Category Archives: Market Intelligence

Influential Damnation 97: Analysts

Conferences are bad, but manageable as they are only once or twice a year. Consortiums are worse, as they meet regularly to thrust their views upon you. Pundits / Futurists are a significant damnation, because their brand of influence seems to be annoyance perfected. But none of these compare to the damnation of analysts. Why?

Analysts are the Gatekeepers of the Gold Seal of Approval.

Let’s say you are a new and innovative startup, or even an older software provider that just went through a re-invention phase, and you have this great new product that contains at least half a dozen innovative features and functions not in any other product in the market that has the ability to deliver any organization that adopts the product tremendous efficiency and cost-control beyond anything else they can put in place. Your software should be winning awards and getting the gold-seal of approval that lets potential customers know that, for industry X with problem Y, this is one of the best solutions on the market. But it won’t even get a side mention in the back pages of the local business journal until it gets recognized by an analyst firm as an emerging solution, and forget front page coverage on something like Mashable until it has been vetted and approved by at least one major analyst firm. They are the keepers of the gold seal of approval, and if they don’t like you, you better keep one foot in the coffin.

If you’re not on their lists, you’re not on BigCo’s list.

The best way to get coverage is to get a big win. But a big win requires a big company adopting your software and getting a big result that they want to advertise to the world (so they can say how smart they were and how well they did). But the chances of a big company even inviting you to an RFX until the analyst firm, that they spend six or seven a years on to advise them, puts you on a contenders list is slim to none. Unless you can find a back door (through a consulting partner who will use your product to get a great result on a services engagement and then mention you in a press release and give you credibility with the firm), you’re out in the cold. After all BigCo payed six, if not seven, figures for the analyst firm’s shortlist, so it should be the best and they shouldn’t question it.

If you won’t pay to play, it will take a while to get on the analyst firm’s shortlist.

Analyst firms have two major client pools: BigCos (the Global 3000s and the emerging mid-market companies that want to be the Global 3000) and TechCos that want to supply the BigCos with tech products. BigCos pay for access to the research library and time with the top analysts to help them identify the right solutions. TechCos pay for access to the research library and competitive analysis and time with the analyst to help craft a product and/or services roadmap that will help them differentiate themselves in an often noisy marketplace. The big clients in each group will pay a significant amount of money, and will respect significant value in return. BigCos will expect one-one-one analyst time with the experts and specific consulting projects and the TechCos will expect prominent placement in all of the research.

As SI has explained, there’s a reason why every time a new Perilous Pyramid report is released on a subject by a big analyst firm, which will typically revisit major software markets every one to three years, the criteria for inclusion as well as the criteria for scoring changes. It’s not just because the technology changes, but because sometimes certain companies need to be excluded and certain capabilities scored higher for those six figure TechCo clients to look good. And if those six figure clients don’t look good, they won’t be giving the analyst firm six figures at renewal time.

And if you’re not a big client, good lucking winning the Perilous Pyramid.

As a result, if you’re a new company that can’t afford to become a big TechCo client of the analyst firm, or that doesn’t believe in the pay-to-play model and won’t pay for lip service, good luck winning the Perilous Pyramid, because, even if you happen to get the attention of the lead analyst on the report and that lead analyst really likes you, if your solution is too much of a threat to the big TechCo clients, it could be a couple of years of relationship building before you even get a mention as an emerging company (that didn’t make the Pyramid because revenues hadn’t exceeded the new minimum of m Million). the doctor, who is an expert in optimization and analytics and associated technologies as well as other advanced sourcing platforms can tell you that the best platforms in these areas have never reached the top level of the Perilous Pyramid and many never even got included in the reports when they were one of the best solutions (due to lack of revenue, lack of suite functionality, or some other arbitrary inclusion requirement). Fortunately most of these Pyramids did rank the established companies that were included fairly accurately (as there are big TechCos with good solutions that would serve the needs of most, but not all, client organizations), but the reports never gave a complete picture. Either equivalent options (from a technology perspective) were missing or not ranked as highly due to arbitrary ranking or scoring criteria.

As such, analyst firms are one of the biggest influential damnations out there. Like any market intelligence / consulting firm, they have to keep their clients happy to stay alive, but that often means ignoring solutions that should be covered. This means that new startups suffer as do big clients that have a very specific need that can’t always be met by the bigger TechCos. Now, a few analysts do their very best to uncover and promote new startups that aren’t paying clients (and some even do so without the expectation that those startups will become paying clients when they can afford to do so), but given that they have to spend the majority of their time flitting between, and dancing to, two different types of tunes (BigCo client and TechCo client), they don’t have much time left for anyone else. So while their advice will be good, it’s never complete and even though we might want to think that because we paid six figures for their advice that we could take it at face value, we can’t and, like everything else, have to take it with the grain of salt it comes with.

Influential Damnation 95: Competitors

Conferences are annoying, Consortiums are frustrating, but Competitors are outright damning as they are there, in your face, day in and day out. Your company makes an announcement. They try to one up the announcement. Your sales team gets in front of a customer. They weasel their way in. Your engineers get a great idea. They try to steal it. Your scientists make a big breakthrough. Here comes the corporate espionage! And so on.

But that’s just the tip of the iceberg. Procurement has its own set of problems to deal with. These include:

They compete for limited supply and drive prices up.

Markets are all about supply and demand. Sometimes supply is based on demand, as more demand leads to more supply, but sometimes supply is based on raw maw material availability. Raw materials are often in limited supply due to the amount that can be mined, harvested, or processed. And if your competitors need these raw materials as badly as you, and there is not enough to around, either your prices are going up or you’re the organization not getting your demand met.

They compete for limited talent and drive prices up.

Procurement professionals need to be jack-of-all-trades and masters-of-one. These individuals are very few and far between and your competitors will want them just as bad as you. So, not only will you have to vie for their attention, but you will have to offer the salary, training, international experience, socially responsible, and very attractive opportunities the best candidates are looking for, and one way or another, that’s going to cost you top dollar.

They compete for limited expert (technology) resource time.

Let’s face it. You’re never going to be able to find and hire enough talent in-house to tackle all of your Procurement project needs, which will include complex sourcing, strategic procurement, non-complex/non-strategic sourcing, contract (lifecycle) management, supplier (relationship) management, performance analytics, technology implementation, and data feed integration, and you will need third parties to assist you. However, due to ever increasing requirements for supply management success, and the ever increasing sophistication of platforms and processes needed to manage your constantly evolving global supply chains, you will not only need the best vendor partners, but the best talent at those partners, which is a relatively small percentage of the overall workforce. Your competitors will be vying for this talent too, and some will be making bigger (and in the eyes of the vendor) better offers for the time of these expert resources, which could leave you up the creek without a paddle.

While your organization might need competitors to justify its market, when it comes to Procurement, sometimes that’s the last thing the organization needs. That’s why Competitors are another perpetual damnation.

Freightos: Flippin’ Freight Quotes Faster than a Fleet-Footed Feline on Guarana

A couple of years ago we introduced you to Freightos in our post on how they were helping to bring freight into the modern era. Even today, when we are over half-way through the teens, many Procurement professionals, when they call up a forwarder for a spot quote, still have to wait two or three (or even eight) days for a response. It’s absurd. (See this hilarious video on The Great Freight Experiment.) And when the buyer has to get a shipment from Shanghai to San Francisco, which requires a truck, ocean freight, and another truck or a truck, air freight, and another truck, it’s a nightmare waiting for all the quotes to come in.

Freightos was founded to deal with this problem. In order to address this problem and speed up the freight quote time, on or off contract, in the global market place, Freightos was built as a technology platform that enables an on-line network of global freight forwarders to provide instant spot-rate and on-contract quotes for point-to-point global shipments when a (potential) customer needs them.

When a forwarder, or freight-forwarder / 3PL, signed up for the Freightos network, and uploaded their standard buy and sell rate tables for ocean, air, and land-based shipping for all of the routes they serviced, customers could access the forwarder’s portal on the Freight OS network and get almost instantaneous quotes for the route(s) of their choice. All the buyer had to do was specify the origin, the destination, some basic load characteristics, the desired pick-up date, the allowable modes, whether or not the load is hazardous, if insurance is required, if a customers brokerage is used, whether or not nearby ports / airports can be used, and click quote. Within seconds, the buyer could get the quickest delivery quote, the cheapest quote, and some alternate options from any forwarder that had a rate table in the system and chose to make it public. They could also request custom quotes from a forwarder as well, which they might want to do if they were willing to commit to a certain volume over a certain period of time.

Since it’s launch, Freightos, which primarily targeted freight forwarders and 3PLs, has been extending its platform and its target audience, now also serving (and targeting) enterprise shippers (in traditional logistics divisions) and e-commerce shippers as well. Since it’s initial launch, Freightos has added two major features:

  • the marketplace
    where all forwarders can list their public rates and any buyer can easily search public quotes (without a forwarder having to share quotes with them), compare, and book quotes
  • contract management
    which permits a buying organization to upload all of their contracts, which are included in search results, if the route is covered, and allow a buyer to see their contracted rate vs. the market rates

As well as a few other valuable features for enterprise shippers that include:

  • tariff management
    that allows freight providers (including 3PLs and forwarders) to define all of the associated tariffs and buyers to include all the tariffs defined by their contracted routes
  • spend visibility
    that allows enterprise shippers to see how much is being spent by lane, forwarder, region
  • business intelligence
    that allows enterprise shippers to slice and dice the spend visibility and contract data
  • real-time multi-currency support
  • powerful filtering
    that allows an enterprise shipper to include or exclude forwarders, forwarders, transport modes (and specify ocean only or air only), select and deselect nearby ports, etc.

Freightos is a very powerful solution that will soon be Procurement’s best friend. How so? Stay tuned, as Freightos will be launching their Procurement portal early next year which will build on the powerful enterprise shipping portal they have now, but with features and functions targeted to make your life as a Procurement professional much easier when you are trying to build those total cost of ownership models during your multi quarter and multi-year sourcing events.

Finding Your Procurement Mojo and Gettin’ Sigi Wit’ It – Part Deux

This spring, in Finding Your Procurement Mojo and Gettin’ Sigi Wit’ It (Part One), we began our review of Sigi Osagie’s Procurement Mojo, an important book for many procurement professionals and organizations. Unlike most books which attempt to teach you how to do the job (that you already have a decent grip of), Sigi’s book attempts to teach you how to explain to the organization what Procurement does, which is a critical issue that needs to be addressed since:

  1. Procurement is still the Rodney Dangerfield of the organization (and still don’t get no respect) and
  2. most Procurement Pros don’t know how to sell the organization on the unrealized potential that Procurement can bring.

In our first post we discussed how Sigi noted that a key to success was the Procurement brand, but in order to address the Procurement brand, one needed to:

  • build an effective organization,
  • deploy process enablers,
  • manage the supply base, and
  • apply performance frameworks.

Then we discussed some of the key points Sigi made with respect to each of these preliminary steps to building, and most importantly selling, the Procurement brand, but stopped short of discussing any of the game plan because some of his readers would get to hear the man himself and Get Sigi Wit’ It at Trade Extensions’ London event in October. However, now that the event is over, we’re going to discuss the final part of the book and complete the book review.

Sigi outlines three main areas that need to be addressed to build — and sell — your Procurement Mojo:

1. Procurement Positioning

Make sure Procurement is positioned in the organization in the manner and place that will allow it to be the most effective in both delivering its functional obligations and adding value. This involves addressing both reporting structure and enterprise involvement. Not all organizations require a CPO who reports to a CEO, some can do fine with a VP that reports to a COO (who is the CEO’s right hand). For example, if the organization is a manufacturer and most of the spend is direct materials, this can work fine, as long as Procurement is also involved in other key spend categories by the CMO (for agency management), CFO (for back office spend), CIO (for systems spend), and other executives that also have large spend categories. As long as Procurement understands key company purchases and is able to convey the importance of those key purchases to the right stakeholders in a way that elicits their involvement, the reporting structure is not as important as general Procurement involvement.

2. Stakeholder Communication

Every other key Supply Management activity requires stakeholder engagement and support to be successful, so why should brand management and promotion be any different? The key to building, and selling, the Procurement brand (and making your mojo work for you) is regular, effective, stakeholder communication that provides messages relevant to them. Make sure you understand what your stakeholders value most — and address that. Cost savings? Innovation? The relationship? If you can’t talk to their needs and report on value in their terms, it will be hard to break down the silos and sell the value, and brand, of Procurement. Sigi offers some great advice on how to effectively communicate with your stakeholders that most books don’t, and this is a great section of the last chapter, which includes a discussion of how to create a stakeholder map to keep your communications on track.

3. Procurement PR

Good companies make good products. Great companies create a great brand image that people want and instill desire for products even before the products are released or, in some cases, people even know what the products are. Look at Apple. The brand made people want the iPod and the iWatch even before Apple even announced them.

But good PR isn’t easy, especially for a function focussed on hard value and not soft messaging. However, once you know the right formula, it isn’t that hard either. As long as your messaging consistently addresses activities and issues that are:

  • Important,
  • Sustainable, and
  • Credible

and relevant to the audience being addressed, the PR will improve and the brand will grow. How do you do this? Sigi provides a number of examples of efforts that various organizations have used to achieve this goal. While not all will necessarily work for you, some will, and the book is a great aid here as well.

Again, we highly recommend that you check out Sigi Osagie’s Procurement Mojo and Get Sigi Wit’ It.

Authoritative Damnation 65: Solution Partners

Activist Investors and a troublesome Board of Directors are one kind of damnation, but solution partners are another. Generally speaking, an activist investor and a board of directors are only troublesome on a quarterly basis, but solution partners can be troublesome on a daily basis. How so?

You depend on solution partners to serve your customers.

Some customers want your products, but other customers want your products and support services that your organization does not offer. As a result, you will need the help of solution partners, which will likely own the customer relationship. As a result, you are totally dependent on these solution partners to not only serve your customers’ needs but make your customers happy. And if they own critical customer accounts and they say dance, you have two choices, dance or lose critical customer accounts. Not a great position to be in.

You depend on solution partners to run your organization.

You need them for your custom manufactured products, your enterprise software systems, your MRO, and sometimes even for your internal IT and change management projects. The bigger you are, and the more focussed you are, the more you need these solution partners. It’s not a bad thing if you have good relationships, but if the relationships go south, but you are still under contractual commitment for a year or more, it can be a daily damnation until the relationship ends and gets transitioned to a new supplier.

You depend on solution partners for innovation.

If your organization’s strength is marketing and consumer demand forecasting, and it depends on solution partners to come up with new custom product designs to meet those demands, and on solution partners to come up with new manufacturing techniques to implement those designs, then the organization is completely dependent upon solution partners for innovation. This means that it is not only unable to thrive, but also unable to survive, without a strong solution partner ecosystem. It doesn’t matter how big it is or how rich it is, but just on how good it is at managing those relationships. If the organization is not good at SRM (Supplier Relationship Management), it, like Procurement, is doomed, marooned, and about to be entombed.

In other words, while solution partners can be an organization’s saving grace, they can also be a source of eternal damnation, driving you down the highway to hell.