Category Archives: Miscellaneous

The Three Things You Really Need to Know About Big Data Right Now!

A recent post over on the World Future Society on “The Three Things You Need to Know About Big Data, Right Now” annoyed me because the first thing I saw was that the data experts are organizing and they want a revolution. So what? First of all, we’re few and far between, and, more importantly:

  1. For Business, Big is, as it has always been, meaningless
    Like I said in my recent post on how There’s No Such Thing as BIG Data in Business, we’re not doing protein folding, climate modelling, nuclear simulations, supercollider data interpolation, cosmological computations, or even trying to beat Deep Blue at Chess. We’re looking for answers to everyday business problems, which comes from analyzing heterogeneous and related data, possibly through federation, and not from throwing everything into a number cruncher to see what comes out. Although you may have 100 Million transactions in your ERP, you don’t need to analyze them all at once. Analyzing all of your spend at once is akin to comparing your DVD Player to the kitchen sink to an apple. We don’t need a revolution. An evolution will do just fine.
  2. They Don’t Need Your Data
    Yes, every advertiser and his dog is going to want your data to better target you with advertisements you are more likely to look at, but you don’t have to give it. Remember, they only care about statistics anyway, and, depending on the data being collected, a sample as small as 30 can have some statistical relevance. And while economists, population researchers, and medical researchers may have a valid need for certain data items about you, you don’t have to share all your private details and can most likely keep most of your unique identifying details anonymous without impacting the accuracy of their study.
  3. The Correlations will be Uncanny but Many Won’t Matter Anyway
    While some stuff you can predict is amazing, some is not, and while it’s always frustrating to not be able to predict some behaviours and outcomes, we not only accept that as a fact of business and of life, but wouldn’t have it any other way. (There’d be no stock market if we could predict everything.) For example, it’s not unexpected that web-savvy people will be searching for “unemployment” information as soon as they get laid off. But it is unexpected that a subset of Indian Politicians and a subset of Drug Dealers would have much in common (as per this recent Freakonomics Blog Entry. And neither of these facts really helps us with anything.
    Plus, the predictions will never be perfect. Like weather and stock market models, when you try to model large-scale behaviour like consumer activity over the long term, every now and again the model will fall flat on its face.

To summarize, Big Data is like Big Cloud — full of too much hot air.

Take the First Step on Your Next Level Supply Management Journey

And start by downloading the new BravoSolution sponsored Sourcing Innovation WhitePaper on “Taking the First Step on Your Next Supply Management Journey” [registration required] today!

Lamenting that the acronyms and acclamations are flying fast and furious in the Supply Management space, with phrases like VFS. Hi-Def Sourcing. Next Level Supply Management. Next Practices. leading the way, this paper, which notes that even world class Supply Management organizations have to do something more to maintain their year-over-year contributions to the bottom line with the perfect Procurement storm of high demand, low supply, and high market volatility brewing off of the coast, provides a roadmap for those Supply Management organizations that are looking to begin, or continue, a Next Level Supply Management Journey.

For an average organization, this will be a long journey that could take the better part of a decade. There’s a reason that only 8% of the Procurement organizations make the best-in-class cut (defined as being in the top quartile of both efficiency and effectiveness) in the Hackett Group rankings (which benchmark 73% of the Fortune 100). It’s tough to be the best. (But not out of reach for the dedicated. That’s why the rankings change year over year.)

In order to help a Supply Management organization begin its Next Level journey, this paper starts by defining a 3-Level Maturity Model across nine axes that can be easily understood by any Supply Management organization. While you can argue for 5 (and follow the Hackett Model), or even 7 (and follow a pyramidal model), by breaking the model down at the borders, the reality for most organizations is that they are either are best in class, better than average, or worse than average, and until they are deep in a journey, any classification that is more fine-grained just confuses the issue.

The nine axes are:

  • Sourcing Process
  • Organization
  • Finance
  • IT
  • Product Management & Marketing
  • Risk Management
  • Asset Management
  • Relationships
  • Metrics

And depending on where you fall on the majority of these metrics, this will slot you either into a

  1. st level organization still in the standardization and complexity reduction stage, a
  2. nd level organization in the operational excellence stage of Supply Management, or a
  3. rd level best-in-class organization that has progressed to the head of the pack with its mastery of strategic business enablement.

To find out where you fall, and get some good ideas on how you get there, download the BravoSolution sponsored Sourcing Innovation white-paper on “Taking the First Step on Your Next Supply Management Journey” [registration required] today!

820K for a Las Vegas Conference? Amateurs! Just Ask The UK Public Sector.

I’ve been watching the headlines on Spend Matters and Spend Matters UK the last few weeks where they have been harping on the 820K GSA Conference in Las Vegas (and the fact that the GSA cited their maximum budget in advance with no intention of negotiating lower rates) and the lack of spending ethics in an organization charged with helping the Government save money. While this is an example of “excessive and wasteful” Procurement practice that is likely in violation of the policies of just about any Public Sector agency, it’s more of a personnel issue (with a few bad apples who like to misuse funds) than a Procurement issue.

This story, which broke in early, should be dwarfed by a much more important story that broke around the same time, that dealt with an amount 2,800 times as large. And that is, as first reported on SupplyManagement.com (to the best of the doctor‘s knowledge), the result of the 2012 Annual Fraud Indicator, as published by the National Fraud Authority.

According to the report, Procurement fraud, which made up the largest portion of the total loss, cost central government £1.4 Billion and local government £890 Million as a result of false and ‘double invoicing’, price fixing, altering payment details, and giving kickbacks to determine contract awards. Note that the first and last instances of fraud can only occur when someone on the Procurement team is taking part in the fraud. (And don’t tell me the buyer didn’t double invoice. While true, if he didn’t catch it, he’s guilty. It doesn’t take much work to check an invoice, and if you acquire a good P2P system, invoices are checked automatically against invoices in the system, rejected if obviously duplicate [same invoice #, etc.] and flagged if potentially duplicate [similar details, amounts, etc.].) If a large number of false or double-invoices slip through, then someone on the team is letting them. (Unless they are really, really stupid. But, hopefully, by now such people would have been eliminated from such a significant role given the focus on Procurement in the last decade.)

Think about that for a moment. £2.3 Billion or $3.7 Billion U.S. That’s an amount greater than the economy of at least 30 countries (Tuvalu, Kiribati, Sao Tome, Tonga, Dominica, Comoros, Samoa, Saint Vincent, Saint Kitts and Nevis, Vanuatu, Grenada, Solomon Islands, Guinea-Bissau, Gambia, Seychelles, Liberia, Antigua and Barbuda, Saint Lucia, Djibouti, Belize, Bhutan, Cape Verde, Maldives, Central African Republic, Sierra Leone, Burundi, Lesotho, Guyana, Eritrea, Fiji, Togo, and Suriname)! Gone. In the crapper. Down the drain. From fraud! So, Martha Johnson may have had her fun, while single-handedly propping up the economy of Las Vegas for a few days while doing so, but this wasteful spending (on real goods and services, though very heavily inflated in cost) was only a drop in the bucket compared to the money lost in public sector fraud every year.

The message — if you are a public sector organization, get an audit and do something about the fraud. If you don’t know where to start, get help. There are consultancies that specialize in this. Katzscan is one example.