Category Archives: Knowledge Management

Follow the Money — To Find the Spigots that can Turn it Off!

A recent CPO Crunch article over on Procurement Leaders said to Follow the Money as a focus on profit contribution can provide a starting point for improving supply chain transparency.

The article states that having knowledge of our suppliers is one thing, but it’s quite another to have a good understanding of who are suppliers’ suppliers are … not to mention those even further beyond and in a complex, risk-riddled world, such visibility is crucial and can bring meaningful competitive advantage.

In other words, following the money can increase profitability by allowing you to optimize the flow. Which is true, but only half the picture.

The other half is how the flow can be diverted or stopped. Two important things to remember about money flows. First, if these money flows present an opportunity for you, they present an opportunity for others. Not just outright theft of money (or product), but skimming, fraudulent billings/overpayments/handling fees (or your goods don’t move), and even fraudulent good substitution (with knockoffs). Secondly, if any input to any of these flows stops (beyond your visibility), the entire flow stops. And these flows could stop 6 levels down at the source.

For example, let’s say you are in medical device manufacturing or microwave-based manufacturing. Then you need thulium, which is one of the rarest rare earth minerals in the world. If a mine closes, even temporarily, and that mine is the only source of supply into your raw material or component supplier (that produces your enclosed radiation source or manufacturing ferrites), what do you think is going to happen? Production will stop, and your inventory will disappear. Or if you need a custom chip for the control system in your high end electric car, and the one plant currently capable of producing it experiences a fire. (This HAS happened, and chip shortages have been responsible for MULTIPLE shortages in MULTIPLE automotive lines. Just Google it.)

If your only production is in a country with geopolitical instability or deteriorating relations with your country, and borders (temporarily) close, what happens? And so on. If you don’t know the myriad of ways the spigots can be turned off, it doesn’t matter how well you know, or optimize, the money flow. These days, it’s all about risk management, visibility, and quick reaction if a spigot gets turned off to get it reopened again.

opstream: taking the orchestration dream direct!

INTRODUCTION

opstream was founded in 2021 to bring enterprise level orchestration, previously only available to IT, to Procurement in a manner that supported all of Procurement’s needs regardless of what that need was. In the beginning, this was allowing Procurement to not only create end-to-end workflows from request through requisition through reaping, but also create workflows out into logistics tracking, inventory management, and supply chain visibility, as required. Workflows that incorporated not just forms, but processes, intelligence, and, most importantly, team collaboration.

In other words, not much different than most of the other intake-to-orchestration platforms that were popping up faster than the moles in whack-a-mole at an initial analysis, especially since every platform was, and still is, claiming full process support, limitless integration, and endless collaboration while bringing intelligence to your Procurement function. (There was one big difference, and we’ll get to that later.)

However, unlike many founders who came from Procurement and assumed they knew everything that was needed, or from enterprise IT orchestration solutions who thought they knew everything Procurement needed, the founders of Opsteam admitted day one they didn’t know Procurement, interviewed over 400 professionals during development, and also realized the one thing that their orchestration platform had to do when it came to Procurement intake and orchestration, if the platform was to be valuable to their target customers, was direct. And they were 100% right. Of the 700+ solutions out there in S2P+ (see the Sourcing Innovation MegaMap), less than 1/20th address direct in any significant capacity, and none of the current intake-to-orchestrate platforms were designed to support direct from the ground up on day one.

So what does opstream do?

SOLUTION SUMMARY

As with any other intake-to-orchestrate platform, the platform has two parts, the user-based “intake” and the admin-based “orchestrate”.

We’ll start with the primary components of the admin-based orchestrate solution.

Intake Editor

The intake editor manages the intake schemas that define the intake workflows which are defined by request type. In opstream, an intake workflow will contain a workflow process for the requester, approver(s), vendor, and the opstream automation engine as well as a section to define the extent to which the approvers can impact the workflow.

The workflow builder is form based and allows the form builder to build as many steps as needed, with as many questions of any type as needed, using pre-built blocks that can accelerate the process, any and all available data sources for request creation and validation, and any of these sources, from all integrated systems, can also be used for conditional logic validations. This logic can be used to determine whether or not a step, or a question, is shown, or what values are accepted, or if it will influence a later question on the form.

Building the workflow is as easy as building an RFX as a user is just selecting from a set of basic elements such as a text block, numeric field, date/time object, multiple choice, data source, logic block, etc.

The data source allows a user to select any object definition in the data source, select an associated column, and restrict values to entries in that column. And the form will dynamically update and adjust as the underlying data source adjusts.

In addition to having workflows that adjust as related systems and data sources change, the platform also has one other unique capability when it comes to building workflows for Procurement requests. It understands multiple item types: inventory item, non-inventory item, and service — which are understood by many platforms — other charge, which is a capability for capturing non PO spend that only a few deep Procurement platforms understand, and, most importantly, assembly/bill of materials, which is an option the doctor hasn’t seen yet (and which enables true direct support).

As long as the organization has an ERP/MRP or similar system that defines a bill of materials, then the opstream platform can model that bill of materials and allow the administrators to build workflows where the manufacturing department can request orders, or reorders, against part, or all, of the bill of material.

In addition, if the organization orders a lot of products that need to be customized, such as computer/server builds, 3D printer assemblies, or fleet vehicles, the admins can define special assembly / configurator workflows that can allow the user to specify every option they need on a product or service when they make the request.

The approval workflows can be as sparse or as detailed as the request process, and can have as few or as many checks as desired. This can include verifications against budgets, policies, and data in any integrated system. As with any good procurement systems, approvals can be sequential or parallel, restricted to users or opened to teams, and can be short circuited by super-approvers.

In addition, workflows can also be setup for vendors to get requests from the buyer, provide information, and execute their parts of the workflow, including providing integration information to their systems for automatic e-document receipt, transmission, update, and verification.

Finally, the automation workflow can be setup to automate the creation and distribution of complete requisitions for approval, complete purchase orders for deliveries, the receipt and acknowledgement of vendor order acknowledgements and advanced shipping notices and invoices, the auto-transmission of ok-to-pay and payment verifications.

But it doesn’t have to stop there. One big differentiator of the opstream platform is because it was built to be an enterprise integration platform at the core is that — as we’ve already hinted about in our discussion of how, unlike pretty much every other intake/orchestrate platform, it supports assembly/bill of materials out of the box by integrating with ERPs/MRPs — it doesn’t have to stop at the “pay” in source-to-pay. It can pull in the logistics management/monitoring system to track shipments and inventory en route. It can be integrated with the inventory management system to track current inventory and help a Procurement organization manage requisitions against inventory and guide buyers when inventory needs to be replenished. It can also integrate with quality management and service tracking systems to track the expected quality and lifespan of the products that come from inventory and warn buyers if the quality or number of service issues is increasing at the time of requisition or reorder.

Data Source Manager

opstream comes with hundreds of systems integrated out of the box, but it’s trivial for opstream to add more platforms as needed (as long as those platforms have an open API) as the opsteam platform has built-in data model discovery capabilities and support for the standard web connection protocols. This means that adding a new data source is simply a matter of specifying the connection strings and parameters and the source will be integrated and the public data source auto-discovered. The admin can then configure exactly what is available for use in the opstream solution, who can see/use what, and the synch interval.

Now we’ll discuss the primary components of the buyer-based orchestration solution.

Requests

The request screen centralizes all of the requests a user has access to which include, but are not limited to, requests created by, assigned to, archived by, and departmentally associated with the user. They can be filtered by creator, assignee, status, request type, category, time left, date, and other key fields defined by the end user organization.

Creating a new request is simple. The user simply selects a request type from a predefined lists and steps through the workflow. The workflows can be built very intelligently such that whenever the user selects an option, all other options are filtered accordingly. If the user selects a product that can only be supplied by three vendors, only those vendors will be available in the requested vendor drop down. Alternatively, if a vendor is selected first, only the products the vendor offers will be available for selection. Products can be limited to budget ranges, vendors to preferred status, and so on. Every piece of information is used to determine what is, and is not, needed and make it as simple as possible to the user. If the vendor is not preferred or the product not preferred, and there is a preferred vendor or product, the workflow can be coded to proactively alert before the request is made. The buyer can also define any quotes, certifications, surveys, or other documentation required by the supplier before the PO is cut. (And then, once the requisition is approved, the vendor work stream will kick-off). And, once the vendor work stream is complete, the final approvals can be made and the system will automatically send the purchase order and push the right documentation into the right systems.

Vendors

Vendors provides the user with central access to all loaded organizational vendors and provides a quick summary of onboarding/active status, preferred status, number of associated products, # of associated requests, and total spend. Additional summary fields can be added as required by the buying organization.

Documents

Documents act as a central document repository for all relevant vendor, product, and Procurement related information from request through receipt, vendor onboarding through offboarding, and product identification through end-of-life retirement of the final unit. Documents have categories, associated requests, vendors, and/or products, status information, dates of validity and other metadata relevant to the organization. Documents can be categorized into any categorization scheme the buying organization wants and can include compliance, insurance, NDAS, contracts, security reports, product specifications, product certifications, sustainability reports, and so on.

Analytics

The analytics component presents a slew of ready made dashboards that summarize the key process, spend, risk, compliance, and supply chain inventory metrics that aren’t available in any individual platform. Right now, there is no DIY capability to build the dashboards and all have to be created by opstream, but opstream can create new custom dashboards really fast during rollout and you can get cross-platform insights that can include, but not be limited to:

  • process time from purchase order (e-Pro) to carrier pickup to warehouse arrival (TMS) to distribution time to the retail outlets (WIMS)
  • contract price (CMS) to ePro (invoice) to payment (AP) as well as logistics cost (invoice) to tax (AP) to build total cost pictures for key products relative to negotiated unit prices
  • risk pictures on a supplier that include financial (D&B), sustainability (Ecovadis), quality (QMS), failure rate (customer support), geolocation (supply chain risk), geopolitical risk (supply chain risk), transportation risk (OTD from the TMS), etc.
  • compliance pictures that pull data from the insurer, regulatory agencies, internal compliance department, and third party auditor
  • supply chain inventory metrics that include contractual commitment (CLM), orders (ePro), fulfillments (inventory management), current inventory (inventory management), commitments (ERP/MRP), etc.

In addition, since all data is available through the built-in data bus, if the user wants to build her own dashboards, she can push all of the data into a (spend) analytics application to do her own analysis, and with opstream‘s ability to embed third party analytics apps (PowerBI for now, more coming), the user can even see the analytics inside the opstream platform.

This is the second main differentiator of opstream a user will notice. The founders realized that not only is data key, so is integrated analytics and they built a foundation to enable it.

Which leads us to the third and final differentiator you don’t see, the data model. The data model is automatically discovered and built for each organization as their systems are integrated. Beyond a few core entities and core identifiers upon which the data model is automatically built and generated, opstream doesn’t fix a rigid data model that all pieces of data need to map to (or get left out of the system). This ensures that an organization always has full access to all of their integrated data upon which to do cross-platform analytics on process, spend, inventory, and risk.

CONCLUSION

opstream understands there is no value in intake or orchestration on its own, and that for it to be relevant to Procurement, they have to do more than just connect indirect S2P systems together. As a result, they have built in support for direct, dynamic data model discovery, and integration with end-to-end enterprise systems that power the supply chain, allowing an organization to go beyond simple S2P and identify value not identifiable in S2P systems alone. As a result, they should definitely be on your shortlist if you are looking for an integration/orchestration platform (to connect your last generation systems to next generation systems through the cloud) that will allow you to increase overall system value (vs. just increasing overall system cost).

Procurement Leaders Listen to Roxette!


How do you do (do you do) the things that you do?
No one I know could ever keep up with you
How do you do?
Did it ever make sense to you …

A recent article over on Procurement Leaders asks CPOs why do you do and notes that a recent exercise they’ve been carrying out has been to ask CPOs to share the value propositions they have in place for their function.

Procurement Leaders’ goal was to force extremely busy people to take a step back and think deeply about why they do what they do. What are the ultimate goals of those negotiations with suppliers? Why are they spending time building relationships with certain suppliers and not others? Where should scarce resources and investment dollars be spent? This is because while a value proposition for a Procurement department is not an easy thing to produce and even more challenging to agree and implement, the provocation can allow a Procurement Department to get back to strategy, think about how our decisions affect our stakeholders, suppliers and the communities we do business in.

And while a Procurement department should understand its value proposition, because it helps it focus and relay its value, getting everyone in the organization to agree can be a very extensive effort and extremely time consuming. Furthermore, when you consider the possibility that the “value proposition” ultimately agreed on could be such a mish-mash of different viewpoints and demands to the point that it adds absolutely no value whatsoever, just like a corporate “mission statement” when everyone gets to add their bit to it (and the end result is no different than what the Dilbert Mission Statement Generator used to generate).

However, if you look at the example questions Procurement Leaders’ quoted, you realize that while a vision might be a good goal, a better effort, or at least a better way to start, is to ask the C-Suite to outline it’s top goals for the year, and then for the Procurement organization to identify the best ways they can meet those goals. From there they can identify: which categories should be strategically sourced, which products or services are critical for them, which suppliers are likely critical, and then, for each project, define the value and the goal and not spend effort building relationships with suppliers who are supplying tactical products or services that can be just as easily obtained from the next three lowest bid suppliers and instead spend time developing relationships with suppliers who are critical, even if the overall spend is low. For example, control chips in cars and power regulation systems are extremely critical and often only (capable of) being produced by a few suppliers due to highly specific requirements or proprietary natures. Compared to the costs of the steel, the transmission, the engine and/or the batteries, and even the tires, the total spend might not even register when the chips are only a couple of dollars each — but if a supplier failure, logistics delay, or raw material shortage shuts down your entire production line because you didn’t see a shortfall coming and either work with your supplier to build up an inventory or work with the backup supplier to allow production to be ramped up quickly, hundreds of millions of dollars in revenue could be at stake.

Furthermore, no effort should be spent “strategically” sourcing a product or category where the payback isn’t at least 3X the cost of the manpower required to do so. If an automated multi-round RFX with automated feedback or a reverse auction will get you 99% of the savings and the last 1% won’t even pay for 3X the salary and overhead of the buyer, it’s just not worth it if this prevents the organization from sourcing a lower cost category with a 5% savings potential through better analysis and negotiation. Know the value, define the value, and only put effort in where there is real value to be gained. Otherwise, use appropriate automation or redefine categories and projects. (Definitely don’t go nuts and RFQ everything, because even the squirrels will know you’re nuts if you do. But maybe do some overarching sourcing or negotiation that you can just cut POs or one-time orders against for a year. Sometimes just negotiating for 20% off of lowest list price in a 30 day window [and carefully tracking and documenting those prices to prevent invoice overcharges] is enough to automate catalog orders.)

And similar logic applies to all Procurement (related) activities. While machines can’t replace procurement professionals, they can take over the tasks where their intervention doesn’t add value. That’s the point. So think before you act, and act appropriately.

Dear Fellow Analysts: It’s Time to Step Up And Deal with the PROCUREMENT STINK!

Because if we don’t, no one else will!

What am I talking about?

As per last Wednesday’s article, PROCUREMENT STINKS and we just can’t deny it anymore. In a nutshell, and this is just the tip of the garbage heap:

  1. Case studies are ranker than expired fish in a microwave on high.
  2. Approximately 85% of companies are AI-washing everything.
  3. The Gen-AI claims that it will deliver Procurement to the enterprise are FALSE.
  4. Intake/Orchestration is totally useless on its own.
  5. Consultancies are often more in the dark than the Procurement departments they are claiming they can help.
  6. DEI is being misused to push agendas and sometimes to Do Extra-legal Initiatives,

But this isn’t even the worst of it!

THE REVELATOR recently conducted a poll on who do you trust, and the results were more than a little disturbing as far as I am concerned.

 

That’s right. Only 50% of practitioners trust analysts to help them make the right decision when selecting technology. 36% would rather a consultant, who likely has a very strong incentive to either recommend a preferred partner solution (where they are guaranteed to get the implementation contract) or the solution that requires the most implementation effort (to add months, or years, to the engagement), and, even worse, 14% would rather trust a marketer or salesperson, who gets paid for leads or sales, not for solving a customer’s problem!

As far as the doctor is concerned, anything less than 75% is appalling. While he will happily admit there are some independent consultants at smaller firms without vendor partnerships who will be truly objective and will offer valuable advice, this is not the norm at most of the larger firms that are preferred partners or implementation providers for the bigger players in our space (where the majority of consultants reside), so the fact that the consultant trust is so high is a little off-putting. However, he’s simply aghast at the fact that 14% would rather trust a salesperson or a marketer for solution advice. Frankly, this means we are definitely failing the market.

Basically, if we can’t be the unbiased experts and independent voices of reason that the Procurement practitioners can always trust for good, unbiased, advice, then what good are we?

So what can we do to regain the trust? the doctor is sad to say he’s not exactly sure and hopes that

  • some other analysts will echo the call to action to deal with the PROCUREMENT STINK,
  • analysts will collectively take the lead in cleaning it up and restoring our reputation, and
  • offer up suggestions on what we can do to make it better!

Now, while the doctor doesn’t have all the answers, he does have suggestions on where we can start.

1. Be fully transparent on whom we do and don’t include in maps and logo charts, why, and the business situation in which our recommendations are, and are not, relevant.

This is quite obvious, and most of us are getting pretty good at being very explicit about the inclusion requirements for our maps and studies, but we don’t always take the time to clarify what this means for the market and, more specifically, which types of organizations the reports and maps are targeted at, which types of organizations will get the most value, and, most importantly, which types of organizations are unlikely to get any value because they don’t fall in the size/verticals/etc. the map or report is targeting. As far as the doctoris concerned, now more than ever we need to double down and get it right on both sides of the equation — who is being included, and why AND who should, and should not, be reading the report, and why, when we release something to the market. (Like the doctor did with his mega map.)

2. Stop glamourizing hype cycles and start busting them when there is no perceivable value to Procurement.

Procurement is supposed to be about solutions that deliver enterprise value, not cool technology. Leave that to the Consumer Electronics Show. When we promote tech for the sake of tech, we’re not helping anyone. We need to promote solutions to business problems with measurable ROI, regardless of what the underlying technology is. It’s irrelevant how many vendors embrace Gen-AI, when it has yet to demonstrate even a single use case that offers value beyond traditional tech, and the majority have failed to deliver any value.

3. Stop taking our cues from vendors as to where the space is going and start leading vendors to where the space should be going.

For example, intake-to-orchestrate is the craze, vendors are popping up faster than rabbits in a carrot field, and it’s likely only a matter of time before we see a map covering the intake-to-orchestrate space. (Especially since the doctor has been led to understand that one major analyst firm is already considering such a map, and where one leads, others will follow.)

However, in the doctor‘s view, this SHOULD NOT happen. Because, as stated above, and explained in detail in our article on why PROCUREMENT STINKS, there is NO VALUE in intake/orchestrate on its own. NONE. Intake is nothing more than pay-per-view on your data and orchestrate is just pure SaaS-based middleware, and middleware is something we’ve had for decades (and the need for such is negated completely if all the applications you use have complete, open, APIs as they can then be connected directly). The only value in these offerings would be in any additional functionality they embed to enhance the value of the applications they are linking together so that 1+1=3.

It would be understandable if they all embedded additional functionality that was comparable, valuable on its own, and formed a new application category that made sense to evaluate separately. However, right now, many don’t embed sufficient functionality; those that do are, for the most part, not comparable (as they all tend to specialize in something different, such as easy self-serve Procurement, services management, statements of work, etc.); and there has been no application thereof that wasn’t designed to enhance, or, most of the time, just make existing applications accessible. A standalone map would be senseless. (Instead, the intake and orchestrate requirements that are necessary for success should be included in the definition, and measurement of, Procurement, Sourcing, Supplier Management and other existing applications that can deliver enterprise value.)

3b. Start calling vendors out on bullsh!t when they start chasing, or putting, cool tech before practical solutions with actual ROI.

Privately at first (of course), unless the vendor insists on marketing it through a bullhorn. Then we may have no choice but to publicly call them out on it. Vendors may not like it, and may get upset when we burst their tech-centric bubble, but we’re not helping anyone when we don’t. Not us, not the procurement professionals we claim to support, and definitely not the vendors if we don’t try to dissuade them from throwing good money after bad on tech that won’t solve actual problems and ultimately won’t sell once their potential clients see the lack of value that comes with the price tag. This space has always been about ROI, we need to remind vendors of that, and guide them to where the ROI is just as we guide the practitioners. We need to be helpful to both sides to mature the space.

the doctor‘s not sure it’s enough, but it’s a start, and if other analysts make an effort to figure out how to restore our reputation, maybe we’ll find the answer, provide the unparalleled value that only we can provide, and get back the trust we should have.

Thoughts?

PROCUREMENT STINKS!

Why aren’t you bothered by the smell?!?

If you haven’t been following along, we’ll lay out the top six reasons for you.

1. Case studies are ranker than expired fish in a microwave … and you don’t seem to care.

As per yesterday’s post, Have We Been In The Dank Basement So Long That We Don’t Care If the Fish Stinks?, we’re accepting that case studies are now nothing more than meaningless marketing mush and not even saying anything.

2. Approximately 85% of companies are AI-washing everything.

And the majority of these solutions don’t have any AI, or at least don’t have any native AI and are reliant entirely on questionable AI integrations. AI is hard. Really f6ck1ng hard. It’s not something you whip up overnight, especially if you want a solution that addresses a real problem with a real solution with any reliability. Before the Gen-AI craze, the doctor spent almost two decades here on Sourcing Innovation (and six years on Spend Matters) trying to educate you on the value of (strategic sourcing) decision optimization (SSDO), advanced (predictive) analytics, and proper targetted machine-learning AI that could provide better projections than the majority of “experts” — and the handful of vendors (and he means handful) that had this technology because, at any one time, we’ve never had more than half a dozen or so true SSDO vendors, a dozen or so true spend analytics providers with best-in-class technology, and more than 1 or 2 companies out of every 10 with true AI (and none with AI for more than a few targeted problems, but sometimes that was all you needed to identify extremely significant pockets of value and savings). Now, all of a sudden, we’ve gone from less than 20% to 85% literally overnight, when true AI advances have traditionally taken decades? Not f6ck1ng likely! Not only is AI a buzzword (as pointed out by Sarah Scudder), but it’s a delivery mechanism which, FYI, is a method by which the virus spreads itself.

3. Gen-AI claims that it will deliver Procurement to the enterprise are false.

It will deliver Procurement somewhere, but not the enterprise, unless the enterprise is code for Purgatory or Sheol. Gen-AI, which stands for Generative AI, literally means “AI that makes stuff up“, and, more specifically, since it’s trained to please, it makes stuff up that it thinks you want it to, not stuff that’s true, safe, or even legal. It’s NOT trustworthy, and won’t solve your Procurement problems. And while it may be a bit better at creating natural language responses, we’ve had Natural Language Processing (NLP) commercially for almost two decades, and a few vendors built very good, very reliable solutions, that will provide you with a significantly better chatbot than yet another custom variant of “chat, j’ai pété“. (There are no valid uses for Gen-AI that can’t be accomplished better, faster, and cheaper with existing tech.)

4. Intake / Orchestration is totally useless on its own.

There’s always a bandwagon we have to deal with, but rarely do we have two competing, often overlapping, equally useless bandwagons to deal with, with intake-to-orchestrate now speeding towards the cliff almost as fast as Gen-AI. As we discussed in Marketplace Madness, the days of pure intake-to-orchestrate are numbered because:

  • Intake is Pay Per View on YOUR data. Why are you paying for another view into your data?!?
  • Orchestrate is Solution Sprawl. It’s adding to the problem it purports to solve.
  • Intake-to-Orchestrate is Where’s the Beef? Sure you’re integrating everything and getting visibility into everything, but that’s not Procurement — which is identifying and strategically managing spend. So if the platform isn’t doing that, why not buy a platform that is that supports intake-to-orchestrate natively and allows you to manage strategic spend for risk reduction and savings???

5. Consultancies, purporting to help you, are often more in the dark than you are!

The Big X, which followed the money into tech, and then followed the money into Procurement, did so without any knowledge of where they were going or what was at the end of the yellow brick road. While some of the firms had good knowledge of Procurement from an operational or logistics perspective, they generally had little knowledge in tech and even less knowledge on the ProcureTech landscape (and most would be challenged to name 66 vendors, yet alone the 666 companies in the Sourcing Innovation Source-to-Pay+ Mega Map). And they have no clue how to differentiate the vendors that purport to offer the same (set of) module(s) and determine which one is best for you … and, as a result, all they end up doing is recommending a “best-in-class provider” for which they are a preferred implementation partner (which usually happens to be one they picked from a Market Map, all of which give THE REVELATOR a migraine and the doctor anger management issues because meshing 6+ dimensions on an axis and/or putting a roll-up interface on top of the map that no one understands only adds to the confusion).

But it’s even worse than this … many of the mid-market specialist consulting firms don’t have any more knowledge than the Big X beyond the vendors they have personally worked with. the doctor is sad to say that he’s been talking to quite a number of them and has yet to find one that has a methodology for identifying third party solutions beyond hiring true expert consultants and practitioners with decades of solution (related) experience. And while you will get a good solution from one of their consultants (as they are hand picked by people that know what they are doing), there are two problems here for you:

  • you won’t necessarily get the best solution because the consultant won’t know about it
  • if that consultant retires, which is inevitable as the consultants with the cross-role and industry experience to get this right are closing in on three decades of experience (because you need practitioner/developer, manager, integrator, and consulting experience), and are, thus, a decade or less from retirement, will her replacement be as good?

and two problems for the firm:

  • when the leaders retire, will there be anyone with the necessary depth of knowledge to take their place
  • with not enough senior people to fill the roles relative to the large number of companies that need digitization and Procurement transformation, how will they scale and grow?

It’s too bad that, unlike the next generation of Procurement Providers (like Zip, who realized they needed a Head of Research in-house to help identify what their market was looking for so they could develop the right solution), it would appear that none of these consultancies have realized that they need an internal consultant to keep tabs on the market and help them not only manage technology partners, but qualify the solutions and figure out which clients those technology partners are most appropriate for, so that they can ensure the success of both their clients and their technology partners (and be the consultancy of choice for that partner who will prioritize their deals because they are confident the consultancy vetted the potential client before dangling a “deal” in front of them). (Or, if they are just starting to think about the issue, realize that they can’t just give an existing consultant this role as the background required is different than that of the consultant who works with the clients day-in-and-day-out.)

(FYI: the doctor is not the only one thinking this or saying this, although me might be the only one willing to state it publicly. He’s talked to a number of growing technology solution providers in our space that literally have “consulting” firms tripping over each other to be the provider’s “partner” as a result of the downturn many of these consultancies are experiencing [as qualified by THE PROPHET in his piece on the Consulting Bloodbath], but many of these consultancies are unable to qualify what unique value they would bring to the provider or joint clients. What these consultancies are failing to understand is that providers who are offering real, sometimes almost immediate, value with their SaaS solutions are getting a lot of traction in this down market and don’t have time or personnel [due to budget cuts when the funding taps turned off] to chase poorly qualified deals or deals with little or no profit for the provider. So when all the provider saw in the past from some of these consultancies was poorly qualified deals, they are wary of working with the consultancy that didn’t take the time to understand the potential customer, the necessary solution, and what the hot provider actually did.)

6. DEI is being misused to push agendas and, in some cases, commit fraud!

DEI, which was supposed to be about “equity” (which is supposed to be “fair” and “impartial” and “freedom from bias or favouritism”, as defined by the Oxford and Webster’s dictionaries), somehow became all about “equitable outcomes“*, and now that is being used to push agendas and, sometimes, commit outright fraud as we have numerous examples of not only universities, cities, organizations, and countries mandating a lead Procurement role be filled by a minority (whether or not any exist with the required qualifications), but sometimes firing the person in the role to place a more junior person into the role under the guise of “DEI” so that the leader can ensure that all Procurements go his way (which can include purchases to organizations he is invested in, or gets campaign funds from, and so on). The most recent example is the city of Chicago, with the ramifications laid bare by THE PROPHET in his recent article on Why Would Chicago’s Mayor Fire Its Top Procurement Executive and Bring in Someone With a Fraction of the Experience?

* which is not at all equitable because that is not “fair”, “impartial”, or “free from bias” when you insist a minority be hired; equity is supposed to be about “equitable opportunity”, but apparently no one in DEI knows how to use a dictionary anymore

Now that you understand this, why are you putting up with it? Why aren’t you demanding more? You have every right to demand more, and you should be demanding more of your vendors, consultants, and Procurement leaders!

Because if you don’t, The Prophet‘s April Fools Day joke on how we must #EndProcurement might just become reality!