Category Archives: Best Practices

Where are You on Your Master Data Journey?

You want to get cost under control. Maybe even save. You need to ensure compliance. You need to satisfy the auditors. You want to know the risks you face. And the risks you could face. All laudable goals, but all goals that are unobtainable without … you guessed it … data.

More specifically, clean, rich, up-to-date, relatively complete data … which, likely, resides in multiple systems, duplicated across each. This makes data centralization, which is necessary for any of these initiatives, complicated, and often difficult. It’s not just the last update record date, especially since some systems do the last update at the record level, and not the data element level.

Plus, how do you know which parts of which records can be combined? Especially when they conflict or don’t line up. Without an appropriate master data management strategy, and a system that can handle master data management across multiple, loosely related, supply management and enterprise, it can be downright impossible for any initiative that spans more than a few dozen providers or categories. And even that is an effort.

But MDM is not easy to define, and even less easy to implement. First of all, which systems do you use for master data when there is an argument for multiple systems that store a record, such as a supplier, to be a master data system. Secondly, when you do identify the master system, how do you manage, and approve, updates … and how do you insure they get synched to the right systems at the right time? Third, how do you integrate all the data into a single, even if only virtual, record so that you can run a spend report. A compliance report. A risk report. An audit report?

The point is that it’s not just as easy as selecting a system, proclaiming it your MDM, and believing the implementor that your MDM problems will be solved in a few months. Some companies, that aren’t heavily focussed on, and involved with, the initiative take years to integrate systems and arrive at a nearly clean set of master data.

So before you march forward on your next, data intensive initiative, maybe you should step back, ask yourself where you are on your data management journey, and give an honest answer.

RPA: Are We There Yet?

Nope. Not even close. And a recent Hackett study proves it.

Earlier this month, The Hackett Group released a point of view on Robotic Process Automation: A Reality Check and a Route Forward where they noted that while early initiatives have produced some tangible successes, many organizations have yet to scale their use of RPA to a level that is making a major impact on performance, likely because RPA has come with a greater-than-expected learning curve.

Right now, mainstream adoption of RPA is 3% in Finance, 3% in HR, 7% in Procurement, and 10% in GBS – Global Business Services. Experimentation (referred to as limited adoption) is higher, 6% in HR, 18% in Finance, 18% in Procurement, and 29% in GBS, but not that high, especially considering the high learning curve for the average organization will end up with a number of these not continuing the experiment.

Due to the large amount of interest, Hackett is predicting that, within 3 years, RPA will be mainstream in 11% of HR Organizations, a 4X increase, 30% of Procurement, a 4X increase, 38% of Finance, a 12X increase, and 52% in GBS, a 5X increase, as well as increases in experimentation. Experimentation will definitely increase due to the hotness of the topic, but mainstream adoption will require success, and as Hackett deftly notes, successful deployment requirements have certain key prerequisites too:

  • digital inputs
  • structured data
  • clear logical rules can be applied

And when the conditions are right, organizations:

  • realize operational cost benefits
  • have less errors and more consistent rule application
  • benefit from increased productivity
  • are able to refocus talent on higher-value work
  • strengthen auditability for key tasks
  • have enhanced task execution data to analyze and improve processes

But this is not enough for success. Hackett prescribes three criteria for success, which they define as:

  • selecting the right RPA opportunities
  • planning the journey
  • building an RPA team or COE

and you’ll have to check out Robotic Process Automation: A Reality Check and a Route Forward for more details, but is this enough?

Maybe, maybe not. It depends on how good of an RPA team is built, and how good they are at identifying appropriate use cases for RPA, and how good they are at the successful implementation. Success breeds success, but failure eliminates the option of continued use of RPA, at least until a management changeover.

Don’t Get Sucked in By Impressive Words!

It’s conference season, and that means marketing overload for many vendors. And there’s a few words the doctor is hearing a bit too much and he’s NOT impressed! So what are these words?

Digitization

Digital. Digital Procurement. Digitized. Digitized Procurement. Digitization. Ugh. They’ve been using variations of the same word for almost 20 years — and despite claims to the contrary, the meaning hasn’t really changed. You’re analog, or you’re digital. There’s no degrees to digital.

Look at the dictionary definition for crying out loud! Of, relating to, or using data in the form of numerical digits. What’s new, or even enticing, about this? ABSOLUTELY NOTHING!

Internet of Things

The internet has ALWAYS been an internet of things. Computers are not people. They are computers. The only difference today is that we are sticking computers in more things to collect and transmit sensor data automatically rather than reading it, and entering it into the computer. It’s not the big whoop most companies are making it out to be as most companies haven’t developed much that uses that near real-time in a truly useful way.

Cognitive

It’s not artificially intelligent. It’s cognitive. And the bull crap has reached a whole new level. Let’s look at the definition.

Of or relating to the mental process of perception, memory, judgment, and reasoning.

Yes computers can perceive through sensors, store data in memory, use algorithms to assign, or judge, and use very advanced automated algorithms to reason, but we’re overlooking one key word here. Mental. Computers don’t have a mind, and they are not intelligent. The implication here is that which is cognitive is intelligent, and they are not intelligent.

We haven’t even reached true AI yet in any field and we are supposed to believe that a little Sourcing or Procurement vendor has reached the next, cognitive level of AI development? While a best in class vendor may have a few algorithms that are almost cognitive for a few, select, situations, considering the billions going into AI research and the limited progress most specialist vendors are making, you know we’re not ready to be throwing this term around.

And, an honorable mention (because, while not common in our space yet, it’s coming):

Postmodern

the doctor‘s been seeing this word a lot on social media in marketing and commentary, and, unfortunately, it seems like it’s starting to creep into our space. For those of us that actually went to a real University and have a sound (classical) education, we know that Postmodernism is a rather broad intellectual movement across the arts and fields with applied arts (like architecture and archaeology) based on a philosophy that takes us from the literary-influenced philosophy of modernism to a post-modern way of thinking that developed in the middle of the last century and reached wide acceptance in the 1980s, when it was a Land of Confusion.

This was the time of the MRPs (and not the ERPs). Do we really want to be associating our new and innovative solutions with that era?

So please, please, please don’t get sucked in by the the impressive words. Instead look for impressive, time-saving, value-adding functions (and forget the feature lists). (But that’s another rant.)

Ninety Five Years Ago Today …

TIME magazine was published for the first time, and, to date, has stood the test of time. It was the first weekly news magazine in the US and today has the world’s largest circulation for a weekly news magazine (with three quarters of its readers in the US).

The idea behind the magazine was brevity, with the original intent that a busy man could read it in an hour. The original slogan was Take Time — It’s Brief. Maybe that’s why it’s still around today, since it seems all the younger generation has time to read are short LinkedIn articles and Facebook Posts, and if they are on the go, you’re lucky if they get through the new, double length, tweet.

But it teaches us something … if you want to be widely read, or at least widely acknowledged, get to the point … fast. Add more in depth later when you have attention, bur brevity sells. Advertising revenue may be down (but it’s down in print across the board), but TIME is still surviving, and looks like if it does go down in the future, it will be among the last major print publications to fall. It’s a communication lesson for all of us, so let’s take time to understand it.

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.