If Software Has to Embed Games To Make You Want To Use It …

Then the software isn’t worth using in the first place!

When Pierre mentioned a YouTube video of a “first-person shooter” (FPS) game for SAP PO (Purchase Order) approvers to blow away those pesky POs in his recent piece on Gamification in Procurement [Looking Beyond the Technology] (Plus content on Spend Matters), I thought he was being satirical! But he was being factual. And it’s pathetic that this concept exists.

While I agree that gamification has potential as a learning tool, the fact that you have to consider putting games inside your software to get people to use it says, no, screams something — YOUR SOFTWARE SUCKS and no one should be using it in the first place when there are dozens of other options.

In other words, when Pierre said that this is where gamification really runs the risk of going off the rails and resembling the proverbial hammer looking for the nail I not only have to agree, but take it one step further and emphatically state that this is where gamification goes completely off the rails.

Supply Management technology should help you get your job done efficiently and effectively. If it’s done right, and accomplishes this goal, you will want to use it because you’re overworked, underpaid, and will do whatever it takes to get the job done and get home before it’s time to go to bed and start the cycle all over again. Because, while you like games, you’d rather go home and play a tabletop Euro-game with your family where you not only get to challenge your problem solving skills and teach the next generation the basics of supply and demand and resource management, but actually enjoy some time with your family.

So, while Pierre is right in that games, properly applied, can be powerful learning tools (and why SI ran a whole series on the Board Gamer’s Guide to Supply Management), they are educational and modelling tools that need to be used appropriately — not misused to mask crappy software. So, when it comes to games, apply the theory (and, yes, game theory is great), and leave the FPS to the war-gamers.

Savings Are Disappearing, Cost Are Risings, and Value is Vanishing. Is Your Procurement Infrastructure to Blame?

A recent 2013 CPO survey from Deloitte reported that only 61% of organizations are somewhat effective at delivering value for stakeholders. There are a number of explanations for this, but the most prevalent reason stated was a lack of business alignment.

In addition, 79% of CPOs consider cost reduction to be their primary goal. There are various reasons for this as well, but a common reason, cited in multiple studies, is a lack of focus around demand management.

Not only did Aberdeen echo this focus on cost in their recent publication on the Top Three Supply Chain Execution Priorities for 2014, but they also indicated that the most critical strategic action for Procurement is to improve internal cross-departmental systems, process collaboration and integration and to align the Procurement strategy with organizational goals.

If you put all of this together, it tells a story. The organization is still seeking cost savings because potential savings opportunities are not captured. There is a lack of compliance with contracts and purchasing policies. The potential cost savings are not captured because demand is not properly managed, despite best efforts. Users are not buying the right product, not buying from the right supplier, not buying at the right price, and/or not buying at the right time (and incurring extra costs by way of expedited shipping). There is a lack of visibility into true demand. This lack of demand management is partially due to the lack of an aligned Procurement strategy consistent with organizational goals — and the lack of alignment is largely due to a lack of actionable intelligence.

In other words, many Procurement organizations, including those with (relatively) modern eProcurement or eSourcing software solutions are blinded by a lack of visibility, hindered by the absence of a platform that supports actionable intelligence, and still challenged with achieving basic contract compliance.

A key part of the solution is missing. Specifically, it is the part that provides visibility into the organization’s real buying behaviour.

So how do you fill the gap? You acquire a Procurement Marketplace that provides users with visibility into policies, contracts, and goods and services readily available for consumption and purchase.

What does such a solution look like?

The Power of Compliance Join the doctor of Sourcing Innovation and Vinimaya at 13:30 PDT / 16:30 EDT / 20:30 BST one week from today on Thursday, October 16 for our webinar on The Procurement Marketplace and the Power of Compliance where we will discuss how a modern Procurement Marketplace can significantly reduce the 30% to 40% of negotiated savings that disappears every day when buyers buy off-contract and incorrect invoices are overpaid.

Attendees will be the first to receive Sourcing Innovation’s New White Paper on The Procurement Marketplace and the Power of Compliance.  Register now for The Procurement Marketplace and the Power of Compliance and get a leg up on your competition!

Why Are We Going to Spend Thirty Posts Exposing Past Procurement “Trends”?

Is it because the doctor is just plain tired of 2nd rate analysts and consultants selling last century’s solutions instead of accepting that we are in the 14th year of the 21st century?

Is it because without a solid understanding of where Procurement comes from, where it is, and where it needs to be, you’ll never get to where you need to go?

Or is it because without this understanding, you’ll never select the right technology and continue to be among those organizations that select those procurement tools that collectively cost organizations in North America 1.5 Billion per year and waste more than 32 Million man-hours because the Procurement system fails to increase their productivity (and, in some cases, because the system is not aligned with organizational processes and needs, actually decreases productivity and hinders savings identification and realization)?

It’s a combination of all three.

Modern Supply Management tools are supposed to save the organization money, not cost it money, but as The Topline Strategy group discovered (as summarized in this article over on S&DC Exec (“only one quarter of procurement professionals believe their procurement system makes them much more productive”) and MarketWatch (“survey finds inefficient procurement systems cost north american businesses 15 billion annually”), only 28% (or one-quarter) of sourcing an procurement professionals believe that their procurement systems make them productive.

This is an abysmal statistic in an industry that spent over 1.4 Billion on Enterprise Software in 2013, software that is supposed to increase efficiency and, in the case of Supply Management, identify savings and add value to the process.

Why is the situation so bad?

The article gives a few hints, including:

  • convoluted user interfaces,
  • lack of critical features,
  • poor integration or implementation (with enterprise systems & IT infrastructure), and
  • lack of regular, often necessary, updates

But, in many cases, the real reason is lack of fit and key functionality.

UI, proper implementation, good integration, and regular updates are important, but the system has to fit the workflow and support organizational processes. Sometimes the organization’s processes will need to be updated, but there is a difference between updating to a more appropriate process, and changing to a completely different process unsuitable to the organization’s business just to force fit a square system into a round architectural hole.

And there’s no way you can select the right fit if you don’t know what the right process should be for your organization. And you can’t know the right process until you know what that process has to support, why, and how the process will need to evolve over time.

And that is fundamentally why we have to spend thirty posts diving into past procurement “trends” so you understand what the real requirements are and what is just hot air coming out of the mouth of another slick talking speaker (or vanishing ink from their specially made pens). It will take time, especially since we will have to take a few breaks to maintain our sanity, but we have to do it.

Don’t you agree, LOLCat?

Can U Wake Me When Its Over.

Yes, LOLCat, we’ll wake you when itz over. We don’t want to drive you to drink too! (Futurists have already driven this LOLCat to drink!)

So, Why Are “Futurists” Still Stuck in the Past?

And driving poor LOLCat to drink?

There are a few reasons.

  1. They Have No Knowledge as they come from different backgrounds which offer them no education or experience in Supply Management.
    Just because you can get high, have psychedelic visions, white them down, and spin a good yarn doesn’t mean you can be a futurist. A poet, sure, but not a futurist …
  2. They Have No Vision beyond what the rear view mirror (or the hydrocarbon gas from the bituminous limestone) offers them.
    When Meatloaf said “it was long ago and far away and it was so much better than it is today“, he was referring to newly discovered young love, not business processes identified 30 years ago …
  3. They See Too Many Organizations Stuck in the Past and a few organizations (in the Hackett top 8%) ahead of the pack and they think they can peddle these best practices as future vision.
    This is not 1914 (which was 12 years before the first transatlantic telephone call) where good ideas take years to spread (and the first person to bring a new idea or technology from a different continent can make millions on someone else’s work) and a career can be built on one single improvement — this is 2014 where it only takes a few seconds for a story to be spread around the world. But I guess if you can’t look beyond the rear-view mirror …

So, why are so many organizations still stuck in the past (and fuelling the flame that powers these fantasy futurists)? There’s a few reasons, and they include:

  • Lack of Education
    Many Supply Managers were simply thrust into the role, with no training or background for the role. And despite the fact that they have some competence or experience in other areas, they are so ill-equipped and ill-prepared for the role that they might as well have been dropped in The Lost World*.
  • Lack of Resources
    Most Supply Managers are overworked (and underpaid, but who isn’t these days) and resource-constrained, with no time for training and no budget even if they had the time (or would sacrifice their few remaining free hours to get better and more efficient so that maybe someday they can take a whole weekend off).
  • Lack of Clarity
    With no formal education, no training, and no resources to make sense of the barrage of BS being thrown at them by futurists and analysts alike, how can they differentiate between current and past processes and technologies and what they need to embark on a path that will ready them for what comes next?

And the third reason is the most crucial. Until they get some clarity, Supply Managers are going to continue to be taken in by modern con-men (who include 2nd rate analysts, consultants, and salesmen of outdated technology) selling them silicon snake oil when they just need modern sourcing and procurement tools that fit their workflow and daily needs.

So, to this end, now that we’ve explained why thirty (30) of the thirty-three (33) future-trends are, at best, last decade’s future trends, we’re going to explain why futurists (and the organizations they preach too) are still stuck in the past, what’s relevant, and what it means to you and your organization.

And we’re going to do it one trend at a time. Starting tomorrow, with “future” trend #33 on governmental regulations, we’re going to illuminate the old news and ongoing blues trends one by one until we’ve laid them all bare. It will take a while, but if you stick with it, it will be worth the effort.

What do you think, LOLCat?

"Futurists" Drive Me Bananas!"

Me too, LOLCat. Me too.

* I’m referring to the original here, so if you’re thinking Michael Crichton, then the problem is even bigger than you realize.

Procurement Needs to Expand its Horizons

On Friday, Pierre Mitchell published a great piece over on Spend Matters on how “Procurement Needs to Stop Benchmarking Itself Against Procurement”. According to the post, most procurement organizations know to benchmark themselves against others outside of their own industry, but they often don’t look to completely different functions, processes, technologies, techniques and even cultures to help them find and deliver new sources of value, of which there are many.

Some of the best ideas presented in the post are to:

  • use knowledge management to gather/store intelligence, catalog transformation projects for storyboarding, and model skill supply for resource planning like management consultants
  • get a grip on supply chain network design
  • master competitive intelligence and content/intelligence tools
  • predict model building using all data available to you
  • transition from quality control to supplier enablement and
  • manage the Procurement brand .

Taking these one by one, Procurement can definitely improve by:

  • documenting what it learns from every project and using that to define improved processes and transition management,
  • looking at the entire supply chain before defining the category and the bid,
  • making use of all of the market data available to it to determine how well it is doing and how well it could be doing,
  • building predictive trend models to understand likely order volumes for seasonal / limited life span products,
  • find new potential sources of innovation, and
  • improve the Procurement brand and the reach of Procurement.

We’ll discuss a few of these in upcoming posts, but for now check out Pierre’s post and remember, as we’ll also discuss in an upcoming paper series later this fall, improvement comes from reaching beyond Procurement’s current limited boundary.