Category Archives: rants

The “Future” of Procurement: Old News Part I

As per yesterday’s post, today we’re going to dive right into a discussion of the list of the 33 “future” states that the symposium speakers are thrusting upon you in their halogen halo. But unlike the halo of an angel*, these are man-made halos and far from heavenly, so we must take care not to be suckered in by their splendour, because prolonged exposure to these halos might just give us skin cancer. So we’re going to debunk the deceptions one-by-one as soon as we repeat our warning that a duck will be called a duck, a spade will be called a spade, and a red-assed baboon will be called a red-assed baboon. If the thought of brutal honesty makes you uncomfortable in any way, you can always hop over to Spend Matters for the week where they have an editorial team that’s usually a little more PC.

33. Governmental Regulations

Government regulations have been enabling and restricting trade since trade between nations began. Why would it suddenly stop being an issue? Yes, the regulations and trade agreements will be in constant flux as governments are full of big egos (who constantly want to gain the upper hand for their country and look like a hero) and greedy grubbing con-men who weren’t quite psychopathic enough to be big business CEOs** (and instead went into government and push for whatever legislation is favoured by the lobby group that gives them the biggest bribe … err … the lobby group that loses a suitcase of money in their office and never claims it, making it legally theirs after they try, but fail, to find the person who lost the suitcase full of money). However, because of the due process of law that must be followed in all countries, and the fact there are always egos that will be damaged and special interests that will be disadvantaged by whatever trade agreement is made or law is passed, these changes take time and can be prepared for if you keep watch and stay on the ball. Now, some regulations will be so onerous (such as the ones being proposed in the TPP) that they might just make it impossible for your business to compete in one or more of its current markets, in which case you will have to decide whether you want to change product and service offerings, change markets, or shutdown the business while it is still profitable (so that the investors can take their earnings and start something else while they still have the chance). But that’s just the way it is, and things usually aren’t that bad. And any expert who thinks you don’t know this already, like the moron who thought his CD Tray was a Cup Holder and really was too dumb to use a computer, is in fact too dumb to even be writing future trend pieces (and, unfortunately, also too dumb to realize that he’s too dumb to be writing future trend pieces and, as a result, pumps them out faster than Harlequin pumps out their lushy romance novels).

32. Globalization

Globalization is not new. Soon after trade between neighbouring nations began, the more aggressive traders looked for ways to expand their trading reach and increase their wealth, power, and influence. They formed caravans. They used ships. And they got as far as they could. And some of these routes lasted for thousands of years. Consider the Silk Road, which was, as per its name, a major trading route for Silk dating back to the Han dynasty, starting around 200 BC, approximately 3000 years or so after the establishment of trading routes between Egypt and Mesopotamia for pottery, lazuli, and obsidian. Moving forward, the Vikings established the Volga trade route back in the 9th century and traded along it for about 300 years. Then, another 300 years later, Elcano completed Magellan’s attempt to circumnavigate the world, creating the first global trade route. Yes, faster travel options, the outsourcing and rightsizing crazes, and the internet accelerated the pace of globalization beyond the wildest dreams of the early industrialists, and opened the global marketplace up to smaller enterprises, but globalization has been with us for a long, long, long time and it’s here to stay. And any future trend talk focussed on this should be relabelled “More Facts from Mr. Obvious”.

31. Increased Competition

To be fair, an idiot, and maybe even an imbecile, might not be aware that Globalization is, obviously, going to lead to increased competition and that as the pace of Globalization increases, so does the pace of increased competition because it does require some basic logic skills to deduce this, but not much more than your average middle year child is going to use to try and convince you to buy him / her that new video game. Of course you are going to face increased competition as a result of globalization. Globalization means you will be entering markets that already have providers that offer competing products and/or services, which can now enter markets you are already in. Not realizing this is like not realizing that the same stairs*** that you used to walk up to the second floor can also be used, gasp!, to walk back down.****

For more ranting and raving, come back tomorrow. Or, if you’re in the mood for something a little closer to puppies and rainbows*****, check out Spend Matters and come back next week. the doctor should have worked his way through most of the sheer lunacy by then. No guarantees, but that’s the goal!

* Where we are using the popular perception of what an angel is under the Christian influence.

** Many of the best business leaders, where best is defined according to Wall Street, are psychopaths. Multiple studies, summarized on patheos, confirm this.

*** Stairs, not escalators.

**** Which, sadly, is a fact that has escaped at least one lawyer! (See Things People Said, Courtroom Quotations).

***** No guarantees!

So Why Shouldn’t We Talk About the Future of Procurement?

In yesterday’s post, we talked about the fact that conference season is around the corner and, with it, plenty of talks on the Future of Procurement, Procurement in 2015, and Procurement 2025 — What it Will Take to Get There. We noted that the doctor is beginning to really despise this because it’s repetitive, unnecessarily stressful (with the false sense of urgency for the wrong solution), and, most importantly, focussed on the wrong question. It’s not what the analysts and vendors think the future is, it’s what the future needs to be for your organization to be successful (and solvent) and what you need to do to get it there. These are not one in the same.

So why is it repetitive? the doctor recently reviewed dozens of “future” studies, papers, articles, PowerPoints, and posts written in the last year and compiled a list of 33 commonly identified “future states” that Procurement is supposedly, according to a plethora of authors that shall not be named to protect the guilty, going to have. The majority of these have been “future states” for years (and are old news). Only a minority are still somewhat innovative (and are ongoing blues) if looked at in the right light and only a portion of these from a select few forward-thinkers are truly new (like a pair of shiny new shoes) and informative and relevant to a future-state discussion as these select few trends have not yet been discussed and drubbed for nearly a decade, and, in a very small number of cases, could not have been foreseen a decade ago.

To illustrate my point, the doctor is going to discuss the full list of 33 “future states”, of which at most 7 “future states” are truly new and forward thinking and relevant to a current discussion. The majority are old news and ongoing blues. Once we get through the old news and ongoing blues, which will take us over a week, we will discuss the 7 “future states” that are still new and shiny and that were not clearly visibile through the long-range telescope as recently as five years ago. Given that we have 33 “future states” to get to, starting with tomorrow’s post, we’re going to dive right in.

But before we continue, let me make one thing very clear. These posts are categorized as rant for a reason. Just like the doctor has no restraint when it comes to rubbish, he has literally no patience for puff-pieces, which he has recently read a lot of. As a result, he’s not pulling any punches with this series. So if you have a habit of reading, sharing, or promoting these pieces, unless you’re ready for a rumble, you might want to go hop over to Spend Matters for the next week where I’m sure you’ll find friendlier pieces. Because, in this series, I’m going to call a duck a duck, a spade a spade, and an idiot an idiot*. the doctor will do his best to keep the language Safe for Work, unless you mention a trigger word, but the bile will likely bleed through where it is well deserved. You have been warned.

* the doctor is well aware you catch more flies with honey than with vinegar, but he doesn’t want to attract any annoying little insects with brains smaller than a mustard seed who, after spending the bulk of their day in someone else’s excrement will, despite being swatted at repeatedly, continue to buzz around senselessly until they get their brains bashed out.

It’s Conference Season Again — Do We Have to Talk About the Future?

Conference season is around the corner and, with it, plenty of talks on the Future of Procurement, Procurement in 2015, and Procurement 2025 — What it Will Take to Get There.

Regular readers will know the doctor is beginning to really despise this. Why? First of all, as will be outlined in an upcoming series of posts, it’s a lot of the same old, same old … which, in some cases, will be recycled for the tenth year in a row. Second, many* of the solution providers will be doing their best to instill in you an unnecessary sense of urgency to adopt second rate sourcing and procurement solutions that you aren’t ready for or that won’t deliver the returns you need now. (While 9 out of 10 companies do need better sourcing and procurement solutions, the solutions these companies need to start with often aren’t the solutions that money hungry solution providers push upon them.) Third, and most annoyingly, come the questions on what does the doctor think the future of Sourcing / Procurement is.

Why is this annoying?

  1. A Future Vision Doesn’t Change Much In Six Months

    Conference season is every six months, but unless a radical, ground-breaking, unexpected innovation hits the scene, between one conference season and the next, one’s future vision is not going to change a heck of a lot. And when one considers there has not been any radical new offerings in Supply Management in over 5 years, one’s future vision doesn’t have much reason to change at all.

  2. Tomorrow Has Come And Gone Many Times, but The Promised Future Has Not Arrived

    If you look at the predictions for 2020/2025, they are not that much different than the predictions for 2010/2015 that were made 10 years ago. Why? First of all, as per our last point, there haven’t been any radical new offerings in Supply Management in over 5 years (just steady improvements, with a few providers progressing much faster than others). Second, adoption of mainstream sourcing and procurement solutions remains slow. Third, the best solutions, and the advanced solutions that an organization really needs to make an impact on their Supply Management return, have not yet been adopted outside of a handful of best-in-class organizations.

  3. It’s Not What You Think the Future Will Be, It’s Where You Need To Go

    When an organization asks What’s the Future of Procurement, it’s asking the wrong question. First, while most of the consultancies, analyst firms, and providers feeding these consultancies and analysts firm their provider preferred messaging tend to agree on what the future is at a high level, each tends to tailor their message to the product or service offerings they can deliver to you today. Second, the future is in a state of flux due to uncertainties in supply management, business, and globalization. Third, and most important, it doesn’t matter what the future is, it matters what the future needs to be for your organization to succeed. The question an organization needs to ask is what is our Procurement Future — where do we need to go to succeed.

So while it’s very important to plan for the future, it’s very annoying to keep talking about it again and again in a way that adds nothing to the message. So, since the medium is the message, unless you want to be annoying, let’s ditch all this feel-good future talk and focus on figuring out how to get the right solutions into the companies that need those solutions now if those companies are to have any hope of having a future. Capis?

*Many, but, fortunately not all. But do you know enough to tell the difference?

In What Way Would I Improve Spend Analysis?

When it comes to spend analysis there is at least one particularly powerful tool out there that will meet the majority of the needs of any organization and probably at least one tool that will do, with elbow grease, just about any analysis an analyst can think of. Since businesses have wanted reports and analytics since the days of the first spreadsheets, analysis tools are always advancing and most are beyond the ability of the average user to fully utilize their functionality.

So, given this fact, how would I improve spend analysis? And given that this question may imply that I may only make one improvement, just what would that improvement be? Especially since most tools don’t do (true) federation, don’t support full reg-ex (regular expressions), don’t understand semantics, and don’t run fast enough on large data sets — indicating that, as a PhD in CS with deep expertise in analysis, modelling, optimization, and semantics, there are theoretically a number of advancements I could bring to the table if I put my mind to it?

Despite the plethora of options available, today there is only ONE thing I would do to improve spend analysis. I’d make it impossible to do anything but spend analysis. Specifically, I’d make it illegal to include dash-boarding capability in any (spend) analysis product.

Why would I do such a thing? Besides the fact that I’ve been ranting since 2007 that dashboards are dangerous and dysfunctional, I would do such a thing because, among other things, they give you a false sense of security that, if mismanaged, could be so grave that, like the myth of Nero, you would fiddle while the factory burned.

Why would I ditch the dashboards and make it a crime punishable by any fate one could devise that was worse than death to include any capability whatsoever designed to support a dashboard? Because I just read this post on Purchasing Insight on “the inordinate cost of poor spend analytics” that said that it’s reckoned that more than 50% of businesses employ between 2 and 5 people to prepare and create procurement dashboards and spend reports. This is ludicrous. (No, not Ludacris.) If these people are senior analysts, then a large organization is spending more than 500,000 a year on salary and overhead to create dangerous and dysfunctional dashboards that spit out shiny spend reports that, after being analyzed the first time for inefficiencies, provide zero value to the organization. Once the report is analyzed, the inefficiency identified, and the problem corrected, and once this is verified in the next report, no subsequent report is going to tell the analyst, or management, anything new.

As SI has said again and again, the value of spend analysis is actually doing spend analysis, again and again, testing new hypothesis every time they pop into the analyst’s head. Yes, most hypotheses will yield nothing, but that’s not important because it only takes one insight to yield 100,000 worth of savings. If the tool is flexible, powerful, and configured appropriately, the user will be able to explore dozens of different analyses in a week, and if even one yields 10,000 of savings, that’s an (amortized) ROI of (at least) 5X. Spend analysis is analysis. Not dashboards and reports.

So if you really want to improve spend analysis — ditch the dashboards and focus your talent on real analysis. Otherwise, just download a free reporting engine off the internet. You’ll get the same worthless result, without forking out six figures for a tool you’re not really using.

Air Canada! Blame Canada!

Today, SI is going to pay homage to SM and Jason’s recent experience with Air Canada Rouge, summarized in this post on “A Review of Air Canada Rouge – Just Say No for Business and Personal Travel” over on Spend Matters. In consideration of his predicament, I suggest that one takes a South Park view and, in the spirit of consideration granted us by Trey Parker and Matt Stone … Blame Canada! (South Park Movie Clip; language NSFW)

Times have changed
Our flights are getting worse

They won’t upgrade their planes
They just want to fatten their purse!

Should we blame the government?
Or blame society?
Or should we blame United* for their misdeeds?

No, Air Canada<sup>**</sup>!
Blame Canada!

With all their beady little eyes
And flapping heads so full of lies

Air Canada!
Blame Canada!

We need to form a full assault
It’s Air Canada’s fault!

Don’t blame greed for old aircraft
Canada is so lax, they don’t know how to spend the tax!

And CEOs once had our travel needs first
But now amenities, one by one, have been dispersed!

It’s Air Canada!
Blame Canada!

It seems that everything’s gone wrong
Since Air Canada came along!

Blame Canada!
Air Canada!

They’re not even a real airline anyway

My son could’ve flown with dignity and flown in comfort too
Instead he froze like an eskimo without an igloo

Should we blame the captain?
Should we blame the crew?
Or the VPs who cut the fuel budget too?
Heck, no!

Blame Canada!
Air Canada!

With all their hockey hullabaloo
And that loser Harper too!

Blame Canada!
Shame Air Canada for…

The dirt we must avert
The excess we must redress
The despair and woe, out it all must go
We must blame them and cause a fuss
Before somebody thinks of blaming us!

* They Break Guitars!

** Before you tell me Air Canada Rouge is technically not Air Canada, as they are a (wholly owned) subsidiary, ask yourself if the average person is going to know that.