Category Archives: Technology

Ecovadis: Ecovating the Globe

When we introduced you to Ecovadis back in 2008, we pointed out how this European start-up was building a sustainability solution for evaluating and monitoring suppliers in a manner that would help companies meet and exceed the emerging green and sustainability regulatory requirements. Fully compliant with GRI G3 (Global Reporting Initiative) standards and the ISO 26000 CSR Guidance with their solution that tracks metrics across 23 green/sustainable criteria for the 150 procurement categories they support, it provides a very extensive CSR scoring mechanism across environmental, social, ethical, and supply chain issues.

Back in 2008, all they had on the technology side was the core supplier assessment module for the buyer — which was built around a “dashboard” that provided a snapshot rating of a supplier on each of the key categories with drill down ability into the scorecards for each rating, cross-industry benchmarking, and integrated news feeds (with human reviewed articles, relevant legislation, etc.), and a supplier portal — which allowed the supplier to log in, answer questions, provide relevant data, and see their scorecard. On the services side, they had the ability to arrange and verify audits on your behalf, scan and classify relevant documents automatically, and support suppliers in five languages even though the platform only supported English and French. And when SI last covered them, they had only three public customers.

Flash-forward to 2010, and they have made considerable progress on the technology, services, and customer front. On the technology front, they have made significant updates to the core supplier assessment platform (the newest of which are in beta testing now and will be in general release at the end of the quarter / start of next quarter), released an audit module, released a new risk analysis module, and improved the multi-lingual capabilities of the platform. On the services side, their partnership with SGS, the largest certification company with over 1500 auditors certified in CSR auditing, allows them to do 2nd party audits on your behalf on your suppliers anywhere in the world and they have added a few more languages to their back office. On the customer front, they have increased their customer base tenfold, with 30 public customers that include 10 companies in the Global 500 who are in the top 10 in their vertical (including the largest construction company, the second and third largest insurance companies, the third largest building materials company and the third largest industrial manufacturer), with a few more big names to be announced soon. These customers represent over 2,500 users that collectively track CSR data on over 4,000 companies across 40,000 sites in 80 different countries with a 94% adoption rate among suppliers.

The upgrades to the core supplier assessment module include an improved UI, feedback capability within scorecards, guidance for buyers and suppliers on how to improve ratings and the most critical weaknesses that need to be tackled, and a new corrective action plan capability for suppliers to allow them to propose corrective action plans and collaborate with buyers on their design and implementation. The guidance highlights key issues across each of the 23 categories, primary weaknesses, (upcoming) regulations and initiatives of import, policy recommendations, and proposed actions.

The Risk Analysis module, designed to allow all users to perform a quick check of the potential CSR risks associated with a specific supplier profile, and identify those suppliers which should be subject to a formal assessment or audit, is pretty simple, but it’s a great start considering that most organizations don’t have any tools at all. (Plus, you can’t automate risk analysis — this will always require human interaction. Software is not intelligent and can’t identify unknown threats — only humans can.) Basically, the user fills out a (proposed) usage profile (direct or indirect, country, turnover, categories, branding, influence, etc.) which can be uploaded from an Excel file, the system extracts the CSR profile of the supplier and all of the related data, and an automated analysis engine determines the primary potential risks, the probable degree of supplier CSR risk relative to buyer CSR exposure on a nine-by-nine grid (which goes from low to high as you progress from the lower left [green] zone to the upper right [red] zone), and the action you should take (which is either no action, assessment, or full audit). While not perfect, it will quickly identify the majority of the company’s riskiest suppliers, which is where the company should start its risk management efforts.

The real value in their solution to procurement is in the massive cost savings it enables. CSR is important, but we all know that North America tends to follow the mantra of Gordon Gekko and that, unfortunately, when times get tough, the mighty dollar trumps everything else. Companies like to feel good, but they like to profit more. These days, profits come not from sales (which are sluggish), but from savings that come from cost reductions and risk avoidance. Ecovadis’ platform assists you on both accounts. Without the platform, buyers are wasting a lot of time and money chasing suppliers, who are fatigued from answering the same damn survey over and over again, for data, analyzing that data, and shelling out for expensive benchmarks from high priced consultants to put that data into relative light — data that might be suspect to begin with. Similarly, suppliers are wasting time cutting and pasting data instead of providing the buyer with the products and services the buyer needs, which drives up costs for both parties, and not even getting any decent feedback in return that they could use to improve their operations. But with the centralized sustainability marketplace Ecovadis provides, suppliers only have to answer a question once, they only have to suffer a time-consuming and costly audit once, and they get a scorecard which not only rates their performance, but benchmarks them against their peers and identifies areas for improvement. Buyers get up-to-date reliable data and actionable scorecards which they can use to leverage suppliers and make better decisions. Everyone wins. Plus, if the buyer has a SPM tool (like that offered by Ariba, Aravo, Hiperos, SAP, etc.), Ecovadis’ can plug their platform into the tool and greatly simplify the CSR SIM that the buyer would likely have to do manually.

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SI’s Policy: No Time Limit and No Fixed Schedule on Briefs

One week ago today, Spend Matters (“SM”) announced (in its Friday Rant) that it was limiting briefings to a one-hour-and-twenty-minute interval on Thursdays and a two-hour-and-30-minute interval on Fridays. SM stated that briefings would be limited to 40 minutes, including 10-15 minutes of introduction/background, the remaining time to be spent on “the presentation or announcement”.  SM further stated that it requires reference contacts for a follow-up call, and that it is limiting follow-up demos to 30 minutes.

While it is not Sourcing Innovation’s place to comment on the policies of other blogs in the space, the doctor would like to take this opportunity to make SI’s policies, most of which are very different from the above (and laid out in the FAQ), very clear.

  1. SI will schedule briefs at times of mutual convenience. If this means after hours, that can be arranged.
  2. Although initial demos are usually limited to 60 or 90 minutes, SI does not impose time limits of any kind on briefs. If a brief needs to be continued, then it will be, for as long as it takes. SI is interested in your solution. Very interested.
  3. SI is not interested in “announcements” or “presentations.” Rather, SI wants to see your solution in action. Plan on a deep dive into your solution, followed by an intelligently-written post, assuming that the doctor believes that your solution solves areal problem in our space. Note that the doctor is very respectful of any software solution that solves a real problem, because he knows what it takes to bring such solutions to market, having done it himself on multiple occasions.
  4. SI is generally not interested in making reference calls*, because the doctor doesn’t care about your Marketing department’s ability to find customers who think your solution is the greatest thing since sliced bread. He is interested in your solution, not third-party opinions about your solution. This is not People Magazine or Gartner, so the opinion of a random “celebrity” customer, regardless of how prestigious his or her corporate logo may be, is irrelevant here. Lemmings are plentiful, and they come in all sizes.

Finally, SI sees no issue in trying to “keep up with” vendor products and announcements. Although many vendors make routine “exciting” announcements about new functionality and so forth, in practice these announcements are usually just marketing noise, having little to do with important functionality changes and enhancements. SI is confident of its ability to cover real enhancements and real innovations when they really occur, and can see no immediate danger of running out of cycles to do so.

For vendors who require a Non-Disclosure Agreement (NDA) before providing a demo, SI is not interested in reviewing your solutions. the doctor’s assumption is that organizations requiring an NDA before doing a deep dive for a reviewer are irrationally hiding functionality that is released and in the public domain anyway, so their motives for trying to conceal that functionality are suspect.

Thank you for your attention.

* The exception being when you make a strong claim about savings, ROI, etc.

Saving on Systems Integration Costs

If you’ve ever bought an enterprise system, you know that the sticker price is usually only a small fraction of the total cost of ownership and that the implementation and integration costs can dwarf the sticker price by an order of magnitude. As a result, integration costs often present supply management with an opportunity to save six or seven figures. But how? Especially when 70% of enterprise projects fail to deliver on their initial promise?

In a word, planning. According to several experts in the field, the most common problems that arise when companies set out to integrate procurement, distribution, warehousing and communication systems come not in executing their plans, but rather in conceptualizing them. The reality is that if your plans are good enough, you can get a junior team fresh out of an India technical school to implement them successfully*. But if the plans aren’t good enough, you might as well take that money to Las Vegas, because those 10% odds of success are better than the odds of your project succeeding.

Not only do you need a shared view of success at the enterprise level, as discussed in this article on “drawing the lines on system integration”, but you need a detailed plan that describes what systems will be integrated, what modules will be linked, what data will be exchanged, what functionality will result from the integration, and what success cases look like. Coding is rarely the challenge. It’s usually knowing what to code.

* Unfortunately, the doctor has never seen plans this good. It is possible to create them, but it seems that companies never spend enough time in the planning stage anymore …

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Before You Take to the Clouds

… where you are likely to experience asphyxia, hallucinations, brain-damage, and death, make sure you secure your rights, namely:

  1. You own your data,
  2. you’re entitled to the service levels you are promised, and
  3. you have a right to come down when you’re ready to breathe again!

As per James Urquhart’s “Cloud Computing Bill of Rights”, your data is your data. This means that the vendor:

  • must never claim any ownership of any data you upload, create, generate, modify, host, or otherwise associate with your IP;
  • must always provide you with APIs that not only allow you to upload data as needed, but to download all of your data in a standard format at any time; and
  • must inform you where your data is being hosted and must host only at those locations you agree to.

Furthermore, while it is your responsibility to undertake any integration and perform any necessary maintenance that may be required, from time to time, that you agree to, it is fundamentally the vendor’s responsibility to meet the service targets they promise. This means that vendors:

  • must do everything in their power to meet service level targets;
  • must monitor service levels and give customers access to the same metrics and logs they use to monitor those service levels;
  • must not terminate your contract for any reason not explicitly stated as grounds for termination in the contract; and
  • must not invoke “act of nature”, “act of god”, or force majeure clauses except for true force majeure events which could not be predicted or prevented against (occasional loss of power from the main provider or loss of internet from the main provider is to be expected and power, internet, and other key systems must be fully redundant, etc.).

But most importantly, you have a right to come down when you’re ready to breathe again! The vendor, subject to the terms of the agreement:

  • must let you extract all of your data and end the contract whenever you have the right to;
  • must not charge you to download your data; and
  • must not charge you any additional fees other than any early termination penalties you agree to.

It’s your data. It’s your solution. It’s your business. And if you decide down the road that you don’t want to experience asphyxia, hallucinations, brain-damage, and death, that’s your right!

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Want To Speed Up? Slow Down!

I really enjoyed this recent article in the Harvard Business Review on “the acceleration trap” and how corporations often take on more than they can handle when faced with intense market pressures by increasing the number and speed of their activities, raising performance goals, shortening innovation cycles, and introducing new management technologies or organizational systems at a furious and frenetic pace until employee motivation is sapped, the company’s focus is scattered in various directions, and exhaustion and resignation blanket the company which enters a rapid downward spiral.

It happens more often than one might think. And even if it doesn’t bring a company down, it can bring down a department. The worst scenario is when a company, after waiting, waiting, waiting almost forever to upgrade antiquated and failing systems decides it is going to do a big-bang upgrade in record time and decides to go, go, go before anyone plans, outlines, or even thinks about what they are doing. (There’s a reason that at least 70% of technology initiatives fail to some degree. This is usually it.) That’s why sometimes the best way to speed up is to slow down, take a step back, figure out what’s important and needs to be done, develop a plan of action, and then attack it with zest, but not so much zealousness that all of the employees will burn out before it’s done and success is achieved. Otherwise, you might be the next FoxMeyer.

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