Category Archives: Technology

Is the End of the Wild Digital West in Sight? I Hope So!

The MIT Technology Review recently published a great article on The Dark Secret at the Heart of AI which notes that decisions that are made by an AI based on deep learning cannot be explained by that AI and, more importantly, even the engineers who build these apps CAN NOT fully explain their behaviour.

The reality is that AI that is based deep learning uses artificial neural networks with hidden layers and neural networks are a collection of nodes that identify patterns using probabilistic equations whose weights change over time as similar patterns are recognized over and over again. Moreover, these systems are usually trained on very large data sets (that are much larger than a human can comprehend) and then programmed with the ability to train themselves as data is fed into them over time, leading to systems that have evolved with little or no human intervention and that have, effectively, programmed themselves.

And what these systems are doing is scary. As per the article, last year, a new self-driving car was released onto New Jersey roads (presumably, because, the developers felt it couldn’t drive any worse than the locals) that didn’t follow a single instruction provided by an engineer or programmer. Specifically, the self-driving car ran entirely on an algorithm that had taught itself to drive by watching a human do it. Ack! The whole point of AI is to develop something flawless that will prevent accidents, not create a system that mimic us error prone humans! And, as the MIT article states, what if someday it [the algorithm] did something unexpected — crashed into a tree. There’s nothing to stop the algorithm from doing so and no warning will be coming our way. If it happens, it will just happen.

And the scarier thing is that these algorithms aren’t just being used to set insurance rates, but to determine who gets insurance, who gets a loan, and who gets, or doesn’t get, parole. Wait, what? Yes, they are even used to project recidivacy rates and influence parole decisions based on data that may or may not be complete or correct. And they are likely being used to determine if you even get an interview, yet alone a job, in this new economy.

And that’s scary, because a company might reject you for something you deserved only because the computer said so, and you deserve a better explanation than that. And, fortunately for us, the European Union thinks so too. So much so that companies therein may soon be required to provide an adequate, and accurate, explanation for decisions that automated systems reach. They are considering making it a legal right for individuals to know exactly why they were accepted for, or declined, anything based on the decision of an AI system.

This will, of course, pose a problem for those companies that want to continue using deep-learning based AI systems, but the doctor thinks that is a good thing. If the system is right, we really need to understand why it is right. We can continue to use these systems to detect patterns or possibilities that we would miss otherwise, many of which will likely be correct, but we can’t make decisions based on this until we identify the [likely] reasons therefore. We have to either develop tests, that will allow us to make a decision, or use other learning systems to find the correlations that will allow us to arrive at the same decision in a deterministic, and identifiable, fashion. And if we can’t, we can’t deny people their rights on an AI’s whim, as we all know that AI’s just give us probabilities, not actualities. We cannot forget the wisdom of the great Benjamin Franklin who said that it is better 100 guilty persons should escape than that one innocent person should suffer, and if we accept the un-interrogable word of an AI, that person will suffer. In fact, many such persons will suffer — and all for not of a reason why.

So, in terms of AI, the doctor truly hopes that the EU stands up and brings us out of the wild digital west and into the modern age. Deep Learning is great, but only as a way to help us find our way out of the dark paths it can take us into and into the lighted paths we need.

We Need BlockChain, But Not for the Reasons You Think.

The biggest use for blockchain right now is to support digital currency, namely bitcoin, and secure trade of that currency. And since it has the potential to revolutionize e-payments, everyone is talking about it. But let’s face it, your employees don’t take bitcoin, your suppliers probably don’t take bitcoin, and your customers aren’t paying in bitcoin. Most of your employees want direct debit, your contractors want checks, and your suppliers probably want ACH. Bitcoin and blockchain is the furthest thing from their minds and, thus, is the furthest thing from yours.

But there is one use for block chain, and that is, simply put, the secure transfer of IOUs. What do we mean by this? About a year ago we penned a post that asked With Currencies Crazy, Is It Time to Return to Barter. In this post we asked what if there was no exchange of currency. What if it was an exchange of a raw material or service for another raw material or service, where each raw material or service came from the organization or a partner in the same country. Since the value of a product or service, adjusted for inflation, is relatively constant over time and since the relative value of one versus another is also relatively constant over time, such a contract would not be subject to rapid changes in value differences regardless of what happened in the currency markets.

Now imagine if instead of trading raw materials, you could trade IOUs and send them up and down supply chain until all of the differences could be settled within a country. You wouldn’t need to exchange raw materials with a company you might not want to, and, more importantly you definitely wouldn’t need to deal in non-native currencies. You could just settle those IOUs with in-country in-currency bank transfers, clear out the IOUs, and all would be settled.

Up until now, there has been no way to securely trade those IOUs. You had to trade payments in banks. But now, with the advent of blockchain, you can trade those IOUs simply by creating an IOU cryptocurrency specifically for keeping track of all the barters. And, if you’re not sure how to optimize the trading of IOUs, we gave you a great idea on how to do that in our post on With Currencies Crazy, Is It Time to Return to Barter — you build a special, shared, supply chain optimization model that allows all participating entries to upload their data and opt-in to in-currency barter optimization and then trade the IOUs through the new cryptocurrency and only the final imbalances in each country need to be paid. It’s the future …

Forty Five Years Ago Today

The United States of America, under the leadership of Richard Nixon, launched Landsat-1, the first satellite of what began the US’ Landsat program – the longest running program for the acquisition of satellite imagery of Earth. (We are now up to Landsat 8, launched four years ago on February 11, 2013.)

As succinctly summarized by Wikipedia, the images collected and archived at receiving stations around the world are a unique resource for global change research and applications in agriculture, cartography, geology, forestry, regional planning, surveillance and education, and can be viewed through the U.S. Geological Survey (USGS) ‘EarthExplorer‘ website. For example, the latest, Landsat 7, records data across eight spectral bands with resolutions ranging from 15 to 60 meters and a temporal resolution of 16 days.

And while Landsat 1 only had two sensors, the return beam vidicon (RBV) and a first generation multispectral scanner (MSS) that recorded, respectively, visible and near infrared photographic images and radiometric images, this was still extremely valuable imaging data where none had existed before. And without it, we’d never have Google Earth.

When Selecting Your Next Supply Management Solution Remember …

All opinions are not equal. Some are a very great deal more robust, sophisticated and well supported in logic and argument than others.
Douglas Adams

This is something that should always be kept in mind when soliciting opinions on a perspective solution for Supply Management. Consider who you are going to ask:

  • Your co-workers.
  • Your peers on a user group.
  • Vendor references.
  • Vendor representatives.
  • Analysts.
  • Bloggers.

Consider their average perspectives.

  • Co-workers: probably didn’t look under the UI covers of potential solutions because, like you, they are too busy …
  • Peers: stuck in a single world view provided to them by their vendor … and they are gonna love it or hate it …
  • Vendor References: peers who absolutely love the solution (or they wouldn’t be given to you) …
  • Vendor Reps: there to sell their solutions, so they will give you the best of theirs and the worst of their peers …
  • Analysts … will give you a reasonably fair comparative analysis of the vendors they know … which are typically the ones that made their quadrant … which are typically the biggest companies and/or their biggest customers …
  • Bloggers … who will tell you everything they know … but unless you pick the blogger who specializes in that area … it won’t be everything you need … but, with the exception of analysts, far better than the rest because they do their research on each vendor they cover …

In other words, when trying to select a solution and soliciting opinions from your internal survey, not all responses should be weighted equal. Insight from those who have done their homework should be weighted more heavily than from those who quickly assessed a UI and decided they like the Amazon-one best (even though a B2C interface may be totally unsuited for the task at hand) or from those with restricted world views (which make them experts on one vendor in the final three but not the other two).

Keep this in mind if you want to truly select the best solution.

Free Procurement Isn’t Free — So Why Are We Going Through This Again?

Apparently SpendMap, a relatively unknown provider of Procurement software (compared to the big guys), has decided on the marketing strategy of “Free Procurement” to make a name for themselves and, hopefully, get their software known.

the doctor really wishes they would have consulted with him, or another knowledgeable analyst who has been around for a decade, before making this decision. “Free Procurement” doesn’t exist, and it’s just gonna bite them in the rear if they don’t do the smart thing, like Coupa did, and drop it.

This isn’t the first time, or even the second time, a company has tried this, and it didn’t work then for the same reasons it’s not gonna work now. Most people don’t remember, but way back when Coupa launched on Procurement Independence day, they offered a free downloadable, streamlined, do-it-yourself version of their software. Anyone could download this RoR (Ruby-on-Rails) code bundle, install it, test it, and use it for free as long as they wanted — if they could install it, configure it, get it working to their liking, and deal with any bugs that managed to slip though. (And installation wasn’t a breeze, mainly because you had to get the RoR stack working, which wasn’t a breeze to do in the early days of RoR.)

Then, a few years later, a company called Bupros (remember them, probably not, but they are still around) decided to make the same play. They also released an open source PHP community edition of their procurement software about 3 years after Coupa and still no one knows their name. (And installation of this, despite being three years after Coupa, was even more painful. PHP is a nightmare — unless you are using the same version on the same stack in the same environment it was developed and tested on, something is not gonna work right. Plus, their documentation didn’t quite sync up with their download and the doctor remembers spending the better part of a day for what should have been a 30-minute install just to get basic functionality going. [Remember, the doctor has a PhD in CS and has been a Chief Scientist, Chief Architect, and CTO and has been coding for over 25 years, so when he says something should take X time, and it takes 10 time, you can trust that assessment is reasonably accurate.])

So why isn’t there any such thing as “Free”? And why doesn’t “Free” work?

First of all, when it comes to Procurement software, especially do-it-yourself procurement software, as per our classic post on Uncovering the True Cost of On-Premise Sourcing & Procurement Software, it’s not just the license cost. It’s the cost of the hardware and middleware infrastructure (which could include databases, web servers, third party middleware, etc.) it runs on. It’s the cost of the installation, which, as per above, can take a lot longer than the provider will say it will (because only their developers know all the gotchas to watch out for and avoid), integration with any third party systems that need to push data in or pull data out, and maintenance. It’s the internal training and support costs. And these costs can often be substantially more than the license fee.

And don’t get fooled by a pure SaaS offering either. Just because the license is free and you don’t have to buy servers, there’s still the integration costs (as someone has to figure out how to use the APIs to push data in and pull data out and actually do it), the training costs, the maintenance (as the provider upgrades the platform and introduces new connectivity requirements) and re-training costs (as new features or modified workflows require retraining). And then there’s the back-up costs (it’s free, which means no service guarantees, including no guarantee the platform and/or your data will still be there tomorrow) and contingency plan creation, testing, and maintenance costs (what to do if the platform, or your data, disappears). These add up. And they might be considerably more than just licensing the lowest cost product on the market where you have service guarantees, initial integration, maintenance, and regular (web-based) training or free access to a complete self-training audio, video, and manual library.

So, regardless of the intention of the provider, who might be trying to move you up the ladder or increase the visibility of Procurement software (which is an important component of success), don’t get taken in by free. When it comes to Procurement (or Sourcing) software, there is no such thing as free. Low-cost, yes, because basic procurement and e-negotiation-based sourcing functionality is now a commodity, but not free. Either you’re paying a provider, who can take advantages of economies of scale, or your paying IT and support staff (and possibly paying for more infrastructure). And if you’re small, you’re paying more when you go the free route.

If a company really wants to help small and small mid-size businesses get on a platform and modernize, they’ll go the low-cost consumer-based SaaS route and offer low-cost monthly licenses per user that a user can put on their p-card or credit card and expense monthly and, as part of that service, offer all of the support and reliability of other online service offerings (like SalesForce, Zendesk, etc.). But they will never, ever, offer, or push, free.