Category Archives: Technology

You Wouldn’t Let Your Banker Pick Out Your Job …

So why do you let a systems implementor / integrator choose your Sourcing / Procurement system???

And while you might initially believe that this simile is far-fetched, the reality is that it’s very close to home. While a banker is the right partner to help you manage your money, he or she is probably the worst person to figure out the right job for you given that he or she doesn’t really know you. Similarly, while you’re preferred implementation / integration partner is probably the best company out there to implement the platform that will control the majority of your organizational spending, chances are that partner has no knowledge of the true breadth of your Procurement processes work and no clue what the right kind of system for the organization would be. And as a result, just like a banker might steer you towards a job you’d fail miserably at (and lose, leaving you without a pay cheque), an implementor / integrator might steer you towards a system that will not work at all for your organization, and cost your organization millions in the process.

Furthermore, this is also true for any consultancy that has partnerships with a select group of source-to-pay vendors. In fact, taking advice from any of the consultancies that have partnerships with a select group of source-to-pay vendors is MORE risky than an implementation partner without any relationships. Why? Because these consultancies, by way of their partnerships, tend to ONLY recommend their partners because:

  1. that’s all they tend to implement, and know, and
  2. their partnerships provide them with referral fees, guaranteed services, and / or higher margins (and the senior partners at these consultancies mandate that these options are always recommended)

So, if your preferred consulting partner only has relationships with platforms that are primarily for indirect S2P, but your organization is primarily direct S2P, your organization’s chances of getting a good recommendation are zero. That’s right. Zero! (Even worse than a generic systems implementor with no knowledge of the space doing a Google search, coming up with five vendors, and making a random recommendation — at least then you have a 20% chance of getting a good recommendation!)

In other words, if you want a good recommendation, you have to ask a neutral third party, like an analyst firm, a niche consultancy which does not do implementations (and has no partnerships), or a consultancy that uses third party evaluations to provide you with the best recommendations it can, leaving aside any partnerships the consultancy might have. (For example, such a consultancy could license Spend Matters Customer Maps, which are Solution Maps with custom personas defined specific to the client needs, to help your organization identify the best fits and then help your organization with the RFIs to identify the best-of-the-best).

Otherwise, the doctor can pretty much guarantee you’re always going to be recommended vendors A and B (and maybe C) in North America and vendors X and Y (and maybe Z) in Europe … even though there are 8 S2P platforms and dozens of best-of-breed solution providers that might be right for you (as Solution Map ranks over 50 and plans to add many more over time). [Not that A, B, C, X, Y, and Z aren’t good in the right situation — but in S2P, one-size does not fit all — especially when you consider direct vs indirect, product vs service, head vs tail spend, strategic process requirements, optimization and analytics needs, automation, etc. — and the fact that some providers never get recommended even though for certain industries they are usually the best choice.]

So again, unless you want a quick way to triple your losses, don’t let an implementor choose your S2P platform. You choose it, and as per a recent piece of the doctor‘s over on Spend Matters, you take what you want!

How Do You Identify Dead Companies Still Standing?

They still use Excel.

We’ve known for over a decade now that errors in spreadsheets are pandemic. Needless to say that it boggles my mind that Microsoft Excel still continues to be the application of choice for supply chain and logistics managers around the world. Why do we need to remind you that Fidelity lost 2.6 Billion as a result of a spreadsheet error, that Fannie Mae made a 1.13 Billion honest mistake with a spreadsheet, and RedEnvelope lost more than a quarter of their value in a single day after they warned of a fourth-quarter loss due to a spreadsheet-based budgeting error that resulted in an overestimate of gross margins.

How long is it going to be before someone accidentally uses a plus sign instead of a minus sign in a profit formula and forgets to uncap an inventory calculation and instead of ordering 100,000 units of a profitable product, instead orders 1,000,000 units of a product that actually results in significant losses at the target sale price, for which the market demand is weak, ties up all of the organization’s working capital, and essentially bankrupts the company?

My guess, with the steadily increasing complexity of S&OP, JIT inventory management models, and supply chains, any day now! But, maybe after a few companies are brought to their figurative knees from spreadsheet errors, we’ll see the day when Excel is sh!tcanned along with the dinosaurs who still think it has any more use than a HP or TI calculator.

It’s time for anyone still using Excel to wake up and realize we don’t live in Walt Disneyland and that the story of the prince and the pauper is a fairytale. A pauper is not going to become the benefactor of princely riches by trying to save money on real supply chain and logistics software by stretching Excel to the limits just so that it can temporarily inflate the balance sheet or the profit and loss statement. In today’s uber-connected world, appearances don’t account for much. It’s not long before someone digs deep and uncovers the truth.

There’s a reason why customers are demanding end-to-end visibility of their supply chains, including those of their supply chains logistics’ partners. And a reason customers ow expect all of their suppliers and business partners on the supply chain (including logistics providers) to participate in a supply chain network. It’s because they know that the only way they can accurately manage their supply chain is to keep on top of it, that the only way they can build accurate models is with accurate data gathered from partners, and that the best reports they are going to get are going to come from supply chain visibility and planning software plugged into these “networks” (where, in reality, these are “enterprise communities” that allow the necessary collaboration, not “consumer [social] networks” where you can poke, prod, and shake your buddy for no apparent reason).

In other words, Excel has become the new paper, and, like paper, it needs to be abandoned. So if you don’t want to be the pauper, move off of this outdated technology and onto solutions designed for your supply management needs. With a plethora of Best-of-Breed solutions on the market, including modern Source-to-Pay solutions, designed for large and small providers, it’s extremely likely that there’s at least one solution that meets your needs almost exactly without too much tweaking. If you look hard enough, the doctor would bet that there’s at least three, or will be before you can look twice

Twenty Years, and Nothing’s Changed. It’s still all about the Pentiums!

Today they might be called Xeon Ws or something similar, and power Mac Pros, but at the core, they are still, more or less, Pentiums!

Rock on, Al Yankovic, Rock on!

Because It’s All About The Pentiums (Original Video!)

Al may have been Running with Scissor, but no one did a better job of predicting the future of the IT industry.

     
My new computer’s got the clocks, it rocks
But it was obsolete before I opened the box
You say you’ve had your desktop for over a week?
Throw that junk away, man, it’s an antique
Your laptop is a month old? Well that’s great
If you could use a nice, heavy paperweight

  It’s All About the Pentiums
    by “Weird Al” Yankovic (@alyankovic)

Two Hundred and Twenty Nine Years Ago Today …

The first foundations were laid for the patent pirates with the introduction of the first U.S. patent to Samuel Hopkins for a potash process. While patents are a necessary evil to protect the investments of real inventor and corporations that have to spend millions upon millions (sometimes to the tune of hundreds of millions) to produce a truly new technology, software patents are an unnecessary evil that allow the pirates to plunder millions upon millions of dollars from rivals with fundamentally different products (but covered under an interpretation of a sufficiently abstract description) and prevent true innovation in our space.

It’s been a downhill trend ever since the first software patent was issued 51 years, 3 months, and 8 days ago as it was a mere 4 years before the software patent pirates saw an opportunity when the first software patent case went before the courts a mere four years later.

That’s right, we’ve had almost five decades of pirates in cyberspace, and you thought malware was the big problem?

Still Looking for that Supply Management Usability Guide!

Long-time readers will know that there are a lot of guides out there as to what a good Supply Management solution for Sourcing, Procurement, etc. should do — including a lot of advice on this topic here on SI and over on Spend Matters, but not many guides. And while the doctor did write rather extensively on the topic of usability in Sourcing, Supply Management, Procurement, and P2P over on Spend Matters Pro, there are still very few guides for usability. (Searches in major search engines still come up few and far between, even after our first post on the topic here on SI seven years ago).

As per our last post, if the provided software was so obvious and easy to use that even a fifth-grader could figure it out, then the issue of “ineffective instructions” is a small one. But the reality is that, even with most platforms that are attempting to adopt consumer-style interfaces, most procurement and logistics software is still reasonably complicated due to the complex nature of what a Procurement or Logistics package capable of supporting global trade needs to do.

The thing is, even though the functionality is well understood, the best way to lay out the functionality, and underlying workflow, is not well understood in comparison and, unfortunately, if one company builds an interface that is too close to a competitor’s for some standard functionality, instead of the formation of a standard, in America, we get a frivolous lawsuit (courtesy of the patent pirates). So even though there should be design standards, there usually aren’t.

And even when the best-of-breed providers finally figure it out, since most of their UIs are built on decade(s) old technology, updating the UI is no easy feat. Especially when the new generation of employees, the millennials, are expecting consumer like interfaces. But who has anything close to this? Coupa with parts of the core platform (which has been built and re-built repeatedly to be easy to use around core Procurement functionality) and advanced sourcing (built on TESS 6 built from the ground up to be eminently configurable); Zycus is on the right path with their dew drop technology, but it will take a while to upgrade the entire platform; Vroozi with their mobile-first philosophy is quite usable for what it does; Keelvar with their configurable automation-based workflows; and GEP with their new user-centric UI vision are not just a few examples, but the majority of examples.

In comparison in the S2P game, Ivalua is getting close with their configurable workflows, but it’s still not obvious how to configure the platform to make it obvious to junior users; Wax Digital is one platform on one code base and pretty simple (but based on older Microsoft tech that takes time to upgrade); Determine, based on the old b-Pack platform is very configurable, but older technology and far from a modern look-and-feel; and Synertrade is really outdated (but very powerful).

And if we go beyond the big names, when it comes to the smaller vendors, except for a few of the newer best-of-breeds, like Bonfire and ScoutRFP, usability has always been a second concern and while a few of the smaller vendors are updating their UI (like EC Sourcing which should be much more modern with a year), most vendors are definitely not there yet.

Hence, since most platforms aren’t consumer like, and not likely to be figured out 100% by junior users without training, we still need that Supply Management Technology usability guide — especially since none of the platforms mentioned above with “modern” interfaces have the same workflows for the processes they support.

And what about the poor organizations who still have a mishmash of five generation one or two systems with inconsistent interfaces and workflows? What hope do they have of making sense of the full inter-related capabilities of their systems? Very little.

And while the doctor knows more than ever that the very nature of software, which is always evolving, makes such a guide difficult (and that this particular challenge is compounded by the fact that America still allows software to be patented so the pirates can plunder), but there should be at least some standard workflows and processes that all sourcing, procurement, and logistics software should attempt to follow in a reasonably standard way. It would make things easier for all supply chain partners, minimize unnecessary stresses and bumps, and help us evolve the profession as a whole. But alas, it will probably be another seven years before we get close to a real usability guide.