Category Archives: Technology

Societal Damnation 47: XaaS (Part I)

XaaS, short for Everything as a Service, is the latest craze that is going to cause your Supply Management organization nothing but suffering and pain. While it sounds really cool, because, historically, the transformation of a non-core but essential function (legal, accounting, etc.) or utility (water, electricity, waste disposal, etc.) into a service made your life easier, as with any good thing, it’s always possible to have too much. (A glass of red wine a day is a good thing, unless you are an alcoholic, but the same cannot be said of a bottle. A couple of aspirins are a good thing if you have a headache or a mild heart condition, but a bottle can kill you. Recruiting firms are a good thing, but imagine the chaos if you had to hand over all hiring to a third party who knew nothing about your corporate function or talent needs. Think about that for a minute.)

The right services can provide an organization with considerable advantages that include, but are not limited to:

  • Expertise
    that the organization might not have
  • Cost Reduction
    from economies of scale when all the service provider does is a certain function (and can amortize solution and personnel costs across multiple clients)
  • Efficiency
    that comes with best practices and the focus of personnel on homogenous tasks in an efficient manner (under the right, lean, six-sigma optimized, virtual production line model)

provided the organization does not have the economies of scale, dedicated personnel, or expertise in house. However, the wrong services will burden the organization with a number of considerable disadvantages that may include, but are not limited to:

  • Cost Increase
    as cost reductions only materialize if there is enough work on which to achieve a cost reduction (through the provider’s economy of scale) that covers the incremental overhead and management cost that goes with outsourcing a function
  • Efficiency Decrease
    since the management and administrative overhead of handing over a small amount of work is more than the efficiency savings achieved by the third party when there is not enough work to take advantage of an economy of scale
  • Loss of Control
    which is critical if the task is critical to organizational success (which is the case if the task supports the core business function of the organization)
  • Third Party Management (3PM) Nightmare
    if the provider is difficult to work with, in a time-zone that is opposite to normal working hours or the time-zones under which most other third parties operate, or has management requirements that are unduly burdensome to an organization already stretched thin with regards to third party management requirements

And if different business units decide to start outsourcing what they perceive as non-core functions (which are in fact core to the business or which should be managed by Supply Management or a different business unit), functions for which the service provider cannot achieve economy of scale, or functions that have not been optimized for outsourcing (which will result in an efficiency decrease as a best-practice provider will not be able to optimize inefficient workflows) willy-nilly, Supply Management will have quite a third party management mess to deal with.

How so? Come back for Part II.

Statess Wants to Stabilize Your State of Flux Part III

In our last two posts we introduced you to Statess and their SRM solution. With eleven years of SRM consulting behind it, and six years of Global SRM research, the platform hits the mark and provides the solution that many companies need to manage their supplier performance, development, and relationships. In today’s post we’re going to cover some of the key features of a few of the core platform modules.

As indicated in our last post, the platform is easily configured to provide a 360-degree view of a supplier and from the supplier homepage, a user can quickly access the overview report, profile data (which can be used to build a complete Supplier Information Management, or SIM, solution), performance data (collected internally and from third parties), the risk profile, associated contracts, tracked innovation efforts, Corporate Social Responsibility efforts undertaken by the organization and/or the supplier, current projects, supplier accreditations, 360-degree surveys (by the supplier of the organization), existing reports, and all dashboards that correspond to the supplier. In addition, if available (via 3rd party plugins), the buyer can also access trading information related to the supplier and its products, news feeds on the supplier, and the supplier’s media portal. Whereas some SRM solutions scatter supplier data throughout the different modules, the Statess solution, which allows for data entry and maintenance throughout the different modules, allows for the easy creation of centralized views by supplier so the organization, and a buyer, always has all of the relevant information through one common access point.

The system supports very extensive supplier profiles. In addition to basic HQ, Finance, and Contact information, the system can also store information on the supplier’s organizational structure as well as information on the supplier’s mission, vision, corporate objectives, and sustainability commitments (used in the CSR module). Furthermore, it can store extensive governance information that includes all of the individuals responsible for the relationship on both the supplier side and the organizational side, a complete stakeholder map, necessary actions, governance plans, planned meeting dates, and the minutes and reports associated with those meetings. Actions are implemented as project tasks and have owners, states, and status. This, in turn, provides a strong foundation for performance management and development programs.

At its core, the platform supports a very powerful generic survey mechanism that, like a good RFI solution, allows multiple types of surveys to be built with multiple sections, different response types (checkbox, numeric fields, free text, etc.) for each question, and automatic weighting mechanisms. This allows the organization to prepare the appropriate internal performance surveys and external 360-degree surveys that form the basis of good performance, CSR, Risk, and Relationship management programs.

Projects, which can correspond to the different types of efforts that can be managed in the system (including, but not limited to, risk management, compliance management, supplier development, innovation, and sustainability), can be associated with a business unit, optionally associated with one or more contracts or bids, and contain multiple stages or tasks, as they are defined in accordance with the traditional, well understood, project management methodology.

Performance reviews are built on KPIs (Key Performance Indicators), one or more KPIs can be built for each area (risk, compliance, CSR, contract, etc.) of interest, and the review can be broken down by key area. Year-over-year changes can be automatically calculated and the data can be imported from external systems or the ERP in supported data formats. Color-coding and drill-down views allow an organization to quickly pinpoint problem areas and then launch development initiatives off of the relevant area or KPI. KPIs have an extensive definition in the system (which includes categorization, associated business units, organization and supplier owner, input/import method, update frequency, default reporting frequency, tolerance levels, etc.) and, when properly defined, become a powerful performance measurement and management tool.

Risk tracking is also quite extensive, allowing the organization to categorize risks in different categories and track them using external data feeds (or manually entered data), define and store supplier contingency and business continuity plans, and integrate Lexis Diligence in real-time against the supplier and identified risks of interest.

Contract Management tracks all of the contract meta-data that you would expect, supports versioning, stores default templates, tracks contracting entities, and even allows for the definition of sibling (related) and child contracts so a buyer can not only quickly retrieve a contract for a product or service, but determine if there are any other contracts of relevance if she is sourcing a category or thinking of dealing with an entity wholly owned by the supplier.

The innovation module serves two primary functions. First of all, it allows an organization to centralize tracking and management of supplier projects focussed on innovating (a new product design or service). Secondly, it allows the organization to track public challenges that it issues on sites such as Innocentive. This is a useful capability that many software solutions overlook.

In summary, the new Statess solution is a very extensive SRM platform that makes a great entry point for any company wanting to get their SRM under control.

Statess Wants to Stabilize Your State of Flux Part II

In our last post we introduced you to Statess, a relatively unknown solution provider in the SRM space on this side of the pond even though they were conceived from State of Flux who have been producing leading SRM research reports for six years, in business for eleven, and are a leading provider of SRM consulting in the UK.

We discussed how they offer a SRM suite focussed on performance, contracts, risk, innovation, relationship, and sustainability management with over fifty sub-modules that address dozens of facets of performance, risk, and relationship management. We also noted how the platform could, if needed, be used for category management in addition to contract management, CSR management, and even the management of overall supplier development programmes.

The first thing to note about the Statess SRM platform was that it was designed to be modular, flexible, and adaptable. This means an organization can not only choose only the functionality that they want from such a platform, but can configure it how they want and even customize the terminology used in the UI. Even if an organization could use all of the functionality, sometimes a staged roll-out with limited functionality is best at first as this allows training to be focussed and prevents users from getting overwhelmed and avoiding the system. (And if the organization has systems with some of the functionality and wishes to keep using those existing systems, disabling duplicate functionality makes sure that the users don’t get confused.)

The next thing to note is that this web-based platform is highly configurable. Not only can the user define and customize reporting dashboards, as one would expect from any modern tool, but the user can design and customize their home page and the view for the entry point to every module they have access to. Basically, not only do all reports have overview widgets, but all action types have summary widgets, particular to what the user can see and do, that can be shown or hidden, rearranged as the user sees fit, and customized from a look-and-feel perspective. This allows the user to create a page that focusses on upcoming and overdue actions, quick access to artifacts (such as contracts, audits, certifications, etc.) stored in the system that they need to review on a regular basis, and entry points for key tasks that the user performs on a regular basis instead of just a shiny dangerous and deadly dashboard (which is where most systems stop).

After this, the next most important thing to note is that the user can create views from both an organizational perspective and a supplier perspective. The latter allows them to focus on a 360-degree view of a single supplier, as opposed to just an organizational view from a performance, relationship, or contract perspective and even replicate what the supplier will see based on what information they choose to share (with the supplier). Furthermore, from this view they can create or access any data or system artifact that relates to the supplier, regardless of the module it lives in as well as initiate new survey, innovation, or development programmes. The system maintains the necessary multidimensional relationships between the different data elements to enable the buyer to rapidly configure and access multiple views. Just like the best insights in a spend analysis project often come from looking at the data in unconventional ways, the best insights into supplier performance and, most importantly, development opportunities often come from looking at the supplier (data) from multiple perspectives. Statess realized this and built a tool that could support these multiple perspectives.

And the last point we are going to note in this post is that the platform, while quite extensive, is still looked upon as an early stage solution and is being actively, and aggressively, developed and more (and deeper) functionality will materialize over time, as well as more integrations to third party systems and data sources to shorten the average implementation timeframe and progress towards even more of an “out of the box” solution.

In our third, and final post in this initial series on Statess, we’ll overview some of the key capabilities of a few key modules.

Statess Wants to Stabilize Your State of Flux (Part I)

These days an average organization has a lot of uncertainty to deal with as a result of sustainability, regulatory, and risk headaches that plague it on a daily basis. These headaches range from paperwork headaches to regulatory migraines to minor delivery hiccups to major supply chain disruptions depending on whether an import form wasn’t received on time, certification requirements for key personnel were not completed, a strike erupted at a major port, or an earthquake destroyed a major production plant.

However, that uncertainty can be reduced with good planning, monitoring, and execution. Somewhat ironically, achieving this requires proper planning to identify the right processes and technologies that can be used to not only monitor the supply chain for events that can cause disruptions, but create mitigation and continuity plans that can be executed at the right time. And while it’s not always easy to identify the best processes, it’s a bit easier to identify the right kind of technologies. An organization that wants to reduce uncertainty needs to implement systems that monitor for events outside of its control that could increase its organizational risk and cause unexpected disruptions and it needs to implement systems that monitor for issues inside of its control that, if left unchecked, could increase risk or decrease effectiveness. One of the most important systems in this latter category is a SRM (Supplier Relationship Management) system because an organization’s suppliers, that often are the recipients of up to 80% of organizational spend, represent one of the biggest known, and manageable risks, to the organization.

While SRM solutions aren’t new, new SRM solutions are still being developed, and one such SRM solution that you likely haven’t heard of that could meet your organization’s needs is Statess. Although it’s a relatively new solution, it’s quite mature for its age as, unlike many solutions that first hit the market, it was not developed by a new software company but originally conceived of over six years ago by State of Flux, a mature, eleven year old provider of Supplier Management consulting, training, and research services (that recently rebranded their technology division as Statess). Even though you may never have heard of them, as they are on the other side of the pond, State of Flux is a leader in best practices and thought leadership for Supplier Management, and has been producing the Global SRM Research Report for the last six years. That’s longer than a number of self-proclaimed industry leading research firms on this side of the pond have been around!

As a result of this research, and the consulting they did for their clients, they not only quickly realized the need for a proper tool to manage supplier relationships, but realized that if the tool was not designed to streamline the common operations and adapt to the organization’s needs, it would not be effective. Based on this, they set out to design a tool that would work for the average organization it served and not end up as another piece of shelfware. Such a tool would not only have to help manage relationships and performance, enforce compliance, and mitigate risk, but also promote supplier development, allow for cross-organizational team collaboration, and, most importantly, go beyond just management to encourage true supplier innovation. In addition, depending on organizational need, the platform may need to support and manage contracts and categories, address sustainability and Corporate Social Responsibility (CSR), and manage overall supplier development programmes.

It’s a pretty tall order, but the new Statess supplier management platform meets the bill with core modules for relationship management, performance management, contracts management, risk management, innovation management, and sustainability with over 50 uniquely defined sub-modules that address different aspects of contracts, performance, risk, innovation, and relationships.

In our next post we will begin to discuss the capabilities of the solution in detail and how it addresses each of these core issues.

Technology Damnation 82: The Secret Seven

We all think the internet, with its distributed design, open and thoroughly tested encryption and security technologies, and its foundation of our modern public, private, government, and academic culture is, despite regular security breaches (which are often a result of improperly applied security procedures and technologies of corporations that should know better), relatively secure and reliable and will remain outside of any one organization’s control for years to come. Especially since our global business functions, and global procurement functions in particular, rely on it.

And while that is the expected future, as no one corporation, nation, or conglomerate owns the internet, the reality is that ICANN, the Internet Corporation for Assigned Names and Numbers, which is a private corporation, has an awful lot of power over the internet as it manages the Internet’s Domain Name System (DNS) that links your domain to the right IP address. In order for a registrar to sell you a domain (to link to an IP that is typically made available to you by your ISP), the registrar has to be accredited by ICANN. In addition, IANA, the Internet Assigned Numbers Authority, which is another private corporation, is responsible for the Internet Protocol Addressing System and allocates IP blocks to the Regional Internet Registries (that allocate, in turn, to National Internet Registries, that allocate, in turn, to the Local Internet Registries that, in turn, allocate IP address to the local ISPs).

This says that if a body managed to gain control of IANA, they control your IP address, and, even worse, if a body managed to gain control of ICANN, they control the mappings, and since everyone uses domain names, and not IPs, they would essentially control who goes where on the information superhighway. This couldn’t really happen, right? Wrong. While not likely, all a villainous/terrorist organization of Bond proportions needs to do is gain control of, or replace, the seven key holders that control the core ICANN DNS system. That’s right. The vault that controls the entire global internet only takes seven keys to open.

And even though the key holders hold traditional safety box keys, the keys that control the internet aren’t regular keys you find on a key ring and are, in fact, smart cards, that can only be accessed by the key holder (with the safety box key) after going though traditional and biometric security screenings that are likely tighter than they have in place at Fort Knox (and the process required to complete the ceremony and gain access to the machine that generates the new master key has over 100 steps). And no key on its own can make changes to the master DNS. All seven keys are required to activate the machine that generates the master key that allows the DNS to be updated. (And whoever holds the master key, just like whoever holds a traditional master key, has access to the entire internet just like a traditional master key gives you access to an entire building.)

But at the end of the day, it only takes the keys and biometrics of 7 people to get the smart cards that activate the machine that generates the new master key for the internet which allows whomever holds it to redirect domains at will. It is true that these 7 people, who are some of the greatest minds in internet security and who are as trustworthy as they come, are spread all over the world, but still, at the end of the day, it would only take 7 samurai to slay the internet.

In other words, no matter how far we progress with technology and security, it all comes down to the trust and nobility of a select few to keep our global supply chains humming.

And if you start to think about this too deeply, you might really believe we’re all damned in the end!