Evaluating the Business Case and Approval Process for Supply Chain Execution Systems

The use of technology as a catalyst for business, while not new, is relatively young compared to business itself. In fact, the supply chain concept itself is a new innovation of business. The term Supply Chain Management dates back to the early 1980’s as businesses began to see the need to integrate key business processes between the company and the supplier.

Technology as a key enabler of this notion evolved in a slightly lagging but parallel path. EDI (Electronic Data Interchange) as a standard rose in the late 1970’s and throughout the 1980’s as businesses sought to share order files and similar “documents” between them electronically.

As the complexity of supply chains have increased over time initially in a more national / regional sense and now as a global environment, technology has continued to evolve to help businesses work to manage this complexity. In tracing this evolution since around 1990, technology, along with supply chain complexity, have gone through several transformation and eras as depicted in Figure 1.

It started in 1990’s with changes in consumer buying and the ERP driving an evolution in business. Most recognize three factors in this evolution. The first was the recognition by businesses that their existing supply chains were becoming too complex to handle using traditional approaches. Interestingly, it was likely the rise of the consumer choice through micro-marketing, product selection growth, mass advertising techniques, etc. that appears to have driven this complexity.

The second was the evolution of technology enabling broader computing resources to decentralized “users”. The creation of client-server technology, for instance, when combined with the proliferation of desktop computers in business created a new opportunity to leverage system technology. And finally, there was a focused development on expertise in these systems, primarily through the “Big 5” consulting firms that created armies of implementation experts to help business plan and install these systems.