| Jeff Kaplan on the Evolution of Software |
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| Written by Scott Koegler | |
| Friday, 07 November 2008 | |
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The importance of EDI may never have been so, well... so important. As we get the news that job losses for the last year approach 1 million, and profits for some of the most stalwart companies plunge into negative territory, expense reduction remains at the top of the list for any company involved in moving products from one place to another. We have recently seen some interesting announcements from some EDI service providers that may help companies provide better service to their customers, improve their internal processes, and make significantly better use of the information contained in their EDI transactions. For a perspective on these advances, I talked with Jeff Kaplan, Managing Director at THINKstrategies, Inc, in Wellesley, MA. ; "Image"){kind=small} Jeff, I've seen different levels of activity in a very few sectors of the EDI industry
lately. In some ways, the activity has been pretty much business as usual. But in a very few areas,
the activity has been encouraging. From my perspective, one of the big picture objectives set out by
panelists at UConnect, a few years ago has been leapfrogged by some innovative companies. In
particular, a panel including representatives from GXS, Innovis, and a few of the other larger EDI
software companies at that time, talked about providing what they termed "Visibility." They
described how they would be able to let their customers see the status of orders at any and all
stages of the order process.
I came away from the presentation with lots of thoughts about what this kind of intelligence could do for both customers and manufacturers. The idea of being able to monitor progress, and to be proactive in resolving issues, made a lot of sense to me. Of course it still makes a lot of sense. But at the same time, I wondered about the feasibility of tracking information, when it exists in so many separate instances... a database at each location. None of the companies participating in the presentation housed any of their customers' transaction data centrally, though they were able to intercept the transactions as part of their VAN activities. At the same time, a few, mostly smaller companies, had begun offering online versions of EDI processing applications. These were mainly offered as webforms, and intended for smaller companies with comparatively smaller transaction volumes. But the promise of the platform, one that not only processed the transactions, but housed the data in its entirety, had begun to show promise in its use by a company in an unrelated industry - specifically SalesForce.com. So, without restating all the things that have already been said about the use of SaaS, and success of SalesForce.com, I've begun to see what I would call the next level of utility emerge from companies engaged in SaaS deployments. I'm thinking about the recent press releases I've seen from SPSCommerce, with regard to what they call their Trading Partner Intelligence Service, that draws a variety of different reports and status updates from the consolidated data they collect as part of their normal service offering. With that long introduction, Jeff, What is your impression of this? Do you see it as a trend, or possibly as a normal progression? Kaplan: I'm very enthused about these developments. I founded the MetaGroup's benchmarking practice in the early '90s, and what we did was collect information via interviews and lots of paper reports, then manually aggregated the results, and analyzed it to provide high value information to our customers. It took a lot of work, by a lot of skilled analysts, and we got a lot of money for what we did, but the reports really had limited business value. Now, the entire interaction can be captured because of the direct connection of the software. The transaction data can be aggregated, analyzed, and redistributed to provide a whole new level of value to those customers. And this can give them real benchmarks that can help them understand true industry best practices. SPSCommerce is picking up on this theme, and I see other companies in the SaaS market joining in on the theme as well. In fact, our company is working with some of the companies in this market to provide independent validation for their efforts. It would seem that in addition to the information collected for a single customer and its
transactions, there may be some way to leverage the data to provide industry level best practices
metrics.
Kaplan: That's exactly the case. In fact, my company is working with a company in the IT sector that provides SaaS based managed services. One of the services they provide is the monitoring of installed software vs licenses. They use an auto-discovery tool to count, for instance, the number of Microsoft Office installations in a company. They can then let their customer know how many copies are in use in order to verify they have the correct number of paid licenses, so they are in compliance with the license agreements. This is important to the customer, obviously. But they went to the next level. Because they now have this information for many customers, they have been able to aggregate the results into industry level findings. What makes this easy for them to deliver, is the fact that they collect data from all their customers, and store it in a single database. Interestingly, what they have found is that many companies have more licenses then they need, of the more expensive versions, and that many companies can save as much as 50% by licensing the right versions for the right number of seats. That's pretty powerful stuff. Do you see this any limits to this kind of facility?
Kaplan: Not at all. In fact, I've been advising clients to look at these initial releases as the beginnings of what they may be able to expect in the future. We are seeing the lines blurring between what we now call software, or SaaS, and business services. For example, is ADP, a software service, or a business service? The next step is to call companies like SPSCommerce, a software service, business service, or even an information service. If they are successful, they will be able to provide a variety of business and information services. Their task now is to develop a way to package, price, and provide these services in ways attractive to their customers. Is this something specific to SPSCommerce?
Kaplan: Any SaaS provider doing a good job, and planning correctly should be in a position to deliver similar services. They should already be tracking these same kind of metrics, even for their own purposes for tracking the use by their own customers. But if they are doing it properly, they can harvest the date without violating privacy rules, to deliver a whole new level of information and analysis. SaaS providers should be able to increase customer loyalty by using data based results, to provide insights to their customers on best practices in a very real, and usable sense. Thanks for your perspective on this continuing evolution, Jeff. I'm sure we'll talk about it again. The SaaS market continues to grow and evolve, and I'm interested to see how people and companies take advantage of the various facilities that are coming to market.
Jeff recently wrote about the SalesForce / Dreamforce event in his blog. |