Monthly Archives: March 2017

Supply Chains Are Complex … and the Earth is Round.

Hey, some of you might not know the earth is round! It’s only been 70 years since the first pictures of earth were taken from an altitude greater than 100 miles in space (and, up until that time, the non-believers could demand visual proof)! (To be precise, the first pictures of Earth as seen from an altitude above 100 miles was on March 7, 1947. Source: NASA)

But to not know that supply chains are complex, when “global” trade is almost as old as civilization (as purchasing is, of course, the world’s second oldest profession until such time as someone can definitely prove astronomy came first), that’s, well, really unthinkable. But yet, APICS and Michigan State University just gave us yet another report that announced yet again that supply chain leaders are citing “complexity” as the top supply chain challenge. Moreover, they decided to dive into the sources of complexity and found, surprise, surprise that they are:

  • customer accommodation
  • operations globalization
  • supplier (local sourcing) complexity
  • supply chain trends

But there’s nothing new here either. Let’s take ‘em one by one.

The number of variations of a product desired is equal to the number of customers you ask. Period. Has always been. Has always will be — so the more customers you try to accommodate, the more complex your product variations, and supporting supply chain, becomes. And we’ve known this since long before Marshall M. Kirkman wrote the first Purchasing Manual.

Of course the supply chain becomes more complex as you go more global. Every locale has the potential to add languages, currencies, culture, local regulatory requirements, logistics challenges, border challenges, and so on and so on.

And then there are all the local issues faces by the suppliers — additional regulatory requirements, sustainability and CSR efforts to stay off of boycott lists, local workforce challenges, local disruption and disaster risks, and so on.

And of course trends affect complexity. They are usually the source … but they are not new issue. As we laid bare in our “future trend expose”, of the 33 trends commonly cited as future trends, only 3 were really relatively new, and only 1 was really a future trend.

Complexity has always been here, and the more global we get, the more complex we get. Nothing has changed, and if it’s not completely obvious at this point, you’re in the wrong profession.

That’s why SI has been preaching optimization and analytics since day one, since those are the only advanced sourcing solutions that can really handle the complexity of modern supply chains.

Has the Death of the Enterprise Suite Been Exaggerated?

There’s a big movement towards best of breed in many Procurement, and a bigger promotion on the part of many vendors towards such a movement. It makes sense, given that there are few suite vendors in the space compared to point-based best-of-breed vendors, which constitute the majority of vendors. But does that mean that the end of the enterprise suite is near?

Over on deal architect, the disruptor asks are enterprise suites dying? He notes the big disconnect between vendor and customer talk, including the facts that:

  • the last generation of vendor suites disappointed
    and that most customers ended up buying a number of “ring fence” applications and customizing the packages to meet their needs
  • the concentration of dollars with a handful of suppliers led to “lock-in” and bad vendor behaviour
    and the promise of economies from vendor reduction just stayed a promise
  • enterprises are finding a wide array of cloud applications
    that they themselves are weaving together

And these are true, and yes many burned CIOs are now anti-suite, but does this mean the suite is dead? There are still a number of managers and executives out there with the one-suite solution dream. Plus, as best-of-breed solutions pile up, the number of solution providers an organization has to deal with gets unmanageable for those CIOs who are under-staffed and under-resourced. So even if they don’t like the current suite providers, as too many solution providers creep in, they’ll like that situation even less.

So, while suites haven’t lived up to their promise, as Procurement organizations try to support their operations end to end with platforms, they are going to want less providers, not more. While they may not centralize on one suite, chances are they will want to centralize on a small number of multi-application vendors, and isn’t that just the definition of suite?

When a Quartet’s Not Enough, It’s Time for a Simfoni!

When you’re first effort was essentially a duo (Trading Partners), your next a quartet (MarketMaker4), what comes next? A symphony! And that’s exactly what the founders of Simfoni are trying to create. After creating two successful Procurement companies, including Trading Partners (a former e-Auction leader) and MarketMaker4 (acquired by Xchanging), the founders of Simfoni are using their experience to try and create the perfect Procurement-as-a-Service (PaaS) for end-user organizations of various levels of maturity and consulting organizations a like. Are they succeeding? Time will tell, but they are already being used, and promoted, by PWC and Deloitte (among the largest global consulting organizations), so they’re going somewhere. Where? Time will tell, but for now, we’ll give you a brief introduction.

Founded in 2015, Simfoni is a global solutions provider and solutions integrator based out of the UK and the UAE (and with an office in Australia) that combines both its own technology, it’s services, and third-party capabilities (where relevant) to bring savings and benefits to their customers. It characterizes itself as a “mobile-first” solution provider, and all of its initial applications are built around, and embrace, the mobile platform. Even it’s analytics offering is designed so the reports look good on an iPad.

The Simfoni solution consists of four main options:

  • Virtuosi
  • PocketBuyer Mobile
  • PocketBuyer Desktop
  • iOS Assessment App

Virtuosi

Virtuoisi is Simfoni’s analytics platform. Based on Microsoft BI and augmented with “roll-your-own” customized capabilities, the Virtuosi platform is custom configured for each client organization to give Procurement, Finance, Risk Management and management teams a real-time perspective on sourcing, spend, procurement and risk related performance and opportunity. It can integrate with multiple data sources and classify the data in real time for exploration through the front-end, which can be configured by Simfoni to report on whatever data the organization needs to see in whatever way it needs to see it. This is a great benefit to the platform, but could also be a limitation to an organization that wants to roll-their-own.

PocketBuyer Mobile

PocketBuyer Mobile is an app that allows the management of all low value (tail) spend in one place, whether it originates through requisitions, travel, or daily operational management. Organizational personnel on the go can use this to request whatever they need — ground transportation (car services), a new laptop, parts for the production line they are inspecting, the office supplies order they forgot to put in before they left, and literally anything else they need — when they need it. It’s intuitive and quick to use. It’s a great tail spend tool, but missing a powerful punch for larger buys.

PocketBuyer Desktop

This is where PocketBuyer Desktop should come in. However, right now this is the desktop version of the PocketBuyer application where a user can make the same requests through a web browser that they would make through the app. Literally a big screen version, the application is just as easy to use, with the major difference being that instead of taking a picture of what you need and attaching it to a request, you attach an image file. Now, the recent acquisition of PurchasingPlatform.com could change this and give Simfoni the solid P2P foundational capability they need, but, again, time will tell.

iOS Assessment App

Simfoni’s IOS aplication is native tablet “app” that provides a procurement maturity assessment and category management tool to help consultants help their client organizations identify profit improvement strategies that can also be used by internal procurement organizations with a centralized and/or center of excellence (CoE) driven model that acts as a services provider to the business.

The app encodes a detailed multi-criteria assessment that assesses an organization’s maturity on the dimensions of strategy and rating, structure and capability, category management, sourcing, contract management, purchase to pay, vendor & risk management, warehouse, IT infrastructure, spend management and analysis. It includes pre-defined outputs/answers that represent the scale of maturity against each criteria as entered, and all the consultant (or other user) has to do is select the right one for each criteria and when all is said and done, the app will automatically compute, objectively, the maturity of the organization. Moreover, the assessment is aligned with the SCOR (Supply Chain Operations Reference). It may not be perfect, but it certainly gives a solid, objective, assessment of where an organization is.

In addition, Simfoni, which does have ties to other technology and consulting providers as outlined above, has its own team of internal sourcing and procurement experts that enables it to take on the services portion of engagements as well. It’s a next generation PaaS offering which might just be the right choice for many emerging Procurement organizations. For a much deeper dive into, and discussion of, Simfoni, check out the doctor and the prophet‘s upcoming in-depth series over on Spend Matters Pro [membership required].

The Big Bad Blockchain

It’s not just the big bad wolf you have to worry about, it’s the big bad blockchain … especially when it becomes disassociated with bitcoin.

Bitcoin, which is neither good nor bad (it’s just another currency), is powered by a special type of blockchain — one that is decentralized, open, and auditable by anyone using the system. And one that is extremely hard to alter because altering a block (to steal the currency) would require not only require that every other block after it were regenerated, but all copies of such block (and there can be multiple as all nodes participating in the decentralized system can store a copy of the block) be replaced simultaneously.

Theoretically, this can be used to record supply chain transactions because we could create a virtual currency for any real world unit we want to trade (such as CELLcoins, RAMcoins, etc.) but could also encode other related information in the hash and serve as a fully auditable record of ownership of the corresponding products end-to-end, source-to-sink, but this would require that a similar, truly open, system be developed.

But right now, when you get down to it, the most “open” blockchain proposals are akin to the most “open” supplier networks … and there are no truly open supplier networks. Every supplier network of note in existence is owned by a for-profit company and even those with “open” APIs or “open” integration are not really “open”. Yes, there is an API that third parties can integrate into, but in every case there is a “catch” — either the integration is limited or integration is only permitted at a “price”. It’s not open and free — and “openness” is only “open” as long as the network decides they are “open”.

If any company owns the blockchain, then it is not truly open, and not truly decentralized, open, and auditable by anyone and everyone. And that is necessary for a true block chain solution. So until a global non-profit conglomerate with Procurement punch and tech-chops steps up and creates a truly open, decentralized, non-corporate controlled block-chain solution, let’s stop pretending blockchain is the solution we’ve been waiting for … because all we’re going to get is a prison for our data that will come with hefty prison maintenance fees. And then we won’t just be talking about how Ariba doesn’t have customers, it has prisoners. We’ll be talking about how BlockChain Company X has everyone’s supply chain data as prisoner.

So while you continue your Bitcoin Buoyancy, we’ll keep our expectations realistic.