In the next step of its evolutionary, in late 2007, Sterling Commerce announced the availability of the Sterling Selling and Fulfillment Suite, a revamped solution designed to managing complex inquiry-to-cash cycles in the manufacturing, retail, distribution, and communications sectors. The idea behind the suite is to further remove the barriers to successful customer and supplier interactions by providing a single view of marketing, lead management, selling, orders, inventory, delivery, and supply—plus returns, repairs, and settlement across the supply chain. It is a modular solution for the execution of complex order life cycles, addressing both the selling side (including the "market", "sell", and "order" processes) and fulfillment side (such as, the "source", "procure", "distribute and replenish", and "fulfill" processes).
The Sterling Selling and Fulfillment Suite aims at simplifying the multifaceted inquiry-to-cash cycle by delivering the applications and technology to manage demands from virtually any channel, for any mix of product and services, and for any supply base. It is a set of applications for managing the inquiry to cash sub-processes consists of seven solutions. In addition to Sterling Order Management; Sterling Warehouse Management; Sterling Transportation Management; and Sterling Supply Chain Visibility, this application set also includes Sterling Catalog and Offer Management; and Sterling Configure, Price, Quote (CPQ), which stem from Comergent. These are described below.
1.
Sterling Catalog and Offer Management. This solution enables companies to transform how they market and sell products and services across all channels. The solution improves business responsiveness by allowing business users to easily create and manage product and service catalogs, and build complex offers. It also helps companies target offers and promotions, as well as retention programs through every available touch-point to meet and adjust to changing customer and market demands. Sterling Catalog and Offer Management aggregates products from multiple vendors into a single catalog, and gives companies full control over product pricing and catalog updates. It also includes parts assembly capabilities—to manage all aspects of ordering product parts. With Sterling Catalog and Offer Management you can easily and quickly create and administer complex offers—all available through the various ways they reach their users.
2.
Sterling Configure, Price, Quote (CPQ). Again as the name implies, this solution guides prospects, customers, partners, and internal users through the process of finding, configuring, and ordering complex products and services in a Web-based, self-service environment. It offers pricing capabilities that allow companies to determine the appropriate pricing based on customer, customer segment, region, contract, or any other criteria they define, while the quoting capabilities automates building quotes based on pricing rules and selections made during the configuration process. Sterling CPQ provides a seamless mechanism to automate the creation, negotiation, and approval of quotes for prospects into orders.
Latest Product Additions
Along with the introduction of the suite, Sterling Commerce also brought in new capabilities in both the selling and fulfillment solution bundles, starting with the availability of Sterling Inventory Replenishment, a new product in the Sterling Multi-Channel Fulfillment suite that enables companies to create collaborative replenishment processes with their trading partners. Key inventory strategies, such as lean manufacturing (see Lean Manufacturing: A Primer), vendor-managed inventory (VMI), and collaborative planning, forecasting and replenishment (CPFR), are difficult to execute because there has been little visibility into trading partner information, while the development of joint plans and forecasts is labor-intensive. Thus, Sterling Inventory Replenishment focuses on reducing this complexity, and instead effectively executes these strategies by creating a collaborative environment for inventory planning that analyzes daily inventory and sales information, automates the purchase order generation process, and delivers an optimal inventory plan with the capability to execute the plan.
Sterling has also started to bundle their enterprise integration and B2B integration offerings with the Selling and Fulfillment Suite, along with a library of modules that accelerates and simplifies the integration with the most popular ERP and best-of-breed SCM solutions to help customers achieve a quicker time to value as well as consolidate these processes on to a single platform. This approach is expected appeal to IT departments as they struggle with multiple platforms/products to manage the internal integration with applications and external integration with supply chain partners.
Sterling Selling and Fulfillment Suite Recap
To recap, Sterling Commerce's product offerings now apparently include quite a few SCM solutions outside its traditional EDI and e-commerce communication realms. While each of these point solutions has a unique focus and its own traditional customer base, the company's target market—large multinational businesses—often require solutions from several of these categories. In summary, Sterling Selling and Fulfillment Suite's potential key benefits appear to be
*
increased user companies' revenues by expanding B2B and B2C sales channels while enabling a higher customer experience;
*
reduced fulfillment costs, thanks to more efficiently orchestrating the sourcing and delivery of goods and services across multiple systems and partners; and
*
improved business responsiveness through greater visibility and business process adaptability.
Furthermore, as application service providers (ASP) and managed service providers (MSP) hosting technology matured (meaning that ASP is not a "dirty word" any more), Sterling Commerce saw some vindication. Generally though, the SCM vendors it acquired had realized most of their revenues from licensing their software on-premise, and related implementation and maintenance services (except Nistevo that was on-demand basically "from the word go"). Today, while still selling many products under the license model, Sterling Commerce offers some of its products, in part, on a SaaS (multi-tenant) basis, but mainly on a hosted MSP basis (in a dedicated, single-tenant manner). The future direction of Sterling is certainly inclined towards SaaS delivery. As a reminder, under the SaaS model, the software is installed, operated, and maintained on vendor-owned servers, which are monitored and maintained by vendor personnel. While the software is still configured and integrated to the customers' needs, implementation, and integration challenges are substantially reduced (see Software as a Service beyond Customer Relationship Management and Sales). Under this approach, a customer's monthly subscription and hosting fee is substantially less than the typical one-time license fee, but over the life of the subscription Sterling Commerce can generally produce equivalent or greater revenue. The lower up-front costs and integration hurdles tend to reduce customer approval requirements and shorten sales cycles. All revenues associated with subscriptions are apportioned over the life of the arrangement, including software licenses, set-up services, and implementation services. This should eventually result in more stable and predictable (albeit deferred) revenue for Sterling Commerce.
Nothing Grand Comes Without Challenges
Sterling Commerce has a good vision; an intriguing product roadmap; an established growth record and path, with, in part, a recurring revenue model in the offing. It also has a proven management execution; a successful M&A track record; a loyal, blue-chip customer base; etc. One can nonetheless imagine how colossal the job has been for the company (with no prior expertise in some of the acquired realms) to cohesively enhance its product portfolio, and how challenging it might be in the future. The road between devising a compelling value proposition and delivering it (with all current moving parts working in synch) is certainly long and winding. While all its acquisitions were "thoroughbred" SCM applications providers, Sterling Commerce had long been an infrastructure supplier offering integration, EDI, and GDS solutions. This in itself may be problematic for some prospects—especially those suffering from FUD (fear, uncertainty and doubt) "courtesy" of Sterling's competitors. Although EDI and integration are integral to supply chains, Sterling Commerce must still contend with doubt about whether it, as an EDI provider, can become an SCM expert almost overnight. Moreover, Sterling risks the perception that it will become a direct competitor to enterprise resource planning (ERP) vendors. If this perception pervades, then its partnerships with existing application partners could fade, as the case was with its QAD's partnership for the Sterling Gentran EDI integration product.
In addition to brand recognition in the SCM application space (where almost everyone still associates Sterling Commerce with EDI or GDS), another major difficulty of Sterling's application strategy is in possessing enough domain specific knowledge to compete (i.e., create a product, market, sell, and support it) to compete with application vendors that have supply chain processes "in their blood". To be fair, Sterling Commerce has taken a wise approach and moved strongly into the application space by largely keeping the domain experts of its acquired companies. Still, some organizational integration growing pains (in addition to products' integration) are expected to persist for some time to come.
Also to be fair, the vendor aims at delivering its applications through integrated, high-performance technologies designed for maximum compatibility with its customers' existing disparate systems and computing environments. Its underlying platform is based on the latest open standards (to facilitate integration with CRM, SCM, and ERP systems, portals, and legacy enterprise systems). It also provides some tools necessary to derive better (ROI for its customers. Some of these are real-time configuration and distributed administration for greater business flexibility; and easy-to-use web interfaces allowing business users to modify workflows; and multilingual capabilities for international deployment, with fairly high-performance, cost-effective, reliable, and scalable operations. By positioning the Selling and Fulfillment Suite and Sterling's B2B integration offerings as enablers to connect, communicate and collaborate across multi-enterprise supply chains should help to differentiate them from other best-of-breed supply chain vendors and ERP vendors offering supply chain suites.
Integrating these should enable so many companies still stuck with a mix of SAP, Oracle, Infor, and other ERP systems across their divisions to build business processes, automated all the way from order capture to fulfillment and payment. One of the major attractions of Sterling's new, configurable package is that it allows for detailed feature configuration that aligns the system with business needs, and has configurable security, which operates throughout the levels of a system, from encryption of network traffic to business-oriented authorization policies. Whereas it would take many "man-months" to tweak multiple ERP systems to align with multi-channel and multi-enterprise order and fulfillment processes, this system comes largely pre-configured. For example, e-storefronts can typically go up and live for categories of merchandise in between 90 to 120 days.
Yet dynamic multi-enterprise supply chains require even more sophisticated solutions to connect enterprises with their suppliers, partners, distributors, dealers, and customers, as to better coordinate and optimize business processes, accelerate revenue, lower costs, and improve customer service. A type of a composite application framework (CAF) that is based on SOA principles should enable the delivery of tailored solutions without the typical cost, development, and time required for customization (see Architecture Evolution: From Web-based to Service-oriented Architecture). With such a framework, customers will eventually be able to combine application services in Sterling Commerce and third party products to create new solutions that more precisely address particular business problems. Like its former peers, Yantra and Nistevo, Comergent users, too, should be able to adopt the Sterling business process platform, which currently includes business intelligence (BI) frameworks, business process execution language (BPEL), alert monitoring, and business activity monitoring (BAM). For more details on some of the above features, see Business Activity Monitoring—Watching The Store For You and Understanding SOA, Web Services, BPM, and BPEL.
However, more concrete details and products are needed to see how well-rationalized this framework and platform will be for all Sterling Commerce products. Given how much thought and excruciating effort it has taken for even the likes of SAP to deliver on its (ongoing) SAP NetWeaver business process platform (BPP) promise (see Multipurpose SAP NetWeaver), one can only imagine the magnitude of the still-outstanding work for Sterling Commerce. There are even some indications that SAP is starting to de-emphasize NetWeaver's role at least for external integration purposes.
Functionalities that are either non-strategic to selling and fulfillment or are overlapping will present additional caveats in this regard. For non-strategic features (coming from Comergent, such as marketing campaigns), Sterling will have to maintain separate research and development (R&D) and sales and support expertise and decide whether to maintain them in the future. Regarding some overlapping fulfillment functionality between Yantra and Comergent, the decision will have to be made as to which one will be rewritten into the integrated suite going forward, and how well served current users will be by such standalone products (with separate data and process models). Some customers may not necessarily opt for the next-generation integrated Sterling Selling & Fulfillment suite.
In fact, Sterling Commerce would not be the only company with such a noble idea, since many enterprise-level companies have espoused similar undertakings—from SAP and Oracle with their respective SAP NetWeaver and Oracle Fusion Middleware platforms, and Click Commerce with its composite application framework (CAF), Manhattan Associates Supply Chain Process Platform to i2 Technologies, the supply chain player, with its Agile Business Platform (formerly Supply Chain Operating System [SCOS]). For instance, Sterling's selling and fulfillment proposal is indeed similar to i2's, which is a standards-based open architecture that offers organizations a way to run collaborative and planning supply chain tools within the enterprise and across the extended enterprise for real or near-real time supply chain visibility.
The Sterling Selling and Fulfillment Suite aims at simplifying the multifaceted inquiry-to-cash cycle by delivering the applications and technology to manage demands from virtually any channel, for any mix of product and services, and for any supply base. It is a set of applications for managing the inquiry to cash sub-processes consists of seven solutions. In addition to Sterling Order Management; Sterling Warehouse Management; Sterling Transportation Management; and Sterling Supply Chain Visibility, this application set also includes Sterling Catalog and Offer Management; and Sterling Configure, Price, Quote (CPQ), which stem from Comergent. These are described below.
1.
Sterling Catalog and Offer Management. This solution enables companies to transform how they market and sell products and services across all channels. The solution improves business responsiveness by allowing business users to easily create and manage product and service catalogs, and build complex offers. It also helps companies target offers and promotions, as well as retention programs through every available touch-point to meet and adjust to changing customer and market demands. Sterling Catalog and Offer Management aggregates products from multiple vendors into a single catalog, and gives companies full control over product pricing and catalog updates. It also includes parts assembly capabilities—to manage all aspects of ordering product parts. With Sterling Catalog and Offer Management you can easily and quickly create and administer complex offers—all available through the various ways they reach their users.
2.
Sterling Configure, Price, Quote (CPQ). Again as the name implies, this solution guides prospects, customers, partners, and internal users through the process of finding, configuring, and ordering complex products and services in a Web-based, self-service environment. It offers pricing capabilities that allow companies to determine the appropriate pricing based on customer, customer segment, region, contract, or any other criteria they define, while the quoting capabilities automates building quotes based on pricing rules and selections made during the configuration process. Sterling CPQ provides a seamless mechanism to automate the creation, negotiation, and approval of quotes for prospects into orders.
Latest Product Additions
Along with the introduction of the suite, Sterling Commerce also brought in new capabilities in both the selling and fulfillment solution bundles, starting with the availability of Sterling Inventory Replenishment, a new product in the Sterling Multi-Channel Fulfillment suite that enables companies to create collaborative replenishment processes with their trading partners. Key inventory strategies, such as lean manufacturing (see Lean Manufacturing: A Primer), vendor-managed inventory (VMI), and collaborative planning, forecasting and replenishment (CPFR), are difficult to execute because there has been little visibility into trading partner information, while the development of joint plans and forecasts is labor-intensive. Thus, Sterling Inventory Replenishment focuses on reducing this complexity, and instead effectively executes these strategies by creating a collaborative environment for inventory planning that analyzes daily inventory and sales information, automates the purchase order generation process, and delivers an optimal inventory plan with the capability to execute the plan.
Sterling has also started to bundle their enterprise integration and B2B integration offerings with the Selling and Fulfillment Suite, along with a library of modules that accelerates and simplifies the integration with the most popular ERP and best-of-breed SCM solutions to help customers achieve a quicker time to value as well as consolidate these processes on to a single platform. This approach is expected appeal to IT departments as they struggle with multiple platforms/products to manage the internal integration with applications and external integration with supply chain partners.
Sterling Selling and Fulfillment Suite Recap
To recap, Sterling Commerce's product offerings now apparently include quite a few SCM solutions outside its traditional EDI and e-commerce communication realms. While each of these point solutions has a unique focus and its own traditional customer base, the company's target market—large multinational businesses—often require solutions from several of these categories. In summary, Sterling Selling and Fulfillment Suite's potential key benefits appear to be
*
increased user companies' revenues by expanding B2B and B2C sales channels while enabling a higher customer experience;
*
reduced fulfillment costs, thanks to more efficiently orchestrating the sourcing and delivery of goods and services across multiple systems and partners; and
*
improved business responsiveness through greater visibility and business process adaptability.
Furthermore, as application service providers (ASP) and managed service providers (MSP) hosting technology matured (meaning that ASP is not a "dirty word" any more), Sterling Commerce saw some vindication. Generally though, the SCM vendors it acquired had realized most of their revenues from licensing their software on-premise, and related implementation and maintenance services (except Nistevo that was on-demand basically "from the word go"). Today, while still selling many products under the license model, Sterling Commerce offers some of its products, in part, on a SaaS (multi-tenant) basis, but mainly on a hosted MSP basis (in a dedicated, single-tenant manner). The future direction of Sterling is certainly inclined towards SaaS delivery. As a reminder, under the SaaS model, the software is installed, operated, and maintained on vendor-owned servers, which are monitored and maintained by vendor personnel. While the software is still configured and integrated to the customers' needs, implementation, and integration challenges are substantially reduced (see Software as a Service beyond Customer Relationship Management and Sales). Under this approach, a customer's monthly subscription and hosting fee is substantially less than the typical one-time license fee, but over the life of the subscription Sterling Commerce can generally produce equivalent or greater revenue. The lower up-front costs and integration hurdles tend to reduce customer approval requirements and shorten sales cycles. All revenues associated with subscriptions are apportioned over the life of the arrangement, including software licenses, set-up services, and implementation services. This should eventually result in more stable and predictable (albeit deferred) revenue for Sterling Commerce.
Nothing Grand Comes Without Challenges
Sterling Commerce has a good vision; an intriguing product roadmap; an established growth record and path, with, in part, a recurring revenue model in the offing. It also has a proven management execution; a successful M&A track record; a loyal, blue-chip customer base; etc. One can nonetheless imagine how colossal the job has been for the company (with no prior expertise in some of the acquired realms) to cohesively enhance its product portfolio, and how challenging it might be in the future. The road between devising a compelling value proposition and delivering it (with all current moving parts working in synch) is certainly long and winding. While all its acquisitions were "thoroughbred" SCM applications providers, Sterling Commerce had long been an infrastructure supplier offering integration, EDI, and GDS solutions. This in itself may be problematic for some prospects—especially those suffering from FUD (fear, uncertainty and doubt) "courtesy" of Sterling's competitors. Although EDI and integration are integral to supply chains, Sterling Commerce must still contend with doubt about whether it, as an EDI provider, can become an SCM expert almost overnight. Moreover, Sterling risks the perception that it will become a direct competitor to enterprise resource planning (ERP) vendors. If this perception pervades, then its partnerships with existing application partners could fade, as the case was with its QAD's partnership for the Sterling Gentran EDI integration product.
In addition to brand recognition in the SCM application space (where almost everyone still associates Sterling Commerce with EDI or GDS), another major difficulty of Sterling's application strategy is in possessing enough domain specific knowledge to compete (i.e., create a product, market, sell, and support it) to compete with application vendors that have supply chain processes "in their blood". To be fair, Sterling Commerce has taken a wise approach and moved strongly into the application space by largely keeping the domain experts of its acquired companies. Still, some organizational integration growing pains (in addition to products' integration) are expected to persist for some time to come.
Also to be fair, the vendor aims at delivering its applications through integrated, high-performance technologies designed for maximum compatibility with its customers' existing disparate systems and computing environments. Its underlying platform is based on the latest open standards (to facilitate integration with CRM, SCM, and ERP systems, portals, and legacy enterprise systems). It also provides some tools necessary to derive better (ROI for its customers. Some of these are real-time configuration and distributed administration for greater business flexibility; and easy-to-use web interfaces allowing business users to modify workflows; and multilingual capabilities for international deployment, with fairly high-performance, cost-effective, reliable, and scalable operations. By positioning the Selling and Fulfillment Suite and Sterling's B2B integration offerings as enablers to connect, communicate and collaborate across multi-enterprise supply chains should help to differentiate them from other best-of-breed supply chain vendors and ERP vendors offering supply chain suites.
Integrating these should enable so many companies still stuck with a mix of SAP, Oracle, Infor, and other ERP systems across their divisions to build business processes, automated all the way from order capture to fulfillment and payment. One of the major attractions of Sterling's new, configurable package is that it allows for detailed feature configuration that aligns the system with business needs, and has configurable security, which operates throughout the levels of a system, from encryption of network traffic to business-oriented authorization policies. Whereas it would take many "man-months" to tweak multiple ERP systems to align with multi-channel and multi-enterprise order and fulfillment processes, this system comes largely pre-configured. For example, e-storefronts can typically go up and live for categories of merchandise in between 90 to 120 days.
Yet dynamic multi-enterprise supply chains require even more sophisticated solutions to connect enterprises with their suppliers, partners, distributors, dealers, and customers, as to better coordinate and optimize business processes, accelerate revenue, lower costs, and improve customer service. A type of a composite application framework (CAF) that is based on SOA principles should enable the delivery of tailored solutions without the typical cost, development, and time required for customization (see Architecture Evolution: From Web-based to Service-oriented Architecture). With such a framework, customers will eventually be able to combine application services in Sterling Commerce and third party products to create new solutions that more precisely address particular business problems. Like its former peers, Yantra and Nistevo, Comergent users, too, should be able to adopt the Sterling business process platform, which currently includes business intelligence (BI) frameworks, business process execution language (BPEL), alert monitoring, and business activity monitoring (BAM). For more details on some of the above features, see Business Activity Monitoring—Watching The Store For You and Understanding SOA, Web Services, BPM, and BPEL.
However, more concrete details and products are needed to see how well-rationalized this framework and platform will be for all Sterling Commerce products. Given how much thought and excruciating effort it has taken for even the likes of SAP to deliver on its (ongoing) SAP NetWeaver business process platform (BPP) promise (see Multipurpose SAP NetWeaver), one can only imagine the magnitude of the still-outstanding work for Sterling Commerce. There are even some indications that SAP is starting to de-emphasize NetWeaver's role at least for external integration purposes.
Functionalities that are either non-strategic to selling and fulfillment or are overlapping will present additional caveats in this regard. For non-strategic features (coming from Comergent, such as marketing campaigns), Sterling will have to maintain separate research and development (R&D) and sales and support expertise and decide whether to maintain them in the future. Regarding some overlapping fulfillment functionality between Yantra and Comergent, the decision will have to be made as to which one will be rewritten into the integrated suite going forward, and how well served current users will be by such standalone products (with separate data and process models). Some customers may not necessarily opt for the next-generation integrated Sterling Selling & Fulfillment suite.
In fact, Sterling Commerce would not be the only company with such a noble idea, since many enterprise-level companies have espoused similar undertakings—from SAP and Oracle with their respective SAP NetWeaver and Oracle Fusion Middleware platforms, and Click Commerce with its composite application framework (CAF), Manhattan Associates Supply Chain Process Platform to i2 Technologies, the supply chain player, with its Agile Business Platform (formerly Supply Chain Operating System [SCOS]). For instance, Sterling's selling and fulfillment proposal is indeed similar to i2's, which is a standards-based open architecture that offers organizations a way to run collaborative and planning supply chain tools within the enterprise and across the extended enterprise for real or near-real time supply chain visibility.
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