Category Archives: SpendFool

Ode to the SpendFool

Traditionally, Sourcing Innovation would chronicle the wit and wisdom of the SpendFool on December 31, but ever since he announced his departure in the seventh comment to a post on SpendMatters last year, he’s been quiet. As a result, there are no comments to base my annual wit and wisdom post, which chronicled the best of the ‘Fool’s comments during the year. So instead, I bring you “Ode to the SpendFool” in the hopes that the ‘Fool will accept my offer and return to the space (as a[n anonymous] contributor on Sourcing Innovation should the ‘Fool so desire).

Ode to the SpendFool

so full of wit

who could strike down with his pen

the loudest of twits

Ode to the SpendFool

experienced and wise

since the departure of your voice

others have tried to improvise

but none have approached

the supernatural shiver

that your prophetic words

would always deliver

So I beg your return

before the realm of the blog

becomes a wasteland

covered in fog

For those of us left

fighting the surge

without your help

could soon be submerged

by the voices of irony

and the voices of doubt

and the voices of fear

that would spread chaos about

lies of omission

and tales of despair

of those that think before acting

and let their savings vanish into thin air

We know the truth

and spread it we try

but we’re few against many

who try to drown out our cry

So return to us SpendFool

let the space here you wail

with your pen on our side

we may yet prevail!

For those of you who yearn for yesteryear when the ‘Fool’s voice was strong,

here are quick links to the three “Wit & Wisdom of the SpendFool” posts:

The Wit & Wisdom of the SpendFool 2008

In keeping with holiday tradition, I again bring you the Wit and Wisdom of the SpendFool, culled from all of the foolish comments I could find on Spend Matters during the last year. As usual, the SpendFool left some juicy tidbits again this year, and I hope you enjoy them, along with his 2006 and 2007 contributions, because, if the Fool is true to his word, 2008 might be the last year he leaves any tidbits of merit. (See the seventh comment.)

The Wit

From Everything IS Bigger in Texas But 15 Million Suppliers is Not Something to Brag About

Well, if there’s one thing you can’t accuse Texas of (besides turning the town drunk into the governor and the POTUS), it’s supplier diversity!

The WSJ Shows No Love for Aberdeen

As Groucho Marx quipped, “I wouldn’t want to belong to a club that had me as a member”.

Charlie Dominicks War

I’m going to be introducing a certification called the Society of Professional Analysts in Supply Management, or SPASM for short. Some of the modules will include key skills such as:

  1. seeing some trends in business week, writing them up, and then claiming credit for them the following year
  2. knowing when to create a good rumor or dredge up an old one (e.g., Ariba getting bought is always a good one)
  3. knowing when to write up a lovely alert on Emptoris and their success at GSK and Motorola (when the bill comes due on their renewal)
  4. running from the ERP vendor analyst handlers at a trade show in order to actually go look at real functionality and talk to real customers

I’ll also add an extra training module on an old system that is important to know about it if you’ve never been exposed to it, and that is the Manufacturing Information Access Software System. If you’ve never heard of it, I HIGHLY recommend you Googling it to find out some great user comments about it.

What’s in Store for SAP SRM 7.0

Thermodynamics says that vapor will become solid at higher pressure, and I can tell you that the pressure is definitely on at many marquis SAP shops where the Procurement executives feel like Charlie Brown with the football getting pulled away again.

Wahhooo! We’re Making More Money — Just Not Enough to Fight Off Inflation

As a sidenote, if you all think I’m too sarcastic, please consider it a marker of higher evolution, not cruelty:
   Sarcasm Seen as Evolutionary Survival Skill

Emptoris Empower — Additional Numbers to Share

It’s due to an arcane mathematical effect called Avnermatics where all reported figures geometrically multiply at a constant determined by the proximity of an acquisition and it’s also like “Schrodinger’s cat” in quantum mechanics because you can’t actually measure it, and if you do, you’re likely going to kill it.

The Wisdom

Do We REally Need Analyst 2.0?

If the commodity manager doesn’t pay attention to the innovative new suppliers out there, then the commodity manager is an idiot and not doing his/her job, merely prone to racking and stacking stale incumbants rather than identifying discontinuous improvements in the market on behalf of his/her clients. These are the true analysts, those that analyze where things are going, and where the innovations are happening (and putting it into context for a client with a very complex organization situation) rather than trying to put new shinola on old sh&t.

How Will Green e-Procurement Play in a Recession?

If you set the way back machine to the great sensei Genichi Taguchi and his definition of waste, it was actually a loss function to the consumer and to society – so this correlation is both understandable and natural.

The WSJ Shows No Love for Aberdeen

What’s funny is that nobody from Aberdeen ever chimes in on this blog defending themselves and their “honor” (ok , stop laughing). Why? Because they know it to be true and the analysts are using Aberdeen (to build their personal brands) as much as Aberdeen uses them. To quote Bob Seeger, they were “getting their share”.

Exploring the True Costs of SaaS

You have the 2 opposing philosophies of the assemble/maintain your own versus going for a turnkey low-maintenance option. Thing is … both are needed (strategic stuff for the former) … in line with “IT doesn’t matter” (in fine print: for the commodity stuff) … BUT, mass customization hinges upon great design, and SaaS offerings can’t just have the many-to-many data model and a few data dictionaries. SaaS is the right concept, but time will tell how much customization features will be available as native functionality so that the platform will be commonized, but will be tunable (e.g., plug-in’able content) to specific user requirements.

Mickey D’s — Eating Cost Increases for Customers

The biggest cost though of beef is its impact on global warming. Methane is 21x more ‘warming’ than CO2 and organic beef is even worse given the time it takes to get an organic cow to slaughter weight. Dairy cows also are part of the equation. So, my friends, it’s great that you’ve switched to a hybrid car and changed your lightbulbs, but you now need to give up cheeseburgers and milk in order to save our planet. I guess it’s veggie burgers and soy lattes in our foreseeable future. Otherwise, we need start doing methane reclamation not just in landfills, coal mines, and manure piles, but also in livestock, and that’s just not a visual that I care for on a bike ride through Vermont or Wisconsin.

Supplier Management Lessons from Steely Dan

A Procurement organization should be ‘fit for purpose’, and it’s less about the size of the spend than how you use it… which is to deliver lasting value.

RNC Final Dispatch — I Blog You Decide

In procurement, it’s all about talent, and transformation. And we need a whole lotta both.

Well, that’s likely it. I hope you enjoyed this three-part series.

The Wit and Wisdom of the SpendFool Revisited

One year ago today, I brought you The Wit and Wisdom of the SpendFool, culled from all of the foolish comments I could find over on SpendMatters. The SpendFool was also kind enough to leave some very juicy tidbits again this year, but in case you missed them, here are the highlights.

The Wit

From Risk & Supplier Performance — When Conventional Wisdom Isn’t:

In MY next guest article, I will play an Aberdeen analyst and argue that the conventional wisdom of “cross-functional teams are a waste of time” is indeed false by proving that “Leading CPOs are 2X more likely to emphasize procurement team management”.

From Buick: Crap or Crème De La Crème?:

No amount of Tiger Woods commercials will be able to save the design-by-committee Rendevous. That is one “Coyote Ugly” vehicle. They ought to make it even uglier and turn it into the new version of the old VW “The Thing”.

From Emptoris Targets Ariba/Procuri Customers … Only 2 Hours After the Deal News Breaks!:

“Hello, pot? Yeah, this is kettle, you’re black!”

From Emptoris Grows, Trash Talks Competitors:

Captain, it’s not logical to attack the Borg and the cling-ons. It’s not worth your tribbles. Focus on the enterprise.

– and –

From A Gift for Your Favorite Supplier This Holiday Season:

In the beginning was the Plan.
And then came the Savings Targets.
And the Targets were without form.
And the Forecasts and the Budget were without substance.
And darkness was upon the face of Procurement.
And the purchasing agents spoke among themselves, saying, “This is crock of sh*&, and it stinks.”
And the purchasing agents went unto their Senior Buyers and said, “It is a pail of dung, and we can’t live with the smell.”
And the Senior Buyers went unto their Commodity Managers, saying, “It is a container of excrement, and it is very strong, such that none may abide by it.”
And the Commodity Managers went unto their Regional Directors, saying, “It is a vessel of fertilizer, and none may abide its strength.”
And at the annual global Procurement conference, the Regional Directors said to the CPO, “It contains that which aids plant growth, and it is very strong.”
And the CPO went to the CFO, saying unto her, “It promotes growth, and it is very powerful..”
And the CFO went to the President, saying unto him, “This new Procurement plan will actively promote the growth and vigor of the company and in these areas in particular.”
And the President looked upon the Plan and saw that it was good.
And the Plan became Policy.
And that, my friends, is how sh%& happens.

The Wisdom

From Why 80% is not Enough … :

“Do a mega-lot with both basic and advanced requirements, and you’ll indeed get the 80% solution which does leave money on the table (payback is indeed usually after 1-5 events). So, break up the market basket between analytics, RFX, contracts, scorecards, portals, yada yada and then build humpty dumpty up. Worst case, you get a good discount on the 80% solution (which ain’t cheap and certainly doesn’t come often). Best case, you get the right tool for the job, take the money on the table, and then re-bid in 3 years when SAP/Oracle have their next-gen polyrazzmatazz suites. The money you’ll save on hundreds of events during that time will make everything else noise (except for maybe the ERP upgrade costs). Why do you think BoB (aka “Bondo”) vendors are filling those holes so well these days. Buyers are generally not stupid and markets are generally efficient. Generally. With 0.7 probability for those reading in Stamford.

From Risk & Supplier Performance — When Conventional Wisdom Isn’t:

When supplier performance increases, you get the right stuff at the right place at the right time at the right quality, etc. Seems like risk goes down when all is right, no?
As the good Dr. said … “The better performing suppliers also had the lowest risk level as measured by our model”. Makes sense, what you measure is what you get, and since firms measure pretty much along these categories, that’s what they indeed do get. So, the conventional wisdom is indeed wise and now empirically proven. Q.E.D.

From Emptoris: Going Under the Numbers:

On the topic of contract management:
They’ve been subsumed as a component of a BoB spend management suite. That’s fine, but let’s not delude ourselves into thinking that these vendors are really going to be viable, long-term players in enterprise contract management. Yes, it’s a dessert topping AND a floor wax! Puh-lease. They don’t have even the horsepower to invest in decent integration to the back office for the Procurement stuff. Ask for references and enjoy the ensuing tap dance.

From What Does ISM’s New Board Composition Mean?:

Supply Management is about harvesting the power of supply markets, not catering to stale incumbants who are chummy with the top brass. …
When I look for innovation in supply management these days, it’s more likely to come from technology vendors and niche consultants than the flip charts from the last elk lodge session in Boca Raton.

From Wrong or Right? Equating Supply Chain Performance with Spend Management:

Why does a good discussion on the impact of Procurement devolve into vendor CMOs strutting their little peacock feathers on niche (albeit important) sourcing techniques. Did you know that Flavia coffee systems were used at 70% of these firms versus 40% adoption at low-performers? Clearly, using Flavia (winner of the Tweedleman award for worker caffeination) is a key predictor of supply chain excellence. I think there’s a pending Aberdeen report on it – Jamie will make it say whatever you want it to. Also, did you know cocaine users are 10x more prone to using caffeine than non-cocaine users (even more in Rome). So is caffeine a SCM best practice or a gateway drug to hell?

A better discussion is talking about how supply management (the process – not the renamed Purchasing department) supports the operational excellence capabilities that allows AMR’s named firms to excel: lower inventory via supplier consignment/VMI and lower cycle-times; reduced price and non-price factors; faster NPI processes, better products through supplier innovation, etc. Also use it to reduce trade-offs between cash, cost, delivery, etc. Read AMRs heirarchy of supply chain metrics if you haven’t.

and, finally,

From Why I’m Not a Poet:

On the topic of the doctor‘s literary genius
  The student has indeed become the master. You are truly foolish.I lay my bells at your feet.

I hope that this means that the SpendFool will stop lurking and start offering up some of his wisdom on this blog. (Comments may require an e-mail, but there’s no reason it can’t be an anonymous e-mail account on a free server.)

The Wisdom and Wit of the SpendFool

Regular readers of Spend Matters who take the time to check out the comments on a regular basis will know that of all the idiosyncratic irregulars who allow themselves to be drawn into dizzying, debaucherous, delirious debates, the wisdom and wit of the SpendFool is second to none. In an effort to insure that you don’t overlook the stupendous sapience and satire that is only served up to you on the SpendFool’s sliver platter, I am going to summarize the best of such savoir faire for you.

SpendFool Sapience

  • Toxic/sparse/duplicated supplier master and item/catalog master and contract data will spill into your transaction history unless you keep your data clean. (The real elephant here in the room is that strategic sourcing groups are still doing “drive-by sourcing” events and throwing the contracts over the wall without getting measured on how those savings are really accruing to the business and making that process easier for end users and Purchase-to-Pay staff.) (source)
  • The really important risk management stuff is not some external supplier attribute database fed with supplier scorecard data into an auto-magical warning generator, but rather, good scenario planning processes which look holistically at all risk factors and their expected frequency & consequences.(source)
  • Reducing your capital base, whether through asset disposition (“Investment recovery”) or working capital improvements through inventory reduction (Goldratt’s “The Goal” rings loudly here), inventory re-deployment, DSO shortening, or DPO improvement (i.e., either stretching DPO or taking attractive early pay discounts), is not an extension of a vendor-defined “space” (or derivative analyst infomercials) named after consumer billing practices from Utilities companies, but rather, a multi-faceted approach (org, process, technology, etc.) to improving returns on capital employed so as to improve ROCE, FCF, EVA, and ultimately, the stock price which makes senior executives (who employ Purchasing professionals) happy.(source)
  • Technology trickles down and complexity inevitably gets solved, automated, and deployed to the masses. … I’ll take ‘simple’ tools deployed to the masses (a la Toyota) to touch way more spend, even if the savings are slightly less. Simplicity is key – especially for compliance.(source)
  • It’s not the size of the solver, it’s how you use it. … Nothing wrong with the consultants with big brains and tools to solve the really strategic problems AND also use mass deployed tools from ERP and/or SaaS vendors. Pick the right tool for the job.(source)
  • Would the exec’s care even realize the gold hidden in the mountains of data, or would the data be lost like the thousands of pedestrians in street? He had to make them see, but how? (source)
  • You still need an analytic data model and a physical data store as George Carlin said “a place for your stuff”. … When I say “data warehouse”, I mean having a centralized analytic data model – that’s all. Not an over-engineered, IT-led, designed-from-scratch, custom-built, already-bought-it-so-need-to-use it (i.e., “sunk cost fallacy“) solution-looking-for-a-problem approach.(source)
  • Stay with the core competency. (source)
  • Scott Adams is a genius.(source) (But you already knew that!)

SpendFool Satire

  • Hmmm, methinks you opted for the de-caf latte at the airport and perhaps not all neurons were firing? (source)
  • May they fancifully fly in the face of the follies and foibles of a fallacious fiddling flippers to find fresh fields of freedom and fun.(source)
  • Remember, the golden road to the emerald city starts in munchkinville, so, power to the little people and those who use them! (source)

Stay Foolish!

Happy New Year, SpendFool!