oracle, then pulling together that single product catalog can be quite challenging. Add to that the process of vetting each product's data to ensure accuracy in addition to the cost of the product catalog and integration software and an enterprise may see this as a risky proposition, especially with tight 2003 IT budgets.
In 2003, early adopters on the supply side of the equation are discovering that efficiencies realized from product data cleanup can fund a data synch project. The costs of maintaining and storing obsolete product data and fixing invoices and deductions manually paves the way for an enticing opportunity. Meta Group believes that an investment in UCCnet not only benefits the retailer but also benefits the supplier due to data cleansing.
New Competitive Concerns
As in the past, no new initiative is without concerns, and in the case of data synch, concerns have surfaced from both manufacturers and retailers surrounding loss of competitive differentiation. With the tight economy of 2003, retailers and suppliers are fighting for every point of market share.
These are valid concerns, especially when competitors can purchase the same solutions to run their businesses that you are using. However, do retailers and consumer goods companies really compete on the data they use to describe a product or do they compete on the products they sell?
Some may say both, but Meta Group believes that structured data in rows and columns does not differentiate an enterprise. The business processes and model enable differentiation.
So how does collaboration fit into this landscape? Imagine that all suppliers and retailers are using the same structured data to describe a product (and there are those who are doing this today). We would then have a common language to center all joint business processes (e.g., VMI, CPFR, DSD) on, from forecasting to replenishment, from new product design to retirement. With this common language, we can then begin to link collaboration solutions that enable structured and unstructured content to be shared and distributed as part of trading partner business processes.
Room for Improvement
In 2003, enterprises opened up data and processes with technology such as portals. These windows into the enterprise enable partners to perform self-service related activities that can benefit the provider of the portal. Moreover, we have seen great results with inventory levels and orders because of visibility into each other's position. Yet, there is still plenty of room for improvement.
A recent flurry of consolidation in the enterprise content management market between EMC and Documentum, Opentext and Ixos indicates that vendors are merging many types of unstructured content management capabilities such as digital asset management (images, video, audio), Web content management (pages, templates), document and records management with other collaboration capabilities. Such capabilities include virtual team rooms, instant messaging, e-mail and e-learning with companies such as Microsoft, IBM, Documentum, Interwoven, Vignette, Opentext, Filenet, Stellent and others seeking leadership positions with next year being the year of content and collaboration for retailers and suppliers as enterprises seek to improve content related business processes.
What the Future Holds
Meta Group research indicates that during 2004 and 2005 data synchronization and collaboration advances will be the focus for many consumer goods enterprises. Moreover, we believe that by 2008 or 2009 the unification of data synchronization and enterprise content management will enable collaboration efficiencies to join business processes. Furthermore, we believe that retailers and manufacturers will create joint collaborative environments to improve product designs that reduce product cycle times, travel and shipping costs.
The Bottom Line
Data synchronization and enterprise content will lay the foundation for a new level of collaboration among retailers and consumer goods enterprises.
Gene Alvarez, vice president, technology research services at Meta Group, has 20 years of IT experience in business impact assessment, vendor management, project management, software development, and delivery of complex business applications. Prior to joining META Group in April 1999, Gene held positions with Nine West Group, KPMG Peat Marwick, New York Power Authority and AT&T Communications.