ClientLoyalty – Ironic Name, Straight-Laced Solution

Supplier Relationship Management is quickly becoming the “hot topic” among progressive Procurement organizations that want to advance on their supply management journey, and materializing as a slew of checkboxes that are appearing on product selection and evaluation checklists. But Supplier Relationship Management, while a hot topic among buyers, and a hot topic among marketers, is not a hot topic among developers. While many suite suppliers have supplier management solutions, the reality is that the majority of these fall into the classic Supplier Information Management or the slightly more modern Supplier Performance Management buckets.

The reason that SRM is a “hot topic” but not a common offering is that to truly support the relationship “R” in SRM, the software has to go beyond simply tracking information, performance metrics, and action plans. It has to track, measure, and manage feedback — from the organization and the supplier, monitor measures that track the evolution of the relationship — and not just performance, and allow for the collaborative creation of action plans to improve the relationship.

While many platforms will track all relevant supplier information — such as locations, contacts, products; and all performance metrics — such as on time delivery, defect rate, and target cost performance; few will go beyond that. Only true best of breed SRM platforms will address the relationship aspect. One of these, and possibly the newest entrant to the SRM arena, is ClientLoyalty.

ClientLoyalty was founded with the desire to bring true relationship management to companies that realized that in order to get the most value for their money, and the best performance from their suppliers, they needed to actively measure, manage, and improve the relationship. Therefore, they built a tool that allows an organization to track, measure, and manage performance, experience, risk, and reputation and integrate this more holistic 360-degree view into a single relationship strength indicator using net promoter scores.

The net promoter score is a customer loyalty metric developed by Fred Reichheld, Bain & Company, ad Satmetrix Systems, and introduced by Reichheld in a HBR article in 2003. Calculated as the difference between positive responses and negative scores, the net promoter score is positive if the overall experience is generally positive and negative if the overall experience is generally negative. If the relationship is improving, then the net promoter score will improve over time and if the relationship is degrading, then the net promoter score will degrade over time.

The ClientLoyalty NPS Loyalty metric is the (possibly weighted) average of performance, experience, risk, and reputation. Performance is calculated using a net promoter score over hard performance metrics calculated and tracked by the organization and hard performance metrics submitted by the supplier. These metrics will generally differ as both parties will generally have different definitions and calculation parameters. For example, the buyer might define on time delivery as the truck in the yard at 8 am and the supplier might define on time delivery as the driver reporting a delivery on the same date. Because of this, the buyer might have an on time delivery rating on the supplier of 80% and the supplier might have an on time delivery rating for the buyer of 98%. In this situation, the supplier would have a negative NPS due to the buyer’s lower appraisal of the situation – and this discrepancy highlights an issue. In addition, the platform comes with over 90 built in KPI definitions that the organization can use to get started, and more appear with every release.

The platform also supports extensive document management capability. Users can upload and tag critical documents in a central storage system for easy search, reference, and tracking. Contracts can be specially tagged as contracts and additional metadata and tags defined for contract status tracking and monitoring. Attachments can be correlated as well.

It’s a rather unique offering as it appears to be the only one with true, 360-degree, NPS scores and a home-grown sentiment analysis algorithm that can monitor social media sources and news sites to identify relevant comments and stories and extract the sentiment from the sites and stories and integrate it into a consistent score and one of the first platforms built from the ground up with full data import and export capability through CSV, XML, and APIs and extensible document capability.

But, like any new platform, it does have its weaknesses. There is no out of the box support for major procurement and ERP platforms; no ability for automated meta-data identification and extraction; and no innovation management. An action plan is a corrective action plan, not an innovation management solution.

However, especially given the relative dearth of true SRM providers compared to SIM providers and Sourcing/Procurement suites, ClientLoyalty is still one to watch and one to likely put on the shortlist, especially in North America.

For a deep dive into this wily provider, check out the recent in-depth coverage by the doctor and the prophet over on Spend Matters Pro [membership required]. (Part I, Part II, and Part III)

Procurement-as-a-Service: High Priority or HYPE HYPE HYPE!

Next month, the public defender will be hosting a webinar on the evolution of procurement: alignment, flexibility, and Procurement-as-a-Service where he will be discussing whether Procurement-as-a-Service (PaaS) is high priority for your Procurement organization or just hype. Guess which way SI is leaning?

First of all, let’s define what Procurement-as-a-Service (really) is. Procurement-as-a-Service is the new name for the service you get from a Managed Services Provider that combines technology, personnel, and expertise to take over part, or even all, of your Procurement operations in a transparent and effective way. They use technology to identify what you are spending on, what you need, and where savings likely are; choose categories for sourcing and assign category experts; modern technology to do the sourcing and procurement; and track the purchases and payments and do m-way matching to make sure you only pay for what you get and that you get what you are supposed to when you are supposed to. They also make the process visible through, at a minimum, a reporting and progress portal, and may even give you some access to the analytics and procurement tool to run your own reports, record inventory, and upload payments.

Second, let’s break it down.

1. Technology

Nothing new here. Given that MSPs are typically using someone else’s tech, there’s nothing new here. In fact, they’re probably using inferior tech as they are looking for something that works best at managing multiple client procurement portfolios and not at conducting that best sourcing event, bringing the best analytics or optimization solution to the table.

2. People

Note that we are using people here, not talent. MSPs have people. A lot of people. Because they have to fill a lot of seats, but not all are talented, or at least not talented with respect to your business. And this is key. Talent is appropriately educated, experienced, and relevant to your business. This brings us to:

3. Expertise

While there will likely be a number of people at the MSP with expertise in your categories, this number could be a dozen or two among thousands. And you won’t likely get them working your account, nor are you guaranteed to even get the results you would get from a GPO (Group Purchasing Organization).

Third, let’s analyze what we broke down. No guarantee of even best of breed technology. No guarantee of the right talent for your organization (based on your categories or industry). And no guarantee of the right expertise, or sufficient expertise to go around.

So what is PaaS? In SI’s view it’s a quick-fix band-aid for those organizations without enough tech, talent, or transition management capability to handle its own Procurement operations. But for any organization with any capability to acquire and manage even basic tech, attract talent, and acquire and employ expertise, what does a PaaS provider offer, especially when there are GPOs, niche consultancies, and SaaS solutions that have been offering the same, if not more, for quite some time now? The answer: so far, nothin’.

So, in SI’s view, it’s hype, hype, hype. But it will be interesting to see what the public defender has to say when he goes head to head with Comensura‘s Jon Milton on March 7, 11:00 EST, 16:00 GMT.

A Properly Overhauled Visa Program Will Benefit Supply Chains

In yesterday’s post, we pointed out that a properly overhauled end-to-end visa program would be much more effective in implementing President Trump’s goals than a wall or any other initiative that President Trump has to-date proposed to keep people out and make foreigners pay for his program. But we also pointed out that this would have a number of positive side effects including, but not limited to:

  • An increase in STEM capability
  • An increase in American jobs
  • An increase in blue-collar and white-collar salaries

In today’s post, we’re going to focus mainly on the first benefit, as this is not just an American centric benefit, and the one that will most benefit the supply chain.

Supply chains are getting longer and more complex, product life-cycles are getting shorter, service requirements more varied, and supply chain pirates are getting much, much more sophisticated and capable of subverting all of the advanced tracking and monitoring technology that you can bring to bear.

As a result, you need smarter mathematicians to model the supply chain, smarter engineers to keep up with the shorter life-cycles (and get it right), smarter business and linguistic graduates to figure out how to deliver varied service requirements globally, and smarter techs to increase security to keep your products, and your supply chain, safe. Not a hundred thousand additional low-end programmers writing essentially the same old code, maintaining the same old installed systems, and doing other tasks that can be done by any run-of-the-mill programmer and even outsourced.

If the visa program is revamped, only these smarter mathematicians, smarter engineers, smarter business and linguistic professionals, and smarter technologists will get the visas. That will not only benefit the US, but the US-centric supply chains that effectively run most global supply chains.

Revamping the Visa programs will not only force IT outsourcers to think smarter and go global, but benefit supply chains as a whole.

Forget the Wall, Mr. Trump; An End-to-Edd Visa Program Overhaul will be MUCH more effective!

You’ll accomplish three of your goals simultaneously:

  • Keep People Out
  • Make Foreigners Pay for Your Programs
  • Make it easier to deport people

Let’s take this one-by-one.

1. Keep People Out

If you make it so that the only way in to the country for any extended period of time, for any reason other than vacation, or from any country that is currently high risk, especially where there is no appropriate trade program in place, is a visa, then the majority of people will be kept out.

2. Make Foreigners Pay for Your Programs

If you introduce more visas, with more requirements, and cost-based processing fees, foreigners will end up paying for your programs.

3. Make it easier to deport people

If you make it so that deportation is automatic for anyone without a visa, provided you make it so that everyone who should have a visa can get one, including people who are already in the US, possibly illegally but who should be given the chance to be made legal, then, after a reasonable grace period, you’d face little opposition to automatic deportation.

But these are not the only benefits you’d see from an overhauled Visa program.

You’ll also see:

  • An increase in STEM capability
  • An increase in American jobs
  • An increase in blue-collar and white-collar salaries

An increase in STEM capability

If the H1-B Visa program is properly overhauled, as suggested by Vinnie Mirchandani over on deal architect, then instead of getting tens of thousands of displaced Indian programmers, who likely only have a Bachelors and a few years of experience, you will get Masters and PhDs with advanced education and experience and true innovation capability — especially if you resurrect Senator Cruz’s proposal to make the minimum salary of a H1-B $110,000 a year. No one’s going to pay the equivalent of a $50,000 a year (at best) graduate $110,000 — and if they have to pay above market for a programmer, they’re going to hire an American first (which will be much cheaper than importing a $110,000 outsourced worker) — but for a real genius in physics, chemistry, bio-tech, engineering, that will be cheap. Especially since there will actually be H1-B visas available as they will no longer be sucked up in their entirety by Indian outsourcing firms.

An increase in American jobs

As indicated above, just fixing the H1-B program will increase American jobs as it will deter bringing people in that can effectively be used as indentured servants at cheap wages. But, better yet, introduce more visa categories, requirements, and fees for hiring non-Americans and, presto, you’ll do more for American jobs than lowering taxes (which never stay down anyway), building walls to keep people out, or pushing “buy American” policies. After all, your average constituent at the end of the day is lazy and greedy — if it’s easier and cheaper to hire an American than a non-American, then unless that non-American truly brings unparalleled value to the company (and, indirectly, the country). they are going to hire American.

An increase in blue and white collar salaries

The majority of your voters are in the middle class, working decent paying factory jobs (which will now be more expensive to fill with Mexican and other immigrants from poorer nations) and white collar tech-based jobs (which will now be more expensive to fill with visa program candidates). As a result, the best Americans will be in sought after, demand bigger salaries, and, guess what, owe it all to you. Going back to my comment that your voters are greedy (as the dollar comes first in America), this will only help you as they won’t care about party at election time, only the one President that fattened their pay cheque while increasing their job security.

So, Mr. Trump, forget that Wall and overhaul those Visa programs. It’s about time someone did.

Can John Oliver educate President Trump on the Basics of Supply and Demand?

Nordstrom cut Ivanka Trump’s clothing line, President Trump tweeted about it (and how unfair it was), and it caused a media firestorm. Retail became political fast, on a decision that was, in all likelihood, not politics based. Most retailers exist on (razor) thin margins and the last thing they can afford is to carry inventory that’s not selling, which ties up money and (eventually) results in losses if the merchandise acquired is end of life.

Moreover, it doesn’t matter how well the product line may be doing overall, it matters how well it is doing for the retailer that chooses to carry it. Sometimes a product line increasing in demand flounders at a retailer for various reasons. If most of the consumers who want the product do not live near the retailer, if the retailer does not carry the hot items at the right time, or if the retailer can’t effectively promote the line, it will flounder. And the retailer, due to lack of demand through its stores, needs to make the decision to drop it before they lose money.

It’s yet another example of a statement that illustrates an apparent lack of understanding about the intricacies of supply and demand. It’s even caused people to ask:


And I can understand why. While Mr. Trump clearly understands how to do business deals, and how to build/deliver what (he believes) someone wants (or he wants), that’s deal making, not demand planning, supply monitoring, or an intricate understanding of large-scale supply and demand. Plus, his statements on unemployment rate (which is result of demand, and supply, in the job market) and how it might be anywhere from 4.9%/5.0% to 42% and GDP (as it’s impossible to have a GDP less than zero, only a trade differential) mean that he needs more education and facts on the large-scale economics that govern supply and demand.

But, as the doctor tweeted in response, who would be up to that challenge?

After watching the last episode of Last Week Tonight, he thinks he has the answer.

John Oliver.

Just look at how simplistic his Last Week Tonight show team make a number of issues in the commercials that they specifically developed for Mr. Trump.


If John Oliver can tackle these issues, why not Supply and Demand?