Category Archives: Technology

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.
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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.

The UIX One Should Expect from Best-In-Class Auctions, Part II

Last week we dove deep into the basic general requirements for any e-Negotiation platform, namely e-RFX and e-Auction, and called out the need for easy template creation and easy starting bid population and validation as two necessary key requirements (among a set of requirements). (See: Best-in-Class e-Sourcing Part I and Best-in-Class e-Sourcing Part II.)

However, as we explained in our last post, the requirements for auctions go quite deeper than the requirements for RFX. In our latest article over on Spend Matters Pro [membership required] on What To Expect from Best-in-Class Reverse Auction Technology and User Design (Part 2), the doctor and the prophet dive deep into specific capabilities required of modern e-Auction platforms in order for a user to have a great experience.

In our article, we define three absolutely requirements, as well as two requirements that will soon be absolute, for every e-Auction platform that wants to be a modern platform, including real-time connectivity monitoring.

As we state in our article, internet and software connectivity should never be taken for granted. This is a lesson one of the authors originally learned over 15 years ago (first hand) when helping run early online sourcing events at FreeMarkets. However, even today, many platforms still take this for granted, assuming that everyone has the reliable, redundant internet infrastructure of a modern first world data center. This is still simply not the case. Your supplier representatives are probably located at their factories in the middle of Nowheresville in the Lost State of Third World Country and might still be on a 1.54 Mbps T1 connection, which is only up on good days. Their data centers might be located in the nearest city, which barely has enough electricity to meet demand on a good day (when the AC or Heat is cranked up in every home and building), and subject to occasional rolling brown-outs. And so on.

The fact of the matter is the software should assume that suppliers can, and at least one supplier representative will, lose connection during an event. And if this happens, the supplier still needs to be able to bid. A modern platform allows for each supplier representative to designate one or more proxy bidders, in priority order, and if the main rep is unable to establish, or maintain a connection, the software will detect that and automatically switch the bidding designation to a proxy (who will be view only until he or she needs to take over bidding). In addition, the loss of connectivity and change of delegate will be noted and the buying organization notified.

In addition, it will detect if multiple supplier representatives lose connectivity, assume there is a major issue, automatically suspend the event, and notify the supplier representatives through other means (e.g. backup emails, fax, and/or even SMS) that the event has been suspended and will pick up either the designated back-up time or at a time to be communicated by the buying organization as soon as the issue has been identified and resolved.

This is necessary not just to maintain good supplier relations, but to prevent costly legal challenges, especially in the public sector, if an organization lost because it couldn’t bid through no fault of its own (and could prove that it was willing to make the lowest bid which, in many jurisdictions, requires the award to be given to that organization). But yet, a [large] number of auction providers (of the 50+ that the authors collectively know about) do not provide this capability.

Curious to know what the other four requirements are? Then check out our full piece over on Spend Matters Pro [membership required] on What To Expect from Best-in-Class Reverse Auction Technology and User Design (Part 2).

No Solution is Completely Foolproof

A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.
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Source-to-Pay solutions are getting easier by the day and soon they will be so easy that some vendors will be claiming their solutions are so simple that even a fool can use it error-free. But that’s really not the case. No solution is foolproof. Never will be.

Why? First of all, it’s impossible to predict every action a person could take. So, no matter how many situations you plan and check for, if there is even one you missed, and if the application is complex enough there will be at least one, no matter how unlikely that situation is (or how nonsensical it is), there will be at least one user who finds it and either crashes the application or generates a scenario that is nonsensical.

The alternative is to lock the application down to an enumerable finite set of inputs in each state and limit the allowable actions to those that will allow a smooth, predictable, transition to the next state without fail. But if the vendor chooses this route, the result will be a very limited application with very limited possibilities. And given that the real world is not limited to a small set of situations with always predictable solutions, this is not a very useful solution.

Secondly, never underestimate the application stupidity of a potential user. First of all, the user could be a new transfer from another department with no training and a very shallow understanding of Procurement. What a vendor would assume to be obvious to an average Procurement user would not be obvious to a new transfer. Secondly, not all users are Procurement users. For example, shop floor users might have access to initiate requisitions. And these workers might have limited computer knowledge. And then there’s management. And consultants.

Thirdly, the more a vendor tries to make a solution foolproof, the more they end up throwing in way too much unnecessary code. The more unnecessary code that is put into an application, the more errors that creep in. Errors multiply with code. Always. Doesn’t matter if the code compiles. Doesn’t matter if the code passes the boundary tests. All that matters is that there is more code with more paths and more state transitions to track, to the point where eventually there are too many paths to track and test and something breaks when a user goes down the wrong path.

The moral of the story? Don’t fall for any vendor who says their application is foolproof. And don’t look for a foolproof application, because it’s not about how easy the application is, it’s about how much value the application can generate. The best applications, while easy and logical for most of the functionality, will not be foolproof. Nowhere close. So, value first. Because, at the end of the day, the only user a foolproof solution is for is a fool.

What Makes a Good UX? Part II “Smart Systems”

A couple of months ago, after we sang Bye, Bye to Monochrome UIs, we indicated that we were beginning a series that chronicles what makes a good UI, and more importantly, a good UX (User Experience) in a modern Sourcing or Procurement system. This is critical because systems that are not useable do not get widely adopted, and systems not widely adopted never deliver the promised value.

In our first post on What Makes a Good UI where we noted that the full series was being published over on Spend Matters Pro [membership required] as it is the result of a deep long-term multi-blogger collaboration (led by the doctor and the prophet) designed to identify what should be (and not what ay given vendor will try to promote based on what they have), and sponsored by Spend Matters, we outlined some of the fundamental requirements of a UI / UX for any Supply Management application which include, but are not limited to:

  • integrated, pervasive, guidance
  • … that is based on true expertise and historical use
  • “touch-less” automation wherever possible
  • extremely context aware
  • mobile support and mobile first in the field
  • messaging as a competitive advantage

(And if you want deep coverage on these topics, see the first instalment of our full series on Measuring the Procurement Technology User Experience: More Than Just a Pretty Screen over on Spend Matters Pro [membership required].)

But, as we stated, these were just the absolute base-line requirements. In Parts II and III of our full series, we outline the next set of core functionality that should be pervasive across any Supply Management platform that you acquire. And in future articles, we dive into e-Negotiation, e-Auctions, Optimization, Spend Analytics, SXM, CLM, Requisitioning and Shopping, Procurement and Catalog Management, and Invoicing … just to start. But we’re getting ahead of ourselves.

One of the core requirements we reveal, and dive deep into, in Part II in our article on Smart Systems and Messaging, Chat, and Collaboration is smart systems.

As per our article, smart systems drive integrated guidance leveraging new “AI” techniques -— better termed automated reasoning (AR), as software isn’t truly intelligent —- that adapt and learn over time. They do this by mixing semantic technology, sentiment analysis, key-phrase driven expert systems and other machine learning techniques with history to determine what the user is doing and what the user wants to do.

For example, a smart system in sourcing will detect if there has been a full event/process before run by a user or similar peers in an organization, and allow the user to instantiate a new instance (by copying the template or previous event). Or, in the case of one-time requisition in which competition could benefit the outcome, a smart system can detect an automated spot-buy event that can be run against prequalified suppliers hands off, which the system suggestions.

And that’s just the beginning of what a smart system could, and should, do for you. For deep insights into not only where the bar is today (as leading providers start to release first versions of these guided systems), but where the bar will be by 2020, check out our post, which also dives deep into the Messaging, Chat, and Collaboration functionality [MCC] that a modern system should support. [Hint, more than just integrated e-mail or first generation chat!]

And stay tuned for the next part, coming later this week, on the final set of core requirements that we feel a modern Supply Management System cannot be without!

P.S. If you are a vendor invited to the Sourcing, SRM, CLM, or Spend Analysis Solution Map, this is a series you do NOT want to miss!