By James M.

Dorsey

COLUMN

More for Less

ne upside of an economic down- turn is that it forces private and public sector management to seek ways to do more for less. The art of survival in a crisis is the ability to provide the same product or service at a reduced cost by increasing efficiencies and streamlining business processes that have become too complex in times of mushrooming turnover, growth and focus on acquisitions. To erase unnecessary management layers, thus simplifying the coordination and handling of information, a growing number of companies are employing electronic data interchange software. Theoretically, companies would want to control costs and streamline efficiency in good as well as in bad times. The reality is that in good times the focus is on more for more rather than more for less, benefitting from customer confidence to develop and market added-value features at increased prices. Organizationally, the more-for-more focus involves perpetuating outdated procedures, the emergence of incompatible IT systems, and the development of conflicting departmental policies beyond managements purview. For multi-product, multi-site companies, the cost of these inefficiencies can be substantial. As a result, companies small and large are making corporate efficiency and performance a core activity independent of economic cycles. Larger corporations are introducing permanent performance improvement or so-called six sigma teams. More often, companies are employing electronic data interchange software the electronic transfer of business documents through inter-company and application-to-application exchanges. Software solutions that allow companies to have an overview of their business processes with little need for maintenance and a clear cost profile are key in a continuously changing market, says Jan Sundelin, CEO of TIE Holding, a market leader in supply chain integration software, whose recently launched Business Integration SmartStart takes electronic data interchange a step further by allowing TIEs 1,500 clients to communicate with each another. With management often struggling to identify the real cause of cost inefficiencies, providers like TIE enable executives to pinpoint the major drivers of

their companys performance and establish performance frameworks. non-value-adding functions such as overly complex processing, double handling, waiting times and errors. without human involvement. Major retailers like Walmart and JC Penny employ EDI to cut delivery times substantially, reduce inventory and increase sales. EDI is enabling European and US textile companies that are suffering from cheaper Asian production to compete with superior service. Similarly, US customs use EDI to accept electronic customs documentation in advance of shipments to avoid port delays. Royal Malaysian Customs selected the TIE Kinetix Business Integration Platform as their new solution for all their EDI messaging, For companies big and small, the trick is to be able to sustain the enhanced performance achieved with EDI. That often involves far-reaching, painful change such as redesigning performance measures and altering job descriptions and incentive schemes that management too frequently shies away from. As a result, many companies declare victory too soon, only to be confounded when performance starts slipping again. While critics claim that EDI requires investment and argue that no two EDI applications are the same, even if the same specs are used, EDI has become an industry standard that is a key tool in good and bad times. The trick is to recognise that, not only when the strategy is more for less, but also when it is more for more. Companies that do so maintain their success by constantly examining and improving the efficiency of their operations, leaving them in a position of strength when the inevitable crises arise. Theirs is a constant quest for efficiency, not a reaction to current events, says Alan Masterton, the University of Sydneys director of performance operations.

James M. Dorsey was for more than 30 years a foreign correspondent for The Wall Street Journal and other publications. Today, Mr. Dorsey is a columnist, media entrepreneur and international affairs analyst who provides consultation services for strategic communications, water and security companies and financial institutions.
TIE ~ 2011 ~ P7