Getting value from "IT alphabet soup".

Can any businessperson remember life before e-mail? Before SCM, ERP, CRM, SFA, MES, APS, PCS, LIMS, ASP and WWW acronyms became part of the everyday business fabric? Today, business people, not IT staff, are the "go to" people within organizations for selecting solutions and suppliers. IT is still a critical player in the selection process, and definitely carries the ball for infrastructure and ongoing systems support. However, interpreting the business value of technology solutions has never been more critical than in these times of limited capital and soft markets.

The Supply Chain & IT Alphabet Soup

Supply chain management (SCM) has become the umbrella of justification for selecting most software. Enterprise resource planning (ERP) has become unfashionable for software company marketing, but is descriptive for enterprise integration of a company's internal business functions. These enterprise-integrating applications, whether packaged solutions or internally developed, are the backbone for leveraging a company's supply chain or extending the information flow to the Internet.

Customer relationship management (CRM) and sales force automation (SFA) focus on the customer end of the supply chain and how the incoming portion of a company's supply chain overlaps with the supplier's CRM and SFA efforts.

Manufacturing execution systems (MES) is the general category for a number of plant level IT systems. Advanced planning and scheduling (APS), laboratory information management systems (LIMS) and process control systems (PCS) improve efficiencies, automate quality tracking and provide process information on equipment control and performance. These systems are the foundation for determining a manufacturer's profitability and meeting customer product requirements. They also send information to higher enterprise IT systems that can be extended to external supply chain partners via the Internet.

The World Wide Web (WWW) has changed the business world forever. Application service providers (ASP) offer manufacturers the opportunity to use a variety of applications without purchasing the expensive IT infrastructure to run the software or going through a lengthy implementation to install the software. Applications offered via an ASP model also avoid technology obsolescence because they are easier to upgrade as new technology becomes available. For maximum return on investment, it is essential to integrate these ASP applications with existing enterprise systems.

The bottom line

Cutting non-value adding transaction costs and creating greater connectivity, among supply chain partners is the best way for manufacturers to increase profitability and maintain market share. Eliminating fragmentation of internal IT systems at all levels will ensure that reliable, accurate information is available to improve supply chain efficiencies. These more cohesive IT systems will also allow manufacturers to use ASP supply chain integrating applications that avoid technology obsolescence, offer shorter time to use and are more cost effective. "IT alphabet soup" ingredients may differ by company, but the blend should result in bottom-line business value and improved information flow among supply chain trading partners.

Get the right IT soup recipe for your company at the 34th Annual PIMA IT Conference, April 21-24, 2002 in Richmond, VA.