Recently we've seen an explosion of software in every single field, including energy and industrials. It's tough to know what software is actually useful and what is an additional cost burden, especially when it is not an area of expertise.
We’ve found the easiest way to evaluate the value-cost tradeoff when looking at software is understanding what fundamentally makes software valuable. From our experience, there are 3 areas in which software generates value:
#1: Shortcut multistep and repetitive tasks:
Computers are built for repetition and following a series of instructions. To that end, it's prudent to shortcut repetitive manual processes with technology. A prime example of this is in commodity pricing. In the past, you would look at the newspaper to see the price of a commodity. Depending on the volatility, those prices would fluctuate, and you would have to make a couple more phone calls to figure out exactly where prices stood. Now, with real time pricing, you don’t have to buy the paper, nor do you have to take the steps to assess volatility, make the relevant phone calls, and update your own pricing.
#2: Working with and storing data
Software is very good at storing data in a format that's accessible and easy to edit. It takes what you would normally have on pieces of paper or endless spreadsheets and consolidates it into one place. You can then analyze and manipulate the data in order to make better decisions. A clear example of this value prop is ERP systems. By storing thousands of lines of product and integrating the ERP with your tools, you are able to move data seamlessly through the ERP system to where it needs to go. Moreover, by analyzing the data that the ERP collects, you can optimize strategic tasks like ordering new inventory.
#3: Enabling collaboration
Software allows people to collaborate in real time without regard for geography. If your team is spread out or you have clients outside of your operating geographies, software can help align your teams or make the sales process significantly easier. With the pandemic in 2020 and 2021, no example makes this more clear than the adoption of video conferencing platforms. As people were forced to work from home, the value of decentralized collaboration & sales through software came to the forefront.
Why does the supply chain need software?
The supply chain involves multistep, repetitive processes that utilize a large amount of data. We can break down software’s value prop in the supply chain by looking at vendor onboarding as a use case.
Onboarding each vendor is a long multistep process where someone needs to gather the financial information of the vendor, vet the vendor and finally create an MSA that is agreeable to all parties involved. Furthermore, the process kicks off every single time you need to onboard a new vendor or want to work with a new counterparty. Because the task is repetitive and has many steps, software can automate the work making it repeatable and simple.
All the documents collected during onboarding are pieces of data that need to be tied to a specific vendor. Oftentimes, this data is floating around in email or lost in spreadsheets. As a result, the data becomes very difficult to manage and nearly impossible to procedurally edit. Purpose-built software can act as a single hub to store all data related to a specific vendor, alleviating the organizational stress & making the data easy to access and edit.
At Parq:
Vendor onboarding is one of the fields that we're tackling. With our tools, we hope that you will be able to visualize your vendor network and manage your vendors to create a sustainable supply chain built for the future.