Author Archives: thedoctor

The USA is a Third World Country (and by now, Canada is too!#) (Bad Billionaires 1/3)

Why do I say this? Because the “official” US poverty rate is over 11.5% and the official US (long term average) unemployment rate (U3) has been averaging 5.7%, and we both know the official rates (far) undercut the reality since:

  • in big cities and wealthy states, you couldn’t afford rent and food if all you made was $1 above the poverty line; and the US leads all nations with the highest overall child poverty rate of 20.9% (Source: Confronting Poverty)
  • the official unemployment rate (U3) excludes part time workers seeking full time, people who have not been able to secure a job in more than a year, went back to school (even part time) in an effort to level up, etc. and this (U6) rate is usually 50% to 60% higher (putting the long-term average U6 rate at 10.1%)

None of these statistics should exist in a first world country!

According the World Bank, of the 162 countries they track with a poverty line, 18 have a lower percentage of people living in poverty, including pre-war Ukraine, Belarus, Vietname, Kazakhstan, and Algeria. Something is VERY wrong here!

According to Trading Economics, 68 countries have less unemployment than the United States, with Uganda, Liberia, Vietnam, and Mexico included in the countries under 3%! Something is VERY wrong here!

According to UNICEF, there are 34 countries with a lower child poverty rate than the USA. THIRTY FOUR! Something is TOTALLY FUCKED UP here. You are (way) better off having a child in Slovenia, Czechia, Poland, or Croatia than the good Ol’ US of A.

Moreover, if you’re a blue collar worker or a low-tier white collar worker, you’re also screwed since you’ll never be able to pay off your student loans as almost everything you make will go on rent and food. And even if you’re true white collar middle class, good luck buying a house or sending your kids to college.

While all the economists and politicians want to tell you how great things are because the averages keep going up and up, this is all a facade to prevent you from finding out the truth that things have actually getting worse for you since the eighties (when “trickle on”*, which the Republicans like to call “trickle down”, economics were introduced) because the median is not getting better. (In good years, it’s barely holding steady.) The problem with averages is that they include everyone, which includes billionaires that are collectively worth more than 6 Trillion dollars. (If Bezos moved to a small town with under 1,000 people where the average income was 35,000, the average income per person would suddenly be over ONE Million dollars, while the median would stay the same. It’s all lies, damn lies, and statistics.)

The problem is that our buying power has decreased considerably since the 70s (which was the last time things were really good for the average American) as our median family income has not kept up with rising costs (which should not be a surprise as the federal minimum wage in the US has not increased in 15 years). The relative cost of a house has almost doubled, and the cost of sending our children to a community college or trade school has almost tripled.

Here’s a simple table to break it down for you.

Year Median Income Median House Price X times Median Income
1975 13720 39300 < 3X
2020 76600 391900 > 5X

And yet another simple table:

Year Median Income Average Tuition % Median Income Harvard Tuition % Median Income
1975 13720 542 4% 5350 39%
2020 76600 9488 13% 47730 62%

When you break it all down, relatively speaking, the cost of almost everything has increased significantly since the 1970s. The only budget item that has stayed relatively flat (in the 10% to 15% of median household income) is food for a family of 4, but that’s only looking at the numbers. Today, most Americans can only afford cheap (ultra) processed foods, and even Fox News is now warning us about those! (If you were to compare spending on healthy food baskets, the buying power does not remain constant.)

In other words a significant number of you are poor (and much worse off than the majority of OECD Countries [Confronting Poverty]), unemployed, or both, and the way things are, this number that has been rising for decades is going to keep rising unbounded unless something is done. And until that something is done and these numbers start decreasing and level off at acceptable levels (5% max for poverty and 3% max for U6 unemployment), as far as I’m concerned, the US (and Canada, which switched from following the UK’s lead to America’s lead a few decades ago), is a third world country!

So what can you do about it? Some would say ban billionaires (because no one needs that much money and it should be shared more equitably) while others would say fix government (and ban SuperPACS and lobby groups that have too much influence over governments and divert them from your welfare to theirs) and others still fix economics (and what it actually measures), but neither is a solution on its own. It’s not about fixing the wealth imbalance (it’s always been there, it always will be), or ending lobbying (although we probably should end SuperPACs and limit funding levels from any individual or corporation), or changing the definition of economics (because, thanks to lies, damn lies, and statistics, there will always be ways to corrupt the measures and mislead the public), but about increasing the prosperity of the average blue collar and white collar worker, getting them back to 1970 levels, and putting them back on the path to increase prosperity (compared to the majority of the world and making the USA a true first class country again).

How? That’s going to be hard, especially since you’re one of the last “democracies” (well, not really, you’re a republic) still on a two-party system (which is easily corrupted and has been for decades and that’s why you’re not a first world country anymore), but if a party would come along and focus on the right things, it wouldn’t be too hard to right the course … especially since productivity of the average worker has increased almost fourfold since the 1970s due to American ingenuity and grit.

But first, let’s babble about those Billionaires and why they simultaneously are and aren’t the problem. Stay tuned.

 

* Republicans have been telling us that “trickle-down” economics are good for us, when history has shown time and time again that they are not. In reality, those Billionaire tax cuts are “trickle on” economics, because that’s what the Republicans and their Billionaire buddies are doing to you, and if you don’t understand what that means, then type “golden shower” porn site into Google and it should bring up links to at least 30 sites that should have very graphic visual descriptions that demonstrate precisely what “trickle on” economics really is! (I asked Google how many golden shower porn sites and it said top 30, so I am assuming it will deliver at least 30 links to you.)

# Statistics Canada is always years behind compared to other countries, with no good data beyond 2021, but the projection for Canada this year was a 10.1% poverty rate!

You Admit You Might Be a Dumb Company. How do you avoid the fork in the road that leads to the Graveyard? Part 2

Good for you! As we noted in part 1, admitting you might be a dumb company is the most important thing to do on the yellow brick road to enlightenment.

So what do you do next? In short you continue to:

  1. admit to every mistake you are making and do something about it,
  2. look for opportunities to improve that are logical next steps, and
  3. never, ever forget the timeless basics.

Today, we’ll continue with describing what you do when you identify, and admit to, one of the last five mistakes we chronicled in our re-introduction to our “dumb company” series and want to do something better.

6) No More Training

Start picking out your corporate coffin and writing your corporate obituary, because the minute you stop learning and stop improving is the first minute on your corporate deathbed. So:

  • time your process throughput across corporate processes (and compare to industry averages)
  • examine your SaaS utilization (on the SaaS apps you keep after you Get SaaSy)
  • train where either can be noticeably improved

7) Tighten The Belt One Notch Per Month

You can trim the fat, but you have to stop trimming when the fat is gone.

If revenue is not increasing, it means that either your marketing or sales is not effective or your product is not appropriate. In both cases, you will have to invest further. In the first, to get some consulting from an expert low-cost guerrilla marketer as well as the educational assets you will need, and then some training on how to improve the effectiveness of your sales cycle. In the latter, expert advice on where to focus the development roadmap to make it more appropriate, and appealing, to your target market.

If there’s not enough cash, then you will have to wrangle more investment (even if the terms aren’t what you hoped) or, if you have revenue, take a loan (and keep your equity).

8) From 60 to 0 in Marketing

As already indicated, just because you wasted the entire $M marketing budget on overpriced events, email marketing, “analyst firms” and their maps, soundbite marketing, and a CMO who only cares about his jet-setting media-centric lifestyle, that doesn’t mean you can cut it to 0. If you do so, crawl in the corporate coffin as it’s almost time to nail the lid.

You need constant visibility as you have to be “the name they know” when your target customer finally gets budget and can invite you to an RFP or a contract negotiation. At any given time, half of your customers are going to be six months away from a potential budget. One fourth, nine months, and only one fourth will be close to a budget season, where they may not get budget, and then it’s fifteen months before they can talk to you.

Constant visibility doesn’t mean a booth at a 100K event every month and the media that comes from it, it means monthly educational content that not only keeps your name visible, but keeps you front and centre as they look for that content to consume, to learn from, and hopefully build their business case to buy your product.

9) Real Innovation is Too Risky

First of all, a lot of customer problems can be solved with evolutionary renovations to existing tech, and “innovation” is thus not as risky as you think.

Secondly, sometimes real innovation is needed to solve a problem, or at least do so affordably. While it’s risky (maybe you won’t solve it / get it right), if solving that problem is key to your corporate growth, and possibly your corporate survival, it’s definitely riskier not to pursue innovation. So do it, but carefully and in a controlled manner — don’t bet the bank on anything without a [very] high probability of success. Innovation should NOT be costly (beyond the innovator’s salary) in software-based tech. It’s just research, trial, and error. More than that, and you’re not doing it right.

X) Raise the DrawBridge!

You don’t know everything. And that’s okay. No one does.

But always remember: what you don’t know can kill you. Bring in an expert ASAP to do an analysis of your critical activities, identify weaknesses, and then, if necessary bring in an expert to address them. SI has been telling you for years consultants are cheap as the value a fair priced expert consultant will bring you is multiples of what that person will charge.

Next up: Avoiding the Graveyard if you are a Dead Company Walking! (Part 1 of 8)

What SHOULD Procurement Officials Learn from CrowdStrike?

A recent article over on on GovTech titled What Can Procurement Officials Learn from CrowdStrike caught my eye because I wondered if it contained the most important lesson.

The article, which sub-headlined on how CrowdStrike is a useful lesson for officials who draw up government IT contracts, pushing them to ask the question of how future contracts can prepare for any unplanned outages, hit on five important point(s) of modern SaaS / Cloud-powered technology.

  • additional safeguards are needed in IT contracts
  • even with safeguards, there is still the possibility of a cyberattack, so there must be an immediately actionable disaster response and recovery plan (which vendors must be able to live up to)
  • there should be alternate backup/failover options, even if non-preferred, and that can include paper in the worst case (as far as the doctor is concerned, it’s absurd when a store shuts down in broad daylight because they lost power or internet connectivity to the bank — that’s why we have cash and credit card imprint machines)
  • one should consider specifying liquidated damages up front, to prevent long drawn out lawsuits and delayed response time from the third party (who will want to avoid those damages)
  • consider cyber insurance, either on the vendor side or your side

Which is all good advice, but misses the most important point:

NEVER ALLOW A CRITICAL SYSTEM TO BE AUTOMATICALLY UPDATED (en masse)

Now, there’s a reason the military will exactly configure a system designed for single use and LOCK IT DOWN. That’s so it can’t accidentally go down from an unplanned / uncontrolled update when it’s needed most.

For example, there’s no way any update, no matter how minor, should be pushed out to a core airline operations terminal without an administrator monitoring the update (which could be on the vendor side IF the vendor maintains a [virtual] configuration that is the exact same as the customer’s configuration) and ensuring everything works perfectly after the update. And then the updates should be propogated to the rest of the terminals in a staged fashion. (Unless you’re dealing with a critical zero-day exploit that could expose financial or personal information, there’s no need for rapid updates; and even then, there should be techs on standby after that test update is complete just in case something goes wrong and a system has to be immediately rolled back or rebooted.)

Modern operating system installations, like Windows 11, can have up to 100,000,000 (that’s one hundreds million) lines of code and since you never know where the bugs are, there is no such thing as a low-risk update. Any update has the chance of taking down the OS or the application you are updating that is integrated with the OS.

But this is not the only critical lesson to takeaway. The next is:

For critical systems, your provider must maintain backup hot-swap redundant systems!

Once a configuration is confirmed to be bug-fee, it must be propagated to the backup, which must have a backup redundant data store with all transactions replicated in real-time (so that you’d never lose more than a minute or two of updates with an unexpected failure) that can be hot-swapped through a simple IP redirection should something catastrophic happen that takes down the entire primary system. This backup redundant system must have enough power to run all critical core operations (but not necessarily optional ones like reporting, or tasks that only need to be run every two weeks, like payroll, etc.) until the primary system can be brought back online. A catastrophic event like a rolling failure from a security or OS update or cyberattack should be recoverable in minutes simply by re-routing to the failover instance and rebooting all the local machines and/or restarting all the browser sessions.

Those are the lessons. If a system is so critical you cannot operate at all without it, you must have redundancy and a failover plan that can bring you back online with an hour, max.

Advanced Procurement Yesterday — No Gen-AI Needed!

Back in late 2018 and early 2019, before the GENizah Artificial Idiocy craze began, the doctor did a sequence of AI Series (totalling 22 articles) on Spend Matters on AI in X Today, Tomorrow, and The Day After Tomorrow for Procurement, Sourcing, Sourcing Optimization, Supplier Discovery, and Supplier Management. All of which was implemented, about to be implemented, capable of being implemented, and most definitely not doable with, Gen-AI.

To make it abundantly clear that you don’t need Gen-AI for any advanced enterprise back-office (fin)tech, and that, in fact, you should never even consider it for advanced tech in these categories (because it cannot reason, cannot guarantee consistency, and confidence on the quality of its outputs can’t even be measured), we’re going to talk about all the advanced features enabled by Assisted and Augmented Intelligence (as we don’t really have true appercipient [cognitive] intelligence or autonomous intelligence, and we’d need at least autonomous intelligence to really call a system artificially intelligent — the doctor described the levels in a 2020 Spend Matters article on how Artificial intelligence levels show AI is not created equal. Do you know what the vendor is selling?) that have been available for years (if you looked for, and found, the right best-of-breed systems [many of which are the hidden gems in the Mega Map]). And we’re going to start with Procurement.

Unlike prior series, we’re going to mention some of the traditional, sound, ML/AI technologies that are, or can, be used to implement the advanced capabilities that are currently found, or will soon be found, in Source-to-Pay technologies that are truly AI-enhanced. (Which, FYI, might not match one-to-one with what the doctor chronicled five years ago because, like time, tech marches on.)

Today we start with AI-Enhanced Procurement that was available yesterday (and, in fact, for at least the past 5 years if you go back and read the doctor‘s original series, which will provide a lot more detail on each capability we’re discussing. (This article sort of corresponds with AI in Procurement Today Part I and AI in Procurement Today Part II published in November, 2018 on Spend Matters.)

YESTERDAY

TRUE AUTOMATION

Not sorry to burst the Gen-AI believers’ bubble, but true automation has existed in leading Procurement technology for almost two decades, using tried-and-true rules-based RPA that supports advanced rule construction using the full breadth of boolean logic, mathematical formulae construction, and flexible (regex, clustering, etc.) pattern matching.

SMART AUTO RE-ORDER

Threshold re-order points, adaptive trend analysis (based on sales data for quantity, expected delivery time and economic order quantity for interval and volume determination), and contract/preferred suppliers can handle this better than most stock clerks for MRO / commodity stock items.

GUIDED BUYING

All you need to do this amazingly well is RPA, rules based on contract/preferred/budget, and semantically aware keyword/phrase matching, and, if you want a NLI (Natural Language Interface), traditional semantic processing to extract the key-words/phrases that are the appropriate nouns (and items of interest).

SMART (ADAPTIVE) AUTOMATIC APPROVALS

This is just RPA using a rules based workflow, thresholds, and exception-based decision pattern analysis to allow the thresholds to be adjusted within a range based on an approval and/or the platform to infer the thresholds/rules actually being applied by the approver using pattern identification (based on significant factor analysis or fingerprinting) across exceptions to suggest the necessary rule modifications.

ERROR PREVENTION

This just requires valid pattern definition, context-based range analysis, and outlier detection (using clustering, curve fitting, or trend analysis). Anything that can’t be done with the right mix of these methods can’t be done reliably.

M-WAY MATCH

Anything you can’t do with RPA using rules-based workflow, identifier matching, and confidence-based pattern matching and suggestion SHOULD NOT BE DONE. Moreover, anything that can’t be matched with certainty should be flipped back to the supplier for correction/completion (if key identifiers were missing), possibly with a suggestion/question (for e.g. does this invoice correspond to PO 123XYZ?).

SUMMARY

Now, we realize this was very brief, but again, that’s because this is not new tech, that was available long before Gen-AI, which should be native in the majority (if not the entirety) to any true best-of-breed Procurement platform, that is easy to understand — and that was described in detail in the doctor‘s 2019 articles for those who wish to dive deeper. The whole point was to explain how traditional ML methods enable all of this, with ease, it just takes human intelligence (HI!) to define and code it.