CPOs Deserve to be in the C-Suite

And the general belief is that because Supply Management is so important to organizational success, CPOs should report to the CEO. And while this should be the case in theory, should it be the case in practice?

According to a recent study by A.T. Kearney (as highlighted over on S&DC Exec) conducted in association with CIPS and the ISM, only 10% of procurement functions have established recognition with their CFOs regarding how procurement contributes value and that the benefits are real and measurable. Ouch! Reading this make one wonder if maybe the CPO should be reporting to the CFO.

Why? Because if the CPO is a direct report, it might convince more CFOs to spend more time trying to understand the ways of Procurement and convince more CPOs to spend more time trying to understand the ways of Finance. The joint effort might result in more CFOs and CPOs coming to a joint understanding, which might result in more CFOs understanding the true value of Procurement.

Right now, as per a recent Cap Gemini Survey (available at this link), 20% of CPOs report to Finance. It’s unfortunate that we don’t know how many of these CFOs are among the 10% of those that understand the value of Procurement. Because if the majority of CFOs who understand the value of Procurement were those who had the CPO as a direct report, then the answer would be simple. Have the CPO sit at the table but report through the CFO on a daily basis until such time that Finance understands the true worth of Procurement. However, if the percentage of CFOs with direct CPO reports who understand the value Procurement brings is only in the 20% range, then having the CPO report to the CFO makes no difference.

Any thoughts on the issue?

BYODD is the Norm, But What Should This Tell Us?

According to a recent post on Spend Matters, BYODD (Bring Your Own Damaged Device) is Now the Norm, and the doctor has to agree. Not only are mobile devices ubiquitous in today’s workplace and home-life, but so are damaged ones. With essentially one in two mobile devices in use being damaged in some way, this means that at least one in two employees are using a damaged mobile device.

According to the author, the solution is to follow the advice in the referenced 2014 ZAGG Device Damage Study. Specifically, if companies are encouraging employees to bring their own devices to work, then those companies should be buying screen protectors, cases, and other damage defense products for their employees to make sure that these employees not only have damage free products to work on but to represent the company.

That is sound advice, and a precaution that should be taken, but that’s not the solution. That’s a fix. The solution to the problem is to address the root cause, and the cause is the proliferation of devices that are, simply put, way too brittle. While the doctor is not suggesting that we all need to be carrying around military-grade tech that can withstand blows, high-impact falls, and desert terrain, we should not be carrying around phones that bend in our pockets.

In other words, the real problem is the proliferation of devices that are being made flimsier and flimsier in a ridiculous effort to make a device that is not only lighter than the predecessor, but, as far as the doctor can tell, lighter than (compressed) air. And while 23.6 pounds (which was the weight of the first portable computer) is a bit heavy for a laptop, we can easily lug around a laptop that weighs 10 pounds considering we used to carry around textbooks that weighed 5 to 7 pounds each. We don’t need a 3 pound laptop (which is the rounded weight of a Macbook air), especially when a gust of wind can shred it! The same goes for phones. We used to lug around cell phones that weighed almost 2 pounds. We can certainly handle a pound if that’s what it takes to make it resilient and reliable. At 4 ounces, it can blow away with the wind!

So just like we need to avoid developers who insist on putting look before feel and functionality, we need to avoid manufacturers who focus more on making devices featherweight then on making devices resilient and support those manufacturers who take a more balanced approach to device production. When the money stops rolling in, this will quickly convince all manufacturers to kick their obsession with making featherweight devices and get back to reality.

Twenty Five Years Ago Berners-Lee Proposed the WorldWideWeb Project and Web Software Still Sucks. Why?

Because too many software designers and project managers think “Look and Feel” stands for make it look awesome because then you’ll feel good when you look at it. They don’t realize that “look and feel” refers to the “feeling” you get from using it, not just from looking at it.

And that’s why software still sucks. When it comes to software, looking good is important, but not more important than being usable. If, as Thomas points out in this post over on Spend Matters on why you should “Understand Your Use Case First — Develop Later!”, it’s impossible to find the button or menu item you need, or determine if it even exists in the first place, as good as the software looks, it still sucks, at best.

Software has to support whatever process it was designed for, and it has to make it easy for the user to accomplish that process — if it doesn’t do that, then it fails — spectacularly! It might look damn good when it fails, but it still fails.

And as long as developers continue on this ridiculous hidden-menu, infinite scroll, more features than you need but none you actually use kick, software will continue to suck and keep us in the technological dark ages.

So what can you do? Shun software that puts look first and functionality second. Developers will get the message, and eventually so will their managers. Then software can continue to progress forward.

Procurement Trend #24: Better Governance Model

Twenty-one dreary, and weary, trends still need to be discussed, so let’s keep the fire burning. The sooner we get through these, the sooner we can expose these charlatans once and for all.

So why do so many historians keep pegging this as a future trend, and keep poor LOLCat regressed in his past life? There are a number of reasons, but among the top three today are:

  • models may be few but most organizations don’t use the right one

    and even those organizations that have selected the right model don’t always apply it properly

  • compliance regulations make governance critical

    since SOX can put you in the Box with Fox!

  • investors want a return
    and they know a lack of governance won’t give them one

So What Does This Mean to You?

Governance Model

De-Centralized, Center-Led, Centralized, or Control Tower — which is right for your organization? The answer is all of them, depending on the situation.  For example, snow-clearing services should probably be de-centralized as it makes no sense to run them out of Houston, Texas or San Jose, California. IT Support should be center-led, as regional providers will probably give you the best price. Global contracts for your core product production should be centralized, as you need the volume for leverage and you need good supplier management. And it’s likely that a Control Tower model will be needed to manage the proper application of each model to each category it is suited to.

Fox in the Box

SOX can put your CEO and CFO in the box with fox if your company doesn’t make an acceptable effort to comply with the Sarbanes-Oxley Act of 2002. But this isn’t the only regulation that can get your company in hot-water. Labour regulations, environment regulations, etc. can all put your company at risk with unlimited (legal) liability in some cases. So companies have to make sure that the governance model takes into account compliance and supports the collection of all necessary data to insure that the organization doesn’t go foul of SOX or other regulations that could get it in hot, hot water.

Greedy Investors

They want a return and won’t be satisfied until they get one. And unless you can convince them that you have things well in hand, you’ll have a group of very clingy monkeys on your back, weighing you down. So you want to make sure that you have good, documented, governance procedures that will keep them happy and keep hundreds of pounds of monkeys off of your back.