Category Archives: Miscellaneous

(e-Sourcing) Wikis are Organic

The recent issue of Backbone, the Canadian Business Technology Lifestyle magazine, had an article titled “Building a Wiki Workplace: Unleashing the Power of Human Capital” that noted that the nature of work is changing; it is increasingly team-based and collaborative, cutting across the organizational silos and bureaucratic structures of the 20th century corporation. (Echoing the sentiments of Tim Hindle as summarized in The New Organisation“, Sourcing the New Organization” on the e-Sourcing Forum [WayBackMachine], as printed in the Economist last January and discussed in my post , the fifth installment of last summer’s Purchasing Innovation series.)

It discussed the increasing popularity of wikis and blogs in the corporate world because they help employees work with more people, in more regions of the world, with less hassle and more enjoyment than earlier generations of workplace technology. The result is faster innovation, lower cost structures, greater agility, improved responsiveness to customers, and more authenticity and respect in the marketplace. The primary example provided is that of Best Buy, which continues to crush its competition with plans to open more than 100 new stores when competitors such as Circuit City are closing locations. Best Buy believes store managers and associates know customer habits, wants, and frustrations better than market research statistics and asks general managers to fine-tune the company’s broad-brush thinking for local markets. These general managers then go online to brainstorm and swap experiences and ideas, using collaborative technologies such as wikis.

However, it is the closing paragraph that provides the most insight:
Clear goals, structure, discipline and leadership in the organization will remain as important as ever and perhaps more so as self-organization and peer production emerge as organizing principles for the workplace. The difference today is that these qualities can emerge organically as employees seize the new tools to collaborate across departmental and organizational boundaries.

In other words, the benefits of the wiki will grow and emerge over time, and possibly provide value and insight in a manner you could never have predicted. Just make them available, make them easy to use, encourage their use, and have some patience. Given time employees will develop their own self-organized interconnections and form cross-functional teams capable of interacting as a global, real-time workforce. And, oh yeah, check out the e-Sourcing Wiki [WayBackMachine] spread the word.

The article also provides six tips on the implementation of collaborative technologies.

  • Use Pilot Projects to prove benefits
    and start with fact-based efforts
  • Choose a receptive group for the pilot
    such as young people familiar with collaborative technologies
  • Maintain Leadership and Vision
    and find a leader who is passionate but not too controlling
  • Use loose control systems
    and set clear performance goals while encouraging the use of new tools
  • Use innovative techniques to achieve critical mass
    and pre-populate the wiki with baseline useful content
  • Use light incentives
    and focus on creative pleasure, peer recognition of expertise, and visibility

Those China Pirates …

Ashton Udall has a good discussion on why the Chinese are likely to copy your products and steal your Intellectual Property over on the Product Global blog (which was inspired by a posting on “Why Does China Copy Designs” on the Design Sojourn blog). The great thing about the post is he breaks it down into two major themes, each of which boil down to the same basic theme: culture, which I have partially discussed in my Is Low Cost Country Sourcing to China really Innovative, my Can China Be Innovative, and my Supply Chain Top Three posts. For those of you considering a new sourcing venture to China, I would highly recommend you check the post out.

Strategic Sweetening

For those of you who haven’t had a chance to catch Jason Busch’s The Now Future presentation where The Spend Prophet of Spend Matters where he highlights five trends you need to be aware of and simplifies the technology landscape to the point that a human mind can grasp it, thanks to a last minute cancellation and some strategic sweetening (see the last paragraph of the blog entry “Ketera Gets Some Play”*), you have another chance tomorrow at Procuri’s (acquired by Ariba, acquired by SAP) encore Supply Management 2.0 Forum in Chicago.

* All posts prior to 2012 were removed in the Spend Matters site refresh in June, 2023.

Expert Purchasing Management, A Review, Part II

To emphasize my point that I believe Next Level Purchasing’s new course “Expert Purchasing Management” is worth your time and dollars, with kind permission, I am going to dive into a few topics covered in the course that I believe illustrate the expert advice contained within the course.

The course begins by noting that there are four critical areas to the success of a purchasing department.

  • Organizational Perceptions of Purchasing
    if you’re not perceived as effective, your internal customers will try to bypass you instead of working with you
  • Purchasing Performance Measurements
    since management often only cares about metrics
  • Purchasing Staff Skill Levels
    since purchasing today requires top notch skill sets
  • Purchasing Staff Morale
    as a happy employee is a productive employee

It provides methodologies to gather intelligence on organizational perceptions and paint a clear picture, to determine how purchasing is measured and how well it is performing, to determine current staff skill levels and gaps between what the skill levels should be, and to improve morale.

A little over halfway through the course in lesson five it points out that a purchasing manager must act independently. A purchasing manager must be a leader and not a doer and not fall into the trap of doing the buyers work for them – as this will ensure the manager never has time to focus on department strategy, improvements, and cost savings and reduction innovation. It provides some good tips to help purchasing managers from falling into the trap of doing a buyers work for them, which include:

  • adding “works independently and solves problems with a minimum of management assistance” on performance evaluations
  • holding weekly meetings to encourage buyers to share challenges and solutions with their colleagues
  • encouraging buyers to think through situations and develop several potential solutions on their own – they should only come to you for advice on choosing the best solution

Finally, near the end (in lesson seven) it notes that, when it comes to eSourcing systems, sometimes less in more and when evaluating such systems you should only use a basic capabilities checklist and not detailed specifications (even though the sponsors of the Sourcing RFP Template might disagree). Specifically, detailed specifications have the following disadvantages:

  • specifications can be slanted to a particular provider
  • strict specifications may penalize more cost-effective software which actually does 90% of what you want and 99% of what you really need
  • strict specifications could result in a provider adding functionality that could then become a foundation for a patent dispute, which could be a problem for you if you are using the only instance with that customization

Finally, the course provides you with a starting capabilities checklist that you can use when evaluating eSourcing solutions.

I hope this has given you some more insight into the importance of continued education and appropriate courses for your professional development and why I believe the “Expert Purchasing Management” course and the “Senior Professional in Supply Management” certification is most likely worth your time and investment as a procurement professional.

Expert Purchasing Management, A Review, Part I

Recently, I reviewed the on-line course “Expert Purchasing Management”, the latest offering from “Next Level Purchasing” (now the Certitrek NLPA). The course, designed for new and existing purchasing managers struggling to balance the many demands of their leadership role and get the most out of their department, is designed to teach a purchasing manager evolving best practices, new technologies, and the policies and procedures they’ll need to take their purchasing department to a new level of success.

According to NLP‘s website, those who take the course will learn

  • How to report purchasing performance metrics to senior management
  • Four things about the purchasing environment that you need to assess right away
  • How to develop a purchasing customer service survey
  • Tips for improving purchasing staff productivity
  • The secrets for involving internal customers and establishing a successful Purchasing Advisory Board
  • The most important things to consider when naming your purchasing department
  • Five common purchasing department structures and their advantages and disadvantages
  • How to prioritize commodities that the purchasing department will source
  • Four indicators that you should look for to identify non-traditional areas for potential savings
  • Three different ways to assign buyer responsibilities
  • The types of various purchasing profit center models and the dangers of choosing the wrong one
  • How to staff your purchasing department with the right people
  • How to create a Purchasing Dashboard
  • How to set the perfect purchasing department goals
  • How to develop purchasing policies and procedures
  • How to establish a standard sourcing process
  • Strategies for using templates to improve productivity and reduce problems
  • Best practices for making recommendations to senior management
  • Three ways to reduce the tactical purchasing activity under your management
  • Five steps to take to ensure that you don’t do buyers’ work
  • How to improve compliance with purchasing initiatives
  • The essentials of launching a purchasing department Web site
  • How to assess the available purchasing technology by watching video demonstrations of leading software from Ariba and Zycus
  • Ten keys to eSourcing success

But of course, like the four courses I previously reviewed here on Sourcing Innovation (links below), it not only lived up to its promises, but also:

  • Covered the basic performance measurements and how to differentiate good metrics from bad
  • Discussed the five common organizational structures for purchasing departments as well as the associated advantages and disadvantages
  • Included a three-stage plan for long term purchasing development
  • Discussed eight types of policies and four types of procedures you should consider defining and implementing if you haven’t already
  • Discussed best practices for creating RFX, Contract, and Analysis templates
  • Highlighted the point that while ERP systems are very strong in terms of their database functionality and integration of data across the enterprise, they tend to be very inept when it comes to supporting world-class purchasing practices.
  • Provided some basic patterns for successful spend analysis.
  • Compared the traditional RFX process with the eSourcing RFX process step-by-step to ensure the advantages and efficiencies of best practice eRFX use are crisp and clear
  • Highlighted that when it comes to eSourcing applications, sometimes less is more and that its best to figure out the basic capabilities you need and simply compare such systems to a capabilities checklist because companies often reap great results when using less expensive eSourcing systems.
  • Discussed and differentiated the different types of pricing models being used by eSourcing providers as well as the advantages and disadvantages of each model.

Thus, I’d have to say that this course is definitely worth it. However, unlike the previous courses, which have been under continuous improvement for a couple of years now (since NLP collects all feedback and questions and makes it a point to update each course at least once a year), I did find two minor issues. Not that anything was wrong, just that I disagree.

The first issue is that Next Level Purchasing defines eSourcing as as the use of the Internet to automate several tasks associated with an RFP process. As regular readers know, I define eSourcing as the full eSourcing cycle from spend analysis through contract creation and management, following the spend analysis, supplier qualification, RFX, auction and/or negotiation, decision optimization, award and contract creation and subsequent management process that is currently outlined in “Strategic e-Sourcing Best Practices” over on the e-Sourcing Wiki [WayBackMachine]. As far as I’m concerned, Charles definition is that of the executable eSourcing Cycle which starts with the pre-RFX supplier qualification and ends with the post-RFX auction phase. That being said, everything the course covers about RFPs and related activities is correct.

The second issue is that the course does not devote a section to explaining the differences between traditional installed behind-the-firewall enterprise applications and on-demand applications, and the various models for on-demand delivery as well as the advantages and disadvantages of each. Although this is partially covered in the section on pricing models, there’s a lot to be said on each side of the fence and I feel that a good understanding of the issues can make the difference between selecting an eSourcing suite that’s good for the organization and an eSourcing suite that’s great for the organization. Of course, this wasn’t designed to be a technology course, so my point might not be valid. But you should know by now I am picky.

Of course, knowing the perfectionist that Charles Dominick is (the President of Next Level Purchasing), I’m sure these qualms will be addressed in spades in the very near future.

So if you’re looking for a professional certification, I still believe that the “Senior Professional in Supply Management” is likely the certification for you, and that if you have the SPSM and are looking to maintain it, then this course is worth your time and dollars. But if you still don’t believe me, be sure to read part II where I dive into three topics of interest.