We do feel proprietary about our data, don’t we? The importance of our IT systems in maintaining our competitive edge, and in the evolution of our business identities and internal workings overall, has placed data at the very center of our closely held treasures. And our increasing anxiety over its security, as new species of predators emerge and cause us to shore up our defenses, make us want to double the guard at the database door and demand strip searches of users.
So perhaps you’re not ready to hear that this thinking may be wrong, wrong, wrong for your business. Nevertheless, take a moment to consider the possibility that opening up, rather than closing off, the door to your company’s data may be your surest path to strategic advantage in your marketplace.
ERP has second-guessed us all
When Enterprise Resource Planning first began emerging as a new paradigm, it had a two-fold task:
- Adapt the contemporary IT world to a new, better business environment, where leaner/meaner performance, combined with more integrated business partnerships and increasingly customer-driven processes, jack up response times and product cycles.
- Anticipate the changing attitudes of business leadership in this new environment, and provide a platform for the development of entirely new (and even revolutionary) data structures and processing techniques to accommodate the new relationships.
Whatever promises ERP has delivered over the past decade, there is more distance to go before its potential to re-engineer us is exhausted. Let’s give ERP the benefit of the doubt and confront the question above: Is there any reason we would want to open, rather than close, the door to the company’s data? This raises two more questions: (1) Why in the world would we want to do it, and if we did, (2) How could we do so safely?
ERP provides us with answers to both.
Timing is everything
The bottlenecks to your success and the central challenges to business performance in today’s climate are all linked to the clock. Immediate response to an increasingly global and impatient customer base is mission-critical. IT systems have been evolving to slash response time and permit rapid reconfiguration. But no matter how fine-tuned a company might be internally—no matter how well-integrated and coordinated its constituent departments may be in the lattice of a well-deployed ERP platform—it is still constrained by the cycles it shares with partner companies in responding to customers. Wherever you sit in your particular supply chain—manufacturing materials, components, products, providing distribution, or selling the end result—you are tied to the clocks of your partners.
For example, you as a builder of widgets might provide them for sale to retailers. You can employ ERP to fine-tune your manufacturing process to frightening efficiency, cutting your manufacturing costs to the bone and implementing just-in-time such that you don’t need to keep any inventory. But you still crank the widget-making based on the receipt of purchase orders from retailers, and retailers insert steps into the process, such as querying as to the current availability of widgets and your immediate capacity to crank out more. Down-line decisions are made based on such information, just as your levels of production are dictated by the demand you derive from incoming purchase orders and your projections, based on history, of how it might increase or decrease.
Consider that the purchase order process, as well as these queries, and the decision-making that goes on across the retailers’ fence all add time to your cycles—time you can’t directly control. Why? Because of the order-invoice interaction that you’ve always adhered to. It’s how business is done, right?
You can reinvent your business dialogue
Imagine for a moment that all of the partner companies that are part of your supply chain are not separate companies but divisions of your own company. Suppose you could completely eliminate purchase orders, order entry, invoicing, ship notices, the whole shebang. Pretend for a minute that all the down-line departments can call forth product directly, implementing manufacturing schedules and quotas based on anticipated demand, with all the stuff in the middle cut out. Imagine how rapidly you could respond in such an atmosphere. How? By letting them see all the information that you can see—your production schedule, available raw materials, shipping schedules, everything you base your plans on. Cut out the time you spend receiving and responding to those requests for information, and you make yourself and your down-line partner companies vastly more efficient.
The CFO immediately objects, pointing out that the constraining factor in the traditional order-invoice cycle is the 30 days that the buyer has to pay an invoice. If we open our databases to our partners, we increase efficiency and shorten our cycles, but only so much. May we be paid for our product immediately, since we are letting the buyer initiate its manufacture directly? The CFO will say, “Not a chance.” But how many retailers are going to cling to those 30 days when they are being offered a quantum leap forward in just-in-time response? The chance to whip all competitors in accurate fulfillment of customer demand, minimization of returns, and the elimination of errors in both order and invoicing may motivate a down-line retailer to cut a truly mutually beneficial deal.
It doesn’t have to be about the order-invoice cycle, of course. Simply think about the points of information transfer between your company and those you do business with. Where are you at your partner’s mercy in terms of waiting response? Which exchanges do nothing but consume several days needlessly from your schedule? These are the exchanges you should consider eliminating by letting your partners in.
How to open the data doors
All of this hinges on whether you can practically open up your databases to partner companies safely and with the kind of precision these modified processes would require. And here’s where ERP steps forward to meet you.
You can begin to implement, on the leading ERP platforms (SAP and Oracle in particular) a virtual private database. This is an innovation enabled by the data-tabling structures now used: Row-level security permits you to create logical databases that are user-specific. You can create database tables that permit secure multiple views for multiple users. By locking out certain rows and binding the application context to a user-specific PL/SQL routine (Oracle calls this “fine-grained access control”), you can selectively and safely open up your database to outside users. For more information on databases, see “Logical reasons to create logical databases in SAP” and “Create secure virtual private databases in Oracle.”
Put more simply, your “ERP-platformed” inventory database (for example) can be configured to present each outside user with only the data relevant to his or her role in the overall business process. This is more efficient and far less expensive than customized programming, and far more secure. With no application software between the user and the data, opportunities to hack your database with malicious code are eliminated. And since this access occurs in the layer between the RDMS itself and the ERP application level, it is by definition as secure as anything going on within your own walls.
You can now take a quantum leap beyond the integration of your company’s various departments and composite business units, and integrate your company more deeply with those companies that cooperate with you in business processes. You can eliminate days from many business processes (and eliminate frequency of errors) by extending your business and making those partner companies virtual business units. And you can do it with software you already own; all you need to do is take a few steps further back to take in a bigger view.