Category Archives: Procurement Innovation

Proper Project Planning is Key to Procurement Project Prosperity! Part 3

In Part 1 we noted that we wrote about the importance of Project Assurance, and how it was a methodology for keeping your Supply Management Project on track, ten years ago and that this typically ignored area of project management is becoming more important than ever given that the procurement technology failure rate, as well as the technology failure rate as a whole, hasn’t improved in the last decade, and is still as high as 80% (or more) depending on the study you select.

Then, in Part 2, we told you that even before we dove into the project steps for which both assurance, and guidance (because assurance isn’t enough if the project [plan] isn’t right), is needed, we were going to give you one critical action that you needed to undertake to ensure everything starts off, and stays right. And that particular action is to:

  • engage an independent expert to guide you through the entire process and help where needed

because the complexity of Procurement and Procurement Technology has reached a point where it just overwhelms the average Procurement professional. It’s been more than two decades since global conditions impacting Procurement have been so complex and technology has reached the point where even experts are struggling to make sense of the market madness, meaningless buzzwords, and the overwhelming onslaught of Hogwash.

We also pointed out that this expert must be truly independent and cannot be:

  • a resource of the company,
  • a resource of the vendor, or
  • a resource of the implementation provider.

This resource is critical in each of the phases we described in our original Project Assurance series (Part I, Part II, Part III, Part IV, and Part V). Here’s a high level description of why.

  • Strategy: the first step is a “health assessment” that pinpoints where the organization is in Procurement Maturity, and what it should be looking for to get to the next level (otherwise, what’s the point?), and this is where an expert can do a maturity and gap analysis
  • Acquisition: the expert can help craft the right RFP for the organization, identify which vendors have the appropriate technology (to ensure every response received would at least address some of the key pain points, and that the responses would be comparable), and help with the evaluation and review (acting as sale-speak to plain English translators)
  • Planning: once one or more solution (and implementation) vendors are selected, the expert is key in the creation of a realistic, and logical, project plan that ensures the organization doesn’t agree to a “big-bang” implementation proposal (which always results in a “big-bang” and has led to major supply chain failures), that the resource requirements won’t be too strenuous on the organization, and that the most critical capabilities are implemented first
  • Design/Plan Review: the plan is compared to the strategy, RFP, and overall business goals to make sure everything is aligned before the project progresses
  • Development/Implementation: the expert ensures each phase starts, completes, and is properly tested and verified on time; uncovers the reasons for delays and the root causes to prevent future problems; and when changes are required, helps to define and supervise change management (plans)
  • Testing & Training: the expert will not only ensure that the proper tests are designed, but that they are properly implemented and repeated until complete success is the result

In other words, the right expert is your guide to ensuring each step is designed right as well as conducted right, who can also take over any tasks you don’t have the expertise to do so in house. And, most importantly, the right expert is your key to Procurement Project Prosperity!

Advice For Dealing With The PROCUREMENT STINK from Leading Consultants!

Last week, the doctor asked fellow niche/independent consultants as to how we can help to dispel the PROCUREMENT STINK which is permeating the space as a result of poor choices, bad information, and sometimes bad actors, which include the reasons we described in that article as well as many more.

Why? Because it’s going to take a collective effort among analysts, consultants, and vendors to dispel the stink permeating the Procurement space, and no one on his or her own will have all the solutions. As expected, some of the greats chimed in with their thoughts and ideas and these thoughts and ideas need to be given center stage, so this is what we’re going to do today!

James Meads

Clarity and transparency on your business model is key, especially if you have revenue streams from solution providers.

As Patrick Van Osta echoed in the comments, the uphill path to recovery, I feel, is for consultants to reclaim the position of sole trusted advisor, and there’s no way we’re ever going to be trusted advisors if we are not clear and transparent in our operations and goals. If we’re hiding our intentions, or upsides, how will the client know whether or not our goals actually align with theirs?

Joël Collin-Demers

I’m 100% on-board with the need for transparency and taking decisions based on what’s best for the client long term. Your job is to make yourself redundant as soon as possible!

In Procurement, there’s always another project. ALWAYS. You don’t have to milk one for life, with your help and guidance, you can open the client’s eyes as to not only how much there is to do, but how much they can do better, for a great ROI, with your help. Just like there’s well over 25,000 (or 35,000) species of fish in the sea, there are tens of thousands of unique aspects to Procurement in a modern enterprise. And just like you have to know where to fish, what hook to use, and what bait to use to catch a type of fish, you need to know the equivalents for each category, methodology, and process.

Jon W. Hansen

Practitioners stop looking at technology as the “silver bullet” solution but instead focus on doing the real and hard work while Solution providers stop selling shiny paper and “falling in love” with your own technology. … and us consultants have to help the practitioners do the work, understand what they need, and steer clear of the vendor with the shiny new tech (that doesn’t actually do anything [more than cheaper, proven tech]).

Paul Martyn

Consultancies (and their clients) need to Provide performance based compensation with uniqueness. For example, provide specialist consultants with compensation that includes equity. In short, align compensation to customer value (revenue growth and retention). Because, right now, most of the good consultants that can generate the ROI a client should expect are not incentivized to do well on point-based projects (like an Affordable RFP), but instead are incentivized to work on, and sell, long-term “solution” oriented consulting that lines the firm’s (and not the clients’) pocketbook (i.e. keep doing the fishing vs. teaching the client). As a result, most of the good consultants move out of the roles they are needed in to the roles they are incentivized to take.

Vinnie Mirchandani

The web lulled a number of procurement (and IT) folks into expecting vendor, negotiation etc intelligence for cheap, if not free. Vendors are not afraid to spend on sales and marketing. Procurement needs to adopt a similar mindset to even the game.

The best things in life may be free, but the best things in business are not. (As the Arrogant Worms pointed out over three decades ago, you get NOTHING FOR NOTHING!) And if you don’t have the right tools that enable the right processes powered by the right intelligence, you’re not going to win the game. Remember that all of the best sports teams use high-tech sports tech backed by science and data analytics to help their athletes reach peak condition. Raw talent only gets you in the game. You need the right training to win, or, at least, the right guidance and tech to enable you as you learn.

There’s a lot of STINK out there now, but if you follow this advice, you’ll go a long way to removing it. After all, you can’t solve everything with a pressure washer.

Proper Project Planning is Key to Procurement Project Prosperity! Part 2

In Part 1 we noted that we wrote about the importance of Project Assurance, and how it was a methodology for keeping your Supply Management Project on Track, ten years ago and that this typically ignored area of project management is becoming more important than ever. Given that the procurement technology failure rate, as well as the technology failure rate as a whole, hasn’t improved in the last decade, and is still as high as 80% (or more) depending on the study you select, that’s a problem. Especially when, for many companies, theses projects typically start in the million dollar range. (Even if the annual license is only 100K, by the time you multiply that by 3, the minimum term any vendor will give you, the annual maintenance fee by 3, and then add the implementation, integration, training, and ongoing integration maintenance costs and ongoing training costs, it’s well over 1M.)

But we also noted whereas there might have been a time when this was enough to tip the odds of success in your favour, it’s not quite enough anymore. Given the complexity of modern procurement (which hasn’t had as many complex problems to deal with simultaneously in over two decades) and modern technology (which is now AI enabled, AI backed, AI powered, AI enhanced, and or AI driven, even if it isn’t), when most organizational users are still struggling with basic technology (not enabled, backed, powered, enhanced, or driven by [fake] AI bullcr@p).

We told you we were going to dig into the project steps and help you understand what you need to do to get it as right as you can and greatly increase your odds of success. But first, there is one critical action you need to make that is common to all steps that is critical for your Procurement Project Prosperity and that is:

  • Engage an independent expert to guide you through the entire process and help where needed, including assurance.

As noted, this individual

  • cannot be an internal resource, even from a different department, as they are still subject to the internal pressures from the C-Suite (fast, cheap, etc.) that might be counter-productive to project success (that is critical for eventually obtaining the ROI you purchased the platform for in the first place)
  • cannot be a vendor representative as their only goal is to get you to buy more, or at least keep your subscription at the initial purchase level (which likely contained seats you never used, SKUs you don’t use enough to justify, and third party feeds/integrations you aren’t taking advantage of)
  • cannot be an implementation team representative, even if they are a third party consultancy, as the odds are that consultancy has a preferred partnership with the vendor and will be biased towards keeping the vendor and doing whatever is easiest (and thus most profitable for) the vendor to keep getting their implementation referrals

Now, what’s the difference between helping and pure assurance? In addition to making sure each step is accomplished effectively, this person is also guiding you through the creation of the necessary artifacts of each step to ensure success. This person is helping you define the goals, not just ensuring the goals are met. The person is simultaneously a project guide and a project evaluator, bringing the Procurement Best Practices and Technology Knowledge that your organization doesn’t have, and helping you identify the right intersection to take you forward on your journey.

And this goes well beyond just helping you write an RFP (although this is a key step, which is why the doctor has been telling you to get expert RFP help for your Procurement technology RFP for close to two decades, because a bad RFP is one of the leading causes of project failure).

This is because, as we noted ten years ago in our original Project Assurance Series (Part I, Part II, Part III, Part IV, and Part V), project success depends on more than just getting the technical specifications right. Project success also depends on getting the talent right — as it is the people who will have to use the new system. And project success also depends on getting the transition right —- if the changeover is not smooth, significant disruptions to daily operations can occur. And, equally important, they also depend on an often overlooked 4th “T” —- tracery. Organizational success depends on selecting a superior strategy and seeing it through until the desired results are achieved (or the organization changes the strategy). (And since you don’t know what you don’t know, the small cost of engaging an expert, relative to the overall project cost, will generate a return far, far greater than the technology ever will.)

Tracery, which stems from late Middle English, can be defined as a “delicate, interlacing, work of lines as in an embroidery” or, more modernly, as a “network”. Implementing a strategy requires effectively implementing all of the intersecting “threads” that are required to execute the strategy to success. If any one aspect is overlooked, the project can fail. And if you can’t even see all the threads, it should be easy to understand how most projects essentially fail as soon as they begin and why you need a master weaver if you want to beat the odds and actually succeed.

Come back for our next installment where we will dig into the six traditional project steps outlined in our original series and dive into what your independent, third party, Procurement technology project guide (who will be independent from you, your vendor, and the vendor’s third party implementation team) needs to do.

Dear Fellow Independent Consultants: How Can We Dispel the PROCUREMENT STINK!

Hopefully you know by now what the doctor is talking about, but if not, as per the Sourcing Innovation article from two months ago, PROCUREMENT STINKS and we should not deny it anymore.

In a nutshell, and just is just the tip of the garbage heap:

  1. Case studies are ranker than expired fish in a microwave on high.
  2. Approximately 85% of companies are AI-washing everything.
  3. The Gen-AI claims that it will deliver Procurement to the enterprise are FALSE.
  4. Intake/Orchestration is totally useless on its own.
  5. Consultancies are often more in the dark than the Procurement departments they are claiming they can help.
  6. DEI is being misused to push agendas and sometimes to Do Extra-legal Initiatives,

And, as per a poll put out by THE REVELATOR, we are especially concerned with the fact that 14% of practitioners would rather trust a salesperson or a marketer than a consultant or an analyst! (Now, part of this is probably due to the lack of independence from many consultancies who continually pushed their vendor “partners” on the client whether or not the “partner” was the best solution, but still, it’s not ideal. [And, hopefully, as a result of the bloodbath, the consultants who weren’t offering value to their clients were the first to go.])

As far as the doctor is concerned, the most trusted advisors in the space should be:

  1. analysts
  2. independent consultants

and that’s it! No sales people, no marketers, no influencers, no made up positions. Sales people are paid to sell, not to solve problems, and marketers are paid for leads and, in some organizations, there is no correlation between “leads” and the sales funnel.

So how can those of us not at a bigger consultancy, where we would be joined at the hip to preferred partners or subsidiaries (and not recommending them results in a pink slip), dispel some of the stink and regain some trust?

The first thing the doctor wants to state is that he has even less ideas here than he does for his fellow analysts. In fact, the ideas he does have should be pretty obvious.

1. Disclose any (formal) relationships we have with vendors that are recommended.

Even if a partner is the best recommendation for the client, we must still disclose the relationship, especially if there is any additional benefit we get from the recommendation (and definitely if the benefit is financial). (In addition, we should make extra effort to demonstrate that we did thoroughly evaluate the identified alternatives and have a number of reasons for the partner recommendation that are specific to the client’s needs).

2. Create RFPs based on identified needs, not free vendor templates or analyst map outlines.

It’s critically important that we don’t take shortcuts here because vendor templates are designed to ensure that the vendor who gave the template away always comes out on top (by focussing in on the requirements that the vendor executes best) and analyst map requirements focus on a set of requirements that the analysts can use to compare vendors on the same scale, not on a set of requirements that is relevant for selecting a platform for a specific customer, or even a customer of a specific size in a specific vertical.

3. Recommend vendors based on technical fit and hard requirements, not cultural fit and soft requirements.

Just like it’s not an analyst’s job to judge cultural fit or other soft factors in their analysis (as that varies too much by company to even take a shot in the dark), it’s not our job to tell clients who is a good fit — that’s for them to decide. We’re there to tell them which companies can provide a good solution, and let them decide who they are comfortable with as they will be stuck with the vendor for 3, 5, 7 or more years (not us)!

4. Make recommendations on expected ROI for the customer, not follow-on work potential.

At bigger consultancies, where the consultant is often joined at the hip to partners (and must use/recommend their solution if it can be force-fit), they are often also pressured to making the recommendation that will lead to the most follow-on work and engagement extensions (and, preferably, long drawn-out implementations and integrations). As far as the doctor is concerned, this is one of the most egregious things you can do. Especially considering that, in Procurement, work is never done and the client will always need more advice, new technology, and more help.

If we focus on the technology that will deliver the most ROI, then we are enabling the client to generate funding for additional projects and, hopefully, make us their consultant of choice in the process by focussing on them before us. The reality is that there isn’t a Procurement organization anywhere, not even in the upper quartile of Hackett Group top performers, that has all of the resources, technology and knowledge it needs. So we should never think it’s a one-and-done situation if we do well (and, moreover, do it at a fair price-point where we deliver an ROI).

5. Don’t take on projects we’re not qualified to do.

While this might get you fired at a bigger consultancy where the motto is the traditional consulting motto of “sign now, figure it out later” (because they have enough expertise and people across enough areas to do it), we need to be better (because we don’t have expertise anywhere or a lot of people to fall back on). If we’re approached with something that’s not in our wheelhouse as a consultant, we take it to the rest of the company. If it doesn’t fit anyone’s wheelhouse, we need to politely decline the work. If it means we never get asked again, then we know that’s a client we wouldn’t want to work for as any client with working brain cells would be impressed and honoured to know a consultant who didn’t just say yes but instead thought about whether or not they could deliver enough value relative to their price tag before accepting the work.

Furthermore, if we take the time to educate the client on what our services are and where we could help, we should be the first call they make when they have the right project, and maybe even get it in a sole-source negotiation if the project doesn’t cross a mandatory public bid threshold. People worth working for value honesty, and are very likely to come back to you, either at their current company or their next company, if you are honest about what you can and can’t do and what value you can provide. (Furthermore, if you investigate the company and can identify something you could do to help them, nothing stops you from proposing that project and working with them to close that project while helping them find the right consultant for the project you can’t do.)

At the end of the day, no one ever ruined their reputation by saying no to work they weren’t suited for — they ruined their reputation by taking on work they weren’t qualified to even talk about and then f6ck1ng it up royally.

the doctor‘s not sure it’s enough, but it’s a start, and if other independent consultants make an effort to figure out how to restore our reputation, maybe we’ll find the answer, provide the value that we are engaged to provide, and get back the trust we should have.

Proper Project Planning is Key to Procurement Project Prosperity! Part 1

Ten years ago we wrote about the importance of Project Assurance, and how it was a methodology for keeping your Supply Management Project on Track (Part I, Part II, Part III, Part IV, and Part V).

We told you that Project Assurance, which takes a proactive approach and tries to identify issues, and implement mitigations, before they arise, involves the organization periodically stopping to objectively assess project failure points as they arise, typically with the help of an outside third party who can be completely objective, to identify what is and is not being done well and what could cause failure later if not adequately addressed now.

In traditional Project Assurance, there are six health assessments at six critical points in every project (for each of the six initial project phases defined by the classic waterfall project methodology). In particular, there is an assessment at each of the following steps:

  • Strategy (Pre-Presentation)
  • Acquisition (Pre-Vendor Selection)
  • Planning (Pre-Design)
  • Design (Pre-Acceptance)
  • Development (Pre-Testing)
  • Testing & Training (Pre-Acceptance)

And that the right assurance expert can help you with

  • expectation management during the strategy development
  • narrowing the procurement gap during the acquisition phase
  • aligning the troops during the planning phase
  • delineate the disconnect during the design phase
  • evaluate for acceptance during the development phase
  • tame the transition during the testing and training phase

And we stand by these posts and the importance of a third party expert helping you with the assurance ten years later, because we feel that if more companies adopted the methodology, we might not be in the situation a decade late where we still have a ridiculously high failure rate in procurement technology projects (as well as technology projects as a whole), that, depending on the study quoted, still exceeds 80% in some cases.

But we also recognize that, given the complexity of both modern Procurement (which hasn’t had so many issues to deal with simultaneously in over two decades), and modern technology, project assurance isn’t enough to save a project that isn’t planned right from the get go. (You just don’t have time to identify and fix all the problems once things get underway and you have the army of grunts simultaneously doing the implementation, all the integrations, and training as they try to rush an enterprise project that used to take two years and get it done in 9 months so they can promise payback within a year (which never happens when they do this — but that would be a different rant).

So, in this short series, we are going to dive into the project steps and help you understand what you need to do to get it as right as you can and greatly increase your odds of success.