What is the current focus of your business?
Meisner: From a marketing/customer perspective RedTail is targeting a "replacement" market in which we provide an outsourcing solution for companies who no longer wish to support the overhead associated with maintaining internal EDI and other supply chain requirements. Technologically we are focused on building "Software as a Service" solutions that can provide transaction exchange with trading partners in support of the entire order life cycle. We are doing this with seamless integration into the supplier's ERP system and with incorporation of the most up to date standards for EDI and global data synchronization.
How has this focus changed in the last 2 years?
Meisner: When RedTail was founded, now more than 6 years ago, our mission was to "enable" small to medium suppliers, giving them "virtual" capabilities to compete for new business alongside much larger companies. We did this by developing standardized or "out of the box" integration top a number of ERP systems that support middle market suppliers. Examples of these are the Sage family of systems including ACCPAC Pro , ACCPAC ERP, Business Vision, MAS 90, MAS200, MAS500; Microsoft Dynamics ( Great Plains, Navision and Axapta), and SAP Business One among others. Suppliers using these systems could get up and running very quickly with full integration of their EDI transactions into their accounting systems. For smaller suppliers, outsourcing makes sense because they do not need to make an up front investment in software, infrastructure and integration- an investment that often costs more than the entire ERP implantation.
As RedTail has built interfaces to larger and larger ERP systems, we realized that our value proposition is stronger for suppliers who need the integration to support multiple trading partners with high volumes of transactions. At the same time, we witnessed the "globalization" of the supply chain with the second and third waves of compliance taking shape as new standards for data synchronization and RFID emerge. While we are not yet at the rapid adoption stage, these have been catalysts for change, causing larger and larger suppliers to rethink their strategies about which business processes are core , and which are non-strategic. Business processes like EDI are mission critical, but not necessarily strategic and often can be outsourced more cost-effectively. For RedTail this means we have been able to win larger and larger suppliers and as a result the average number of transactions per customer over our installed base has more than doubled over the last 2 years.
What are your current initiatives?
Meisner: Again, from a marketing perspective we have initiatives to build strong vertical specialization in several areas. We have been able to achieve business process integration in the 844/845 transaction set that supports chargeback reconciliation between pharma manufacturers, distributors and buying groups by integrating to the applications that manage these complex contracts and optimize cash flow for the pharma mfr.
Over the last year we have also devoted a great deal of effort to making our ASN functionality more robust. Specifically we can support both low and high volume generation of ASNs, consolidated ASNs and automatic generation of ASNs with data imported from warehouse management systems. Corresponding UCC128 labels can be printed in any location, a need that is increasing as manufacturing moves offshore. We are applying these capabilities to enhance support of the order life cycle in the apparel and footwear area. Suppliers find it cumbersome to do ASNs because most ERP systems support only minimal packing and shipping functionality. They are faced with cobbling together all of the information required for an ASN from disparate systems and business processes. We believe the ASN is the most important transaction in the supply chain, and that suppliers who can handle them efficiently will be well positioned to implement RFID for global track and trace.
How has the market for EDI changed with the impact of the internet?
Meisner: There is no question that the internet enabled many more small suppliers who could not justify a large investment in communication infrastructure, software and expertise to comply with their Trading partners requirements using an XML-based web form approach to EDI. But from the supplier's perspective it was not much value added- swapping electronic drudgery for paper drudgery. Large enterprises were able to build portals for their supply chain and link web forms to their back end EDI. Many third party services to do the same were also spawned. But remember when XML was going to be the Holy Grail of Supply Chain Collaboration and make EDI obsolete? Whatever happened to Commerce One, Chemdex, Ariba, Covisint,etc? The supply chain "exchange" models were flawed, and those who survived have radically changed their business models.
Because EDI is really a business process based on many technologies working together, it continues to evolve and grow. The internet is a public network and its greatest impact has been felt by private networks and VANS. With the emergence of secure communication protocols like AS2 and AS3, more enterprises are willing to use the internet and move their EDI traffic off of the traditional VAN. For large companies this means great cost savings. For VANs it means having to reinvent themselves and find new value added services.
What are the greatest challenges for your customers?
Meisner: The greatest challenge for RedTail's target customer- a middle market supplier- is to maintain multiple business processes on behalf of their trading partners. For example, a Retailer may mandate that a supplier use a third party to do drop ship transactions for product sold through its web site direct to customers, but regular EDI for products that go to stores or distribution centers. Also, their trading partners represent a wide range of adoption of standards. A supplier may be faced with maintaining a VAN, AS2, AS3, sFTP, 5010, global data synchronization, catalog, etc., etc. Suppliers view these as costs of doing business and are hard pressed to find an ROI for compliance.
How are you helping your customers address these challenges?
Meisner: EDI, itself has become mainstream in the supply chain. Between the internet and other web services more and more suppliers have joined the e-supply chain; however this has lead to a proliferation of data and business rules, as well as an increase in transaction errors. The rapidly evolving standards for data sync and RFID, soft mandates from Retailers, and an immature business model for data sync is bewildering for many mid-market suppliers . RedTail's true value is in the business process integration it provides around these new levels of compliance and complexity. We strive to educate our customers about latest requirements and best practices in this space. We help them to evaluate "Total Cost of Ownership" for these functions and how outsourcing all or part of them can reduce risk and create competitive advantage for middle market suppliers.
Who Should Pay for Testing?
Meisner: Presuming this refers to 3rd party testing-Those receiving value should pay. In theory, a Retailer who outsources this function does so to reduce their own internal overhead. So they receive value. The third party testing service receive access to the Retailer's supply chain and the potential to subscribe new customers to their other services- so they receive value. The supplier may or may not receive value, depending upon their own capabilities.
How do you categorize "good" versus "bad" or useless testing?
Meisner: Testing that is redundant is bad. If a supplier has in-house capabilities and is capable of testing their own maps, then they should not have to pay for the privilege of testing with a third party.
What is your stance on the ec-BP organization and tenets?
Meisner: Of course, the dream of every solution provider like RedTail is to be mandated for use by a Retailer/Buyer . But the reality is that supply chains are complex and heterogeneous and there is never a one-size fits all solution. Those providers who work hardest at promoting best practices and educating their target audience will have the chance to collaborate with buyers and prove their value proposition to suppliers.