Daily Archives: January 14, 2008

the doctor’s Not Going To Stop Until He Exposes All Of The Elephants!

Late last fall in the doctor wonders why the elephants in the room are often so hard to see and the doctor exposes the elephants in the room I exposed the elephants in the room that were hiding behind the blinds, couch, lamp, and projection screen. But this is a very big room – and it is jam-packed with elephants. So today, in addition to the optimization, compliance, analysis, enablement, contract management, and hidden cost elephants, I’m going to expose the elephants hiding behind the coat rack, the bar, and the water cooler.

We’ll start with an RFX elephant, who’d have you believe that the number of pre-configured templates in the template libraries are an important selling point of an e-RFX tool. It’s not. After all, every business is different and, in reality, you’ll probably have to customize every single standard template that’s provided to meet your business needs before you can use it. That tells you it’s the flexibility of the tool when it comes to RFX creation that’s important – especially since, no matter how many templates are offered, there’ll always be templates that are missing that you need to create yourself.

Now we’ll move on to the e-Payment elephant who will tell you it’s the platform that matters – and, believe-it-or-not, who provides it. Although it’s important that the company that provides the platform be financially stable, it doesn’t have to be owned by a bank or the biggest player in the space to be useful, because, when it comes to e-Payment, it’s not the payment platform that matters – but whether or not it enables your organization. Does it support the types of payments you regularly make? (If you do a lot of p-card and ACH, and it only supports wires and ACH, then there’s a problem.) Does it automate the capture and transmission of all of the payment details that are required by your e-Procurement / EIPP systems as well as your accounting systems? Does it simplify the transactional processing, freeing up manpower for exception handling and more strategic purchasing responsibilities? Because these are the things that matter!

We won’t forget about the technology RFP elephant though – because this big-daddy of elephants, who is often willing to provide us with RFP templates for any technology we might want to put out to bid, will have us believe that you should be evaluating a solution based on the number of (pseudo-) standard features it has, and not whether it has the functionality you need. This is absurd – especially when you aren’t familiar with the technology! After all, why do you care whether or not it has 300 features you probably don’t need? And how do you evaluate solution A with 350 features vs solution B with 315 features vs solution C with 385 features when the common feature overlap between all three solutions is only 60% based upon your unduly long, inept, and inappropriate RFP that this technology elephant gave you. You need a solution that has the functionality that supports the business processes that you need. To do this, especially when you are unfamiliar with the solutions you’ll be evaluating, you need to send out a rather open-ended RFI that describes the processes you need and the problems that you are having and that asks the vendors to describe how their tool solves these problems. Then, you take the top 3 – 5 RFIs, figure out what your minimal baseline is with regards to key capabilities, and send back a more detailed RFP that outlines the core functionality you need (and any industry standard features you’re aware of that are also required), additional functionality you’d like, and the timeframe you’d like to deploy it in and note that formal submissions will not be considered until you get a full demo (if you haven’t had one already). But still, it should be short. Closer to 60 questions than the 600 or so “feature questions” that I’ve been hearing about from some vendors lately if you’re really focussing on what you need and not the market mumbo-jumbo that the elephants are feeding you.

So take heed, elephants hiding in the closet, behind the door, and under the boardroom table – because you’re next!

Supply Management in the Decade Ahead X: Collaboration

This post continues our coverage of Succeeding in a Dynamic World: Supply Management in the Decade Ahead (a detailed report based on research jointly undertaken by the ISM, A.T. Kearney and CAPS Research), and our review of the seven critical supply strategies for succeeding in a dynamic world in particular, with the fifth critical supply strategy identified by the report – collaboration.

Unlike the days of old where a company could extract gains by creating competition in their supplier markets in order to use the “invisible hand of the marketplace” to maximize value from competitively sourced suppliers, the new marketplace requires collaboration to achieve value above and beyond what you are realizing today.

Respondents to the study identified the following three strategies as the top three internal collaboration strategies for an enterprise:

  • Use cross-functional teams for category and supplier strategy development and implementation
  • Establish shared goals and objectives between the supply management organization and other internal organizations
  • Integrate business planning and supply management processes

Respondents to the study identified the following three strategies as the top three external collaboration strategies for an enterprise:

  • Collaborate with suppliers and customers to reduce supply chain costs
  • Provide transparency of cost and financial information throughout the supply chain
  • Collaborate among supply chain companies to root out waste

The study itself highlighted the following four generic key success strategies:

  • Internal collaboration and integration must advance further if companies are to capitalize on their future needs
  • External collaboration will require a shift from competition to partnership for some segments of a company’s supply base
  • Technology will be necessary to enable an increase in collaboration
  • Companies must be willing to jointly work through their concerns with risk and IP protection

The study then went on to highlight some keys to external collaboration:

  1. Manage Strategic Suppliers
  2. Collaboratively Obtain Innovation
  3. Block Competition through technological exclusivity and tying up supplier capacity
  4. Increase Transparency

I’d like to focus on the first and third recommendations. Managing suppliers might be good, but enabling suppliers is much better. Give them the tools and information they need to help you be a better supplier to your customers, and your gains will be greater. Blocking is also good, but blocks have shorter and shorter life-spans as time goes on. Considering that your supplier probably obtained at least some of it’s new technological capabilities from a vendor itself, it won’t be long before it’s competitors have the same capabilities and your competitors line up partnerships with them. the doctor thinks that a better strategy would be to become the strategic customer to your strategic supplier and work with them to continually outpace your competition.