Monthly Archives: September 2024

Advanced Procurement Yesterday — No Gen-AI Needed!

Back in late 2018 and early 2019, before the GENizah Artificial Idiocy craze began, the doctor did a sequence of AI Series (totalling 22 articles) on Spend Matters on AI in X Today, Tomorrow, and The Day After Tomorrow for Procurement, Sourcing, Sourcing Optimization, Supplier Discovery, and Supplier Management. All of which was implemented, about to be implemented, capable of being implemented, and most definitely not doable with, Gen-AI.

To make it abundantly clear that you don’t need Gen-AI for any advanced enterprise back-office (fin)tech, and that, in fact, you should never even consider it for advanced tech in these categories (because it cannot reason, cannot guarantee consistency, and confidence on the quality of its outputs can’t even be measured), we’re going to talk about all the advanced features enabled by Assisted and Augmented Intelligence (as we don’t really have true appercipient [cognitive] intelligence or autonomous intelligence, and we’d need at least autonomous intelligence to really call a system artificially intelligent — the doctor described the levels in a 2020 Spend Matters article on how Artificial intelligence levels show AI is not created equal. Do you know what the vendor is selling?) that have been available for years (if you looked for, and found, the right best-of-breed systems [many of which are the hidden gems in the Mega Map]). And we’re going to start with Procurement.

Unlike prior series, we’re going to mention some of the traditional, sound, ML/AI technologies that are, or can, be used to implement the advanced capabilities that are currently found, or will soon be found, in Source-to-Pay technologies that are truly AI-enhanced. (Which, FYI, might not match one-to-one with what the doctor chronicled five years ago because, like time, tech marches on.)

Today we start with AI-Enhanced Procurement that was available yesterday (and, in fact, for at least the past 5 years if you go back and read the doctor‘s original series, which will provide a lot more detail on each capability we’re discussing. (This article sort of corresponds with AI in Procurement Today Part I and AI in Procurement Today Part II published in November, 2018 on Spend Matters.)

YESTERDAY

TRUE AUTOMATION

Not sorry to burst the Gen-AI believers’ bubble, but true automation has existed in leading Procurement technology for almost two decades, using tried-and-true rules-based RPA that supports advanced rule construction using the full breadth of boolean logic, mathematical formulae construction, and flexible (regex, clustering, etc.) pattern matching.

SMART AUTO RE-ORDER

Threshold re-order points, adaptive trend analysis (based on sales data for quantity, expected delivery time and economic order quantity for interval and volume determination), and contract/preferred suppliers can handle this better than most stock clerks for MRO / commodity stock items.

GUIDED BUYING

All you need to do this amazingly well is RPA, rules based on contract/preferred/budget, and semantically aware keyword/phrase matching, and, if you want a NLI (Natural Language Interface), traditional semantic processing to extract the key-words/phrases that are the appropriate nouns (and items of interest).

SMART (ADAPTIVE) AUTOMATIC APPROVALS

This is just RPA using a rules based workflow, thresholds, and exception-based decision pattern analysis to allow the thresholds to be adjusted within a range based on an approval and/or the platform to infer the thresholds/rules actually being applied by the approver using pattern identification (based on significant factor analysis or fingerprinting) across exceptions to suggest the necessary rule modifications.

ERROR PREVENTION

This just requires valid pattern definition, context-based range analysis, and outlier detection (using clustering, curve fitting, or trend analysis). Anything that can’t be done with the right mix of these methods can’t be done reliably.

M-WAY MATCH

Anything you can’t do with RPA using rules-based workflow, identifier matching, and confidence-based pattern matching and suggestion SHOULD NOT BE DONE. Moreover, anything that can’t be matched with certainty should be flipped back to the supplier for correction/completion (if key identifiers were missing), possibly with a suggestion/question (for e.g. does this invoice correspond to PO 123XYZ?).

SUMMARY

Now, we realize this was very brief, but again, that’s because this is not new tech, that was available long before Gen-AI, which should be native in the majority (if not the entirety) to any true best-of-breed Procurement platform, that is easy to understand — and that was described in detail in the doctor‘s 2019 articles for those who wish to dive deeper. The whole point was to explain how traditional ML methods enable all of this, with ease, it just takes human intelligence (HI!) to define and code it.

Technology DOES NOT Solve Your Talent Problem!

And any claims to the contrary are a considerable collection of cow cr@p!

So, needless to say, the doctor was disgusted at this thinly disguised advertorial by, and for, Amazon Business, which said technology, i.e. its platform, would solve your talent problem.

Not even close!

According to the advertorial, which appeared, appallingly, in USA Today:

While some churn may be inevitable, organizations can take steps to ensure their procurement teams are satisfied. One major step is ensuring they have the technology they need to do their jobs effectively.

Which is important, but not a major step.

If you ask people what they want in a job, which Gallup did in a survey to 13,085 US employees in 2022, it was:

  1. A significant increase in income or benefits (64%)
  2. Greater work-life balance and better personal wellbeing (61%)
  3. The ability to do what they do best (58%)
  4. Greater stability and job security (53%)
  5. Vaccination policies that align with my beliefs (43%)
  6. The organization is diverse and inclusive of all types of people (42%)

the doctor would bet with certainty that not a single respondent said “better technology” in their top five wants. As he repeatedly points out, which he did yet again in why do successful solution providers ruin everything by becoming tech companies?, no one wants tech or software … no one. They just want whatever makes their job easier, and that ain’t always fancy new tech.

At best, it’s a minor step that can enhance the ability to do what they do best.

Then it quotes their VP who says that since 74% of leaders seeing digitization as­­ key to better operations, the interpretation must be it’s clear we need seamless, consumer-like experiences in business procurement because this is what we are used to.

No! NO! NO! Joël Collin-Demers recently penned a great post on why we need to stop chasing an “Amazon-like” buying experience for requesters in your business! In short, in business, it’s inefficient, ineffective, and downright unpleasant. As Joël says, it’s the paradox of choice.

B2B is not the same as B2C, it’s never been, and never should be. So assuming that B2C is the solution is just plain wrong. B2B needs different solutions customized for the needs of bulk buyers.

The really depressing part about the article is they quote a lot of studies by reputable organizations with really concerning findings about just how bad the talent problem is and give a lot of good advice on what kinds of technology a Procurement organization should have in place. It’s too bad they chose to wrap it in a layer of cow cr@p and sully what could have been a good article on why a company should have a Procurement solution run by good talent (two different problems, two different arguments). They could have written the most credible piece USA Today ever published on the subject, but instead decided to pen some self-service BS rubbish with bad arguments and known wrong conclusions.

The only good thing the doctor can say about it is at least they didn’t mention the Gen-AI bullcr@p when they talked about the use of AI in procurement and got that part right at least!

Here’s the thing, if you have a talent problem, it usually comes down to one of two reasons:

  • you haven’t been able to / can’t hire enough talent
  • the talent you have is leaving

If you can’t hire enough talent, that’s usually because you can’t attract enough talent, and that’s usually because you aren’t hitting the top 6 points in the gallup poll referenced above. You need to step back and

  • evaluate your standard offer (pay and benefits) against the local & global industry norms
  • analyze your work life balance options
  • assess the freedom and control you give employees to do their job
  • gauge the job security you offer
  • minimize your (lack of) vaccination policy (which, if it exists, should match the jurisdiction in which your employee resides — i.e. you comply with legal requirements, and that’s it — the choice should be theirs)
  • ask yourself if you truly are an inclusive organization (which, FYI, does not mean DEI — see THE PROPHET‘s many rants on why this is not inclusivity as, simply put, opportunity does not imply outcome and DEI only measures outcome, which simply means it is being used in some countries as a new form of legal discrimination)

And if you can’t keep enough talent, you have to consider the top reasons people quit (as captured in a 2021 Pew Research Center survey):

  • low pay, see #1 reason for taking a new job
  • no opportunities for advancement
  • no respect
  • child care issues, see #2 reason for taking a new job
  • not enough work hour flexibility, see #2 reason for taking a new job
  • poor benefits, see #1 reason for taking a new job
  • wanted to relocate, see #3 reason for taking a new job
  • too many hours, see #2 reason for taking a new job
  • too few hours, see #4 reason for taking a new job
  • COVID-19 vaccine required, see #5 reason for taking a new job

Now, do you see “poor technology” anywhere on that list? If you do, get a new prescription and review the lists again. You don’t. That’s because, only a small fraction of people who leave a job will quote technology as one of the reasons (and the doctor would guarantee 99/100 it’s not the primary reason), and it’s probably less than the 14% quoted in the article. If you actually dig up the quote Lakeside Software research study, you see it canvassed 600 executives, IT leaders, and employees on the state of workplace technology and their digital experience. Not only is that a small sample group compared to the Gallup and Pew studies, but that’s not a homogenous sample group of employees (who were only 1/3 of the participants) — as executives and leaders (who probably don’t even have to use a computer) have entirely different reasons for taking and leaving jobs than the workforce! And even if the statistic was that high, you should be a heck of a lot more worried about why the other 6 employees are leaving than the 1 who decides he doesn’t like the tech he’s being forced to use, because you have much bigger problems than not having the absolute best tech!

Anyway, if you want more insights into Talent Recruitment, Retention, and Revolutionizing, dig into the SI archives.

SpendKey: Your Solution-Oriented Key to Spend Insights

Preamble:

As the doctor wrote on Spend Matters back in November of 2021, shortly after SpendKey‘s initial release, SpendKey was formed in 2020 by a senior team of Procurement and Spend Analysis professionals with experience at big consultancies (Deloitte, E&Y, etc.), big companies (Thomas Cook, Marks and Spencer, etc. ), big banks and Finance Institutions (Barclays, London Stock Exchange, etc.), and Managed Service Providers (Cloudaeon, Zensar Technologies, etc.) who identified a market need for faster, more accurate data processing and better analytics across the board as well as better expert advice and guidance to accompany those analytics to help companies make quick and optimal decisions to get on the right track the first time around.

After less than a year and a half of development, their initial service-based offering was already sufficient for turn-key consultant led projects and their roadmap had them on track for a completely stand-alone SaaS offering by 2023, which they delivered to the market last year.

So where are they now and what do they do? That’s what we’ll dive into in this article.

Introduction:

SpendKey has evolved from a dashboard driven spend analysis solution to a comprehensive spend, contract tracking and decision intelligence platform with a mission to provide deep insight for sourcing and procurement.

SpendKey‘s unique selling proposition is its ability to index every part, product, services and vendor with context. The product ontology and interoperability creates relationships with any attribute; providing end-to-end visibility; and a data foundation for autonomous workflows (on the roadmap), which can currently be used to power a client’s existing stack.

The SpendKey platform supports the creation of customized reports tailored to client-specific requirements. With a wide array of out-of-the-box dynamic dashboards, SpendKey offers standard insights into spend across categories and suppliers. These dashboards are augmented with advanced analysis tools like ABC analysis, trend analysis, Pareto analysis, Inside/Outside evaluations, order-to-actual correlations, and what-if scenarios, delivering a full-spectrum view of spending.

In addition to its customizable options, SpendKey provides a variety of standard reports to analyse spend, costs, goods, services, and information flows. The platform includes pre-defined reports that cover essential areas of spend analysis with customization for every client need.

SpendKey’s reporting suite has been expanded to include contract reports, budgeting reports, and dynamic MIS reports, offering a comprehensive toolkit for monitoring and optimising spend.
These tools were designed by procurement experts with decades of experience in spend analysis, ensuring that organizations can identify opportunities to not only reduce costs but also enhance overall efficiency and profitability.

SpendKey has an advanced spend-intake process that maps all of an organisation’s spend to any taxonomy (which can be theirs, yours, or a hybrid) using a multi-stage hybrid mapping process that uses known mappings, AI, human corrections, and overrides that feedback into the next mapping cycle. Once the client has worked with SpendKey to do the initial spend upload and mapping, the client can subscribe to incremental updates (that will be handled fully by SpendKey) or do self-serve via file-based incremental uploads.

So, if you read the initial analysis, what’s new?

  • improved data intake pipeline (which increases auto-mapping completeness and shortens the intake cycle)
  • project tracking
  • budget approvals
  • document analytics (and contract tracking)
  • commitments, budgets, and actuals comparison capability
  • ability to index parts, products, and services
  • line item auditability and more security controls
  • more spend sources
  • new dashboards

And what hasn’t changed (much)?

  • still no DIY (do-it-yourself) report builder
  • limited mapping audit access through the front end

And we’ll talk about each of these in turn.

Data Intake Pipeline

The data-intake pipeline is multi-step and works something like this:

1. Upload a raw data file in CSV or Excel or integrate via API

2. Validate the file against column descriptions, data formats, and language requirements (auto-translating to English if required) and apply any necessary transformations and cleansings to create records for classifications.

3. Run the current corpus of mapping rules.

3a. Push the mapped data into the live spend database.

3b. Package the unmapped transactions for web-processing.

4. Extract the supplier, product, and related information and use web-scraping (including Gen-AI models) to extract supplier and line of business information that can be used for classification.

5. Create suggested mappings where there is sufficient confidence for a human to review.

6. Push the verified mappings into the mapping rules and then retrain the machine learning on the new corpus of mapping rules to map the remaining unmapped spend and push through anything with sufficient confidence to the live system, having a human deal with the rest (or push it to an unclassified bucket).

By using multiple techniques, they are able to get to a high accuracy very quickly and turn around the client’s spend cube rather quickly compared to most consultancies using traditional methodologies. For even their largest clients, they are typically live with high mapping accuracy within 10 days.

Project Tracking

When an analyst or buyer identifies a potential savings project, they can record their find/proposal in the tool, get approval, track status, and keep stakeholders informed. All they need to do to define a project (for tracking) is to define the item or category, supplier(s), aggregated spend amount, project period, project type, and expected savings. They can add custom organizational tags or note key stakeholders if required, and then send it off for approval. Once approved, they just have to update the status and savings-to-date on a regular basis until the project is complete.

It’s not meant to be a project management tool, since most of the projects will be sourcing, procurement, contract, or other events or processes managed by other tools, just a tracking tool to track usage of the platform as well as approvals on projects before buyers or analysts go off on their own savings goose chases.

Budget and Forecasting Management

Budgeting and forecasting are pivotal components of financial management that empower businesses to plan, manage resources effectively, and navigate toward strategic goals. SpendKey platform offers advanced budgeting and forecasting tools for the financial year ahead. With predefined templates for easy budget setup, bulk data upload and download capabilities, and the option to assign specific budgets to each supplier.

SpendKey’s budget management module has specific processes for classification and mapping of the budget and spend data, aligning budget allocations with actual spend patterns. It empowers users with advanced budgeting and forecasting functionalities. With comprehensive reports, a user-friendly interface, and the ability to create, manage, and analyse budgets, users can make well-informed financial decisions. SpendKey enables users to optimise their budget allocations, monitor variances, and gain valuable insights for successful investment strategies.

Document Analytics

Spend Under Management is one of the ultimate keys to Procurement success, and this often requires a lot of Spend Under Contract to ensure supply and mitigate risk. This requires understanding the spend under contract, which requires that the contract meta data be stored in the system. As well as contract prices (to track agreed upon to invoiced to paid).

But no one wants to enter meta-data, so they built a machine learning and document analytics application that can automatically parse documents, identify key meta data, extract price tables, and present it to a human for final verification before the data is stored in the system.

The analytics can also be used on POs and invoices for verification purposes, and the user can decide whether or not to store that data in the system (or associated it with contracts).

More Spend Sources

Not only do they now support contract meta-data and contracted prices, but they also support the upload of asset-based data (for an organization to analyze the current and future value of organizational assets), payroll data (since that’s a significant amount of organizational spend), contingent workforce management data (to track services / contingent worker spend), and PO data in addition to AP data (which is the typical data source analyzed by simple “analytics” applications). In addition, if available, they will also load ESG Ranking data.

Their goal is to allow a complete understanding of organizational spend from budget to commitment to ordered to received to paid to projection using both standard cash views as well as amortization, accrual, and projected spend views.

New Dashboards

There are a slew of new dashboards, which include, but are not limited to:

  • Incliner/Decliner: highlights suppliers with increased or decreased spend compared to a user defined period
  • Contract Overview: provides analytics on different type of contract documents types, their expiry date, contract length
  • Contract Details: navigate and review the summary of data for each contract and the ability to view the respective contract
  • End-to-End Visibility: connects data from spend, contract, budget and other systems to provide end to end visibility e.g. spend vs budget vs contracted spend
  • ESG Summary: provides insights ESG score by suppliers and their relevant spend, including average ESG rating by industry and analytics on performance on each of the E, S and G areas
  • ESG Supplier Ranking: provides insights into ESG ranking for each individual supplier
  • Budget Overview: provides an overview of budget allocation and spending trends, highlighting key variances between actual spend and budget across different suppliers and categories.
  • Budget by Category: shows Budget by Category breakdown, displaying spend, budget, and variances across different levels of categories and suppliers
  • Budget by Suppliers: highlights spend, budget, and variance for key suppliers, along with an overall budget variance by category
  • Budget Distribution: shows the distribution of spend, budget, and variance across different transaction brackets, along with the corresponding transaction counts
  • Budget Detail: details supplier-specific budget, spend, and variance, including non-PO spend and transaction counts
  • Supplier Reclassification: allows you to reclassify supplier spend into a different taxonomy
  • Supplier Fragmentation: allows you to to track the number of suppliers in any category or subcategory
  • Key Insights: presents key spend insights, highlighting potential savings, category spend, new suppliers, and contract renewal dates

Add these to the existing dashboards that include, but are not limited to:

  • Main Dashboard : provides an overview of the spend across all categories of spend
  • Category Breakdown : enables the user to drill deep into any category and sub-category of spend to get deeper insights
  • Contract Kanban View : summarizes contract expiry in a kanban view to help identify contracts and suppliers to prioritise for renegotiations
  • MIS Dashboard: provides the user the ability to create their own pivot style report by connecting different data sets to generate views that were not available before
  • PO vs Non PO Analysis : provides an overview of spend compliant with purchase orders
  • Reseller Insights : provides insights to understand purchase of products from resellers
  • Savings Opportunity : provides ability to get a quick high level business case on potential savings based on certain user defined parameters.
  • Spend Summary : provides a narrative on the spend
  • Spend By Country : provides a summary of spend by different geographies and the ability to drill further by country
  • Spend Distribution : provides insights on spend by different transaction brackets to help identify low value low risk spend and suppliers
  • Spend Detail : provides view of the raw data and the enrichment from SpendKey to this raw data at the individual transaction level
  • Spend by Category : provides insights for each category and the relevant sub-categories based on the defined taxonomy tree
  • Supplier Hierarchy : provides insights at supplier level to help understand the parent and all the relevant child entities under that parent
  • Supplier Performance : provides a summary on the reduction in supplier count post data cleansing and supplier normalization
  • Supplier Segmentation : provides the ability to segment or tag a supplier based on user preferences
  • Tail Spend : provides insights and summary into tail spend (bottom 20% to 40% of the spend)
  • What-If : gives the user the ability to try different permutations and combinations of parts/products/services to understand potential savings opportunities
  • IT OPEX Budget : provides the user with the ability to view budget at supplier level or by category or cost centre, material code, etc.
  • Set Budget : provides ability to a user to set and define budget for a user-defined period
  • Forex Rate : gives the user option to set the FX rates for various currencies for a defined date range / period to enable the platform to convert all transactions into the base currency based on your company’s defined FX rates
  • Key Management : this provides the user with the ability to set distribution keys for spend allocation to business units, departments, functions etc. to help calculate recharge
  • Project Tracker : provides the ability to the user to create projects such as savings initiatives and track them in the tool. Also provides a workflow for approval of project milestones such as delivering on your savings targets.
  • User Management : allows the administrator to add new users and define their access control

And it’s a fairly extensive offering for an organization looking for a services-oriented solution to give them insights out of the box.

No DIY Report Builder

Now, companies looking for a services-oriented spend analysis solution aren’t looking for DIY initially, but as they mature in spend analysis, they will likely want the ability to modify the dashboards and reports on their own, which is baseline DIY. As they continue to mature, a few organizations will eventually want to start building their own reports and views, so it’s important that DIY is on the roadmap for an organization looking to mature in their analytics capability over time.

Limited Mapping Audit Access through the Front End

In the backend, they keep a complete audit trail of how and why every transaction was mapped where it was mapped. In the front end every single edit and amend that is made by a user is logged, along with supported commentary by the user. However, when a user goes to edit and amend a mapping in the front end, she doesn’t know if a transaction was initially mapped by rule, SpendKey‘s home-grown self-trained AI, or Gen-AI, and whether or not there was ever a human in the loop.

It’s critical that this data be pushed through to the front end because, among other things,

  1. there will always be someone who questions a mapping,
  2. when that happens, you need to know how it was mapped, and
  3. you need to know the ratio of human vs AI mapping in a category for confidence.

As of now, users can reclassify transactions within the tool, so if there is an error, they can push that to the admin or a “parking lot” for review, where, if the admin agrees, it can be pushed straight to the back end.

Showing who, or what, (initially) mapped the data, and why, in the front end is on the roadmap, and hopefully it appears sooner than later.

Summary

All-in-all, SpendKey is definitely a solution you should be looking at if you are a mid-market (plus) in the UK/Western Europe looking for a services-oriented spend analysis solution to help you analyze your spending and come up with strategies to get it under control.

You Admit You Might Be a Dumb Company. How do you avoid the fork in the road that leads to the Graveyard? Part 1

Good for you! Admitting you might be a dumb company is the most important thing to do on the yellow brick road to enlightenment.

So what do you do next? In short you:

  1. start by admitting to every mistake you are making and do something about it,
  2. look for opportunities to improve that are logical next steps, and
  3. never, ever forget the timeless basics.

Today, we’ll start with describing what you do when you identify, and admit to, one of the first five mistakes we chronicled in our re-introduction to our “dumb company” series and want to do something better. Next week, we’ll tackle the remainder of the mistakes before we move on to our eight-part series (each of which is worth much more than a piece of eight) on avoiding the graveyard if you are a dead company walking. After that, we’ll provide even more advice if you just want to be a smart company in two two-part series! In other words, SI has a lot of great helpful content lined up for you if you are a vendor that wants to successfully sail the choppy seas ahead (and not end up as another wreck on the ocean floor).

1) No More Perks

Unless you’re going crazy on perks, just leave them alone.

If a few are a bit crazy, reign them in to reasonable levels.

If they still eat up too much of your budget, find something else to cut. Start with the deadweight (and begin your search in the [micro] management suite). A useless or salary or two will go a long way to maintaining morale (and if you cut deadweight, morale will even lift).

2) No More Tech/SaaS

First, do a process time audit and figure out where your people are spending too much time on tasks that can be semi-automated to a significant extent.

Then, identify the appropriate solution to the problem and a set of potential SaaS tools to fill that solution affordably.

Then, Get SaaSy and do a SaaS audit, find the 33%+ overspend, cut it, and use that savings to get the SaaS your organization needs to be more productive and receive a return of at least $3 for every $1 spend on SaaS.

Finally, if your cloud costs are significant, Be Cloud Aware and do a cloud audit, tracking down what applications, or parts of your application, are chewing up the most CPU time. Then reign that in. Ongoing cloud costs add up faster than you realize!

3) NPD Can Wait (Sell What We Have)

Maybe heaven can wait, but hell waits for no man, and neither do the competition you don’t yet know about. No matter how good, or how bad, times are, your product must ALWAYS be improving. The minute you stop, the sales will stop as the customers will peg you as a dead company walking if you are not actively developing your product.

Segment all features into must, should and nice to have from a target customer perspective and make sure you are constantly working on the “must have” features, getting a decent number of the “should have” features that aren’t too time consuming to add into the plan, and prioritize any “nice to haves” that can swing a deal in your favour. If you have to slow down a bit because you can’t expand the team, that’s fine, just as long as you don’t stop.

Remember to keep dependencies in mind and structure development so that dependencies are always done first, to minimize release cycles.

4) No More Travel

Before you approve travel,

  1. first do an audit of all travel reasons the company has seen. Then,
  2. identify the direct and indirect ROI on past travel. Finally,
    • determine where in a marketing cycle travel actually results in actual, qualified leads
    • determine where in a sales cycle travel actually results in a selection or sale
    • determine which conferences/workshops/training events helped product management or developers

Then deny all travel that does not fall into one of those buckets.

Next, for travel that does, look at the cost vs. the projected return and how it compares to the most successful travel of the past. If a conference only results in 10 real leads, and it will cost 100K, but there’s another conference likely to result in 5 real leads that will only cost 25K, deny the first request and approve the second.

If $$$’s are tight, then restrict all travel to

  • small, focussed, cost-effective events that will generate actual leads or customer insights
  • on-sites likely to close the deal
  • low cost workshops where your product managers / developers will definitely improve their skills

5) Cut 10% Across the Board

Do a full budget review (keeping the dumb mistakes in mind) and cut the unnecessary expenses. They are MUCH higher than you think (because, when times are good, or you raise too much money, you don’t watch the small stuff and your unnecessary tail spend is just as bad as your clients).

Then, do a performance analysis (and blind peer review) of the teams across the department, especially the management teams, and cut the real deadweight.

Chances are, done right, there’s more than 10% that can be safely cut with no impact (whereas 10% across the board will damage morale to the point that the best talent might leave at a time they are the most critical).

Be sure to keep reading SI as Part 2 posts next week!