Category Archives: rants

Organizational Damnation 60: Human Resources

Does the doctor even have to write this post? I’m sure many of you are already cringing from the title knowing how an overly process driven human resources department, free of logic and common sense, can ruin the best and worst of plans and inspire your best talent to run to the hills and run for their lives.

Why do human resources often bring damnation to Procurement? Simply put,

  • They exacerbate talent tightness. (Societal Damnation 51)
  • They drive talent away. (Societal Damnation 50)
  • They think they know what Sourcing is.

They exacerbate talent tightness.

HR will insist on owning the talent recruitment process. Now, it’s true that, in most organizations, HR should own the process because most departments wouldn’t know how to go to market for talent if the market came to them and bit them on the thigh like a boghog of NowWhat, but a good Procurement organization knows how to go to market for talent. In fact, a good Procurement organization knows how to go to market for everything the organization needs, and, more importantly a good Procurement organization knows what defines talent to the organization.

But this isn’t the problem, it’s the way that many non best in class Human Resource organizations go about the talent hunt. They blast a poorly written advertisement with a list of requirements no living or dead human can meet across multiple channels, collect hundreds, if not thousands of resumes, and then go through a last-man standing vetting process. They create a ridiculous checklist, a set of arbitrary rules for checking the boxes (because they don’t understand what the boxes are), and then eliminate every resume that doesn’t check every box. They then interview the last men, or women, standing, eliminate those that they feel won’t be a good organizational fit (based on gut instinct), and pass you the candidates that remain.

This is almost guaranteed to eliminate a large number of good candidates, if not the best candidates, because Procurement doesn’t need a candidate that checks all the boxes, training can often handle that, it needs a candidate with the aptitude to learn what he or she doesn’t know because organizational needs are always changing and no Procurement professional will ever know everything he or she needs to know.

They drive talent away.

Many HR organizations institute policies that are so onerous, they will drive every individual in the organization insane. These will typically take the form of expense claims and pre-performance review. In the latter case, these will take the form of ten page questionnaires asking the individual to update their resume in detail and list all changes since the last review, describe all of their accomplishments since their last review, list the top ten reasons they deserve a 2% raise, do a 360-degree review on their boss, rate the HR process, etc. until they want to scream and jump out the 10th story window. In the former case, since the review agony comes at most once a year, they will insist on nonsensical requirements for even the simplest of rebates. For example, some organizations have a policy that, in order to get an expense claim reviewed, every employee had to send in an envelope with their expense receipts (and their name on it) stapled to the expense claim to get a refund. This sounds like a good policy, since good fiscal accountability means that receipts should be provided for any expense over a nominal amount, until it’s enforced to the extreme. And some organizations enforce this to the extreme. For example, as described by Sigi in his recent book (reviewed in Gettin’ Sigi With It), one organization refused to honour an expense claim without an envelope, even if their was no receipt. For example, Sigi recounted the story of when one of his team members came to him with a printed e-mail that said an empty envelope with the team member’s name on it was required to be sent in by the team member to get his mileage claim reimbursed. Wow!

They think they know what Sourcing is.

In some organizations, it is HR that thinks they do the Sourcing because, as far as they are concerned, Sourcing is the process of acquiring talent and nothing else. So if you say you do Sourcing, they try to beat you down and kick you unconscious. It’s crazy.

the doctor could go on, but you get the picture. Human Resources is yet another damnation Procurement has to live with. They are the gatekeeper and we are still waiting for the key.

It’s Official! Twitter Has Made Us Dumber Than Goldfish!

It’s official. Twitter, that will make a twit out of you, has now made us dumber than the average gold fish.

According to this recent article in The Telegraph, humans now have a shorter attention span than goldfish, thanks to smartphones. The article summarized a recent study by Microsoft that surveyed 2,000 participants and studied the brain activity of 112 others using electroencephalograms and demonstrated that the average human attention span has fallen from 12 seconds in 2000, when the mobile revolution began, to 8 seconds today.

And why are people checking their smartphones every 8 seconds? It’s not web browsing, that still doesn’t always work that well on a small screen. It’s not e-mail, that only polls the server and pulls e-mails down every 5 minutes at most. It’s not Facebook, people are always on it, but not posting every 8 seconds. It’s Twitter. New tweets in your feed every single second. Non-stop beeps for attention. And the 140 characters can be formatted to fit your screen exactly.

Congratulations Twitter. Thanks to you, we are now dumber than an average goldfish (which are believed to have an average attention span of 9 seconds).

I guess there’s nothing left to do except join in the chorus. I am the Twitter!

Why Is No One Using Big Brains?

Apparently one of the best presentations at Coupa Inspire earlier this month was a presentation by IBM on Procurement Transformation and Big Data. (Needless to say that this does not inspire the doctor.) Ouch! Big Data is good, but only if it’s a big bucket of relevant data, but that’s not usually the case. Usually it’s a big bucket of random data where only some of the data is relevant and the statistical relevance is low. This is bad because if an organization takes big data as gospel, it can be led down the wrong track. (And we’ll get back to this.)

And given the examples that the prophet is presenting in his post on “When Watson Meets Procurement” on Spend Matters, the doctor is a bit worried. Why? Let’s take them one by one.

Parsing unstructured data to extract “soft facts” and information from news feeds and social media to line up against traditional risk management data feeds to drive a new level of supply risk management intelligence.

Okay, this is smart, because it can identify potential problems, but not necessarily all that useful. For example, let’s say it detects a few dozen instances of consumer unrest due to product defects. If the product is one with a warranty, chances are your customer service department already has a few dozen instances of warranty claims. No new information. Let’s say it detects a few hundred instances of consumer duress because one of your suppliers was using slave labour – but that resulted from a news story that was already picked up by your supply chain visibility and risk monitoring system. Nothing unexpected here. All you can really pick up on is general consumer sentiment, but only the consumer sentiment of the consumer base that is online, and, more likely, the consumer base that is unhappy with the product, since people who are unhappy are more likely to complain that people who are happy are likely to go online and give good reviews.

Ask Watson about Procurement that can leverage natural language processing to extract data buried in contracts, documents, and other organizational systems such as AP.

Okay, this is kind of smart too, but this is not so much big data processing but natural language processing and query formation as this is no different than implementing a meta interface that parses a query and translates it into a format that is appropriate for each system that may contain related Procurement data. Yes, the number of systems that could contain related information magnify the data magnitude problem, but since you can search separately and then only integrate relevant data, this is really not that much of a big data problem.

Build My Briefing, Watson that aggregates information about a Procurement entity (category, supplier, etc.) into an auto-generated deliverable for anyone who needs it (for sourcing, supplier review, etc.)

Okay, this is also smart, but not big data. This is just aggregating data from multiple systems and shoving it in a pre-built template. It’s just a reporting engine on steroids.

the doctor would like to see a good use of Big Data for procurement to solve a problem that could not have been solved otherwise, but he hasn’t seen it yet. The reality is that, as he has been saying for years, Big Brains Will Win in the End.

Coupa = 1B? the doctor is still shell-shocked!

the doctor is still so flabbergasted that he does not know what else to write! So, in honour of their amazing, unprecedented, achievement, the doctor is reposting the classic first single from the Coupa EP: Davie and the Coupa Factory, which was originally released on March 24, 2007.

Oompa Loompa Doom-pa-dee-do
I’m building a great product for you!
Oompa Loompa Doom-pa-dah-dee
If you are wise download it for free.

What do you get when you go open source?
Straying away from the Oracle course
Where you are going terribly flat
What do you think will come of that?

I don’t like the look of it

Oompa Loompa Doom-pa-dee-dar
If you are willing, you will go far
You will live in happiness too
Like the Oompa Loompa Doom-pa-dee-do

Oompa Loompa Doom-pa-dee-do
I have a great product for you
Oompa Loompa Doom-pa-dee-dee
If you are wise you’ll take a look-see

Oracle’s fine when you have lots of cash
It stores all your data and caches it fast
But when you’re cash-strapped, you’re hung out to dry
To watch the vultures circ’ling high

Up in the dark’ning skies

Oompa Loompa doom-pa-dee-dar
But now there’s Coupa, you can go far
You will buy in happiness too
Like the Oompa-Loompa doom-pa-dee-do

Oompa Loompa Doom-pa-dee-do
I have a great product for you
Oompa Loompa Doom-pa-dee-derd
If you are wise, you will spread the word

Ask who they’ll blame when your spend is off track?
Deep in the red and there’s no turning back
Contracts alone will never be enough
If your software’s not up to snuff

And doesn’t track your stuff

Oompa Loompa doom-pa-dee-dar
But now there’s Coupa, you can go far
You will buy in happiness too
Like the Oompa-Loompa doom-pa-dee-do

Oompa Loompa Doom-pa-dee-do
I have a great product for you
Oompa Loompa Doom-pa-dee-derd
If you are wise, you’ll buy enterprise

Recquisitions with a click of the mouse
No more mistakes for accounting to delouse
One click receipts when the order arrives
Invoice matching that always jives

You’ll have no … you’ll have no … you’ll have no regrets

Oompa Loompa doom-pa-dee-dar
But now there’s Coupa, you can go far
You will buy in happiness too
Like the Oompa-Loompa doom-pa-dee-do

Top Procurement Challenge

What is it?

We all know the CPO has a jam-packed agenda. One just has to review “What is Top of Mind for CPOs” for a list of 20 hot issues that are keeping the CPO up at night. But what is the top CPO challenge?

If you Google Top Procurement Challenge, the top hit today is Spend Matters’ post on “The Top 5 Challenges for the Chief Procurement Officer”, based on an overview of the chief findings of a 2014 survey of European CPOs conducted by Xchanging.

The survey found that the top five challenges affecting those CPOs were:

  • spend creep and cost containment
  • realized savings visibility
  • compliance to contracts
  • technology leverage
  • a lack of deep sourcing or industry expertise in the team

Even though each of these is easily solved by way of an:

  • e-Procurement platform that enforces budgets
  • analytics and reporting platform that regularly produces savings visibility reports
  • contract management platform and procurement platform that enforces rules
  • e-Sourcing technology to support strategic sourcing
  • training, training, and more training

So what’s the problem?

It most likely relates to alignment with Finance (as recently investigated by the maverick, summarized in this recent post on When it Comes to Procurement, Don’t Forget Finance!), and, more specifically their alignment on ROI. As far as Finance is concerned, Procurement systems are IT systems and IT systems cost too much, return too little, and never do what they are supposed to. They don’t understand that it’s not the early noughts where systems cost (close to) seven figures. It’s the teens where the systems barely cost six figures. The systems are not first generation systems with limited functionality. The systems are second, bordering on third, generation with extensive functionality. It’s not the early noughts where it takes months to implement an on-site system. It’s the middle-teens where it takes hours to create a new instance in a true multi-tenant SaaS solution.

Most modern Supply Management Systems — including e-Sourcing, e-Procurement, SRM, and CLM — deliver a return within six months, and some, like Spend Analysis and Decision Optimization, can deliver a return in six weeks. The ROI is there, and is often substantial, but Finance doesn’t always see, or believe it. As a result, Finance doesn’t always support Procurement with the funding they need to acquire the platforms, services, and knowledge they need to not only be effective and efficient at their jobs, but successful. Which is a shame considering how far Procurement success can take an organization.

Which would indicate that the top Procurement challenge might actually be to align Finance and Procurement on the ROI of platforms and processes Procurement wants to implement for the good of the organization.