Monthly Archives: March 2018

One Vendor Won’t Rule Them All … And One Ring Won’t Bind Them!

A common question (from buying organizations and investors alike) these days is which vendor is going to win out in the end? Who will still be around in 5, 10, and 20 years and which horse should take all the bets?

The answer is no single vendor is going to win. And the reason for that is many-fold. One, different types of companies need different types of vendors. That’s why SpendMatters SolutionMaps (where 3.5 of the 4 SPT maps were developed by the doctor) classifies vendors according to six different buying personas. While six personas doesn’t quite cover all the buyers out there, it covers the majority and shows that most vendors don’t do everything well.

Two, different locales around the world have different regulatory and compliance requirements, as well as (culturally) different ways of doing business, and one vendor is not always going to be the right fit, if they are even a fit at all.

Three, different organizations are at different stages on their e-Sourcing journey and need a different amount of complexity — and if they are just beginning, there’s no way they will be able to start with, and adapt to, a complex 42-step sourcing platform designed as a one process fits all. (Yes, those still exist, and they are the reason some organizations are abandoning major players with solutions they’ve invested millions in for mid-market solutions that cost a tenth of the price with a tenth of the functionality.)

As a result, different organizations value different things depending on where they are on their journey. Companies just starting their e-Sourcing journey just want a simple, configurable, workflow that can be configured to minimal requirements. Companies a bit further along want to easily centralize and manage their supplier information. Companies further along want to be able to centralize all their spend and do advanced analytics. (Or vice versa, depending on who whispered in their ear first.) Companies quite advanced on their journey want advanced modelling and optimization capabilities.

In other words, the sourcing platform with the best workflow management solution will be a winner among the newbies. The sourcing platform with the best supplier lifecycle management platform will be a winner among those that need good supply base management. The sourcing platform with the best analytics will be a winner among those that need a good understanding of their spend. And the sourcing platform with the best optimization capability will be a winner among those that need to extensively model and optimize their supply chain.

Just like there are a multitude of winners in real estate who can make money focussing on low rental, suburban housing, condos, high-end mansions, low-end commercial, and high-end commercial, there will be a multitude of winners in the sourcing space. The best in each category — and each persona — will win.

The Days of Black Box Marketing May Soon Be Over!

In what marketing will refer to as the good old days of the Source-to-Pay marketplace, when the space was just emerging and most analysts couldn’t see past the shiny UI to what features were, or more importantly, were NOT, lurking underneath, it was a wild-west, anything goes marketplace.

Marketers could make grandiose claims as to what the platform did and did not do, and if they could give a good (PowerPoint) presentation to the analysts, the analysts would buy it and spread the word, and the story would grow bigger and bigger until it should be seen as crazy and unrealistic, but instead was seen as the new gospel according to the power on high.

Big names would get bigger, pockets would get fatter, but customers would lose out when they needed advanced functionality or configurability that just was not there. On the road-map, maybe, but would it get implemented before the company got acquired by a bigger company, which would halt innovative development dead in its tracks?

But those days, which still exist for some vendors with long-standing relationships with the big name analyst firms, may soon be numbered. Why? Now that SpendMatters is doing SolutionMaps, which are deep dives into well defined functionality, a customer can know for sure whether or not a certain provider has a real solution in the area, how deep it goes, and how it compares to other providers. As a result, the depth of insight that will soon be expected by a customer has been taken up a couple of notches, and any analyst firm and consultancy that doesn’t up the bar, is going to be avoided, left behind.

Once (potential) customers realize the degree of information that is available, and should be available, they’ll never settle for less. And that’s a good thing. Because it means the days of black box marketing will soon be over. While North America may never be a Germany where accurate technical specs lead the way, at least accurate claims will. And every vendor will be pushed to do better.

A Great Day in American Automotive History …

Sixty years ago Today the Ford Motor Company produced it’s 50 millionth automobile the Thunderbird, and fifty years ago today General Motors produced it’s 100 millionth automobile, the Tornado, putting the automobile revolution in full swing and launching the Automotive industry to its height (before their downfall began in the 1970s and 1980s with a series of engineering, manufacturing, and marketing mishaps and disasters, a downfall which continued in the 1990s where the recession resulted in weak auto sales and operating losses). Up until the 1980s, the US was the largest automobile producer in the world until Japan overtook it.

Producing a million units of anything in the 50′s was a feat, especially for something as large and complex as an automobile, and the fact that American companies could do it … and do it well … means that they used to have great supply chain management. Remember, even local and vertically integrated supply chains are still supply chains and this goes to show the value of near-, and home-, sourcing and (deep) control over key aspects of your supply chain.

Significant (non optimization backed) cost savings always comes at a price, and that price is usually an increase in risk. Be careful. Or your company could meet the same fate of the US automotive manufacturers, many of whom had to enter into bankruptcy and receive big bailouts from the government just to stay alive.

Get Your Head Out of the Clouds!

SaaS is great, but is cloud delivery great?

Sure it’s convenient to not have to worry about where the servers are, where the backups are, and whether or not more CPUs have to be spun up, more memory needs to be added, or more bandwidth is needed and it’s time to lay more pipe.

However, sometimes this lack of worrying leads to an unexpectedly high invoice when your user base decided to adopt the solution as part of their daily job, spin up a large number of optimization and predictive analytics scenarios, and spike CPU usage from 2 server days to 30 server days, resulting in a 15-fold bill increase over night. (Whereas hosting on your own rack has a fixed, predictable, cost.)

But this isn’t the real problem. (You could always have set up alerts or limits and prevented this from happening had you thought ahead.) The real problem is regulatory compliance and the massive fines that could be headed your way if you don’t know where your data is and cannot confirm you are 100% in compliance with every regulation that impacts you.

For example, EU and Canada privacy regulations limit where data on their citizens can live and what security protocols must be in place. And even if this is a S2P system, which is focussed on corporations and not people, you still have contact data — which is data on people. Now, by virtue of their employment, these people agree to make their employment (contact) information available, so you’re okay … until they are not employed. Then, if any of that data was personal (such as cell phone or local delivery address), it may have to be removed.

But more importantly, with GDPR coming into effect May 25, you need to be able to provide any EU citizen, regardless of where they are in the world and where you are in the world, with any and all information you have on them — and do so in a reasonable timeframe. Failure to do so can result in a fine of up to €20 Million or 4% of global turnover. For ONE violation. And, if you no longer have a legal right to keep that data, you have to be able to delete all of the data — including all instances across all systems and all (backup) copies. If you don’t even know where the data is, how can you ensure this happens? The answer is, you can’t.

Plus, not every country will permit sensitive or secure data to be stored just anywhere. So, if you want a client that works as a defense contractor, even if your software passes the highest security standards tests, that doesn’t mean that the client you want can host in the cloud.

With all of the uncertainty and chaos, the SaaS of the future is going to be a blend of an (in-house) ASP and provider managed software offering where the application, and databases, are housed in racks in a location selected by the provider in a dedicated hardware environment, but the software, which is going to be managed by the vendor, is going to run in virtual machines and update via vendor “pushes”, where the vendor will have the capability to shut-down and restart the entire virtual machine if a reboot is necessary. This method will also permit the organization to have on-site QA of new release functionality if they like, as that’s just another VM.

Just like your OS can auto-update on schedule or reboot, your S2P application will auto-update in a similar fashion. It will register a new update, schedule it for the next, defined, update cycle. Prevent users from logging in 15 minutes prior. Force users to start log-off 5 minutes before. Shutdown. Install the updates. Reboot if necessary. Restart. And the new version will be ready to go. If there are any issues, an alert will be sent to the provider who will be able to log in to the instance, and even the VM, and fix it as appropriate.

While it’s not the one-instance (with segregated databases) SaaS utopia, it’s the real-world solution for a changing regulatory and compliance landscape, which will also comfort security freaks and control freaks. So, head in the cloud vendors, get ready. It’s coming.