Category Archives: Compliance

Procurement Trend #24: Better Governance Model

Twenty-one dreary, and weary, trends still need to be discussed, so let’s keep the fire burning. The sooner we get through these, the sooner we can expose these charlatans once and for all.

So why do so many historians keep pegging this as a future trend, and keep poor LOLCat regressed in his past life? There are a number of reasons, but among the top three today are:

  • models may be few but most organizations don’t use the right one

    and even those organizations that have selected the right model don’t always apply it properly

  • compliance regulations make governance critical

    since SOX can put you in the Box with Fox!

  • investors want a return
    and they know a lack of governance won’t give them one

So What Does This Mean to You?

Governance Model

De-Centralized, Center-Led, Centralized, or Control Tower — which is right for your organization? The answer is all of them, depending on the situation.  For example, snow-clearing services should probably be de-centralized as it makes no sense to run them out of Houston, Texas or San Jose, California. IT Support should be center-led, as regional providers will probably give you the best price. Global contracts for your core product production should be centralized, as you need the volume for leverage and you need good supplier management. And it’s likely that a Control Tower model will be needed to manage the proper application of each model to each category it is suited to.

Fox in the Box

SOX can put your CEO and CFO in the box with fox if your company doesn’t make an acceptable effort to comply with the Sarbanes-Oxley Act of 2002. But this isn’t the only regulation that can get your company in hot-water. Labour regulations, environment regulations, etc. can all put your company at risk with unlimited (legal) liability in some cases. So companies have to make sure that the governance model takes into account compliance and supports the collection of all necessary data to insure that the organization doesn’t go foul of SOX or other regulations that could get it in hot, hot water.

Greedy Investors

They want a return and won’t be satisfied until they get one. And unless you can convince them that you have things well in hand, you’ll have a group of very clingy monkeys on your back, weighing you down. So you want to make sure that you have good, documented, governance procedures that will keep them happy and keep hundreds of pounds of monkeys off of your back.

The Procurement Marketplace and the Power of Compliance

When it comes to Procurement, compliance is very important.

  • Non-Compliance with contracts is the biggest reason that 30% to 40% of negotiated savings never materializes.
  • Non-Compliance with standards and regulations often results in poor product quality, unusable inventory, or, even worse, seizure of goods by customs.
  • Non-Compliance with insurance and financial regulations could leave you on the hook for million dollar lawsuits and your CEO and CFO on the hook for criminal charges.

Compliance is also very hard to enforce in the average organization because your resources, time, and visibility is limited and it’s easy for anyone and everyone to fly under the radar whenever and however they want to.

But there is something you can do about it.

The Power of Compliance To find out, join Sourcing Innovation and Vinimaya at 13:30 PDT / 16:30 EDT / 20:30 BST this Thursday, October 16 for our webinar on The Procurement Marketplace and the Power of Compliance, hosted by Don Carrington and the doctor, where we will fill you in on how you can go about improving your organizational compliance.

Attendees will be the first to receive Sourcing Innovation’s New White Paper on The Procurement Marketplace and the Power of Compliance. Register now for The Procurement Marketplace and the Power of Compliance and get a leg up on your competition!

HICX Solutions Wants To Buy You A Shiny New Pair of Shoes! Part III

In Part II of this series we not only noted that HICX, which stands for Harmonize, Integrate, Control, and eXchange, is a relatively new SIM offering on the market (even though it has been in development since 2004), addresses the classic SIM sweet-spots, but also hits a few new ones. Not only does it include on-boarding and an integrated supplier portal like classic SIM, and more than adequately address Performance and Compliance Management — mainstays of current SIM platforms, but also goes beyond to offer a complete Master Data Management (MDM) solution for your Supply Management operation.

But that isn’t the only trick it offers. As hinted at in Part I, it not only allows a user to define, and redefine, data models as necessary but define, and redefine, workflows as necessary to allow an organization to not only accommodate new product demands but adapt to new technologies and new business requirements as they arise. These new tricks are not to be underestimated. While a number of platforms allow you to extend and augment the data model, most do not allow the data model to be extended after the fact, and those that do require all existing elements to have the new property defined, or at least defaulted (to a default or a value that represents a not-yet-defined value).

In contrast, the HICX platform allows the data model for any element to be updated at any time by any user with authority, and since the HICX platform supports versioning with all data elements of the data model, no existing elements are impacted or need to be updated since the data (element) model is loaded with each data element and each data element is validated against the (element) model it was created with. (Once the data element is loaded, the user can add any additional elements required to update the associated data model, if desired.)

But that’s not the best trick that the HICX platform has to offer. The best trick is that the platform allows the workflow to be updated at any time by any user with the authority to do so, even if the workflow is being used in an initiative currently in progress — such as an on-boarding, compliance, or performance improvement initiative. This is because the platform not only versions data models, but workflows that drive the product and initiatives. If, during an event, the event administrator notices that that the workflow is causing problems for the suppliers and can be simplified, or notices that the information being collected is not what was expected, the administrator can simplify the workflow or add additional, mandatory, data requests. Suppliers who have already started the workflow will be able to finish the current workflow, and can then be sent a request for additional information by the administrator (who can limit the request to suppliers on the older version of the workflow) but suppliers who did not begin the initiative before the update will start on the new workflow.

But the real power of the workflow management capability is the ability to change registration, data collection, and performance measurement workflows (and associated data element models) when suppliers change, products change, and evaluation methods change. Traditional SIM platforms decline in usage because they can’t keep up with changing business requirements and user needs. But with the ability to update workflows to match the business needs at any time, using an integrated visual workflow designer, the HICX platform insures that SIM is always relevant and current. It’s the new trick that most SIM platforms have been missing.

Other tricks include:

  • Dynamic Dashboards

    like any good SIM product, the HICX platform supports user dashboards, but doesn’t stop at one dashboard per user — the user can create as many dashboards as he or she wants and customize them to specific purposes — compliance, performance improvement, on-boarding, insurance, etc.; the tool includes a sophisticated dashboard designer that allows a knowledgeable user to design a dashboard that is actually relevant to the initiative at hand (which can be focussed on non-compliance, non-performance etc. — since we all know that dashboards that report success are dangerous and dysfunctional)

  • Advanced Search

    that allows the user to search for any data element using any fields, and filter using any set of fixed values (lists) and related elements; these searches can be used to define supplier sets for initiatives, using as many dimensions as necessary to get it right

  • User Defined Escalations

    that allow the user to define multiple levels of automated escalation during initiatives, where each escalation can occur at a different interval and be targeted to a different group or individual

These aren’t all the tricks the platform has to offer, but they are most of the tricks of note that serve to distinguish the HICX platform from the other SIM products on the market. If you’re on the market for a SIM solution, you should definitely take a look. The name and website might be a bit non-descriptive, but the tool certainly isn’t.

HICX Solutions Wants To Buy You A Shiny New Pair of Shoes! Part II

In Part I we noted that, despite the fact that SIM (Supplier Information Management) was old news and a mature Supply Management solution offering (as the early leaders in this space were formed as early as 2000), it may still have a few tricks up its sleeves and the acquisition of the right technology platform might just get the acquirer a shiny new pair of shoes that are as coveted as Dorothy’s Ruby Slippers. (Of course, the acquisition of the wrong technology might get the acquirer a pink slip.)

We also noted in Part I that HICX, which stands for Harmonize, Integrate, Control, and eXchange, a relatively new SIM offering on the market (even though it has been in development since 2004), not only addresses the classic SIM sweet-spots, but also hits a few new ones that can bring significant value to your organization if properly implemented and utilized as it brings with it a new bag of tricks. How does it do this?

Let’s start with the five major areas of SIM covered in Part I:

  • Onboarding

    The HICX platform not only allows the entire process to be automated, but allows the workflow to be customized to each supplier according to the supplier type (sub-contractor, one-off vendor, product, service, importer, government agency, etc.), the region the supplier is in, the business unit(s) the supplier deals with, the products or services the supplier offers, the languages the supplier uses, and the data that is required for performance, compliance, or other initiatives that involve the supplier. The customized process insures that the supplier is only asked for data that is needed, and that the supplier can designate the appropriate personnel to provide that data. The portal can be configured to include a significant number of data checks to not only make sure that the data is of the right type (numeric, alpha-numeric, attachment, etc.) but that the data provided makes sense (is in range, is from a pre-defined set of answers, etc.) — which prevents a lot of typos (which can result in bad scorecards and unnecessary alerts in an exception management setup, which the platform also supports). In addition, known supplier data can be pre-populated for review, and can even come from supplier directories (including the D&B directory). It’s very easy for the user doing the onboarding to customize this process as that user can customize the process by simply selecting the supplier type, region, business unit, products, services, languages, etc. of relevance to each supplier and the system does the rest. The user then has the option to add or remove additional requirements for individual suppliers, and override any and all defaults (that they have the authority to override as per the fine-grained permissions and securities models).

  • Master Data Management

    Not only does the MDM solution provide you with numerous “out-of-the-box” data models, standards, and validations that you can customize as needed, but it recognizes that MDM systems have to integrate with downstream ERP/MRP systems, upstream sourcing and procurement systems, and even overarching BI, Spend Analysis, and Reporting systems that cross and connect the streams. (Supply Management streams are not dematerializers — sometimes it is beneficial if the streams cross.) As a result, it has out-of-the-box integrations with a number of upstream, downstream, and mid-stream systems and can push, pull, and sync data as required according to any number of user-defined rules. Plus, it allows certain aspects of master data, including bank master data, to be handled separately (and stored in separate, heavily encrypted, and highly secure data sources).

  • Performance Management

    The performance management component, as expected, allows the user to build scorecards around business goals and use whatever information is required, whether it is supplier provided, internal or third-party and whether it comes from the SIM solution, upstream solutions, downstream solutions, or cross-stream solutions. It also supports a very dynamic and flexible scoring mechanism that can support whatever formulae the user feels is necessary to construct an adequate scorecard.

  • Compliance Management

    The compliance module allows the user to create and manage compliance initiatives across one or more suppliers for one or more projects. This can be as simple as collecting raw material data to insure that the products your suppliers are manufacturing do not contain any restricted substances under RoHS or other directives, or as complex as collecting all data relating to sustainability initiatives to directly and indirectly support your organization-wide Corporate Social Responsibility (CSR) initiative.

  • Integrated Supplier Portal

    As per our coverage of the on-boarding solution, the portal is streamlined so that the supplier is only asked for data that is needed, all aspects of the portal provide the supplier with a consistent experience, and the supplier can designate the appropriate personnel to provide and maintain the data that is needed on a data type, product, or initiative basis.

But this is not all that the HICX solution has to offer. Come back for Part III.

HICX Solutions Wants To Buy You A Shiny New Pair of Shoes! Part I

Last week we asked if SIM was old news or a shiny new pair of shoes. We noted that SIM (Supplier Information Management) was a mature and stable technology with a large number of solution providers not only providing the tools and best practices to manage supplier life-cycles, but to manage risk, compliance, receivables and even spend repositories for spend management. It’s almost a commodity in the Supply Management space, and, thus, an acquisition thereof is not likely to get baby that new pair of shoes anytime soon. Unless, of course, the solution has some new tricks not found in most current solutions.

What tricks? Tricks that provide added value to your organization. What might these tricks look like? As per our last post on the issue, if the SIM product not only allowed a user to define, and redefine, data models as necessary but define, and redefine, workflows as necessary to allow an organization to not only accommodate new product demands but adapt to new technologies and new business requirements as they arise, then this would qualify as new tricks as many classic SIM products have rather fixed data models and inflexible workflows. It’s not the only new trick that would have value, but it is a new trick. And it’s a new trick that HICX Solutions brings to the table with their SIM solution. More on this later.

HICX, which stands for Harmonize, Integrate, Control, and eXchange, is a relatively new SIM offering (even though it has been in development since 2004) that not only addresses the classic SIM sweet-spots, but also hits a few new ones that can bring significant value to your organization if properly implemented and utilized. But let’s back up a bit.

In addition to classic SIM, the HICX SIM platform addresses each of the following areas, which, with the exception of MDM, are all addressed by most current SIM platforms:

  • OnboardingHICX is not the first SIM provider to have a comprehensive on-boarding solution, and won’t be the last, but they are one of the few that recognizes the absolute criticality of a good on-boarding process as effective SIM is 100% dependent on good, complete supplier data — which is dependent on the supplier providing that data to you on a timely basis. This is, of course, dependent on getting the supplier on-board not only with your efforts but the systems you use to collect the data. As a result, effective on-boarding is key.
  • Master Data ManagementWhile many SIM solutions manage data, most can’t serve as your MDM (Master Data Management) repository. However, the HICX solution can. This is important since most Supply Management solutions outside of the ERP space do not have MDM capabilities. But MDM is the key to good supplier and supply management initiatives as every initiative — analysis, modelling, payments, reporting — requires good data. And since the ERP is usually so tightly locked down, and such a mess, you rarely get the good data you need out of it.
  • Performance ManagementThe whole point of collecting good information is to help the organization effectively manage the supply base and improve both organization and supplier performance. As such, this was the first major piece of functionality offered by SIM providers and one of the staples that should be offered by every SIM provider.
  • Compliance ManagementA critical part of performance management is compliance management. It doesn’t matter if your supplier can produce the product 10% cheaper if they do so using a chemical that is banned under RoHS and your product would be confiscated if you tried to import it. Compliance is critical. Compliance with regulations and directives. Compliance with agreed to processes. Compliance with ethics. So you definitely need good compliance management capabilities.
  • Integrated Supplier PortalThe best way to get the data is directly from the supplier, and the supplier is only going to buy-in if the portal is easy to use and integrated. If the supplier has to go to a separate page for each request, with a different login, workflow and UI, the supplier is going to start boycotting your tools and your initiatives faster than the hammer drops.

Moreover, in a few of these areas, and MDM in particular, the HICX solution adds a few tricks of its own. What tricks? Come back for Part II.