And we all know what that means …
New predictions from the futurists!
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Category Archives: rants
Procurement Trend Expose: An Epilogue
When we started this series to expose Procurement Trends back in October, we noted that most Supply Management ‘futurists‘ were still stuck in the past, and if we were lucky, it was the recent past (as some of them are feeding us trends that are literally thousands of years old as these trends have been around since trade began)! We asked why, and the best we could come up with was that either they had no knowledge (which we’re sure is true in a few cases), they had no vision (which is obviously true in a lot of cases), and/or they see too many organizations still stuck in the past (and believe that they can still sell these organization’s last decade’s snake oil).
Now, some organizations have a valid reason for being behind. They have no resources, no support from the C-Suite, and the organization, because of these backwards views, hasn’t yet attracted a CPO with a strong vision for the future. However, this does not give the futurists a valid reason for continuing to preach last decade’s trends as future trends if all of the best-in-class organizations are already doing it and the average organization is already starting down the road to addressing the trend with new processes or technology. They might be current trends for some organizations, but they are not future. A future trend is what an organization needs to start preparing for so that it is ready when the trend emerges, not what the organization should already be doing.
Even if an organization is not ready for a given trend, it still has the right to know where that trend sits on the Supply Management timeline and whether it is a trend the organization should already be addressing, one it should have addressed five years ago, or one it will not need to address for another two or three years. Without proper knowledge, the organization cannot build the proper transformation roadmap or know what the organization should be working towards. If the organization still thinks centralization and outsourcing are emerging trends, it will be in a bit of a shock when it overdoes centralization and outsources too much because it wasn’t working towards a balanced centre of excellence (or control tower) and a near-sourcing plan to allow it to bring production closer to home once global transportation costs got too high (and near-source providers advanced their automation capabilities).
That’s why we had to bust each of the “old news” and “ongoing blues” trends one by one so that an organization which lacked proper resources to get a proper education wouldn’t be fooled by these snake-oil salesmen and understand what is old, what is current, and what is coming. Moreover, we didn’t just stop with exposing the audacity of the claims, but we explained why the futurists thought they could slip a quick one by you, what the situation meant, and where you needed to look for guidance and inspiration if your organization was behind the curve with respect to the trend in question and what your starting points were.
It was a good start to your education, but more education is still needed. For example, while we made it clear with respect to what you needed to do to get ahead of the competition with respect to many of the trends in question, we didn’t do a deep dive into how. Nor did we address how to put together an integrated plan that would address multiple trends simultaneously with common processes or technology. (This will be covered in one or more future blog series once we give poor LOLCat a break. We certainly don’t want LOLCat to start drinking again.) Nor did we point out the top trends that you have to get a handle on now, either because they are about to hit you or just starting to be addressed by the leaders (which means that, to be a leader, your organization needs to start addressing them too). In this case, for those of you wanting to skip ahead, if you haven’t already, you should download SI’s recent white-paper, sponsored by BravoSolution, on the Top Ten Trends for 2015.
Do you have anything to add, LOLCat?
Tired of Historical Viewpoints? Want Insight into Real Trends?
Then you need to download Sourcing Innovation’s latest white-paper on Top Ten Trends for Supply Management Value Generation in 2015 (registration required).
If you’re like the doctor, then you’re tired of reading about the same old “trends” year after year that were tired old trends twenty years ago. Not only does it show a lack of insight on the part of the trend promoter, but it shows a lack of forward thinking on the part of the receiver to keep on listening.
Sourcing Innovation and the doctor are so tired of these futurists who are stuck in the past, and the fact that they have everyone convinced they should be asking for trend updates on a semi-annual basis, that in September, SI published a series on The Future of Procurement that specifically focussed on we shouldn’t be talking about the future of Procurement after all. First of all, as clearly illustrated in the series, thirty of the thirty-three trends that are commonly being promoted as future trends are not future trends at all. Secondly, some of these trends are so old, they weren’t even future trends of your forefathers. Thirdly, and most importantly, trends which are entirely in the future don’t help you when you’re still struggling to prepare for next year.
The trends you need to know about are the trends that are at the leading edge that are relevant to your business now, not ten years ago, and not ten years ahead in one possible future. So, for those of you who want to cut to the chase and get a bead on the real trends that will help you today and tomorrow, and not a tangent into the obvious or an excursion into the dark ages, download Sourcing Innovation’s latest white-paper on Top Ten Trends for Supply Management Value Generation in 2015 (registration required), sponsored by BravoSolution.
Procurement Trend #13. The Cloud
Ten time tripping trends from the eighth dimension still remain, and as much as we’d like to assume that string theorists aren’t right and that those dimensions don’t all curl up and trap LOLCat in a box, we can’t. Thus, we must continue to follow the lead of the MythBusters and attack each claim made by the futurists, who are so deeply despised by LOLCat, one by one.
So why do so many historians identify The Cloud, which, to be blunt, has to be the single biggest piece of marketing malarkey of the past decade, as a future trend? Is it because they are dumb enough to believe that anything repeated enough times must be true? I don’t know, but I do know that:
- computing is becoming ubiquitous
and just about anything that can have a microprocessor shoved into it has one
- on-demand computing can be bought with a credit card
and can be bought from the same online store that you buy your books, clothes, and groceries from
- cloud marketing is ubiquitous
and even Oracle was crushed under the weight of the cloud craze and eventually buckled to the trend
So what does this mean?
Computing is not the Problem, Modelling is
These days, the average person has more computing power in her smartphone than she knows what to do with. Because so much computing power is wasted on unnecessary graphics and very poor algorithms, she may not know it, but the dual-core 1.4 GHz Apple A8 processor in your iPhone 6 with over 2 billion transistors can process hundreds of billions of instructions per second. This is 100 times faster than the first Pentium that revolutionized Procurement!
Computing is not expensive, Mindsets are
Computing used to be expensive, but it’s not anymore. You don’t need expensive Sun, IBM, or HP racks for most day-to-day business processing, and you certainly don’t need expensive machines for high-power computing. Remember, analysis and optimization is running data sets and models over and over again until you find a result. If you burn out a core, you can just buy a new one. The only place you really need to invest in redundancy and reliability is in the SAN (Storage Area Network) — you need multiple backups of raw data — not of temporary data sets.
Many Marketers are Morons, or, at the very least, think we are
The cloud is as vacuous as the real thing. It’s all about access to the software you need when you need it, not what you call it or where the application is hosted (and whomever is cutting the cheque should know where it is hosted). If you want to buy infrastructure as a service, with all the pros and cons, go for it. But it’s the applications and what you need to do with them that matters.
It Might Be Wabbit Season …
But you don’t have to go all Elmer Fudd and shoot everything in sight …
Even though it would appear to be the case that this is precisely what some bloggers would have you do. A few weeks ago we published a two-part piece on It’s Conference Season And That Means it’s Travel Season on why — even though it’s very, very, very important to get your Travel and Expense spend under control — it’s not Procurement’s job to question the validity of the spend or whether or not it aligns with organizational goals put in place. That’s the C-Suite’s job because, when it comes to T&E, it’s not always about immediately measurable financial ROI.
However, last week saw yet another post over on CPO Rising on T&E, which purported to give you “the three goals that every travel and expense management program must achieve” which, like the previous post, illustrated two of the right things to be doing and one potentially wrong thing because, doing it could be akin to shooting yourself in the foot. Presumably that is not something you want to do?
The post was right in theory when it said that you should strive for alignment between the travel and expense management program and both procurement and finance, but only right in practice if alignment is appropriately defined. According to the author, alignment is achieved when three goals are achieved. The first two goals, which should be achieved, were:
- Linked capabilities that can capture all booking options which is important because no spend, and no relevant detail, should be lost and
- Seamless, repeatable processes that result in “straight-through” expense-processing and the ultimate elimination of manual intervention for any expense that does not require manual intervention
because once you see where the spend is going and what the spend should be, and put the right rules in place, there’s no point in wasting a whole lot of manual effort on it.
And the third goal, which should never, ever be pursued without proper definitions was:
- Pure alignment between the travel and expense management program and both procurement and finance objectives
Why? Because pure alignment dictates that an exception to the rule is never allowed, and there will always be situations during travel where the rules need to be relaxed, and full adherence to the objectives defined in the author’s previous post means that no T&E without an immediate financial return is justified. We already did a two-part rant on why that is not the case (in parts I and II), but it seems we have to remind you of the importance of controlling spend and keeping departments on budget, and the importance of keeping your hands off of policy.
Track, measure, report, and process efficiently — but stay out of policy. The minute you over-step your bounds, the minute the other departments turn against you. And that’s not what you want.