KPMG Is Listening To Too Much Bob Dylan …

… but still failing to understand the subtlety of the message the Nobel Laureate conveyed in the message he imparted to us 53 years ago.

Recently, as pointed out by the procurement dynamo over on Procurement World in his post on 4 Fascinating Futures, KPMG gave us four potential visions of Procurement’s future in their recent Future-Proof Procurement paper (co-published with Florida State University’s College of Business). [It’s a great read, by the way, for those of you that always enjoy a good alternative universe/timeline SciFi story.)

According to KPMG, we are headed to one of four possible Procurement futures, namely:

  • Primacy of Procurement
    where Procurement becomes the center of power as a result of technology enablement
  • The Creative Agency
    where Procurement totally re-invents itself in order to stay relevant
  • World of Project Economy
    where Procurement disperses (and becomes merely a means to an end)
  • R.I.P. Procurement
    where Procurement brings about its own demise (and is replaced by machines)

All Depending upon the outcomes of the following matches:

  • human centricity vs. algorithms
  • centralism vs. decentralism

In the second case, it depends upon whether or not the march to centralization continues or decentralism retakes center stage. And in the first case, it depends upon whether technology becomes good enough where it can be trusted in place of a Procurement pro.

And, according to KPMG, the futures are defined by the winners as per the following graphic:

In other words, KPMG believes that we need to either prepare for

  • The Path of Dominance
    where Procurement takes total control of the extended supply chain, and, as a result, the business world
  • The Path of Salvation
    where Procurement totally reinvents itself and stays relevant in the turbulent global economy as time shifts the sands
  • The Path of Harmony
    where Procurement adapts to the gig based project economy and simply becomes a means to an end OR
  • The Path of Progress
    where we enter a new era where there is no Procurement. R.I.P. Procurement (Peter Smith, Spend Matters). (It’s already among the walking dead and soon to be entombed, anyway.)

But all this assumes that there will be one winner in the human centricity vs. algorithm war and one winner in the centralism vs. decentralism, but until SkyNet takes over and locks us in The Matrix, there will be no winner in the humans vs. algorithm war, just like there will always be no winner in the centralism vs. decentralism war as there will always be new recruits to factions on both sides.

We’re not in the world of Anachrony where there can be only one one winner if the cataclysmic future is to be prevented. We’re in the real world, and the situation is a lot more complex.

Bob Dylan said it best:

The line it is drawn
The curse it is cast
The slowest now
Will later be fast
As the present now
Will later be past
The order is rapidly fading
And the first one now will later be last
Cause the times they are a-changing

The line is drawn and the curse it is cast. The two sides of the centralist debate will fight to the last.

The slowest now will later be fast. As the laggards adapt new technology and the leaders drown in that they amassed.

As the present now will later be past. And leaders will fly different masts.

The order is rapidly fading.

And the first one now will later be last. Emerging economies take lead and leading economies are surpassed.

Cause the times they are a-changing.

But the more things change, the more they stay the same. And that’s the underlying message. The conflicts won’t be resolved, fueled by emerging and changing economies, with new governments and organizations taking center stage, discovering and rediscovering the Procurement revolutions, while leading economies go through devolutions as a result of shifting market landscapes and first generation solutions failing to deliver.

Procurement will still be on the verge of death, or among the walking dead, 20 years from now. Only the technology (vendors), processes, and terminology will have changed. The only question is, will your organization have switched sides (from laggard to leader or vice versa).

Despite Bob’s plea, fifty three years later:

Senators and Congressmen still block the hall
They stand in the doorway, don’t heed the call
and the country gets hurt for they have all stalled
and the battle outside keeps raging
it shakes all our windows and rattles our walls
for the times they are a-changing.

ScanMarket – Spreading P2P through the Clouds

ScanMarket is a Denmark-based cloud-based Source-to-Contract suite provider with hundreds of global clients and high adoption rates. ScanMarket claims that companies that switch to their solution see 3x gains in adoption and spend volume (put through the system), and it’s not an unrealistic claim (especially when the system is compared to older Source-to-Contract solutions). It’s another company that has been around quite a long time (since 1999), even though it’s not a name you know in North America.

Even though modules can be activated or deactivated as desired (and an organization can buy anything from just Project Management to the whole suite), ScanMarket was designed to be a single, integrated, source-to-contract suite that contains eRFX, eAuctions, Contract Management, Supply Base Management, Project Management, and Spend Analysis (which is the only module that is almost completely separate). Functionality can be purchased separately, but there is no versioning — ScanMarket is one platform, one instance (where ‘modules’ can be turned off depending on the functionality not desired by a customer). (ScanMarket provides a short, quick on-line introduction video overview of what they think an e-Sourcing platform is.)

The RFX solution allows RFI, RFP, and RFQ which support numerous evaluation settings via bid parameters and weighted scoring, a powerful bid matrix that can capture up to 1 Million data points in a single bid, a template (and question) library for quick event creation, (standard) Excel integration for offline completion, and integration into the sourcing dashboard. In addition, it contains the ability to copy events using multiple template settings that take just the desired data forward. In addition, the buyer can choose to just take some suppliers and some bids forward as well. It’s pretty powerful for an RFX platform.

The e-Auction platform is more-or-less your standard e-Auction platform supporting Japanese, Dutch, Reverse, Factored, and Forward auctions with numerous, configurable, bidding rules to match the event to the situation including individual starting prices, feedback options, blindfolding, proxy bidding, rank, traffic lights, staggering, blind period, reserve price indicator, and partial quantity bidding. Auctions can be monitored in real time on an item and lot level, and the buyer can choose whether to see a full tabular history of bids by item or lot or a real-time graphical “horse-race” view. In addition, the bids can be modified in real time using one or more modifiers (such as switching costs) or formulae (which can include factors to account for different defect rates) and allow buyers to do realistic cost comparisons (even if such cost comparisons are hidden from suppliers).

Contract Management provides a single, online, repository for all contracts with search and reporting. It supports templates (for quick contract data capture), version control, categorization, and buyer-defined meta-data with a detailed approval workflow to support negotiations. Contracts can be instantiated directly from the results of a (cherry-picked) RFX or e-Auction, dates specified, and appropriate notifications and reminders set.

ScanMarket SBM is their Supplier Information Management (SIM) solution that acts as the central, single, repository for all supplier information. It can capture all of the data you expect, including any and all attachments that need to be captured, index those attachments with meta-data, allow for repository-wide (metadata) search, provide full visibility into associated supplier activities (including event history, contracts, and captured performance), and maintain complete audit trails. It also integrates with the suite dashboard for dashboard-based reporting.

Project Management in ScanMarket is a single repository for all projects, notes and attachments that provides an integrated dashboard view of, and reporting across all, projects. There is customizeable workflow management, that allows for the creation of multiple project workflows that can be instantiated as needed, and the templated workflows can be customized for each task in each project across stakeholders and participants. There is also integrated communication and messaging and the ability to quickly jump into the appropriate point in the eRFX, e-Auction, supplier profile, or contract associated with the project.

ScanMarket is a solution that is definitely worth looking into. For more information, see the recent Spend Matters Pro [membership required] series by the doctor and the prophet. (Part I, Part II, and Part III)

Agiloft — For those with Lofty Ambitions for Contract Management Agility

Agiloft is another rare breed in the Supply Management space. It’s ancient (as it was founded in 1991, only a year after the first web browser was invented), it was founded to be a back-office B2B enterprise application (and their main offerings are service desk, workflow & business process management, and contract management), it’s debt-free, it has a large network of resellers, it has multiple global hosting locations (to support local privacy laws or government & military security requirements), and you can have it anyway you want: pure (low-cost) multi-tenant SaaS, classic ASP, or even on-premise with your choice of two different platforms (Windows or Linux). [Hint, choose the 2nd.]

Obviously, in this post we are going to focus on the contract management solution, as that is the most relevant to Supply Management, and the related BPM and Workflow elements they have in their Workflow and BPM solution to support it as well as their Asset Management capabilities. While the ability to use a single vendor for multiple “back office” B2B applications might be attractive to some organizations, our specialty here at Sourcing Innovation is Supply Management and Supply Technology Innovation, and that’s what we will cover.

The contract management solution supports contract creation, negotiation, approval and renewal. It contains a searchable central repository with double-byte language support and automatic audit trail for regulatory compliance, clause libraries, Word templates, and Word integration. In addition to Word integration, it also provides a complete API and and bi-directional pre-built integration with systems such as AD, SAML, Oauth, SSO, SalesForce, MS Exchange, DocuSign, QuickBooks, and Xero.

The contract creation is not only flexible, but so is the complex review and approval routings that can contain a combination of sequential, parallel, and conditional approvals. Agiloft’s ability to create and support complex, customizeable, business processes and workflows make complex creation and approval processes a snap. Furthermore, in addition to complete version history (and automatic redlining), it also supports a complete audit trail of those changes, built in OCR that can process attached image files, and fine-grained security that can control access by user group down to individual fields in a contract record.

It can easily be configured to support any industry and regulatory requirements that the organization has to support (or wants to support) by way of additional data capture, workflow modifications, mandatory checks and required approvals by appropriate risk management personnel. It can also be integrated tightly with asset management and each asset affected by the contract can be correlated with the contract, and each contract that references an asset can be correlated with the asset. This last point is particularly relevant as some assets can be shared across contract if they are only needed for short periods of time (such as excavators on construction projects).

However, as of now, any organization that has regulatory or compliance needs, requirements to track additional types of compliance, insurance, or audit documents has to define the requirements, create tables to track the necessary data and documents, define the relationships, create the monitoring tasks, create the notification templates, hook the notifications up to email, and so on. The wheel has to be re-created in each and every organization that needs to track a specific requirement. The platform needs the ability to capture and store common tasks, workflows, and components in a repository that can be accessed by any and all customers and included in individual instances as needed. Agiloft plans to release a community next year that will allow customers, consultancies, and anyone on the platform to export and share custom capabilities that they have created, and this is a good start, but it would really quicken start up time if this functionality was there.

That being said, the configurability of the solution (and the speed at which it can be configured by their services team) should not be overlooked. Consider the example of Enki(.co). Enki is a cloud services provider that was founded by the former NetSuite CIO and Director of Engineering. They spent 6 man-months customizing NetSuite for contract management, sales, and support, but never realized their vision. They eventually replaced NetSuite with Agiloft, and managed to customize it to their needs in 10 days, going live a week after that. In other words, the platform can be customized to the needs of most organization’s in a matter of weeks, but only by an experienced configurator. (However, once someone in the organization goes through about a week of training with Agiloft, they will learn to maintain and customize the platform at close to the same speed going forward.)

Agiloft is a great fit for those organizations that have some supply management capability (in front end strategic sourcing or back end procurement / procure to pay) but do not have good contract management and need a good CLM tool to serve as a foundation for their Supply Management processes. The ability to define the required contract lifecycle and sync with other platforms makes it a great central system for any organization that does not have, or cannot acquire, a fully integrated source to pay suite (as it can manage workflow across applications).

Talent Tempering: Part IV

In our last two series we discussed Technology Advances and Process Transformation, which SI calls Transition, that collectively comprise two of the three T’s critical for organizational success. The third T, talent, that we are discussing in this series must not only be in abundance, but also be appropriate for the organizational needs. This means that you not only need talent with a good mix of IQ (intelligence and skills), EQ (emotional intelligence and wisdom), and TQ (technology and mathematics/logic), but that the mix must be suitable to cover the range of Supply Management tasks before your organization, and in sufficient quantity.

But, as we discussed, this is often easier said than done. In order to determine if you have the right mix of talent, you first need to understand the type of talent you have individually and as a team (through a multi-faceted collective assessment), define where you need the talent to be (which can be a complicated affair, and would take at least another series, if not a short book, to describe), do a gap analysis, and devise a plan to get the team, collectively and individually, from where they are to where they need to be. This plan will consist of a mix of training and education options, so that each individual is offered the methodology by which they (likely) learn best, but also related methodologies to broaden their horizons and increase their learning potential.

But this will not be enough, because, by the time they get to where the plan identified they should be, processes will have changed, technology will have changed, and the supply chain as a whole will have moved on rapidly. You can’t keep up … the best you can hope for is a team that will individually and collectively work together to keep up as best as they can and prioritize the needs as they arrive and change.

But sometimes, you’ll have a team where one or two members have no interest in going above and beyond and riding those supply chain rapids day in and day out. They’ll want to get off every day at 5 pm, and not get back on until the next workday at 9 am. The rest of the team won’t be able to survive unless everyone is willing to contribute as needed 24/7. In this case, and only this case, will you have to (immediately) replace your talent.

(Before we continue we should note that you don’t replace talent just because they don’t have the skills, because that’s often your fault, and not theirs, for not providing them proper training and mentoring — which we know you’re not doing given that training budgets were slashed heavily during the last recession and never restored, despite the constant lip service paid to the importance of talent and training. Not until you have provided them with ample training, mentoring, and time can you deduce whether their lack of performance is their fault or yours, and since they should never have been hired in the first place if they did not show aptitude, it’s only fair to assume it’s your fault that aptitude never blossomed into capability and performance. Of course, if they can’t pull their weight after given sufficient mentoring, training, and time, then you will have to reassign them [or let them go if there is no suitable job in the organization], but typically you will need to replace people because they don’t want to pull their weight, not because they can’t.)

So how do you go about finding and recruiting the right talent?

That’s a tough question. Fundamentally, you need to find a candidate that

  • has the raw IQ, EQ, and TQ you need
  • has a desire to learn …
  • and the willingness to put in the hours on and off the job
  • plays well with others
  • doesn’t overvalue his worth …
  • but respects it as well (as you need the candidate to also respect the worth of others)

and, preferably:

  • has experience in the industry …
  • and with the categories she will be dealing with …
  • preferably through another role (engineering, marketing, etc.) as well as that will help her work with the other departments
  • is familiar with the types of technology being used …
  • has sufficiently strong math, logic, and reasoning skills
  • and sufficiently strong people skills

even before you get to your customized wish list. This is a tough sell, and one you are not likely to do on your own.

You will need to rely on your team to help you — they will know who the best candidates are among their peers and who the organization should seek. And any of your colleagues who do not agree are the kin of Maury the Management Moron and, as indicated in this classic post on what to do if you really want a renaissance education, I can only hope that one day your boss will catch on to the fact and show them the door, Fresh Prince style!