Enterprise 3.0 In The Supply Chain: GT Nexus Cofounder Greg Johnsen (Part 7)

Sramana: Many years ago I wrote about the notion of the extended enterprise. What you are doing is facilitating the extended enterprise. I have a model for enterprise 3.0 which includes much of what you have described.

Greg Johnsen: It is funny that you used that term. When we won Hewlett-Packard in 2000, even though it was contract management we did not call it a private logistics network. We called it extended shipper enterprise. It was about extending and including others in your logistics operation.

We have had nomenclature changes which force downstream ripples. We just went through another nomenclature change because over the years things were not quite lining up the way that our customers thought about it. You want to get it right, but we did stumble along the way and we had to correct our nomenclature to make it more intuitive for our customers.

Over the next couple of years we do have to hit our stride in terms of how we connect to the CEO of our major customers. What is that message? What we have is massive B2B infrastructure. It is not just applications in the cloud. It is a broad network with deep integration and software services. It is a completed technology outsourcing initiative around supply chain. The top-level message is that the companies of the future need to be agile. They cannot compete on their own; they need to be nimble in how they work with their partners to succeed. You cannot afford to have your product held up for four weeks after a natural disaster. You have to figure out how to reroute in three hours.

Sramana: When you bring on a new customer, how much integration is involved?

Greg Johnsen: A lot.

Sramana: Are you working with major system integrators for this?

Greg Johnsen: They are very late to this game. In some ways, this model is very disruptive to the way that system integrators have traditionally done business. In our model the hook-up is faster, and once it is done you do not do another one. You have to jump to the next thing, which is really about value transformation once the infrastructure is in place.

Sramana: You could also have your own McKinsey-style consulting arm which does CEO transformational-level consulting and brings you business.

Greg Johnsen: That is something we have thought about. We have a solutions consulting team, but they are used primarily for sales engagements. No big deal we do ever gets done without that. They have sat in the front row of supply chain transformational projects and have more knowledge in their heads about how to get a company to turn the lights on in their supply chain than anyone else. We are well positioned to create a niche high-end consulting company around how to transform supply chains.

At the same time, it could be nice to engaged the McKinseys and other consultants because they have the scale to get it done. We are working on that. I see them changing as well. They were not talking about cloud two years ago, but they are now. Their interest in what we are doing is significantly different.

Sramana: The consulting business is becoming domain specific. Spreadsheet jockeys are the king of pointless now. If you want transformational work, you need someone with domain knowledge. Maybe McKinsey will not win that game. People are willing to pay a lot of money for transformational consulting.

Greg Johnsen: We see that in the service of a deal as opposed to the service of developing a market. You have made a great point.

Sramana: How much money have you raised to build this company?

Greg Johnsen: Over $50 million. Our investors are long-term investors. They do want an exit at some point, but we have selected patient investors. Our founders are investors in one of our principle funds, and the carriers invested in us early on as well.

Sramana: Congratulations on your success to date. You have a very interesting company, and I look forward to following your continued success.

This segment is part 7 in the series : Enterprise 3.0 In The Supply Chain: GT Nexus Cofounder Greg Johnsen
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