Category Archives: Miscellaneous

Selected Insights from the Hackett Best Practices Conference

Despite talking to Hackett personnel for years, including the one and only Pierre Mitchell, it was the first time I made The Hackett Best Practices Conference. It was interesting, to say the least. I took lots of notes and will probably write a number of posts over the next few weeks, but for those of you who missed it and are anxious to find out what you missed, here are a few takeaways until Thomas* (who is the new Analyst at Spend Matters) and I have a chance to collect our thoughts and publish a more detailed analysis on our respective platforms. (We’re still waiting for a deep dive into the new Hackett Performance Exchange.)

Do more with less and grow at the same time (or at least add more value) is the new mantra for Procurement and (Shared) Service Organizations.

Despite the uncertainty and volatility of the market, many organizations believe now is the time for growth while simultaneously believing that they still need to conserve (or is that hoard) cash. As a result, they are tasking every organization to achieve growth without an increase in budget or headcount.

Talent is on everyone’s mind.

The leaders / world class organizations can’t find talent. The average performers / Hackett “peer group” can’t afford talent. And the laggards / those below the median can’t get their cost of temporary / contract labour low enough.

Strategic Sourcing / Procurement has become so complex at the leaders that they can’t find anyone that fulfills the job description, regardless of what they are willing to pay. The average performer, where sourcing and/or procurement is moderately complex and can be done by someone who worked for a leading organization, as a result of the budget crunch brought on by the downtown, can’t lure the talent they need away from the leaders who will, literally, pay whatever it takes to keep the talent they have. And laggards, with rising cost of oursourced labor in “emerging” economies that, in many ways, have “emerged” in their own right, can’t keep costs down (as they haven’t moved to an appropriate global services model and learned how to be more cost effective with more higher paid workforces who are more skilled and can realize exponential efficiency gains with automation).

Transitioning to Global Services Model is a Journey.

And it will take you longer to realize sustainable value than just throwing work over the wall to a GPO or outsourcing to India. If you’re a large organization, you’re generally looking at a minimum of two years to realize any sustainable value and five years to maximize value from efficiency and effectiveness if you’re doing it right.

While everyone likes to talk about their success, few will talk about their failures.

Not a single speaker didn’t tout the success of the finance / services / procurement organization over the last X years, due at least partly (if not largely) to Hackett’s help and expertise in benchmarking and best practices. However, not every speaker would openly discuss lessons learned (as that would imply some roadblocks / failures). Only a few would talk about mishaps or false steps along the way (and a shout out to Rick Wertsching of Disney for willing to be candid in this regard) and only one speaker (of the presentations I attended) was willing to not only admit that they weren’t world class, but show exactly how they compared to world class (even though they aren’t yet anywhere close to where they need to be). (And major kudos to Thomson Reuters for being completely honest about the fact that while they have made great progress in the last 4 years, they still have a journey of at least 4 years ahead of them.)

If you want Spend Matters to attend and cover your event,
the surest way to get their involvement is to make sure Sourcing Innovation has already committed.

*I’m thrilled that Jason added Thomas to the Spend Matters team. His technical prowess is a great complement to Jason’s business savvy and provides a solid foundation for Spend Matters to become the next great Analyst 2.0 firm.

Alignment is Pivotal in the Supply Chain Too

A recent post over on the HBR blogs by Nilofer Merchant, author of The New How, on how “We Can’t Agree to Disagree” discussed the importance of alignment and three areas where alignment is pivotal in a business. The post was excellent, but overlooked a fourth major area where alignment is critical to success: the supply chain.

If the supply chain is not aligned, one or more of the following will happen:

  • wrong product in the wrong place
    the product will be in a truck when it should be in a warehouse, in a warehouse when it should be on the shelf, or shelved in a low-traffic store instead of a high-traffic one where it will sell five times faster
  • overstock on poor selling SKUs, across-the-board stock-outs on high selling SKUs
    this will result in the need to take losses to clear out the excess inventory on the poor selling SKUs and lost sales on the high-selling SKUs
  • (severe) production delays
    when the required raw materials don’t arrive when needed or when orders are sent to factories that are near capacity instead of factories that are idling 50% of the time

And this is jus tthe tip of the iceberg. So when you are aligning you brand, your board, and your market, don’t forget the supply chain that is required to serve the market your company is focussing on.

Apple Dominates The Portables Market Because

Apple dominates the supply chain. While Sony and RIM had to delay products, Apple trucked ahead with the iPad2 right on time, and even though the backlog was a little bigger than they expected, they’re still doing fine. But how can you argue with over 60 Billion in Cash? Especially when “Apple could survive on current cash alone until 2018” (TUAW.com).

And that’s another reason why your company needs to be a supply chain leader.

We Need a “Loser Pays” Bill for Patent Lawsuits

If we can’t follow Europe’s lead and abolish software patents and get rid of the patent pirates once and for all, we should at least consider a loser-pays bill to prevent superfluous patent lawsuits which seem to litter the space every few years. Forget about the attempt to bring the English Rule to Texas, bring the patent pirate rule! And then, to make it really interesting, if the plaintiff loses, it pays double!

It’s time we got back to competing on service and value.

I Thought ‘C’ Was For Cookie

When I was young, it was ‘C’ is for Cookie and that was good enough for me. But it seems these days that ‘C’ is for ‘Criterion’ since, every time I turn around, we have another ‘model’ built entirely of ‘criterions’ that start with ‘C’.

There’s the The (Sourcing Innovation) 9 Cs of Site Selection, which is an expanded version of the Strategy + Business Five C’s of Site Selection.

There’s the Three C’s of Procurement (Central).

There’s the 6 Cs AchieveGlobal Model of Innovation Culture.

There’s the Five Cs of Credit Definition.

And the 3 Cs of Information Commerce.

We’re a crazy criterion culture obsessed with confusing configuration and it’s getting hard to cope without my cookie!