Column by James M. Dorsey

1. By James M. Dorsey
COLUMN
More for Less
O
ne upside of an economic their company’s performance and establish perfor-
down- turn is that it forces mance frameworks. non-value-adding functions such
private and public sector as overly complex processing, double handling, waiting
management to seek ways to do more times and errors. without human involvement. Major
for less. The art of survival in a crisis is retailers like Walmart and JC Penny employ EDI to cut
the ability to provide the same product delivery times substantially, reduce inventory and
or service at a reduced cost by increasing increase sales. EDI is enabling European and US textile
efficiencies and streamlining business processes that companies that are suffering from cheaper Asian
have become too complex in times of mushrooming production to compete with superior service. Similarly,
turnover, growth and focus on acquisitions. To erase US customs use EDI to accept electronic customs docu-
unnecessary management layers, thus simplifying the mentation in advance of shipments to avoid port
coordination and handling of information, a growing delays. Royal Malaysian Customs selected the TIE
number of companies are employing electronic data Kinetix Business Integration Platform as their new
interchange software. solution for all their EDI messaging,
Theoretically, companies would want to control For companies big and small, the trick is to be able to
costs and streamline efficiency in good as well as in sustain the enhanced performance achieved with EDI.
bad times. The reality is that in That often involves far-reaching,
good times the focus is on more for painful change such as redesigning
more rather than more for less, performance measures and altering
benefitting from customer job descriptions and incentive
confidence to develop and market schemes that management too
added-value features at increased frequently shies away from. As a
prices. Organizationally, the result, many companies declare
more-for-more focus involves victory too soon, only to be
perpetuating outdated procedures, confounded when performance
the emergence of incompatible IT starts slipping again.
systems, and the development of While critics claim that EDI
conflicting departmental policies requires investment and argue that
beyond management’s purview. no two EDI applications are the
For multi-product, multi-site same, even if the same specs are
companies, the cost of these inefficiencies can be used, EDI has become an industry standard that is a key
substantial. As a result, companies small and large are tool in good and bad times. The trick is to recognise
making corporate efficiency and performance a core that, not only when the strategy is more for less, but
activity independent of economic cycles. Larger also when it is more for more. Companies that do so
corporations are introducing permanent performance “maintain their success by constantly examining and
improvement or so-called six sigma teams. More improving the efficiency of their operations, leaving
often, companies are employing electronic data them in a position of strength when the inevitable crises
interchange software – the electronic transfer of arise. Theirs is a constant quest for efficiency, not a
business documents through inter-company and reaction to current events,” says Alan Masterton, the
application-to-application exchanges. “Software University of Sydney’s director of performance
solutions that allow companies to have an overview operations.
of their business processes with little need for
maintenance and a clear cost profile are key in a
continuously changing market,” says Jan Sundelin, James M. Dorsey was for more than
CEO of TIE Holding, a market leader in supply chain 30 years a foreign correspondent for The
integration software, whose recently launched Wall Street Journal and other publications.
Business Integration SmartStart takes electronic data Today, Mr. Dorsey is a columnist, media
interchange a step further by allowing TIE’s 1,500 entrepreneur and international affairs
clients to communicate with each another. analyst who provides consultation services
With management often struggling to identify the for strategic communications, water
real cause of cost inefficiencies, providers like TIE and security companies and financial
enable executives to pinpoint the major drivers of institutions.
TIE ~ 2011 ~ P7