Shopping for a new or replacement materials management
information system? Here are a few words of wisdom from Jamie
Kowalski, managing director of business development for
Owens & Minor
Inc. to add some clarity to the evaluation process.
Don’t address the strategy and process, which is
frequently lacking, but rather the functional capabilities of the
software you’re interested in, according to Kowalski.
1. Is a ROI required for an investment in a new MMIS?
If so, how is a ROI being achieved? Who is tracking the actual vs. the
projected ROI? If a ROI is not required, why not? "I think they can
and should," Kowalski said. "MMIS should and can be self-funded."
2. Is the info technology strategy to select
best-of-breed or comprehensive ERP? What is good and not good about
either? Who makes the final decision on that direction/strategy? Who
should? "Given that the supply chain makes up about 50 percent of
total operating expenses and soon will exceed 50 percent, the needs of
supply chain management must be given priority," he said. "If an ERP
has too many gaps compared to best-of-breed, then best-of-breed should
be selected."
3. Is the MMIS intended to process transactions and
report on them or provide the visibility and analytics needed for
optimum supply chain spend and management performance? "While MMIS’
are improving on their analytic capabilities, they still appear to be
primarily good transaction processors," he noted. "That is okay since
there are many gap-filling tools out there that can now integrate with
a pure MMIS or ERP in a complementary manner."
4. MMIS buyers must make sure that they recognize the
need for thorough training and retraining – for remedial and new
employees – and not cut that out of the budget when acquiring the MMIS.
Without the training, supply chain staff will be unable to tap the
full capabilities in either the ERP or best of breed system. This
means the probability of a strong ROI will be very low.
5. The MMIS must be recognized as an enabler or tool
that helps the supply chain and other staffs achieve optimized
operational and financial performance – the means, not the ends.
"Someone must take action with the data and information produced," he
said. "The system will not take the action."
6. The MMIS should be selected based on completion of
an assessment and strategic plan for the supply chain. The plan would
identify the operations that needed change or elimination or
automation via the MMIS or other tool. "The MMIS is not the strategy,
just the tool that can help execute the strategy," he added.