Supply Management Technical Difficulty … Part I

A lot of vendors will tell you a lot of what they do is so hard and took thousands of hours of development and that no one else could do it as good or as fast or as flexible when the reality is that much of what they do is easy, mostly available in open source, and can be replicated in modern Business Process Management (BPM) configuration toolkits in a matter of weeks.

So, to help you understand what’s truly hard and, in the spend master‘s words, so easy a high school student with an Access database could do it, the doctor is going to bust out his technical chops that include a PhD in computer science (with deep expertise in algorithms, data structures, databases, big data, computational geometry, and optimization), experience in research / architect / technology officer industry roles, and cross-platform experience across pretty much all of the major OSs and implementation languages of choice. We’ll take it area by area in this series.


Technical Challenge: NOTHING!

I’m going to burst a lot of bubbles here, but there’s nothing technically sophisticated about the development and implementation of an RFX solution by any stretch of the imagination. In this day of age, one could pretty much implement a basic RFX application in HTML5, javascript, and MySQL with a bunch of open source libraries in a couple of days. Form elements, templates, basic branching workflow, weighting, etc. … you even see most of this in free survey tools. Even bulk file upload is just naming conventions. ( But it’s amazing how many vendors haven’t even figured this out. :-( )

E-SOURCING – e-Auction

Technical Challenge: NOTHING!

Again, more bubbles bursting by the dozens. Twenty years ago, implementing an e-Auction was a real challenge with relatively simple web technology, slow internet speeds, and lack of graphical frameworks that could be updated in real time. But today, there’s a host of cheap / freemium solutions that implement basic e-Auction functionality. Unless the vendor is tying in with an optimization solution in real time to create a optimization-backed auction solution, no reason you should pay much for these dime-a-dozen solutions.

E-SOURCING: Optimization

Technical Challenge 1: MODELLING

This comes in two forms.

1. Structured for “Easy” Definition

Creating one or more templates that allow a user to quickly define the entities of interest — suppliers, products, services, locations, lanes, etc., collect the bids, define the constraints, and solve unconstrained, and maybe default constrained scenarios (3 suppliers, geographic split, etc.). Making what’s hard easy is no easy task.

2. Free-Form for Custom Models

Not every model the organization will need to create will fit in a template — especially if the organization wants to optimize working capital, minimize risk, cross-optimize related categories, etc. This requires the ability to allow end users to define the models they want using a modelling interface, which will not be easy to build because how do you hand over all the power but still make it understandable by a non-programmer / non-mathematician.

Technical Challenge 2: SOLVING

It’s hard to build these models, but it’s much harder to solve them. First of all, you have to map them to a system of equations that can be solved by your, hopefully, mixed integer linear programming solver (as you want to use a solver that is mathematically sound and complete), optimize them, optimize the solver settings, and hope that everything was translated consistently and there are no conflicting or unsatisfiable constraints and the model can be solved in a reasonable amount of time. Given that solution time grows exponentially with model size, this can be quite a challenge even for moderate sized models.

E-SOURCING – Contract Management

Technical Challenge 1: Contract Analytics

A simple contract management application, which is nothing more than meta-data based contract indexing and tracking, can literally be built by a high-school student with an Access database and go head-to-head with most of the basic contract management modules out there today! In fact, most of the capabilities of most contract management modules are pretty simplistic and can be built in a matter of days with a good BPM configurator (and companies like Agiloft have done it). The exception is contract analytics (like that provided by the likes of Seal Software).

Using semantic analysis to figure out what contracts contain clauses of a certain type, what contracts are missing clauses that pertain to a certain regulation, and whether a certain clause is close enough to a required / suggested clause is not easy. Not easy at all! Semantic technology is still emerging, and trying to capture a user’s wants, even given a set of sample clauses, is quite computationally difficult!


With the exception of decision optimization and contract analytics, baseline e-Sourcing is pretty much common fare today that can be bought off the shelf from dozens (and dozens) of providers, but, as you can see, it’s not all equal — any provider with true decision optimization or true contract analytics is leagues ahead of anyone else.

And, of course, in this series, we’re not discussing the User Experience, and in some cases, a good User Experience, while not always challenging to code, can be
very challenging to define.

Next up, baseline e-Procurement!

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