Monthly Archives: April 2019

What Elements Should You Be Looking For in a Platform (Part I)

That’s a very hard question and, to some extent the key elements will, at least in many views, revolve around what you are looking for the platform to support, but there are some elements that should be part of your S2P platform regardless of where your solution focus is.

What are they?  Where can you find some hints?  For starters, you can loo to the new version of Solution Maps, designed by the doctor, with initial results releasing in less than two months, which have refactored all of the maps to have a new Common platform section (as well as a new common section for Sourcing – SXM due to the large overlap between the requirements and today’s platforms) which focuses on areas that are critical to S2P success regardless of your focus. 

This new Common section is broken down into five categories

Analytics
Configurability
Supplier Portal
Foundational SXM
Technology

And they key requirements for any platform can be found in these four categories

Analytics
Technology
Configurability
Supplier Portal

Let’s start with analytics.  This has four sub-categories, all of which are vital:

Data Schema

  As today’s information economy runs on data.  Big data.

Data Management

  As this data is constantly expanding and changing.

Metric Management

  As you can’t manage what you can’t measure

Reporting

  As we need to extract the data we need to do our jobs.

Now let’s look at technology.  Each of the seven sub-categories it contains are vital:

Data Management Support

  Which looks at foundational technology requirements to handle the data needs of today and tomorrow

Document Management Support

  Which looks at the additional technology required for document management (as the business world runs on documents and contracts)

Core Platform 

  Which looks at the architecture and software stack designed to support an evolving system

Automation

  As efficiency is about automation, usually accomplished by RPA and, in some cases, assisted intelligence (the first level of AI, which is where most companies are)

Standards and Integration

  As one platform can’t do it all.  Just like the internet does not support the One Ping. 

Emerging Technology Support

  As platforms must keep up

UX Layer

  As the platform must be usable. By the average user, not just the PhD with years of esoteric knowledge. 

Tomorrow we’ll outline the other categories and then in future posts we’ll dive into some of these key areas and define what they might mean in plain English. 

Stay tuned. 

For Global Procurement You Need a Global Platform

As per our post from a couple years ago, Procurement is Global. Platforms should be Global. Truly Global. in order to be of use to a truly global organization.

And, furthermore, as we also pointed out, the platform is only of use if it is adopted. This latter point is key. And we’ll focus on this in our post today as our last point addressed the key steps of a global rollout.

So, what are the key steps for a global adoption?

6. True Multi-Lingual Support
While your key business managers will speak English as it is the global language of business, your average worker won’t, or at least won’t speak it well, and since the most successful platforms are used by more than just senior buyers, you want everyone — including the warehouse worker who accepts the stock or the maintenance worker who keeps the inventory or the AP clerk that makes the local payments — to be able to use it easily. So it needs to support every language used by your organization. We know that no S2P platform supports every language out-of-the-box, but the best ones make it easy to add new languages through auto-translations and easy overrides where the translations fail.

7. Localized Workflow Support
Just like languages differ, so do workflows. Sometimes it’s due to local operating practices (with regards to how a local buyer buys, or inventory manager choose to interact with the systems), and sometimes its due to local regulations (in terms of invoice acceptance, processing, and payment processing). Either way, it should be simple to tweak the workflow by locale for as many locales as you need.

8. Varying Levels of Automation
In some offices, senior buyers and other approved users can spend up to a threshold with no approvals required, so the requisition should auto flip to a PO which should be auto-flippable to an invoice when the supplier sends a shipping notice which should be auto flipped to a payment approval when the warehouse worker records all parts received. In other offices, approvals, or at least hold periods (where managers can choose to intervene or not) will be required. Some buyers will be comfortable with auto-buys to replenish MRO and tail-spend categories (from catalogs or automated auctions against approved suppliers), others will want to manually do everything. The system should support this.

9. Fully customizeable dashboards by user by screen/module
Everyone should be able to see what they want, how they want, when the want. And they should have lots of easily adjustable templates to start from.

This isn’t everything, but it’s a key start. We’ll be talking about platforms more in the months to come, as platforms are going to get us to full Procurement 3.0 and next generation platforms will bring about Procurement 4.0 in the latter part of the next decade.

Dear Procurement: You Aren’t Nearly As Advanced As You Think You Are

One of the best presentations at Ivalua Now Paris last week (which the doctor summarized in a post over on Spend Matters UK on how the conference was A Huge Success and a Testament to their growth) was Duncan Jones’ presentation on Successful Procurement Transformation that summarized a recent survey on enabling smarter procurement that clearly proved what the doctor and other leading analysts already know: most Procurement organizations believe they are considerably more advanced than they are.

The survey asked Procurement departments to rate themselves as beginner, intermediate, or advanced. The results, which, unfortunately were not unexpected, indicated that:

  • 65% of respondents said they were advanced,
  • 31% said they were intermediate, and
  • 4% said they were beginner

When the reality is that, according to Forrester

  • 16% of respondents are advanced
  • 24% of respondents are intermediate
  • 60% of respondents are beginne

On the Forrester scale which, by the way, is not as arduous as the scale used by the doctor (but we’ll get to that in another post). In other words, four times as many organizations said they were advanced as were actually at that level. So if you think you are advanced, there is at most a 1/4 chance you are advanced and at most a 2/3 chance you are intermediate or better.

This means that you as a Procurement organization need to take a step back, get a third party evaluation, and understand the reality of where you are. It’s totally okay if you’re not as advanced as you think you are because neither are your competitors. And, in fact, if you are willing to get an honest third party assessment and use it as the foundation for improvement, you are way ahead of your competition which still has their heads in the sand like an ostrich. Because, thanks to modern platforms and well understood best practices that can be efficiently experienced by efficient consultants who have been doing it for a decade, you can master intermediate levels of performance quite quickly, and that puts you in the top 40% in a very short time-frame. And it often doesn’t take a lot of improvement to see significant savings, process improvements, or value generation. (With many more tangible improvements to come as you embark on that first 3 to 5 year transformation journey.)

The key to advancement and tremendous success in Procurement is simple:

  • understand where you are
  • accept where you are
  • put a realistic plan in place for mid-term transformation (3-5 years) with well defined milestones along the way
  • commit to change
  • monitor, measure, and stay on track

Now that the best S2P suite providers can roll out enterprise implementations in a quarter, you can enable processes that lead to significant ROI in 6 to 12 months, and take it step wise from there. But it all starts with accepting the reality and committing to change. The system, the process, and your hard work will take care of the rest.

And a big thank you to Duncan to proving the reality!

Procurement 4.0: We are Borg?

One of the more interesting talks at Ivalua Now Paris was Natacha Trehan’s (of the University of Grenoble Alpes) talk on the “Future of Procurement”. In it she said that in the noetic economy of tomorrow, Procurement’s function will be to drive complex ecosystems on hyper connected platforms that empowers a neuronal organization that values collective intelligence.

I don’t know about you, but it sounds to me like we’re going to be part of the corporate Borg. For those of you who don’t know what the Borg are, they are a fictional alien race of cybernetic organisms in the Star Trek franchise linked in a hive mind called “the Collective”. They expand by way of assimilation where they forcibly transform individual beings into drones by way of nanoprobe injections and cybernetic implants. And their motto is “resistance is futile”. Which often seems to be the case once a large enough organization embarks on a given trajectory.

So why does she think we are on that path? Which, except for the neuronal part sounds great to the doctor because Procurement does need to learn to drive complex ecosystems on hyper connected platforms that empower a knowledge-driven organization that values collective intelligence — he’s just not fond of the “neuronal” aspect that can be easily misconstrued and misapplied.

Because the biggest future challenge for Procurement, once an organization reaches and masters 3.0 (and almost no organization has), is to reinvent the business model. Once procurement has achieved its sustainability of supply, cost reduction, and risk management objectives, it needs to be able to continually create value to elevate its function and maintain its central importance to the business. Be it supplier development, new product introduction, innovation, or business transformation, Procurement will need to serve up what the business needs.

As Natacha says, Procurement will need to become more entrepreneurial and energetic and harbour the propensity to shake up routine and define innovation. After all, once you’ve squeezed the fat out of the margins, optimized the production and distribution process, and minimized the risk, the only way to find value is to truly innovate the product or service.

Plus, as resources continue to become scarce, regulations continue to multiply, and trade winds continue to change, more and more innovation and creativity is going to be needed to meet sustainability goals.

And then there’s the fact that more and more product-oriented markets are transforming to as-a-service markets. People aren’t buying, or even leasing/renting, vehicles anymore, they are switching to uber-like models in both their personal lives and their business lives. Who knows what will be next.

Plus, as companies progress on their Procurement journey, they all want the same, most innovative supplier as they admit only so much innovation can happen within their four walls. This will shift the balance of power back to the supplier unless you are the most advanced, and best, customer to work with (in which case the odds will be about even as they will want you as a customer). “Customer of choice” is going to be measured not on dollars and volume, but what you bring to the table.

In other words, the Procurement function will need to continue to change, continue to advance, continue to collaborate, and continue to connect … but let’s make sure to avoid those neuronal implants, just to be on the safe side. 🙂