Monthly Archives: September 2018

2020 is Fast Approaching – What Have You Accomplished? Part II

As per our last post, it was just five years ago that all of the big consulting houses — PWC, Accenture, Deloitte, etc. — were talking about the future of procurement in 2020 and how it was going to be nothing like what it was then, or should I say, what it’s like today because, to be frank, it really hasn’t changed that much in the past five years.

We ended yesterday’s post asking you what today’s Source-to-Pay have that yesterday’s applications didn’t have. To answer this, let’s consider the typical Source-to-Pay platform capabilities:

Analytics: Take out the AI classification (which takes a lot of training and can’t always outdo a human despite claims) and there isn’t a single platform out there today that has more raw analytics capability than BIQ did almost 10 years ago. Better UX? Yes. Better capability? Not really.

RFX & Auction: There’s nothing new. Better interfaces. Tighter integration. More support for third parties. But nothing new.

Optimization: Trade Extensions was the most powerful platform then. It is now. Jaggaer/SciQuest CombineNet and Jaggaer/BravoSolution (VerticalNet (Tigris)) were the close runner ups then. And they are now. And about the only new capability is greater infeasibility and sensitivity analysis. But these capabilities were in their infancy then.

Contracting: The only real improvements are in deep semantically driven contract analytics — and they only appear in specialist vendors like Seal Software or Exari (Adsensa). Not in traditional CLM platforms for Source to Pay.

e-Procurement: Catalog Management. Guided Buying. Requisitions. Purchase Orders. The song remains the same. Nothing new.

Invoice Management: e-invoicing. m-Way matching. OCR and meta-data match. The tech has become a bit smarter, but nothing different.

The fact of the matter is that we’re not that much further technologically then we were five years ago, and that’s probably why Procurement has not really progressed much in the last five years (and why it caused many to Proclaim it dead because, if something stops moving for long enough, you pretty much assume it’s dead).

And that’s why we’re asking what have you accomplished? Because it’s certainly nothing close to what all the big firms told us you would accomplished. But then again, knowing that most of these firms are all bark and no bite, what would we expect?

2020 is Fast Approaching – What Have You Accomplished? Part I

It was just five years ago that all of the big consulting houses — PWC, Accenture, Deloitte, etc. — were talking about the future of procurement in 2020 and how it was going to be nothing like what it was then, or should I say, what it’s like today because, to be frank, it really hasn’t changed that much in the past five years.

Despite all the recent talk about Cognitive Procurement and AI hitting the mainstream, Procurement platforms haven’t changed much. There’s only a few offerings outside of very point-based Contract Analytics offerings, like Dhatim, LevaData, and Xeeva, that have anything that’s truly cognitive-borderline, but even these platforms only work on a very narrow range of categories in one or two industries.

And sourcing platforms haven’t changed much either … very few have any capabilities whatsoever that didn’t exist five years ago. The biggest change is that you have more S2P suites, partly as a result of the M&A frenzy and partly as a result of PE firms investing deeply in platforms with the capability to be leading S2P platforms. Whereas a few years ago you really only had Ariba, Emptoris and Jaggaer (known as SciQuest) — although, five years ago, Jaggaer was more a collection of applications that would eventually become a platform; Emptoris was much stronger in Source to Contract than Procure to Pay; and Ariba was just acquired by SAP, which stagnated development for a few years.

But today, we have eight major S2P platforms, which are included in Spend Matters Q4 Solution Map: Coupa, Determine, GEP, Ivalua, Jaggaer, SAP Ariba, SynerTrade, and Zycus. Coupa, which was a leading P2P platform, acquired Analytics, Optimization, and Risk; built out contracts, and now has a complete S2P platform using a classic definition. Determine, which resulted from Selectica’s acquisition of Iasta and b-Pack and replatforming of everything on the b-Pack platform. GEP, which acquired Enporion in 2012, integrated, built up, and built out and now has S2P. Ivalua, which just acquired DirectWorks (formerly Co-exprise), has been building out end-to-end since the early days and now has pretty much everything except optimization from a classic S2P perspective (and is getting deeper in direct capability as a result of DirectWorks). Jaggaer integrated everything through a common data layer and had S2P, and then acquired BravoSolution last year (which also just achieved S2P from its Puridiom acquisition), and now has 2 complete S2P platforms as well as deep direct sourcing capability (from its Pool4Tool acquisition). SAP Ariba (which acquired Procuri years ago) has been developing extensively, replatforming its analytics on SAP Hana, simplifying implementations and supporting the mid-market through partners with SNAP, deepening its risk management to go head-to-head with best of breed, and so on. SynerTrade, like it’s counterpart Ivalua, has been developing an integrated platform for almost two decades, which started out as a collection of “apps” (like Pool4Tool started out as a collection of modules), and has everything one would expect as well as integrated optimization — it’s the best platform most of you haven’t heard of. And then we have Zycus — once the “dollar general” of S2P platforms, it’s come a long way and is starting to hold its own with the best of them (and with it’s new iRequest module, it’s bring S2P visibility to the masses).

But when you think about it, what do they have that past platforms didn’t have?

We’ll let you dwell on this for a day …

SolutionMaps – A Badge of Honour for All!

Spend Matters recently saluted the value leaders — SolutionMaps Best Performers — in the recent release of Q3 Solution Map. But as the Consulting Lead Analyst for the majority of SPT, the doctor wants to make one thing clear. SolutionMaps are a badge of honour for all those that participate.

Solution Maps are not your typical tragic quadrant or grave reports, chronicling arbitrary notions of “market leadership”, “vision”, or “revenue giants” of days gone past, with fuzzy definitions of fuzzier metrics highly dependent upon analyst interpretation of both vendor capabilities and customer feedback, and fuzzier definitions of inclusion criteria that can change from report to report.

They are highly objective technical analysis of very specific technical requirements with pre-defined scoring scales that allows analysts to objectively rank all vendors on the same scale crossed with raw, unfiltered, unbiased, customer feedback where raw scores are averaged by vendor — and then all these cross-products are mapped against each other using the center point on each of the two dimensions as the average.

And when you consider that the technical scores can be composed of anywhere from 100 to close to 1000 data points (depending upon whether a vendor is doing a single map or the entire set of S2P maps), you can see this is a monumental effort. The capabilities associated with every question must be clearly documented (and this can take a paragraph or two per question), exhaustively demoed, and the details maintained over time … because the analysts verify each and every claim of significance. Each and every claim. (In fact, some vendors claim responding to one of our RFIs can be more intensive than responding to an RFI from a fortune 500.)

And considering that three of the RFIs were written by the doctor, and a fourth co-written by the doctor and the maverick, you can rest assured that these questions are not broad high-level capability requests but detailed technical requests that must be answered with precision.

So, yes, all vendors who appear in a SolutionMap quadrant — be they solution leaders, customer leaders, or value leaders — have earned a badge of honor, and you should feel free to hail them all.

The Road to Riches? The Rails, My Friend, the Rails.

Every day, SI is becoming more convinced that if you want your Supply Chain to be a success, you need to ride the rails. It used to be if you were shipping goods long-haul over land, you’d ship them by train. There was no long-haul trucking and air was just too expensive. But then the war ended, Dwight D. Eisenhower championed the National system of Interstate and Defense Highways, the Federal Aid Highway Act of 1956 came into effect, long-haul trucking became an option, buses became more popular than trains for many trips, the railroads started to struggle financially, and ground eventually overtook rail for most cargo in the US.

And today, people in North America associate trains with the Wild, Wild West despite the fact that rail is, by far, the most cost-efficient way to move cargo over ground for distances in excess of 500 miles. It’s also typically the best choice for intermodal ocean freight as the major rail networks will not only have their terminals in the ports, but SLAs (Service Level Agreements) to make sure cargo is quickly transferred from ship to rail-car. For example, agreements between the Port of Halifax and CN Rail gives you a double-stack rail-service direct link to Chicago in 71 hours, which is typically a 3-day drive when you factor in daily driver limits and border crossing.

Why is SI becoming more convinced that Rail is the Future? Three reasons:

  1. Fuel Efficiency
    Efficient trains can move a ton of freight nearly 450 miles on a single gallon of fuel. Find a truck that can do that!
  2. Predictability
    The railroads control the rails – and can schedule them to maximize capacity and prevent traffic jams that can delay trucks for hours or more. Plus, well maintained lines and trains that keep to schedules suffer significantly less accidents than traffic on the road.
  3. Adoption by the East
    While the young and immature west might have dumbly abandoned trains just like it abandoned trams (and replaced them with gas guzzling polluting busses), the East is investing Billions in new (high-speed) rail lines everywhere. Consider the amount being invested in the Kunming-Singapore Railway with Laos alone committing to invest 6.2 Billion on the 260-mile segment between Kunming and Vientiane straight through the mountainous region of Northern Laos. Think about that. The GDP of Laos is only 9.3 Billion! That’s a huge commitment for a country the size of Laos, even if the commitment connects China to Thailand and will capture a sizeable portion of the 4 Trillion worth of imports and exports that flow into and out of China. This 6.2 Billion dollar railway will require 196 km of blasting and will create 76 tunnels. To put this into perspective, combined they would form a tunnel long enough to connect Korea to Japan under the sea.

It’s time to ride those rails! All around the world!