Daily Archives: June 30, 2017

Why Advanced Sourcing Is Not Progressing …

“Protect me from knowing what I don’t need to know. Protect me from even knowing that there are things to know that I don’t know. Protect me from knowing that I decided not to know about the things that I decided not to know about. Amen.” That’s it. It’s what you pray silently inside yourself anyway, so you may as well have it out in the open.
Douglas Adams, Mostly Harmless, Chapter 10

Regular readers will know that there are a couple of scary statistics in this space. First of all, almost 40% of Sourcing / Procurement organizations don’t have any modern, Sourcing / Procurement specific, applications tailored for their jobs and are still making do with e-mail and spreadsheets and Microsoft products. Ack!

Secondly, the number of organizations with advanced sourcing solutions, such as modern spend analysis (with predictive and prescriptive analytics), decision optimization, and contract analytics is much, much less. For the former category, we might hit 50% of organizations this year (as spend analysis is all the rage) but for the latter (which is what identifies the real missed opportunities and captures them), maybe 20% of organizations with solutions. Maybe. Ack! Ack!

All this despite the fact that SI has literally spent over a decade trying to convince organizations to buy these solutions, even though the first (and even second generation) were clunky and sometimes difficult to use. (Unlike e-Procurement, which has to be easy to generate value, if a solution can save you 10% on a 100 Million category, you can put up with a bit of pain to save 10 Million. Heck, you can put up with a lot of pain.) However, we’re at generation three now and they are almost as easy to use as search, click, buy e-Procurement systems. They have smart templates, smart workflows, and dozens of validity checks and while you still have to know what you are doing and what the solution does, what used to be days of setup can be accomplished in hours and processing that used to take days sometimes finishes in minutes. They should be ubiquitous, but they’re not.

Why? Because even though the solutions have improved considerably over the past decades, the staff of these Procurement departments have not. They still use old tools and they still believe the solutions now are just more colourful and fanciful versions of the solutions then. And thanks to an utter lack of training (due to budgets being cut year after year after year during crunch times despite all the lip service to the value of talent and training), they don’t know better. And like poor Arthur Dent, they just can’t fathom how the old man walks from pole to pole and crosses space like it’s just not there. (Because that’s what these solutions do. They literally cross hyper-dimensional solution spaces you can’t see like they aren’t there.)

And, like Arthur, they say their daily isolationist prayer because they can’t handle it any other way. But it’s not their fault. It’s management’s fault for cutting the training budget year after year and leaving their team in the Supply Management dark ages. And now we’re all suffering.