A prediction from the doctor with regards to Big Procurement Events

In a recent post over on Spend Matters UK on “eWorld Procurement and Supply” by Peter Smith, he made a number of observations on the event that happened last month. A few of these might have been unexpected by the average practitioner, but are not really surprising when you think about it. First we’ll cover them and then we’ll discuss why the doctor does not think these observations to be all that surprising.

Mr. Smith’s observation number two: There was also a good number of suppliers, although there seemed to be quite a few of the bigger software firms missing this time.

Mr. Smith’s observation number three: The standard of the presentations is still highly variable.

Mr. Smith’s observation number four: The other thing that might help on that would be a little more detail on the content in the programme.

Mr. Smith’s observation number seven: Ultimately, there is considerable value to delegates in eWorld, particularly if you are smart / lucky enough to choose the right sessions ….

Let’s start with observations number three and four. When you have an event that relies on lots of vendors forking over lots of dollars, you can’t always be that fussy when it comes to whose dollars you accept. And since those dollars come at the price of a presentation, it’s obvious that since vendors are of various quality, the presentations, as well as the descriptions of such presentations, will be of various quality. And as a result …

Mr. Smith’s observation number seven is a logical consequence. As a result, the value to delegates will be entirely dependent on those delegates choosing the right sessions, which, with limited information, will depend as much on a delegate’s luck as the delegate’s skill in picking the right presentation to attend. But the most important observation is …

Mr. Smith’s observation number two — the lack of bigger software firms. Not only does the doctor not find this surprising, but expects more and more absences from the leading firms in the year to come. Why? The ROI of this event for a leading provider is less and less every year. The more providers who are present, the less mindshare each provider gets. The bigger the event gets, and the more practitioners who get to go at little or no cost, the more the vendors have to pay to attend. In other words, vendors end up paying more for less every year. Especially when the practitioners who are attending the big events not only range in seniority from Junior Buyer, with no buying influence, to CPO, with ultimate buying authority, with the majority being on the Junior Buyer side of the scale.

And if you are a large, best-in-class, vendor, with a decent education budget, you have enough to finance and attend a much smaller event with a larger percentage of Director’s, VPs, and CPOs, where you are not only going to get more mind-share, since there will be fewer vendors at this smaller event, but more potential marketshare, since every individual that shows interest is one with actual buying authority.

Furthermore, since the even larger best-in-class vendors can host their own Procurement education days, with thought leaders, client case studies, and hands-on training sessions, these best-in-class vendors can get 100% mindshare for a limited time from every person who attends. So what’s the better value? A big event like eWorld or ISM where vendor capability ranges from simple e-Negotiation capability to full-fledged Source-to-Pay with little hope the average attendee will have time to figure out the difference? Or a smaller, focussed event, where the limited number of vendors have similar capability, more time to educate the participants, and a chance to educate more senior participants? Obviously, the latter, and, as a result, it’s only a matter of time before the number of absences at big events like eWorld and ISM from big, leading vendors increases. And that’s the doctor‘s prediction.

When it Comes to Procurement, Don’t Forget Finance!

Surveys regularly ask Finance to rate Procurement effectiveness, but is this the right question to be asking? Maybe Procurement should be rating Finance effectiveness? After all, is it necessarily Procurement’s fault that there are usually noticeable gaps when the results of these surveys are published? Maybe, but maybe not.

The only way the gaps will close is if the root cause of the gaps is identified and addressed. Is Finance providing the necessary funding for the platforms, training, and resources that are required to effectively address all of the categories? Is the organization evaluating effectiveness against the right KPIs? Does the Procurement agenda align with the organizational agenda that Finance has a hand in shaping?

Now, I’m not saying it’s Finance’s fault, and I’m not saying it’s Procurement’s fault, but I’m saying there is a reason for the gap and the reason needs to be identified. Sometimes it will be a lack of effort or focus on Procurement’s part, sometimes it will be a lack of effort or focus on Finance’s part, but the doctor‘s guess is that more often than not it will not be anyone’s fault but be due to a lack of alignment.

As the maverick points out over on Spend Matters in his post on “What Does the CFO think of Procurement”, Procurement and Finance are misaligned in numerous ways, and this misalignment is costing companies a lot of money.

That’s why the maverick teamed up with ISM to conduct a new study on Procurement and Finance Alignment to help Procurement and Finance understand all the misalignment areas and the loss of value caused by this misalignment so that Procurement and Finance can work collaboratively to realign. the doctor had a chance to review, comment on, and contribute to the study before its release and can tell you that it’s well designed and well worth your time, especially since the average company will be able to complete the full study in about 15 minutes.

I strongly encourage every company, no matter how well they think their Procurement function is doing, to take this study which is designed not to assign blame but to detect areas of misalignment where Procurement and Finance can work together to improve performance.

Taking the study is easy. Simply e-mail the maverick at pierre (at) spendmatters (dot) com and you can get the study link and first access to the results.

245 Years Ago Today

James Cook spots the south-eastern coast of Australia and his crew of the Endeavour becomes the first recorded Europeans to encounter its eastern coastline, 164 years after the first undisputed sighting of the western coastline by the Dutch in 1606, and 148 years after the first English sighting. (Ten days later Cook’s expedition makes landfall at a place he called Botany Bay, now known as the Kurnell Peninsula, and made contact with the Gweagal.)

Cook’s expedition is significant because, 125 days, he took possession of the whole Eastern Coast, which he called New South Wales, in the name of the Kingdom of Great Britain which, thereby, became the first European power to officially claim any area on the Australian mainland. And then, a mere 18 years later, the Kingdom of Great Britain started using it as Penal Colony, transporting convicts from the cold, damp, foggy miserable shores of the Northern landscape to the warm, dry, clear, sunny shores of the Southern Australian coastline. Talk about early logistics put to good use! šŸ˜‰

The Patriot Act In Layman’s Terms: The NSA Has Your Dick-Pic!

The Patriot Act is due to be reauthorized again in a mere six weeks on June 1, 2015. While no one doubts the importance of this act, or the continued need for foreign surveillance and border security, the act does contain some controversial provisions on domestic surveillance and security. Controversial provisions which, since the act came into law on October 26, 2001, have resulted in one arrest of one taxi driver who wanted to give $8,500 to a known terrorist group. (In other words, the controversial provisions never resulted in the ends they hoped to achieve.)

If no fuss is made, the Senate will just rubber stamp it back into law, as is, on June 1, 2015 and that might be the right thing to do. However, before the Senate does this, every American should decide if that is what she wants and advise the senator she elected accordingly. Because, whether she knows it or not, the provisions of the act not only allow the NSA to essentially tap and store just about every piece of electronic communication created by everyone in the US and by everyone communicating with someone in the US, but it allows the NSA to intercept, store, and view all of your private pictures, including those naked selfies the average American is so fond of taking.

In layman’s terms, if you took a dick-pic between October 26, 2001 and today, the NSA has it and there’s a good chance that someone who was not the intended recipient has looked at it. Listen to the interview below between Edward Snowden and John Oliver (who was the first to put the provisions in layman’s terms) where Snowden not only confirms that multiple sections of the Patriot act give the NSA these rights, but recounts his experience where NSA employees casually shared private pictures of various individuals’ naked parts for fun.

If you are happy with this, then by all means tell your Senator to re-authorize the Patriot act as is. But if you aren’t, tell your Senator that while you fully support the foreign surveillance and border security provisions of the act, domestically, you have a right to your privacy and you would like to see the controversial provisions amended to where the government agencies can only collect your personal, private data with probable cause and a warrant.


 

What do you think of this, LOLCat?


I iz Shocked!

Global Process Ownership: The Other GPO

As organizations seek to become more efficient and effective, one proven strategy is the ability to manage cross-functional processes using a global process ownership (not ā€œgroup purchasing organizationā€) model.
the maverick, “Exploring Procurement’s Other GPO”, Spend Matters

GPO is harder than it looks. As the maverick points out, it’s ultimately about having both accountability for an end-to-end process and the ability to control the strategies and resources used for the process execution. If Procurement is made accountable, but Finance and the Engineering organization controls the financial and physical resources, then Procurement cannot control the global process. And this is another reason why the full extent of negotiated savings and identified value is never realized and end results are never as expected. Because, without control to go with the accountability, Procurement cannot execute. Planning, which is just another word for Knowing, is only half the battle. And it’s a shame the CFO and the rest of the C-suite don’t remember this single lesson that they should have been paying attention to when watching G.I. Joe every Saturday morning. (It was supposed to be about more than just blowing stuff up, even though that is what is perceived as the American way.)

Of course, this assumes that Procurement even knows what to do. As the maverick goes on to explain in his next piece on “the 3 dimensions of global process ownership”, global process ownership is more than just process breadth / scope. It’s also, as some of the leaders recognize, organizational breadth / scope as most Procurement-based processes have repercussions and effects throughout the organization, and, more importantly, category management breadth / scope. The organizations that understand, and effectively execute against, this third dimension are the organizations that truly excel and make their way into the Hackett Group top 8%. Different categories have to be managed in different ways. There is no one-size-fits-all process or organizational framework.

And that’s one of the many reasons sourcing must be strategic.