Monthly Archives: January 2010

Facebook at the Factory?

Sure! Why Not? While we’re at it we can get Plaxo for the plant, MySpace for the warehouse, and Back Orifice for the Office! After all, why shouldn’t we let our employees SuperPoke their buddies all day, flit away their day following their contacts’ twitter feeds, or hack into their supervisor’s computer … it’s not like they have anything better to do with their time! Right?

Needless to say I was outraged when I saw “Facebook at the Factory: Manufacturing Must Become More like Social Media” headlining over on the Supply & Demand Chain Executive site — because it’s such an idiotic idea. I’m faceless, spaceless, and twitter-free for a reason … and that reason is because these platforms offer zero value to a hard-working professional.

So I’m going to take a moment and point out the dumb conclusions the article reached … which were especially idiotic given that the writer(s) had access to a study with valid results and lots of information easily available through a Google search upon which to draw more realistic conclusions.

The article started by quoting a finding that said “62% of respondents want their ERP system to capture and record the knowledge of senior experienced engineers and professionals so that it becomes part of the corporate knowledge base”. That’s knowledge management, not social networking.

It then quoted the CTO of IFS who said “Enterprise 2.0 and social media tools are designed to draw information out of people, to get them to talk”. While this is true, it bluntly failed to mention what kind of information Social Networking sites draw out of people … their entertainment preferences, their personal preferences, and where they went to get blind drunk last night (with potentially embarrassing pictures they don’t remember taking). And what use does that information have in the daily operation of your business? That’s right. None!

Finally, it quoted the CTO of IFS who, correctly, said that web 2.0 tools like wikis, threaded discussion boards, and other features of social media will become common fixtures in enterprise software. That’s right, useful tools will become incorporated in enterprise software as time goes on. And Facebook, as of today, does NOT fall into that category.

Share This on Linked In

Why Haven’t You Applied Automation to Global Trade Yet?

Considering that

you have to be either extremely organized and knowledgeable about your global operations or a complete idiot not to.

And now Hausman and Lee from Stanford University and Napier and Thompson from TradeBeam have released the full study on “How Enterprises and Trading Partners Gain from Global Trade Management” (A New Process Model for the China-to-US Trade Lane) which found

  • $ savings of 1.7% to 2.4% in Annual Sales for Exporters
  • $ savings of 0.6% to 2.2% in Annual Sales for Importers
  • a 28% to 40% increase in Annual Profit for Exporters
  • a 10% to 37% increase in Annual Profit for Importers
  • Manufacture-to-Invoice Cycle Reduction of 9% for Exporters
  • Days Sales Outstanding Reduction of 28% to 29% for Exporters
  • Order to Receipt Cycle Reduction of 35% for Importers

Extrapolating these benefits to total worldwide trade Exports and Imports based on World Merchandise Exports of 13.6 Trillion in 2007 and World Merchandise Imports of 14.0 Trillion, this suggests that the annual benefit to global supply chains would be:

  • $194 Billion to $263 Billion to Exporters and
  •   $54 Billion to $109 Billion to Importers.

That’s free savings there for the taking! All you have to do is some business process re-engineering, which consists of:

  • modelling “as-is” processes,
  • designing “to-be” processes,
  • benchmarking the current state,
  • defining the target state,
  • identifying the skills, partners, processes, tools, and technologies to get to the target state from the current state, and
  • implementing, measuring, and continually improving in a methodical, step-by-step fashion, until you get there.

There are a number of Global Trade companies out there with SaaS solutions ready and willing to help you. And if you don’t know where to start, [shameless plug] you could always contact the doctor and I could help you with a needs assessment and RFP to find the right solution and partner(s) for you.

So go out and get yourself a Global Trade solution. You’ll be glad you did … especially when you come out looking like a Global Trade Hero.

Share This on Linked In

The Real Reason No One’s Buying Contract Management Software

Over on Commitment Matters, Tim Cummins authored a post on The Guilty Secret of Contract Management Software where he attempted to explain the disappointing uptake in contract management software. It was pretty good, and he was right in that the uptake is not simply down to a reluctance to buy and due to a failure to achieve widespread internal adoption within many organizations that have bought. But he missed the real reason why.

According to Tim, the problem is that contract management continues to be a football, today owned by one function, tomorrow another; today centralized, tomorrow decentralized; at one moment an instrument for compliance, at the next a source of empowerment. Basically, the activities that lead to [contract] creation and management are generally fragmented. Finance, Legal, HR, Product Management, Marketing, Procurement, business unit management, Sales — all of them have an interest, yet none feels responsible.

While Tim’s observations are correct, it’s not a problem of “the buck doesn’t stop here”, it’s a problem of “where is the buck“? Even if a company appointed a head of contracts with ultimate responsibility for all contracts (which should reside in the Procurement or Supply Management department), such as a VP of contracts, you’d still have an uptake problem. Why? Because contract management systems, on their own, don’t offer much in the way of value.

But they centralize all of my contracts. So does a shared directory on the central file server. Heck, so does a filing cabinet and a little bit of diligence.

But they provide me dozens of useful contract templates. So does the CD I picked up for $5 ten years ago.

But they allow for automatic contract generation from standard clause template libraries. So does Microsoft Word.

But they allow me to query my contracts and create custom queries. So does an Access database and a high school programmer.

The simple fact of the matter is that most of what the contract management vendors sell is hot air. The real value of a contract management system materializes when you integrate it with your e-Procurement, EIPP, and/or P2P system and use it to automatically check all invoices against your contracts to make sure that

  • no off-contract purchases are accepted without appropriate management approvals, and only with good reason and
  • all charges are at contracted rates.

Then you stop maverick spending and overcharges dead in their tracks, which collectively account for the 40% to 60% of negotiated savings that are never realized in your average Procurement department. Otherwise, you’re just buying an over-priced content management system with word processing capabilities — and you might as well use Open Office and a centralized shared directory with naming conventions as the uptake will be about the same unless you can demonstrate how the software is going to result in real hard dollar savings.

Share This on Linked In

2009 Vendor BS of the Year: SRM

Since I’m sure you’ll find many posts and articles on the best supply management technology of 2009 if you take the time to look, I’m going to take a slightly different approach and focus on the best bullsh*t supply management technology of the year in 2009. That was, without a doubt, SRM, or, in it’s full vernacular glory, Supplier Relationship Management. Less than five years after SAP adopted the phrase as their own, it seems every vendor and their mascot has jumped on the SRM feel-good-wagon and tried to make it their own.

It’s simultaneously hilarious and pathetic because there’s no such thing as SRM technology. There’s SCM (Supplier Compliance Management), SDM (Supplier Data Management), SEM (Supplier Environmental Management), SIM (Supplier Information Management), SPM (Supplier Performance Management), and probably a dozen other SXM solutions that are, more-or-less real, honest-to-goodness technology solutions, but not SRM.

The very definition of relationship is “a connection between persons“. Persons, not systems. Even if the technology uses AI and connects to a supplier system that also uses AI, that’s still not “a connection between persons”. So while you can buy systems to track environmental and regulatory compliance (SCM), electronically exchange data with your suppliers (SDM), track carbon emissions (SEM), manage all of your vendor data across multiple systems though a single interface (SIM), and track metrics and scorecards (SPM), you can’t buy a piece of software that will manage your relationship, as that requires real person-to-person interaction.

It’s too bad that you, my dear readers, and I are apparently the only ones who realize this as I’m sick and tired of hearing how great SRM is from all of the publications who have apparently fallen for this bullsh*t –spread by the vendors in the space en-masse because “SAP did it” — hook, line, and sinker. Every time they profile this BS, another great technology goes unnoticed. And, as far as I’m concerned, that helps no one (except, of course, for the publication that gets a nice chunk of advertising revenue from the vendor they profiled in their SRM story, but I’m probably not supposed to write that).

If you disagree with me and think that another bullsh*t technology, process, or claim was even wider spread in 2009, I encourage you to leave a comment below stating what it was, why it was bullsh*t, and why it deserves to knock SRM out of the top spot. And remember, on the leaner and meaner SI, as long as you follow the comment rules, you don’t have to pull your punches.

We’ve got the right to choose and
there ain’t no way we’ll lose it
this is our life, this is our song.
We’ll fight the powers that be
just don’t pick our destiny
’cause you don’t know us, you don’t belong

oh we’re not gonna take it
no, we ain’t gonna take it
oh we’re not gonna take it anymore
Twisted Sister, 1984

Share This on Linked In

Business Intelligence is More than Data Mapping and Cleansing!

BI, more BI, and even more BI. Every time I check a supply management or technology publication, I see yet another article on BI, like this recent article from Inside Supply Management on “getting smart at business intelligence”. Now, you think I’d be pleased at this as I’m always promoting advanced sourcing applications like decision optimization and spend analysis because good technology can help you do good analysis which helps you to make decisions which make you efficient and cost effective, but I’m not. Because every frickin’ BI article, just like every spend analysis article, always starts with mapping and cleansing, and then dwells on it like it’s the be-all and end-all.

Now, I probably shouldn’t complain because what is your average journalist supposed to think is important when even the high-and-mighty analysts — who are supposed to know that “It’s the Analysis, Stupid” — write long-winded thirty-five (35) question spend analysis surveys where twenty-nine (29) questions are about mapping, cleansing and categorization and only one (1) question is about analysis, but I am going to complain, because it’s not helping any of us. It’s not helping those of us trying to teach you what real high-end technology should, and can, do for you and it’s not helping you find the best tools for the job.

You see, real Business Intelligence, when you get right down to it, is not mapping and cleansing, not business unit involvement (because all you really need is the data), not rapid prototyping (because any solution you use should already be built as there are already lots of tools out there), not integration (because modern middleware platforms do that for you with point-and-click interfaces), and not canned reporting (which only tells you what you’re doing, not what you should be doing). Real business intelligence is making smart decisions based on insights gleamed from real data analysis … and real data analysis requires a tool that can cube, slice, and dice data any way you can think of looking at it. Face it, just like there’s no such thing as (a) spend intelligence solution, there’s no such thing as a business intelligence solution — because half of the “solution” is the brains in your head. Brains which won’t get to realize their full potential without a real data analysis tool to provide answers to their inquiries. So what is the definition of a real data analysis tool? I think I’ll let Eric answer that in his forthcoming series. (See the recent Spend Rappin’ repost for quick links to his previous ground-breaking and forward-thinking series on spend analysis.)

Share This on Linked In