Category Archives: Best Practices

A Great UIX is MORE than just a Version Number

… and MUCH MORE than just a minor version number!!! Soon after the doctor and the prophet published the first part of their UIX guide, the doctor received a copy of a mass email from a vendor claiming that they couldn’t agree more and that their new release, X.Y+0.1 now met that requirement. Pretty bold claim!

As we haven’t yet reviewed the current release, we can’t comment, but we imagine that it would not be that much different than X+Y, which we did see. Now, we’re not saying in this case that X+Y wasn’t good, it was, or that the vendor won’t be a leader if it participates in the upcoming solution maps, as it has as good of a shot as anyone else, and probably better in some ways, but UI and UIX doesn’t change over night, and definitely doesn’t change much on a minor, almost quarterly, release cycle.

And a bold claim like this, especially a bold claim coupled with a minor release, can cause the vendor more harm than good as it can lead to unrealistic expectations in the mind of analysts and, more importantly, potential customers that might then hold it to an unrealistic standard when evaluating the solution than the analysts, and more importantly, customers would otherwise convey upon the solution. This could cause the vendor’s solution to be scored lower than it should be, and even lower than an inferior solution from a competitor (as compared against the customer’s specific needs) which would then be, incorrectly (with respect to the customer’s specific needs) chosen.

Moreover, a great UI / UIX does not need to be sold — one look and the UI/UIX and it sells itself. All a vendor with a great UIX needs to do is promote all of the great things the solution can do and all of the processes that it solves and get in front of the potential customer. That’s it.

Remember, as Scotty always said, under-promise, over-deliver. After all, how else do you expect to get a reputation as a miracle worker?

Classic (Friday) Rant: The Key to a Successful (Virtual) Procurement Center of Excellence? No MBAs and No PMPs!

As you know, the doctor is pushing for platform-powered Virtual Procurement Centers of Excellence, and some of you might be wondering how to staff them.  The answer is, with the best Procurement Pros you can get.  Who are they? The answer is often industry, Company, and sometimes even category specific, but to get you started, we’re going to reprint this classic post that defines who they are not and, in traditional SI style, pulls no punches.

Regular readers will know I’ve been blasting MBAs (Master of Business Administration) for years and feel that the degree on its own is worthless (a belief that has started to be echoed by many progressive US companies who realize that MBAs have too much training on the coastline of business and not enough on the mainland, as pointed out by Robert Kaplan on The Hollow Science). In a nutshell, if all you have is an MBA, then, as far as I’m concerned, you’re just a Master of Business Annihilation!

But what regular readers don’t know is that I hold project / product managers with no education or skill in what they are attempting to manage in the same regard and believe that PMPs (Project Management Professional, as certified by PMI for e.g.) with no other skills are nothing more than certified, legitimized, pimps. (Think about it. All you are to them is a resource with a skill to be sold to the highest bidder. The only difference between them and a street pimp is that, while the street pimp is selling a resource with physical skills to the highest bidder or favoured client, they are selling a resource with mental skills to the highest bidder, or favoured executive.) The reason that I’ve been quiet is, until now, I’ve had no proof. But thanks to a recent Hackett Group study, nicely summarized in this Information Week article on Project Management Offices: A Waste of Money, we now know that not only are you not expected to get better business outcomes or project delivery performance if you use a PMO (Project Management Office) staffed with PMPs, but using one might actually decrease outcomes and/or performance. In fact, the study found that an IT organization’s performance actually improved once the PMO was eliminated.

What everyone seems to be forgetting is that, especially today when the level of process and technical sophistication in most fields is higher than its ever been and the pace of advancement is still relentless, you cannot effectively manage what you do not understand. While the basic principles of good business and project management are the same across disciplines at the high-level, 30,000 foot view, the implementations vary, and the knowledge needed to understand if a project is really on schedule or if a disruption is serious or not is different across every industry, organization, and project — especially in software and engineering. Every project comes with its own unique challenges, many of which will be deeply technical or process oriented. And if you don’t even understand the ramifications of the second law of thermodynamics, don’t expect to understand the challenges your design engineer is facing when the system keeps overheating at normal usage levels and how long those challenges might take to resolve.

Now, to be clear, I’m not denying the usefulness of MBA skills or project management skills, as they are useful when layered on top of a deep understanding of the organization’s supply chain or a relevant engineering degree (when one is managing an engineering project) — as they are incredibly useful in these circumstances, just denying that these degrees and/or certifications have any value on their own. In fact, as some recent studies have shown, on their own they can be down-right destructive!

So if you want a successful Supply Management Center of Excellence, forget about the MBAs and the PMPs and look for people with the skills in the disciplines necessary to create and deliver your products and services. If you produce electronics, look for designers, electrical and electronics engineers, risk management experts (to prevent supply disruptions from your dependence on rare earth metals), finance experts (to help manage working capital until the first product is sold), and any other cross-functional expertise necessary for a successful product. If you find the right experts, you can then train them in the project management and business skills that are required. And since these skills require substantially less capability and training than the disciplines the experts have already mastered, your experts will be able to master these skills given sufficient time and proper training. (On the flip-side, the chances that a PMP with only an associate’s degree in psychology is going to gain a sufficient mastery of power electronics to truly understand the project requirements to design a new overload reset switch for a local power grid are slim to none.)

To Truly Be Successful at Supplier Risk Management, ADMIRE!

Now that we’ve carefully explained that you’re just not up to the task of preventing a black swan event, hopefully you have made risk management a priority. So, to help you understand, at a high level, what this is, we’re reprinting this classic post from 2010. Most of the articles out there get the basics wrong, but if you get them right, it’s not that hard to do a decent job (especially if you get a good platform to help you out). Enjoy!

Not only is supplier risk at the forefront of thought these days, but articles on it are at the forefront of online publications as well, including this recent article in Supply Chain Digest on the key drivers of successful supplier risk management. However, most of the articles miss the point.

For example, according to this article, the trick to successful supplier risk management is to:

  1. engage top-level management,
  2. segment suppliers based on relative risk,
  3. rigorously measure and manage risk,
  4. give category managers tools and training, and
  5. collaborate with key suppliers.

Which is all good advice that is fine and dandy, but it misses the point. Risk management is all about identify risks, identifying mitigations, monitoring risks, and executing mitigations at the appropriate time. Management support is important, but it doesn’t have anything to do with risk identification or mitigation. Segmentation is a good tactic as more attention needs to be placed on suppliers which represent more significant risks, but again it has nothing to do with risk identification or mitigation. The same goes for giving category managers tools and training. Collaboration is relevant only if the mitigation requires collaboration. In other words, in this list, the only key driver is the “rigorous management and mitigation of risk”.

The reality is that success depends on your ability to ADMIRE the situation. Specifically, the ability to:

  • Ascertain the risks,
  • Define the risks that could cause significant damage,
  • Monitor those risks,
  • Identify appropriate mitigations,
  • React when signs of the risk begin to materialize, and
  • Engage the supplier when collaboration is required to mitigate the risks and
  • rinse and repeat

That’s it. But don’t forget the rinse and repeat. The biggest risks today are not the biggest risks tomorrow, so you always have to be actively engaged in risk management. Always. And since there are always more risks than you can actively address and mitigate, at any particular time you need to focus on the major ones (but still monitor for, and evaluate, the rest and as soon as they become likely or potentially costly, elevate the priority so that a mitigation plan is prepared in time).

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Spring Will Soon Be Here. Time to Clean Up Your Procurement Operation. Part II

Spring is on the way, and that means that it’s spring cleaning or not, and whether you want to admit it or not, your Procurement operation has a few messes that can be cleaned up, or at least minimized. And, as we indicated yesterday there is no better time than the present to clean those messes up … as much as you might want to leave them behind.

If you’ve taken the first step, you’ve identified (the worst of) the messes you have. Now you get to tackle them. How depends on the mess in question, but we’ll help stimulate some ideas by discussing how you might deal with the messes we mentioned in yesterdays post.

People – Maverick Buying

If the maverick buying is due to the fact that buyers just don’t know about the contracts in place, then make sure they have easy access to a centralized e-contract repository with powerful, free-text, search which understands product and services similarity. This way, a single search should identify the majority of products and services they should be buying on contract. They may still miss some contracts for obscure products or services which can only be uncovered with obscure keywords, but the majority of off-contract purchases going forward will be intentional (and then you have a different problem).

People – Master Data Degredation

Hold mandatory training sessions for all employees on procurement and data management processes, insure that the processes are adequate to prevent data degradation, and that only the right people have approval authority. This will keep data clean and useable.

People – Denied Party Dealings

Put processes in place where the only people with contract signing authority have been trained in denied party searches, sign a statement indicating that they will always do a denied party search before signing a contract, and have them immediately report potential denied parties to appropriate legal counsel in the company. Not only will the chances of a denied party transaction be greatly reduced but if, by some chance, a transaction ever occurs with a denied party, the organization will be able to show best efforts to prevent such a situation.

Process – Piles of Paper

This is an easy problem to remedy — install a modern e-Invoice management solution with EDI, XML, PO-flip, intelligent OCR, and m-way matching and the organization will not only approach 99% e-Invoice rates, but 96% straight-through processing (where suppliers deal with routine exceptions and small errors and resolve 90% of those without purchaser interaction).

Process – Slack Sourcing

This is another easy problem to ready — a modern e-Sourcing or e-Source to Pay platform with easy RFX and e-Auction creation, customizeable workflows and lots, as little or as much detail as you want, bulk attachment uploads, templated projects and weightings, and everything else an average buyer needs to get a 3-to-6 bids and a buy event configured and launched on tail spend that would normally just go to the first supplier identified.

Process – Quality Quarrels

Another problem easily remedied by technology — scorecard technology to be exact. Keep good data on all key metrics, monitor them monthly, and automatically alert the buyer and supplier when a threshold is hit or a downward trend (defined as lapses in performance over 3 regular measurement periods) is detected. This allows both parties to collaboratively identify, and correct, a root cause before slips become falls and minor losses become major losses.

Platform – No Platform

Get one — and if you’re starting from scratch, get one that supports a Virtual Procurement Center of Excellence.

Platform – 1st Generation Platform

If the budget is there and the right stakeholders can be convinced, upgrade, if not, bolt on missing functionality from best of breed providers to cover the key components of the end-to-end source to pay cycle as well as deep analytics.

Progression – Change Management

Make sure the organization has a great competency in change management. Hire someone if needed.

There is no silver bullet, or should we say, silver dustpan that can clean up every mess, just like there is no one-size fits all

Spring Will Soon Be Here. Time to Clean Up Your Procurement Operation. Part I

Spring will soon be here, that means it’s spring cleaning time and, chances are, somewhere in your Procurement organization is a mess … maybe a whole whack of messes. And there’s no better time than the present to clean those messes up … as much as you might want to leave them buried.

The first step is to identify the messes you have. Chances are they fall into one of the following buckets.

People

We’re not saying that your people are a mess, and should be let go (although that is sometimes the case), just that, probably due to lack of experience or lack of training, they are contributing to the mess. For example, they might be regularly ordering off contract or from non-preferred suppliers (because they don’t know how to look up contracts cut by the centralized CoE), screwing up the master data (because they don’t know the proper procedures for requesting data updates that can be properly verified and approved), or even signing contracts with denied parties (because they don’t know how to check the lists).

Process

Maybe you are getting a third of your invoices on (e-)paper when only 3% should be coming in on (e-)paper, maybe you are only sourcing 30% of your buys when you should be sourcing 80%, and maybe your return rate is 10%, when it should be 2%, as a result of poor quality control processes.

Platform

Maybe you are lucky (given that only 6/10 Procurement organizations have any Procurement Technology at all) and have a first generation e-Sourcing or e-Procurement platform and have primitive RFX, e-Auction, or Supplier Information Management technology, and maybe you are not so lucky. Anyway, without the right platform, you’ll be impaired day in and day out.

Progression

Maybe you have some sort of process / technology review, and / or some sort of change management capability, but chances are you don’t. In most organizations, any evolution of the function is literally seat-of-the-pants, and that’s a recipe for chaos and even disruption. Change management is critical for procurement success as modern supply chains are the most dynamic entities on the planet, with disturbances and disruptions occurring on almost a daily basis, and the severity never known until it hits.

In other words, you need to take stock of where you are and what you need. Then you need to do something. What? Come back tomorrow for part II.