This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.
I first met Art Mesher in 1995. We were both freshmen Gartner analysts and in class and bars he would passionately talk about “federated networks” and supply chain “visibility and velocity”. I knew he was ahead of his time, and actually understood him a bit more when the conversation turned to salmon fishing and his home in the cliffs of Wisconsin, which he was equally passionate about. He left Gartner a few years later to implement many of his ideas at Descartes.
I caught up with him a year ago and asked him what he thought of modern networks, especially social ones, which while voluminous, seemed casual about credentials and commerce. He has clearly been thinking of them, because he recently penned a white paper (see link below) and I invited him to post a shorter version on this blog.
“Virtually all supply chain and enterprise applications created prior to 2011 will become obsolete because they were designed to be “permanent platforms” that ignore today’s rapid acceleration of business processes, technology and networks. While these systems won’t go away, they will not offer businesses competitiveness either.
To remain competitive, companies will need to adopt technologies that let them keep pace with this acceleration. Specifically, competitiveness will require businesses to be able to harness presence on networks, leverage ubiquitous distributed wireless communications and computing and extend these legacy systems and platforms. The notion of replacement cycles for technologies will need to become replaced by continuous investment cycles.
“Form follows function” in technology and I believe we’re seeing a new type of company – the “Entrust” – that will help businesses guarantee outcomes and insure against failures.
An Entrust is a process-enabler, not a technology or logistics service provider. An Entrust is trusted by a community to facilitate consistent, predictable transactions. An Entrust is a federator, bringing together other member enterprises and networks to streamline processes. An Entrust authenticates and issues credentials to participants to ensure that the community operates safely and securely. An Entrust insulates its members from the continuous investments needed to modernize, harmonize and effectively harness new waves of technologies. An Entrust provides shared service environments for a community of players with varied technology capabilities. An Entrust provides broad access to a community to allow members to rapidly assemble, disassemble and reassemble its supply chain relationships with speed and grace. An Entrust will distinguish itself on consistency, predictability and fairness to a community. An Entrust will guarantee delivery of expected service and provide warranties with respect to failures. Entrusts will start in highly-specialized communities, such as high-tech component manufacturers and suppliers, food distribution, CPG/copacker food production or freight forwarders/airline cargo.
Not everyone can or will be able to be an Entrust. Many existing businesses will lack the technological infrastructure or community trust to be successful or accepted as an Entrust. Entrusts will be powered by a commitment to newly-architected operating systems that facilitate the security, scalability, reliability and collaboration required in community-based distributed computing. The operating system will be designed to standardize transactions that automate multiparty processes across the community – both in the physical logistics supply chain sense and the technical business process management sense.
As mentioned earlier, winners in this new era will be business models that network together, harnessing technologies to cleanly and elegantly assemble and disassemble themselves and their business processes/relationships with speed and grace. There are a number of Entrust providers that are emerging.
Here are four examples:
Nulogy - Nulogy integrates the community of CPG brand manufacturers with contract packagers (co-packers).
E2Open - The E2Open community is comprised of brand owners and their suppliers, particularly in markets with short shelf-life products, such as consumer electronics and apparel.
SPS Commerce - SPS Commerce allows retail trading partners to manage and fulfill orders by running a trading partner integration center.
Descartes - Descartes operates the largest federated network for logistics, comprising a community of influential shippers, logistics intermediaries, carriers and government agencies across multiple modes and geographies.
If you would like to understand more about the market dynamics that are creating the need for Entrusts and the types of Entrusts that are emerging please follow this link.”
He can be reached at amesher AT descartes DOT com.