‘Nuff said.
Where Are The Intelligent Networks?
In a recent piece from ChainLink Research on “Remapping the Supply Chain Universe”, the author suggests that there are intelligent networks [that] are truly unique, yet little understood. What I’d like to know is, where are these intelligent networks. As far as I’m concerned, an intelligent network is as real as a griffin or a chimera.
The author suggests that they are a trusted source to synchronize the mutual data and processes between trading partners using a shared model based on agreement in policy, process, [and] security. Supposedly they separate the physical supply from the logical supply chain to enable mobility by providing peer-to-peer access and a single version of the truth.
Working backwards, the only system I’ve ever seen give a truly single version of the truth is a spend analysis system after an expert has merged all of the disparate data sources using hand-mapped rules. (Now, there are half-a-dozen companies running single instance Oracle systems that also provide a single version of the truth, but since these white unicorns are rarer than black swans, we might as well pretend they don’t exist.)
Peer-to-peer access has been around for decades, and hit the mass market on the web back in 1999 with Napster. Don’t tell me that was intelligent.
Every system separates the physical supply chain from the logical one. After all, software is an abstraction. And it’s not intelligent. It’s just code.
Marketplaces have been providing a shared model based on agreement in policy, process, and security for over a decade as well. It’s framework, not intelligence.
Finally, there’s no connection, or even correlation, between a “trusted source” and intelligence.
Plus, if you look at today’s “social networks”, there’s a good chance that you’ll wonder if there’s even any intelligence in the user base!
The reality is that “intelligent” networks don’t exist because “intelligent” systems don’t exist because there’s no such thing as “artificial intelligence”. Take it from a CS PhD who knows. If someone is trying to sell you an “intelligent network”, they are bs-ing you. Don’t fall for it.
Will the Force(.com) be the Glue that Binds BoB to PoE?
As per a recent post, Best-of-Breed ( BoB )Â solutions alone are not enough, you need an end-to-end enterprise platform operations engine ( PoE ) that consolidates all of your spend and provides you with one version of the truth. Otherwise, you’re working with blinders on and a seemingly good decision, like going with a lower cost provider, can cost you more in the long run, because their shipping costs and their defect rates are higher.
And as per another recent post, the time of niche is (almost) here, and best-of-breed solutions will be needed for certain verticals, departments, and / or categories. Generic platforms with generic processes will not be complete enough, or useable enough, for the sophisticated buyer of specialized products or services — who expects an ease of use and power that goes beyond Amazon.com and today’s social networks. As a result, the base systems will be bypassed and critical spend will escape management.
Both BoB and PoE solutions are required, but unless they are integrated, a user will not be able to realize the full benefits of either platform. But as there is still no common supply chain language, and no magic middleware that can connect any ERP or transaction engine to any BoB front-end, how can you insure that your systems play nice?
In a recent post I noted that, these days, it seems that everyone wants a piece of the Force. I’m still not entirely sure why, since it was built to serve CRM (and not SRM), the ecosystem is new, and it’s still not a proven enterprise platform for the supply chain, but vendor after vendor is taking the leap, so we have to acknowledge that, until something more exciting comes along, it’s where the supply chain market is going.
Given that the Force is cloud-based, that, for better or worse, it’s becoming the new ERP of (small and) mid-sized business in particular, and that it won’t be long before every vendor and its mascot has a Force.com app, it would appear that it won’t be long before you can use the platform as your data store and different vendor apps as your BoB applications. Now, it’s probably going to take a while for most vendors (who haven’t been training with the Force since day one) to port the bulk of their functionality, but with development timeframes compressing by the year, probably not as long as one may think. Which begs the question, is the Force going to be the glue that binds BoB to PoE and bring us the next level of supply chain efficiency?
Procurement Tasks are Not Clear-Cut Regardless of Organizational Size
A recent article on SupplyManagement.com on “Making Waves” which tries to compare and contrast procurement at SMEs and procurement at large companies seems to suggest, a few pages in, that buyers in large organizations are less willing to sit down face-to-face and negotiate as it’s all about getting the RFP, doing an assessment, and then getting someone in and talking through their proposal while their counterparts in a smaller organization see it as more a case of negotiating face-to-face and you can do two or three of those a day.
It also seems to suggest that procurement at most large organizations is a mature function with a systemized approach to procurement while most smaller organizations have almost no process in place for procurement.
The reality is that the state of procurement is very organizational dependent and that the preferred methodology is very buyer centric. If a buyer is an introvert, doesn’t like face-to-face negotiations and has access to modern e-Sourcing and e-Negotiation tools, then the buyer is going to focus on events. If the buyer is an extrovert, doesn’t believe in new-fangled technology that removes the human element, and believes that the best deal always results from face-to-face negotiations, then the buyer is going to focus on negotiations. Company size be damned in either case.
While the article has some good examples of real-world scenarios faced by procurement professionals, it is dangerous to draw broad conclusions from just a few interviews with a scattering of procurement professionals. It’s never clear-cut.
Is Now The Time of Niche?
The current trend in sourcing and procurement is to build a bigger, badder, more generic platform that can serve a broader and broader market (and, preferably, get as close to 100% adoption as possible). From a theoretical business perspective, it sounds great — bigger market translates into bigger customer base which, presumably, translates into a bigger bank account. However, from a more practical perspective, this isn’t necessarily the case.
The broader you get, the less your potential customers have in common and the number of features you have to leave out soon surpasses the number of features you put in. Moreover, the more generic the workflow becomes, the less useful it becomes to specialized categories where a lot of customized and/or non-standard functionality, specifications, or interactions are required. For example, the procurement methodology used by an Engineer to buy custom manufactured products differs from the procurement methodology used by HR to buy contingent labour which differs from the procurement methodology used by Marketing to buy creative services. And while the underlying core process might be the same — put out an RFX, evaluate the bids, and make the award(s) — the processes used by each group are in many ways quite different. Engineering will want product and raw material samples, descriptions of quality control processes, and production schedules. HR will want rate sheets, resumes, and references. Marketing will want examples of successful campaigns, estimated budgets, and timelines of personnel availability.
Plus, the deeper you get into certain functions, especially in certain verticals, the more distinct they (think they) are and, whether or not it is justified, the more they believe that they need a specific tool — and this is especially true in the hospitality, healthcare, and legal services industries (for example).
Furthermore, if you look at what’s out there, for any given (e-)sourcing / (e-)procurement / (e-)supply chain function, there are already about a dozen different (on-demand/SaaS/Cloud) generic applications on the market — and you can only get so much easier to use and/or cheaper before it becomes irrelevant or you price yourself out of existence.
When you put it all together, it seems that the only way for a new provider to make an impact, or an old provider to get noticed again, is to go niche. What do you think?