Category Archives: Blogologue

Demystifying the Marketing Madness for you!

The marketing madness is returning, the incomprehensibility is increasing, and the terminology almost terrifying, so here’s the simplest easy-peasy guide the doctor can make to interpreting what the messaging is actually saying, if it’s saying anything at all!

AI-enabled/AI-backed/AI-enhanced/AI-driven: We don’t actually have any capabilities that you won’t find in one to three dozen of our peers, but since they’ve all jumped on the “AI” bandwagon, we will too and use the exact same meaningless messaging. (Remember, there are NO valid uses for Gen-AI in Procurement and most valid uses for “AI” are constrained to specific use cases, the rest of the time it’s just rules-based RPA/Automation.)

Autonomous Sourcing: If you configure enough rules, or, even worse, turn on our Gen-AI auto-negotiator, the platform, given a demand, will auto configure and run a sourcing event to the point it selects a supplier and sends out an award notification, with little to no guarantee it’s what you wanted (if you turned on Gen-AI).

Delightful Procurement: terribly sorry, but even the doctor can’t translate this one!

Intake-to-Procure: Takes a request in, but doesn’t do anything with it … unless you have a Procurement system it can automate or punch into. (As the doctor has said, intake on its own is Pay-Per-View on your data, and something that SHOULD be included in every proper Procurement solution because you should not have to pay another third party to see YOUR data!)

Margin Multiplier: Our ROI isn’t much better than other best-in-class solutions appropriately applied (the difference between the savings achievable from an average Strategic Procurement/Source-to-Pay and a Best-in-Class Strategic Procurement/Source-to-Pay platform appropriately applied is typically less than 2% [unless one platform includes appropriate SSDO and the other doesn’t] … i.e. you might get 12% savings instead of 10%), but since it’s best in class, you might be able to multiply your margin if all the math works out (3% to 6% instead of 3% to 5.8%), and Margin Multiplier just sounds so much cooler!

Orchestration: Cloud-based middleware that allows you to connect platforms using their APIs through a UX and build data-based workflows that pulls data from one platform and pushes it to another while controlling a multi-application process. Unless it supports integration beyond source-to-pay applications, likely not that useful as it just ADDS to solution sprawl when you can just direct connect the S2P applications yourself using the APIs and rules-based automation to push and pull data (as they all work on essentially the same data).

Smart Procurement: Procurement powered by rules-based workflows, but smart just sounds cool, eh?

Spend Orchestration: We don’t do anything different than all the other orchestration providers, but it sure sounds cool!

Sustainable Procurement: Generally speaking, this simply means you can see supplier / product sustainability (carbon, etc.) data when sourcing, but we don’t actually help you identify more sustainable suppliers or, more importantly, how to work with your supplier to decrease the carbon footprint, raw material utilization, fresh water footprint, etc.

Supplier Insights: An extensible, centralized supplier information/relationship management platform that can be augmented with ALL related supplier finance, product, location, compliance, risk, ESG, and other relevant data. A capability offered by a few dozen platforms, which means this platform isn’t that special.

In short, all of this new marketing gibberish is essentially complete bullcr@p and I have to echo the desire of Sarah Scudder and Dr. Elouise Epstein for Procurement solution providers to tell us what your solution actually does and, in the doctor‘s words, CUT THE CR@P!

Yes, Jon. Some Analyst Firms Do Stink!

Last Saturday, Jon The Revelator penned a piece on how Going “off-map” is the key to finding the best solution providers, which he correctly said was critical because Gartner reports that 85% of all AI and ML projects fail to produce a return for the business. As per a Forbes article, the reasons often cited for the high failure rate include poor scope definition, bad training data, organizational inertia, lack of process change, mission creep and insufficient experimentation and, in the doctor‘s view, should also include inappropriate (and sometimes just bad) technology.

The Revelator asked for thoughts and, of course, the doctor was happy to oblige.

Starting off with the observation that while it is impossible to give precise numbers since companies are always starting up, merging, getting acquired, and shutting their doors in our space, statistically, if we look at the average number of logos on a module-quadrant map (about 20), and the average number of providers with that module (about 100, ranging from about 50 for true analytics to about 200 for some variant of SXM), for every provider “paying” to get that shiny dot, there are 4 going overlooked. And given that the map represents “average”, that says, statistically, 2 of those providers are going to be better.

Furthermore, maps should NEVER be used for solution selection (for the many, many reasons the doctor has been continually putting forth here on SI, heck just search for any post with “analyst” in the title over the past year). A good map can be used to discover vendors with comparable solutions, and nothing more.

The Revelator replied to this that the first thought that came to his mind was the urgency with which we buy the dots on the map without realizing that many have paid a considerable sum to get the logo spot and recounted the story of why he sold his company in 2001 after he was approached by Meta (an analyst firm eventually acquired by Gartner), in response to the successful results of his first big implementation, who said his company was on the leading edge and that they wanted to “cover” his company. The short story was that, when he said it sounded great, the Meta rep said “terrific, let’s get started right away and the next step is you sign a contract and pay the $20,000 [$36,000 today] invoice that we will send immediately and then we can begin“. Not something easy to swallow for a small company, and even less easy than today when it now costs at least 50% more (in today’s dollars) according to some of the small companies he’s talked to if they want Gartner attention. [And that’s just for basic coverage. Guaranteed inclusion on some of the big firm maps generally requires a “client” relationship that runs 150,000 or more!]

the doctor‘s response to this is that it’s still definitely a pay-to-play game with most of these firms, as per his recent posts where he noted that dozens of the smaller vendors that he talked to this year (who keep asking “so, what’s the catch?” when the doctor says he wants to cover them on SI) said they were being quoted between 50K and 70K for any sort of coverage. Wow!

Furthermore, while Duncan Jones insists it is likely just a few bad apples, those bad apples are so rotten that many of these smaller firms steadfastly believed they couldn’t even brief an analyst if they didn’t pay up (as the rep wouldn’t let them). And it wasn’t just one firm whose name the doctor heard over and over … 4 (four) different firms got over 3 (three), sometimes very angry, mentions across the two to three dozen mentions where the smaller vendor was willing to indicate which firm was quoting them 50,000 to 70,000+ or not willing to talk to them unless they signed a client agreement. (the doctor has reached out to over 100 small companies over the past year, and almost every response indicated that they expected there would be a fee for coverage based on their analyst firm interactions, and when he asked why, the majority of them said they were quoted (high) fees by one or more other firms that said they wanted to “cover” them.)

So yes, most of the smaller firms without big bank accounts aren’t making it on to these maps (because they hired people who could actually build products vs. people who could bullsh!t investors and raise the money to pay these “analyst” firms). (Especially since an analyst from at least one firm has admitted that they were only allowed to feature clients in their maps, and an analyst from another firm has admitted that they had to design the criteria for inclusion to maximize client exposure and minimize the chances of a non-client from qualifying, as they were limited in the non-clients they include in the map [to low single digits].)

And, furthermore, when you look at those vendors that did make it, The Revelator is correct in the implication that some of them can’t carry more than a tune or two (despite claiming to carry 20).

And it seems that the doctor‘s punch hit a little harder than The Revelator expected because he followed it up with a post on Monday where he asked us Is This True?!?, and of course the doctor, who already recounted his tales of rage on LinkedIn in response to his posts that asked Are Traditional Analyst and Consulting Models Outdated and/or Unethical? and Does it Matter if Analyst Firms Aren’t Entirely Pay-to-Play if the Procurement Space Thinks They Are, couldn’t let this one go (because, to be even more blunt, he doesn’t like being accused of being an unethical jackass just because he’s an analyst, because not all jackasses are unethical, and things would be different if all analysts and consultants were as honest and hardworking as a real jackass [can you say foreshadowing?]) and responded thusly:

Well, this was the first year doing his (own) reach-outs [as the client relations team did them at Spend Matters, so he really hasn’t done many since 2017] where a few companies said they wouldn’t talk to him and/or show him anything because if they weren’t being charged, then the doctor is just going to “steal their information and sell it to their competitors“, like a certain other analyst firm whose name won’t be mentioned.

Yes, the doctor is getting a lot more “what’s the catch?” than he ever did! Apparently analysts/bloggers don’t do anything out of the goodness of their hearts anymore, there’s always a price. (Even when the doctor tells them the catch is “the doctor chooses who he covers, when, and DOES NOT actively promote the piece since no one is paying for it“, some still don’t believe him (even when he follows it up with a further explanation that even if he covers you, he likely won’t cover you again for at least two years because he wants to give all innovative or underrepresented vendors a chance, and may even ignore them completely during that time, even if they reach out, because, again, they’re not a client and his goal is to give a shot to as many companies trying to offer as he can).

Also, in the doctor‘s view, this is a big reason that analyst firms need to step up and help fix the Procurement Stink, but you can guess the response he received to the following post on The Procurement Stink (and if you can’t, ask the crickets).

The Revelator concluded his question with a reference to a Jon Oliver assertion about McKinsey, a firm that bluntly stated, “We don’t learn from clients. Their standards aren’t high enough. We learn from other McKinsey partners.” (and if this isn’t a reason to never use McKinsey again, then what is?) and asked if this was true across the analyst and consulting space. the doctor‘s response was that the Jon Oliver assertion was representative of a different problem. The Big X consultancies are too busy sniffing their own smug to realize that, hey, sometimes their clients are smarter (and so are a few analysts as well, but the problem is not nearly as common in analyst firms as it is in Big X consulting firms).

Our problem as independent analysts who try to be fair and ethical is that a few of these big analyst firm sales reps are ruining our reputation. And the fact that these big firms don’t immediately throw out the rotting trash that these sales reps are is why some analyst firms do stink!

To this The Revelator promptly replied that as always, the doctor isn’t pulling his punches, which is true because …

we’re getting older. We don’t have the stamina to dance around all day pulling punches. Only to hit fast and hard, especially since that’s the only chance of pulling some of these young whipper-snappers out of the daze they are in as a result of the market madness and inflated investments (ridiculous 10X to 20X+ valuations were not that uncommon during COVID when everyone was looking for SaaS to take business online).

Not to mention, we’ve heard and seen it all at least twice before, probably three times on The Revelator‘s end (sorry!), and we know that there is very little that’s truly new in our space under the sun. With most companies, it’s just the new spin they manage to find every few years to bamboozle the market into thinking their solution will find considerably more value (with less functionality) than the less glitzy solution that came before (and which has already been proven to work, used correctly, at dozens of clients).

Of course, we first have to accept there is no big red easy button and that, gasp, we have to go back to actually TRAINING people on what needs to be done!

Another problem we have is that when the Big X listen to Marvin Gaye and Tammi Terrel, they hear:

๐˜“๐˜ช๐˜ด๐˜ต๐˜ฆ๐˜ฏ ๐˜ฃ๐˜ข๐˜ฃ๐˜บ, ๐˜ข๐˜ช๐˜ฏ’๐˜ต ๐˜ฏ๐˜ฐ ๐˜ฎ๐˜ฐ๐˜ถ๐˜ฏ๐˜ต๐˜ข๐˜ช๐˜ฏ ๐˜ฉ๐˜ช๐˜จ๐˜ฉ
a๐˜ช๐˜ฏ’๐˜ต ๐˜ฏ๐˜ฐ ๐˜ท๐˜ข๐˜ญ๐˜ญ๐˜ฆ๐˜บ ๐˜ญ๐˜ฐ๐˜ธ, ๐˜ข๐˜ช๐˜ฏ’๐˜ต ๐˜ฏ๐˜ฐ ๐˜ณ๐˜ช๐˜ท๐˜ฆ๐˜ณ ๐˜ธ๐˜ช๐˜ฅ๐˜ฆ ๐˜ฆ๐˜ฏ๐˜ฐ๐˜ถ๐˜จ๐˜ฉ, ๐˜ค๐˜ญ๐˜ช๐˜ฆ๐˜ฏ๐˜ต
๐˜ง๐˜ฐ๐˜ณ ๐˜ฎ๐˜ฆ ๐˜ต๐˜ฐ ๐˜ด๐˜ข๐˜บ ๐˜ต๐˜ฉ๐˜ข๐˜ต ๐˜บ๐˜ฐ๐˜ถ ๐˜ฎ๐˜ช๐˜จ๐˜ฉ๐˜ต ๐˜ฌ๐˜ฏ๐˜ฐ๐˜ธ ๐˜ด๐˜ฐ๐˜ฎ๐˜ฆ๐˜ต๐˜ฉ๐˜ช๐˜ฏ๐˜จ ๐˜ ๐˜ฅ๐˜ฐ๐˜ฏ’๐˜ต
๐˜•๐˜ฐ ๐˜ฎ๐˜ข๐˜ต๐˜ต๐˜ฆ๐˜ณ ๐˜ฉ๐˜ฐ๐˜ธ ๐˜ด๐˜ฎ๐˜ข๐˜ณ๐˜ต ๐˜บ๐˜ฐ๐˜ถ ๐˜ณ๐˜ฆ๐˜ข๐˜ญ๐˜ญ๐˜บ ๐˜ข๐˜ณ๐˜ฆ
s๐˜ช๐˜ฏ๐˜ค๐˜ฆ ๐˜ต๐˜ฉ๐˜ฆ๐˜ณ๐˜ฆ’๐˜ด ๐˜ฏ๐˜ฐ ๐˜จ๐˜ณ๐˜ฆ๐˜ฆ๐˜ฅ, ๐˜ต๐˜ฉ๐˜ข๐˜ต ๐˜ณ๐˜ถ๐˜ฏ๐˜ด ๐˜ฏ๐˜ฆ๐˜ข๐˜ณ๐˜ญ๐˜บ ๐˜ข๐˜ด ๐˜ฅ๐˜ฆ๐˜ฆ๐˜ฑ
๐˜ข๐˜ด ๐˜ต๐˜ฉ๐˜ฆ ๐˜จ๐˜ณ๐˜ฆ๐˜ฆ๐˜ฅ ๐˜ช๐˜ฏ ๐˜ฐ๐˜ถ๐˜ณ ๐˜ฉ๐˜ฆ๐˜ข๐˜ณ๐˜ต๐˜ด

The whole reason of their existence for a Big X firm is to continually sell you on what they know, whether it’s better or worse, because, once they have a foot in the door, you’re their cash cow … and the sooner they can convince you that you’re dependent on them, the better. Remember, they’ve stuffed their rafters with young turkeys that they need to get off the bench (or fall prey to the consulting bloodbath described by THE PROPHET in the linked article), and the best way to keep them off the bench is to make you reliant on them.

Unlike independent consultants like us (or small niche, specialist consultancies with limited resources), they don’t want to go in, do the job, deliver a result, and move on to something better (or a new project where they can create additional value for a client) … these Big X consultancies want to get in, put dozens of resources in a shared services center, and bill you 3X on them for life.

(If the doctor or The Revelator sticks with you for more than 12 to 24 months, it’s because we keep moving onto new projects that deliver new sources of value, not because we want to monitor your invoice processing for the rest of our lives, or star in the remake of “Just Shoot Me!”)

(And to those of you who told the doctor he was mean, he’d like to point out that while he was, and is, being brutally honest because that IS the modus operandi of the Big X consultancies, he wasn’t mean as he didn’t call them, or anyone they employ, a F6ckW@d. [That requires more than just following your playbook that is well known to anyone who wants to do their research.])

This brought the reply from The Revelator that:

In another article, he discussed the fact that VP Sales and Marketing people change jobs every two to three years.

As far as The Revelator could tell, they are put in an unwinnable position of hitting unreasonable targets based on transactional numbers rather than developing relationships and solving client problems. That is not a fair position because the focus shifts from what’s working for the client to hitting quarterly targets where, in many instances, the only client success is found in the press release.

The Revelator remembers many years ago talking with a top sales rep from Oracle who said that with his company you are only as good as your last quarter. When he said good, he was really talking about job security.

Ultimately, the most powerful testimony regarding the inherent flaws of the above approach is Gartner’s recent report that 85% of all AI and ML initiatives fail.

To this the doctor could only respond:

He can’t argue that. This is one of the problems with taking VC/PE money at ridiculous valuations (of more than 5X to 6X, which is the max that one can expect to recoup in 5 (five) years at an achievable year-over-year growth rate of roughly 40% without significantly increasing price tags for no additional functionality). The problem for Sales and Marketing is they now have to now tell the market that, suddenly, their product is now worth 3X what they quoted before the company took the VC/PE money at the ridiculous multiple and that if the customer pays only 2X (for NO new functionality, FYI), the customer is getting a deal. The problem is that the investors expect their money back in a short time frame WHILE significantly bumping up overhead (on overpriced Sales and Marketing), which is not achievable unless the company can double or triple the price of what it sells. This is often just not doable even by the best of marketers or sales people, which forces them out the door on a 2 to 3 year cycle. (Because, as you noted, as soon as they manage to get a few sales at that price tag, suddenly, as the investors realize they also need to add more implementation and support personnel as well, increasing overhead further, the Sales and Marketing rep quotas go up even more and all of them will eventually break if they don’t get out and go somewhere else just before they just can’t hit the unachievable target.)

The Revelator also noted that he now makes money through a low monthly fee that includes his experience and sales expertise, and that it’s a model he first used when he started his blog because making money is not bad when it is reasonably priced in relation to the services and value being delivered, and the doctor wholeheartedly agrees

in fact, the doctor used to do that too … but good luck finding more than one or two companies these days that honestly care about reader education and not just pushing their marketing message down a target’s throat … that’s why SI sponsorships are still suspended (and will be until he finds 4 companies that are willing to return to the gold old days where education came first — which, FYI, is one of the keys to long term success).

SI sponsorships included a day of advisory every quarter and a post covering the vendor’s solution (in the doctor‘s words, not theirs), which could be updated semi-annually if warranted and a new article whenever the vendor released a new module or significant new functionality (and it was the doctor‘s call as to what significant was).

At least The Revelator can still go back to Coupa or Zycus for sponsorship … EVERY SINGLE SPONSOR SI had pre-Spend Matters (when sponsorships were suspended on SI for obvious reasons) was eventually acquired (and why they all eventually dropped off).

(Just to be clear, the doctor is NOT saying it was the SI sponsorship, or even the doctor‘s advisory that resulted in their success [although he hopes it contributed], but he is saying that companies who are willing to listen and learn from experts, and who care more about educating and helping clients then just shoving a message down their throat, tend to do very well in the long run. Very, very well.

This is something the new generation of know-it-all thirty-somethings popping up start-ups in our space every other week don’t seem to get yet and likely won’t until they have their first failure! It’s just too bad they are going to take good investors, good employees, and beta/early clients down with them when there is no need.)

All Hail The Gruntmaster 6000!

It was more influential than you think!

The Gruntmaster 6000, first introduced in the The Name, and eventually realized by Infomercial is, more importantly, a great foundation to explain why the doctor started Sourcing Innovation and why it is still going SIX THOUSAND (6,000) published articles later (even though the GruntMaster 6000 ended up being an exercise machine with a graviton generator)! (And yes, this is the 6,000th published article on Sourcing Innovation.)

In The Name, it all starts with the team, including Dilbert, being challenged by the PHB (Pointy-Haired Boss) to come up with a new product (to replace the product that killed everyone who used it), starting with the name — which he believes is more important than whatever the product ends up being! A name that has to ultimately be approved by the CEO, who, of course, also believes that the name is the most important thing ever!

It’s an attempt to clarify, in a humorous fashion, both the absurdity of modern marketing for technology products and modern “suit” management who, when they are running a company they fundamentally don’t understand (still a big problem today, and we’ve had multiple recent examples of why accountants, bankers, and lawyers should NEVER run tech companies), over focus on details that just don’t matter.

And, more importantly, propagate the belief that all you have to do is select the “right” product, where the “right” product is obviously the one from the most successful company, because if a company is successful, the product must be good, right? And how do you identify the most successful company? The one that looks most successful, and, obviously has the most successfully sounding product name, right? Right?

WRONG! It’s the propagation of this problem into Procurement which is why Sourcing Innovation exists. The belief that you can pick a few successful companies, throw a problem over the wall, and get a good solution. And while you theoretically can, if you don’t pick the 3 best companies for you, the odds of you getting a good solution are not good. In fact, the odds of you getting a good solution are vanishingly close to zero! (That’s why at least two thirds of technology projects fail. Standish Group’s CHAOS 2020 report analyzed 50,000 global projects and reported 66% failure rate. And that’s one of the lowest reported failure rates the doctor has ever seen. Many of the reports he’s seen over the last two decades report 70% to 85% technology project failure.)

And you can’t pick good companies unless you know

  • what makes a good product
  • what makes a good company
  • … and, most importantly …
  • what you need the product to do
  • what you need the company to do

And that requires education. Continual, never-ending, education. Education that no one was giving you in the sea of (marketing) madness. That’s why Sourcing Innovation exists, and why it is still going SIX THOUSAND published articles later.

And, FYI, because the focus is on education, with the exception of a few hundred posts on products that no longer exist, the vast majority of what was written in the early days is as valid today as it was then. For example, the doctor, thinking ahead to the inevitable conclusion of outsourcing (and understanding EVERYTHING wrong with it*), has been preaching the desperate need to return to on-shoring, near-sourcing, and even home-shoring for the past fifteen (15) years! And every single one of the 101 Procurement Damnations still exists today! So feel free to jump back to the second post on Strategic Sourcing Innovation Defined published on 2006-June-10 and start reading forward. the doctor is sure you’ll learn something from almost every single post! And the best thing about going back to the beginning, you can read an hour a day every day for the next year and still not make it to 2024! (At roughly 5.8 MILLION words, and an average reading speed of 238 words per minute, the average reader will have over 406 hours of reading!)

* as he did study the history of trade as well as pre-recorded history, early history, archaeological, and anthropological methods [even though sometimes he thinks a better understanding of cryptozoology might help him understand modern business better] … and he’s even gave a presentation on the archaeology of spend analysis, as many of the best algorithms for spend analysis have their roots in the algorithms developed by mathematicians for archaeologists …

Rabbit Season? Duck Season?

Is it just me or does the annual return of “conference” season remind you of the old Looney Tunes Rabbit Season, Duck Season shorts with all of the competing, similar, but yet mangled and confusing messages about what you should be focussing on, what conferences you should be going to, and what you should be hunting for?

For the younger generation, the classic “rabbit season, duck season” was a “hunting” trilogy of Warner Bros shorts starring Bugs Bunny, Daffy Duck, and Elmer Fud that began with Rabbit Fire in 1951, that was the first to show Daffy as a flawed, greedy, vain character who always, secretly, wanted the spotlight (and not just a screwball comedian who wanted to make you laugh).

In this particular episode, where it is supposedly rabbit season, Daffy lures Elmer Fudd (the hunter) to Bug’s burrow and convinces Bug that a “friend” is there to see him, seemingly aiming to take out the competition. High jinks ensue until Bugs manages to trick Daffy into saying it’s actually duck season, at which point Elmer tries to shoot Daffy. Then the two find increasingly creative ways to turn the tables until the hunter decides its rabbit and duck season, at which point both realize how stupid they were and work together to make it “Elmer” season …

So why do I think of this cartoon?

Well, first of all, many vendors spend a lot of the year trying to eliminate their competition from your consideration by claiming that the competitor’s product is lacking key features you need for efficiency, value, or ROI (Daffy tricking Elmer into hunting Bugs); then, during Conference Season, the competition (Bugs) strikes back with slicker messaging that encourages the buyer to turn on the vendor that may (or may not) have led them astray; then the original vendor (Daffy) starts copying the message of the competition, with a few twists to get the attention back; and the marketing and messaging dance continues until the buyer (Elmer) gets simultaneously so confused and so angry that he wants to eliminate both vendors (Daffy and Bugs) from consideration, at which point the vendors need to team up (or at least call a temporary back-room truce) in some way to trap the buyer back into buying at least one of their solutions, and if there isn’t complete overlap, preferably both!

As far as the doctor is concerned, this misses the point of conference season, which is supposedly to educate you about the offering and the value you can get from it. Which would be great if that was what the majority of events did, but over the years, I found that less and less of a reality at the bigger shows by the bigger vendors and conference players. Starting with the latter half of the last decade, the events at many of these players have become less about education and more about how spectacular of a show the vendor or conference group could put on as vendors, professional organizations, and conference groups tried to show value by showing how successful they were, instead of just keeping it simple and showing how successful you could be with their technology, education, processes, or platforms (built up from the technology and processes of their sponsors).

I don’t know about you, but I’m a little bit saddened by it — I know it’s been a staple in the enterprise software world for a while, going back to the old trade-show mentality where if you couldn’t afford the poshest venue and the biggest suite, then obviously you weren’t successful … but isn’t Procurement supposed to be about your success and not theirs?

Although it means regular work is less guaranteed, the doctor is actually quite happy to be independent now as it means he can pick and choose what conferences and events he does, and more importantly, does NOT have to even consider going to as, this year, he’s only seen ONE event by a top suite vendor he’d actually like to attend. (Compare this to the early and mid teens where he was quite interested in going to almost all of them … )

Now, I should say, this viewpoint, which is the doctor‘s and the doctor‘s alone, is lobbied primarily at a subset of the big vendor conferences and the big conferences / trade shows and not the smaller vendors or smaller workshops. There are still plenty of smaller and best-of-breed vendors putting on great educational events, many of which even us analysts don’t hear about until it’s too late, that are more than worth your time and money to attend.ย  (Heck, sometimes even us old dogs and cats who’ve been in this for over two decades will learn a new trick.)

In other words, given that your time, money, and patience is limited, don’t fall for the hype and instead look for the education that you need to make the right decision as to what platform, product, process, or service your organization needs next and whom you should buy it from. And enjoy the fact that you know you don’t have to go to everything or anything if it’s not relevant!

There’s Nothing Wrong With Using Upstream vs. Downstream

Only with trying to fix a continuous process to a discrete point in time.

Confused? Let’s back up. Last Friday the doctor‘s co-conspirator in the definition of Contract Lifecycle Management (CLM) went on a rant about the use of upstream and downstream without a paddle in contract management. In his Friday rant, the maverick claimed that if you put supplier management in the upstream bucket, you’ve violated the whole naming convention and that upstream can have a time dimension to it and represent earlier processes, but it can also have a supply chain connotation and represent multiple tiers farther upstream in the inbound supply chain โ€“ working back to raw commodities. So, itโ€™s confusing in that regard in terms of time vs. space. However, the maverick‘s biggest gripe seems to be it puts the signature of the contract artifact as the singularity of the procurement universe โ€“ sort of like using B.C. and A.D. to define world history to non-Christians.

So what? We need a way to measure time and a milestone against with to measure progress.

As humans, we don’t know exactly when we first evolved (or, if you follow a religion based on a form of creationism, were created), so we can’t choose that date as a reference point for a precise timeline. We barely have decent records back to 0 AD, and if we go back more than a few hundred years beyond that, we don’t really have enough to establish a good date system. So the date chosen is just as good as any other date during that period.

Similarly, if you look at the full contract lifecycle, just when does the project start? When is the first analysis or opportunity identification performed that leads into the business case. Hard to say. We know the date a sourcing project is approved, but just like 0 AD, before that gets a bit fuzzy, but there could still have been significant events that led to approval which are really part of the Procurement process and which should not be overlooked just because a date can’t be fixed. Similarly. When does it end? The date the contract officially finishes? The date the post mortem is done? The date a new contract is signed? The date the switchover actually occurs to a new supplier? The date the supplier is officially retired from organizational service? Hard to say.
So choosing the date of signing as a reference point is a logical choice for dividing up the process and English commonly uses the same word to mean different things in different contexts so there’s no reason it shouldn’t be clear when someone is talking about upstream in the contract/category management process and upstream in the supply chain. (After all, we live with sourcing and sourcing in Procurement is much different than sourcing in HR.)

In other words, the definitions make sense and since they are now commonly accepted, let’s not bicker about how they are defined but about how some providers and analysts tend to misuse them by trying to fix-point activities that actually need to occur throughout the process, like category management, supplier management, compliance management, and risk management. Use upstream and downstream to indicate when particular activities in a process should occur, not to categorize processes that exist simultaneously with the contract lifecycle, and that build off of the primary artifact, the contract, in new and interesting ways (when done right).

Not everything fits in a one or two dimensional model, and we need to be prepared to accept the true complexity of the situation. That’s why many tenders these days are complex and why organizations that don’t have spend analysis can’t identify the inherent complexity and why organizations that don’t have strategic sourcing decision optimization can’t adequately deal with the complexity. Just like the world is not flat, neither is the sourcing model or the necessary execution process that follows. A spreadsheet won’t cut it and neither will point-in-time processes. However, we still need fixed points in time to measure against (forward and back), and at least the date a contract is signed is a point in time everyone across all departments in the organization can agree on.