QuickREAD

October 11, 2006

Oh, Great—the CEO Locked Me Into an Outsource Deal Without Any Due Diligence
It's a scenario scary enough to induce night sweats in even the steeliest CIO. Your CEO, just back from a conference in Phoenix, strides into your office. Yesterday, he played golf with the vice president of sales for one of the big IT services companies and now he's telling you that this company could take over most of your IT functions and cut your company's IT budget in half. Not only that, they can deliver better services levels. After all, it's what they do!
Our business isn't IT anyway, the CEO continues, waxing enthusiastic. And our biggest competitor just signed an outsourcing megadeal, too. Best of all, there's no need for a long, drawn-out RFP process. "Just call this guy up tomorrow," the boss says with a big smile, sliding a blue-and-white business card across your desk. He's doing you a favor. "It's practically a done deal," he concludes happily.
For many CIOs, this nightmare is neither a dream nor all that uncommon. But unlike most dreams, the morning after brings consequences that are all too real. Outsourcing a particular function within IT—or all of them—without considerable study can have disastrous consequences that you, not your CEO, will have to solve.
Source: CIO, http://www.cio.com/

Has This Been Your Experience? IT Vendors' Web Sites are the 'Worst' for Communication
CIOs and IT pros are often told they should improve their communication skills, but it looks like it's the Web site designers and Webmasters at IT vendors and consultants that really need to work on them. A new study about to be released by the Customer Respect Group, an Ipswich, Mass., company that rates company Web sites for how well they treat online customers, shows that the Web sites of IT vendors are the absolute worst of any industry for communication—responding to their customers' questions, one on one. In CRG's "Fourth Quarter 2006 Online Customer Respect Study of the High-Technology and Computer Industry," IT vendors earned just a 4.5 score on a 10-point scale. Retailers, by comparison, scored 6.6 and telecom companies averaged 5.9.
Source: eWeek, http://blog.eweek.com/

Hollywood's Next Big Blockbuster: The Digital Supply Chain
When Warner Bros. Entertainment established an umbrella division, the Warner Home Entertainment Group, last October for all business units involved in the digital delivery of entertainment to consumers, it was fast-forwarding the most important technical transaction the studio has made in decades. "The great promise of digital technology … is that consumers will be able to choose how they want to consume content," Kevin Tsujihara, president of the new division, said in making the announcement. "We're entering an exciting time in the entertainment business when the consumer, empowered by new technologies, has an active role in the process instead of being a passive participant."
Sourced: Baseline, http://www.baselinemag.com/

It's About More than Just Counting Pennies—It's a Holistic Approach to Innovation as Well as Cost
The world of direct material sourcing and procurement has shifted. Replacing the traditional single-minded focus on cost cutting is a more holistic approach that considers quality, risk, and product innovation as well as cost.
"Cost savings are great, but what's really happening is a transformation to compete in a global economy," says Dan Willmer, vice president of spend management at Ariba Inc., a provider of spend management products.
As a result, new emphasis is being placed on process optimization and collaboration both internally and with suppliers. "Execution is not enough," explains Patrick Scholler, director of the Procurement Competitive Edge Group at HP. "We need to go to the next step—optimization—not only within functions but across functions," he says.
Source: Managing Automation, http://www.managingautomation.com/

Patent Process in China Can Be Rife with Obstacles and Possible IP Theft
Worldwide IP theft is a growing problem that costs the U.S. industry roughly $250 billion annually, according to the U.S. Chamber of Commerce. Electronics and semiconductor companies, which are among the most prolific patent filers in the world, have a lot of IP at stake in China. China is a "first to file" country, as opposed to the U.S., which is a "first to invent" country, so registering your IP is handled differently (see "Protect your IP: Register," this page.).
Enforcement of IP rights is an issue for foreigners doing business in China, but new allegations of unfair practices in China's patent office indicate that some IP problems begin as early as the patent application review stage. "It's been my experience and also that of my colleagues that foreigners have recently been running into problems in the Chinese patent office while trying to secure patents," says Thomas Langer, an attorney who specializes in IP at Cohen, Pontani, Lieberman & Pavane.
Source: Electronic Business, http://www.edn.com/

Dow Identifies 50 Projects Where It Will Use RFID and GPS Technologies
As the largest bulk chemical shipper in North America, Dow Chemical has to keep close tabs on shipments, especially when they contain hazardous materials. Dow is looking to step up the effort. Under the direction of CIO Dave Kepler, Dow is testing a technology that combines radio frequency identification with global positioning systems. The service tracks both truck and rail shipments, and it's designed to reduce the risk of theft, spills, diversion, product contamination, and tampering, as well as other dangers.
In coming years, Dow plans to increase use of RFID and GPS as the technologies mature. The company generated $46bn in sales in 2005, from businesses that range from chemicals to plastic materials to agricultural and other specialized products and services. Last year, Dow identified 50 projects related to RFID and GPS that it plans to pursue—not only in tracking products but also in manufacturing and plant maintenance.
Source: Business Week, http://www.businessweek.com/

Have You Spoken to Your Outsource Service Provider about Its Disaster Recovery Plans?
At first glance, a border dispute between the Indian states of Karnataka and Maharashtra wouldn't seem to be of any significance to the American business community—until you consider that Karnataka is where Bangalore, the offshoring capital of world, is located.
Normally buzzing with IT and business process outsourcing (BPO) activity, Bangalore recently came to a standstill as Karnataka state observed a general strike. "Bangalore wore a deserted look with all companies, BPOs, commercial establishments, schools and colleges remaining virtually closed bringing the city to zero activity," noted the Karnataka News.
Strikes, torrential rains, and other unpredictable events (like the chaos caused by the recent death of a movie star or communal violence) combine to mean that "the frequency of upheaval that results in delivery center shutdowns in Bangalore and in other Indian tech capitals is quite high," according to analyst Dana Stiffler of AMR Research.
So far no catastrophic event has succeeded in giving India Inc. a permanent black eye, but AMR still thinks it is worth quizzing your Indian IT/BPO service provider about their disaster plans and procedures.
Source: Line 56, http://www.line56.com/

Robots Have Tripled the Hourly Output of Human Workers in Staples Warehouse
Armless, mobile robots? Eventually hundreds of them? They're automating storage and retrieval at the Chambersburg, Pa., warehouse of Staples Inc., the office supplies and equipment retailer. Used as warehouse gofers for order fulfillment operators, hourly output per person has tripled. For example, robots roam the 500,000-square-foot facility and deliver the needed inventory items to the order fulfillment operators. Those operators now stay at their workstations awaiting robotic delivery of individual shelving pods containing the needed product.
Source: Industry Week, http://industryweek.com/

Streamlining the Mother of All Supply Chains
U.S. Transportation Command, the division of the Department of Defense responsible for worldwide air, land, and sea transportation for the U.S. armed services, manages the mother of all supply chains. It distributes material to every corner of the defense enterprise—including durable goods, fuel and consumable supplies, hazardous materials, perishables, and even personnel.
"USTransCom is a multibillion-dollar, multinational operation," says Air Force Brig. Gen. Mike Basla, director of command, control, communications, and computer systems for the command. "There aren't too many examples in the corporate world, if any, that we could say resemble the kind of scope and breadth of what we do."
USTransCom's mandate was broadened significantly in 2003, when it was assigned the role of DPO (Distribution Process Owner). Previously, the command had been concerned only with distribution from the port where goods were loaded to the port where they were received. The DPO designation extended its responsibilities to include coordination and synchronization of the supply chain from end to end.
But as the scope of USTransCom's operations increased, so too did the complexity of its I.T. infrastructure. Basla guesses that USTransCom's full distribution capabilities are now distributed across some 600 I.T. systems, many of them antiquated, poorly integrated, and redundant. "If you go back maybe 15 years in technology, you can probably find it somewhere in the enterprise," Basla says.
Given the uncertainty surrounding ongoing military budgets, overhauling that legacy infrastructure has become a top priority. During the next few years, USTransCom will consolidate its systems and eliminate legacy applications as part of an ambitious move toward a modern infrastructure based on SOA, with the goal of reducing those 600 systems to fewer than 100.
Source: CRM Daily, http://www.crm-daily.com/

Don't Know What ERP, SaaS, SOA, IP, VPN, DBA, HTTP, ISP, ASP, LAN, SAN Mean? HA,HA, HA.
While some may find it amusing to bewilder technophobes with technospeak, the prevalent use of insider terminology actually has business—and career—consequences. At the very least, confusion over IT- related buzzwords can lead to miscommunications that breed frustration and waste time. At worst, it can engender serious battles between misunderstood parties that can end in litigation.
“You could be the best technical person in the world, but if you can't effectively communicate with your business partners, then who cares?” says Jerry Luftman, executive vice president of academic relations at the Society for Information Management and associate dean at the Stevens Institute of Technology in Hoboken, N.J.
Source: Computerworld, http://computerworld.com/

Overseas Mover Says RFID Is on the Ball When It Comes to Tracking Valuables
Whether shipping is part of your business, or you're just sending correspondence to a customer, your company sends and receives some sort of material every day. If something is particularly valuable, you send it via an agent like UPS or FedEx and track the progress of the package via those agents' Web sites. Easy, right? Unfortunately, things aren't so easy when shipping overseas. There are different agents in each country, some with better tracking capabilities than others. There are customs and port authorities; there's also the risk of theft in less-secure regions of the world. It all amounts to a tremendous logistical challenge, something American Red Ball International is well aware of. Red Ball is an overseas relocation provider, handling the packing and moving of families' and individuals' household goods to new residences. The company typically provides these services for the military, government agencies, and corporations.
Red Ball performs approximately 20,000 moves per year, with each move involving four or five large (10 feet by 8 feet) crates and/or a steamship container. The customer's belongings are placed in the container or crates; those are brought via truck to a local moving agent contracted by Red Ball. The shipment is processed, then taken to the nearest international seaport or airport. The sea carrier or airline then transports the container overseas, where it is processed by customs, then sent to another local agent, also contracted by Red Ball. Once processed there, the shipment is brought by truck to the new residence.
Until recently, Red Ball's visibility into this process was very limited. Tracking of shipments was done through telephone calls, faxes, and e-mails from the various stops in the shipping process. This information would be received by data entry personnel and entered into Red Ball's shipment tracking system. “This system had a lot of holes in it,” says Dave Hope, president. “It could be three to four days after a shipping event occurred before we knew of it. Also, anytime you manually transfer data from a written document into a computer system, you run the risk of inaccurately keying the information.”
In an effort to close the gap, Red Ball turned to identification technology, eventually landing on RFID.
Source: Integrated Solutions, http://integratedsolutionsmag.com/

Healthcare Industry Supply Chain Has Its Own Special Requirements
Every dollar saved in healthcare supply expense goes directly to a facility's bottom line. In comparison, a provider needs to increase revenue by $16 to get the same $1 return. In the past, the focus was on lowering the purchase price to achieve savings. Today, the focus is on data synchronization.
"Data integrity is more important than ever," says Mary Beth Lang, president of Diagnostix. The company, a subsidiary of GPO Amerinet, provides supply chain software tools and consulting. "Over the past few years, more and more providers have asked us for help updating their item masters and increasing the amount of the total purchases that they can analyze."
Source: CRM Buyer, http://crmbuyer.com/

Trucking Industry Relies on Telematics to Rein In Spiraling Costs
Times are tough in trucking. Operating margins are low, driver turnover is high, and fuel costs are through the roof. Consider the expenses associated with truck idling alone. As long-haul drivers rest in their cabs or operate onboard appliances such as microwave ovens and TVs, often they leave the engine running. According to a 2002 study by the Environmental Protection Agency, long-duration truck idling consumes about 960 million gallons of diesel fuel annually. No wonder it's drivers, rather than fleet operators, who control some 80 percent of the variable costs associated with trucking. In an effort to rein in expenses, a growing number of trucking companies is investing in so-called telematics, a combination of computing, wireless data, and global positioning system technology.
Source: Mobile Tech, http://www.mobile-tech-today.com/

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