Monthly Archives: October 2014

50 Years Ago Today Russia Took Us One Step Closer to Inter-Planetary Supply Management

But we still aren’t there yet!

I know I keep ranting and raving about this, but considering that 51 years ago General Dynamics told us that a mission to Mars could be launched in 1975, and yet, we still haven’t gone beyond the moon, it is more than a little disheartening. But then what can one expect when the budget allocated to NASA in 1971 was less than one half of the budget in 1966 and NASA’s funding dropped from 4.41% of the federal budget to 1.61% in a mere five years, and has been on the decline since. (By 1975 it was under 1% and only broke 1% three times since, reaching 1.05% in 1991, before dropping back down to 0.94% in 1994.) In comparison, the defense department consistently gets about 18% of federal spending, which is not only, relatively speaking, about 4 times the amount spent by most countries on defense but 18 times what NASA gets. (I’m not saying the US shouldn’t spend at least as much on defense as anyone else because it should even if your goal is peace as you never want to be caught with your pants down. I am saying that maybe some of that R&D research budget should be redirected to more useful pursuits. We’re running out of rare earth minerals and other raw materials here on earth. Maybe we can mine Mars and, someday, with enough advances in technology, build bio-domes that will allow us to live there as well.)

So what happened 50 years ago today? The Soviet Union launched the Voskhod 1. While the seventh manned Soviet space flight might not be a memorable one for most people, it was the first flight to carry more than one crewman into orbit, the first flight without the use of spacesuits, and the first flight to carry either an engineer or physician into outer space. It also set the manned spacecraft altitude record of 336 km (209 mi). It was another step towards GD’s goal of a manned mission to Mars … which never happened. Sigh.

Procurement “Trends”: Interlude 1

As far as the silicon snake oil selling “futurists” are concerned, it’s:

Everything Louder Than Everything Else!

I know that I will never be politically correct
And I don’t give a damn about my lack of etiquette
‘Cause as far as they’re concerned the world could still be flat
And if the thrill is gone, then it’s time to take it back!
If the thrill is gone, then it’s time to take it back!

Who are we? Why are we here?
They forget the questions, they’re too busy drinking beer!
What’s the problem with them? What’s the meaning of it all?
They tried to learn to dance before they learned to crawl!
They tried to learn to dance before they learned to crawl!

So sign up all you raw recruits
Throw away those designer suits
Time to get your systems cocked and your targets in sight
There’s such massive spending all over the world
You gotta save your comp’ny, got spending to unfurl
You’re all enlisted in the armies of the night

And I ain’t in it for the power
and I ain’t in it for my health
I ain’t in it for the glory of anything at all
and I sure ain’t in it for the wealth

But I’m in it ’till it’s over and I just can’t stop
If you wanna spread the truth, you gotta do it yourself
’cause they like their drivel like I like my rock

Everything louder than everything else!
Everything louder than everything else!
Everything louder than … everything else!

Everything louder than everything else!
Everything louder than everything else!
Everything louder than … everything else!

(wasted youth, wasted youth)
(wasted youth, wasted youth)

I got a file on them and it’s a mile long and
I know that I have all of the proof
that they’re just another case of arrested development
and that they all wasted their youth
I say that they’re in need of some radical discipline,
I say they gotta face the truth,
that they’re just another case of arrested development
and just another wasted youth

They say I’m wild and I’m reckless
but they should be acting their age
They’re all illiterate schizos in a tumultuous world,
and they keep us at a difficult stage

But it seems to me to the contrary,
of all the crap they’re going to put on the page,
that a wasted youth is out-shined by far
by a wise and productive auger!

A wasted youth is out-shined by far by a wise and productive auger!
A wasted youth is out-shined by far by a wise and productive auger!
A wasted youth is out-shined by far by a wise and productive auger!
A wasted youth is out-shined by far by a wise and productive auger!

(louder, louder, louder, louder, louder!)

If you want their views of hist’ry, then there’s something you should know;
the three men they admire most are Curly, Larry and Moe!
They don’t worry about the future, ’cause sooner or later it’s the past
and if they say the thrill is gone, then it’s time to take it back
If the thrill is gone, then it’s time to take it back!

So sign up all you raw recruits
Throw away those two-bit suits
Time to get your systems cocked and your targets in sight
There’s such massive spending all over the world
You gotta save your comp’ny, got spending to unfurl
You’re all enlisted in the armies of the night

And I ain’t in it for the power
and I ain’t in it for my health
I ain’t in it for the glory of anything at all
and I sure ain’t in it for the wealth

But I’m in it ’till it’s over and I just can’t stop
If you wanna spread the truth, you gotta do it yourself
’cause they like their drivel like I like my rock

Everything louder than everything else!
Everything louder than everything else!
Everything louder than – everything else!
with many, many, many apologies to Meatloaf*.

Rock and Roll LOLCat

* Not the food!

If Software Has to Embed Games To Make You Want To Use It …

Then the software isn’t worth using in the first place!

When Pierre mentioned a YouTube video of a “first-person shooter” (FPS) game for SAP PO (Purchase Order) approvers to blow away those pesky POs in his recent piece on Gamification in Procurement [Looking Beyond the Technology] (Plus content on Spend Matters), I thought he was being satirical! But he was being factual. And it’s pathetic that this concept exists.

While I agree that gamification has potential as a learning tool, the fact that you have to consider putting games inside your software to get people to use it says, no, screams something — YOUR SOFTWARE SUCKS and no one should be using it in the first place when there are dozens of other options.

In other words, when Pierre said that this is where gamification really runs the risk of going off the rails and resembling the proverbial hammer looking for the nail I not only have to agree, but take it one step further and emphatically state that this is where gamification goes completely off the rails.

Supply Management technology should help you get your job done efficiently and effectively. If it’s done right, and accomplishes this goal, you will want to use it because you’re overworked, underpaid, and will do whatever it takes to get the job done and get home before it’s time to go to bed and start the cycle all over again. Because, while you like games, you’d rather go home and play a tabletop Euro-game with your family where you not only get to challenge your problem solving skills and teach the next generation the basics of supply and demand and resource management, but actually enjoy some time with your family.

So, while Pierre is right in that games, properly applied, can be powerful learning tools (and why SI ran a whole series on the Board Gamer’s Guide to Supply Management), they are educational and modelling tools that need to be used appropriately — not misused to mask crappy software. So, when it comes to games, apply the theory (and, yes, game theory is great), and leave the FPS to the war-gamers.

Savings Are Disappearing, Cost Are Risings, and Value is Vanishing. Is Your Procurement Infrastructure to Blame?

A recent 2013 CPO survey from Deloitte reported that only 61% of organizations are somewhat effective at delivering value for stakeholders. There are a number of explanations for this, but the most prevalent reason stated was a lack of business alignment.

In addition, 79% of CPOs consider cost reduction to be their primary goal. There are various reasons for this as well, but a common reason, cited in multiple studies, is a lack of focus around demand management.

Not only did Aberdeen echo this focus on cost in their recent publication on the Top Three Supply Chain Execution Priorities for 2014, but they also indicated that the most critical strategic action for Procurement is to improve internal cross-departmental systems, process collaboration and integration and to align the Procurement strategy with organizational goals.

If you put all of this together, it tells a story. The organization is still seeking cost savings because potential savings opportunities are not captured. There is a lack of compliance with contracts and purchasing policies. The potential cost savings are not captured because demand is not properly managed, despite best efforts. Users are not buying the right product, not buying from the right supplier, not buying at the right price, and/or not buying at the right time (and incurring extra costs by way of expedited shipping). There is a lack of visibility into true demand. This lack of demand management is partially due to the lack of an aligned Procurement strategy consistent with organizational goals — and the lack of alignment is largely due to a lack of actionable intelligence.

In other words, many Procurement organizations, including those with (relatively) modern eProcurement or eSourcing software solutions are blinded by a lack of visibility, hindered by the absence of a platform that supports actionable intelligence, and still challenged with achieving basic contract compliance.

A key part of the solution is missing. Specifically, it is the part that provides visibility into the organization’s real buying behaviour.

So how do you fill the gap? You acquire a Procurement Marketplace that provides users with visibility into policies, contracts, and goods and services readily available for consumption and purchase.

What does such a solution look like?

The Power of Compliance Join the doctor of Sourcing Innovation and Vinimaya at 13:30 PDT / 16:30 EDT / 20:30 BST one week from today on Thursday, October 16 for our webinar on The Procurement Marketplace and the Power of Compliance where we will discuss how a modern Procurement Marketplace can significantly reduce the 30% to 40% of negotiated savings that disappears every day when buyers buy off-contract and incorrect invoices are overpaid.

Attendees will be the first to receive Sourcing Innovation’s New White Paper on The Procurement Marketplace and the Power of Compliance.  Register now for The Procurement Marketplace and the Power of Compliance and get a leg up on your competition!

Why Are We Going to Spend Thirty Posts Exposing Past Procurement “Trends”?

Is it because the doctor is just plain tired of 2nd rate analysts and consultants selling last century’s solutions instead of accepting that we are in the 14th year of the 21st century?

Is it because without a solid understanding of where Procurement comes from, where it is, and where it needs to be, you’ll never get to where you need to go?

Or is it because without this understanding, you’ll never select the right technology and continue to be among those organizations that select those procurement tools that collectively cost organizations in North America 1.5 Billion per year and waste more than 32 Million man-hours because the Procurement system fails to increase their productivity (and, in some cases, because the system is not aligned with organizational processes and needs, actually decreases productivity and hinders savings identification and realization)?

It’s a combination of all three.

Modern Supply Management tools are supposed to save the organization money, not cost it money, but as The Topline Strategy group discovered (as summarized in this article over on S&DC Exec (“only one quarter of procurement professionals believe their procurement system makes them much more productive”) and MarketWatch (“survey finds inefficient procurement systems cost north american businesses 15 billion annually”), only 28% (or one-quarter) of sourcing an procurement professionals believe that their procurement systems make them productive.

This is an abysmal statistic in an industry that spent over 1.4 Billion on Enterprise Software in 2013, software that is supposed to increase efficiency and, in the case of Supply Management, identify savings and add value to the process.

Why is the situation so bad?

The article gives a few hints, including:

  • convoluted user interfaces,
  • lack of critical features,
  • poor integration or implementation (with enterprise systems & IT infrastructure), and
  • lack of regular, often necessary, updates

But, in many cases, the real reason is lack of fit and key functionality.

UI, proper implementation, good integration, and regular updates are important, but the system has to fit the workflow and support organizational processes. Sometimes the organization’s processes will need to be updated, but there is a difference between updating to a more appropriate process, and changing to a completely different process unsuitable to the organization’s business just to force fit a square system into a round architectural hole.

And there’s no way you can select the right fit if you don’t know what the right process should be for your organization. And you can’t know the right process until you know what that process has to support, why, and how the process will need to evolve over time.

And that is fundamentally why we have to spend thirty posts diving into past procurement “trends” so you understand what the real requirements are and what is just hot air coming out of the mouth of another slick talking speaker (or vanishing ink from their specially made pens). It will take time, especially since we will have to take a few breaks to maintain our sanity, but we have to do it.

Don’t you agree, LOLCat?

Can U Wake Me When Its Over.

Yes, LOLCat, we’ll wake you when itz over. We don’t want to drive you to drink too! (Futurists have already driven this LOLCat to drink!)