Monthly Archives: August 2023

It Doesn’t Matter Where You Start, You End with BoB in SXM!

In a recent article, we asked in the battle of Suite vs. BoB (Best-of-Breed), which do you choose, and ended up with the answer of neither, but potentially both, because, as indicated in our article we asked in our post on Where’s the Procurement Management Platform, you need a true platform (that enables the creation of a true source-to-pay plus ecosystem for the various workflows and processes that need to be managed).

As a result, we indicated you could start where you wanted, provided:

  • you could conceivably manage it (if you don’t have any reasonably modern e-Procurement applications, expecting you can dive into more than a couple, learn them, and incorporate them in your daily processes in a short-time frame is completely unrealistic, so you shouldn’t buy from a suite vendor unless you can activate modules over time as you are ready for them)
  • the vendor offers, and publicly publishes, a complete Open API that, at a minimum, can be used to import and export all data the platform supports and should support the execution of core functions (so that you can script in a related module a date/time-based import/refresh process, re-execution of a core function/calculation, and retrieval of updated results)
  • the vendor offers the necessary quick-start services (you need to be able to get going quickly — if it requires a 3 to 6 month onboarding process, you’re dead in the water before you begin from both a first year ROI and adoption perspective)

But where do you end up? It depends. On what:

  • the module (Spend Analysis, Sourcing, Contract Management, Supplier Management, e-Procurement, e-Invoicing/AP, etc.)
  • the organization’s biggest need for workflow/process management
  • the organization’s biggest savings/cost avoidance/value creation opportunities

And for some modules, like e-Procurement, standard sourcing (no optimization/automation), AP (accounts payable), it’s quite hard to make the case for one over the other for an average organization (as it’s not how many features, functions, bells, and whistles, but which of those will actually add value to the organization acquiring the solution).

But for others, it’s crystal clear. And the clearest case is Supplier Management. Why? As per our recent article in our Source-to-Pay+ Series, Supplier Management is a CORNED QUIP Mash, and there’s no way that a suite, which is typically only average across-the-board, is going to be deep enough for the key functionalities needed by an organization (and the majority only address SIM reasonably well, with limited SRM-related capabilities). In fact, you’re not even going to find a single BoB provider that provides leading functionality in more than a few areas of what supplier management can encompass (especially if an organization needs quality, enablement/innovation, orchestration, or other specific direct or service support requirements, etc.). (So do you think you’re finding a suite that does everything? Not a chance!)

So you can start with a suite (that serves as a foundation for comprehensive SIM), or even a module from a BoB provider (that likely provides baseline Supplier Information Management as a Sourcing/CLM/Analytics add-on), but if you are serious about improving supplier performance (quality, compliance, cost of service), you will eventually progress to one (or, for extensive, different, Supplier Management needs, multiple) BoB solutions.

There’s Some Really Awful Procurement Job Seeking Advice Out There — Truly Awful!

On a weekly basis, the doctor scours the internet for recent developments and news in sourcing, procurement, and supply chain that major publications, analysts, bloggers, and the major LinkedIn trolls … errr … influencers might have missed. If you follow a half dozen thought leaders, analysts, major sources, etc., you won’t miss much, but deep searching can sometimes dredge up interesting tidbits, and other times can dredge up decaying waste that really should be left in the deep.

Recently, deep searching for procurement news dredged up one of the worst Procurement job seeker interview questions and answer articles he’s ever read. (These are bad in general, but if I was hiring, and you gave a single one of these answers, I’d end the interview then and there. You would have clearly demonstrated you do NOT have what it takes to survive one of the hardest back-office jobs there is, with new, unforeseen challenges arising daily.)

I’m not going to link to the article in case the author is a real person who was assigned the grisly task by the publication of writing about something they clearly had no clue about and not auto-generated by a BS OpenAI tool trained on the worse mush it can find, because they don’t deserve the embarrassment if they are a person assigned to write about a subject they were clearly clueless about. However, I am going to quote the first three questions and responses and point out why any Procurement Director worth their weight in any commodity would quickly judge you as unworthy and show you the door, before it had time to finish closing, if you rattled off one of these extremely poor canned responses presented to you.

Q1: Describe your previous experience.

Not a bad question (but the interviewer should ask you about unique aspects of your relevant experience). But

With a background of over 10 years in procurement, I bring comprehensive experience spanning various aspects of the field. My expertise includes sourcing, supplier management, contract negotiation, and administration. Throughout my career, I have consistently delivered noteworthy cost savings and streamlined processes. Additionally, I possess in-depth knowledge of both local and international procurement laws and regulations.

Is NOT a good answer.

1) Presumably if you are applying for a senior procurement role, you have significant relevant experience, how many years you have is going to be clear from your resume, and if you don’t meet a baseline, you don’t get the interview. More meaningful is related experience that brings unique insights to the role.

2) Buzzwords are meaningless. If you don’t have any experience in sourcing, supplier management, or contracts, you’re not Procurement. This is super obvious. If you don’t have any specific skills, or deep knowledge of certain processes, back to the sea with you.

3) If you didn’t deliver savings or process improvements, you would have been fired. Multiple times. It would show on your resume, and you wouldn’t get the interview.

4) What local and international laws? There are 195 countries. These all have laws and regulations that affect Procurements in, from, and through their countries. These could be finance (post-audit/clearance, anti-bribery, etc.), human welfare, sustainability, or other laws. Get specific. If you spent a decade buying fruit from South America but the company wants you to buy semiconductor chips from China, Taiwan, and Japan — how does that help?

Q2: Tell us about your qualifications for this job.

Again, not a bad question (but the interviewer should focus in on your strongest or most unique). But

I hold a bachelor’s degree in business administration with a specialization in supply chain management. Over the course of 5 years, I have actively worked in procurement, honing my skills and expertise. My experience spans the management of both direct and indirect spend, granting me a comprehensive understanding of procurement operations. Moreover, I possess proficiency in various procurement software systems and boast a solid comprehension of contract law.

Is also NOT a good answer.

1) Obvious from the resume, but I can, and probably will in a later article, argue that most business / operations / supply chain programs are NOT (on their own) qualifications for Procurement. (Future article, because this rant is more than an article in itself.)

2) Repeating an answer, inconsistently (10 to 5 years), is useless and adds nothing beyond the resume (except confusion).

3) Again, buzzwords are meaningless. Indirect to one company is direct to another and vice versa. What did you buy? And what insights did you glean (that the average schmuck has no understanding of)?

4) Various systems. Do you mean email and Excel? A 20 year old version of SAP Ariba? A modern suite like Coupa or Jaggaer? Or BoB solutions like Anydata, Bonfire, ContractPodAI, DecideWare, EC Sourcing, etc. etc. etc.

5) Contract Law? Great! But what countries, states/provinces, and contract types are you most adept with. (And remember, expertise in contracts is NOT expertise in contract law. It’s pretty easy to be an expert in contracts if you do them enough, but without a solid legal understanding, it’s pretty hard!)

Q3: How would you describe your procurement process?

Finally, a good question. But

The procurement process typically starts with the receipt of a request for proposal (RFP) from a potential customer. This document outlines the customer’s specific requirements for the desired product or service. The procurement team will leverage this information to compile a comprehensive list of potential suppliers. Subsequently, they will issue a request for quotation (RFQ) to these suppliers.

Is NOT a good answer. It’s actually even worse then the answers above!

1) If you worked for a make-to-order / build-to-order organization, that’s typically the process. If you make off-the-shelf CPG, then the process starts with a forecast and an assignment to “get ‘er done“.

2) If the interviewer doesn’t know what an RFP is, you should run for the door.

3) You can’t procure without suppliers, so this is a standard step in every 5/6/7/8/9 step process out there!

4) DUH!

Not once does it get into any specific, unique, best practice details that show the deep understanding you possess of Procurement processes.

At this point in the article, the questions got slightly better — but the answers continued to be bad or even worse than this one.

It’s sad. None of them address what a Procurement Director / Chief Procurement Officer (CPO) is looking for.

The relative priority of desires will vary from CPO to CPO, but these are the big ones that all CPOs have in the back of their minds.

1) Education – a university degree; relevant to what you are buying is typically preferred if you are junior, any degree if you are senior; how does your education relate to the position you are applying for?

2) Experience – relevant experience in what you will be buying, not necessarily as a buyer, possibly as an engineer, depending on the expertise needed to do the job (just like you can teach a mathematician accounting but you can’t always teach an accountant advanced mathematics, you can teach a trained professional Procurement but you can’t always teach an average buyer the fundamentals of technology or engine engineering).

3) EQ (Emotional Quotient) – you will have to work in a team; how did you work in a team in previous job(s) for complex procurements

4) TQ (Technology Quotient) – you will have to use technology, and hopefully continually improving and evolving tech; what modern tech have you used?

5) Think-on-Your-Feet Adaptability – nothing will ever go according to plan, and you will have to fight fires on a daily basis and find solutions quickly to prevent minor bumps leading to major derailments

6) Strategic Thinking – how should you approach a category or a problem; how could you improve current processes based on current learning; what did you do that improved a process in the past or solved a difficult problem?

7) Risk Management Mindset – you can’t eliminate all risks, but you can mitigate many and manage others; how do you embed this in your process

8) Sustainability – both environmental and corporate; you often have to find a delicate balance; what requirements did you have and how did you meet them without skyrocketing costs

9) Mathematics and Cost Modelling – a quote is not a cost, it’s a quote; you need to understand core cost drivers to judge quotes; demonstrate this in at least one answer

10) Independence – you will need to continually learn and continually self manage; your boss won’t be available 24/7 and definitely not when you need to make a critical decision quickly to keep a project moving

Five Best Practices for Buyers (when searching for software solutions)

Building on our piece on five easy mistakes source to pay tech buyers can avoid, here’s a piece on five (5) best practices to get the buy right. We’re even throwing in a bonus practice since we dove deep into the critical sixth mistake most tech buyers make in source to pay (who need to realize that No Tech Should Be Forever).

#1 Understand your core pain points

Don’t buy based on hype, buy based on need. Any good salesperson can spin you a good yarn on how much that sourcing solution will save, how that SRM will get your suppliers in line, and how that tail-spend solution will prevent your spend from going into a tail-spin. But there’s no guarantees that any of those solutions will solve your current problems, which might require e-Procurement or Spend Analysis.

Review your source-to-pay processes and determine where your pain points are. Is it in quote collection or analysis? Adequate supplier discovery, identification, or certification? Contract negotiation, implementation, or obligation management? Purchase orders and approvals? Invoice verification and matching? Opportunity identification? Supplier proliferation? If you don’t know where the majority of time is being spent and how much of that time is fighting fires, doing unnecessary tactical work, or taking too long to do something that should be quick, then you’re letting someone else identify your problems, which might turnout to be problems relatively small in the grand scheme of things.

#2 Understand which pain points can be best alleviated with technology vs. those that can be best alleviated with process improvements.

Technology can’t solve all of your ills. (And it especially can’t solve all of your ills if it is based on Automated Idiocy. Remember, that’s what the “AI” they are selling you is.) It’s important that you understand what technology can and can’t do before you look for a solution. This will help you identify honest providers offering honest wares and vapourware vendors selling silicon snake oil.

Consider the above pain points. If it’s quote collection, a good RFP system will help. If it’s quote analysis, maybe, maybe not. It may be the complexity of the ask, and not the complexity of the process, that’s the problem. If it’s supplier discovery, you will likely need a discovery platform or a large supplier network; if it’s supplier identification, possibly just a better process of identifying which suppliers you’re already using who can solve a new problem for you. Supplier certification, that requires manual review and sometimes tech can’t help at all. When it comes to contract negotiation, while platforms can shuttle contract drafts back and forth, negotiation is between people. Implementation and obligation management, that’s the kicker, and more than what you can accomplish with just an electronic filing cabinet, which is what many “contract management” systems are. Purchase orders are as much a process problem as a technology problem, most AP systems can generate them. Approvals, process problem to identify it, but often a technology problem to ensure that the process is followed. Invoice verification — manual approval is required but m-way invoice matching can help with the process by identifying the corresponding purchase order, any payments made to date, any credits accrued to date, any approvals required, and so on. Opportunity identification? Well, all of the pain points you identified represent opportunities, but beyond that, you’ll likely need spend analysis. Supplier proliferation — that’s a process and management issue. All the SRM does is track the suppliers.

If you don’t understand what the pain points are that tech can actually solve, you’ll never select the right tech.

#3 Identify your top 3 pain points that can be addressed with technology and the corresponding source-to-pay module(s) you need to address those pain points.

Once you’ve identified the pain points, whittled down to the subset of pain points that can be best addressed by technology, and then identified the three (3) that will have the biggest impact if addressed, you can continue with your quest for tech.

#4 Compile an appropriate shortlist of vendors.

Once you know what you want to address with tech, and why, you can start the process of identifying an appropriate short-list of vendors. This is not just three to five vendor names given to you, or three to five vendor names that come up first in a Google search — it’s three to five vendors that are confirmed to offer a module that will address the same (sub)set of problems you are looking to address.

This is not three to five vendors that claim to offer the same technology, as many vendors will purposely use, and sometimes abuse, the same terminology in an effort to sell completely different products. For example, sourcing, procurement, and purchasing are sometimes used to mean the same thing by three vendors, and sometimes mean completely different things by three vendors. There are vendors that call their sourcing systems procurement, purchasing vendors which just offer catalogs, and so on. You have to research their offerings carefully to determine whether or not they truly offer a solution to what you are looking for.

#5 Determine what you need in a partner before you start evaluating vendors and the RFPs they submit.

You don’t just need a vendor that can provide technology, you need a vendor that can provide a solution and work with you, offering as little or as much as you need in the way of training, implementation, integration, and services. You need a venture that will match your culture, get along with your team and make sure you are successful with their product. You need to identify everything that makes a good vendor before you start the evaluation, otherwise you will grade just on the tech, and the tech is not enough. (It’s a necessary part of the solution, but not a sufficient part on its own.) All supply chain problems have a human element. Never forget that.

#6: Bonus Get help with the shortlist and the RFP.

If you’re not familiar with the technology, the vendors, or the terminology, it can be difficult to determine which vendors might actually be able to solve your problems and what vendors will just bamboozle you into thinking they can* when you send them the RFP. Get help from someone who is an expert in the technology, the vendors, and the true capabilities the vendors offer.

* Not necessarily on purpose; a misunderstanding caused by different usages of terminology (see point #4) can cause a vendor to believe they have the perfect solution for you.

Don’t Trust an Analyst Firm to Score UX and Implementation Time!

A post late last month on LinkedIn started off as follows:

“If you’ve ever read any research papers or solution maps on procurement tech, you’ve probably figured out a couple of things.

1. It’s confusing and overly complex
2. It doesn’t cover the basic, most obvious-of-the-obvious fundamentals that everyone needs to consider.

These are:

– User interface and user experience (UI/UX)
– Ease and speed of implementation

Why don’t they do this?

Honestly, I don’t know the answer.

The cynic in me says it’s because their biggest paymasters have a horrible UI/UX and require a very complex and lengthy implementation.”

This really bothered me, not because UX and implementation time aren’t super important, they are, and they are among the biggest determinants of adoption (which is critical to success), but because anyone would think an analyst firm should address this.

The reality is that no proper analyst will attempt to score these because they are completely subjective! As a result:

  1. There is no objective, function-based/capability-based scale that could be scored consistently by any knowledgeable analyst on the subject and
  2. What is a great experience to one person, with a certain expectation of tech based upon prior experience and knowledge of their function, can be complete CR@P to another person.

Now, some firms do bury such subjective evaluations on UX and implementation time in their 2*2s where they squish an average of 6 subjective ratings into a dimension, but that is why those maps are complete garbage! (See: Dear Analyst Firms: Please stop mangling maps, inventing award categories, and evaluating what you don’t understand!) So no self-respecting analyst should do it. As an example, one analyst might like solutions with absolute minimalist design, with everything hidden and everything automated against pre-built rules (that may, or may not, be right for your organization and may result in an automated sourcing solution placing a Million dollar order with payment up front for a significant early payment discount to a supplier that subsequently files for bankruptcy and doesn’t deliver your goods) while a second might like full user control through a multi-screen multi-step interface for what could be a one-screen and one-step function and a third might like to see as much capability and information as possible squished into every screen and long for the days of text-based green-screens where you weren’t distracted by graphics and animations and design. Each of these analyst would score the same UX completely different! On a 10 point scale, for a given UX design, three analysts in the same firm could give scores of 1, 5, and 10, averaged to 5 … and how is that useful? It’s not!

(And while analysts can define scales of maturity for the technology the UX is based on, just because a vendor is using the latest technology, that doesn’t mean their UX is any good. New technology can be just as horrendously misused as old technology.)

The same goes for implementation time. An analyst that mainly focuses on simple sourcing/procurement where you should just be able to flick a SaaS switch and go would think that an implementation time of more than a week is abysmal, but an analyst that primarily analyzes CLM and SMDM would call BS on anything less than six weeks and expect three months for an implementation time. This is because, for CLM, you have to find all the contracts, feed them in, run them through AI for automated meta-data extraction, do manual review, and set up new processes while for SMDM you have to integrate half a dozen systems, do data integrations, cleansing, and enrichment through cross-referencing with third party sources, create golden records, do manual spot-check reviews, and push the data back . Implementation time is dependent on the solution, the architecture, what it does, what data it needs, what systems it needs to be integrated with, what support there is for data extraction and loading in those legacy systems, etc. Implementation time needs to be judged against the minimum amount of time to do it effectively, which is also customer dependent. Expecting an analyst to understand all the potential client situations is ridiculous. Expecting them to craft an “average customer situation”, base an implementation time on this, and score a set of random vendors accordingly is even more ridiculous.

The factors ARE absolutely vital, but they need to be judged by the buying organization as part of the review cycle, AFTER they’ve verified that the vendor can offer a solution that will meet

  • their current, most pressing, needs as an organization,
  • their evolving needs as they will need to get other problems under control, and
  • do so with a solution that is technically sound and complete with respect to the two requirements above while also being capable of scaling up and evolving over time (as well as capable of being plugged into an appropriate platform-based ecosystem through a fully Open API).

A good analyst an guide you on ways to judge this and what you might want to consider, but that’s it … you have to be the final judge, not them.

That’s why, when the doctor co-designed Solution Map when he was a Consulting Analyst for Spend Matters, the Solution Map focussed on scoring the technological foundations, which could be judged on an objective scale based on the evolution of underlying technology over the past two-plus decades and/or the evolution of functionality to address a specific problem over the past two-plus decades. It’s up to you whether you like it or not, think the implementation time frames are good or not, believe the vendor is innovative or not, and are satisfied with the vendor size and maturity, not the analyst. Those are business viewpoints that are business dependent. Analysts should score capabilities and foundations, particularly where buyers are ill-equipped to do so (and this also means that analysts scoring technology MUST be trained technologists with a formal, educational, background in technology — computer science, engineering, etc. — and experience in Software Development or Implementation –and yes, the doctor realizes this is not always the case, and that’s probably why most of the analyst maps are squished dimensions across half-a-dozen subjective factors [as they are not capable of properly evaluating what they are claiming to be subject matter experts in; as a comparison, when you have a journalist or historian or accountant rating modern SaaS platforms that’s the equivalent of having a plumber certify your electrical wiring or a landscaper judging the strength of the framing in your new house — sure, they’re trade pros, but do you really want to judge their opinion that the wiring is NOT going to start an electrical fire and burn your house down or the frame is strong enough for the 3,000 pounds of appliances you intend to put on the 2nd floor? the doctor would hope not!).

The cynic might say they don’t want to embarrass their sponsors, but the realist will realize the analysts can’t effectively judge vendors on this and the smart analysts won’t even try (but will instead guide you on the factors you should consider and look for when evaluating potential solutions on the shortlist they can help you build by giving you a list of vendors that provide the right type of solution and are technically sound, vs. three random vendors from a Google search that don’t even offer the same type of solution).

Have the Analyst Firms Finally Admitted They Don’t Know What They’re Doing?

the doctor recently went on a big rant about the analyst firms and the utter lack of usefulness in the maps they release, the focus they put on what they don’t understand, and the award categories they invent because, even though they have/had some great talent (and should be doing incredible work), what they’ve publicly released has been mostly valueless to the market they’ve been trying to serve (when it wouldn’t be too hard to provide a lot of value based on all the research and work they do). In the doctor‘s view, this is very sad because if they could demonstrate the value they provide, they would be more relevant across the market (and likely get a lot more business from smaller and/or more innovative providers who think that, because of the budgets the big players like Oracle, SAP, and Coupa have, the analysts are always going to recommend those companies anyway).

However, now he’s gone from sad to mad about something he has just heard from a couple of vendors regarding one of the biggest firms, because, if true, it means not only do they not have a clue about what is and is not valuable in tech, but they are unnecessarily creating confusing and obfuscating technology that still may be best in class.

So what have they done now? Well, apparently they are now basing 30% of the score on whether or not the vendor has “AI” in their platform, something which they’ve repeatedly proven they have ZERO ability to score whatsoever! So, either a vendor makes false, grandiose claims (and tries to use Applied Indirection to fool the Analyst Idiot that they have more than Artificial Idiocy in their Application Implementation), or they get scored low even if they have the best technology built on best practices, proven algorithms, and consistent results that give their customers a 5X to 10X ROI.

True AI adds value, but, in the doctor‘s experience,

  • up to 80% of AI claims are Applied Indirection (at best) or Artificial Idiocy (at worst); in fact, some of the “AI” in spend analysis is still the “AI” they used in the early 2000s, and the doctor would rather not spell out that sad, but still true for some vendors, racial slur
  • up to 80% of the rest, or up to 16% of tech that claims AI, is level one Assistive Intelligence; and this is typically just classic RPA (Robotic Process Automation) using human-defined parameter-based rules, and the “AI” is the automatic parameter adjustment based on user overrides … not very intelligent, eh?
  • up to 80% of the rest, or up to 4% of the tech that claims AI, is level 2 Augmented Intelligence, which is the first level of AI where the tech can learn from human feedback and provide better insights and recommendations over time on one or more specific tasks, and the first level of AI that you should even consider as AI
  • up to 80% of the rest, up to 1% of the tech that claims AI, and the highest level modern technology has generally achieved, is level 3, Apperceptive Intelligence, or Cognitive Intelligence, where the systems can not only learn from specific human feedback to recommendations but from general knowledge and intelligence available to it from integrated data sources to mimic the performance of the best human experts over time, even evolving processes, behaviours, and actions within well-defined bounds
  • and then the rest, 0.1% or less, is nearing level 4, Autonomous Intelligence, where the system can learn, evolve, adapt, and maintain itself over time without human intervention … and hopefully execute meaningful, appropriate decisions grounded in best process and fact that considers all of the relevant information available (and not go off of the rails and advise you to commit suicide because you feel bad, Hail Hitler, or sacrifice a trolley full of people and a cross-walk full of pedestrians because there might be a cat in the road — all things AI has already done)

And even where a platform has semblances of real AI, chances are that the AI (the vendor is now forced to include or arbitrarily be relegated to the dustbin because, apparently, it’s not solutions but buzz-acronymns that matter now) is producing worst results than the best traditional algorithm or methodology on expert curated data sets and dimensions. For example, the vast majority of the market believes AI improves forecasting. It doesn’t. The best AI is still inferior to the best techniques developed in the 70s when applied to the right data dimensions. All the “AI”, which is just fancy, souped-up versions of classical machine learning (using algorithms developed in the 80s and 90s for which we didn’t have enough computing power until recently), does is run all of the data through a model that integrates classification with prediction to filter out the most relevant dimensions and the best curve fitting technique as all these algorithms, at the core, are based on 50+ year old statistics! This means that, at the end of the day, their best case performance is something a human genius figured out 50+ years ago.

But to achieve that best case, the developers have to implement the right AI algorithms, tune them properly, allow them to run long enough to correctly fit (but not over-fit) the training data sets, and monitor those algorithms over time … and to do that they need to be an expert in those algorithms, which they probably aren’t. So, in order to “check a box”, and sell you a product, they are ultimately integrating algorithms that will give you an inferior result (while requiring considerably more computing power that runs up your cloud utilization bill), versus sticking to tried-and-true algorithms and processes that their experts tweaked over years and that their experts can explain and verify at any time.

And this is an almost reasonable example of what a technology vendor might do (as the best predictive algorithms are not untested “AI” but based on classical, tried-and-true, statistical or optimization functions). Most of what the doctor has seen is MUCH worse than this. And the fact that some big analyst firms are now forcing vendors with good tech to integrate underdeveloped, unproven, and often untested AI just to get a rating, make a map, or be recommended is downright stupid.

SHAME ON ANY ANALYST FIRM THAT DOES THIS! Buzzwords are not products, and unproven tech is not value. Analysts should be recommending the best solutions, regarding of the tech they are based on. the doctor is simply appalled!