Monthly Archives: September 2006

Cross Border Shipping

Every business needs to send packages. It’s just the natural order of business. But with such a dizzying array of options: Fedex, UPS, Purolator, DHL, who do you choose?

Well, I do not know if they are better suited to your needs or not, but after this advertisement (I apologize for the low quality, but I do not have access to a color scanner at the moment), Purolator has my vote!


For the curious, the missing text is the following:

From anywhere in Canada to every zip code in the U.S., trust the experience of Canada’s largest courier. Just visit to ship all your documents in one easy step. Our enhanced technology ensures better U.S. tracking. And one courier means one invoice. For more information, visit or call 1 888 529 9777 to order your U.S. shipping kit.

Well, based on this add, and the fact they ship to Moose Jaw express (1 888 JAW XPRS), I have to give them my vote, eh?

The Talent Series III: Finding, Training, and Retaining

This week was another good week. To start off, Charles Dominick of the Purchasing Certification Blog started us off with a post on Talent Management that offered some suggestions for a mid-sized company to retain talent. In summary:

  • hire the “right” person, not necessarily the “best” person,
  • have a career development plan from junior buyer to VP of, Purchasing
  • don’t change the plan “on a whim”, and
  • reward employees for educational achievements.

Dave of Buyer Analytics chimed in with a great post on Practical Talent Management for Procurement. Dave shared with us five best practices for finding, retaining, and nurturing procurement talent. Briefly, these were:

  • Take advantage of the “Feeder Pool” of College Graduates available to you,
  • pair recent graduates with purchasing managers in direct materials,
  • rotate new buyers to indirect materials,
  • rotate the now more-experienced buyers back to direct materials, and
  • at the right time, put them on the management track.

Dave of Procurement Central followed up on his teaser Thought of the Day with an insightful post on Performance Based Pay – Thoughts from a Silicon Valley guy.

He really hit the nail on the head with the following:

Dave Stephens (annoying young engineer): “Doug, why isn’t going above and beyond rewarded more here?”

Doug White (CEO): “Dave, this is a company of engineers. Engineers value stability above all things. We don’t differentiate much on performance – that would make things unstable. We like it that way and we’re not changing things.” (but more polite and CEO-like)

I knew right then I was working for the wrong company.

Your best people work hard, perform well, and expect to be rewarded. The best answer we have right now is performance based compensation. Now, Dave is right in that measuring performance can be extremely tricky, but if you do it regularly, include objective and subjective ratings from an individual and corporate performance, do your best to approach fairness & correct mistakes as you make them over time, then not only will you get better, but your people will see the effort your making, realize you value their contribution, and, odds are, stick around for the long haul. I agree with Dave, “by being honest & upfront and not getting overly specific, management can ensure performance based pay, just like procurement, is good medicine for your business.

Finally, even though it is not part of the talent series, I’d like to mention a post on Joe’s Corner Blog. In When Small is Big, Joe gives us some great advice that can be applied to the talent gap. Think of the principle of small is big, or less is more, and success will follow. In other words, if you find the right people, you may not need as large a buying group as you think you do to succeed (especially if you empower them with the right tools and incentivize them to stick around!).

Eight Figures for an ERP? Think again. Think Compiere.

ERP – Enterprise Resource Planning – the be-all and end-all of business software – all of your transactional data in one place – everything you need to run your business – only seven figures! That was the promise.

The reality is much different. Seven figures for the software license. Multiples of that for the installation. That much again for the annual maintenance contract. In the end, it was an eight figure system – that if you were lucky recorded the majority of your transactions, in such a way that you couldn’t derive any intelligence out of the system without buying expensive modules for each business domain that sat on top of the ERP to allow you to create your financials, run human resources, create your manufacturing plans, negotiate your contracts, etc.

And that’s if you were lucky – if you weren’t, you couldn’t afford a real ERP and had to settle for a smaller, imitation system that probably only contained some set of transactions for the business unit that maintained it, was only accessible by a few people, and didn’t even meet their needs – leading to home-grown ad-hoc systems created by mavericks in an effort to do their jobs.

Either way – you probably have a solution that does not meet your needs. A system that requires more modules or third party add-ons than you can afford to be truly effective or a system that does not have the core capabilities or third party support. But what can you do? If you haven’t fully depreciated your mainstream ERP, you can’t afford to rip-and-replace, and if you don’t have one, you just can’t afford one.

You can look to open-source! And no, I’m not stark raving mad. Once the exclusive domain of big international multi-billion dollar software vendors, even ERP is now available open source. Compiere is a fully functional open-source ERP with built-in CRM functionality that is being used today by hundreds of companies all over the world. In addition, Compiere has amassed almost 100 partners in countries all over the world – so local support is available. And because it’s open, anyone can build extension modules on top of it, and custom modules for various domains are already being offered by it’s partners. Furthermore, Compiere and some of its partners are already hosting instances on-demand. And no, I do not believe I’m insane.

If you’re not an IT company, why not host your ERP on-demand? If it’s not your core business, why maintain an expensive 24-hour IT operation with redundant power supply, internet connectivity, real-time failover, automated off-site backups, IT security experts, always available on-call tech support, etc? After all, with today’s encryption and security protocols, communication security is probably the least of your security concerns.

For those of you who are already open source converts, you might be a little disappointed that Compiere was built on Oracle, but fear not! Compiere just received a significant amount of funding, relocated to Santa Clara, is in the process of completing a Sybase port, and it’s a safe bet that a MySQL(X) port may occur in the future!  (MySQL(X) may not have the required functionality to support Compiere yet, but MySQL(X) improves every year!)

It’s a procurement professional’s dream come true. No huge up front spending for an ERP system that may or may not deliver. With Compiere on demand, you’re paying for the system and support that you use, when you use it, and you’re not locked in!

Furthermore, you just know that a complete open-source-based on-demand procurement system with Compiere at its base is around the corner. After all,  Rearden Commerce is less than 30 miles away in its San Mateo offices and there are a number of e-Procurement companies, like Ketera, nearby.  If these three companies adapted their APIs to allow you to merge their solutions, it would not be long before you could manage 100% of your contracted materials and services procurement spend. Rearden excels at services, Ketera is good for indirect procurement, and ERP-based planning and forecasting systems are the foundation of your direct materials spending.

I know it’s just pure speculation, but if these three companies made it easy to integrate their solutions, you’d be able to run your entire procurement effort on-demand! Then you could run your entire sourcing and procurement operation on-demand! After all, with respect to a complete solution, we have only left out sourcing (remember, procurement is the acquisition phase, sourcing the predecessor negotiation phase) and visibility (since, at a high level the cycle is Source-Acquire-Monitor). But wait – companies like Iasta have been offering (complete end-to-end) sourcing suites on-demand for years and now we have companies like Apexon offering on-demand visibility solutions!

As a side note, Compiere is holding it’s annual Partner Conference next month in Santa Clara – October 20-21 at the Embassy Suites at 2885 Lakeside Drive in Santa Clara. Check out Compiere’s Events Calendar for more details.

The Unique Solution for Travel Procurement

Earlier today we discussed the unique challenges of travel procurement – a nightmare shared by your employees as well as your finance team. After all, when booking a single trip can take an hour by the time you book your flight, rental car, hotel, airport transportation, off-airport parking, and dinner reservations and when finance has to sort through (tens of) thousands of expense reports literally by hand to determine whether their preferred carrier owes them a discount, how could you call it anything but?

Last week I was fortunate enough to see the answer. It’s called the Rearden Commerce Network. For those of you who read Spend Matters regularly, you’ll probably remember Jason more-or-less gushing about them as well in posts such as Rearden unShrugged where he called Rearden the future of “personal” services Spend Management for employees.

Services are tough. They’re calendar-based, time critical, and dynamically priced. There’s a reason there is no Amazon, Google, or Yahoo for services. Even the brightest software engineers cringe at the thought of trying to build a single platform to handle such a diverse array of services. But as far as I can tell, Rearden has done it. Sure the interface still looks Web 1.0, but the capabilities are Web 2.0 all the way. And when they say you can book a complete trip in 10 minutes – they mean it. I saw it – and it works! I’ll tell you one thing – from an applications perspective, few software packages on the market today impress me. Even today, I equate most software applications with undifferentiated organic fertilizer (which is probably why you hear me mention so few companies in this blog – that, or I really am another one of those arrogant PhDs). But Rearden’s solution impressed me.

If you are a mid-size or larger company with a lot of travel related spend, I can not think of a single reason why you should not be using Rearden now! When your employees who travel regularly are probably wasting up to 20% of their time on travel arrangements (instead of a more palatable 5%, or less), when you have no way of easily tracking who you are spending your travel budget on (and if you qualify for discounts) and, more importantly, no way of enforcing that employees are buying against your preferred contracts when possible and sensible when there is this easy to use system that lets your employees do almost everything they need in a one stop shopping experience, allows your finance team to figure out whom you are spending on and in what amount, and allows your procurement team to enforce flexible spending rules. It’s a great addition to your supply chain suite!

Now, I’m not entirely sure whether it will scale up in the future to support all services in a consistent, coherent manner, even though they claim the platform was built to support any service you can imagine, but it is certainly capable of supporting any T&E service you can throw at it, and this is a very significant feat from both a business and a technological perspective. I can’t wait to get some time with their senior technology guys to do a deep dive into the architecture and technology. (After all, I need to use the PhD sometime!) If it’s as impressive as the business capability, I might just be inquiring as to whether or not that Director of Applications Engineering position that they are advertising can be done remotely.

The Unique Challenges of Travel Procurement

Travel procurement is challenging because it is services-oriented procurement. Services-oriented procurement is challenging because it:

  • is Calendar-based
  • is Time-critical
  • requires Confirmations and updates
  • revolves around Real-time inventory
  • is Dynamically Priced
  • is often Group-Oriented

Travel procurement is even more of a challenge because:

  • Travelers have limited flexibility and the need for frequent changes
  • Employee expectations are continually rising
  • Low adoption of current solutions
  • Maverick spend runs rampant
  • Forced usage of sub-standard tools meets with employee resistance
  • Training costs and burden associated with current tools
  • Increasing fragmentation of the marketplace
  • Current solutions take a silo-approach
  • Agencies, first-generation travel tools, and on-line consumer booking tools all have their limitations

So what can you do? Check back this afternoon!