QuickREAD

February 28, 2007

Cross-Cultural Manners Are important, But Negotiation Is the Crucial Next Step
Techniques used in cross-cultural negotiations can win or cost companies millions of dollars in contracts. This is one of the conclusions of a recent study spearheaded by Hewlett-Packard involving MIT and Harvard researchers and HP executives with extensive negotiation experience in the Asia-Pacific region. "The researchers provided the neutral entity and objective perspective we wanted," says Benjamin Webster, HP's global strategic negotiation manager, Vancouver, Washington.
The study sought to discover how a Western model (the Mutual Gains approach, collaborative or interest-based negotiations) could be applied in China, Japan, and Korea and where pitfalls might lurk. "We got interesting conclusions which we have used to adapt HP processes, training, and even some of our tools," Webster says.
The study was prompted by the amount of global business HP conducts annually: some $70bn worth of goods and services a year. "The portion of money spent with partners in Asia Pacific is increasingly growing, with about $20bn of procurement purchasing happening in Taiwan alone," says Webster. "With these kinds of numbers, we knew we'd better be good because it's critical in moving forward in our competitive landscape."
Knowing how to shake hands, hold a business card, or when to hold the door open are very important, says Webster. "But we needed to get to the next level to discover actual critical success factors in negotiating overseas."
Key negotiation points in the western model involve preparing strategically, creating value, focusing on interest, developing alternatives, building trust, and developing sustainable agreements, reports Webster. "We were expecting some notable differences--but what we discovered was all of these things are accentuated even more during cross-cultural negotiations in the Asia-Pacific region. So there's even more focus on trust and building sustainable agreements. You can't simply rely on what the contract says in China."
Source: The Manufacturer, http://www.themanufacturer.com

Why Isn't Wal-Mart Requiring Suppliers to RFID-Tag Everything?
In the early stages of Wal-Mart's RFID rollout, the RFID team within Wal-Mart's IT department would meet with suppliers, explain the RFID vision and work with them on tagging one or more SKUs as a start. Some suppliers picked products that were RF-friendly and would be easy to tag--such as paper towels or cartons of jeans. Others decided to tag difficult products to try to learn as much as they could about the physics of RFID. Now, those within Wal-Mart who are responsible for ordering products from suppliers are telling those suppliers what they'd like tagged, based on Wal-Mart's ability to use the tag to improve on-shelf availability. In other words, it's business benefits that will drive what's tagged from now on.
There's a part, frankly, that wishes Wal-Mart would require all of its suppliers to tag all SKUs going to RFID-enabled stores or distribution centers. That would drive up volumes and help vendors that produce RFID chips, tags and interrogators make money. These companies have invested considerable sums in developing newer and better hardware, and they are struggling to make those investments pay off because they aren't yet selling hardware in huge volumes.
Wal-Mart isn't taking that approach. Instead of having suppliers tag just for the sake of tagging, it's having them tag where it makes good business sense. The buying teams will ask suppliers to tag products that are often out of stock, so that both Wal-Mart and the supplier get a benefit--an increase in sales. The volume of tags consumed won't ramp up as quickly in the short term with this approach, but more suppliers are going to buy in and, therefore, adoption will be faster in the mid- to long-term.
Source; RFID Journal, http://www.rfidjournal.com

Utility Relies on SOA to Integrate Six Separate Databases
Over the past five years, electricity distributor Southside Electric Cooperative in south-central Virginia has seen the number of accounts it services increase by 73 percent, from 30,000 to 52,000.
While it grew, the utility's management team sought to maintain good customer relations--from responding to a request for account information to a service outage.
Problem was, Southside Electric uses six databases to store information on outages, dispatches, electricity usage, geographic mapping, billing and accounts receivable--and the databases were not connected to each other.
In 2005, Southside Electric set out to build a real-time integrated system. The goal was to have all databases appear as if they were one, and to create a system that linked all departments and functions to provide employees with reliable information. To achieve that, the utility turned to a service-oriented architecture to aggregate and integrate information from the separate databases.
Source: Baseline, http://www.baselinemag.com

Small Business Likely to Set Up Shop in Post-Fidel Cuba First
Although Raúl Castro has so far shown himself to be a doctrinaire Communist, experts such as Daniel Greenberg, director of the Latin American Studies program at New York's Pace University, suspect he would show a more pragmatic side as president. In that case, says Greenberg, Cuba may wind up with a transitional economy similar to China's: Communism with open markets.
At the moment, of course, the Foreign Assistance Act of 1961 imposes an economic embargo on Cuba, prohibiting trade and most travel there. Additionally, the Helms-Burton Act of 1996 prevents recognition of a Cuban government led by either Castro, and extends the 1961 embargo to prevent foreign companies from doing business with any Cuban enterprise whose assets were owned by a U.S. business prior to 1959.
Most experts expect the embargoes to be lifted in phases after Fidel dies. Within a year of his death, Cubans and Cuban Americans will likely be allowed to travel between the U.S. and the island freely, predicts Jorge Pinon, senior research fellow at the Institute for Cuban and Cuban American Studies at the University of Miami. That could be enough to spark demand for more open markets within Cuba, he adds. "The biggest catalyst for change in the economic transition is going to be the small and medium-sized businesses," he says, adding that those likely to move in first are small businesses such as Miami-based contractors who can get to Cuba easily, invest small sums of money, and hire relatives. Large businesses, he says, aren't likely to make significant investments until the infrastructure, which has decayed badly since the Soviet Union collapsed, is partially rebuilt.
Source: Business Week, http://www.businessweek.com

Air Products: We Want One Supply Chain Platform, One Set of Metrics
When John Jones was promoted to chairman of Air Products and Chemicals Inc. back in 2000, he set out to transform the company to higher levels of growth and profitability. It wasn't that the Allentown, Pa.-based chemical and gases company was in trouble, but "we were pretty much entrepreneurial to a fault," remembers George Diehl, Air Products' global director of process management. "We had a lot [of] 'my department, my region, my business' thinking going on."
Jones's vision, part of an overall strategy known as Deliver the Difference, is centered on a corporate-wide adoption of common processes. Taking to heart the theory that "you can't manage what you can't measure," Air Products found that it could be more efficient and effective if, instead of trying to support seven or eight IT systems, it focused on one common supply chain platform, with common metrics. "Our transformation was built around a common organization, a common set of metrics, a common process, a common supply chain, a common implementation of SAP, across all the countries where we operate," Diehl explains.
Using the Supply Chain Council's guidelines on defining core supply chain processes (plan, source, make, deliver and return), Air Products now measures five key areas of its supply chain: cash-to-cash cycle time, perfect order fulfillment, demand forecast accuracy, resolution of customer complaints and customer master data accuracy.
Source: Industry Week, http://industryweek.com

India Is Still About Low-Cost Labor, But the Work Is More 'Strategic' Than Ever
In their quest for cost-reduction opportunities, U.S. companies have been offshoring information technology services to Indian suppliers for more than 20 years. The bulk of this business consisted of "non-strategic" services, such as software development and programming. A number of U.S.-based multinationals, such as Electronic Data Systems, Hewlett-Packard and General Electric, have already set up "captive" operations in India as part of their integrated global delivery IT organizations. During this period, Indian suppliers have built strong delivery capabilities and have become innovators in offshore delivery -- which is why leading multinationals have begun to trust them with more strategic and higher-value processes and functions.
Why are the CIOs today more inclined to send their companies' strategic services off to India? There are two main reasons. First, they have the continuous challenge to reduce costs in order to stay competitive. The less strategic work has already been largely done offshore and there is not enough savings left in these areas for some multinationals. Second, Indian companies have geared up to serve the entire IT services value chain, which includes the consult, design, build, operate and maintain elements of technology.
Source: Inside Supply Management, http://www.ism.ws

This SOA Stuff Just Won't Go Away, But How Do You Know It's Right for You?
Now, you've heard a few sales pitches about service-oriented architecture SOA. And you may have attended a conference or two to learn more. These architectures, you were told, are based on internet technologies. That seemed good, sounded modern. But you are still unsure of how battle-tested they are, although you feel they are better suited for faster response and flexibility. They were also described as "open," but you've heard that before from the IT vendor community.
Even though you are still not sure whether SOAs will lower the cost of computing for your company -- after all, there could be a lot of expensive change management to go with it -- you are willing to put the price tag question aside for a moment. SOAs are coming at you whether you like it or not, so the bigger issue is whether all the SOA stuff is going to work, and, if so, according to whose rules.
Source: Managing Automation, http://www.managingautomation.com

Teleworking Good for Companies, Employees Both, But There Are Serious Security Issues
Despite network attacks, virus onslaughts, data loss and other hazards that remote users can introduce, many U.S. companies haven't bothered to establish security policies for teleworkers, according to Runzheimer International Ltd., a Rochester, Wis.-based provider of employee mobility products and services. In Runzheimer's 2006 survey of 87 organizations with mobile workers, 62 percent of respondents said they were concerned about the security of company assets located off-premises, but only 46 percent reported that they have a virtual office policy.
"A lot of companies are just hoping that nothing will happen," says Jack Gold, a mobile technology consultant at Runzheimer. "And yet for a reasonable amount of effort, they could eliminate 90 percent of the potential problems."
For starters, telecommuters should use only company-owned equipment for their work, not their own home computers, Gold says.
Source: Computerworld, http://computerworld.com

Northeast, West Most Vulnerable to Job Loss Due to Outsourcing
Amid the debate over whether outsourcing is good or bad for the U.S., an important point has been largely ignored: Outsourcing is as much a regional issue as it is a national concern. Certain cities and areas are hit hard, while others remain largely unscathed.
The overlooked point is made plain in a new study from the Brookings Institution that attempts to predict which parts of the country will be most affected by the loss of jobs to foreign shores. Metro areas in the Northeast and the West are most vulnerable, while those in the Midwest and the South are less so, according to the study.
"There had been almost no work done on which metropolitan areas would be most affected," says Howard Wial, an economist with Brookings, a think tank based in Washington. "We wanted to address that."
Where might job losses be the heaviest? At the top of the ranking are San Francisco; San Jose, Calif.; Boulder, Colo.; Lowell, Mass.; and Stamford, Conn. The five cities are expected to lose between 3.1 percent and 4.3 percent of their jobs to outsourcing between 2004 and 2015. The next tier of metro areas is forecast to lose 2.6 percent to 3.0 percent of their jobs. It includes Boston, Dallas, Denver, Minneapolis, Seattle, and Washington.
Source: BPM Today, http://www.bpm-today.com

RFID Chips Small as Powder Flakes, But Without Any Real Use So Far
Tiny computer chips with myriad applications--from scanning concert tickets to tracking the family dog to monitoring travelers as they cross international borders--are shrinking, and have now have caught up with the imaginations of science fiction and spy novel writers.
Japanese electronics maker Hitachi unveiled this week the world's smallest radio frequency identification, or RFID, chips. They are just 0.002 inches by 0.002 inches and look like flakes of powder.
They are thin enough to be embedded in a sheet of paper, according to Hitachi.
The latest chip is 60 times smaller than Hitachi's previous Mu-chip, and can handle the same amount of information, which gets stored as a 38-digit number, according to Hitachi.
Although the tags are now the smallest made, they need an external antenna to work, and the smallest antenna developed so far is about 80 times bigger than the tags.
"It is another sign of innovation in the market," says Michael Liard, research director of RFID at ABI Research. "However, we are still several years away from having any practical business solutions realized."
Source: CRM Buyer, http://crmbuyer.com

Have You Checked Your Spam Account Lately?
If a renewed surge in spam continues on this track, 90 percent of all e-mail will be spam by the end of the year, according to a new report.
A flood of spam coming out of China and South Korea is fueling a 30 percent jump in spam levels in just the past week, according to the Australia-based Marshal's Threat Research and Content Engineering Team. It reports that spam volume is at its highest peak ever, increasing 280 percent since just last October.
"The increase in spam coming out of the region is likely the result of a newly activated botnet running off computers in Asia," said Bradley Anstis, a director at Marshal, in a written statement. "Approximately 85 percent of all emails received are spam. If the current increases in spam volumes continue in 2007, users can expect at least 90 percent of all emails received to be spam by the end of the year."
Source: Information Week, http://www.informationweek.com

Rich Internet Applications Aren't Just for Consumers Anymore
Do you think rich Internet apps (RIA) are just a concern for developers of consumer Web sites? Think again. RIAs will soon make their mark on the enterprise, making complex software such as ERP and BI systems more accessible and understandable to ordinary business users.
Source: Intelligent Enterprise, http://www.intelligententerprise.com

More Mid-Market CIOs Tap Into Open-Source ERP
Often, ERP vendors pitch smaller enterprises with packaged applications that they can run as is, requiring little or no IT investment. It's a logical pitch in environments with scarce technology resources. But a substantial percentage of smaller companies want or need to customize the applications to fit their specific business needs--just like larger enterprises, notes Paul Hamerman, vice president of enterprise applications at Forrester Research. And that's where open-source ERP comes in.
"There's such a diversity of needs. Some companies want a system they can mold to their business, which gives them more inherent flexibility. And open source is designed to be customized," he notes. And without astronomical cost.
Source: CIO, http://www.cio.com

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Supply Chain Technology's Most Wanted
How are companies investing their supply chain technology budgets and what tops their 'wish lists'? Our second annual Technology Survey, conducted with the Aberdeen Group, answers these questions, providing a benchmark to help readers assess their own technology road maps.
In the April issue of Global Logistics & Supply Chain Strategies magazine