Category Archives: rants

Forget the Wall, Mr. Trump; An End-to-Edd Visa Program Overhaul will be MUCH more effective!

You’ll accomplish three of your goals simultaneously:

  • Keep People Out
  • Make Foreigners Pay for Your Programs
  • Make it easier to deport people

Let’s take this one-by-one.

1. Keep People Out

If you make it so that the only way in to the country for any extended period of time, for any reason other than vacation, or from any country that is currently high risk, especially where there is no appropriate trade program in place, is a visa, then the majority of people will be kept out.

2. Make Foreigners Pay for Your Programs

If you introduce more visas, with more requirements, and cost-based processing fees, foreigners will end up paying for your programs.

3. Make it easier to deport people

If you make it so that deportation is automatic for anyone without a visa, provided you make it so that everyone who should have a visa can get one, including people who are already in the US, possibly illegally but who should be given the chance to be made legal, then, after a reasonable grace period, you’d face little opposition to automatic deportation.

But these are not the only benefits you’d see from an overhauled Visa program.

You’ll also see:

  • An increase in STEM capability
  • An increase in American jobs
  • An increase in blue-collar and white-collar salaries

An increase in STEM capability

If the H1-B Visa program is properly overhauled, as suggested by Vinnie Mirchandani over on deal architect, then instead of getting tens of thousands of displaced Indian programmers, who likely only have a Bachelors and a few years of experience, you will get Masters and PhDs with advanced education and experience and true innovation capability — especially if you resurrect Senator Cruz’s proposal to make the minimum salary of a H1-B $110,000 a year. No one’s going to pay the equivalent of a $50,000 a year (at best) graduate $110,000 — and if they have to pay above market for a programmer, they’re going to hire an American first (which will be much cheaper than importing a $110,000 outsourced worker) — but for a real genius in physics, chemistry, bio-tech, engineering, that will be cheap. Especially since there will actually be H1-B visas available as they will no longer be sucked up in their entirety by Indian outsourcing firms.

An increase in American jobs

As indicated above, just fixing the H1-B program will increase American jobs as it will deter bringing people in that can effectively be used as indentured servants at cheap wages. But, better yet, introduce more visa categories, requirements, and fees for hiring non-Americans and, presto, you’ll do more for American jobs than lowering taxes (which never stay down anyway), building walls to keep people out, or pushing “buy American” policies. After all, your average constituent at the end of the day is lazy and greedy — if it’s easier and cheaper to hire an American than a non-American, then unless that non-American truly brings unparalleled value to the company (and, indirectly, the country). they are going to hire American.

An increase in blue and white collar salaries

The majority of your voters are in the middle class, working decent paying factory jobs (which will now be more expensive to fill with Mexican and other immigrants from poorer nations) and white collar tech-based jobs (which will now be more expensive to fill with visa program candidates). As a result, the best Americans will be in sought after, demand bigger salaries, and, guess what, owe it all to you. Going back to my comment that your voters are greedy (as the dollar comes first in America), this will only help you as they won’t care about party at election time, only the one President that fattened their pay cheque while increasing their job security.

So, Mr. Trump, forget that Wall and overhaul those Visa programs. It’s about time someone did.

Do You Need a Spend Cube to Identify Top Underperforming Products?

No, you don’t. But that doesn’t mean you shouldn’t have one!

Let’s face it, if you have an n-step process that can theoretically be done in a spreadsheet, then it can be done in a spreadsheet — but how long will it take to do it in a spreadsheet vs. doing it in a modern spend analysis solution?

If sub-steps of the process consist of:

  1. researching and accumulating industry specific data
  2. comparing your data to industry averages
  3. repeating the comparisons with selected competitors, putting your place in their shoes
  4. looking for anomalies
  5. selecting top categories outside industry average
  6. selecting top underperforming products within those categories

How long is it going to take without a proper spend analysis product?

Industry data is going to come in many different forms, in many different tables, and will initially need to be stored in many different sheets. It will take a lot of manual effort and data formatting to get the data into a consistent format that will allow it all to be compared apples to apples. In contrast, a good spend analysis platform with ETL will allow for data to be automatically mapped to the right format will easily save hours or days of manual effort, as most good data tables will be detailed and large.

Comparisons in spreadsheets require lots of formulas and calculations, which can be tedious and error-prone to implement. Modern spend analysis packages come with lots of standard reports and templates that will allow for comparisons with industry averages and available competitor data out of the box. Again you will be saving hours, if not days, with a good package.

Anomalies are really easy to see in appropriate scatter plots, but very, very hard to spot in rows of data. If you have thousands of rows, how do you detect outliers with a manual scan? Sure you can pivot on volume or distance from average and so on, but is it really an outlier? Careful inspection and analysis is required on each potential row — but a visual glance at an appropriate scatter plot gives you results in seconds.

So no, you don’t need a modern spend analysis product or a spend cube to identify good potential opportunities, if you don’t mind dedicating a back room full of people for days or weeks to do an analysis that can be done by a good spend analysis product in a few hours.

And that’s why modern spend analysis solutions can deliver an ROI of more than 10% year over year as the expected value of analysis is typically above water, vs. under it, as it is when you do it manually. (See this classic post on .)

So while you don’t need a spend analysis solution, it’s akin to saying you don’t need modern technology for sourcing either. There’s nothing you can’t do with pen, paper, and telephone, but do you really want to remain in the dark ages?

As far as SI is concerned, there are only three reasons someone trying to sell you a sourcing suite would tell you that you don’t need a modern spend analysis solution (based on proper spend cubes):

  • they don’t have it and they don’t want you to use another vendor in case that vendor also has, or implements, a comparable sourcing solution (and they fear competition);
  • they want the services revenue (there’s a lot of billable hours to doing it manually); or
  • they truly don’t understand what modern spend analysis can do

And none of these reasons are good reasons. In fact, they are all reasons to be wary of the provider! There are only two cornerstone technologies that set leading sourcing organizations apart, and analytics is one. (The other is optimization.)

Are You An Idiot? Stupid? Dumb? Oh, and Happy New Year to You Too …

Today’s guest post is from Dalip Raheja, President and CEO of The Mpower Group, and is reprinted with permission (as it originally appeared on The Mpower Group Blog. (Dalip provides us guests posts as well.)

Obviously that’s a rhetorical question and not one that I’m asking but it was in an article that stated:  ”Any idiot should be able to work out that publicly-quoted advertising holding companies (whose margins are public knowledge) have to make their money somewhere…..” (Stephen Foster) and I’m pretty sure that the idiots he was referring to are the procurement departments of various advertising agency’s  clients.  What the author is referring to is the practice of extremely low priced contracts from the agencies but who then get compensated from the media owners (where ads are bought) in the form of rebates.  Think of it as the rebate that car dealers get from auto companies thus muddying up the price you actually pay for your car.

Almost all the major advertising holding companies and reportedly a few others are under investigation by the Department of Justice for taking rebates (kickbacks?).  Stephen points out that this is a result of overzealous procurement departments squeezing the last penny out of contracts thus forcing the agencies to make up margins through rebates.  Another article goes on to say, ”Procurement has triumphed in commoditizing marketing, and its tentacles are deepest in media. Blind e-auctions and a general policy of letting agencies know the cheapest bid will win have stripped out nearly all the visible profit from media.”  Not only has this led to the rebate conundrum but also in agencies directing business to sister companies within the family and also led to the recent scandal of getting third parties to submit high bids so that in-house production units would end up winning the business (also under investigation and resulted in jail time in 2002).

For those that have followed this blog and our work over the years, this should sound a bit familiar – all the way from “Strategic Sourcing is Dead” to the more recent “Back to the Future – Strategic Sourcing is Dead – or It Should Be… ”.  We have long argued that the over-the-top focus on lowest price by procurement was actually destroying value and this would be a perfect illustration of that.  While procurement drives results that deliver to their own metrics, the marketing department suffers as they are not getting the service levels they need and are still paying higher prices – except on a different set of invoices.  Here are some additional comments from different authors: “If brands continue to turn everything into price, if they continue to screw cost so tightly ….then they would be stupid not to realize there will be mission (scope) creep.”  “If brands can’t see how reducing everything to cost at first saps the big agencies….. then they are dumber than anyone could have ever thought.”  Seems like everyone wants to call us idiots, stupid and dumb!!!

Google recently announced a formal “rebate” program where they are paying the agencies for placing ads with them accompanied by this gem, “If you hit certain thresholds and depending on the market, a check is paid back to the agency, which the agency should theoretically pass back to the client,” said a Google source with detailed knowledge of the program. “The agency will then divvy it up by client. P&G gets X and Visa gets Y.”  So procurement feels great that they negotiated a great contract with their agency but are willing to pay more for the actual ads and let marketing then fight to get some share of the rebate from the agency!!  Only in Strategic Sourcing does that make sense .  It’s almost similar to buying lots of things in a store because they are on sale and you can document huge savings – even though you don’t need half the stuff you bought?

The good news is that more and more of the conversation at various conferences is starting to get away from cost and much more into value(TCO=Value Destruction??). Unfortunately, the relentless focus on price/cost is not losing a lot of steam with procurement in most companies.  In the above example, it has changed the way the entire industry operates and is in fact lessening the options and competition for procurement by forcing a lot of independent agencies out of business – all brought upon by strategic sourcing practices.  Perhaps those calling us idiots, dumb and stupid may have a valid point?  I leave that up to you to decide.

Thanks, Dalip!

KPMG Is Listening To Too Much Bob Dylan …

… but still failing to understand the subtlety of the message the Nobel Laureate conveyed in the message he imparted to us 53 years ago.

Recently, as pointed out by the procurement dynamo over on Procurement World in his post on 4 Fascinating Futures, KPMG gave us four potential visions of Procurement’s future in their recent Future-Proof Procurement paper (co-published with Florida State University’s College of Business). [It’s a great read, by the way, for those of you that always enjoy a good alternative universe/timeline SciFi story.)

According to KPMG, we are headed to one of four possible Procurement futures, namely:

  • Primacy of Procurement
    where Procurement becomes the center of power as a result of technology enablement
  • The Creative Agency
    where Procurement totally re-invents itself in order to stay relevant
  • World of Project Economy
    where Procurement disperses (and becomes merely a means to an end)
  • R.I.P. Procurement
    where Procurement brings about its own demise (and is replaced by machines)

All Depending upon the outcomes of the following matches:

  • human centricity vs. algorithms
  • centralism vs. decentralism

In the second case, it depends upon whether or not the march to centralization continues or decentralism retakes center stage. And in the first case, it depends upon whether technology becomes good enough where it can be trusted in place of a Procurement pro.

And, according to KPMG, the futures are defined by the winners as per the following graphic:

In other words, KPMG believes that we need to either prepare for

  • The Path of Dominance
    where Procurement takes total control of the extended supply chain, and, as a result, the business world
  • The Path of Salvation
    where Procurement totally reinvents itself and stays relevant in the turbulent global economy as time shifts the sands
  • The Path of Harmony
    where Procurement adapts to the gig based project economy and simply becomes a means to an end OR
  • The Path of Progress
    where we enter a new era where there is no Procurement. R.I.P. Procurement. (It’s already among the walking dead and soon to be entombed, anyway.)

But all this assumes that there will be one winner in the human centricity vs. algorithm war and one winner in the centralism vs. decentralism, but until SkyNet takes over and locks us in The Matrix, there will be no winner in the humans vs. algorithm war, just like there will always be no winner in the centralism vs. decentralism war as there will always be new recruits to factions on both sides.

We’re not in the world of Anachrony where there can be only one one winner if the cataclysmic future is to be prevented. We’re in the real world, and the situation is a lot more complex.

Bob Dylan said it best:

The line it is drawn
The curse it is cast
The slowest now
Will later be fast
As the present now
Will later be past
The order is rapidly fading
And the first one now will later be last
Cause the times they are a-changing

The line is drawn and the curse it is cast. The two sides of the centralist debate will fight to the last.

The slowest now will later be fast. As the laggards adapt new technology and the leaders drown in that they amassed.

As the present now will later be past. And leaders will fly different masts.

The order is rapidly fading.

And the first one now will later be last. Emerging economies take lead and leading economies are surpassed.

Cause the times they are a-changing.

But the more things change, the more they stay the same. And that’s the underlying message. The conflicts won’t be resolved, fueled by emerging and changing economies, with new governments and organizations taking center stage, discovering and rediscovering the Procurement revolutions, while leading economies go through devolutions as a result of shifting market landscapes and first generation solutions failing to deliver.

Procurement will still be on the verge of death, or among the walking dead, 20 years from now. Only the technology (vendors), processes, and terminology will have changed. The only question is, will your organization have switched sides (from laggard to leader or vice versa).

Despite Bob’s plea, fifty three years later:

Senators and Congressmen still block the hall
They stand in the doorway, don’t heed the call
and the country gets hurt for they have all stalled
and the battle outside keeps raging
it shakes all our windows and rattles our walls
for the times they are a-changing.

Talent Tempering: Part IV

In our last two series we discussed Technology Advances and Process Transformation, which SI calls Transition, that collectively comprise two of the three T’s critical for organizational success. The third T, talent, that we are discussing in this series must not only be in abundance, but also be appropriate for the organizational needs. This means that you not only need talent with a good mix of IQ (intelligence and skills), EQ (emotional intelligence and wisdom), and TQ (technology and mathematics/logic), but that the mix must be suitable to cover the range of Supply Management tasks before your organization, and in sufficient quantity.

But, as we discussed, this is often easier said than done. In order to determine if you have the right mix of talent, you first need to understand the type of talent you have individually and as a team (through a multi-faceted collective assessment), define where you need the talent to be (which can be a complicated affair, and would take at least another series, if not a short book, to describe), do a gap analysis, and devise a plan to get the team, collectively and individually, from where they are to where they need to be. This plan will consist of a mix of training and education options, so that each individual is offered the methodology by which they (likely) learn best, but also related methodologies to broaden their horizons and increase their learning potential.

But this will not be enough, because, by the time they get to where the plan identified they should be, processes will have changed, technology will have changed, and the supply chain as a whole will have moved on rapidly. You can’t keep up … the best you can hope for is a team that will individually and collectively work together to keep up as best as they can and prioritize the needs as they arrive and change.

But sometimes, you’ll have a team where one or two members have no interest in going above and beyond and riding those supply chain rapids day in and day out. They’ll want to get off every day at 5 pm, and not get back on until the next workday at 9 am. The rest of the team won’t be able to survive unless everyone is willing to contribute as needed 24/7. In this case, and only this case, will you have to (immediately) replace your talent.

(Before we continue we should note that you don’t replace talent just because they don’t have the skills, because that’s often your fault, and not theirs, for not providing them proper training and mentoring — which we know you’re not doing given that training budgets were slashed heavily during the last recession and never restored, despite the constant lip service paid to the importance of talent and training. Not until you have provided them with ample training, mentoring, and time can you deduce whether their lack of performance is their fault or yours, and since they should never have been hired in the first place if they did not show aptitude, it’s only fair to assume it’s your fault that aptitude never blossomed into capability and performance. Of course, if they can’t pull their weight after given sufficient mentoring, training, and time, then you will have to reassign them [or let them go if there is no suitable job in the organization], but typically you will need to replace people because they don’t want to pull their weight, not because they can’t.)

So how do you go about finding and recruiting the right talent?

That’s a tough question. Fundamentally, you need to find a candidate that

  • has the raw IQ, EQ, and TQ you need
  • has a desire to learn …
  • and the willingness to put in the hours on and off the job
  • plays well with others
  • doesn’t overvalue his worth …
  • but respects it as well (as you need the candidate to also respect the worth of others)

and, preferably:

  • has experience in the industry …
  • and with the categories she will be dealing with …
  • preferably through another role (engineering, marketing, etc.) as well as that will help her work with the other departments
  • is familiar with the types of technology being used …
  • has sufficiently strong math, logic, and reasoning skills
  • and sufficiently strong people skills

even before you get to your customized wish list. This is a tough sell, and one you are not likely to do on your own.

You will need to rely on your team to help you — they will know who the best candidates are among their peers and who the organization should seek. And any of your colleagues who do not agree are the kin of Maury the Management Moron and, as indicated in this classic post on what to do if you really want a renaissance education, I can only hope that one day your boss will catch on to the fact and show them the door, Fresh Prince style!