Amazon makes the majority of its money selling books that are not popular enough to be stocked in traditional bookstores. That illustrates a concept that's been going around the internet and business world lately: the long tail of marketing. It's based on the idea that there is a demand curve that shows a large number of consumers that all want the same products, but that behind that curve is a long downward slope that represents smaller groups of consumers that have more specific needs. Historically, companies had to focus on the largest market area, but the internet has opened the door to meeting the demand of each of those smaller groups.

I think the long tail theory can be applied to IT projects, specifically in the area of supply chain collaboration. Traditional supply chain IT spending has gone to large, monolithic software packages that handle an entire functional area of the business: warehouse management, ERP, purchasing, etc. Trying new things such as using the internet to better collaborate with suppliers or customers is often met with resistance because it is assumed that any kind of change in those areas would require a drastic overhaul of the IT infrastructure. But there is a long tail of smaller opportunities that can provide immediate value while proving out concepts that can later be applied to other targeted areas and eventually the entire organization.

With the growth of on-demand applications, faster and more dynamic software development, and XML standards, a company can test the waters with smaller projects and smaller risk. For example, a company could work with a single key supplier or customer to improve inventory visibility, collaboration, and supply chain processes. With a hosted application, there is much less upfront spending which lowers a big traditional risk of trying to make these kinds of changes. With new tools and platforms available, an internal IT department, consultant, or vendor can quickly bring new applications to bear, avoiding 12-month roll-out cycles. And by using XML standards the risk of obsolescence, vendor lock-in, or never-ending consulting arrangements is mitigated. The work to write to standard APIs is done once and if the tools or developers need to change, that work is still relevant and useful.

By working in the long tail of IT initiatives a company can explore the possibilities without having to bet the farm. In the above example, the company may get tangible financial benefits from the initial project. Or, they may fail miserably but at a small cost and the lessons they learn can be applied to make the next attempt successful. Or, they may get limited benefits that grow exponentially as more suppliers and customers are brought on board. Low risk, high potential gain - what more can you ask for?

Aberdeen explores some of these ideas and goes into more detail on supply chain collaboration in Technology Strategies for Accelerating Global B2B Collaboration.