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Cloud and Digital Supply Chain Management


IT is increasingly going to be using public cloud services – SaaS applications for things like sales force automation, email, and other non-core applications; IaaS for development and production environments, and as they mature, PaaS to make creation of new applications faster. 


What does the Digital Supply Chain look like?

In other words, what we will have is a “digital supply chain”, where the applications that the business and business’s customers use are dependent on the performance, compliance, and security of public cloud “digital suppliers”.


The diagram below shows what such a digital supply chain might look like.


digital supply chain.002.jpg


Now, the business is very happy that public cloud is allowing us to create applications and new application functionality more quickly, BUT, we must ensure the availability and performance, compliance and security that they need. Regardless of what we do “under the surface”, if we don’t meet these criteria, then we have failed.


Ensuring that the Digital Supply Chain is working well - KPIs at the chain link points

And supply chains are called “chains” for a reason – they are only as strong as the weakest link. It is therefore essential that we are able to manage the behaviour of our entire digital supply chain.


In order to do this, we therefore need to collect data from each of the interface points in our supply chain. Because if we do this, we can then understand where the chain is underperforming should there be a problem.


The diagram below shows this. It shows the “chain links” between the different players in the chain. It’s these chain links that we need to measure – we need “KPIs” across these chain links.


digital supply chain.003.jpg


Not only must we monitor KPIs for performance, compliance and security, but we should also measure cost too. Suppliers’ value for money can change and we need to ensure that we are always providing the most cost efficient digital supply chain (not withstanding the high switching costs there may be between suppliers – which is why, of course, the public cloud providers are so keen to get us up from IaaS to PaaS).


So, we need a measurement system that allows us to measure KPIs at the “chain link” or the interface points between the parts of our digital supply chain. We can then ensure that there are no weak links in the chain.


The result of all this?  Applications delivered to the business and the business’s customers that are available and performant, complaint and secure and that are delivered using best value for money “digital components”.  


How realistic is Digital Supply Chain monitoring?

Is this doable? Digital supply chain management is one of the applications of HP’s IT Performance Suite Executive Scorecard (XS for short). XS can measure the KPI data for the “chain links” we talked about above, and then scorecard these in a way that best represents the digital supply chain’s performance for you (see the screen show below).


XS screenshot.png


How realistic is the vision that I have painted? Can we do it now? How will these kinds of solutions evolve?


Cloud provider performance is something we can measure now. IT can measure the performance of IaaS, PaaS and SaaS systems (our products are being used for this, today, by a number of customers).   And service desk ticket interaction can be measured too, if such a contractual relationship exists. HP IT has relationships with a number of SaaS providers, and there is an “incident ticket SLA” in some of the contracts.


Measurement of the security and compliance of cloud providers is a way off, I think, but it’s something we have to get to if we are to give compliance and security guarantees for the resultant application that is using the cloud services.


Cost is a good thing to have a handle on, and if it’s an IaaS that is being used, suppliers could be switched at relatively low cost. But if it’s a PaaS or a SaaS, the switching cost will be high and while it’s good to get a handle on cost, we can’t just “flip suppliers” should costs rise.  


Author : Mike Shaw

Mike Shaw
Director Strategic Marketing

linkedin.gifMike Shaw

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About the Author


Mike has been with HPE for 30 years. Half of that time was in research and development, mainly as an architect. The other 15 years has been spent in product management, product marketing, and now, strategic marketing. .


Great Insight, especially the little piece from XS on Salesforce CRM service not meeting the published SLA to customers.  As a decision maker, I would question the use of the Service all together.  Its not cheap, and the switching costs really aren't that high, once you factor the end-user company not realizing value.  Cloud Architecures bring the power of choice, and part of that is the ability to choose services with your company-dollar.  My customers realize these gains every day, and experience the same phenomena when internal budget holders choose to host information, data, and content offsite with third parties. Its a big upside for future business, and a big risk to old school IT.  Enterprises that maintain sunk-costs risk spending exponentially more on missed opportunity.  Our industry is just getting started.  Take a look at Big Data.  Imagine what could happen if the entire supply chain shared a single view of the consumer.  As more and more companies mix SLAs, take on the cloud, and welcome a hybrid sourcing model, the conversation around privacy and sustainability really comes into play.  But thats for another discussion.  Take care. 

Jan 30-31, 2018
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