Monthly Archives: February 2017

Procurement-as-a-Service: High Priority or HYPE HYPE HYPE!

Next month, the public defender will be hosting a webinar on the evolution of procurement: alignment, flexibility, and Procurement-as-a-Service where he will be discussing whether Procurement-as-a-Service (PaaS) is high priority for your Procurement organization or just hype. Guess which way SI is leaning?

First of all, let’s define what Procurement-as-a-Service (really) is. Procurement-as-a-Service is the new name for the service you get from a Managed Services Provider that combines technology, personnel, and expertise to take over part, or even all, of your Procurement operations in a transparent and effective way. They use technology to identify what you are spending on, what you need, and where savings likely are; choose categories for sourcing and assign category experts; modern technology to do the sourcing and procurement; and track the purchases and payments and do m-way matching to make sure you only pay for what you get and that you get what you are supposed to when you are supposed to. They also make the process visible through, at a minimum, a reporting and progress portal, and may even give you some access to the analytics and procurement tool to run your own reports, record inventory, and upload payments.

Second, let’s break it down.

1. Technology

Nothing new here. Given that MSPs are typically using someone else’s tech, there’s nothing new here. In fact, they’re probably using inferior tech as they are looking for something that works best at managing multiple client procurement portfolios and not at conducting that best sourcing event, bringing the best analytics or optimization solution to the table.

2. People

Note that we are using people here, not talent. MSPs have people. A lot of people. Because they have to fill a lot of seats, but not all are talented, or at least not talented with respect to your business. And this is key. Talent is appropriately educated, experienced, and relevant to your business. This brings us to:

3. Expertise

While there will likely be a number of people at the MSP with expertise in your categories, this number could be a dozen or two among thousands. And you won’t likely get them working your account, nor are you guaranteed to even get the results you would get from a GPO (Group Purchasing Organization).

Third, let’s analyze what we broke down. No guarantee of even best of breed technology. No guarantee of the right talent for your organization (based on your categories or industry). And no guarantee of the right expertise, or sufficient expertise to go around.

So what is PaaS? In SI’s view it’s a quick-fix band-aid for those organizations without enough tech, talent, or transition management capability to handle its own Procurement operations. But for any organization with any capability to acquire and manage even basic tech, attract talent, and acquire and employ expertise, what does a PaaS provider offer, especially when there are GPOs, niche consultancies, and SaaS solutions that have been offering the same, if not more, for quite some time now? The answer: so far, nothin’.

So, in SI’s view, it’s hype, hype, hype. But it will be interesting to see what the public defender has to say when he goes head to head with Comensura‘s Jon Milton on March 7, 11:00 EST, 16:00 GMT.

A Properly Overhauled Visa Program Will Benefit Supply Chains

In yesterday’s post, we pointed out that a properly overhauled end-to-end visa program would be much more effective in implementing President Trump’s goals than a wall or any other initiative that President Trump has to-date proposed to keep people out and make foreigners pay for his program. But we also pointed out that this would have a number of positive side effects including, but not limited to:

  • An increase in STEM capability
  • An increase in American jobs
  • An increase in blue-collar and white-collar salaries

In today’s post, we’re going to focus mainly on the first benefit, as this is not just an American centric benefit, and the one that will most benefit the supply chain.

Supply chains are getting longer and more complex, product life-cycles are getting shorter, service requirements more varied, and supply chain pirates are getting much, much more sophisticated and capable of subverting all of the advanced tracking and monitoring technology that you can bring to bear.

As a result, you need smarter mathematicians to model the supply chain, smarter engineers to keep up with the shorter life-cycles (and get it right), smarter business and linguistic graduates to figure out how to deliver varied service requirements globally, and smarter techs to increase security to keep your products, and your supply chain, safe. Not a hundred thousand additional low-end programmers writing essentially the same old code, maintaining the same old installed systems, and doing other tasks that can be done by any run-of-the-mill programmer and even outsourced.

If the visa program is revamped, only these smarter mathematicians, smarter engineers, smarter business and linguistic professionals, and smarter technologists will get the visas. That will not only benefit the US, but the US-centric supply chains that effectively run most global supply chains.

Revamping the Visa programs will not only force IT outsourcers to think smarter and go global, but benefit supply chains as a whole.

Forget the Wall, Mr. Trump; An End-to-Edd Visa Program Overhaul will be MUCH more effective!

You’ll accomplish three of your goals simultaneously:

  • Keep People Out
  • Make Foreigners Pay for Your Programs
  • Make it easier to deport people

Let’s take this one-by-one.

1. Keep People Out

If you make it so that the only way in to the country for any extended period of time, for any reason other than vacation, or from any country that is currently high risk, especially where there is no appropriate trade program in place, is a visa, then the majority of people will be kept out.

2. Make Foreigners Pay for Your Programs

If you introduce more visas, with more requirements, and cost-based processing fees, foreigners will end up paying for your programs.

3. Make it easier to deport people

If you make it so that deportation is automatic for anyone without a visa, provided you make it so that everyone who should have a visa can get one, including people who are already in the US, possibly illegally but who should be given the chance to be made legal, then, after a reasonable grace period, you’d face little opposition to automatic deportation.

But these are not the only benefits you’d see from an overhauled Visa program.

You’ll also see:

  • An increase in STEM capability
  • An increase in American jobs
  • An increase in blue-collar and white-collar salaries

An increase in STEM capability

If the H1-B Visa program is properly overhauled, as suggested by Vinnie Mirchandani over on deal architect, then instead of getting tens of thousands of displaced Indian programmers, who likely only have a Bachelors and a few years of experience, you will get Masters and PhDs with advanced education and experience and true innovation capability — especially if you resurrect Senator Cruz’s proposal to make the minimum salary of a H1-B $110,000 a year. No one’s going to pay the equivalent of a $50,000 a year (at best) graduate $110,000 — and if they have to pay above market for a programmer, they’re going to hire an American first (which will be much cheaper than importing a $110,000 outsourced worker) — but for a real genius in physics, chemistry, bio-tech, engineering, that will be cheap. Especially since there will actually be H1-B visas available as they will no longer be sucked up in their entirety by Indian outsourcing firms.

An increase in American jobs

As indicated above, just fixing the H1-B program will increase American jobs as it will deter bringing people in that can effectively be used as indentured servants at cheap wages. But, better yet, introduce more visa categories, requirements, and fees for hiring non-Americans and, presto, you’ll do more for American jobs than lowering taxes (which never stay down anyway), building walls to keep people out, or pushing “buy American” policies. After all, your average constituent at the end of the day is lazy and greedy — if it’s easier and cheaper to hire an American than a non-American, then unless that non-American truly brings unparalleled value to the company (and, indirectly, the country). they are going to hire American.

An increase in blue and white collar salaries

The majority of your voters are in the middle class, working decent paying factory jobs (which will now be more expensive to fill with Mexican and other immigrants from poorer nations) and white collar tech-based jobs (which will now be more expensive to fill with visa program candidates). As a result, the best Americans will be in sought after, demand bigger salaries, and, guess what, owe it all to you. Going back to my comment that your voters are greedy (as the dollar comes first in America), this will only help you as they won’t care about party at election time, only the one President that fattened their pay cheque while increasing their job security.

So, Mr. Trump, forget that Wall and overhaul those Visa programs. It’s about time someone did.

Can John Oliver educate President Trump on the Basics of Supply and Demand?

Nordstrom cut Ivanka Trump’s clothing line, President Trump tweeted about it (and how unfair it was), and it caused a media firestorm. Retail became political fast, on a decision that was, in all likelihood, not politics based. Most retailers exist on (razor) thin margins and the last thing they can afford is to carry inventory that’s not selling, which ties up money and (eventually) results in losses if the merchandise acquired is end of life.

Moreover, it doesn’t matter how well the product line may be doing overall, it matters how well it is doing for the retailer that chooses to carry it. Sometimes a product line increasing in demand flounders at a retailer for various reasons. If most of the consumers who want the product do not live near the retailer, if the retailer does not carry the hot items at the right time, or if the retailer can’t effectively promote the line, it will flounder. And the retailer, due to lack of demand through its stores, needs to make the decision to drop it before they lose money.

It’s yet another example of a statement that illustrates an apparent lack of understanding about the intricacies of supply and demand. It’s even caused people to ask:

And I can understand why. While Mr. Trump clearly understands how to do business deals, and how to build/deliver what (he believes) someone wants (or he wants), that’s deal making, not demand planning, supply monitoring, or an intricate understanding of large-scale supply and demand. Plus, his statements on unemployment rate (which is result of demand, and supply, in the job market) and how it might be anywhere from 4.9%/5.0% to 42% and GDP (as it’s impossible to have a GDP less than zero, only a trade differential) mean that he needs more education and facts on the large-scale economics that govern supply and demand.

But, as the doctor tweeted in response, who would be up to that challenge?

After watching the last episode of Last Week Tonight, he thinks he has the answer.

John Oliver.

Just look at how simplistic his Last Week Tonight show team make a number of issues in the commercials that they specifically developed for Mr. Trump.

If John Oliver can tackle these issues, why not Supply and Demand?

Why Isn’t Procurement Changing?

It’s a good question, and one the procurement dynamo recently tackled over on According to the dynamo, multiple factors are at play, including, but not limited to:

Big Jelly Theory

Attributed to Paul Finnerty, the ‘theory’ is that if you throw yourself and your team members, 100% mentally and physically, at the organization, in an attempt to change it, at best the organization will give a little shiver, momentarily, like a giant jelly, and then immediately return to its pre-existing shape and carry on, with business as usual, as though nothing has happened.

Irrational Actors

Attributed to Charles Jacobs, brain cience has found that human beings are anything but reasonable… When it comes to motivation, our approach is based on the view of classical economic theory that people are rational beings trying to maximize their economic return. This leads us to use the promise of rewards to motivate the behavior we need. But in direct defiance of the theory, people don’t respond reasonably or objectively to the rewards.

But are these the only reasons? There are two reasons that modern Procurement solutions aren’t adopted. The first is the people. They can resist, resist, and resist. The second is the management.

Management with Revolving Door Priorities

When Management falls for every fad of the day and changes priorities, processes, and even technologies every couple of years, employees get jaded and even more resistant to change then they’d naturally be. The Big Jelly gets bigger.

Maury the Management Moron

Sometimes the team, who want to do well and get their bonuses, will come to the conclusion they need a new solution, go through a detailed evaluation and select one they are willing to give an honest go. But, Maury the Management Moron, who will just see the price tag (and not the ROI) and correlate it with a potential negative impact on his bonus will say no. And that’s the end of the Procurement progression.

So, when trying to figure out a way around the conundrum, you have to go beyond just people and look at roles and how the values change as the role changes. And take that into consideration when applying your economic theory. (And, sometimes, wait for Maury to be shown the door.)