Best Practice Vendor Selection for True Multi-Nationals Part V: Stuck with an ERP? You do have options!

Despite claims to the contrary, you are not stuck being a sap or hearing prophecies from an ethylene-gas inhaling delphi. You do have options. Acquisitions might have some analysts in a tizzy, but you only need to remember one thing. Don’t Panic.

Ariba & Emptoris were not the only best-of-breed game in town
You still have options, and these options are on both sides of the Atlantic.

Best of Breed vendors eat, sleep, and drink procurement
Unlike do-it-all or ERP vendors, best-of-breed procurement vendors are focused entirely on procurement and, as a result, they tend to be much better at it than do-it-all or ERP vendors, especially supplier enablement, which we all know fuels the e-procurement benefits engine.

Best of Breed on an ERP backbone can offer significant advantages

  • Best of Breed providers often know the ERP systems better than the consulting implementation partners, who care more about weaseling their way into long-term strategy consulting than a successful implementation. (For example, there are a couple of vendors with over 100 customer SAP implementations, who know the system way better than a Big 5 consultant on his second implementation.)
  • Best of Breed providers have enabled hundred of thousand of suppliers, maybe more, over the years … in all regions of the world … your 347 suppliers aren’t going to make them flinch (and it’ll be faster and cost less, because once again, they’ve been there, done that … a few hundred thousand times.)
  • Best of Breed provider’s customers are all former ERP e-procurement / consulting implementation customers … that’s right, most of whom have already failed using the ERP/consultant approach, spent the millions, got 7 punchouts and 11 catalogs implemented … now they spend thousands and get … well, you already know … actual results and benefits.
  • Best of Breed providers have to be better than the ERP or broad portfolio providers, because they can’t fall back on their CRM sales or app server license revenue if they don’t deliver.
  • And because of all of this, Best of Breed providers have way more references than the ERP providers. Those big ERP guys based in Germany have two significant e-procurement references … one they’ve been using for 3 years, and another from a company I never heard of on this side of the Atlantic … I know of one Best of Breed provider who has 19 published case studies, and has only lost one customer in 14 years, and that was after this company was a customer for 9 years, and decided to outsource IT, and the outsourcer, IBM brought in an ERP to replace all of the internal systems.
  • Best of Breed providers’ SaaS-type offerings and supplier networks eliminate the need for your IT department or external consultants to be involved, so they implement faster and less expensively
  • The most successful Best of Breed providers have service organizations around the globe to assist with implementations and provide stability.
  • Best of Breed providers fill in the gaps where ERP fall short. ERP may try, but it is not all-in-one and they are usually a year or more behind the Best-of-Breeds functionality-wise.
  • Best of Breed works and they have the client stories to prove it. Follow SI’s advice and check their references.
  • Best of Breed will help your SUM (Spend Under Management) soar.

Consider your options carefully. A Best of Breed solution on your ERP backbone might be the best decision you can make.

The Lost Art of Account Management


Rant on blogger, rant on along
Rant on buddy till the day is through
Rant on brother, sister too
Rant on momma like I asked you to do
And rant on fellow blogger, rant on (Rant On!)


Today’s guest post is from Dan Kane, a Project Analyst at Source One Management Services, LLC.

In today’s information age, businesses are gaining unparalleled access to data from their suppliers. However, this new focus on a customer’s ability to access account information on their own has had an unexpectedly negative effect on the quality of supplier account management, and the ability for customers to get assistance from their account management team. This issue is especially prevalent in the technology, and financial industries, where complex issues can require multiple points of contact, and significant end-user involvement before they can be resolved. In part, this can be attributed to increasingly complex products; however a large part of the blame rests with the organizations themselves, and a new-found reliance on automation, and customer self-service. While it is understandable that not every supplier representative is versed in every aspect of these specific solutions, it is imperative to the management of a customer relationship that businesses are provided a single point of contact with whom issues can be addressed.

Problem resolution can often take the form of education, by making sure that customers have the knowledge required to access information on their own, and understand the products and processes involved with their partners. This method has yet to be widely adopted, and account managers tend to refer questions to complicated service guides, or online portals, without the instructions on how to interpret these complex, customer-facing tools.

Some functional separation is fine, and many suppliers are attempting to provide account representatives who can completely manage services provided to national organizations, however it is important to note that a single “contact” should not be SINGLE PERSON on whom organizations are completely reliant on, Situations out of the individual’s control, such as sickness, can arise and leave an organization with no recourse to solving their problem.

Few things are more frustrating to businesses than calling for support, spending 10 minutes on hold waiting to get connected, finally reaching an operator who refers them to a single person for help, and happens to be out of the office.

The necessity of accessible information should not be a reason to diminish the functionality of account managers. Even if the information that a customer wants is available to them, the purpose of management is to identify solutions to problems, and assist customers with the tools that they may or may not know are at their disposal. It is counter-productive to decrease the level of live, human support in exchange for automation, and the self-serve environment that many organizations are migrating to.

What ever happened to the delicate, human touch, and a little thing called customer service?

Thanks, Dan!

Frack the Fines! Make the Frackers do the Time!

I know it was only a month ago that I was advocating the No-Maximum Mega Fines, but I’m now of the opinion that it’s not enough. First of all, in most circumstances, the fines are not anywhere close to keeping pace with the magnitude of the ill-gotten gains the corporate fat cats are often making when they choose to break the law. And, secondly, since the dastardly are often convinced that they probably won’t get caught, and, if they do, it will be so far down the line that they will already have made, and covered up, a fortune and the losses won’t come close to equaling the gains, they’re not going to stop unless things change significantly.

So what really grinds my gears this time? Why do I want to go all Stewie on their backsides? And throw psycho kitty into the boardroom? (Warning: Links Probably NSFW) This recent article in the Economist on an unsettling settlement where Standard Chartered agreed to a rapid settlement of the case brought against it by the New York State Department of Financial Services that alleged Standard Chartered had illicitly processed at least $250 Billion in transactions with Iran between 2001 and 2007, in (flagrant) violation of American sanctions against Iran.

In other words, if you cough up a big enough chunk of change, and agree to the installation of a monitor in its New York branch to evaluate its money-laundering controls, you can get away with pretty much anything.

Now, it might be the case that not all of the 250 Billion in transactions were illicit, as there may have been some transactions with similar characteristics that got caught in the initial sieve, but state departments are not likely to claim more than they think they can prove, and collect on. I wouldn’t be surprised if there were 200 Billion in illicit payments, and that the bank made around 4 Billion (or more) on these transfers, given usual currency conversion and wire fees, and that the 340 Million represented, at most, 10% of the illicit gains.

But it’s not the fact that the agreement didn’t wipe out all the illicit gains that is making me mad, but the fact that this is clearly a situation where someone repeatedly did something they knew they should not be doing (and thus settled quickly to avoid trouble). Now, it’s one thing if someone does something wrong and doesn’t know it, which is getting more likely by the day in a global multi-national when new laws are coming into effect all the time and it’s almost impossible to keep on top of everything, but it’s not going to be long before someone in legal or risk or compliance notices the infraction and brings it to the organization’s intention. At that point, the infractions should end, or the individual who continues to commit the infractions should be criminally prosecuted. Until the day comes when the worst that will happen to you from knowingly breaking the law behind the corporate veil is a small fine to your company is replaced with automatic criminal prosecution for your crime, nothing is going to change.

In summary, all I have to say is that Skid Row got it right when they said to tear down the rat racial slime and that Halestorm was right to echo their belief and the need to tear this thorn from our side. These rat bastards, who fly in the face of all that is good and just, need to be to be taken down a peg or two and do some hard time. If they knowingly violate contraband laws, embargoes, or laws meant to enhance national security, they should be convicted of treason and sent to maximum security. Because, until that happens, they’re going to keep flaunting the law for the almighty dollar.

Why It’s Important To Only Select Logistics Carriers …

… who insure that their drivers understand relative metrics through written and verbal testing BEFORE letting them behind the wheel:

Topless Truck

Unless, of course, you want your shipment to be the next shipment that is permanently delayed when this happens again next week.*

* It’s a rare week when I don’t see an article about yet another truck getting damaged or destroyed because a driver somewhere in the world doesn’t understand what height restriction means.

45 Million People Are Blind today!! Cheesecake Factory Might Be the Answer? (Part 1 of 2)


Today’s guest post is from Dalip Raheja, past contributor to Sourcing Innovation and CEO of The Mpower Group, Inc.

45 Million People Are Blind today … and 80% of them could be cured through surgery (36 million if you’re looking for your calculator). Oh, of course, most of these people cannot afford the surgery, don’t know about it, cannot physically be where eye care is available, and so on and so on. The answer? Reverse Innovation (RI) — a term coined by Jeffrey Immelt and Vijay Govindarajan. The basic premise of RI is that all innovation cannot flow from the developed to the developing world. There is a lot of innovation going on in the developing world that can and should be adopted here. According to Govindarajan, one can and should argue that the paradigm in the developed world is “spend more to come up with innovation,” while in the developing world the exact opposite is true, “spend less to come up with innovation.”

Let’s look at some comparative facts first:

India US
Aravind surgeries 2,000 a year 125 a year
Average Cost $30 $1,000
Complications 1 / 2 Double

So, what’s the secret? It must be that they are performing a procedure that is not even accepted in the developed world. Not true. What they perform is called Phacoemulsification (considered the gold standard in cataract surgery).

What they have done is reimagined (not just reengineered) the entire conceptual framework with a different set of assumptions and come up with some innovations that are staggering. They have created an assembly line mentality that allows surgeons to focus on what they do best — perform the actual surgery. Not the prep, not the paperwork, not anything else but that which leverages their specialized skill set the most … allowing a surgeon to do 30 to 40 surgeries a day!! There is no time wasted between surgeries — the next patient is prepped, draped, and ready to go. With no degradation of quality! Oh by the way, Aravind performs about 300,000 of these procedures a year … WITH HALF OF THEM FREE!

Because they are offering the latest procedures with exceptional quality, half of their patients pay them full going market rates which then subsidizes the charity cases, which is what they are really about. They have used the combined volume leverage and scale to start making their own intraocular lenses and providing some lenses for $2, and they are now exporting these lenses to 120 other countries (Canada, Denmark, and Israel amongst them).

If all of this sounds like a classical supply chain/sourcing problem being solved — that’s because it is. They have applied a number of ideas from the business world to the non-profit world. So much so that they have also reimagined the traditional model of a charity organization always looking for a handout — they’ve planned half of their effort to be a commercial venture generating profits to pay for charity.

This is but one example amongst many:

  • GE’s portable EKG machine — developed in China
  • Boston’s PACT program — modeled after a program in Haiti
  • Kangaroo care — developed in Colombia
  • Pedialyte — developed in Bangladesh

And one of the biggest stories is Dr. Therdchai Jivacate (Thailand) who is providing artificial legs made out of plastic yogurt bottles for about $100 with a delivery time of 1-3 days compared to $10,000 and 7-10 days! Dude — don’t throw away that water bottle! And to lower the cost of labor involved in actually working with patients, he has trained local recipients of the artificial legs. He just broke the Guinness Book of World Records by serving 864 amputees in 13 days.

So before you pooh pooh those ideas from your colleagues from the developing world, you may want to keep an open mind and process them. You may want to actively seek innovations from your suppliers in the developing world. Remember — their context is different and context is very powerful and they are able to reimagine problems that we cannot because we cannot shake out of our context.

In the next post, we will continue this conversation about innovation and examine Atul Gawande’s suggestion of using the Cheesecake Factory (a place I’ve never been to) model to reimagine the healthcare system.