Monthly Archives: January 2010

Winning the Talent War in China

The McKinsey Quarterly recently published an interview with Emmanuel Hemmerle, a principal with Heidrick & Struggles, on Winning the Talent War in China. It had some great information for those multi-nationals who are looking to expand into China or who are having problems finding the top level talent they need.

It had a number of good points that you should not miss. These include:

  • Top Talent is NOT Cheaper in China
    Packages for top talent — with experience, skill sets and responsibility equal to their counterparts in Europe and the US — are often higher.
  • Strong and Weak Performers Have to be Differentiated
    Failure to do so will seem unfair and may lead to resentment.
  • You Will Need to Invest In China
    In some areas, the market economy is quite new, like luxury goods which really started ten years ago. Senior talent just isn’t available. You have to instead look for rising talent and take them the rest of the way yourself.
  • Talent in China Looks for Careers
    They are very sophisticated and, like their American and European counterparts, are looking at the long term impact of any offer on their career.
  • You Need to Localize
    A majority of the management team of the China operation should be mainland Chinese as this supports localization by showing that you see them as your equals, which they are if you have sought out and hired their top talent. (With a population that is more than four times that of the US, they have four times as many geniuses. Remember that.)
  • You Need to Seek Out the Best
    You should not only know who your top competitors are, but who their top people are and try to recruit them. Even if you don’t get your first choices, it shows your commitment to identifying and hiring the best talent.
  • You Need to Embrace the Culture
    You need to provide them with an environment that is attractive to them. This will include the fostering of a relatively non-hierarchical environment with growth opportunities for each individual, opportunities for each individual to get promoted to the top, and socially responsible activities.

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Rosslyn Analytics – Taking Analytics-Based Insights to the Masses

I have to say that I am quite impressed with Rosslyn Analytics‘ spend analysis platform and their overall approach to the problem as compared to many of the spend analysis providers in the space, especially given the relative youth of the platform. And no, it has nothing to do with their UI, graphics, or other eye candy that, as you know, accounts for zero points of credit as far as I am concerned (despite the fact that some bloggers and analysts apparently go Gaga for fancy graphics). Heck, I’m not even going to give them points for ease of use, because that’s a basic requirement of any modern supply management application.

So why am I impressed with Rosslyn? Vision. Clarity. Execution.

Rosslyn understands that sustainable results only emerge en-masse when you enable the masses, your platform has to evolve as needs evolve, every organization is different, and even if it every organization wasn’t different, you still can’t do everything yourself, and it shows in their platform and their delivery there-of.

Rosslyn believes that you don’t have spend visibility unless that visibility is available to, and understood by, everyone in the organization. As a result, they not only sell their platform using an unlimited access model, but designed the basics of their platform to be self-explanatory to the point that anyone — be it a procurement, finance, accounts payable, accounts receivable, or sales user — can load it up and intuitively find a report on the aspects of spend or organization performance relevant to them. Their vision is to provide the foundations of a platform that everyone can use to make more informed decisions.

Rosslyn also believes that you can’t make good decisions unless you have a complete set of relevant data. As a result, they have not only streamlined extract and upload for over 30 of the most common ERP and MRP systems, but they have also built a rules-based platform that allows them to integrate with new systems in under a day, on average. They are able to automatically extend your data with D&B data, other third party index data, and even your own proprietary indexes if you have them. And cleansing is built in, as it should be, because the point, as I have stressed over and over again, is analysis. As a result, you not only see an integrated view of your data, but you have the ability to augment it with non-spend data and give it context, because A/P and invoice data is just the beginning.

Rosslyn is committed to insuring that each and every customer gets rapid results, and their execution speaks for itself. Not only are they able to get even the largest companies up, running, and fully operational — with an average refresh rate less than 24 hours (maxing out at 72 hours, which compares very well with the industry average of 4-5 weeks for most of the spend visibility platforms on the market) — in two to three weeks, but most of their customers see ROI in under 8 weeks. Furthermore, while most organizations will start with only 10 to 20 users, they find that the number of users increases 10-fold within 3 months. In addition, they are constantly upgrading their fully cloud-based multi-tenant SaaS solution with new features, with major upgrades every quarter and minor upgrades every few weeks. Sometimes they add new reports and reporting capabilities “seemingly overnight” to meet the evolving needs of their user base.

And while the platform may not do everything you might want (but then again, what platform will), you can take comfort in the facts that (1) it’s as good as the majority of the spend analysis platforms on the market and that (2) Rosslyn understands you can’t do everything. Thus, while some of the platforms are trying to broaden their footprint and do everything, Rosslyn is staying focussed on spend visibility and working with third-party e-Procurement platform providers to give you a complete solution. Furthermore, while some platforms will make it nearly impossible to get your data out in an effort to lock you into their solution exclusively, Rosslyn makes it just as easy to get your data out of their platform as they do to get your data in. Recognizing that some users will always be more comfortable with Excel, that power analysts will always be trying to come up with new ways to analyze data that current platforms don’t yet address, and that some corporations have invested Millions in proprietary data warehouses and business intelligence platforms, Rosslyn supports exports to a number of standard data formats (XLS, CSV, PDF, etc.) and supports full bi-directional integration with your data warehouses. (They can extract your data, cleanse, classify, and augment it with their rules-based classification engine, and push it back in automatically on a regular refresh cycle.)

In Part II, I will describe the built in capabilities of the platform as it exists now, and some of the exciting developments you’ll see next quarter.

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New and Upcoming Events from the #1 Supply Chain Resource Site

The Sourcing Innovation Resource Site, always immediately accessible from the link under the “Free Resources” section of the sidebar, continues to add new content on a weekly, and often daily, basis — and it will continue to do so.

The following is a short selection of upcoming webinars and events that you might want to check out in the coming weeks:

Date & Time Webcast
2010-Jan-26

10:00 GMT-08:00/AKDT/PST

Leveraging Oracle BI
  

Sponsor: Oracle

2010-Jan-26

11:00 GMT-08:00/AKDT/PST

Effective Procurement Engagement Within Marketing Spread
  

Sponsor: Sourcing Interests Group

2010-Jan-27

11:00 GMT-05:00/CDT/EST

Managing Supplier Performance and Compliance Risk
  

Sponsor: Aravo

2010-Jan-27

1:00 GMT-05:00/CDT/EST

Recovery 2010: The Rise of Contract Talent
  

Sponsor: Fieldglass

2010-Jan-27

14:00 GMT-05:00/CDT/EST

Visual Spend Analytics : Take Your Spend Analysis to the Next Level
  

Sponsor: tableau Software

2010-Jan-27

11:00 GMT-05:00/CDT/EST

Using demand management to drive procurement excellence
  

Sponsor: Ariba

2010-Jan-28

15:00 GMT-08:00/AKDT/PST

Oracle Supply Chain Webcast
  

Sponsor: Oracle

2010-Jan-28

14:00 GMT-05:00/CDT/EST

Lean Quality for Pharma and Consumer Product Manufacturers: Saving Millions With Rapid Testing
  

Sponsor: Celsis

2010-Jan-28

12:00 GMT-05:00/CDT/EST

Commodity Management for Supply Chain Professionals
  

Sponsor: PMAC

Dates Conference Sponsor
2010-Feb-22 to
  

2010-Feb-23

Institute of Business Forecasting: Supply Chain Forecasting & Planning Conference
  

Phoenix, Arizona, USA (North-America)

IBF
2010-Feb-23 to
  

2010-Feb-26

Logistics and Supply Chain Management 2010
  

Orlando, Florida, USA (North-America)

SAP
2010-Feb-23 to
  

2010-Feb-24

Cold Chain Storage and Distribution conference
  

London, England, UK (Europe)

Arena International Events
2010-Feb-24 to
  

2010-Feb-25

eWorld Purchasing and Supply
  

Birmingham, England, UK (Europe)

eWorld
2010-Feb-25 to
  

2010-Feb-27

Clean Energy Power 2010
  

Stuttgart, Germany (Europe)

Simba Media GmbH
2010-Feb-25 to
  

2010-Feb-25

Spend Management Day
  

Los Angeles, California, USA (North-America)

Ariba

They are all readily searchable from the comprehensive Site-Search page. So don’t forget to review the resource site on a weekly basis. You just might find what you didn’t even know you were looking for!

And continue to keep a sharp eye out for new additions!

Spend Analysis II: Why Data Analysis Is Avoided

Today’s post is from Eric Strovink of BIQ.

If I have learned one thing during my career as a software developer and software company executive, it’s this: contrary to what I believed when I was a know-it-all 20-something, there are a lot of clever people in the world. And clever people make smart decisions (for example, reading this blog, which thousands do every day).

One of those decisions is the decision NOT to perform low-probability ad hoc data analysis. It’s a sensible decision. Sometimes it’s based on empirical study and hard-won experience, and sometimes it’s a gut feel; but either way, the decision has a strong rational basis. It’s just not worthwhile.

A picture is helpful:


Click image to enlarge

The above shows the expected value of an ad hoc analysis of a $100K savings opportunity. On the X axis is the number of days required to prepare and analyze the data; on the Y axis, the probability that the analysis will be fruitful. I chose a $700 opportunity cost per analyst-day; choose your own number, it doesn’t really matter.

Note that the graph is mostly “underwater”; that is, the expected value of the analysis is largely negative. Unless the probability of success is quite high, or the time taken to perform the analysis is quite low, it’s simply not a good plan to undertake it.

We are all faced with the decision, from time to time, whether to explore a hunch or not. However, an analyst can only work for 220 days per year. Sending a key analyst off on a wild goose chase could be a serious setback, so it’s a risky decision, and we don’t do it, and so our hunches remain hunches forever.

But what if it wasn’t risky at all?

Nothing can be done about the “probability that the analysis will be fruitful”; that’s fixed. But plenty can be done about the “number of days required to prepare and analyze data.” Suppose a dataset could be built in 5 minutes, and analyzed in under an hour? This turns the expected value of speculative analysis sharply positive. Suddenly it is a very good idea indeed to perform ad hoc analysis of all kinds.

And that’s good news. Because there is a ton of useful data floating around the average company that nobody ever looks at. Top of the list? Invoice-level detail, from which all kinds of interesting conclusions can be drawn. Try this experiment: acquire invoice-level (PxQ) data from a supplier with whom you have a contract. Dump it into an analysis dataset, and chart price point by SKU over time. Chances are, like most companies, you’ll find something very wrong, such as prices all over the map for the same SKU (ironically, sometimes this happens even if you have an e-procurement system that’s supposed to prevent it). If you have a contract, only one of those prices is correct; the rest are not, and represent money on the table that you can recover trivially.

Of course, please don’t spend weeks or months on the exercise, because then it won’t pay off. Instead, find yourself a data analysis tool with which you can move quickly and efficiently — or a services provider who can use the tool efficiently for you (and thus make a contingency-based analysis worthwhile for both of you). Bottom line: if you can’t build a dataset by yourself, in minutes, you’ll end up underwater, just like the graph.

Next installment: Crosstabs Aren’t “Analysis”

Previous Installment: It’s the Analysis Stupid

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There’s Good Risk Management Advice …

… and then there’s the risk management advice in the Logistics Management version of the Supply Chain 2010 article. According to this version, you should:

  • get in the habit of much shorter contracts
    … and throw any hope of cooperative innovation right out the window
  • adopt a logically variable cost structure
    … and watch your costs go through the roof every time an index runs wild
  • get in the habit of stress testing your supply chain
    … instead of taking the time to design it properly so that it survives the stress tests

Risk isn’t going away and you have to start managing it better, but don’t make stupid decisions based on the assumption that this transient, lengthy recovery is the way things are going to stay. We’re working our way back to the Old Normal, and as I pointed out in my last post, that requires visibility, flexibility, and education. Don’t forget that.

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