Enterprise 3.0 In The Supply Chain: GT Nexus Cofounder Greg Johnsen (Part 4)

Sramana: How much add on revenue does a major enterprise customer provide when they bring along all of the additional suppliers?

Greg Johnsen: When you win big customers, say five or six, and a single third party logistics provider such as DHL services for each one of them, the impact is that their commercial organization knows that they have to plug into GT Nexus to support companies such as HP, Caterpillar, and Home Depot. The biggest thing to happen to our company in our third phase of supply chain is three of the top six third party logistics providers in the world have standardized on GT Nexus as their visibility system to their customers.

Sramana: How does the inclusion of these third party Logistics providers on your platform impact your ability to scale the business overall? And how do you deal with channel conflict with your own direct sales channel?

Greg Johnsen: 3PLs are a critical constituency in the supply chain mix.They work with suppliers on the other side of the globe, they consolidate cargo, they monitor flow throughout the chain. They also provide IT and visibility services to their customers. When the largest 3PLs begin to use the GT Nexus platform for that IT service, two things happen. First, they lower their own cost for IT. They get a world-class system on demand for less. And it’s a system their customers love.

The second thing that happens is that they accelerate the adoption of electronic commerce on GT Nexus. We’re trying to build an industry wide supply chain utility. Our direct sales force sells a supply chain control tower proposition to Fortune 2000 enterprises who work not just with one 3PL but multiple [ones]. 3PLs deliver visibility for just their service. The 3PLs on GT Nexus drive faster adoption of the platform then we could ever do on our own. But when customers want to upgrade to the full multi-3PL control tower, they go to GT Nexus directly. These are mutually re-enforcing strategies, and in our view both are needed to win.

Sramana: Let’s talk about the company building process. You have a very sophisticated product offering. How do you do the product marketing around it?

Greg Johnsen: Our company is a good example of being a collection of executives where no executive owns or can put his or her name on one idea. We have a lot of creative people in the company. An idea will be tweaked and refined 15 times before it becomes actionable.

We have fairly traditional processes. We have a product marketing team and are a product marketing–driven company. We think of strategies, markets and solutions well before we go execute. We are not reacting to a market in terms of waiting for our sales teams to come back with great ideas which we use to build our product. We have very good processes for taking market requirements and solution descriptions and vetting them well. We did not cut corners.

In addition, we have a very well balanced team. Teams are like soups, and they need the right ingredients. We need people who are creative and expansive as well as people who have good judgment and who are pragmatic. Ideas are invited, but they are put under severe scrutiny. We have a culture of persuasion as opposed to one of coercion, from the CEO down.

Sramana: When you are approaching customer, what is the message you are reaching out to them with?

Greg Johnsen: For a long our message focused on driving efficiency and cost savings to our customers. We helped our customers save anywhere from 5% to 12% of their global transportation spending, and for large customers this was significant. We did this by helping them procure freight better, and optimize the allocation mix across carriers in the network to ensure the best service for the lowest possible cost. And we provided the mechanisms to track the flows and the spend as the supply chain executed, which ensured that the plans were actualized.

When we introduced sophisticated supply chain visibility solutions, in 2004 and 2005, we began to give our customers control over the flow of product and of inventory. The average company today has access to just about 20% of the total data set they need to manage and control fulfillment and delivery. The other 80% is locked up in the systems and processes of external partners. We solve that. We connect all a company’s partners to a single platform and get 100% of the data in a single place where all can use it.

This segment is part 4 in the series : Enterprise 3.0 In The Supply Chain: GT Nexus Cofounder Greg Johnsen
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