With the economy still struggling, retailers continue to postpone investing in new store openings. However they are investing in new systems, upgrading existing ones, or are implementing new processes to help manage the current business more effectively. System changes or new implementations mean massive interface changes between the new systems and existing ones. Many companies hire contractors to manage this spike in IT needs where others take the opportunity to join the "cloud computing" wave and look to outsourcing processes instead of managing the change/upgrade.
If your organization is in the process of implementing new systems or upgrading existing systems, this may be a good time to add the strategy of outsourcing. Some of the more common areas where use of SaaS (Software as a Service) are implemented with good success are the following -
· Many retail organizations provide Vendor portals as a method for their suppliers to trade electronically. This is one area where SaaS has gained interest. Many of these portals are used to provide PO's, and allow for suppliers to invoice or receive updates on payment remittances.
As companies look to expand the communication of information, it has become apparent that the portals would need to go through a complete revamp in order to support expanding the information provided or needed. Many retailers are now looking at the Advance Shipment information, wanting carriers to provide invoicing, suppliers to provide orders statuses, Vendor Scorecard or with the growth of E-Commerce and moving to Factory Direct shipping branded pack slips. Trying to manage the interfaces needed for an ERP upgrade or develop new needs with an existing portal can be quite the undertaking. Thus Retailers are looking at service providers to take over all or some of these tasks.
· Over the years companies had been purchasing and supporting in-house EDI software systems, however with the various players in the SaaS model, moving EDI to an outsource model has been growing. Factors contributing to this transition are the size of the EDI staff, expected growth of new business documents, and raising costs for VAN services.
As I've mentioned in previous articles, retailers are looking at adding EDI transactions to the library of business documents. Grocery is looking at the ASN for managing inbound freight, and more importantly as a step to "product traceability". Retailers are looking at Order Acknowledgements as a way for managing their item master cleanup. Knowing the status of orders so that lower lead-times and Inventory levels can be maintained. Adding more trading partners to an EDI program and more business documents for the EDI staff to support means either adding staff or looking outside the organization for assistance. This is where outsourcing would make sense.
· Another area of interest for an outsourced function is through Transportation Management Systems, and there are several reasons for this growing interest. One of the trends is that retailers are looking at moving from Prepaid to Collect freight terms with their suppliers. This change brings the need for additional resources to manage the building of loads and the routing of the freight. For some retailers, they had never had a tool for managing freight routing, so the decision is to buy software or hire a service. For many it's the service option that is intriguing. Especially with addition of new players and the growth in SaaS model for transportation
Whether you are implementing a new ERP system, needing to expand your penetration with your trading partners, dealing with additional requirements needed by the business for more information about orders, or looking at alternatives for managing your freight, SaaS seems to be an increasingly viable option.