Monthly Archives: September 2015

Technological Damnation 79: Big Data / “Data” Scientists

About the only technological damnations that grind the doctor‘s gears more than “Big Data” are Mobile, Apps, or The Cloud (which may be the worst damnation of them all).

So why is this a damnation? Besides the facts that “big data” is not new and the term “data scientist” is bullish!t? Let’s list a few reasons:

  • it’s unnecessary confusion for the sole purpose of
  • fear marketing and
  • labour cost inflation.

Let’s take each of these one by one.

Big Data is NOT new

We’ve always had more data than we could fit in memory, or even on a hard disk. When the doctor was getting his degrees back in the early 90’s, he was focussing on (multi-dimensional) data structures, algorithms, and computational geometry (which are the fundamental computer science and mathematics theories that underlie databases, analytics, and optimization) and when he was designing structures and algorithms to process this data efficiently and effectively, and studying their ability to scale, he regularly ran into the problem of not having enough memory to fit all of the data in memory that he wanted (to study large scale applications) or not enough disk space to store everything he wanted (and support swap files). Physicists, (GIS) engineers, operations researchers, etc. always had (access to) more data than they could work with at any one time or even fit on a single machine. Nothing has changed. Yes it is true that we can collect data faster than ever with so many devices with microprocessors and onboard memory collecting data every second, but it’s also true that hard drives and memory have scaled. Back in the day, the doctor‘s first PC had a 10 GB hard drive and 1 MB of RAM (and that was a lot). Now, the doctor‘s three-year old mid-end laptop has 8 GB of RAM and a 500 GB hard drive (and the average server has 256 GB, or more, of RAM and a few terabytes of hard drive space).

“Data” Scientist is a bullsh!t term

Pardon my language, but what the hell is a “data” scientist. Don’t you understand that every scientist is a “data” scientist. All scientists collect data, analyze data, interpolate data, make hypotheses on data, and collect more data to test those hypotheses. All scientists do this, no exceptions. Some, such as statisticians or computer scientists, focus more on data analysis and interpretation than others, but they are not a “data” scientist. They are a statistician or a computer scientist.

Unnecessary Confusion

Pretty much everyone who uses “big data” or “data scientist” is using it in such a way as to do their best to confuse you to the point where you feel stupid and ask them for help. Help which will cost a small fortune.

Fear Marketing

Most utilization of the terms is designed to not only confuse you, but instill as much fear as possible because it is designed to make you feel like you don’t understand it, but your competitors do and, moreover, if you don’t figure it out fast, your competitors are going to use their understanding to derive insights that these competitors will then use to steal your customers and your marketshare — so you better pay a big fistful of cash to take a ride on the “big data” bandwagon fast, or risk being stranded on the side of a desert road with no horse, no water, and no map.

Labour Cost Inflation

Because the providers who are driving the “big data” bandwagons are driving unnecessary demand for their analysts (which they are calling “data scientists”) through their confusion-based fear marketing, and rapidly reducing availability of those resources (beyond normal utilization of those resources) when they are successful, they are able to unrealistically inflate prices because of the perceived lack of resource supply. Net effect, you pay more for resources you may not even need!

In short, not only is “big data” an eternal damnation (and one that children of the 80’s would proclaim originated on Eternia), but it is a damnation that will be in your face day-in and day-out until the providers find a new fear-driven bandwagon to thrust upon you.

Technological Damnation 85: Apps

Of all the technological damnations, this is probably one of the most annoying. Procurement is B2B, not B2C, and there is not an app for that. The only app we need in Procurement is an app for getting each and every person who says there’s an app for that diagnosed as mentally insane and committed. Because, when it comes to Enterprise Procurement, there is no app for that!

In order to make this crystal clear, let’s define exactly what an app is:

An app is a piece of software designed to run in a browser or on a mobile deice

So why isn’t this enterprise procurement? Again, let’s start with a definition.

Enterprise Procurement is the act of buying raw materials, components, goods, services, works, or other consumables from an external source to support the needs of the business and its consumers. This act involves a process that starts with (strategic sourcing), moves on to contract negotiation and management, involves supplier performance and relationship management, generates requisitions and purchase orders, that are followed by invoices and goods receipts, matches, payments, and inventory management.

You really think there is an app for that? Really?

Let’s be clear.

  • Approving a requisition is not an enterprise procurement application.
  • Viewing a report is not an enterprise procurement application.
  • Checking the status of a shipment is not an enterprise procurement application.
  • Placing an order is not an enterprise procurement application.
  • And every other tinky-dink feature you can do in a browser is not an enterprise procurement application.

When it comes to enterprise Procurement, there are only platforms. Anything less is a waste of time, money, and bits. But the app bullsh!t is increasing by the day. It’s a damnation. See it for what it is.

Procurement 2020: We’re Off Track, But Can We Get Back on Track? Part II

In part one, which lamented our recent post that asked if we were on track for Procurement 2020 because the reality is that we are way, way, off track, we discussed business process sourcing, supply performance management (SPM) and supplier relationship management (SRM), and knowledge management, three of the six levers that need to be properly pulled to get Procurement on track for 2020, as identified by Hackett way back in 2008. In this post, we will discuss the other three levers and discuss whether or not there is still time to properly pull them.

Talent Management

While tomes can be written about this subject, of all of the fixes that are required, this is the easiest. All one has to do to get things back on track is to reinstate the training budget, give the team the time to get and take training, give Procurement the resources it needs to attract and retain top talent, and sit back while the talent takes your Procurement up a notch. That’s it. It really is easy-peasy. You don’t even need the big red button!

Next Level Strategic Sourcing

This is also an easy fix. Get a true next generation sourcing platform designed for complex tenders that can support true strategic sourcing decision optimization and next level sourcing, get training on what next level sourcing is, and just do it. For more information on what this is, check out Sourcing Innovation’s paper on Optimization: What Comes Next and its upcoming paper on Complex Sourcing, being released on October 7th.

New Product Development & Introduction

Once processes are under control, knowledge is captured and maintained, talent is where it needs to be, platforms are in place, and next level sourcing processes have been instituted, Procurement is going to get results and respect. When it is able to demonstrate to Engineering how involving it earlier in the process will save money and increase value, it will get invited to the table earlier in the process and will eventually be asked to consult and provide guidance on every NPD/NPI opportunity. It will help lead the organization into new markets, rather than just scrambling to make the best of the poor situation it is placed in. And it will be able to do this because it will already have collected the market knowledge, already have cost model baselines that it can use to create should-cost models, already know where to look for the market intelligence to predict the costs associated with different options, and so on.

In other words, we can get back on track, but only if some major changes happen.

  1. Talent needs to come first.
  2. Knowledge needs to be captured.
  3. Platforms and processes need to be in place to support purchasing and capture spend.
  4. Suppliers need to be engaged, monitored, and developed.
  5. Sourcing needs to be taken up a notch.

This is all feasible with today’s knowledge and today’s platforms, and the vision can be realized, but a serious commitment has to be made by the organization which also has to stop focusing on, and more importantly, measuring Procurement on savings and savings alone. It’s not cost reduction. It’s cost avoidance and management. It’s knowing that going too far to save a penny today will cost a pound tomorrow. It’s making the best overall decision to not lower costs now at the expense of being locked into higher costs for for years to come when the organization should be investing in suppliers and platforms that will generate additional value for the organization down the road.

Will it happen? In a few, forward thinking organizations, yes. In the average organization still dancing to the drum of Wall Street, probably not. And it’s a shame. But as global market situations worsen and short-sighted companies begin to fail, far-sighted companies, where Procurement is encouraged to take a longer term view, will gain market share and those that re-institue long term five and ten year plans will prosper the most. While the state of affairs won’t be what they should when we reach 2020, maybe 2030 will see an improvement (and Procurement optometrists will have to adjust their vision scales).

One Hundred and Ninety Years Ago Today

We entered the age of the steam locomotive when the Stockton and Darlington Railway is ceremonially opened in North East England as the world’s first public railway to use steam locomotives. One of the first uses of this railway system, and the steam locomotives that powered it, was the movement of coal to ships, and the age of steam-powered logistics began.

Soon after their introduction, steam locomotives dominated the world of railway transport until the middle of the 20th century (when they were gradually superseded by electric and diesel locomotives). However, they dominated the railways for well over 100 years (as evidence by Walter Lucas’ 1981 collector’s edition release of 100 Years of Steam Locomotives as they retained their dominance in the US until the 1950s and in the UK until the 1960s). This is not surprising considering that, near the end of their reign, they were capable of producing over 6,000 horsepower (as the Union Pacific Challenger could in 1936) and even the smaller locomotives at the time were capable of producing over 3,600 HorsePower (including the 4-8-4 Northern Class Locomotive #3101 built in 1928 by the Canadian Pacific Railway in Montreal, see this silent film).

And these steam engines changed the world. Steam power, first widely used in steam locomotives, not only transported the goods created during the industrial revolution, it drove the industrial revolution. It powered the factories, the ships, and the locomotives. And on land, nothing was more powerful, or faster, than the locomotives for transport.