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SMART MANAGEMENT Technology is increasingly a part of your future
Schmitt: Within Activant, does each software product have its own
(Continued from page 14.)
group? Roach: I’ve merged the teams to
create a single point of leadership and a single toolset. I’m a process guy and a lot of my experience is in man- ufacturing, where there is a tremen- dous focus on processes. Prior to working for activant, I was president of Rockwell software, and am a cer- tified six sigma black belt. I believe that institutionalization of processes results in more consistent output. after the processes are in place, we
can continue to tweak them. Schmitt:Can you give me an exam-
ple of a process you are describing? Roach: We’ve adopted the
sCRuM agile development method- ology. traditional software develop- ment cycle involves writing a design spec, getting sign-offs, coding, test- ing, etc., that typically runs about 18 months. after which, you release it and find out if it really meets the cus- tomer’s needs. the result is lower- quality, less-relevant software. sometimes you may miss the mark completely. using sCRuM method- ology, we employ two-week sprints where we build, document, debug and validate chunks of code. so at the end of a sprint, we are back with the cus- tomer testing finished code. If we
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misunderstood, or the customer sees the finished code and changes his mind, we have a 20 man-week mis-
take versus a 300 man-week disaster. Schmitt: There is a lot of press
about cloud-based solutions. I think the jury is out as to whether they make sense for mission critical appli- cations like an ERP. Does Activant have an offering for customers inter- ested in that type of platform? Do you
think the cloud is ready for ERPs? Roach: the cloud-based eRP has
some concerns like security, reliability and hacking. But don’t forget, the on- premise-based eRP has concerns like natural disasters, security and reliabil- ity, too. Currently we offer P21 and eclipse in three options: on-premise, hosted in our data center, and on-de- mand, which what most people con- sider to be a “cloud” offering. our customers can choose whichever ap- proach works for their company. While most of our customers use the on-premise option, hundreds use the hosted and on-demand options. sur- prisingly, size isn’t the only consider- ation – they range from small to
multi-billion dollar companies. Schmitt: Switching to your view of
the distribution industry, any obser- vations about where you see it
headed? Roach: there is a high density of
family-owned companies where the owner is involved in the business. the intimacy these people have with their employees, their customers and suppli- ers is tremendous. I enjoy that part of the industry. I think that there is a lot of consolidation going on and expect a feverish pitch as the economy contin-
ues to recover and capital frees up. Schmitt: Suggestions for whole-
salers? Roach: the industry has tended
not to be early adopters of technol- ogy. this is natural, but in the future, more aggressive leveraging of tech- nology will be critical to remain com- petitive. there’s still plenty of room to improve business performance, re- duce costs, and increase customer satisfaction with applications like business analytics, web 2.0 collabo- ration, or mobile apps. If I could recommend just one thing
See contact information on page 86
to distributors, it would be to value stream map every one of your processes. We and other companies offer help in doing this. You start by measuring and studying how you do things, then design processes to do them better using “lean” and “six sigma” principles. In simple terms, “lean” is about reducing waste, and waste is anything that does not add value to your customer. “six sigma” is about reducing process variations that
•THE WHOLESALER® — JUNE 2011
produce defects. applied to order entry, it can produce 30% to 40% pro- ductivity gains and similar reductions
in defects for well-run distributors. Schmitt:What is the next big tech-
nology challenge? Roach: I think we are going to see
a major shift in technology. eRP sys- tems replaced paper and manual sys- tems. these are referred to as “systems of Record.” they were put in place to serve the top levels of the company and to produce the finan- cials. there was not much for middle managers. If you compare corporate It to consumer It, frankly, corporate It is lagging by comparison. as a consumer, I can do anything that I want; I can buy online 24 hours a day; I can schedule trips; I can video chat with anyone all over the world. But when I get to work, I’m con- strained to e-mail or voicemail tech- nology. We need to bring the same “systems of engagement” that we support as consumers into our busi- ness models. the future is the conver- gence of these “systems of record” with “systems of engagement” like Facebook, twitter and the million other social sites that business people currently view as toys. this conver- gence will turn these toys into tools that can remove major chunks out of cycle time. the famous business au- thor Geoffrey Moore is writing a book on this. We think it is going to change the way business systems work and how we support and collab- orate with our customers. ****************
I enjoyed my conversation with
Kevin Roach of epicor this month and my interview last month with andy Berry of Infor. Both guys are passionate about the industry and the challenges their companies face. they come from hands-on technol- ogy backgrounds which, I think, help them to better understand and cham- pion changes in their companies for the benefit of their customers. n Note: As we go to press, Apax Part-
ners has announced the completion of their acquisition of Epicor and Ac- tivant. The new company, as Kevin indicated above, will be called Epi- cor Software Corporation.
Rich Schmitt is president of Schmitt Consulting Group Inc., a manage- ment consulting firm focused on im- proving the profitability of distribution and manufacturing clients.
www.go-scg.com
Rich is also the co-owner of Schmitt ProfitTools Inc. (SPI), a business pro- ducing print, CD-ROM, web and palm-based catalogs as well as pric- ing management and analysis soft- ware for wholesalers.
www.go-spi.com
• Be sure to visit
www.thewholesaler.com for web exclusive articles and videos! •
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