How ERP helped turn big dreams into reality at Hyper Ride

When New Zealanders want to buy the gear that makes fun possible, they turn to online megastore Hyper Ride. For more than ten years, the Auckland-headquartered e-tailer of leading surf, snow, skate, wake, cycling, motocross, and camping brands has provided easy shopping and rapid delivery of more than 100,000 products. What they don’t see is that behind Hyper Ride sits First Software’s powerful, locally developed e-commerce-ready Enterprise Resource Planning solution, n2. The software has powered Hyper Ride from day one, when it was little more than a great idea, and has facilitated rapid business growth without ever requiring the systems upgrades demanded by an increasingly complex organisation.

“n2 has facilitated Hyper Ride’s expansion with absolute ease”

Hyper Ride was co-founded in 2008 by Simon Furness and Richard Bush, who spotted an opportunity for online retailing of a wide range of equipment and accessories for sports involving a ride of any kind. The business has rapidly grown, building relationships with hundreds of the world’s most popular brands to provide the widest range, provide excellence in customer service and next-level convenience.

Situation

As part of establishing Hyper Ride, Bush engaged with First Software as a key partner. Familiar with n2 ERP from a previous business, he wanted to start with a system which, for most startups, would be considered too complex. “Startups don’t usually invest in ERP software,” he confirms. “But the vision we had for Hyper Ride was clear: this thing could scale, and with the right approach, we could carve out significant market share by doing online retail better and faster than anyone else.”

He says conviction is as important as passion for the ambitious new business owner. “It is impossible to see the future, but we wanted to plan for success from the first minute of starting our operations. It’s a decision that has stood us in very good stead; where most startups might run off Excel spreadsheets and maybe an accounting software package, we equipped ourselves with a system which was more powerful than we needed initially, but which has facilitated Hyper Ride’s expansion with absolute ease.”

Solution

Designed for New Zealand businesses with multiple branches, N2 ERP offers a complete set of modules working together for accurate handling of common business processes. Hyper Ride’s implementation includes n2’s eCommerce engine, Purchasing, Sales Order, Warehousing, Complex Freight Calculations, Marketplace Integration, Forecasting, and Customer/Supplier Integration. With multiple custom integrations to its suppliers, Hyper Ride offers the widest possible range of products through its website, with accurate inventory control. In practice, this means when a customer selects an item, it is in stock and ready for shipping.

But Bush says while the software is indispensable to Hyper Ride’s efficient operations, it isn’t necessarily where the most value derives from the long association with First Software. “What makes our situation unique is the proximity of First as a vendor to our business. They know Hyper Ride as well as I do, and that means they know what works for this business, where development effort should be focused, and what makes our customers choose Hyper Ride ahead of any other competitor.”

This extends to the Hyper Ride website, also designed, created and supported by First Software. The site, which incorporates multiple services so customers can pay the way they choose, is designed for ease of updating; with so many products available, full control by Hyper Ride staff is essential to keep creating offers, uploading SKUs, and removing them once stock has sold out.

Results

Probably the best and most durable result of its association with First Software is Hyper Ride’s effortless expansion from startup to major player, now shipping thousands of items across New Zealand every week. “Our business model is low-touch and high-throughput. Thanks to the software, we take on inventory, load it to the website and have it ready for sale within hours. This reduces the time stock sits on the shelf, and if we’re moving it rapidly out the back door, it means our customers are getting their orders fast whether they are down the road in Auckland, or in Invercargill,” says Bush.

Innovations which he believes would be either impossible or impossibly expensive if working with an international vendor include a warehouse scanning solution, and an automated process for item repricing. “Features like this make a big difference to our business,” he says. “It reduces handling time and that makes for efficiency and accuracy.”

Thanks to n2 ERP, Bush adds that running the warehouse which sits at the centre of Hyper Ride is easy. “As a seasonal business, we have short term workers – often senior school pupils – coming in and helping out in busy periods. The way things are set up, we can hire someone and they’ll be productive within a day or two. That’s thanks to great business processes, backed by software that just works.”

ERP from day 1 drives Sprint Fit’s business to new heights

While it takes more than a leap of faith, Auckland-headquartered online supplements store Sprint Fit has demonstrated the enduring value of starting up with a highly capable enterprise resource planning software solution provided by a vendor within direct reach. In a short period of time, the store has rocketed from experimental startup to a major player in the hyper-competitive supplements and nutrition industry, underpinning basic business principles with First Software’s n2 ERP & Ecommerce solution from day one – and carving out a meaningful competitive advantage as a result.

“This is also a high volume, low margin business, so we must carefully manage markup and stock holding on a razor’s edge”

Established in 2014 by brothers Alex and Leon Petraska, Sprint Fit was initially a test bed for business development with First Software’s n2 ERP and e-commerce solution but has rapidly grown into a substantial business with a million-dollar + monthly turnover. With offices and a warehouse in Auckland’s Onehunga, Sprint Fit stocks thousands of products from more than 20 major local and international supplement and sports nutrition brands, including Optimum Nutrition, Ghost Lifestyle, EHP Labs, Balance, Musclepharm, Goli and more.

Situation

The supplements industry is highly competitive, with an enormous range of products available internationally and locally. Product is also available in-store anywhere from cycle shops and other specialty sports retailers, to dedicated nutrition retailers, and even in supermarkets. This reality made a daunting mountain for Sprint Fit to climb. “Basically, we have to be better than anyone else, including every local retailer as well as the likes of Amazon and eBay,” confirms Managing Director Leon Petraska.

“This is also a high volume, low margin business, so we must carefully manage markup and stock holding on a razor’s edge”

Being better means creating and delivering the very best online experience. That starts with an easily navigable website and routine contact with customers with special offers, new products, information, and education. And then it extends to the mechanics of e-retail, and nowhere are those mechanics more important than fulfilment: Fast shipping, unimpeachable support, secure payments processing, and something every customer appreciates, a great deal every time.

“We have massive complexity in stock management. Not only are there more than 20,000 SKUs, but there are minor differences such as flavours and colours – and those differences are important to our customers,” Petraska explains. “This is also a high volume, low margin business, so we must carefully manage markup and stock holding on a razor’s edge – down to the cent, really. And we need to know costings, margins, and stock holding immediately, we need to see what is going out the door and have accurate information at our fingertips, or it’ll cost money.”

Solution

Where most other new businesses are often powered by hopes, dreams, and Excel spreadsheets, Sprint Fit kicked off with n2 ERP modules including eCommerce Engine, Purchasing, Sales Orders, Warehousing, Freight Engine, Marketplace Integration, Sales Analysis, Forecasting, Customer/Supplier Integration, and First Software’s custom n2 Ecommerce website

Petraska explains that the proximity of First Software – the companies initially worked out of the same office – wasn’t about testing software, specifically, because N2 was already proven in some 60 customers in New Zealand and Australia. Instead, it was about testing a business model where software vendor and user co-operate in a partnership.

“You see a lot of claims about software vendors partnering with their customers, but most of that isn’t much more than lip service,” he points out. “Most vendors work through a channel, so they have little to do with their end customers. With Sprint Fit, First Software doesn’t just provide the ERP system – it also provides guidance on business processes, routes to market, integrations with suppliers, and much more.”

Unusually for an ERP vendor, First Software also provides a crucial component of every online retailer: the website itself. All too often, retailers treat the front and back ends of their web presence as separate entities, with a tension between the web design people, and those who run the ERP. Clunky integrations and difficult website management are often the result.

“First Software actually built our website from the ground up,” says Petraska. “The focus is very much on functionality over form, although a great looking site is obviously essential. But we have fast moving goods and that means we need to update all the time, get the new goods loaded up, and remove the ones sold out. First Software has made that easy – which, again, means we have an edge. As soon as goods come into the warehouse, they’re loaded and offered for sale, often leaving to customers the same day.”

He adds that the website is ‘customisable to anything we want’. “Any idea that comes up, we can implement exactly. It’s a massive advantage – for example, at checkout, we put in upsells, and can easily control the offers, increasing order size and moving inventory. If we want a one-day special offer, up it goes.”

A further advantage that Petraska describes as crucial to Sprint Fit’s success, is his custom dashboard, drawing information from N2’s warehousing, logistics and custom integrations to suppliers – from supplement manufacturers to NZ Post. “The dashboard tells me everything. New and returning customers, average order values, margin turnovers, buyer behaviour, stock levels, stock which is and isn’t moving. Through the dash, we can design offers and give discounts, with multiple angles giving insights on what is happening on any given day.”

If things are slow, for example, he says, it’s possible to put together an offer and email it to customers within minutes. “That literally moves stock almost immediately.”

In fact (see below) Sprint Fit customers routinely rave about the speed of delivery, with orders to Auckland often arriving within hours of placement. Again, this comes down to First Software working closely with Sprint Fit; when NZ Post provided a Web service, Sprint Fit found printing waybills took 5 seconds or more apiece. “If you pick and pack a 1000+ orders every day, that was a lot of wasted time. So, First Software developed a better system, integrated straight into NZ Post, which prints the labels immediately straight out of n2 ERP,” Petraska explains.

Results

Thanks to n2 ERP, Sprint Fit’s business is information driven.  Customers find the products they like on the website, place an online order which goes straight into the back-end warehouse system, which updates every second. The orders come through to the pick and pack department for boxing, with NZ Post courier labels printed in batches of 10. Tracking numbers go to customers as soon as the order is packed and again on dispatch, with often no more than 5 minutes between order placement and notification of successful packing.

Couriers visit several times per day, with orders fulfilled at mind-boggling pace. “Sprint Fit customers often comment on Google reviews about how quickly their orders get delivered. First Software has worked with us on an order processing optimisation effort,” says Petraska. “And with NZ Post label production embedded in n2 ERP, it’s literally ten times faster than the standard NZ Post software.” That optimisation effort means Sprint Fit offers multiple shipping upgrades – Auckland customers can, for example, place an order before 3pm for a 6-9pm same-evening delivery.

Petraska says n2 has played an integral role in the growth and success of Sprint Fit, right down to making it easy and engaging for staff members working on the shop floor. “The system is simple and intuitive, so we can train a new employee in minutes, and they will be proficient in as little as a week.”

More than that, he says the closeness of First Software is like having a tailored suit versus something off the peg. “Over the years, we’ve nipped and tucked on little things that add up to a lot. This has equipped Sprint Fit to process way more volumes with fewer people, so we can invest in demand generation. With straight-through processing, including views directly into supplier stock, we make fewer mistakes, get orders right more often, and deliver the experiences which keep our customers coming back for more.”

With recent news of the planned obsolescence of SAP solutions including its long established ECC and R/3 ERP products, users are under pressure to consider when they will migrate to the latest iteration of the German giant’s software. But for many in Australia and New Zealand, the advantages of SAP’s most recent flagship solution, S/4HANA, are such that migrations and upgrades are being completed proactively, long before any hard deadlines are brought to bear.

iStart caught up with Nick Mulcahy, CEO of Zag, one of Australasia’s leading SAP implementation partners, in a quest to understand what end of support means – and why many of Zag’s customers are already shifting to S/4HANA.

“We’re seeing a ‘soft landing’ from SAP, and that’s pretty unprecedented.”

Mulcahy immediately said there should be no reason to panic at the announcement of end of support for R/3 and ECC, initially announced as 2025, now 2027. “What’s interesting is that we’re seeing a ‘soft landing’ from SAP, and that’s pretty unprecedented,” he said.

“A great example is that the original statement on end of support said all HR and payroll customers had to be off by 2025; a more recent announcement says anyone on existing on-premise systems can remain on them indefinitely.

“SAP was perhaps a little ambiguous with the initial announcement of 2025, but they quickly changed plans once they realised it may not be possible, with the number of partners available to assist customers with a migration, and so pushed that to 2027.”

What Mulcahy is alluding to is that like most ERP and digital transformation projects, SAP installations and upgrades can take time, investment and change management. This is not unreasonable, as SAP installations are also typically found in what he calls “the most complex” of environments: highly demanding, by necessity customised, at enterprise scale. An upgrade can be as challenging or even more so than a Greenfield implementation – and that means even the well-established partner ecosystem might find itself overwhelmed.

Mulcahy says it is encouraging that SAP is listening to its customer and partner base. “I wouldn’t expect them to be severe and the move as a whole fits with what customers want; all customers, including those on R/3 and ECC and even those on S/4HANA, can take comfort from the softening stance SAP is taking.”

Part of that relates to the reality of highly complex systems in global companies; another part reflects the realities of certain customers around the world who are unable to countenance a move to the Cloud.

The S/4HANA stampede has begun
To date, Zag has already brought multiple customers onto the S/4HANA platform. “We’re seeing significant adoption of S/4HANA, particularly in New Zealand; several are live, and we have more lined up for the coming year than we’ve already delivered,” Mulcahy confirms.

He adds that in the early days, the fastest SAP ever (first released in 2015), with its in-memory HANA database delivering what SAP describes as ‘Intelligent ERP’, sales were slow. “S/4HANA is a considerable upgrade and with considerable upgrades businesses often wait for a few other organisations to convert first, taking on board their lessons learnt. Now that the early adopters and industry disrupters have blazed the trail, we’re seeing a big group of companies in the early majority category eager to implement.”

It is in that organic momentum that the justification for the effort is to be found. In simple terms, S/4HANA is worth the effort. “We’ve never seen this before in SAP upgrades. Businesses are being proactive; they are requesting S/4HANA and they are going about it differently than before.”

One approach has been through completing a technical upgrade first, in which the SAP system is brought to the latest released version, and then the business case is delivered with innovation sprints. “Customers are completing anywhere between 5-10 sprints, each a month long and delivering specific functionality,” Mulcahy said.

This is noteworthy because it represents better business planning and ‘innovation in action’. “It also differs from the traditional approach which bakes the lot into a core implementation,” says Mulcahy, adding that the ‘sprint’ approach consequently delivers value faster. “The technical upgrade might take 5 to 7 months, then you cherry pick innovation sprints depending on where value is found.”

He believes the changed approach owes to customers becoming adept at digitising their businesses. “IT departments especially are getting well used to the agile concept and how to do it. The business side, perhaps not as much, but we are seeing more savvy Boards where they want milestones and value paybacks along the way not waiting until the end.”

The value is in the S/4
It’s all about value and Mulcahy is adamant that the numbers of customers willingly signing up (“We don’t have to push this,” he notes) is a confirmation that the juice is well worth the squeeze.

“Customers cannot execute their 5-10 year strategy on ECC and SAP legacy solutions because the underlying technology is holding them back from, for example, delivering procurement savings or having the ability to grow their business which requires changing the way they execute their supply chain,” Mulcahy explains.

Improved execution depends on a digital core and real time data, created with S/4HANA and enhanced with Ariba or C/4HANA or Success Factors. “Broadly speaking, these customers are taking customer-facing journeys, the stuff that McKinsey and BCG are talking about, with big programmes of work changing the way their business operates.”

Towards a brighter SAP future
Since S/4HANA offers considerable advantages in delivering a ‘digital core’, Mulcahy says every SAP customer should get it on their radar. What’s more, with a deadline coming and analysts around the world questioning the capacity of the partner ecosystem, those who move early are likely to enjoy easier access to services. “The talk is that the ecosystem will have to double to meet demand and even that won’t be sufficient to convert all customers by 2027. It’s therefore a good idea to look at your business cases and consider where your business is going – and for some, for example on ECC who haven’t had an outage for 5 years, maybe there isn’t a case and that’s fine. But if your analysis points to action, best to take it sooner rather than later.”…

A can of beans on a shelf for $1? It’s a simple good on the face of it but dig a little deeper and you’ll find it involved thousands of people in hundreds of vocations around the planet for its production.

It started with someone who produced bean seed and that would involve geneticists, horticultural experts, various scientists and so on. Then there was someone who made fertiliser, some people who moved and traded and retailed seed and fertiliser, someone who bought those things, while someone far away mined ore to make steel to make a can for the beans while elsewhere trees were felled and pulped so paper could be made for the label.

“It is those very visible hands that are likely to screw this whole thing up.”

Somewhere else, ink and a printing press were produced so the labels could be made…each industry with its own sub-processes which make it work. And each with thousands of ‘non-essential’ workers in their ‘non-essential’ industries.

Of course, all this tied together with information systems, databases and messaging systems that allow for transactions to be created, tracked, delivered and settled.

Note that at this point, we don’t yet have any beans, let alone baked ones in a can.

Then the farmer gets involved, with land, capital, tractors, machinery and so on, and grows millions of rows of beans. Time passes, harvest time comes, beans are separated from chaff. The tractors, farm bikes, utes and so on are serviced, maintained, fuelled and ‘tyred’ by an army of workers and invisible supply chains which stand behind every item, involving thousands upon thousands of workers, most in ‘non-essential’ jobs.

And yet we still have nothing we can put on the supermarket shelf.

Once the beans are harvested and pre-processed into dry goods, they go through a complex market where they might be traded by a commodities broker and may garner the attention of market speculators, trading on a price tick up. Are these guys parasites, or are they too essential workers? Guess we will be finding out soon.

Note. No beans yet. Nothing the supermarket can sell.

Now we have the (deemed essential) manufacturer producing 200k cans’ worth of beans a day; the plant is equipped with machinery, the machinery itself produced by manufacturers with their own complex supply chains supporting the engineering, production, sale and support of mixers, ovens and other gear. There’s other ingredients like flavours and preservatives that go into our can of beans, and that means the work of food scientists, production managers, labourers…another micro-universe of supply chains and complex interactions which are involved in the production of a simple good, whether it is sodium bicarbonate or just plain vinegar.

Once we’ve got a volume of cooked beans in tomato sauce, it moves on to a processing plant which puts them into the cans. What’s behind the processing plant and all its workers? By now you’ll have some inkling.

Now the beans are canned and labelled, marketed and sold on the international market before entering the complex logistical, distribution and warehousing operations of FMCG. Finally, a retailer receives the beans and puts a can on a shelf.

Decreeing who is and who is not an essential industry
One can of beans represents the efforts of probably hundreds of thousands of people working together, entirely anonymously and without any knowledge of their colleagues. Why? It’s the power of the free market and the incentives it invisibly provides for human society to collaborate on a grand scale. In fact, Adam Smith called the unintended social benefits of an individual’s self-interested actions ‘the invisible hand’ (perhaps trite that we’ve wound up with a can of beans masquerading as a social benefit).

The effort required to produce a can of beans is in every sense herculean. And every single one of those workers and those industries is essential to the production of a cheap can of beans.

Now we start to see the problem. Take just one section of that value chain out, by decreeing that say a printer is not an essential worker, or a trader, or a copywriter, or a service technician, or even a marketing manager, and what do you have? The simple answer is a more expensive can of beans on the supermarket shelf. There will also be fewer cans, since the automatically optimised value chain has been compromised.

The trouble with price controls
Nobody likes more expensive beans, so the shoppers complain. The PM introduces promises of help in the form of price controls or more politically expedient market intervention (now well practised as with bakers, butchers, and  non-daily news media).

Let’s go back to the bean factory for a minute, while noting it is but one link in a complex chain. It’s geared for the production of 200,000 cans a day, with the economies of scale making it (ultimately) possible to put a single can on the shelf for a dollar (though there are of course hundreds if not thousands of variables involved in the production of those beans, as we have seen).

Let’s say the interference with the value chain means the factory can now only produce 100k cans a day – but the fixed overheads for the plant, machinery and other input costs are higher now per can of beans produced.

The price of beans must increase if the production is to remain sustainable. In highly simplistic terms, either the can of beans on the shelf has to be $2 to be sustainable (because now we have a shortage, which means scarcity), or the production of beans must stop because it is no longer sustainable.

And here we have the trouble with price controls. Prices rising in times of shortage is a valuable mechanism which ‘auto rations’ goods, because people must now think twice before buying what they perceive as a dollar can of beans for $2. If it is still $1, but shortages are either here or coming soon, it incentivises those with money to buy more than they need (and hoarding is an entirely economically sensible action to take, particularly if one can see shortages being likely).

So-called ‘price gouging’ automatically rations the available goods to those who really need them, while higher prices incentivise producers to keep producing. Price controls might seem to help keep things affordable, but in reality, it accelerates shortages because the supremely complex value chains which underpin the production of beans or any other good, must be sustainable through pricing mechanisms if they are to continue producing beans.

If you’ve kneecapped those processes by deeming half or more of the workers involved ‘non-essential’ you cannot hope to avoid scarcity and shortages, which must by necessity force prices upwards. If the prices are controlled, bean production must (and will) cease – hurting those who the price controls sought to help in the first instance, because now there are no cans of beans on the supermarket shelf, rather than fewer cans at a higher price.

It’s a problem of productivity
This is the real problem we face. It isn’t a problem of ‘money’, as hundreds of thousands are sent home from work. It is a problem of ‘productivity’ and it’s a global one.

Money is only worth something if it is backed by productivity, measured as GDP output. Our GDP has been compromised in a massive way, with the so-called non-essential workers sent home, and now a forlorn hope or expectation that we can put beans on the shelf at the same price as before.

At the same time, now non-productive workers are sitting at home with $580 a week (of their own money, it must be said, because all government money comes from those workers in the first instance).

When money isn’t backed by productivity, it becomes meaningless. At least part of the reason Zimbabwe had and has runaway inflation owes to an unproductive economy. If we aren’t working, our money is worth less.

In simple terms, if beans aren’t being produced at the same rate, there won’t be enough to go around. Shortages are likely. The cost of production will rise, and therefore prices to the end user must do so too if production is to remain feasible. That’s on the one hand.

On the other, we’re being issued with free money in the form of benefits – an unplanned experiment with a Universal Basic Income.

Because most of those involved in canned bean production are deemed ‘non-essential’ workers (and you can substitute any industry for beans), we’re not going to have quite as many cans on the shelves. Combined with an influx of ‘free money’, the situation is likely to become rather dire in the coming months.

The corollary, therefore, is that your business, whatever it is, is ultimately essential. Remember, if your industry wasn’t essential, it wouldn’t exist. So, stand firm arguing your case. Be over-protective of your workers’ health and safety to stop the spread but wherever, whenever possible, carry on being productive. Use the tools technology has provided us with. Choose activities and ways of working that are safe, rather than what’s deemed ‘essential’ by politicians with little real-world experience. It is those very visible hands that are likely to screw this whole thing up.

The economy matters because it feeds, houses and clothes us. And ‘the economy’ isn’t something abstract, it is you and I being productive so that society can be prosperous.

That’s because AWS CEO Andy Jassy (pictured) has a lot to say. And he has a lot to say because AWS is famous for introducing torrents of new products and services at its annual re:Invent gathering, taking place now in Las Vegas.

But Jassy started with some advice for companies looking to transform their businesses with the cloud: “Cloud success depends on senior level conviction and alignment. You need aggressive top down goals,” he told an audience of more than 65 000 who made the pilgrimage to Nevada (and later reiterated in a closed press session).

“We remove the undifferentiated heavy lifting so customers can focus on the differentiating work.”

While the casual observer might feel the cloud has reached a stage of maturity, Jassy doesn’t share that opinion. In fact, he believes cloud is in its infancy, with the vast majority of computing still on premise. “We’re in the early stages of the most titanic technological shift in our lifetimes. In the fullness of time, relatively few companies will have their own datacentres. This will happen but I continue to believe it will take several years,” he said.

And he offered a warning, too, for those organisations merely toying with the cloud. “Inertia is a powerful thing. It’s easy to get excited about the cloud and dip a toe in for a long time , but that and talk is not the same thing as action. And you need to train people. While the cloud is easy to use, you will need skills.”

What AWS does is provide the tools for action and there are a lot of them. Right now, the company offers 175 services, up from 140 last year and 100 the year before that. And AWS isn’t content ‘merely’ delivering cloud services, either. After acquiring Israeli chip designer Annapurna in 2015, it now churns out custom silicon, too. And it even offers edge devices and a configurable box called the Outpost which helps bridge the gap between on premise workloads and the AWS cloud.

In his keynote alone, Jassy made more than 20 announcements of new products and features and if there is a theme, then it is machine learning and artificial intelligence. If that boggles the mind, consider this: In 2011, it released around 80 services and features; in 2012, nearly 160. In 2013, 280, in 2014, 516, in 2015, 722 in 2016, and 1,430 in 2017.

In 2018 that was up to 1,957 new features and services. AWS probably has a service running somewhere tallying it all up.

In a sit-down with iStart, AWS ANZ MD Paul Migliorini had the task of contextualising the many announcements for the local market; he agreed keeping track of it all isn’t easy. “At the outset, though, what we build comes from customer feedback. The volume of products and services is a simple function of the mathematics, we have many millions of customers all iterating fast and asking us to build new things. And when we build for one customer, everyone gets it.”

He singled out Wavelength, its SageMaker toolset which now includes a complete integrated development environment, and Outpost for special mention; as AWS doesn’t have physical data centres in New Zealand as yet, Migliorini said the general availability of its Outpost solution is likely to capture the attention of the customer base. “It lets you get a consistent AWS cloud into your own data centre and I think this is interesting for New Zealand organisations.”

He added that AWS Wavelength which brings AWS services to the edge of the 5G network will have appeal. “And we’re already seeing organisations using SageMaker with sophisticated adoption. That’s had 15 feature releases in the past year and a further six today; in New Zealand we have a lot of good developer skills but not a lot of data science skills and I think this really democratises machine learning and AI.”

When it was suggested that AWS does a solid job of commoditising advanced technology, Migliorini said AWS prides itself on leveraging economies of scale and returning the benefits to customers. “We see our job as removing the undifferentiated heavy lifting so customers can focus on the differentiating work. You don’t have to build a whole AI stack, instead you access that in AWS and then focus on the things that matter.”

He pointed to the example of the company’s Transcribe service, which takes notes for doctors, relieving them of a tedious but necessary task. “The principle carries through to whatever we do. And I like to think of it as democratising rather than commoditising as it means any organisation can access these kinds of services.”

With the kick-off of its annual re:Invent conference in Las Vegas, AWS was quick out of the blocks with a raft of announcements around the ‘new frontier’ for computing. Quantum computing is expected to boot the capabilities of the computer into an entirely new league, promising gains in performance which will, in a stroke, make a mockery of Moore’s Law.

Also, the first media round table raised the spectre of the blockchain, in this case being trialled by consumer products company Nestle to better track and trace the origins of coffee. Yes, heads were scratched and more on that later.

Quantum computing is far from mainstream, but AWS is looking to commoditise it already.

First, let’s look at quantum computing, starting with just what exactly that is. Those who have dabbled in physics, and possibly also those who have dabbled in James Bond flicks, will recognise that quantum generally implies very small things. In computing, very small things has long been recognised as advantageous, which is why you’ll see processor manufacturers bragging about the ever-reducing number of nanometres involved in the production of a computer chip.

Quantum computers go all the way past the atomic level to the subatomic, so nanoscale becomes rather like using a builder’s measuring tape when sizing up computer components. At the subatomic scale, particles behave rather oddly, capable of existing in more than one state at any time. Where regular computers are limited to two states – the one or 0 of binary, really – quantum computers aren’t.

By encoding information as quantum bits, or qubits, which can exist in superposition, the quantum computer can produce results far faster, perform far more complex calculations (including easily busting unbreakable encryption), leap tall buildings in a single bound, etc.

They can, but although theoretical physicists including the great Richard Feynman have theorised about quantum computers since the 1980s, there aren’t really any real examples of them in action today (Google AI and NASA recently said its Sycamore quantum processor completed in 200 seconds a task the equivalent of which would take a state-of-the-art supercomputer approximately 10,000 years to complete.)

Which is what makes AWS’s announcements noteworthy. The web giant said in a statement that it’s AWS Braket service, which is named for the notation for quantum states, lets customers explore, evaluate, and experiment with quantum computing hardware to gain in-house experience as they plan for the future.

Ah, but AWS is not building a quantum computer – rather, as is it’s wont, it is providing services on which you can…one day…potentially access and use an underlying quantum computer, to be built by third parties.

At the same time, it is establishing the AWS Center for Quantum Computing, and the Amazon Quantum Solutions Lab as it seeks to accelerate the development of quantum computing technologies and (crucially) applications. After all, quantum computing is so radically different from the Turing model of computing that, well, we’re going to need a whole new generation of nerds to make sense of it. Oh, and new applications, too.

In a statement, AWS SVP for utility computing services Charlie Bell, “We believe that quantum computing will be a cloud-first technology and that the cloud will be the main way customers access the hardware.” Translation: quantum computing is far from mainstream, but AWS is looking to commoditise it already.

Coffee blockchain
Call us dumb, but we have a hard time understanding why the blockchain would be good for, well, anything, really. At it’s heart, the blockchain is an ‘append-only’ ledger which can be publicly accessible. It can also be super, super inefficient, as demonstrated by its most (in?)famous implementation, Bitcoin.

But those are not reasons for Nestle to avoid trialling Amazon’s blockchain for tracing the origins of Nestle coffee. There’s a snazzy video which explains why Single Origin is a thing, but does little to explain just exactly what, if anything, the blockchain actually does to enable that.

Which is why it was a treat to have the affable Armin Nehzat, digital technology manager at Nestle, on hand for some additional insights. “No, I am not going to sell you Bitcoins!” he declared at the outset.

Why blockchain, then? The answer is that a lot of the data you might like to check to verify the origin of your brew is contained in ERP and other ‘proprietary’ databases. Hard to access, hard to share, hard to verify.

“This data is critical to do demand planning and product personalisation. Across the supply chain, we come up with SKUs and ship them to market, we ask consumers what they want, we ask farmers what they have. We need real time collaboration through the supply chain and blockchain was identified as the most suitable technology for this application,” explained Nehzat.

He also pointed out that blockchain comes in many flavours (not entirely unlike coffee, then) – and another media attendee later said in his opinion, Nestle’s pilot application is more like a private ledger.

If such matters pique your interest, check out how you can trace your morning bev here. Potentially due to intellectual limitations, your humble correspondent remained unconvinced as to how the blockchain allows you to see the full provenance, and somewhere a head is still being scratched over the Oracle problem.

Significant time, effort and money are tied up in invoicing and the Australian and New Zealand governments have indicated that the imminent introduction of a new standard for digitising the exchange of business documents could put A$30 billion back into the economies.

That standard is named PEPPOL, or Pan-European Public Procurement Online, and government agencies on both sides of the ditch have been consulting with industry partners to bring the benefits to life. One such partner is B2BE, which is set to become one of the early access points to the network. B2BE, with deep local roots and a global footprint as an electronic data interchange specialist, is expecting PEPPOL to go-live shortly and start putting those savings into the pockets of local organisations. This, says B2BE PEPPOL manager Jason Diack, will initially be driven by companies doing business with the government being encouraged and incentivised to use e-invoicing.

“This is a big step forward for what we generally call Electronic Data Interchange , because it effectively allows anyone to trade under a single framework whether locally or in Australia,” says Diack.

On the western side of the Tasman, the Australian Tax Office is the PEPPOL controlling authority; in New Zealand, the role is handled by the Ministry for Business, Innovation and Enterprise (MBIE). When the PMs of both governments jointly announced PEPPOL back in February, they estimated the A$30 billion would be cut out of invoicing costs over the course of the coming decade. “There are a number of pilot activities already underway around the draft specifications which have been established for PEPPOL locally,” notes Diack; “There’s obviously many document types, but PEPPOL is kicking off with the most common – e-invoicing.”

Clive Calder, Senior Manager Trade Technology at Pfizer New Zealand, explains the benefits of EDI. “With B2BE we cover numerous connections to our customers in the pharmaceutical and healthcare industry.  Over time, we have expanded the number of customers we connect with, and this now includes electronic messaging of purchase orders, acknowledgements, shipping notes and invoices. This automation enables Pfizer to better serve customers with reduced effort, improved accuracy and quicker response. It is an important contributor in managing and optimising the supply chain.”

“It’s a faster, easier setup because everyone’s talking the same language.”

Praful Patel, in charge of eBusiness at NZSafety Blackwoods which has used B2BE services for over 10 years, adds that the efficiencies associated with EDI connections cannot be underestimated. “Our customers benefit by using a standardised procurement practice to raise and submit purchase orders, which allows for efficient processing and payment of invoices. B2BE make it simple by translating purchase order and invoicing formats so they work in our systems, and in those of our customers.”

He adds that NZSafety Blackwoods is likely to use the PEPPOL standard in due course. “If government agencies that procure from us are changing, we’ll partner with them on it. And we’ll work with B2BE to do it; their experience in the integration space is second to none.”

Pfizer’s Calder, meanwhile, says the pharmaceutical company has reviewed PEPPOL. “We do not have any deployments in place, but we will engage with B2BE in New Zealand if opportunities arose to drive procurement improvements for our customers. “

Diack points out the big advantage of PEPPOL over other EDI standards and methods: “As a single standard, it is an easy introduction to EDI. With ‘traditional’ methods, if you had 100 trading partners, you might spend $1,000 integrating each one to your business systems. It could be more, depending on how many document types you’re exchanging – purchase orders, advanced shipping notices, waybills.”

It costs that much says Diack, because most EDI requires custom programming on both sides of the transaction. “PEPPOL standardisation and conformity means you map one document to trade with all government departments and your trading partners. It’s a faster, easier setup because everyone’s talking the same language.”

A good question is where PEPPOL leaves ‘other’ EDI. It isn’t a case of ‘one ring to rule them all’ and nor has it ever been, explains Diack. “PEPPOL will broaden the reach of EDI particularly to smaller businesses, but it doesn’t replace custom integrations. These remain valuable, particularly those already in place. And a general standard doesn’t always provide for specific use-cases, so going forward, companies with process- or industry- specific EDI requirements will still find value in custom interconnections.”

Diack’s colleague and fellow B2BE BDM Grant Young says B2BE is extending its 20-year track record in the provision of EDI solutions to PEPPOL and certification as a PEPPOL access point. “We’re ready to help local businesses get on to PEPPOL so they quickly see the advantages and the cost savings,” he says.

And it’s more than cost savings; going digital is faster, more convenient and delivers a boost to the cash conversion cycle. Simply put, e-invoicing should mean getting paid faster, with less hassle – something every business appreciates.

B2BE is happy to speak with anyone seeking more information about how PEPPOL works and what is involved to get it set up.

Contact details:

Australia                                                        New Zealand

T: +61 3 9682 6388                                        T: +64 9 912 2200
E: au.info@b2be.com                                    E: nz.info@b2be.com…

With Industry 4.0 or the Fourth Industrial Revolution breaking all around us, businesses of every stripe are obliged to do better or stand by as competitors move in on their territory by delivering improved accessibility, convenience and service.

Doing so depends on appropriate systems to make it happen. The coincidence of many so-called digital transformations across organisations has heralded an ‘Age of Industry Transformation’ where data is much more fluid along the value chain. It is an era that will be driven by a postmodern enterprise technology architecture.

That is the idea put forward by Matthew Addley, business strategist and industry evangelist at Infor, who says that while there is an element of the foundational in core systems like ERP, they must also enable agility and innovation.

“Postmodern implies a willingness to co-exist… it’s a thin wrapper on those core services, into which other systems can easily be connected as and when required.”

“When you have digital siloes emerging, you have a problem. You need your core systems to be open and flexible and to do that you invest in the cloud and a suitably open architecture which gives you the ability to pivot and develop nuanced aspects with, for example, collaborative workflows and mobility within the same platform.”

Postmodern ERP, he explains, is a business applications strategy which features a connected portfolio of heterogenous applications.

“You are making sure to have rigour in the core, along with the ability to provide workflow and collaboration. Postmodern also implies a willingness to co-exist, rather than trying to be all things to all people; it’s a thin wrapper on those core services, into which other systems can easily be connected as and when required.”

The Age of Industry Transformation is to digital transformation what postmodernism is to modernism. It is an era where businesses have a sharp focus on customers and convenience, with less attention afforded to raw ‘cost’ (which, regardless of what anyone says, remains a fundamental driver for most buying decisions).

What this means in practice is the necessity for more integrated supply chains and business systems more closely married to the particular operations of any one business (Infor calls this ‘micro-verticals).

After all, convenience and customer service are differentiators capable of transcending even the powerful force of cost (people are always prepared to – and do – pay for convenience). And achieving convenience at scale depends on finely tuned operations.

Addley says this fine tuning starts with a solid set of foundations within the enterprise, but also depends on integrating other systems and data sources – IoT data, POS data, or the systems of partners and suppliers.

“The important bit is that your systems can integrate and they can enable collaboration not only at a systems level, but at a people level too,” he notes.

As for ‘openness’, that means Application Programming Interfaces, right? “One of the technologies is an open API, that’s the preferred method and it can perform well. But many businesses don’t have API-ready platforms themselves, so you have to offer more,” Addley confirms.

And it doesn’t have to be ‘high tech’ either, at least not conceptually. He says something akin to the humble chat app can play a major role in advancing the Age of Industry Transformation, and it all has to do with the fact that people do business with people.

“If you’ve got the procurement department beating up vendors just for another cent off, it doesn’t actually help matters, it introduces additional risk into the supply chain,” Addley points out. “But even in the absence of integrated systems , you can achieve better cooperation if people are equipped to talk to one another very easily.”

Addley looks to business collaboration apps delivering clever stuff like context analytics resting on data contained in enterprise systems, as well as easy sharing of screens and other information involved in various business processes. But at its heart, it’s simply a repurposing of a tool which has its roots somewhere back in the 1990s.

The Age of Industry Transformation is the topic of our Lunch Box webinar where Matthew Addley presents the concept to attendees, and then discusses in a roundtable with DX professionals representing enterprises who have or are undergoing transformational change.

…

Management guru Peter Drucker’s memorable line that ‘culture eats strategy for breakfast’ has a local incarnation in the winner of the recent CIO Awards ‘Best ICT Team Culture’ gong. Top SAP and cloud services partner Zag has added the accolade to its collection and it’s one the company is particularly proud of.

That’s according to Nick Mulcahy, Zag CEO. “It’s phenomenal to win, particularly given the growth we’ve experienced over the past year. And even though this award is aimed at internal IT teams rather than whole companies, we had confidence in our entry because everyone in our business is part of one team – team Zag.”

Zag recently rebranded from Soltius, with the new name reflecting the consulting provider’s approach of ‘doing things differently’ (where others zig, they Zag). There’s the usual stuff, of course, of focusing on customers and treating everyone with respect and dignity; these are obvious and generic requirements for common decency if nothing else, even if all too often it’s more lip service than fact.

The way Zag shows it is getting the bacon delivered is in some hard facts of its own. In business for 23 years, it has a 90 to 95 percent staff retention rate. It has 5 employees who have been with the company for over 20 years. The management team has a 50/50 gender split. Mulcahy started as an Enterprise Architect 16 years ago; the Chief Customer Officer as an IT Administrator in 2004. Zag is 100 percent owned by its employees, in fact, almost a quarter of them own shares in the business.

Everyone within the company is expected to actively live the values – which themselves were determined through engagement with every staff member

There are more numbers, too, and they point to the natural difficulty of maintaining an award-winning culture in a growing organisation. There’s the sheer headcount, for starters, which has gone up by 27 percent in the past year, following several years of 15-odd percent growth. This makes for some 200 employees. Then there’s the cultural differences across countries: Zag has expanded to Australia and the United States, both nations where things are done somewhat differently from God’s Own.

Those with an anthropological bent will know that co-operation with larger numbers becomes increasingly difficult. In fact, it gets to a point where it all falls down…unless there is a commonality which gets everyone pulling in the same direction.

That commonality is culture, and this is precisely why it eats strategy for breakfast.

It starts with lived values
Creating a company culture starts with values. Since values lists don’t generally vary much from one business to another, there’s no point rolling them out here; what is instead important is the approach taken by Zag in instilling them.

“Actions speak louder than words, everyone within the company is expected to actively live the values – which themselves were determined through engagement with every staff member,” says Chief People Officer, Sarah Millard. “It’s why, when expanding to Australia and the States, we made sure to have a consistent senior executive presence in the new offices. It helps culture grow through osmosis.”

Where Zag differs from many is through a desire to actively encourage, measure and manage windows into its culture. The primary tool to do that has been the Officevibe interactive platform. Feedback and comment are constantly assessed, either anonymously or personally, weekly surveys constantly measure the pulse and major changes or decisions impacting employees – like the creation of company values – are put to a vote.

“We have a high survey participation rate and thousands of comments or suggestions . Our leaders are constantly answering queries, acting on suggestions and most of all actively listening to what our people have to say,” Millard reports.

It means staff members aren’t isolated from one another or managerial decisions; Mulcahy likes to joke that his door is always open. That’s because he doesn’t have one, choosing to  sit in the open-plan office with the same desk set up as the next staff member.

Investing in people
If you’re going to claim a culture of caring, demonstrating care is essential. “Our people are our brand and our identity is a tight-knit, high-performing team who do things differently,” says Mulcahy.

Keeping people happy, engaged and up-to-speed is crucial, adds Millard, and that, she says explains Zag’s high staff retention. “We invest heavily in health and wellness, and training and development initiatives. And we have company targets for new skills gained, knowledge sharing and completion of development plans.”

The company has ‘wellness rooms’, Fly-Home Fridays (where staff working at remote sites do just that) and provides flexible hours and work-from-home opportunities. It has even engaged a wellness doctor and mentorship coaches. Again, hard facts, not easy words.

“We might be involved in technology services,” says Millard, “but we’re in the people business. Looking after our people is the foundation on which Zag is built. In every decision we make, culture is thought about first and foremost.”

Company culture is probably a bit like marriage. In the early days, things progress well all on their own. As time goes by, more effort and investment are required. It’s something Zag clearly takes very seriously and by all accounts is endorsed company wide.

After all, just look at the Best ICT Team Culture trophy shining, amongst plenty of others, on the awards table.…

There’s something of a preoccupation with how people are going to keep themselves busy in a brave new world of technological enablement, with intelligent systems and services doing much of the heavy lifting for us. But here’s the thing. It isn’t about employees or employment, it is about society. And getting work done isn’t about technology or how people spend their time at the coalface, it is about the effort involved to achieve a desired outcome. The future of work, then, requires a look at just what work is, and perhaps more importantly, to what end we ‘do’ work in the first instance.

That much became clear at a thought-provoking ‘Future of Work’ discussion at ServiceNow’s Now Forum which took place in Sydney this week.

“What will disappear is a lot of the stuff we do at work which doesn’t add any real value.”

For those who don’t know, ServiceNow is an American service management vendor which provides a ‘platform for work’ in the cloud. Built on ITSM principles, the hot new thing ServiceNow brought to the party isn’t the cloud or the platform, but rather the vision that these principles are not bound to the boring (to some) olde worlde of IT – and that’s a vision that led to Forbes describing ServiceNow as ‘the world’s most innovative company’.

The innovation lies in successfully applying this structured approach, along with workflows and process visibility to disciplines including HR, facilities management, business operations and elsewhere.

Work versus value
But what will disappear – thankfully – is a lot of the stuff we do at work which doesn’t add any real value.

Among the reference customers ServiceNow had on stage to share the problems they have and how new ways of working are solving those problems was Flight Centre. Mountains of uncoordinated systems including spreadsheets and emails, made it nigh impossible to look after the needs of some 10,000 employees. Everyone providing support was busy, to be sure, but the outcomes were sub-optimal, with the value these workers could provide mired in administration.

Enterprise Operations Manager Michelle Carroll said it is her mission to transform this mess into a ‘technology centre of excellence’, and ServiceNow has played a key role in bringing her vision to life.

“When I walked in, call volumes were through the roof, there was no self-service and we had in excess of 200 calls waiting up to 40 minutes at any one time.”

A month after ServiceNow went in, call volumes were down 50 percent, said Carroll, and wait times reduced to just four minutes. Subsequent introduction of ServiceNow for IT operations management delivered equally positive results, bringing visibility to the company’s operations along with an 88 percent reduction in mean time to restoration; “that equates to millions of dollars,” said Carroll.

And such is the non-IT nature of ServiceNow, that she’s got her eye on multiple other areas of Flight Centre where it can have an effect: “Risk and compliance is next, then Security Operations. We’re on a journey to complete the orchestration of all moving parts to achieve operational excellence,” she explained.

Fewer staff…is that bad?
So, what’s the problem here? What happens at companies like Flight Centre when the paper-shufflers are put out of a job?

Far from a Utopia where we’re relieved of the mundane and tedious, the worry is that, across companies like Flight Centre, engineering company WSP Opus and telecom provider Spark NZ (which are busy with digital transformations of their own, using ServiceNow as part of the exercise), a ton of jobs are going to go. Will we have more people than jobs? And despite technology advances of years past which appear to have put the lie to this theory, does the pace of the thing this time mean workers can’t adapt? While Xanadu beckons, will it be only for the select few? And what becomes of everyone else?

Amazingly enough, these are the sorts of concerns which occur not only to those in the ‘technological firing line’, but also to those enabling the change. ServiceNow VP and MD A/NZ, David Oakley hinted at it when explaining that this region is one of the most innovative in its use of technology – perhaps spurred by minimum wage laws – and companies like Australian bank NAB are reducing their workforces dramatically by ushering in new ways of working.

“I’m shocked at how quickly these things are playing out,” he said, referring to ‘massive technology disruption’.

And yet, the United States where ServiceNow is domiciled has just reported some of the lowest unemployment figures in years. The impact of automation, it seems, has yet to decimate the workforce.

But the best point that Oakley made was an almost throwaway comment. “We need to make sure automation is used in the service of people.”

Who are the people?
While the people Oakley was quite reasonably referring to are employees – those working within organisations and for whom cutting out tedious paper- or email-based tasks with automated, technology-driven tools makes their job experience surely better, there’s another set of people who are arguably more important.

It’s the ‘few’ versus the ‘many’. When talking automation and the future of work, the focus invariably falls on the few. Jobs are going to change, as they always have and as they likely always will. Many jobs will disappear, as they always have. The future of work will quite probably have us doing very different things to what we do today.

But what doesn’t change is the reason we do jobs in the first place.

And so, when looking at the ‘future of work’, it’s perhaps useful to go right back to basics with the sort of questions a five year old is likely to pose, simply because the rest of us tend to take the answers for granted, or we never wonder in the first place.

Questions like ‘what is work, anyway? Why do we work? How do we work, is it really ‘9 to 5’? Was it ever? Did we work like we do today, a decade ago? Fifty years ago?

The first two questions are apparently easy. Work is an activity involving mental or physical effort done to achieve a result. Why do we do it? Not because we need a dollar, but because society is needy, infinitely so. It doesn’t matter how well you meet the demands, there will be more tomorrow and the demands themselves will change. So long as there are people, there is work to be done.

And these are the people we should be concerned about. The needs of the many. Customers benefit when Spark improves its service delivery, by whatever means, and needs fewer employees to do it. Customers pay less when an insurance company processes claims automatically and instantly. Citizens benefit when the government administers taxes with a few thousand employees, rather than a few hundred thousand.

This is the future of work
More than being an innovative company itself, the software ServiceNow provides is used by partners and end-customers to themselves innovate and define how work is done in their organisations.

And that, really, is the future of work: it is what various organisations make of it, using an expanded set of tools to do it, and in response to the way in which the workforce makes itself available.

Donovan Jackson travelled to Sydney as the guest of ServiceNow.