More challenges come with the internationalization of business. CIOs must deal with suppliers from every corner of the globe with varying degrees of technological sophistication, as well as multiprotocol communication mechanisms that all have to hook back into the CIOs’ internal systems. According to Enslow’s research, global supply chains in large enterprises were not nearly as automated as their domestic supply chains. This dependency upon a supplier’s questionable systems, upon their e-mails, faxes, and phone calls, "completely stresses out ERP and spreadsheet systems," Enslow says.

Enslow’s research revealed that an astounding 90 percent of enterprises say their global supply chain technology is inadequate to provide their organizations with the timely financial information they require.

Inside the Hosted Supply Chain: A Case Study

In 2001, Agere was made an offer it couldn’t refuse. One of its biggest customers, disk-drive maker Seagate Technologies, strongly suggested that Agere sign on to E2open because Seagate, IBM and others in the high-tech industry thought E2open’s services represented the supply chain future. (E2open had morphed from its beginnings as a dotcom-era online exchange into a vendor of hosted supply chain software.)

By June 2005, Agere had dutifully switched its supply chain front end over to E2open and with it brought along 80 of its primary component suppliers. In a fashion similar to the way Seagate "suggested" that Agere begin using E2open, Agere, according to Morris, "persuaded" its suppliers and customers to use E2open’s services by showing them the value it could return to both parties. ("Of course, some of our suppliers are a lot bigger than us," Morris points out, meaning that he couldn’t simply force a partner to sign on.)

Through E2open’s single, Web-enabled connection, Agere (and those of its trading partners that have signed on to use E2open’s hub) now has a more accurate, timely view of demand and order management data than it did previously, when it depended largely on manual processes, including fax, e-mail and phone calls. For example, the buyers in Agere’s procurement group are now able to quickly adjust order amounts to match new (and more accurate) forecasts and then modify supplier shipment data before it becomes a problem (an incorrect amount) in the back-office Oracle 11i system. On the back end, the purchasing group, which tracks the ebb and flow of purchase orders worldwide, is now able to send and receive purchase orders that are now both more up to date and accurate. And many of those manual processes are becoming a memory as supplier data is now able to flow automatically into Agere’s Oracle ERP applications through E2open’s hub. From a business process perspective—as well as from the IT side of the house—the savings are immense.