This is the second post of Supply Chain digital transformation posts. The first focused on Low Code/No Code for Supply Chains and Logistics. Here we focus on an extremely important topic that is particularly relevant to Supply Chain: the modernization of Supply Chain where solutions and access is provided consistently across multiple channels.
To set the stage, we not that even as enterprises embark upon digital transformation journeys through digital enablers technologies such as Low Code/No Code, the reality is that there are still many incumbent enterprise platform – including mainframes – and resource planning (ERP), point solutions, legacy databases, and home-grown legacy systems, that are difficult to understand, maintain, or change. Putting “lipstick on the legacy platform, application and/or database pig” does not work. These systems are typically systems of record and are essential for “keeping the lights on.” However, they are difficult to maintain and do not inspire modernization for digital transformation.
There are many reasons why organizations need to modernize. The following highlights the pain-points associated with legacy systems for Supply Chain. Each organization on the “chain” of suppliers and components across multiple tiers will have databases, systems of record, and customized legacy code that impede responsiveness, agility, and even innovation. Here are some of the challenges:
- Traceability with Connected Supply Chains and logistics: Covid-19 stressed Supply Chains worldwide that resulted in many challenges not only for consumer goods but also for manufacturing especially as the world faced silicon chip shortages. Optimizing supply chains is critical both for healthcare, consumer goods, as well as manufacturing.
- IT Overwhelmed with Maintenance–Not Innovation: Often, organizations have hundreds of legacy systems and databases and millions of lines of home-grown code that needs to be maintained. In some organizations, upwards of 80% of the IT budget is spent maintaining legacy code or legacy systems. This one of the reasons why IT has a project backlog and cannot keep up with the demands of the business.
- Retiring Knowledge Workers and Experts: Some legacy systems are home-grown programs written by increasingly aging and retiring programmers. Think of procuring and sustaining, say, IBM iRPG programmers who are expert in the greatest and latest versions and have deep knowledge of the language! This disappearing workforce keeps the policies and the procedures, as well as how to work with these legacy systems, in their heads. Since the code is typically undocumented, there is a real danger of losing the reasoning and business logic embedded in the code.
- Fossilized Business Logic that are difficult to customize: ERP or point solutions are closed systems. The business processes and business logic are both hidden and difficult to change or customize. With these types of solutions, there is an initial honeymoon period, where the solution seems to fulfill business requirements. However, very soon the need for customization and specialization becomes apparent, and the ERP and point solutions prove difficult to extend and customize.
- Manual Intervention to Handle Exceptions: In advanced organizations, exceptions are the rule. Exceptions could be raised by the ERP or legacy systems, or they could go unnoticed with dire consequences. Exceptions need to involve knowledge workers to handle complex decisions. For instance, assessment of potential fraudulent supply chain transactions, approvals for large financial transactions or processing of applications that have unconventional cases will involve workers who are knowledgeable about the policies and procedures with exceptions.
To address these and other legacy challenges, organizations embark upon legacy modernization initiatives. Unfortunately, these initiatives often fail.
Now more than any other time, Supply Chain multi-tier partners need complete modernization (aka Digital Transformation) of their Supply Chain applications with enhanced visibility, traceability, and agility to change the applications or even innovate. The ability to leverage any channel for this visibility and traceability is critical. They need a solution that modernizes their legacies while allowing omni-channel interactions.
omni means “all encompassing”. In the context of Supply Chain, it means supporting different channels and all modes of interactions between a supplier in any tier and the various participants in the supply value chain, consistently. This means a supplier, an OEM, warehouse manager, logistics organization and the end retailer are able to interact with the supply chain they have access to via a browser, mobile device, service representative, IVR, or other channels consistently. This “consistency” means that the experience of the stakeholder involving the capabilities of the solution is identical (unless there is a reason to provide a different channel-dependent experience). For example, the procurer of a part can get a discount or promotion independent of the channel. Omni also means they can start an interaction through one channel and then switch to continue through another seamlessly – while maintaining the context of the interaction. For example, in an insurance of supplier delivery application, an insured or claimant interaction can start in one channel (say a tablet) and move to another channel (e.g. a browser) with full context.
The following illustrates at a high level a three-layer architecture for Omni-Channel and Low Code legacy modernization. At the lowest layer you have the the legacies that could involve data center mainframes (like IBM i), ERP systems and many databases – all supporting the supply chain solution of any of the participants.
The middle layer is the Low Code/No Code platform that we discussed in the previous blog. The top layer is the Omni-Channel layer. Increasingly progressive UX/UI is becoming critical here but there are other channels such as social, automated bots, and AI-assisted human agents. This is an especially important layer for legacy modernization. Organizations typically have multiple legacy applications, ERP systems, and databases. They need to continuously extend these with customization and exception handling code. The traditional approach is to do the customization using archaic languages such as C, Java and in many cases even RPG for platforms such as IBM i. Now, with a new generation of modern Low Code platform such as LANSA, you can seamlessly leverage, extend or modernize legacy code much easier – with visual paradigms and easier to use 4GL. Furthermore, LANSA supports the very powerful progressive web application development – that is essential for omni-channel Supply Chain solutions.
Supply Chain Digital Transformation for Modernization: The Journey
Digital Transformation is not easy. As noted above, many legacies: platforms, databases, ERP systems of record, are critical to run the mission critical Supply Chains – which itself are tremendously complex and involve many participants and stakeholders across multiple tiers.
A chain is as strong as its weakest link.
Often these weakest links stem from intra-enterprises or inter-enterprise silos. There are many sources of silos: business units, functional units and platforms or applications. In most organizations the information of suppliers across multiple tiers is often replicated and distributed across many databases, ERPs or systems of record.
Here are some pragmatic steps to embark upon a robust modernization journey – with some recommendations.
- Think Big – Think Transformation but Start Small: Often Digital Transformation initiatives fails due to “Big Bang” approaches that take many months and even years without showing business value. A much better approach – especially for complex applications such as Supply Chain – is to balance business value with ease of implementation. This approach identifies the “low hanging fruits” for Supply Chain optimizations. Contact LANSA for a consultative and solution-oriented session to help you identify the Low Hanging Fruits for Supply Chain modernizations.
- Have a Master Data Management Strategy and Solution: According to the MDM Institute: “Master Data Management (MDM) is the authoritative, reliable foundation for data used across many applications and constituencies with the goal to provide a single view of the truth no matter where it lies. or data quality results in poor, erroneous, and even risky decisions.” Supply Chain solutions are as good as the consistency of the data. There are challenges within (intra) organization silos as well as across (inter) the Supply value chain:
- For Customers, Products, Pricing, Partners, Suppliers, Services, and other Master Data shared across applications, often different siloed systems contain contradictory information about the same entity (e.g., wrong marital status). There is a lot of waste attempting to keep heterogeneous data consistent and of high quality.
- Mergers and Acquisitions also create data consistency challenges – to have a single version of the truth about a customer or offering across the organization.
With the Low Code platform LANSA you can achieve all the benefits of single version of the truth – the core value proposition of MDM – at the Low Code layer. There is no need to replicate or deal with expensive and complex MDM solutions.
- Supply Chain Competency Center (SC CC): To succeed, organizations involved in complex Supply Chains need to also develop a Competency Center (aka Center of Excellence) with the necessary budget and empowerment. The most important focus of SC CC is to balance speed of development and innovation with best practices (security, reliability, performance, etc.). The following are with are within the scope of a SC CC:
- Governance in Enabling 2 Speed IT: innovation speed and maintenance; enablement and governance through the SC CC. Organizations must balance transforming slower, transactional legacy systems with developing new fast-speed architecture.
- Driven by measurable SC Continuous Improvement: the continuous monitoring and improvements with various types of optimizations of agreed upon KPIs for the SC is very much a core competency and focus for the SC CC.
- Leveraging the Low Code Platform: enablement, training and education of the benefits of Low Code are also key capabilities of the SC CC.
There are others. If you are interested in establishing an SC CC and understanding how it related to your other CCs, contact LANSA.