Category Archives: Best Practices

Some Good Advice from Hackett on Building a Better Procurement Scorecard

Supply Management is about more than cost. Much more. But it’s hard to make the point if all that you’re measured on are (soon to be very elusive) cost savings. So you need to be measured on a scorecard, preferably one that’s balanced. But what should it contain? A recent Supply Chain Brain article indicated it should focus on service. CPO Rising indicates that you should focus on categories. And SourceOne authors Bill & Joe say to focus on the balanced scorecard.

Hackett indicates that the following considerations are important

  • innovation
  • supply assurance / supply risk
  • regulatory compliance
  • working capital
  • P2P process efficiency
  • supplier diversity

and I would agree that they are all relevant to Supply Management, but what I really like is their 10 key considerations to keep in mind when developing your next scorecard that should help ensure a more holistic level of success that starts off:

  1. Align with the Business
    While most organizations have still failed to realize this fact, Supply Management is the business. Now that companies no longer make what they sell, supply management now serves the most critical function – as there is no product without it. So its critical that supply management closely align with the business and provide the business what it needs.
  2. KISS (Keep It Simple Stupid)
    When creating a scorecard, its critical to consolidate to a manageable set of metrics. Otherwise, the complexity becomes overwhelming and the utility of the tool becomes increasingly diminished . While it’s important to include all of the key contributions that supply management makes, the scorecard should only measure the key contributions that provide the organization the most value. Your organization might do 101 things, but probably only needs to report on the top 11 or 21.
  3. Compare Externally
    While not all measures need to be externally benchmarked, the organization does need to understand what the measures mean.

Check out this article on My Purchasing Center (on building a better procurement scorecard) for their other seven key considerations for developing a scorecard that will help your Supply Management organization achieve a holistic level of success.

Demo Tips

the doctor has been asked a few times now by vendor reps on how to give a good demo. He’s been hesitant to address the subject beyond what is already on the FAQ regarding product reviews because this is one subject where good is in the eye of the beholder, but since he doesn’t like his time wasted when getting demos, here are his tips for giving a good demo to SI.

(01) PowerPoint is for Pansies.
Did I mention I was going to be brutally honest? You don’t demo a product with PowerPoint. EVER! Powerpoint is only for

  1. Summarizing key facts about your company.
  2. Summarizing key points about the problem domain.
  3. Summarizing key contributions of your solution.

then you get into the demo ASAP (As Soon As Possible).

(02) Off-the-Cuff is only for experts. Have planned, tested, to-the-point walkthroughs that cover the key features you want to promote.
If you just released a new version of your product that adds new auction formats, constraints or cost modelling capabilities to optimization, real-time market feed integration, etc. and that is what you want to show off – make sure you’ve tested minimal walkthroughs that display those capabilities as accurately as possible. Don’t divert from these unless asked as you don’t want to run out of time and not show off your best capabilities. And definitely don’t dilly-dally.

(03) Focus on features that are unique. Not cookie-cutter features found in a dozen competitor products.
Even if it’s new to you, it isn’t going to do anything to impress someone who’s seen it a dozen times before, no matter how flashy your UI is. And speaking of UI, this is enterprise, not consumer, so flash doesn’t get you bonus points. In fact, if the flash slows down or detracts from the process, it gets you strikes. Enterprise is about ease of use and efficiency. Unless you’ve found a way to simplify the process, avoid anything that’s considered a standard feature of the product you’re promoting.

(04) Don’t jump around the screen.
You might have fast internet, but that doesn’t mean that the person on the other end has fast internet or that the web sharing software you’re using can keep up as you jitter around the screen like a Hummingbird. Move smoothly, and slow enough for the software to keep up. If you have a habit of jittering, setup a client machine next to you so you can see what your audience sees.

(05) Have a flushed-out data-set.
Once you get through the scripted part of the demo designed to show off your product’s key feature, or significant enhancements since the last demo, the doctor is going to want to confirm that it is market ready and real. This means he’s going to want to see some random functionality, on the path of his choosing. And he’s not the only blogger who works this way. Be prepared to cater to your audience’s demand. After all, if you want a good write up, you’re going to have to keep their interest long enough for them to get enough material to write it.

(06) Have a domain expert on the call.
Preferably this person and the person giving the demo are one in the same, but if not, be sure you have someone who can answer intelligent, thoughtful, expert questions, which you are going to get if you do a good job and keep the doctor‘s attention because he is, after all, a domain expert.

(07) And, whatever you do, don’t paint an old Fiat 500 black and call it a luxury limo.
Remember that even though you can put lipstick on a pig, in the end, you still have a pig, so do not simply slap a new UI on an old product and try to pass it off as new and improved. If you haven’t improved the process or capability, or it still doesn’t really do what it needs to do to be effectively deployed, you’re not going to be able to hide this from anyone who has one eye open and half a functioning brain when it comes to technology. Trust me on this one.

Wallmedien Puts Another Brick in the Wall – With Contract Management!

When I was hired in Procurement there were certain people who would lay bare our spend anyway they could by pouring their derision upon anything we bought exposing every weakness however painfully skilled it was wrought

But among us it was well known that when they went home at night
they too were paralyzed with fright that gripped them fully throughout their work life.

… because …

We don’t have no contract system.
We don’t have no price control!
No spend monitors in the software,
buyers left in a black-hole
Yes, Buyers, left in a black-hole!

Without contract management and monitoring, most buyers are in a black-hole as they don’t know whether their carefully negotiated savings-laced sourcing strategy is being properly implemented. Every organization needs (near) (real-time) contract management, even if it already has a sourcing suite. That’s why, noticing the dearth of stand-alone contract management solutions on the market (as the best-of-breed vendors keep getting acquired), Wallmedien decided to release a stand-alone contract management solution for those who already had a (partial) sourcing or procurement solution and just needed to fill a gap or two.

Like any good contract management system it supports all organizational contracts (buy and sell side), roles-based access, reporting, inventory and spend tracking, early-warning of upcoming terminations or automatic (evergreen) renewals, automatic identification of contracts that are no longer linked to products or services (or that have not been purchased against in the last x-months), and extensive contract authoring features for framework, services, purchase, maintenance, license, telecommunication, and rental contracts. It can also track warranties and alert a user when a return can be made against a contract. And it seamlessly integrates with numerous third party systems, including the big-name ERPs and MRPs.

Since we all know what contract management systems do and how they work, there’s no need to go to deep into any of these points as the whole point is to let you know that if you need a BoB point-solution to augment an existing sourcing or procurement solution, and are having difficulty identifying a stand-alone contract management solution that meets your needs, Wallmedien is one option that you can definitely consider.

Technology Trials 2012 – Part IV.ii

In Part III, where we assumed that you needed to find a new solution, be it a partial best-of-breed (BoB) or a full supply suite (FuSS), we discussed the critical question that you needed to answer – do you need a point solution to fill a gap or do you need suite to modernize your process and capabilities?

In yesterday’s post, we assumed that you answered the question and determined that you needed a point best-of-breed (BoB) solution to fill a gap in your solution foot-print. In today’s post, we assume that you determined that you need an end-to-end full supply suite (FuSS) to deal with your supply issues.

(04) What are the critical functions that the solution must have?

In particular, as we are dealing with FuSS, we need to ask:

  (04.1)Are there any integration points?
  (04.2)If integration is required, who can do the integration and what is the timeframe?
  (04.3)What data formats need to be supported for supplier collaboration?
  (04.4)Is the solution a foundation for another solution? Can it be extended / integrated as needed?
  (04.5)Are there any known advantages or disadvantages to hosted or SaaS?
  (04.6)Who should support the solution?
  (04.7)What are the training and support options?
  (04.8)What are the normal use-cases that cover normal, and 80% of, expected usage?
  (04.9)Is the vendor likely to be around supporting this solution in the long term?

  (04.1)Are there any integration points?
Do we need to integrate with an ERP, MRP, or suite solution for another supply chain process? E.g. A sourcing platform may need to suck in the transactional data from an e-Procurement platform for spend analysis and spit the contracts out into the platform so that m-way matching can occur against each requisition before it is made and each invoice before it is paid. Similarly, a logistics platform may need to suck in requisitions and spit out inventory levels / goods receipts.

  (04.2)If integration is required, who can do the integration and what is the timeframe?
Can it be done in-house, by a vendor, or will a third-party be required? How long is it likely to take? (If integration will take 3 months, then a solution MUST be selected 3 months before the suite is needed.)

  (04.3)What data formats need to be supported for supplier collaboration?
What formats are you currently accepting supplier data in? What formats do you need to accept to get more suppliers online? Where is the electronic marketplace going?

  (04.4)Is the solution a foundation for another solution? Can it be extended / integrated as needed?
Are you on the market for a procurement suite with the intention that you will be supplementing it with a sourcing suite at a later time, or vice versa? Are you planning to build your entire supply chain foot around a market-leading e-Sourcing platform? Know the answers to these questions up front — don’t be asking them after the fact!

  (04.5)Are there any known advantages or disadvantages to hosted or SaaS?
As with the BoB discussion, if your organization employes enhanced security protocols, does not have the resources to support a system in-house, etc., these restrictions should be known in advance of system selection.

  (04.6)Who should support the solution?
You? The vendor? A third-party? Or does it not matter?

  (04.7)What training and support options are availble to you or will be required?
If there is no in-house expertise on the type of solution the organization is searching for, expertise on the process and the platform will be required. If there is in-house expertise on the process, then only expertise on the solution will be required. In addition, are there individuals who can be trained as trainers, or will external resources be required to train new users on a regular basis? If the latter case, you will need a vendor with a consulting/training team, or one that is big enough that third parties offer that trainig.

  (04.8)What are the normal use-cases that cover normal, and 80% of, expected usage? And what are the abnormal use-cases that cover high-ROI scenarios in the remaining 20% of scenarios?
Just like you should never go to market for BoB solution without knowing the typical and atypical use cases you need to support, you should never, ever go to market for a FuSS solution without knowing the typical and atypical use cases you need to support! Otherwise, the ROI that you expected may not materialize.

  (04.9)Is the vendor likely to be around supporting this solution in the long term?
Whereas this is not that critical for a BoB solution, as you can always replace it in a few years if need be, this is very critical for a platform solution as you know you will be stuck with the solution for at least 5 years, if not 7 or 10 — even if it’s SaaS, because the bigger the solution footprint, the longer it takes to get it replaced in an organization. So you better make sure that the vendor is stable and likely to be for years to come.

Technology Trials 2012 – Part IV.i

In our last post, where we assumed that you needed to find a new solution, be it a partial best-of-breed (BoB) or a full supply suite (FuSS), we discussed the critical question that you needed to answer – do you need a point solution to fill a gap or do you need suite to modernize your process and capabilities?

In this post, we’re going to assume that you answered the question and have determined that you need a point best-of-breed (BoB) solution to fill a gap in your solution foot-print. In tomorrow’s post, we will assume that you determined that you need an end-to-end full supply suite (FuSS) to deal with your issues.

Once you’ve decided that you need BoB to help you fill a critical issue, because the need was contained and the ROI analysis indicated it was the best approach, the next (set) of question(s) you need to answer is:

(04) What are the critical functions that the solution must have?

In particular, as we are dealing with BoB, we need to ask:

  (04.1)What are the integration points?
  (04.2)What data formats need to be supported?
  (04.3)Are we limited to hosted or SaaS?
  (04.4)Can the solution be supported in-house?
  (04.5)What additional training will be required?
  (04.6)What are the use-cases? What is the expected ROI??

  (04.1)What are the integration points?
Specifically, what data do you need to get into the best-of-breed point solution from your existing platform / suite, and what data needs to be pumped back into the platform / suite when you are done with the best-of-breed solution?

  (04.2)What data formats need to be supported?
In particular,
    (04.2.1)What data formats are used by the platform / suite you need to suck data out of and spit data into?
    (04.2.2)What data formats are used by your suppliers / partners / third parties that provide data you want to get into the best-of-breed solution?
This is typically all of the data formats that you need to support for BoB.

  (04.3)Are we limited to hosted or SaaS?
If the current platform is hosted, and strict security requirements would make a SaaS solution almost impossible to deliver, or if the current platform is SaaS, and the integration or support requirements would make a hosted solution unnecessarily expensive, or if there is an edict from above that all solutions must be hosted for security or control reasons or must be SaaS due to lack of technical support, this must be known before potential solutions (and vendors) are selected.

  (04.4)Can the solution be supported in-house?
If it can’t, then the organization will either have to go SaaS (if it has the option), or contract a third-party to maintain a hosted solution.

  (04.5)What additional training will be required?
Even if the selected solution is “plug-and-play”, there’s no guarantee that your talent will have the training required to “play” with the solution as soon as it is available. You can’t just give a man a hammer and a chisel and expect him to magically transform into a master artisan.

  (04.6)What are the use-cases? What is the expected ROI of each use-case??

Before you go looking for a solution, and more importantly, vendors to support that solution, you have to know what the typical daily needs are and the atypical use-cases that you need to support (because they have high ROI) are. Software isn’t about features (and selection is not about feature check-lists, and any vendor who insists they are should be transported back to the middle ages and given free accommodations in the Tower of London where they knew what to do with people who preached blasphemy) – it’s about functionality. Any vendor can add a dozen new features into the next release, but if they don’t enable your process and save you money, what’s the point?