Monthly Archives: December 2008

The Wit & Wisdom of the SpendFool 2008

In keeping with holiday tradition, I again bring you the Wit and Wisdom of the SpendFool, culled from all of the foolish comments I could find on Spend Matters during the last year. As usual, the SpendFool left some juicy tidbits again this year, and I hope you enjoy them, along with his 2006 and 2007 contributions, because, if the Fool is true to his word, 2008 might be the last year he leaves any tidbits of merit. (See the seventh comment.)

The Wit

From Everything IS Bigger in Texas But 15 Million Suppliers is Not Something to Brag About

Well, if there’s one thing you can’t accuse Texas of (besides turning the town drunk into the governor and the POTUS), it’s supplier diversity!

From
The WSJ Shows No Love for Aberdeen

As Groucho Marx quipped, “I wouldn’t want to belong to a club that had me as a member”.

From
Charlie Dominicks War

I’m going to be introducing a certification called the Society of Professional Analysts in Supply Management, or SPASM for short. Some of the modules will include key skills such as:

  1. seeing some trends in business week, writing them up, and then claiming credit for them the following year
  2. knowing when to create a good rumor or dredge up an old one (e.g., Ariba getting bought is always a good one)
  3. knowing when to write up a lovely alert on Emptoris and their success at GSK and Motorola (when the bill comes due on their renewal)
  4. running from the ERP vendor analyst handlers at a trade show in order to actually go look at real functionality and talk to real customers

I’ll also add an extra training module on an old system that is important to know about it if you’ve never been exposed to it, and that is the Manufacturing Information Access Software System. If you’ve never heard of it, I HIGHLY recommend you Googling it to find out some great user comments about it.

From
What’s in Store for SAP SRM 7.0

Thermodynamics says that vapor will become solid at higher pressure, and I can tell you that the pressure is definitely on at many marquis SAP shops where the Procurement executives feel like Charlie Brown with the football getting pulled away again.

From
Wahhooo! We’re Making More Money — Just Not Enough to Fight Off Inflation

As a sidenote, if you all think I’m too sarcastic, please consider it a marker of higher evolution, not cruelty:
   Sarcasm Seen as Evolutionary Survival Skill

From
Emptoris Empower — Additional Numbers to Share

It’s due to an arcane mathematical effect called Avnermatics where all reported figures geometrically multiply at a constant determined by the proximity of an acquisition and it’s also like “Schrodinger’s cat” in quantum mechanics because you can’t actually measure it, and if you do, you’re likely going to kill it.

The Wisdom

From
Do We REally Need Analyst 2.0?

If the commodity manager doesn’t pay attention to the innovative new suppliers out there, then the commodity manager is an idiot and not doing his/her job, merely prone to racking and stacking stale incumbants rather than identifying discontinuous improvements in the market on behalf of his/her clients. These are the true analysts, those that analyze where things are going, and where the innovations are happening (and putting it into context for a client with a very complex organization situation) rather than trying to put new shinola on old sh&t.

From
How Will Green e-Procurement Play in a Recession?

If you set the way back machine to the great sensei Genichi Taguchi and his definition of waste, it was actually a loss function to the consumer and to society – so this correlation is both understandable and natural.

From
The WSJ Shows No Love for Aberdeen

What’s funny is that nobody from Aberdeen ever chimes in on this blog defending themselves and their “honor” (ok , stop laughing). Why? Because they know it to be true and the analysts are using Aberdeen (to build their personal brands) as much as Aberdeen uses them. To quote Bob Seeger, they were “getting their share”.

From
Exploring the True Costs of SaaS

You have the 2 opposing philosophies of the assemble/maintain your own versus going for a turnkey low-maintenance option. Thing is … both are needed (strategic stuff for the former) … in line with “IT doesn’t matter” (in fine print: for the commodity stuff) … BUT, mass customization hinges upon great design, and SaaS offerings can’t just have the many-to-many data model and a few data dictionaries. SaaS is the right concept, but time will tell how much customization features will be available as native functionality so that the platform will be commonized, but will be tunable (e.g., plug-in’able content) to specific user requirements.

From
Mickey D’s — Eating Cost Increases for Customers

The biggest cost though of beef is its impact on global warming. Methane is 21x more ‘warming’ than CO2 and organic beef is even worse given the time it takes to get an organic cow to slaughter weight. Dairy cows also are part of the equation. So, my friends, it’s great that you’ve switched to a hybrid car and changed your lightbulbs, but you now need to give up cheeseburgers and milk in order to save our planet. I guess it’s veggie burgers and soy lattes in our foreseeable future. Otherwise, we need start doing methane reclamation not just in landfills, coal mines, and manure piles, but also in livestock, and that’s just not a visual that I care for on a bike ride through Vermont or Wisconsin.

From
Supplier Management Lessons from Steely Dan

A Procurement organization should be ‘fit for purpose’, and it’s less about the size of the spend than how you use it… which is to deliver lasting value.

From
RNC Final Dispatch — I Blog You Decide

In procurement, it’s all about talent, and transformation. And we need a whole lotta both.


Well, that’s likely it. I hope you enjoyed this three-part series.

The Sourcing Maniacs 2008 Vendor Tour Part 21: Vinimaya

Today’s post has been broken down into vacuity, vindication, and veil.


Vacuity

Wakko I never imagined a Stampede could be so much fun!
Editor’s note: the maniacs took a little detour through Calgary after finishing their visit with Upside Software in Edmonton
Yakko It sure is! But we should probably be getting back to our tour. After all, we still haven’t been offered a job!
Dot We’re not done yet?
Yakko We’re only at U!
Dot Precisely. Who uses V, W, X, Y, and Z anyway?
Yakko Well, I’ll admit that a lot of companies start with the early letters of the alphabet, presumably to come first in the listing or to take advantage of common power words, that usually start with M, N, R, S, T and other Wheel-of-Fortune favorite letters, but there are still a few companies left. I’m sure there are at least ten companies in the space that start with V.
Dot Precisely. Who uses V, W, X, Y, and Z anyway.
Yakko Verian Technologies, Vertical Net, and Viewlocity.
Dot Vertical Net is Bravo Solution now.
Yakko Okay, Vendormate.
Dot Touche! So who next. Any recommended by the doctor?
Yakko Let me check.
more flipping through the handy dandy notebook
the doctor mentioned a company called Vinimaya when we asked him who the innovative companies were.
Dot What do they do?
Yakko Catalog Management.
Dot Sounds so Web 1.0. What else?
Yakko Looks like they’re billing themselves as the B2B Search Engine now.
Dot B2B Google?
Anything else?
Yakko Looks like that’s it.
Dot Are you sure?
Yakko I think so.
Dot So what are we missing? the doctor says they’re innovative, but catalogs and search have existed for over a decade.
Yakko I don’t know. I guess we’ll have to go find out!
  the maniacs take off for Shelton, CT



Vindication

Dot Are we here?
Yakko Uhmm, I think so.
Dot I’ll knock.
tap tap-tap tap tap … tap tap
Smiling Man a smiling man opens the door
Howdy! How can I help you!
Yakko We’re a little confused. the doc said you were innovative, but we understand that you do catalogs and search.
Smiling Man That’s right!
Dot And how’s that innovative?
Smiling Man You need to understand, it’s not what we do, but how we do it.
Dot What do you mean?
Smiling Man To use the doctor‘s terminology, we’re B2B 3.0 all the way.
Yakko B2B 3.0?
Smiling Man Business-to-Business 3.0. We provide enterprise software technology that puts business users on the same footing as consumers who have had “3.0″ technologies at their fingertips for years. B2B 3.0 is about connectivity that is open and free to all, content that is managed once in a non-redundant fashion by the content owner, and an open community where buyers and sellers can come together for short periods of time through virtual networks that allow them to conduct the business they need to conduct — when, and how, they need to conduct it. We provide the technology platform that, using the open connectivity of the internet, enables innovative content management that allows buyers and suppliers to engage in productive e-commerce.
Dot And how do you do that?
Smiling Man Through content unification. If you go back to the beginning, B2B 1.0 if you will, you had the catalog, which was different in every ERP, procurement, and sourcing application, and which had to be maintained by the buyer — who had to collect data from the supplier to populate their application. This led to stale data, and an inability to find new products in a timely fashion. Then the punch-out came along and helped to usher in B2B 2.0. This was a slight improvement, as the supplier was able to maintain their own catalog, which the buyer could connect to, but there were still issues. The catalog was only as fresh as the last supplier update, which could be months in the past as the supplier had to maintain a different puchout with different pricing for each buyer, and the buyer could only connect to, and search, one punchout at a time.
Dot So?
Smiling Man How do you get the best price?
Dot You review and evaluate all the options.
Smiling Man And how do you do that if you can only search one catalog at at time?
Dot You build a spreadsheet …
Smiling Man Don’t you buy a technology solution to help you with your job? Doesn’t having to build a spreadsheet hinder you? Why not just use Google and search each vendor site individually. It would be just as effective and save you money.
Dot True.
Smiling Man So buyer hosted catalogs don’t work, as they are always stale and don’t have the right prices, or products, and punch-outs don’t work as they restrict a buyer to one site at a time. Plus, both solutions often cost way more money than they’re worth. Sure you can get a catalog solution cheap, but how much is it going to cost you in salaries to keep it up to date? If you’re a large company, millions. And you might think punchouts are cheap, but a supplier has to pay someone to create a separate punchout with distinct pricing for each buyer, and then has to pay someone else to maintain that data. And who do you think pays for that overhead? That’s right, you!
Yakko So what’s the solution?
Smiling Man Our platform.
Yakko And how’s that work?
Smiling Man It’s a web-services enabled agent-based meta-search technology that can plug into any electronic product listing a supplier has at its disposal — be it punch-out, e-Catalog, a web-enabled database, or a plain old ASCII flat file — and integrate the listings into one consistent, coherent view for the buyer.
Wakko So it’s e-Bay for enterprises? A single view into all available products and services that you can search — by product name, characteristic, or price range — to find the best product to meet your need at the best price, right now?
Smiling Man That’s right Wakko! We enable buyers and suppliers to conduct commerce the way it was meant to be — simple, easy, and cost effective.
Yakko That’s it?
Smiling Man That’s it. We’re the first company to utilize the full power of the internet to let buyers and suppliers to conduct business using the technology they have available; we add the ability for both parties to define pricing and presentation rules that are applied in real-time on every search; and our powerful interconnectivity platform allows us to integrate seamlessly with all of the major platforms. What else would we need to do?
Yakko I can’t think of anything else.
Smiling Man Precisely! Sometimes you just have to keep it simple.



Veil

  we join the maniacs an hour or so later at a diner
Dot So, are we done?
Yakko We’ve done WhyAbe, and the only other W company I know of is WeSupply, but they’re on the other side of the Atlantic.
Dot And the only X company I know of is Xign, but since they’re owned by a bank, we know they’re just payments, which isn’t that exciting.
Yakko I don’t know of a single company in the space that starts with Y!
Dot I guess that brings us to …
Yakko, Wakko, & Dot Zycus!
Wakko Aren’t they based in India?
Dot They are. But don’t they have US locations?
Yakko They do, but they’re mainly sales offices, and the doctor says he hasn’t had any luck getting a response from them locally.
Dot I guess we’re done for now, then.
Yakko It’s probably for the best. I’m feeling a chill in the air, and I don’t like the cold as much as I used too.
Dot We did get awfully used to the wonderful year-round weather in the valley, didn’t we?
Yakko We did. Let’s go home for the winter. We can start a new tour next year … and maybe, armed with our superior knowledge from this tour, we’ll even find a job!
Wakko And in the mean time, I can be Califorina Dreamin’.
Yakko, Wakko, & Dot All the leaves are brown
And the sky is grey
I’ve been for a walk
On a winters day
I’d be safe and warm
If I was in L.A.
California dreamin’ …
  the maniacs fade into the distance

I don’t know about you, but I think they deserve a 21-gun salute for their efforts. Twenty-one posts and one hundred and thirty pages of amazing content that is so rich that you have to read it multiple times to thoroughly extract all of the nuances is more than some blogs give you in an entire year (or lifetime)! Rest up maniacs, you deserve it!

The Sourcing Maniacs 2008 Vendor Tour Part 20: Ketera

This post is a wee bit lengthy, so I’ve broken it into kidding and Ketera.


Kidding

  the maniacs are enjoying themselves somewhere in Alberta
Wakko Hee Haw!
Dot That was a classic, wasn’t it. Did you know it had Canadian roots?
Wakko Yippie Ki Yo Yippie Yay!
Dot We’re in Alberta, not Texas, Wakko!
  ring, ring
Yakko Yakkos Yiddish Yamakas … cheery caps for cheery chaps!
Australian Accent G’day, Mates! You wanted a demo of Ketera?
  if you’ll recall, back in part 12 (Kinaxis) the maniacs asked Ketera for a demo … they were too busy at the time, but promised to get back to the maniacs
Yakko Yes, we did.
Australian Accent Ace! Could you do it now?
  neeiiggghh!
Australian Accent Is that a Brumby I hear? Is this a good time for you blokes?
Yakko It’s just fine. I’ll fire up the satellite and we’re good to go!
Australian Accent Bonzer!
Are you out in the bush, mate?
Yakko No, we’re just enjoying the ranch.
Australian Accent Texas?
Yakko Alberta.
Australian Accent You’re in the Back of Bourke, aren’t you?
Yakko I guess you could say that.
Australian Accent You’re sure it’s a Mickey Mouse time for you?
Yakko No problem. I’m ready.
Dot I’m ready.
Yakko We just need to wrangle Wakko. One sec.
Wakko!
Get your strides over here now!
Wakko Why?
Yakko It’s time for the Ketera demo!
Wakko Now? Here?
Yakko We got sattelite internet, remember?
Wakko glumly
o. k.
Dot You can get back to having fun as soon as we’re done!
Wakko cheering up
A’ight!
  Wakko moseys on over.
Yakko We’re ready to give it a fair go!



Ketera

Australian Accent switching to his best American for the demo
Today I’m going to run through our new e-Sourcing application. It’s pretty straight-forward, so it won’t take much time.
  unlike the maniacs’ walkabout …
Yakko No problem! Take it away.
Australian Accent I should start off by noting that what we noticed was that a lot of people were spending a lot of money on enterprise sourcing applications without using the full extent of their capabilities … most of our catalog, procurement, and supply network customers were just using e-RFX and e-Auction and most of those customers were just using single round RFXs and traditional reverse auctions … not the dozen or so variants that have sprung up over the last ten years.

We saw the need for a low-cost 80% solution that would give the market what we felt it needed most … a basic sourcing solution for small and mid-size companies without large budgets or sophisticated software needs. And that’s what we built.

Our e-Sourcing solution is just RFX and Reverse Auction … and unlike many enterprise applications that take hours, if not days, to set an event up … our solution allows an event to be configured in minutes using a very simple 3-step process.

Step 1: Create a new event.
Step 2: Specify the items and item details.
Step 3: Invite suppliers.
  Then you just sit back, and watch prices tumble.

Yakko If it’s that easy, is it really an 80% solution?
Australian Accent Think about it. How much does an e-RFX and e-Auction solution really have to do?
Yakko Well, one thing we learned from talking to Source One about WhyAbe is that, for many categories, and many small to mid-size companies, it doesn’t have to do that much.
Australian Accent Precisely. And their offering is actually a good starting point to understand our offering.
Yakko So how does your offering compare to theirs?
Australian Accent Quite good. We both have the bare minimum requirements for e-RFX and e-Auction, but whereas, in our view, they’re more of a 60% to 70% solution, we add a few features that, although they sound like bells and whistles, are actually necessary for an 80% solution in today’s global e-Sourcing marketplace.
Yakko Like what?
Australian Accent Localization. Contract tracking. Fine-grained scoring on RFX questionnaires. Microsoft Excel integration. Templates. Instant-Messaging and Alerts. Customizable dashboards. Supplier Master Management. Wizards for each step of the process. The little things that make it easy, useful, and a pleasure to use — all embedded in a streamlined application with a carefully designed UI that buyers want to use.

And, unlike many other e-Sourcing platforms, it’s a low-cost, self-service, pay-as-you-go platform.

Yakko How low?
Australian Accent $39.99/month for unlimited RFIs, RFPs, RFQs, and reverse auctions. Plus, you get instant access to thousands of suppliers in the Ketera network.
Yakko Beaut!
Australian Accent Too right!
Yakko Anything else we should know?
Australian Accent It’s very easy to administrate, and the item and supplier master views support numerous filters for quick location of the appropriate item or supplier. It’s straightforward to enter proxy bids on behalf of a supplier. All of the reports have decent graphic capabilities. We support the UNSPSC schema for item categorization. And it has basic project tracking capability — you can quickly see your open events, events requiring bid evaluation, and recently evaluated events at any time.
Yakko So it really is a decent sourcing solution for small and mid-size companies just starting out on their e-Sourcing journey, or those companies without sophisticated sourcing needs.
Australian Accent We think so. And, as I said before, very easy to set-up a sourcing event.
Wakko I’m out of baloney. How long to set up an event to source a 3-months supply?
Australian Accent Five minutes. Watch.
  five minutes pass as the salesperson demos the tool
Wakko That’s it?
Australian Accent That’s it!
Wakko Fair suck of the sav!
Apparently, Wakko has his Aussie down pat! If I didn’t know better, I’d say he was from the Never Never!
Yakko Well, thanks for the demo. It certainly is an interesting take on the e-Sourcing space. A sourcing tool that every business can afford.
Australian Accent Thank you. Hooroo, Journo!
Wakko Hooroo, mate.

Supply Chain Responsibility

Chances are that if you’re (out)sourcing globally, your supply chain is not as responsible as you think it is. Even leaders in supply chain social responsibility still struggle with fiascos, as illustrated by The Gap, who faced child-labor allegations in India earlier this year when, without its knowledge or consent, a vendor subcontracted part of an order to an unauthorized facility that used child-labor to produce garments. Considering the impact this can have on your brand, you should be taking steps now to make sure this doesn’t happen to you.

So what should you do? Without reference to the Stanford Global Supply Chain Management Forum, as quoted in this recent Supply Chain Management Review article on Taking Supply Chain Responsibility to the Next Level, I can tell you that you need to put greater emphasis on the social side of the equation. And in addition to the models and measurement systems, you need an overall monitoring framework that will give you real-time visibility into your supply chain, and, most importantly, your suppliers.

In addition to the basic supplier performance management functions, which should include compliance status and the findings of the most recent supplier audit, this framework should also tell you which of your suppliers are actively working on your active orders, and what the status is. This will enable you to properly determine which suppliers pose the most risk, and, more importantly, which suppliers need an active (surprise) audit, and which suppliers don’t.

Furthermore, the technology should lay the foundation for trailblazers to implement structural changes within their supply management function to insure that social and environmental responsibility is considered as part of every award. It should also support the collaboration required to develop innovative products, processes, and technologies that can transform the supply chain and the business.

So how do you select the right technology? Find a technology that can support the holistic, dynamic, and flexible supply chain model that can improve your overall business performance. As highlighted in taking supply chain responsibility to the next level, leaders make the following assumptions about their supply chains.

  • Social and environmental factors strongly correlate with supply chain performance
  • The extended supply chain is fluid, and may not look the same tomorrow as it does today
  • Getting it right is a journey, not a destination, and definitely not a sprint. It takes time to get it right, and the key to success is to get progressively better each day.

In my view, even if it’s not perfect, any technology that can allow you to integrate supply chain responsibility into your overall sourcing process is a step in the right direction. Good examples are Aravo‘s Supplier Information Management (SIM) platform that can allow you to track, report, and execute on all of the data you need to be socially responsible, EcoVadis‘ sustainable supply management solution which tracks the relevant data on your suppliers CSR practices, and SupplierSoft‘s supplier information management platform.

Don’t Be Seduced by Change Management Tools

Industry Week recently ran a great article on change management tool seduction and the damage these tools, and the programs they support, can cause, which include:

  • Wasted Time
    The wrong change programs will do nothing but consume time that could be better spent on other tasks. For example, documenting all of your processes only to find out they’re poor isn’t worthwhile
  • Increased Politics
    Employees might look upon it as punishment, and rebel, or simply use any new data that results from the effort to try and blame other departments for organizational failings.
  • Functional Distractions
    Employees might get caught up trying to figure out how to meet the new requirements rather than working towards process improvement.
  • Strategic Misdirection
    If the change management program selected doesn’t actually improve product or service quality, it’s pointless.

Change management, and change management tools, only work if you’re implementing the right changes, and not the latest fad, cliche, or feel-good organizational change theory. You don’t change just because your competitor did. You change because a detailed analysis caused you to conclude that you will likely see a significant return from going through the effort. You change because your analysis revealed that the process improvements you identified will have a positive impact on your operations and will increase efficiency, reduce costs, and improve quality.

So how do you know if you’re on the right path? The Industry Week article had some great advice for determining whether you’ve embarked on a successful change management project or been seduced by the latest change management tool (or fad). Specifically, if one or more of the following five scenarios exists at your company, you might have to adjust your plans in order to reap benefit from your change management initiative:

  • Tool Tossing
    Are managers trying to solve problems just by throwing technology at the situation? Technology is an enabler, not a solution upon itself.
  • Consultant Lure
    Are consultants repeatedly brought in to tell you what most of the organization already knows?
  • Buzzwords
    Do managers use buzzwords excessively, particularly with the goal of making themselves look knowledgeable?
  • Change Program of the Week
    Has your company introduced so many change programs in the last few years that your staff feels whiplashed?
  • Plan Blindness
    If management believes that a plan in and of itself is progress, look out!

If you want to get help finding and staying on the right path, the article also offers some advice on how to assess the likely impact of a potential change management program to determine if it’s right for you. It’s definitely worth a read.