A survey sponsored by supply chain newsletter ec-bp.org reveals that internally installed applications produce more downtime than do systems based on externally managed services and software-as-a-service (SaaS) based systems. While only 7 percent of respondents said they had never experienced downtime at all, 51 percent responded that they had downtime within the last month.
The survey asked users of Electronic Data Interchange (EDI) about the types of systems they use to communicate with their trading partners regarding orders and supply chain issues. Systems were broken down into four types: internally installed software applications, managed service providers, VAN (value added network) connections, and SaaS services providers. Common wisdom has it that cloud or SaaS-based services are less reliable than alternatives because they are outside the direct control of the users. In fact, the opposite seems to be true.
A majority (52 percent) indicated that their internally based systems experienced outages lasting from two hours to longer than a full day, while 44 percent said SaaS-based systems experienced “brief/inconsequential” outages with no disruptions lasting longer than eight hours. That was followed closely by those using managed services, responding that 42 percent experienced brief outages, but 31 percent had longer outages lasting from four hours to more than a full day.
Another surprising finding was that the longstanding VAN services that have supported the EDI infrastructure since its beginnings were reported by 53 percent as having outages lasting from two hours to more than a full day.
The consequences of these findings are manifold and have continuing impact on both the companies that are using the services and those supplying them. For the trading partners relying on constant uptime to support their trading activities, short outages, particularly with regard to EDI systems, are likely to have only slight financial impact as long as the outages don’t result in loss of data. However, when trading is interrupted for longer periods, resulting in delays to orders being sent and received, the consequences can be significant.
Most suppliers are judged by their customers according to a scorecard valuation that includes timely delivery, not only of products, but of responses to orders and notifications of shipments. When those electronic documents are not delivered within the prescribed time frames, scores can be lowered and, in extreme cases, can even result in chargeback or cancellation of agreements. The outages that last more than a full day are particularly troubling for high-volume trading relationships, and those are the ones most likely to cause serious problems.
For the final question in the survey — “How did your company deal with the situation?” — a full 73 percent of those companies using internally hosted applications indicated they were “confident in the resolution process,” which seems counterintuitive since that group experienced the most frequent and longest outages. As a final and most dramatic resolution, the respondents were asked about plans to replace the offending systems. According to the results, the managed services providers are the organizations most at risk, with 14 percent indicating they were in the process of replacing their systems.
Seventy-one percent of respondents using SaaS-based services said they were confident in the resolutions put into place. It is interesting that this group is nearly as confident in the solution as those using internally based systems, because they have less direct control over the systems they are using. And none of those using SaaS are in the process of finding replacements for their EDI systems.
While the common perception may be that having closer control over systems by installing them inside the corporate firewall results in better overall response and reliability, the survey respondents show this is not the case. In fact, those companies that rely on SaaS/cloud-based EDI services have fewer and less disruptive outages.