Category Archives: Technology

Why’s it all about the platform when it should be all about the power?

As we all know, the last year has been all about the M&A frenzy as the big try to get bigger by gobbling up any player with any modules they don’t have or any player with customer bases in a region they aren’t in, and doing so in a manner that doesn’t always make sense to analysts. As the doctor indicated in his post last month on Surviving a M&A: The Customer Perspective, acquisitions should lead to synergies and do so from a customer, solution, and/or operations perspective.

Preferably, an M&A should culminate in synergies of all kinds. Why? An M&A that doesn’t synch on an operations perspective doesn’t reduce overhead costs, and that means you don’t get any economics of scale, which is something all the traditional textbooks say is the first thing you should look for. If there are no customer synergies, then there are no cross-sell or up-sell opportunities, and that’s typically the next thing the textbooks say you should look for.

And, especially in our space, if there are no solution synergies, then a lot of money is wasted, as the point of the acquisition should be to build a better, or at least, a more complete platform. Otherwise, one company is paying a lot of money for something that will just get tossed in the bit bucket because supporting non-synergistic platforms gets too expensive too fast and the non-synergistic pieces will get sunsetted faster than the sun in Alert, Nunavut in late February.

So why doesn’t the recent M&A Frenzy make a lot of sense to the doctor? Not only has a fair amount of it been lacking in obvious synergies, but a lot of it has been to simply expand platform offerings, without focussing on the power of the solutions being bought or how the acquisitions will help the platform.

The past year has seen the acquisitions of traditional catalog providers and leading spend analytics and optimization providers. In some cases, the power is limited … and in other cases the power is limitless. But in the majority of cases, to date, the integration has been pretty limited. It’s been more or less just plugging a module into a whole without an analysis of not only the power of the solution but how the solution could enhance the rest of the platform in new and innovative ways.

For example, let’s take optimization. Just plugging it into a S2P platform is pretty good, especially given the dearth of optimization solutions on the market today, but is it great? How do you take an offering to market that the market will understand is better than the other leading vendors which have optimization? After all, if it’s just the same process — construct RFI, send it out, get data, pump into model, get result, make award, push into contract management — what’s better from the perspective of an average Joe? But if you have an advanced Procurement solution, can plug it into the catalog and analyze not only the cost, but the total cost if the order can be piggy-backed on other orders from on-contract suppliers who can add it to forthcoming shipments, give you contract-level discounts, etc. that’s value. And if you are looking to assemble a standard kit for a new hire, can run all the various combinations and determine which variant is best over a given time frame, that’s value too.

And a catalog solution can enhance sourcing if it supports punch-out and integrated search and anytime a buyer is considering sending out an RFI, can be integrated to identify current market pricing and source suppliers from the data within the catalog and in punch-out sites. If the buyer compares this pricing to current pricing, this can let the buyer know if going to market will likely be good (if market pricing is significantly less than current organizational pricing) or bad (if market pricing is significantly higher and the best option is just to extend the contract with the incumbent if pricing will stay about the same).

At the end of the day, Procurement is about generating value — and if the platform addition doesn’t generate additional value, what’s the point?

Keep Your Self Driving Car. I’ll Still Choose Good Ol’ Alfred Every Day of the Week!

As the doctor pointed out back in 2014, calling #badwolf on self-driving cars is well-founded. Just last month we had more accidents involving self-driving cars (from Tesla and GM) where a Tesla “ploughed into the rear” of a fire engine in Culver City and where a GM car collided with a motorcycle in San Francisco.

And when you get injured, as in the case of the motorcycle driver, who do you sue? If the car is self-driving, then there’s no driver, just source code. Source code isn’t an entity, so all you’re left with is suing GM, as the cyclist whose motorbike was hit with the GM car is doing (as per this article in Engadget and this article in Popular Science). But is it the company? When technically it’s the software — written by who knows how many employees who used who knows what from open source to speed up development, which was again contributed to by who knows how many authors?

But you can’t sue software, it’s not an entity, at least not a legal one, and that can’t happen at least until we grant it intelligence … and the right to own assets. So, it’s GM, but are they liable under the law? And, if not, how can the individual in the vehicle, not driving, be held liable?

And what happens if the “AI” becomes artificially intelligent and decides to “improve its own code” or the code gets co-mingled with the company’s “sentiment analysis” technology and all of a sudden gains a strong “dislike” for the self driving cars of the competition and, using it’s limited action-reaction processing algorithms, determines the best course of action is to “crash into the competition cars”. What then? We’re driving cars with a “kill” switch we have no control over!

And we’ll never know if there is one! With 99M+ lines of code in an average self-driving car OS, how would you ever find the kill switch until it triggered? And if it triggered en-masse, all of a sudden we have Maximum Overdrive on a global scale! Are you ready for that? the doctor is not!

How Do We Drive Technological Advances? Part II

In Part I, we noted that this is not the first time we tackled the driving of technological advances, having preciously tackled the issue back in 2014 in our 3-part series (Part I, Part II, and Part III) where we noted that any organization that wanted to excel in Supply Management had to master the three Ts: talent, transition (not process) and technology and focussed in on technology in particular. However, not much has changed since we last tackled the subject — new technology adoption in the majority of organizations is still low, and even though 47.3% of the world’s population was online last year, we’re not sure the same statistic holds true in the business world.

And while we can’t say for sure why technological advance is slow and adoption of new technology solutions is low in an average platform, we are pretty sure that it has something to do with the fact that, especially where the older generation is concerned, especially for the older generation, they’ve heard the same old story hundreds of times before — it’ll make your work faster and better and your life easier. And, over the years, they’ve tried dozens of systems that made this claim, but few, if any, have delivered and most that delivered some still had drawbacks. At this point, any talk of trying a new solution just fills them with dread. And that’s not a great starting point for anything.

So you have to not only get past the dread and the suspicion and the outright animosity but get the key stakeholder, who, in this case, is a primary user, to an open state of mind where she is ready to try it and, hopefully, not only see how it will make her daily life easier, but like it.

And this is more than creating great tech with a great UX (which the doctor has been writing a lot about lately across the S2P cycle because just creating a system that works isn’t enough anymore), it’s creating great messaging that gets the message across. And this is as much psychology as it is marketing and definitely more psychology and marketing than technology.

Think about early adopters. Why do they adopt? Theories iclude:

  • they like the social status it brings them
  • they like to be the expert on new technology … and adopting new tech allows them to do the product research they need to be the expert
  • they want to solve their needs before their peers to stay ahead of the crowd

So, if you are targeting early adopters, you need to keep this in mind and have messaging to drive these points home. And that’s sometimes easier said than done … as run of the mill messaging will be something your target audience has probably heard a dozen times before. So, be creative.

Any other ideas to drive technological adoption?

How Do We Drive Technological Advances? Part I

SI tackled this subject back in 2014 in our 3-part series (Part I, Part II, and Part III) where we noted that any organization that wanted to excel in Supply Management had to master the three Ts: talent, transition (not process) and technology and focussed in on technology in particular. But, as we also noted, the technology element hasn’t changed much in the last decade. Consider the public defender‘s recent story about technology over on Spend Matters UK where he talked about a business dinner a few years ago (and by a few years, he means the conversation took place this decade) a company’s representative noted that none of the Executive Board in the firm had a computer in their office. Not only did they not have computers, or laptops, but they didn’t even use e-mail! Their PAs printed off all their emails for their bosses who wrote longhand or dictated responses for the PAs to type and send off. The company, not unexpectedly from the doctor‘s viewpoint, just went into receivership, and as far as the doctor is concerned, any company that doesn’t keep reasonably modern may soon face the same fate.

But driving technological advances is still hard. We still have an older generation that doesn’t like or trust technology and we still live in an age where over half of the world’s population has never used the internet — something most of us take for granted as part of modern daily life. (In 2017, the global population reached 7.558 Billion but the number of people who went online in the year was estimated at only 3.578 Billion, or 47.3% of the total population.)

So what do we do? Obviously we have to focus on adoption, but there’s multiple aspects to adoption. First of all, you need to

  1. get people to try it and then you need to
  2. make sure what you ask people to try is so easy, obvious, good, and valuable to them that they want to use it … so much so that after a few weeks they would get mad if you tried to take it away and have them do it the old way.

We’re finally at the point where #2 is becoming a reality where many of the best S2C/P2P/S2P platforms are really focussing on the user experience, taking cues from the best B2C and C2C sites and applications and giving users an experience that is fun and natural to them. But sometimes getting them to try it is hard. Remember, especially for the older generation, they’ve heard this story hundreds of times before — it’ll make your work faster and better and your life easier. And, over the years, they’ve tried dozens of systems that made this claim, but few, if any, have delivered and most that delivered some still had drawbacks.

If they’ve been burned over and over, and are fearful of any new technology, how do you get them to try it with an open mind and find something that will work … great? Because if they don’t even try it, they won’t adopt it, and there’s no point trying to convince their boss to buy it.

 

Forty Years Ago Today …

… the modern bulletin board was created when the world’s first computerized bulletin board system (CBBS) was created. Developed by Ward Christensen to allow him to exchange information with other computer hobbyists over a MODEM, through a simple MODEM file transfer protocol, later renamed XMODEM.

And while only one user could be connected to the BBS at a time, since the connection was over an old fashioned phone line, it was like nothing that existed before. A user could dial up, share a file, disconnect. Another use could dial up and get it. So could 10 more users. Then some could dial back up and share their updates. When CBBS came online, the internet wasn’t even a twinkle in the minds’ eye of Berners-Lee. ARPANET id not even adopt TCP/IP, which would become the protocol the internet was build on, for another five years.

Today is a historic day in internet history, and one that should not be forgotten.