2020 saw a massive global shift to e-commerce, with consequent supply chain disruption, and that shift is here to stay.
The big challenge for many organisation is how to integrate their legacy systems to the cloud without compromising those on-premise systems into which they have significant investments.
To discuss this dilemma, I invited Mahesh Rajasekharan, CEO of Cleo, a company that builds cloud integrations for increased supply chain visibility.
We had an excellent conversation and, as is often the case, I learned loads, I hope you do too...
If you have any comments/suggestions or questions for the podcast - feel free to leave me a voice message over on my SpeakPipe page or just send it to me as a direct message on Twitter/LinkedIn. Audio messages will get played (unless you specifically ask me not to).
To learn more about how Industry 4.0 technologies can help your organisation read the 2020 global research study 'The Power of change from Industry 4.0 in manufacturing' (https://www.sap.com/cmp/dg/industry4-manufacturing/index.html)
And if you want to know more about any of SAP's Digital Supply Chain solutions, head on over to www.sap.com/digitalsupplychain and if you liked this show, please don't forget to rate and/or review it. It makes a big difference to help new people discover it. Thanks.
And remember, stay healthy, stay safe, stay sane!
You're not able to onboard fast enough, you know, the sales team sold a grocery chain as an account. But it takes six months to get import staff to the chain. Right? That's leakage. And a lot of times, by six months, the grocery chain probably lost interest in your product. Right? So that's really where we come in and say, Look, can we enable these demand points in a matter of days? And if anything changes in the supply chain, can you very quickly respond to those with a single platform that handles all of this?Tom Raftery:
Good morning, good afternoon, or good evening wherever you are in the world. This is the digital supply chain podcast, the number one podcast focusing on the digitization of supply chain. And I'm your host, global vice president of SAP. Tom Raftery. Hi, everyone. Welcome to the digital supply chain podcast. My name is Tom Raftery with SAP and my special guest on the show today is Mahesh Mahesh, would you like to introduce yourself?Mahesh Rajasekharan:
Thank you, Tom for inviting me to your podcast. My name is Mahesh Rajasekharan. I am the president and CEO of Cleo, a global software company that delivers ecosystem integration software solutions, to help companies discover and create value across a multi enterprise supply chains. Okay,Tom Raftery:
that's, that's a whole lot of words there in my head. But can you can you break that down for us a little more? What What do you mean by that?Mahesh Rajasekharan:
Yeah, we help companies connect and integrate their core business processes such as od cash, or procure to pay or in the case of transportation logistics companies that load enter the invoice by connecting with the the customers and the suppliers and their and their logistics service providers. Right. That's the core of what we do. What's interesting, and what we have done is this basic nature of integrating supply chains, what used to work, you know, 510 years ago, because the linear nature of supply chain has been completely upended, because of the growth in e commerce, and has now become more of a matrix you got, you know, a massive change, not only in the way of buying is happening through e commerce channels, but also the fulfillment aspects. And this is where what you're seeing as traditional b2b integration technologies are broken. And the world needs something different, which is more holistic, it solves the entire span of these end to end processes, and really marries the batch type of traditional integration with real time nature integration. So that's really what we do, we sort of blend the traditional sort of batch API integration with the real time API based integration through a single pane of glass. So we can provide end to end visibility, both for the integration flow, but also contextualized for the business process flow.Tom Raftery:
Okay. What, so the listeners, his podcasts are varied. And money can come from different aspects of supply chain that can be anything from people in warehousing, to people in engineering to you know, people in manufacturing? So, for people who might not be fully ofay? With what you mean, can you break that up? Give me a practical example of an organization, what they're doing day to day? And how, what problems are encountering and how you're fixing that for them?Mahesh Rajasekharan:
Yeah, so let's look at the example of a CPG company, you know, let's say in food and beverage, right? Traditionally, you received your orders from retailers, like Walmart, or Target or, you know, in any any traditional retailer, place orders, and usually, people place orders in batch. And they use a technology called EDR, electronic data interchange, right? That that is a sort of the normal model, you know, you you got the orders you receive them, you receive them in certain formats that comes to you based on API, and then you're transforming it into the language that your internal systems theory RP systems would understand. And you're selling, right? That is the sort of the linear world. Now what has happened is, imagine now you're selling through Amazon. Amazon has sort of two aspects that is a marketplace of Amazon, where you're selling through Amazon, and you're required to use Fulfillment by Amazon, that's a fulfillment arm, or you're working with Amazon retailer, that's a vendor Central, where so far they're using an ADA base exchange that signal they're going to be switching and migrating to an API based approach in the future. So now you got a mixed model, right? You're dealing with the more of the traditional retailers through the traditional batch API. You're dealing now with Amazon marketplaces through API's, correct. And now on top of it, you also want to go and have your own website, and have your own e commerce platform like Shopify Magento So now if you look at already cash, you'll notice eating orders both EDI and API. They're coming in different, different sequences and different form factors. And now you need to be able to combine them, merge them, and more importantly, have visibility to what is happening. For example, you're sending it to a three PL, to ship it to the retailer. And the retailer is calling you about the status of the shipment, your ability to see real time where the stuff is moving the supply chain, and be able to intelligently have an answer is really what we enable. And this is not enabled in the past. The problem was, people took multiple technologies and smashed them together. Right, right. And, and that's really the problem is not multiple technologies. That happens all the time. As we know, in software, there's always this power of best of breed. But in this particular niche case, when people are taking Ed ICT technology and API technology, and Managed File Transfer, and you pull it together, and smash it together, you have business process disconnects, this needs to you know, you're not able to onboard fast enough, you know, the sales team sold a grocery chain as an account. But it takes six months for you to put stuff through the chain. Right, that's leakage. And a lot of times, by six months, the grocery chain probably lost interest in your product. Right? So that's really where we come in and say, Look, can we enable these demand points in a matter of days? And if anything changes in the supply chain, can you very quickly respond to those with a single platform that handles all of this.Tom Raftery:
So talk to me about the platform and how how you're fixing that problem far these, in this case, CPG, but other customers as well.Mahesh Rajasekharan:
So essentially, we came up with a new category first, right, which is we call it ecosystem integration, which is sort of the reimagining and reinventing traditional b2b integration in the era of cloud and e commerce. And we went about creating the category and the platform that we launched with four guiding principles. Principle number one is to be able to handle all flavors integration, you know, back CDI, real time API, with end to end visibility, with lightweight agents, these lightweight agents can go into the enterprise, take data encrypted, secure and take it to the cloud. So that's sort of principle one. The second was enable customers a ton of control, right, they can either self service themselves, they can give it to an SI partner, or we can do it for them. Right. Third was we built out a hundreds of connectors, including 30, SAP HANA, and in all the, you know, all the the Amazon marketplaces to Shopify and Magento is with the explicit intent, and with pre configured integration libraries, to accelerate companies, you know, danken revenue, and finally, the notion of end to end integration and business process, contextual data visibility to enable rapid decision making. So all four of this when capsulated include Integration Cloud, okay.Tom Raftery:
Okay. And for organizations who are having these kinds of issues, you know, what, what kind of challenges would you see them having adopting a solution like yours?Mahesh Rajasekharan:
The way we you know, we look at this as people have burning problems today, right? These are pressing problems, I need to be relevant to the Commerce I need to be relevant in the world of digital transformation. Just if you look at some of the numbers, q3 of 2020 alone, you know, there are 37% increase in e commerce. Right 37% increase, when you have a 37% increase, what we see is that in terms of dollar terms, right, now, we think about the, the transaction volume, that's that's basically quadrupling, because, as you know, you're, you're sending notifications, you know, every hour every few hours, in an e commerce, what is known as e commerce, how do you fulfill and get the stuff to the warehouse or to the person's house, or whatever the situation may be. So what we are advocating on our customers is take that burning problem and solve that first, don't try and read the whole thing. Go and say, Look, I need to work on Amazon Marketplace, I need to have my Shopify ecommerce platform will enable that. And we'll help companies unlock free cash flow, because now they can capture revenue, they can accelerate time revenue. And once we unlock free cash flow, now you can do your next project the next budget. So that's sort of our approach and that seems to work extremely well and is working well.Tom Raftery:
Okay. What happens when we get to kind of post covered world? Will it all go back to the way it was before and the problems that you were talking about will go away? And you know, what, you know, are we going to move to it to a new world where your product would be required even more or what? Or somewhere in the middle?Mahesh Rajasekharan:
It's a matter of time, I think And while there, there is some some short term, you know, awareness because of COVID that people realize that, hey, supply chains are designed for cost. And now we need to manage rigidity. I think the e commerce can actually sort of happen in 2019, even before COVID head, right. So if you look at some of the data that McKinsey published recently, they showed the e commerce curve, accelerated a 10 year acceleration happened in a three month period, at the end of 2019, coming in 2020. So So that's something a lot of people don't realize it. Ecommerce is trending up and accelerating and then could happen. And then the nature of the supply chain being rigid, right, that got exposed. So what I think is, what we are doing and what the world needs to the customer integration is absolutely accelerating, because digital transformation is accelerating. Right, right. And like I said, it's not just the e commerce aspect of it, it's a fulfillment, how do you make money in a direct to consumer model? Right? How do you optimize your inventory? How do you optimize your routes? So I think that's where I'm seeing a long term, you know, 10 plus year trend of people adopting these kind of solutions.Tom Raftery:
Alright, and where to from here? I mean, what's the what's the three five year plan for Cleo?Mahesh Rajasekharan:
Yeah, so now we have the got the ecosystem integration platform launched exploration cloud for the last few years, you've got tremendous adoption. And what we have now proven and realized is that as we are putting a lot of operational data into the platform game, the next evolution in supply chain is all about AI, power supply chain, and machine learning, right. And if you look at all aspects of the plant source, make deliver supply chain, the operational data contextualized, to train the machine learning models is very important. So with clear what we have done in the demo, right? We have a lot of operational data, but also is contextualized to the business process, they have already cash procure to pay or not and the invoice, that contextualize data is what you want to train them on systems. And that's where we see the next level of revenue capture the next level of sort of adjusting a demand plan plans based on, you know, signals and supply chain. So I think what next level sort of think about this in sort of three levels, right level one, I've got protections data, which at the firm level, we can make available for them to make short term adjustments, you know, for example, truckers running late based on GPS data, have the model so that the W ms system can reschedule that the labor that's in the docks, right. So the shorter then at the same firm level, we can also look at aggregate data, right across business processes and say, if you're looking at vet goods, traffic is in a South the United States, there is a set of capacities and driver shortage. So the price is going to go up, right or plants or congestion and delays. Right. And finally, we could anonymize data, both at an industry level and cross industry level, we can set benchmarks and start helping helping customers. So our cockpit what we call the integration clouds layer of intimate visibility, which now forms the foundational aspect of building archeo analytics, both prescriptive and predictive. And so this is making clear go north integration technologies, south south supply chain planning systems and becoming sort of the supply chain network execution layer that powers analytics into AI powered systems. So that's what gets us excited and fired up.Tom Raftery:
Nice. Nice, nice, interesting. Okay, we're coming towards the end of the podcast. Now, Mahesh, is there anything that we've not talked about that? You know, anything I've not asked you that you wish I had, or any topics we've not covered off that you think it's important for people to be aware of?Mahesh Rajasekharan:
Yes, we do have some really interesting news this week. And they talked about the power of what we're doing. For companies, one of digitalization is we're seeing a number of companies thriving in e commerce, right? They're opening up stores they're getting into into the Walmart plus tracker plugin Amazon, and is seeing amazing growth, which can only be impacted if they can't manage the customer experience. Right? They can't manage SLS. Right, right. So what we have done is we've introduced a an essential package until Integration Cloud explicitly designed for these companies that are experiencing ecommerce explosion. by automating the API API based business processes ideal for emerging or established companies. All digital ecosystems are rapidly expanding, and seeing more complexity, more participants, more connections, and more volume. Essentially, this essential package provides an easy way for businesses to start quickly, and grow even faster, with a category leading integration platform that makes hyperscale Ability much more attainable for these companies.Tom Raftery:
Super. Wow. Sounds very exciting. Congratulations on that. Thank you. Okay, Mahes . If people want to know mo e about yourself or about t e essentials package or abo t clear or any of the things e discussed in the podcast toda , where would you have me dire t theMahesh Rajasekharan:
They can visit us to learn more at cleo.c m or find us on Twitter at cle never stops, or they can emai us with any questions a firstname.lastname@example.orgTom Raftery:
Fantastic. Mahesh that's been great. Thanks so m ch for coming on the podc st today.Mahesh Rajasekharan:
Thank you, Tom. It's a pleasure.Tom Raftery:
Okay, we've come to the end of the show. Thanks, everyone for listening. If you'd like to know more about digital supply chains, head on over to sa p.com slash digital supply chain or, or simply drop me an email to Tom email@example.com. If you'd like to show, please don't forget to subscribe to it and your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.