Author Archives: thedoctor

There Is No Such Thing as a Free Lunch In the Platform World

So before you rely on a network or free platform, ask yourself, who’s paying? And what is it costing you?

We’ll start with the obvious — the supplier network. Platforms, especially secure ones, cost money. It’s not just the hardware and the connectivity, but the manpower to keep the software up to date and monitor for potential breaches, fixing them before they are exploited. It’s the manpower to make sure the network is in compliance with global regulations in each country its users do business in. And if you’re not paying to find and transact with suppliers, who is? Not a third party. So that means the supplier is paying. And that cost is hidden in your cost. Now, that might be okay if the cost is low, but is the cost low? Especially for the supplier who might need to conduct all its business on the platform? If the cost is a 3% transaction fee taking from the supplier, that’s pretty high when a large network that enables 100M in business a year can be run for less than 1 Million! After all, chances are your business doesn’t have 66% profit! (Although it would like to.)

We’ll move to the not so obvious — the certified supplier discovery portal. A big database of certified suppliers for your diversity, sustainability, or regulatory compliance project. Now, we all know databases are cheap, relatively speaking, in the enterprise software world. Maybe a six figure license and a platform with an annual six figure cost to keep it up. But keeping diversity status, certification status, and regulatory compliance status up to date where such status is human verified at some point ain’t cheap. Even though a minimum page worker can read a certificate and check it against a third party authorization source, that’s still a few minutes of time and if it has to be done for thousands, tens of thousands, hundreds of thousands, or millions of entities … that time adds up, and it costs. If you’re not paying for that, chances are the supplier is for the listing and the verification. That’s fine if it’s a one-time (annual) cost, but if they also have to give up a network introduction fee, transaction fee, etc. every time a buyer wants to reach out to them through a network, that adds up.

But it’s not just supply platforms that cost you. It’s the other free platforms you use every day to find people and suppliers and communicate with them. Consider LinkedIn. It might be free, but do you have any idea how much corporate intelligence you’re giving up when your employees put deep profile information on it. When you advertise jobs on it. When you put company profile information on it. When you put detailed product spec sheets on it. And so on. If someone links and mines all that intelligence, they can figure out not only what you’re trying to sell now, but what you’re most likely working on, who’s doing it, and even how you are going to try to differentiate the offering in the market. That makes free pretty damn expensive in my book.

But LinkedIn isn’t your only worry. Chances are a number of your employees are using Google Office to collaborate. Free Google Office. First of all, that can go away at any time and take all the data stored on the drives with it. Secondly, if you read the fine print, anything you put on the drives can be used by Google as they see fit (for advertising, data mining, etc.). With so much data, chances are that yours will have, or make, any material impact or ever pass before unwanted eyes, but there’s no guarantees. Plus, with everything link shared, your sensitive data is one link away — easily obtained from one email hack.

There’s no free lunch, and the more free platforms you use, the more it is costing you. Remember that.

Forty Years Ago Today …

… the modern bulletin board was created when the world’s first computerized bulletin board system (CBBS) was created. Developed by Ward Christensen to allow him to exchange information with other computer hobbyists over a MODEM, through a simple MODEM file transfer protocol, later renamed XMODEM.

And while only one user could be connected to the BBS at a time, since the connection was over an old fashioned phone line, it was like nothing that existed before. A user could dial up, share a file, disconnect. Another use could dial up and get it. So could 10 more users. Then some could dial back up and share their updates. When CBBS came online, the internet wasn’t even a twinkle in the minds’ eye of Berners-Lee. ARPANET id not even adopt TCP/IP, which would become the protocol the internet was build on, for another five years.

Today is a historic day in internet history, and one that should not be forgotten.

How Can You Claim to Produce an Integrated Report if You Cannot Create a 360-degree Supplier Scorecard?

Integrated Reporting is an approach to corporate reporting that demonstrates the linkages between an organization’s strategy, governance and financial performance and the social, environmental and economic context within which it operates. It’s still on the rise as companies try to demonstrate their focus to sustainability and corporate responsibility.

And while there is no real globally accepted framework for integrated reporting (even though there is the International Framework) that is designed to accelerate the adoption of across the world), it’s coming as more and more investors and stakeholders demand it — and more and more countries demand it from public companies.

But if a company cannot create a 360-degree supplier scorecard, linked to all activities and relevant intelligence on the supplier and its activities, can it really produce an accurate integrated report? After all, can a company really say it’s sourcing ethically just because its suppliers all fill out a survey saying they accept the company’s ethical sourcing guidelines? Can it say it’s using sustainable packaging if only it is using sustainable packaging (that is reusable or recycled) while all its suppliers get their raw materials and components in unsustainably produced (non reusable, non-recycled packaging)? Can it say its meeting its carbon production goals if it is unable to truly capture the carbon produced by its supplier and how it should be allocated across the goods it consumes?

The answer is no.

Nor can it truly report on the (financial) risk in its supply chain if it doesn’t understand its supplier’s (financial) risk and how it impacts its supply chain. The biggest risks … that lead to the biggest disruptions … start deep … sometimes all the way back at the mines or the farms half a world away. And they have ripple effects … getting bigger and bigger as they progress up the chain.

So if you want to claim accurate integrated reports, first make sure you can crate accurate, intelligence enriched, 360-degree scorecards … for your entire supply base.

When Managing Supply, Don’t Forget …

… sometimes supply comes from within the four (virtual) walls of your business. This is one fact that is overlooked by many S2P suites which are setup to acquire external goods and services (and, specifically, finished goods and services that typically fall into indirect categories.

When we are talking about MRO, the goods and services you need might be in a storage room in another building. If we are talking about consumables, like what you might need for a new hire, everything you need might be one floor down, left behind by another hire who, after the probation period, didn’t work out.

Inventory and Asset Management are key to successful Supply Management, and to successful Procurement. One should NOT buy what one does not need. This is the other form of demand management — which is two parts. The curbing of need for consumables (less paper for the printer, less usb drives when there are secure network share folders, etc.), and the re-use of what you have. Laptops or cell phones less than 6 months old should never go unused or reassigned. Expensive MRO replacement parts can often be couriered from site to site for $40 — why spend $5000 ordering another 4-pack to fix the production line and have your minimum “3” on hand when another facility still has 8 in storage.

When you are upgrading your e-Pro / P2P / S2P system, keep this in mind. Either find one that includes inventory management or integrates with an inventory management system, and you’ll save a lot.

But to truly win, make sure it supports end-to-end asset management. It’s not just expensive hardware that often collects dust in storage closets, is also expensive assets. Like expensive snowblowers that are bought, put in the basement, forgot about when the business gets a new, better, facilities contractor and the internal maintenance team doesn’t have to do it anymore instead of being sold or sent to another facility. Expensive 3-D software licenses that are not transferred to another engineer, and then bought again 6 months later when a new hire needs them. Patent or other IP library that could be licensed by sales to a partner for extra revenue. Etc. This last part is key. Not only are unused assets costing the company money (because thy were bought to fulfill a need, which is not being met by them, but costing the company money if they can be licensed, rented, or, in the case their value becomes limited, sold.

So when you are upgrading your e-Pro / P2P / S2P system, keep this in mind too. Make sure it’s inventory and asset management or integrates with an inventory and asset management, and you will not only save a lot, but help the organization generate value.

Where’s the Beef?

Contrary to what you might expect, this isn’t a post about the beef supply chain, or the purity of beef that you source, but a post about modern media. I’m borrowing Wendy’s classic catch-phrase because, well, it’s what we should be asking anytime we watch the news or read an article that, simply put, does nothing more than summarize press releases and coverage from other sources.

Why is the doctor ranting about this now? Well, the day he’s writing this is just a little over a year since the inauguration of Donald Trump, whom, according to The Washing Post, made 2,140 false or misleading claims in his first year. But this isn’t what set the doctor off.

It’s the behaviour of media in the last year, and their repeated spreading of fake news, which is real, and, typically, not the fake news that the politically leaning media enterprises are rallying against (which each have their own set of alternative facts). And how this all popped to the forefront of his mind as he was scrolling through his archives and stumbled upon this classic post from January 2011 on why you have to Think!.

In this classic post, where he covered an awesome article by Atlantic Business of the same name, he started off by quoting the author who worries [that] we seem to have forgotten or dismissed the value of careful and considered thought because common sense seems to be in very short supply. And pondering on this, and the author’s statement that we always want an instant response or immediate gratification, he noted how it was becoming common for a journalist, or blogger, [who] doesn’t cover a “breaking” story the minute it happens, to feel that he’ll miss the boat.

And this, as the doctor noted, is a problem. We’ve gone from a world where a company would make a big announcement in a press conference and it would be a headline the next day — after the journalist had time to verify the statement, think about the impact, talk to experts, verify statements with references and customers, and so on — to a world where the press release goes up and 5 minutes later there are two dozen online sites offering “deep and complete coverage”. How “deep and complete” can a story be if someone spent 5 minutes of research on a press release and a couple of websites? The answer is NOT VERY.

But if we were still in that world, that would be almost acceptable. Today, when a company releases a press release about it’s new product, the journalists talk about whether the color will match your latest outfit based on what’s in style if it’s a phone or accessory. An executive makes a statement about the importance of sustainability and how the government should create regulations and laws, and instead they get unrelated backlash about how the additional cost will result in job loss because companies will just move to a locale where there are no regulations. The Prime Minister of Canada goes to the World Economic Form to discuss important global trade issues and all the journalists care about is what pair of socks he wore.
Who the F*ck cares?

Reporting is supposed to be about facts, issues, and deep information we can’t dig up on our own or deep thought and analysis. It’s supposed to be about the beef, not the bun, the sesame seeds, or the fancy box it came in.

And the worst thing is that our willingness to accept this as news is leading to our willingness to accept press releases as product tech sheets and scientific fact without any analysis whatsoever. At a time when we need to Think! the most, we are now, often, thinking the least when we should be echoing Dave Thomas and asking Where’s the Beef?!