Category Archives: Guest Author

High Definition Adoption Measurement Part III

Today’s guest post is from John Shaw (Senior Director, Adoption Services) of BravoSolution, a leading provider of spend analysis, (e-)sourcing, supplier performance management (SPM) and healthcare sourcing solutions and a sponsor of Sourcing Innovation (SI). It is the third of an eight (8) part series, which, when complete, will form a white-paper that BravoSolution will be releasing to the general populace next Wednesday.

Yesterday’s post (Part II) introduced us to High Definition Adoption Measurement (HDAM) and framed the solution in the context of e-Sourcing, which presents a common complex adoption challenge.

 

Today’s post addresses the typical view from 30,000 feet and how it leaves something to be desired.

Adoption from 30,000 Feet:

The report below highlights what appears to be a very successful Go-Live followed by a year of continual growth of system usage. This is the 30,000-foot view and it should answer some very fundamental questions like:

  • “Have we trained everyone?“
  • “How many of our Souring Events are going through the system?“
  • “Is usage increasing according to plan?“

A view of adoption from 30,000 feet.
These 30,000-foot views are useful. The report could apply to any of our three (3) companies and might be presented at an executive level as evidence of a successful first year of rollout. In this example, it seems our companies are generally moving in the right direction. If we saw problems at this level, we could easily identify the low hanging adoption fruit to pursue.

But if we reflect back upon the business case of each of our example companies, this view does not really tell us much on how any of them are progressing in increasing supplier value, maintaining transparency or increasing efficiency.

Take the following “unknown issues” common in e-Sourcing organizations. Each issue is counter-productive to the organization’s goals, but is not evident on the report:

What you don't see at 30,000 feet.
These examples are the tip of the iceberg. They illustrate how users can appear at a 30,000-foot level to be using a system correctly but also how that 30,000-foot view can be deceptive. When this occurs to your organization, the results are simple. Your organization isn’t realizing the full ROI that you set out to achieve and the Adoption Team doesn’t have visibility into the problems they need to fix.

Part IV will provide an example case study that describes some of the adoption challenges at a global manufacturer.

High Definition Adoption Measurement Part II

Today’s guest post is from John Shaw (Senior Director, Adoption Services) of BravoSolution, a leading provider of spend analysis, (e-)sourcing, supplier performance management (SPM) and healthcare sourcing solutions and a sponsor of Sourcing Innovation (SI). It is the second of an eight (8) part series, which, when complete, will form a white-paper that BravoSolution will be releasing to the general populace next Wednesday.

Yesterday’s post (Part I), which noted that rolling out a technology solution isn’t anything like building the “Field of Dreams“, pointed out that just giving the team the tools they need isn’t enough. The leadership team also needs to acquire a set of tools designed to help their team succeed. In short, they need an “adoption toolkit” to make sure the tools are adopted as standard operating procedure.

Today’s post will introduce the concept of High Definition Adoption Measurement (HDAM), but first, it will frame the problem.

E-Sourcing: A commonly complex adoption challenge

For the purposes of this paper, we’ll discuss Adoption Measurement in the context of e-Sourcing simply because so many organizations use an e-sourcing tool to varying levels of success. It serves as an easy-to-identify-with example. Interestingly, the adoption challenges inherent in e-sourcing can be quite complex. We hope this paper will challenge you take an in-depth look at how you apply adoption measurement in your organization, both for e-sourcing and other solutions you use to support your business.

What is High Definition Adoption Measurement?

High Definition Adoption Measurement is a catchy way of saying that we are going to measure and understand how your organization is using a solution. It is a process of understanding your business case and tailoring a set of standard measurements to create visibility into how well the behaviours of your people are supporting your organization’s goals. It includes sharing these metrics with your team, setting collaborative targets and working towards those targets.
Adoption Measurement serves as the basis for prioritizing opportunities for continual improvement and defining solutions for capitalizing upon those opportunities. It essence, it is the Opportunity Assessment and Wave Planning processes of the Adoption Professional!

Setting the Stage: Understand the Business Case

The first step in measuring adoption is to understand why a particular tool is being implemented by an organization. While this may seem both obvious and easy for something like an e-Sourcing tool, I can assure you that one business case does not fit all organizations, no matter how well the benefits of e-Sourcing have been documented. For our discussion, we will highlight 3 organizations that have been modelled after common customer profiles in BravoSolution’s customer base.

3 Distinct e-Sourcing Needs
 


Three companies, three e-Sourcing needs.
Observe that each of these organizations is trying to solve a different problem with the same e-sourcing tool. Although they all may be able to benefit from using e-Sourcing to achieve additional supplier value, increase transparency to the sourcing process and increase team efficiency, they each have their own focus areas.

Part III will describe the typical view of adoption from 30,000 feet and the useful- and useless-ness of such a view.

High Definition Adoption Measurement Part I

Today’s guest post is from John Shaw (Senior Director, Adoption Services) of BravoSolution, a leading provider of spend analysis, (e-)sourcing, supplier performance management (SPM) and healthcare sourcing solutions and a sponsor of Sourcing Innovation (SI). It is the first of an eight (8) part series, which, when complete, will form a white-paper that BravoSolution will be releasing to the general populace next Wednesday. However, since SI is focussed on delivering educational, innovational, and inquisitive content on a regular basis, BravoSolution has been kind enough to give SI readers a first-look.

So you are a seasoned leader in the rapidly maturing field of strategic sourcing and your leadership team continually challenges you to maximize the value of your team to the organization. You are, of course, resource constrained. Before you lay an open field of opportunities, yet you hold in your hands a limited amount of time, money and people.

And so the work begins! You prioritize the opportunities, build a budget and set about bringing the right mix of people, process and tools forward. As a part of this planning, you invest in giving your people the right set of tools and processes for the job. In the field of Strategic Sourcing this usually means the implementation of solutions to support activities like spend analysis, sourcing execution and contract implementation.

Unfortunately, rolling a spend analysis or e-sourcing tool out across a global organization isn’t anything like building the “Field of Dreams“. Just because you’ve built and shared the solution doesn’t mean the team will use it AND use it correctly. Just as a Sourcing Professional needs the right tools in their toolkit, the leadership team needs a set of tools designed to help their people succeed with the solution and tools they have provided. They need an “adoption toolkit” to make sure the solutions and tools are adopted as standard operating procedure.

The Adoption Toolkit

The most successful adoption programs start at the very beginning of the solution implementation project and are institutionalized into the ongoing operations of a business. In practice, most solution implementations are heavily front-loaded. For a period leading up to the “Go-Live”, organizations invest heavily in solution configuration, communications, training, documentation and process consulting. When the solution goes live, the broader team celebrates, claps each other on the back and leaves the solution’s ultimate success to the solution owner and their super users. We’ll call these individuals left in charge of the solution the Adoption Team.

There are a number of critical tools that should be available to the Adoption Team, but the most important by far are the tools by which they will measure the ongoing adoption of the solution by the organization. Measuring adoption progress against a solution’s business case is the single most important element in understanding where to direct the time and energies of the Adoption Team. Without high quality adoption measurement, an Adoption Team is analogous to a ship at sea without a navigation system; the best and most experienced captains may find their way, but the majority will be left drifting without direction or focus.

Part II will define High Definition Adoption Management (HDAM) and describe it in the context of e-sourcing, a commonly complex adoption challenge.

Innovation in Sourcing

Today’s guest post is from Chetan Raniga, who is General Manager, Americas at Trade Extensions.

As someone who’s been in the strategic sourcing field for over ten years as a consultant and product manager, it’s been interesting to see the rapid evolution of sourcing solutions over the past few years. Leading solution companies now realize that users need solutions that feel familiar; that’s why Excel integration is common among leaders in the supply management arena. It’s the same reason Coupa has screens that almost mirror Amazon.com — providing an interface and workflow that’s both familiar and intuitive. Another example is the use of dashboards — the charts and alerts in Trade Extensions remind users of Mint.com, a popular personal finance site, though they show vastly different types of data!

Here are some other changes for the better:

Collaboration and Workflow:
The sourcing solutions of the past were extremely tactical (e.g., automating the process of running an RFQ or auction for a specific category), and therefore, didn’t give buyers the ability to share ideas, exchange documents, and view the real-time status of their sourcing initiatives. Now, platforms provide robust project management capabilities with Gantt charting, custom workflows (e.g., only have new suppliers go through the qualification step), document sharing, and Skype-like chat features. A buyer can see exactly which suppliers, team members, and stakeholders are online, and instantly communicate with them. Audit trail and logging capabilities have also gotten stronger, which is important for the confidence of both buyers and suppliers in using these platforms. Multiple teams are now using these platforms to share data. For example, a Direct Materials sourcing group can incorporate freight pricing from a tender conducted by the Logistics team. The group can use the platform to determine which items will use the suppliers’ freight (delivered pricing) and which will use the 3rd party carriers’ freight (FOB plus freight).

Flexibility:
Systems of the past didn’t provide the flexibility that we have today in collecting inputs. Labels such as ‘Price per Unit’ would be hard-coded or the cost formula would only support a limited number of operators and functions. Data entry was also cumbersome and error-prone since it involved either manually entering or copying-and-pasting vast amounts of data. Today’s solutions integrate with Excel, so that existing data and formulas can be easily leveraged. For example, item, demand, and cost component data stored on separate Excel spreadsheets can be uploaded with one click. Even better, some solutions allow users the ability to customize the supplier’s bid form. This is critical to change management since companies can continue to use their existing bid forms in the bid gathering phase but obtain the decision support and reporting benefits in the analysis phase. These improvements have led to even shorter RFQ/P creation times.

It’s also now possible to run auctions with optimization (a step forward in utility from the original concept of reverse auctions), and to run RFQ/Ps with feedback — blurring the line between RFQs and auctions but also going further by providing custom feedback (e.g., a custom message of “Not Competitive” is shown when the bid is x% greater than the median price).

Usability in the Analysis Stage:
The one sourcing area that has lagged in adoption has been the use of optimization (which the doctor has defined as the application of one or more rigorous analytical techniques to a well-defined model to generate the absolute best decision from a multitude of possible alternatives in a rigorous, repeatable, and provable fashion). It sounds complicated, and in the past it really was. For example, if a customer wanted to see what the result would be if all the business went to incumbents at their current proportions, then she’d have to create a rule limiting allocation for each item and affected supplier. That’s painstaking when you have a couple of hundred items — but most projects had thousands of items! Nowadays, in a modern optimization solution (which include the solutions by Trade Extensions and BravoSolution), the buyer just selects one rule, written in plain English (as shown below).


Even better, new platforms allow buyers the ability to create rules in Excel and then upload them. In the example below, the buyer is setting limits by plant and supplier simply by completing a table.


Reporting:
The solutions of the past didn’t offer much in terms of reporting. Most had a couple of pre-defined reports that exported to Excel. Buyers had to spend additional time modifying the reports — even changing labels and creating pivot tables — before they could present the results to their peers and managers.

Solutions today have made major strides in this area. Leading spend analysis tools (which include BIQ as well as Trade Extensions) allow users to create custom reports that can be saved as templates and re-used. The ability to choose specific dimensions (rows), columns (facts), and other information means that users no longer have to go outside the system for further manipulation. Some tools even allow the ability to drill-down/up on data (e.g., view allocation data by country first, then by region, then by state, and finally by city/plant).

We have heard buyers comment that their analysis time is shortened by three-and-a-half (3.5) weeks on average by using the new decision support and reporting capabilities mentioned above.

Thanks, Chetan!

Feces!! Dookie!! Scheisse!! How do you define Value?

Today’s guest post is from Dalip Raheja, President and CEO of The Mpower Group (TMG) and a contributor to the News U Can use TMG blog.

Let me answer the question first. It doesn’t matter how you define value. That definition is actually worth a bucket of crap (I missed that one). But I digress and will come back to that question later. Let me address the other part of my title first by asking you a hypothetical question. Regardless of whether you believe in climate change or not, if I were to tell you that there was a way to provide you with water that you could bathe in and drink with a 100% certainty that it was cleaner than any other water source, would you use it? Now, if I were to tell you that it was actually recycled water but was still able to prove to you scientifically that it was absolutely clean, would you still use it? Would your answer still be the same if I were to tell you that it was waste (sewage) water from where you live?

It turns out that people strongly resist the 3rd option of using local waste water, even if they are facing a drought. Water prices are going up and scientists have categorically proven that it is cleaner than almost ALL other water sources (including natural springs). In addition, it has a significant positive impact on the environment, preserves water sources, eliminates the need to dispose of waste water, etc. etc. etc!

According to Alix Spiegel, from NPR on “why cleaned wastewater stays dirty”, “No matter what the scientists or environmental organizations said, the public saw it differently: They thought that directly reusing former sewage water was just plain gross.” It turns out that you can take the physical excrement out of the water but you cannot take the cognitive crap out of it! The technical term for this is psychological contagion. The fact that ALL water has someone’s feces in it (upstream sewage) and the fact that birds and fish are contributing their feces is irrelevant. It just cannot be my scheisse. And it turns out that the only way you can get rid of my psychological dookie is to process the water through a natural aquifer, even though that will take 10 years AND it actually makes the treated water less pure!

The NPR article goes onto say that those working on the project didn’t feel that the public was looking at the scientific facts and simply rejected the water, infuriating water engineers who felt that the public was being irrational. If you replace public with stakeholders (customers) in that statement, it might represent what a large number of Sourcing/Supply Chain professionals might say. The reason is that we continue to define value as we see it, whereas our customers define value totally differently. Continuing to throw more spend analysis, decision optimizers, and Total Cost of Ownership (TCO) models at them is not going to alter the fact that our definition of Value Drivers is fundamentally at odds with each other. Unless we change our definition of value to match the definition of value by our customers, we will continue to knock at the proverbial C level door as a profession. By the way, redefining the Value Drivers is only half the battle. Actually adopting and implementing them is the real challenge.

Thanks, Dalip.