Category Archives: Product Management

Two and a Half Decades of Project Failure

  • 2024 Bain: 88% of business transformations fail to achieve their original ambitions (Source)
  • 2023 HBR: Some estimates place the failure rate as high as 80%.
  • 2023 Gartner: states that 85% of AI projects fail. As well, 87% of R&D projects never get to the production phase.
  • 2023 EY: 2/3 of senior leaders have experienced at least one underperforming [digital] transformations in the last 5 years (Source)
  • 2020 Standish Group: 66% of technology projects end in partial or total failure (based on the analysis of 50,000 projects globally). 31% of US IT projects were canceled outright and the performance of 53% ‘was so worrying that they were challenged.’ (Source)
  • 2020 McKinsey: 17% of large IT projects go so badly that they threaten the very existence of the company (Source)
  • 2020 BCG: 70% of digital transformation efforts fall short of meeting targets (Source)
  • 2020 KPMG: 70% of organizations have suffered at least one project failure in the prior 12 months (Source)
  • 2019 Everest Research Group: 78% of enterprises fail in their digital transformation initiatives (Source)
  • 2018 PWC: 75% of digital transformations fail to generate returns that exceed the original investment (Source)
  • 2018 Standish Group: only 29% of IT project implementations are successful, and 19 percent are considered utter failures (Source)
  • 2017 Gartner: 75% of all ERP projects fail (Source)
  • 2016 Innotas: 55 percent had a project fail in the last 12 months (Source)
  • 2015 Genpact: more than 66% of digital transformations fail to meet expectations (Source)
  • 2013 Innotas: 50 percent had a project fail in the last 12 months (Source)
  • 2012 McKinsey: large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted (Source)
  • 2011 HBR: average project cost overrun is 27%, 1/6 projects is a black swan with a cost overrun of 200% or more Source
  • 2011 Forrester: 70% failure rate of change management initiatives (Source)
  • 2010 Deloitte: only 37% of projects delivered the functionality on time and budget meaning that 63% of projects failed to some degree (if not entirely) (Source)
  • 2009 Standish Group: failure in 68% of projects is probable (because success in 68% of projects is “improbable”) Source
  • 2001 Standish Group: 52.7% of projects will cost 189% of their original estimates and 31.1% of projects will be canceled before they ever get completed (Source)
  • 2001 Robbins-Gioia Survey: 51% viewed their ERP implementations as unsuccessful while 46% did not feel the organization understood how to use the system (Source)
  • 2001 Conference Board Survey: 40% of the projects failed to achieve their business results within one year of going live those that did achieve benefits had to wait (at least) six months longer than expected (Source)
  • 1999 Gartner: 75% of e-business projects will fail to meet the business objectives through 2002 (Source)

Is it just me, or is it the case that:

  • many of the firms who have been chronicling project failures for over two decades are also
  • many of the firms that have been guiding IT projects for over two decades?

Proper Project Planning is Key to Procurement Project Prosperity! Part 3

In Part 1 we noted that we wrote about the importance of Project Assurance, and how it was a methodology for keeping your Supply Management Project on track, ten years ago and that this typically ignored area of project management is becoming more important than ever given that the procurement technology failure rate, as well as the technology failure rate as a whole, hasn’t improved in the last decade, and is still as high as 80% (or more) depending on the study you select.

Then, in Part 2, we told you that even before we dove into the project steps for which both assurance, and guidance (because assurance isn’t enough if the project [plan] isn’t right), is needed, we were going to give you one critical action that you needed to undertake to ensure everything starts off, and stays right. And that particular action is to:

  • engage an independent expert to guide you through the entire process and help where needed

because the complexity of Procurement and Procurement Technology has reached a point where it just overwhelms the average Procurement professional. It’s been more than two decades since global conditions impacting Procurement have been so complex and technology has reached the point where even experts are struggling to make sense of the market madness, meaningless buzzwords, and the overwhelming onslaught of Hogwash.

We also pointed out that this expert must be truly independent and cannot be:

  • a resource of the company,
  • a resource of the vendor, or
  • a resource of the implementation provider.

This resource is critical in each of the phases we described in our original Project Assurance series (Part I, Part II, Part III, Part IV, and Part V). Here’s a high level description of why.

  • Strategy: the first step is a “health assessment” that pinpoints where the organization is in Procurement Maturity, and what it should be looking for to get to the next level (otherwise, what’s the point?), and this is where an expert can do a maturity and gap analysis
  • Acquisition: the expert can help craft the right RFP for the organization, identify which vendors have the appropriate technology (to ensure every response received would at least address some of the key pain points, and that the responses would be comparable), and help with the evaluation and review (acting as sale-speak to plain English translators)
  • Planning: once one or more solution (and implementation) vendors are selected, the expert is key in the creation of a realistic, and logical, project plan that ensures the organization doesn’t agree to a “big-bang” implementation proposal (which always results in a “big-bang” and has led to major supply chain failures), that the resource requirements won’t be too strenuous on the organization, and that the most critical capabilities are implemented first
  • Design/Plan Review: the plan is compared to the strategy, RFP, and overall business goals to make sure everything is aligned before the project progresses
  • Development/Implementation: the expert ensures each phase starts, completes, and is properly tested and verified on time; uncovers the reasons for delays and the root causes to prevent future problems; and when changes are required, helps to define and supervise change management (plans)
  • Testing & Training: the expert will not only ensure that the proper tests are designed, but that they are properly implemented and repeated until complete success is the result

In other words, the right expert is your guide to ensuring each step is designed right as well as conducted right, who can also take over any tasks you don’t have the expertise to do so in house. And, most importantly, the right expert is your key to Procurement Project Prosperity!

Proper Project Planning is Key to Procurement Project Prosperity! Part 2

In Part 1 we noted that we wrote about the importance of Project Assurance, and how it was a methodology for keeping your Supply Management Project on Track, ten years ago and that this typically ignored area of project management is becoming more important than ever. Given that the procurement technology failure rate, as well as the technology failure rate as a whole, hasn’t improved in the last decade, and is still as high as 80% (or more) depending on the study you select, that’s a problem. Especially when, for many companies, theses projects typically start in the million dollar range. (Even if the annual license is only 100K, by the time you multiply that by 3, the minimum term any vendor will give you, the annual maintenance fee by 3, and then add the implementation, integration, training, and ongoing integration maintenance costs and ongoing training costs, it’s well over 1M.)

But we also noted whereas there might have been a time when this was enough to tip the odds of success in your favour, it’s not quite enough anymore. Given the complexity of modern procurement (which hasn’t had as many complex problems to deal with simultaneously in over two decades) and modern technology (which is now AI enabled, AI backed, AI powered, AI enhanced, and or AI driven, even if it isn’t), when most organizational users are still struggling with basic technology (not enabled, backed, powered, enhanced, or driven by [fake] AI bullcr@p).

We told you we were going to dig into the project steps and help you understand what you need to do to get it as right as you can and greatly increase your odds of success. But first, there is one critical action you need to make that is common to all steps that is critical for your Procurement Project Prosperity and that is:

  • Engage an independent expert to guide you through the entire process and help where needed, including assurance.

As noted, this individual

  • cannot be an internal resource, even from a different department, as they are still subject to the internal pressures from the C-Suite (fast, cheap, etc.) that might be counter-productive to project success (that is critical for eventually obtaining the ROI you purchased the platform for in the first place)
  • cannot be a vendor representative as their only goal is to get you to buy more, or at least keep your subscription at the initial purchase level (which likely contained seats you never used, SKUs you don’t use enough to justify, and third party feeds/integrations you aren’t taking advantage of)
  • cannot be an implementation team representative, even if they are a third party consultancy, as the odds are that consultancy has a preferred partnership with the vendor and will be biased towards keeping the vendor and doing whatever is easiest (and thus most profitable for) the vendor to keep getting their implementation referrals

Now, what’s the difference between helping and pure assurance? In addition to making sure each step is accomplished effectively, this person is also guiding you through the creation of the necessary artifacts of each step to ensure success. This person is helping you define the goals, not just ensuring the goals are met. The person is simultaneously a project guide and a project evaluator, bringing the Procurement Best Practices and Technology Knowledge that your organization doesn’t have, and helping you identify the right intersection to take you forward on your journey.

And this goes well beyond just helping you write an RFP (although this is a key step, which is why the doctor has been telling you to get expert RFP help for your Procurement technology RFP for close to two decades, because a bad RFP is one of the leading causes of project failure).

This is because, as we noted ten years ago in our original Project Assurance Series (Part I, Part II, Part III, Part IV, and Part V), project success depends on more than just getting the technical specifications right. Project success also depends on getting the talent right — as it is the people who will have to use the new system. And project success also depends on getting the transition right —- if the changeover is not smooth, significant disruptions to daily operations can occur. And, equally important, they also depend on an often overlooked 4th “T” —- tracery. Organizational success depends on selecting a superior strategy and seeing it through until the desired results are achieved (or the organization changes the strategy). (And since you don’t know what you don’t know, the small cost of engaging an expert, relative to the overall project cost, will generate a return far, far greater than the technology ever will.)

Tracery, which stems from late Middle English, can be defined as a “delicate, interlacing, work of lines as in an embroidery” or, more modernly, as a “network”. Implementing a strategy requires effectively implementing all of the intersecting “threads” that are required to execute the strategy to success. If any one aspect is overlooked, the project can fail. And if you can’t even see all the threads, it should be easy to understand how most projects essentially fail as soon as they begin and why you need a master weaver if you want to beat the odds and actually succeed.

Come back for our next installment where we will dig into the six traditional project steps outlined in our original series and dive into what your independent, third party, Procurement technology project guide (who will be independent from you, your vendor, and the vendor’s third party implementation team) needs to do.

Part Analytics Get PARTicular About Your Electronics-Enabled Supply Chain and Source Smarter with Deep ANALYTICS-based Insight

Over the past few years a few vendors have come out of the factories to support your direct-specific supply chain, but there’s still only a few that specialize in the Electronics Supply Chain (especially when you include deep sourcing [automation] support) and PartAnalytics is one that you may not have heard of, but definitely should know of given their ability to drastically reduce direct sourcing times for electronics components while reducing costs, lead-times, uncertainty, and compliance.

Part Analytics was founded in 2019 to increase open collaboration between Original Equipment Manufacturers (OEMs), Electronics Manufacturing Services (EMS), and suppliers, starting with a comprehensive, standardized source of information for direct components and materials used in electronics-based manufacturing. This would allow demand and supply information to be shared, costs and lead times to be better managed, and supply chain risks minimized. Founded by global sourcing professionals with expertise in electronic and electro-mechanical supply chains, they applied their deep knowledge of products and buying processes to build a solution that would not only simplify the sourcing process for components and bills of material, but also allow much of it to be automated.

The Part Analytics solution is split into four primary modules (which can be accompanied by a fifth that serves as a cross-platform executive dashboard):

  • Part IQ: Contains detailed part data for the electronic / electro-mechanical parts the organization sources
  • BOM IQ: Contains detailed information on BOMs used by the organization (for sourcing purposes)
  • Category IQ: Aggregates part information across BOMs to provide insights into demand, benchmarks, commodity, and supplier risk information and provide analytical insights to reduce spend, lead-time, and risk
  • RFQ IQ: deep RFQ functionality for sourcing (automation) on a Total Cost Basis (TCB) (with up to 97% manual time savings once an event has been setup)

In this article, we will look at each module individually, after noting that since Part Analytics is focused on the electronic and electro-mechanical supply chains, most of the sourcing projects (60% to 70%) revolve around PCBs (Printed Circuit Boards, not Polychlorinated Biphenyls) and related components. As a result, the focus of most of their customers is on part and material cost and lead-time optimization in those categories specifically, which is why their central focus in Part IQ is on those components.

Part IQ

Part IQ is the global supplier parts library that

  • represents the integrated catalog across all suppliers,
  • maintains the organization AVLs (Approved Vendor Lists)
  • maintains Part Analytics‘ and the customers’ internal PPE (Prescribed Parts Equivalent) lists
  • maintains part cost and risk details by part
  • makes global search by part and equivalent quick and easy

Part IQ contains a database of hundred of thousands of components from thousands of suppliers globally and provides real-time inventory availability monitoring from distributors and suppliers. It’s also capable of monitoring part availability and notifying the buyer as soon as a specific part becomes available anywhere in the network.

Deep detail is maintained on every single part and includes information such as manufacturer and part number, usage, prices, savings opportunities, and alternates. It also cross-references BoMs containing the part, known risks associated with the part, and Part Analytics.

This allows a design engineer to quickly gauge availability during R&D or build-to-order quoting, as well as sourcing professionals to quickly gauge immediate availability, lead times and expected pricing if they also have Category IQ (to be discussed later) as it can pull in trends and insights from the Category IQ module. If they integrate with their PLM, they can also see current inventory within the tool as well as pull in product forecasts to see if the available supply is likely to meet their demand.

It also helps R&D to ensure compliance with industry and market requirements as Part Analytics harmonizes all of the data and they can quickly tell not only if a product is compatible, but if it is compliant with certain regulations as detailed specifications with the required material composition will always be available in the drill down.

BOM IQ

Arguably the core of the suite, BOM IQ (or Bill of Materials IQ) stores all of the electronic / electro-mechanical bill of materials being sourced by the organization as well as associated forecasts/demands from the PLM solution (and can push updates on material availability, inventory, AVL, and approved PPEs into the ERP if desired).

At the BOM level, it provides an organization with insight into:

  • the overall health rating (based on compliance, material/product risk, product/part/line-item health)
  • the number of unique line items with lead time, lifecycle, single source, RoHS, or other supported compliance risk (if data feeds/subscriptions are available)
  • the current annual spend summary and projected spend summary
  • BOM cost trend over time
  • the total estimated savings available from based on alternates and negotiation

For every line item it also stores all of the relevant associated information including, but not limited to manufacturer, distributor, current costs, usages, risk/health rating, and information from past events. It’s very easy for a user to navigate around the BOM IQ product and see not only current prices and usage, but to drill into associated risks and compliance.

In a nutshell, the solution provides actionable data by leveraging technology to contextualize data from hundreds of sources including distributors and manufacturers.

Category IQ

Category IQ rolls up the line-item/part/component/material intelligence by category and allows an organization to get an overview of their spend, opportunity, and risk from various points of view such as commodity, supplier, business divisions and products. This allows the organization to get a comprehensive view of spend and savings potential from different viewpoints and make the best overall sourcing decisions for the organization.

More importantly, the organization can also see a roll-up of risks and non-compliance by category, which can be filtered to certain risk types to allow the organization to address the most critical risks first. Especially since it can roll up the number of units in a given life cycle state, being single sourced, etc. and drill in to parts coming from a specific region to allow an organization to quickly assess the potential impact of geographic/geopolitical events and disasters on the supply chain.

Once the buyer has a firm handle on her categories, she can proceed to sourcing in RFQ IQ.

RFQ IQ

With a strong understanding of her categories, a buyer can initiate sourcing projects using RFQ IQ. This module simplifies the sourcing process by allowing buyers to set up events with ease. Key elements include defining line-items or BOMs, approved vendors, questionnaires, and bid sheets with detailed cost breakdowns.

Upon receiving bids, buyers benefit from a comprehensive summary that highlights the total parts up for bid, the number of bids received, and potential new spend based on the lowest bids. This summary also offers insights into category spend by business unit.

The platform enables buyers to delve deeper into individual supplier bids, comparing spend differentials and assessing the impact of choosing specific bids. Buyers can utilize automated features to award the lowest bid by supplier on a part or BOM basis, or make manual adjustments to finalize awards. Notifications are then sent to suppliers, and the award details can be integrated into the ERP system to initiate the contracting and P2P process.

One of the standout benefits of RFQ IQ is the ability to automate much of the sourcing process. Once the master file is established, buyers can launch events by simply defining timelines. Automation can handle the process from initiation to award recommendation, significantly reducing manual effort. For example, one client saw a reduction in manual effort from 710 hours to just 10 hours, thanks to the module’s robust automation capabilities. While results may vary, most organizations experience efficiency gains of 30% to 60%, depending on their automation preferences. Additionally, the overall sourcing process time can be cut from months to mere weeks, providing substantial time savings.

Furthermore, since the demand can be defined by business unit, it allows their customers to maintain their decentralized structure (as the platform can support bids by business unit when each is in a different location and would dictate a different landed cost) while still supporting volume consolidation through a Centralized Center of Excellence (COE) for cost reduction and best practice sourcing. This also allows an organization to get a fully centralized view into their global supply base by category, BoM, and part; identify key areas of material/part/product-based risk that needs to be assessed; and harmonize costs and lead-times at the same time.

By giving buyers a global view, they can identify all FFF and F component alternatives, including those that are more readily available, higher in quality, and/or earlier in their life-cycle, allowing the organization to identify potential strategic OEMs and suppliers early. And for off-the-shelf, always having centralized insight into global supply across hundreds of distributors is extremely valuable when a disruption happens in your current supply chain.

Furthermore, the fact that Part Analytics is PLM (and not ERP) first means that buyers have a firm handle on not only what Manufacturing needs, but what R&D is working on and can ensure R&D is not designing for materials/parts that could be expensive or hard to get and/or maintain a stable supply of when there are more affordable, more available, or more reliable alternatives available.

Plus, if desired, part and BoM population can be done entirely from spreadsheets, allowing for an organization to get up and running quickly as a) most organizations without a system custom designed for electronics / electro-mechanical direct sourcing, even if they have a modern PLM (and/or ERP), maintain all their part and BOM info in spreadsheets. Not only does this allow Part Analytics to get an organization up and running quickly, but it also allows them to instill best practice as Part Analytics serves as the Parts Master and, once the PLM integration is completed, always keeps the BOM in synch, and the organization never has to worry if they are sending the sheet with the right version of the BOM (was that v.21 or v.23 we finally decided on) to a supplier for bidding.

Looking Ahead

Right now, it’s just cost trends over time for category intelligence, but by Q4 Part Analytics intends to release advanced commodity/sub-commodity insights around pricing trends, availability, and lead time using advanced analytic and forecasting algorithms and supply and demand signals in their Category IQ Module.

Also, as indicated above, future releases will support more data integrations for supplier (and not just material/component/part-level) risk analysis.

Summary

Part Analytics is a great solution to harmonize sourcing, inventory, and supply chain visibility in your electronics and electro-mechanical spend categories. Furthermore, it’s real-integration to hundreds of OEMs and distributors provide invaluable real-time insight into supply, demand, lead-time, and cost trends and benchmarks that can help organizations get a better handle on their overall sourcing efforts, especially if they primarily run as a decentralized operation across product lines / business units or geographies, especially since it can unite engineering and commodity sourcing teams on one coherent picture. It’s a great solution for part-based supply chain visibility, and for deeper insight into how to achieve this, you can download and checkout their handbook on supply chain visibility.