In our last post, which noted that an organization must master the three T’s to excel in Supply Management, we lamented that an average organization has not yet mastered any of the T’s, with technology often being the T in which the organization is the furthest behind in (as most organization’s have people, which is a talent foundation, and process, which is a transition foundation). We then lamented on the lack of advice on what to do to drive organizational advancement and adoption in the organization. Certainly training and incentive will help, but it obviously isn’t enough in the average organization as an average organization in Supply Management is still way too far behind the curve. (So far, in fact, that Wile E. Coyote comes closer to catching the Road Runner than an average Supply Management organization comes to obtaining a technological advance that is still relevant.)

SI’s proof? The extreme low rate of adoption of supplier performance management (SPM), S2P project management, and decision optimization in an average Supply Management organization — technologies that help to deliver large savings opportunities that have been around for over a decade and that are still sparsely adopted in an average organization. (And while many organizations may claim to have spend analysis, especially according to the Zycus report, the reality is that most of these organizations are only using old-fashioned OLAP-based spend reporting technology — and that’s NOT spend analysis.)

As a result, SI is still very interested in Chief Executive’s classic piece on “Seven Strategies for Driving Technological Advances”. Not only is any piece of advice that can help spur technology adoption useful, but the apparent lack of heed paid to such articles makes SI ask Why? But the question is, was the advice good, and is it still good?

Chief Executive had the following pieces of advice, which will be discussed one by one.

1. Be a student of technology best practices.The article notes that leaders should strive to understand their industry’s best technological practice, so that they can combine their knowledge with that of the CIO for greater impact and decision making, but this is not going to drive technological adoption. While this may lead to better technology selection, this is not enough on its own. So it was okay, and is still okay, as advice, but you need to be more than a student. You need to be an adopter, and implementer.
2. Connect weekly with the CIO.This will definitely help the Supply Management leader to understand the impact of business decisions throughout the technology lens and, in turn, the impact of a poor technology decision on the business, but, as with the first recommendation, all this will do is lead to better technology selection, not adoption, which is the key to advancing technology in the organization. (Similarly, Procurement will need to connect regularly with the CTO to understand potential impacts from a support and utilization perspective, not just information and insight perspective.) So this is another good start, but just the beginning.
3. Encourage constant IT learning in the Department.This is a good start, because, once a Supply Management professional understands what a new piece of technology can do, he or she may be more open to trying it, but if it doesn’t work right away, it might be labeled as junk or inappropriate and left on the technology shelf. But again, just a beginning. That learning must be put into practice.
4. Communicate and share best practices through technology.
   This is a good practice, as it will increase the organization’s overall comfort level with technology, but unless the organization understands that modern technology is a best practice, the extent of technology adoption in your organization might not go beyond Twitter (which makes you stoopid:CNet) and Facebook (which is ruining society). So, evaluate, modify, and adopt as appropriate.
5. Think benefits, not features.This is very good advice, because organizations (that use supplier-generated RFPs) that fall for the feature buffet typically end up getting software solutions that don’t do what the organization really needs them to do, which is enable talent to manage transitions that result in cost reductions and avoidance. However, just selecting the platform that will theoretically provide the organization with the most benefit does not guarantee that the platform will be used. It’s all about adoption. (And SI’s recent paper on how Higher Adoption is Where True Value Lies will help with this. [registration required])
6. Prepare to invest.The article notes that it’s important to be realistic about how much investment is required to drive beneficial technological advancement within your business, but doesn’t indicate what the investment needs to be in — leaving you to believe the investment needs to be in the technology. Typically, this is not the case. Even enterprise software systems are very low cost these days compared to the investment that was required a mere ten years ago. The necessary investment, which could be significant, will be in the training and transition programs required to secure the adoption necessary to make the technology investment a success.
7. Establish meaningful metrics for your CIO and yourself.Measure the technology in a meaningful way and hold your team accountable to the results. Well, the technology should certainly be measured, and the team should be accountable for what they do, but the reality is that until they can use to do their jobs more effectively than they are doing their jobs today and feel comfortable with the technology, they’re not going to use it. Until their trepidations are overcome, the team will assume it’s just a fad and wait a week to see if you forget. Or a month. Or whatever it takes. So give them the tools they need, the training to use them, and the knowledge to continue to improve.

The verdict? Any advice in the right direction is good, but we need acquisition and adoption to get results. So make sure anything you get is not only modern, but adoptable.

This is a revised version of a post that originally ran five years ago, because not much has changed in the average Procurement organization.

As SI has repeatedly stated, any organization that wants to excel in Supply Management today needs to master the three base Ts^*:

• Talent
• Transition, and
• Technology.

Yes, SI is using talent instead of people and transition instead of process because PPT has been failing us for years. (Which is not surprising considering that death by PowerPoinT is a leading cause of corporate suicide.) Supply Management is not a function where HR can fill a room full of warm bodies and get results. Some organizations still think so (as illustrated by the fact that a few organizations have approached consultancies looking to expand their global supply management organizations by 200 overnight), but it’s not the case. The people need to be talented and that talent needs to be managed.

In addition, Supply Management is not a function where Operations can just take some random processes from a best-in-class competitor and treat them as gospel. The reality is that every organization is different, and every process will need to be customized, or transitioned, to fit the Supply Management organization before any results will be obtained. Similarly, supply chains are fluid and organizations need to adapt to unexpected changes that will continually arise. As a result, the processes will have to be fluid and capable of being transitioned to accommodate new suppliers, distributors, distribution methods, and requirements.

However, the technology element hasn’t changed. The reason — the average organization still hasn’t adopted sufficient modern technology, including most of the must-have solutions SI has identified over the years. (When a recent study by Zycus on The Pulse of Procurement — which would consist largely of companies with e-Sourcing and e-Procurement technology — found that even one quarter didn’t have critical technologies like spend analysis or contract management and 40% didn’t have e-Sourcing or SIM, this is quite telling with regards to the state of modern technology in Procurement.) This is not a good sign when you consider all these technologies have been out there for at least fifteen years and second generation solutions have been available for close to ten years in some categories! It’s true that a few of these technologies were not consumer-level user friendly until a few years ago, but that still shows the burning need for modern technology in an average Supply Management organization today! Not tomorrow! (Because, as The King may have proclaimed in 1971 [when he sang the words of Ernest Tubb], tomorrow never comes, and that’s because you can’t make it through today.)

So what can we do? Certainly a focus on adoption, which includes usability, training, and incentive will help. (SI has authored a great paper on the importance of adoption and how it it is the key to true value. [registration required]) But is that all? Needless to say this conundrum, when first discussed, drew my attention to a now classic article over on Chief Executive on “Seven Strategies for Driving Technological Advances” because any piece of advice that can help spur technology adoption is useful.

Chief Executive had the following pieces of advice:

• Be a student of technology best practices.
• Connect weekly with the CIO.
• Encourage constant learning in the IT Department.
• Communicate and share best practices through technology.
• Think benefits, not features.
• Prepare to invest.
• Establish meaningful metrics for your CIO and yourself.

So how good is this advice for Supply Management? That will be the subject of SIs next post.

^* There are more Ts, but these are the starting three.

This is a revised version of a post that originally ran five years ago, because not much has changed in the average Procurement organization.

… the third mouse gets nothing — unless you count the opportunity to bury the first mouse in a shallow grave before he dies of starvation something.

As Pete Loughlin reminds us in his recent post, “when conventional wisdom goes wrong”, most enterprises make one of two mistakes when selecting enterprise technology. Either they go with the same-old, same-old incumbent technology (that never solved their problem in the first place), or they go with a bleeding edge start-up (because their eagerness to please can be exploited). For the vast majority of companies, neither solves the problem.

While many startups will have something new and innovative, most don’t have the breadth or depth required to support a large organization — even if that is their ultimate target market. Start-ups are good for (smaller) mid-size organizations that need a point solution, or large organizations that just need one thing done better — they are not good as platforms. Similarly, if your ERP has failed you for 10 years, starting yet another customization project with a big 8 consultancy that has yet to deliver what they promised on any project isn’t a good idea either.

The best solution for many organizations is typically a new vendor with a newer, or more appropriate, solution, but not one that is so new that it has not yet been around long enough to be adequately stress tested and proven to have the breadth and depth required for the organizational size and need. A (smaller) mid-size organization should already be using it successfully and it should be clear that the solution has enough scale-power.

It’s often a hard call, but that’s why impartial expert technology consultants — who do not (re)sell solutions^* — should be engaged. In particular, they should be engaged to help an organization identify the processes it needs to support, the key functionality that a platform needs to offer (but not features, as sometimes multiple feature sets can solve the same problem), the scale the platform will need to support, the data that will be required, the integrations to other enterprise systems or external data sources to fetch this data, and the breadth of deployment that will be required to support the processes. Then, they should help the organization construct a proper RFP (that describes the current process, the problems, the desired process, and ultimate goals) and identify potential vendors to send the RFP too, as well as demo requirements, scoring and weighting systems, and best practices in vendor selection. But they should not sell, or have any interest in, any of the solutions — they are guides through the dangerous enterprise jungle, not treasure map peddlers.

And, most importantly, as Pete points out, if the expert is engaged, she should be listened to. Otherwise, the organization is not only wasting money on the executive’s gut-feel technology platform, but also on the advice that was going to be ignored anyway. Always remember, there’s no gold in them thar hills, but there is in the advice of a wise sage.

just a reminder that the doctor does not have any interest in, or receive any compensation for, any technology that he may or may not recommend, unlike many analyst firms that charge per lead and per sale