Category Archives: Best Practices

Digital Procurement Transformation Requires Strategy and Design …

… not just new technology! (As THE REVELATOR would say, an agent-first approach, not an equation-first approach.)

A recent article on Turner and Townsend noted that while effective digital-first procurement strategies are key to capturing the necessary data and providing the comprehensive visibility needed to manage complex and multi-faceted risks, a digital-first procurement strategy demands a strategic overhaul – it cannot only be about adding technology to existing processes.

Furthermore, it needs more than a cultural shift to integrate a digital golden thread that aligns the organization’s overarching commercial vision and the enterprise-wide digital ecosystem. It needs a technological shift, one that goes from looking at technology as a saviour to technology as what it always was, just a tool, and a tool that only works if

  • properly selected,
  • properly used, and
  • placed in the hands of an appropriately educated, trained, and skilled individual.

Furthermore, it doesn’t matter how modern the tool, how much “AI” inside, or what provider is offering it. Just like a power drill won’t screw in a nail, a Gen-AI solution won’t provide a strategy, won’t analyze generic data in a meaningful way to select a sourcing strategy, and won’t properly parse and automate that invoice. (That’s not what it’s for. It will summarize large supplier RFP submissions and crawl through your contracts for common clauses, or lack thereof, but that’s it … it’s just a huge document parser and summarizer.)

Only the right platform will solve your problems, and you’ll only be able to select one if

  • you analyze your processes and identify the data you need
  • you analyze where the data comes from
  • you analyze who has to create / enter any data that needs to be manually vetted …
  • you determine the TQ level of all those individuals who need to use the system
  • you analyze the potential systems with respect to their ability to store the data you need, collect it automatically from any data feeds it is available in, and collect it through manual submission in easy-to-use interfaces that minimizes the chance of error on data entry
  • and when you find ones that meet the data need, then you confirm they can support the process needs …
  • and then you do vendor diligence.

But without the right platform, no progress will be made and, in fact, if you consider the failure stats, chances are the wrong platform will worsen the situation. Technology is NOT an easy button. You still have to do the work of vetting it, implementing it, configuring it, and even when it can automate a task, verifying it on a regular basis (as well as identifying when an exceptional condition arises and dealing with that regularly). Technology can make your life (much) more efficient, and easier, but it’s not an easy button. Never forget that.

Always Start Your Vendor Qualification with a Deep-Dive Demo!

In a recent article, THE REVELATOR asked how many practitioners do a pre-demo discovery call to determine whether seeing a demo is even warranted??

It was a fair question, but for most practitioners, the question is unnecessary because,

  • if you agreed to the demo as a practitioner, then you should have confirmed from the initial sales call that there was enough to actually see (by listening to a rep that sold a solution, not software, and that answered your tough questions);
  • the demo will tell you if it’s worth diving into the vendor’s background, philosophy, and services approach; and, most importantly,
  • if you’re not a senior executive at a large enough company, there’s no way you’re going to get the attention of the right people for that discovery call. (As a [perceived] unqualified lead, you’re not getting a senior person on that pre-demo interview … just a Sales VP who knows what to say to hook you, whether it’s true or not!)

The reality is that any discovery beyond an initial demo to confirm the vendor actually has a solution and, more importantly, a solution that might actually help you by solving some of your problems, is meaningless. Company history, philosophy, and go-forward don’t matter if they don’t have anything worth working with them.

It’s important to remember that technology cannot overcome a solution provider’s misaligned business values and goals. If the tech is wrong (or just not there), the tech is wrong. Not only do you need real tech (and not vapourware), but you need tech that solves one or more problems you have.

As such, if you dig in on a company before seeing the tech, you could be wasting your time. Especially if you do it for every provider given that you will likely go through half a dozen potential providers before you even find one worth to include in your RFP (when you consider all the overhyped marketing and misleading marketing you need to work your way through).

Moreover, forcing a demo early will quickly cause some vendors (without a solution) to self deselect! If you insist on a demo that shows how they solve the problems they claim and how it’s relevant to you, and they don’t have a deep solution and/or knowledge of your industry, they will likely decide it’s not worth the time trying to bluff you and save you the time and effort of invalidating them as a potential provider. (And, in effect, bypassing the technology-led equation-based providers off the cuff, since they won’t even get the demo if they can’t convince you they are about solving problems first and tech second.)

However, if you get through the demo, put the vendor on your shortlist, and tell them that, you can be sure your follow-up company deep dive call will include the right senior people at the vendor, and not just a say-what-you-want-to-hear Sales VP.

So You Admit You Might Be a Dead-Company Walking. How Do You Avoid the Graveyard? Part 4

In short, as per Part 1, you

  1. keep admitting to every mistake you are making and do something about it, then
  2. continue by looking for cost-effective opportunities for improvement and pursue them and finally
  3. never, ever, ever forget the timeless basics.

Today, we’ll continue by describing what you do when you identify, and admit to, one of the next two mistakes (mistakes 5 & 6) we chronicled in our two part introduction to our “dead company walking” (Part 1 and Part 2) series (where we helped your potential customers identify problems that signify you are a SaaS supplier they should be walking away from). (You can find part 2 and part 3 here.)

5) An innovation burst is enough, especially if it is disruptive

A successful innovation burst is great as it can get you noticed, and as it’s very hard to get noticed in an overcrowded space (again, see the Mega Map), that’s a great start. But someone noticing you does not mean they’ll engage with you, and engagement does not mean they will buy from you.

Moreover, it’s never long before a one-trick pony loses the limelight as fast as he enters it. If you want to stay in the limelight, which wants to move on to the next story as soon as you’ve had your 15 seconds of fame, you need to keep innovating, or at least developing the core functionality necessary to flesh out the value message to the point the overall message is so compelling people want to hear it and repeat it.

The reality is that it is continued development, especially around core processes your technology is being designed to support, that will at least keep you on the periphery of the limelight, and that is where you need to be to not only attract enough potential customers, but convert them into customers who want, as we’ve been stating repeatedly, solid solutions to their problem and not shiny tech that looks cool but doesn’t do what they need it to do.

6) Too much investment, too soon, against an overly ambitious plan

This is one of the biggest threats to your success, especially since you will be pushed to scale up fast to support the rapid growth, that won’t come, or at least not early in your corporate development. Falling for this will burn the cash well before you are even close to break-even, and if you can’t raise additional funds fast when you run out, you’re dead.

The first thing to do when you raise too much money is to stop dead in your tracks, stop all external hiring and engagement, and step back and do the detailed market research described in our first mistake and figure out the MVP you’ll actually need to build a significant market share, and focus first on hiring the talent / or acquiring the third party tech, to get there as soon as possible.

Then you need to figure out what not only makes a good customer, but one that is easy to sell. It’s likely that the majority of these customers will need education to get them there. The next thing to do is hire the product people who can build these educational assets for marketing, sales, partners, and customers.

When you get close on the product and the marketing, then you start to ramp up marketing and high-performing sales (who can work without a lot of support and incomplete, but progressing monthly, assets) to start building the initial funnel when you are ready to go hard.

Then start building up your services teams with senior resources who can do multiple roles and initial implementations with little support.

And only once all the pieces start falling into place do you start scaling up.

And in the process, be sure to:

  • review the marketing plan: cut the funding to anything not focussed on education and thought leadership in the early days
  • review sales: cut the “leads” to those truly qualified with problems that match your solution; and definitely cut the spray and forget power washer lead blasting from 3rd parties, you want well qualified leads only
  • review the development plan: make sure it’s 90% steak and only 10% sizzle; sizzle doesn’t solve problems, or fill bellies, and that’s why customers want steak
  • review the budget: anything not going to educational/thought leadership marketing, qualified solution-based lead generation, or solid development is extraneous and needs to be cut ASAP to ensure the money lasts until the solution is broad and deep enough to serve the intended market, command the expected price tag, and get the interest you need for steady, continued, growth

Stay tuned for Part 5!

Want A Good Solution, Ask Vendors The Hardest Questions Off The Bat!

Even though they don’t always do so with their slimy sales and misleading marketing practices, be sure to keep it above the waist as you repeatedly hit them as hard and fast as you can. (You don’t want to dance around with a vendor unless you know they can take a few hits and are in it to win it, because once you start to dance they’ll duck and dodge until the end of time).

This post was inspired by THE REVELATOR who asked us What are the most important questions to ask a potential solution provider partner?

1) Can, and will, you show me (not tell me) live … preferably on use cases or data I give you on the spot?

I’ve said it before, and I’ll say it again: Dear Procurement Practitioner, when it comes to solution selection from today’s vendor, your mantra is Show Me, Don’t Tell Me! There’s too much hogwash out there today, buzzwords don’t solve problems, and when you dive into the marketing madness, you see there’s absolutely no value, or even core capability, in what’s being sold by many vendors.

You need solid solutions with substance, not glitzy fake-take UX, broken Gen-AI, or slack-like conversations that don’t do anything. You also need solutions that digitize and automate the 80% of Procurement / Sourcing / Supplier (Data) Management / etc. that you do day-in and day-out, week-in and week-out, month-in and month-out, and year-in and year-out and not the odd special case that comes up once a week, month, or year. And you definitely don’t need solutions that don’t fit your domain.

Moreover, you want relevant demos. If you’re buying janitorial and building maintenance supplies, you don’t want a demo on how the catalog makes it easy to buy sneakers and shoes. (FYI: I’m not being unnecessarily ridiculous here. I have been in demos where a primarily MRO buyer was demoing the top three platforms, and one showed them how to buy sneakers and shoes!) If you get such a ridiculous demo, you want to show that vendor the door as fast as possible because you have one of two situations: they didn’t do their homework on you (and don’t have a clue if their solution is appropriate), or their solution was built, and over customized, for one niche industry and will not easily support yours.

2) Once you show me the core use cases, can, and will, you explain the breadth of use cases you developed your solution for and how they are specific to my business?

You want someone who both understands what they are selling and how it might help your business. Any less and you might as well just roll the bones to select your solution provider. At the end of the day you need to understand the following:

  • there may be 666 logos on the mega map but there is no perfect solution; and nothing that will meet all of the requirements in your RFP
  • the best solution will meet the majority, and, more specifically, the requirements related to the tasks you do all the time, not the ones that you do once a quarter or once a year
  • the best solution for you will be one that comes close and comes from a vendor who both understands this and makes an effort to customize their solution for you in a manner that will achieve maximum results … from the first demo
  • the best solution provider will take the time to explain that which they don’t have time to demo, or can’t demo without your data; even the sales person will attempt it at a high level, and then bring in a product specialist for where more depth is needed

3) Once we tell you the extent of your solution we feel is appropriate, can you talk us through what the implementation and integration to our environment would require without bringing in a paid third party “expert” consultant? And how long will that take?

A great solution provider for you will be one that understands your needs, their platform, and what will need to be done in order to implement it for you, integrate it into your stack, and prepare it for you to extract the value they promise. They won’t need third party help to figure all this out and walk you through it. If a lot of integrations or data migrations are required, they, or you, may need to partner to get it done, but they should still know what’s required.

And, as we said in the introduction, while you should keep your rapid, one-two-three punch, above the belt until the vendor sales rep goes below in their tactics, you should also endeavour to hit ’em as hard as you can with that 1-2-3 combo. If they can’t take it, you want them knocked out before you waste any time on them, because any good vendor will be able to take them and come back with the best damn demo, details, and arguments as to why they are sure their solution will work for your problems, with concrete examples, in a very short timeframe. (And yes, odds are you could be unlucky and have to knock out the first 6 before you find that first 1/7 that is still there so solve problems. But the wait will be worth it.)

So You Admit You Might Be a Dead-Company Walking. How Do You Avoid the Graveyard? Part 3

In short, as per Part 1, you

  1. keep admitting to every mistake you are making and do something about it, then
  2. continue by looking for cost-effective opportunities for improvement and pursue them and finally
  3. never, ever, ever forget the timeless basics.

Today, we’ll continue by describing what you do when you identify, and admit to, one of the next two mistakes (mistakes 3 & 4) we chronicled in our two part introduction to our “dead company walking” (Part 1 and Part 2) series (where we helped your potential customers identify problems that signify you are a SaaS supplier they should be walking away from). (You can find Part 2 here.)

3) Shiny New Tech is More Important than Tried and True Methodology

Tried and true ALWAYS trumps shiny new tech in enterprise software. Especially when the total cost of ownership after factoring in license fees, maintenance, hardware & software updates, services, data feeds, integration fees, etc. usually push a solution into the realm of seven figures (and eight figures for large enterprises). Companies want a return, and shiny doesn’t generate a return. So focus on algorithms, processes, and approaches that are guaranteed to yield solutions. Do this by:

i) As THE REVELATOR would say, take an agent-based approach and focus in on what the solution should do

It’s supposed to be people-process-technology (or, in the doctor‘s words, talent-transformation-technology since you should first look for opportunities to improve your processes before investing in technology), not technology-forced workflow-prisoner! When you focus on the tech first and forget the process it is supposed to support and the people who have to use it, you’re never, ever, ever going to get it right. And believing that an over-hyped unproven technology will eventually show emergent behaviour (that it has zero chance of doing because of the underlying technology) and “evolve” to solve the problem is just stupid.

Real tech encodes real solutions identified by real human intelligence that have been implemented, repeatedly verified, tested in real world operating conditions, and understood to the point that the success can be repeated predictably. Sometimes it’s traditional AI, sometimes it’s RPA, sometimes it’s workflow, and sometimes it’s a simple calculation. It all depends on the problem and the people-process combo that can be applied to solve that problem. Tech is only transformative when it supports the business. You don’t lead with tech, you follow.

ii) Then identify the best tech options for each step

Once you have fully documented the problem(s) the people need to solve, the processes they can support, and the solutions that will work acceptably (maybe not perfectly, but it’s rare that a solution is perfect — plus, as we’ve repeatedly indicated, most enterprise users would cry tears of joys if they found something that just worked), identify all the potential tech options at your disposal, from open source to out-of-the-box from third parties to custom development.

Then, for each option, evaluate:

  • it’s cost
  • the relative return (for the customer and how that will translate into sales)

And identify the options with the best balance. You’ll be surprised at how often it’s not the new shiny. The best hotness is the old busted hotness.

iii) Select tried-and-true when all things are equal (and save)

Finally, when all things are equal, go for the most stable, tried-and-true, methodology — don’t do experimental new “AI” development if a sold optimization or analytics-based solution already exists.

4) Over Reliance on Third Party Tech is a Sustainable Business, Especially if its Gen-AI!

Reliance on third party tech, especially that which has not been proven to be on stable ground in the market, is not a good business plan. What do you do if the provider goes bankrupt, or, realizes they are on the path to bankruptcy and turns the tech off? If you have nothing else to pivot to, you go bankrupt too. Not a good scenario!

Even if you are building on tried-and-true stable tech (with a large install base), unless your business plan is to be acquired by the tech you’re building on and you actually have a chance of making that happen (you came from the provider, have good connections, etc.), your options are very, very limited if you don’t succeed.

You need to focus on a solution to a real problem that companies will pay to address first. And while it can be based 100% on third party tech to start, that shouldn’t be the game plan. The plan should be to acquire it, build something better in house, or at least find three or four options that will serve the same function until you can acquire or build appropriate tech. (The exception being a product maintained for you by a third party that is based on open source that will always be there for you to take ownership of and then assign to a new team.)

Once you have a solution, and know what tech you need, do the cost benefit analysis of:

  • licensing someone else’s tech
  • acquiring the third party tech
  • building on, and contributing to, open source
  • building your own

for each aspect of the solution, as well as the points at which one option becomes better.

In addition, even when you select a solution, always keep your eyes out for an alternative that has been demonstrated to be more reliable, efficient, or cost effective. When a problem has been newly identified, some companies will just throw anything at it to see what appears to work, without doing a proper analysis and designing a proper solution from the ground up. Eventually, some smart minds powered by Human Intelligence (HI!) will come up with a better solution. Once that becomes economical, you’ll want to switch to that if you don’t have an equivalent solution in house, while keeping back-up options open.

And definitely don’t (over) rely on third party Gen-AI — even the biggest companies can only afford to bleed for so long. There’s nothing Gen-AI can do that traditional tech can’t. It’s best uses are as an interface layer for (very) low TQ (Technology Quotient) folk who are being forced to use tech but just don’t get it (as a more natural language chatbot interface) or as a massive document store search and summarization solution (when traditional semantic / neural networks would just be overloaded). That’s it. And in all of these cases, it needs an underlying application that actually does the work and manages the data.

Stay tuned for Part 4!