Jeff Stiles is the VP Solutions Marketing at Oracle. Oracle is a sponsor of ARC’s Supply Chain Forum. One of the sessions at our forum involves an Oracle customer. Executives from HarbisonWalker International are talking about how their broad implementation of Oracle Cloud applications allowed them to unleash continuous innovation.
Jeff and I discussed the concept of continuous innovation. What follows is an abbreviated synopsis of the discussion. For the full discussion, please view the video below.
Jeff began by discussing how Covid-19 has amplified issues that have existed in supply chain management (SCM) for some time and accelerated change across SCM. He mentioned a PwC Pulse survey. This survey identified innovation as the type priority for chief financial officers (CFOs). CFO’s would not historically have been focused on innovation.
Innovation needs to be a key part of the way companies operate today. Innovation can encompass bringing new products to markets, providing products as services, or even evolving the entire business model. Our point of view is that continuous innovation is just part of the fabric of business. It is just table stakes today.
To facilitate innovation, companies need to connect innovation processes all the way from product ideation, through a product’s commercialization, to commercial success. Silos hinder success in this area. Product engineering and development cannot work independently of downstream functions of planning, sourcing, making and delivering products.
Meanwhile the role of the CIO is changing from being a Chief Information Officer to being a Chief Innovation Officer. The function of the information technology (IT) organization is changing. Traditionally IT organizations had to spend a considerable amount of time maintaining the business applications that are used to support all the lines of business. Those applications were often very highly customized. What that lead to is mountains of technical debt. That comes in many forms. But one of the things that we are seeing is a concerted effort to move past that in order to fund innovation.
When IT organization manage there are costs. These environments can be virtualized. But the IT organization still has to maintain and update the applications. Then there are upgrades, which can rival a brand new implementation in scope when applications have been customized.
Contrast that with a Cloud platform that delivers innovation every 90 days in the form of new functionality that becomes available. This is an appreciating asset. The IT function is shifting from a maintenance focus to higher order tasks like managing the process of change. This allows the IT organization to become a partner with the lines of business in driving business innovation.
Product and service innovation start with a clear definition of the product or the service. Clarifying that in enterprise product records is important. There needs to be a single view of that in a bill of materials that is used to product products is essential.
When you think about manufacturers that are provisioning their product as a service, they must ensure the service is always on and up to date.
Ongoing product and service innovation has multiple dimensions. An enterprise system can help ensure that the product has been properly produced. But the downstream functions are also involved in serving the customer. When you are in a service business it is a very different relationship with the end customer. In many cases, that service comes with a subscription business model. The financial applications need to be able to recognize revenue ratably.
The software industry tends to think of categories of software – supply chain management, customer relationship management, and so forth. The reality is that they need to be tied together. Innovation need to be though about from a value chain perspective. You can’t constrain your thinking about innovation to a product lifecycle management application.
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