Category Archives: rants

Procurement “Trends”: Interlude 1

As far as the silicon snake oil selling “futurists” are concerned, it’s:

Everything Louder Than Everything Else!

I know that I will never be politically correct
And I don’t give a damn about my lack of etiquette
‘Cause as far as they’re concerned the world could still be flat
And if the thrill is gone, then it’s time to take it back!
If the thrill is gone, then it’s time to take it back!

Who are we? Why are we here?
They forget the questions, they’re too busy drinking beer!
What’s the problem with them? What’s the meaning of it all?
They tried to learn to dance before they learned to crawl!
They tried to learn to dance before they learned to crawl!

So sign up all you raw recruits
Throw away those designer suits
Time to get your systems cocked and your targets in sight
There’s such massive spending all over the world
You gotta save your comp’ny, got spending to unfurl
You’re all enlisted in the armies of the night

And I ain’t in it for the power
and I ain’t in it for my health
I ain’t in it for the glory of anything at all
and I sure ain’t in it for the wealth

But I’m in it ’till it’s over and I just can’t stop
If you wanna spread the truth, you gotta do it yourself
’cause they like their drivel like I like my rock

Everything louder than everything else!
Everything louder than everything else!
Everything louder than … everything else!

Everything louder than everything else!
Everything louder than everything else!
Everything louder than … everything else!

(wasted youth, wasted youth)
(wasted youth, wasted youth)

I got a file on them and it’s a mile long and
I know that I have all of the proof
that they’re just another case of arrested development
and that they all wasted their youth
I say that they’re in need of some radical discipline,
I say they gotta face the truth,
that they’re just another case of arrested development
and just another wasted youth

They say I’m wild and I’m reckless
but they should be acting their age
They’re all illiterate schizos in a tumultuous world,
and they keep us at a difficult stage

But it seems to me to the contrary,
of all the crap they’re going to put on the page,
that a wasted youth is out-shined by far
by a wise and productive auger!

A wasted youth is out-shined by far by a wise and productive auger!
A wasted youth is out-shined by far by a wise and productive auger!
A wasted youth is out-shined by far by a wise and productive auger!
A wasted youth is out-shined by far by a wise and productive auger!

(louder, louder, louder, louder, louder!)

If you want their views of hist’ry, then there’s something you should know;
the three men they admire most are Curly, Larry and Moe!
They don’t worry about the future, ’cause sooner or later it’s the past
and if they say the thrill is gone, then it’s time to take it back
If the thrill is gone, then it’s time to take it back!

So sign up all you raw recruits
Throw away those two-bit suits
Time to get your systems cocked and your targets in sight
There’s such massive spending all over the world
You gotta save your comp’ny, got spending to unfurl
You’re all enlisted in the armies of the night

And I ain’t in it for the power
and I ain’t in it for my health
I ain’t in it for the glory of anything at all
and I sure ain’t in it for the wealth

But I’m in it ’till it’s over and I just can’t stop
If you wanna spread the truth, you gotta do it yourself
’cause they like their drivel like I like my rock

Everything louder than everything else!
Everything louder than everything else!
Everything louder than – everything else!
with many, many, many apologies to Meatloaf*.

Rock and Roll LOLCat

* Not the food!

If Software Has to Embed Games To Make You Want To Use It …

Then the software isn’t worth using in the first place!

When Pierre mentioned a YouTube video of a “first-person shooter” (FPS) game for SAP PO (Purchase Order) approvers to blow away those pesky POs in his recent piece on Gamification in Procurement [Looking Beyond the Technology] (Plus content on Spend Matters), I thought he was being satirical! But he was being factual. And it’s pathetic that this concept exists.

While I agree that gamification has potential as a learning tool, the fact that you have to consider putting games inside your software to get people to use it says, no, screams something — YOUR SOFTWARE SUCKS and no one should be using it in the first place when there are dozens of other options.

In other words, when Pierre said that this is where gamification really runs the risk of going off the rails and resembling the proverbial hammer looking for the nail I not only have to agree, but take it one step further and emphatically state that this is where gamification goes completely off the rails.

Supply Management technology should help you get your job done efficiently and effectively. If it’s done right, and accomplishes this goal, you will want to use it because you’re overworked, underpaid, and will do whatever it takes to get the job done and get home before it’s time to go to bed and start the cycle all over again. Because, while you like games, you’d rather go home and play a tabletop Euro-game with your family where you not only get to challenge your problem solving skills and teach the next generation the basics of supply and demand and resource management, but actually enjoy some time with your family.

So, while Pierre is right in that games, properly applied, can be powerful learning tools (and why SI ran a whole series on the Board Gamer’s Guide to Supply Management), they are educational and modelling tools that need to be used appropriately — not misused to mask crappy software. So, when it comes to games, apply the theory (and, yes, game theory is great), and leave the FPS to the war-gamers.

Why Are We Going to Spend Thirty Posts Exposing Past Procurement “Trends”?

Is it because the doctor is just plain tired of 2nd rate analysts and consultants selling last century’s solutions instead of accepting that we are in the 14th year of the 21st century?

Is it because without a solid understanding of where Procurement comes from, where it is, and where it needs to be, you’ll never get to where you need to go?

Or is it because without this understanding, you’ll never select the right technology and continue to be among those organizations that select those procurement tools that collectively cost organizations in North America 1.5 Billion per year and waste more than 32 Million man-hours because the Procurement system fails to increase their productivity (and, in some cases, because the system is not aligned with organizational processes and needs, actually decreases productivity and hinders savings identification and realization)?

It’s a combination of all three.

Modern Supply Management tools are supposed to save the organization money, not cost it money, but as The Topline Strategy group discovered (as summarized in this article over on S&DC Exec (“only one quarter of procurement professionals believe their procurement system makes them much more productive”) and MarketWatch (“survey finds inefficient procurement systems cost north american businesses 15 billion annually”), only 28% (or one-quarter) of sourcing an procurement professionals believe that their procurement systems make them productive.

This is an abysmal statistic in an industry that spent over 1.4 Billion on Enterprise Software in 2013, software that is supposed to increase efficiency and, in the case of Supply Management, identify savings and add value to the process.

Why is the situation so bad?

The article gives a few hints, including:

  • convoluted user interfaces,
  • lack of critical features,
  • poor integration or implementation (with enterprise systems & IT infrastructure), and
  • lack of regular, often necessary, updates

But, in many cases, the real reason is lack of fit and key functionality.

UI, proper implementation, good integration, and regular updates are important, but the system has to fit the workflow and support organizational processes. Sometimes the organization’s processes will need to be updated, but there is a difference between updating to a more appropriate process, and changing to a completely different process unsuitable to the organization’s business just to force fit a square system into a round architectural hole.

And there’s no way you can select the right fit if you don’t know what the right process should be for your organization. And you can’t know the right process until you know what that process has to support, why, and how the process will need to evolve over time.

And that is fundamentally why we have to spend thirty posts diving into past procurement “trends” so you understand what the real requirements are and what is just hot air coming out of the mouth of another slick talking speaker (or vanishing ink from their specially made pens). It will take time, especially since we will have to take a few breaks to maintain our sanity, but we have to do it.

Don’t you agree, LOLCat?

Can U Wake Me When Its Over.

Yes, LOLCat, we’ll wake you when itz over. We don’t want to drive you to drink too! (Futurists have already driven this LOLCat to drink!)

So, Why Are “Futurists” Still Stuck in the Past?

And driving poor LOLCat to drink?

There are a few reasons.

  1. They Have No Knowledge as they come from different backgrounds which offer them no education or experience in Supply Management.
    Just because you can get high, have psychedelic visions, white them down, and spin a good yarn doesn’t mean you can be a futurist. A poet, sure, but not a futurist …
  2. They Have No Vision beyond what the rear view mirror (or the hydrocarbon gas from the bituminous limestone) offers them.
    When Meatloaf said “it was long ago and far away and it was so much better than it is today“, he was referring to newly discovered young love, not business processes identified 30 years ago …
  3. They See Too Many Organizations Stuck in the Past and a few organizations (in the Hackett top 8%) ahead of the pack and they think they can peddle these best practices as future vision.
    This is not 1914 (which was 12 years before the first transatlantic telephone call) where good ideas take years to spread (and the first person to bring a new idea or technology from a different continent can make millions on someone else’s work) and a career can be built on one single improvement — this is 2014 where it only takes a few seconds for a story to be spread around the world. But I guess if you can’t look beyond the rear-view mirror …

So, why are so many organizations still stuck in the past (and fuelling the flame that powers these fantasy futurists)? There’s a few reasons, and they include:

  • Lack of Education
    Many Supply Managers were simply thrust into the role, with no training or background for the role. And despite the fact that they have some competence or experience in other areas, they are so ill-equipped and ill-prepared for the role that they might as well have been dropped in The Lost World*.
  • Lack of Resources
    Most Supply Managers are overworked (and underpaid, but who isn’t these days) and resource-constrained, with no time for training and no budget even if they had the time (or would sacrifice their few remaining free hours to get better and more efficient so that maybe someday they can take a whole weekend off).
  • Lack of Clarity
    With no formal education, no training, and no resources to make sense of the barrage of BS being thrown at them by futurists and analysts alike, how can they differentiate between current and past processes and technologies and what they need to embark on a path that will ready them for what comes next?

And the third reason is the most crucial. Until they get some clarity, Supply Managers are going to continue to be taken in by modern con-men (who include 2nd rate analysts, consultants, and salesmen of outdated technology) selling them silicon snake oil when they just need modern sourcing and procurement tools that fit their workflow and daily needs.

So, to this end, now that we’ve explained why thirty (30) of the thirty-three (33) future-trends are, at best, last decade’s future trends, we’re going to explain why futurists (and the organizations they preach too) are still stuck in the past, what’s relevant, and what it means to you and your organization.

And we’re going to do it one trend at a time. Starting tomorrow, with “future” trend #33 on governmental regulations, we’re going to illuminate the old news and ongoing blues trends one by one until we’ve laid them all bare. It will take a while, but if you stick with it, it will be worth the effort.

What do you think, LOLCat?

"Futurists" Drive Me Bananas!"

Me too, LOLCat. Me too.

* I’m referring to the original here, so if you’re thinking Michael Crichton, then the problem is even bigger than you realize.

When it Comes to an Event, How Big is Too Big?

1 Category?
5 Categories?
25 Categories?

10 Commodities?
50 Commodities?
100 Commodities?

50 Lanes?
500 Lanes?
5000 Lanes?

It depends. How much can you handle at one time?

If you’re sourcing with optimization, the bigger the better. Tackle as many categories at a time that overlap with at least one other category, especially if you are dealing with physical goods that are coming from common locations. The way you save on logistics costs is to minimize the number of trucks, which occurs when you can combine as many shipments as possible as to minimize the number of LTL shipments.

Or if you are dealing with multiple service categories that can sometimes be provided by the same contract or temporary labour agencies. For example, engineers and software developers are often offered by the same specialist agencies; warehouse, janitorial, security and other unskilled labour are often obtainable from the same agency; and certain others specialize in legal, accounting, and similar trade professions.

Tackling them all as one mega-project doesn’t mean that you have to negotiate with them all simultaneously or that you have to create massive RFXs, Auctions, or bid-sheets. There’s nothing stopping you from organizing your sourcing events so that each category is being sourced simultaneously by a different team member, co-ordinated so that all of the bids come in simultaneously for a round of global optimizations to determine if there is any overlap in transportation or supply base that would suggest a (temporary) combination of categories or a splitting of transportation into a separate project.

Optimization isn’t just doing the best job you can on the event, it’s defining the right event in the first place. Sometimes the best way to do this is to look at a number of categories simultaneously when they are each in the middle of a sourcing project and see if the definition and split really is the right one. If the mega-optimization suggests something different, re-define the categories and events and continue the right way.

Just make sure that, when the event notice goes out, that you inform suppliers / carriers that the bids will be multi-round and that the scope of the transportation requirements might be increased or decreased after initial bid analysis and further category definition; or, in the services case, that this is a preliminary request for information and rate cards and that the suppliers should inform you of other services they can offer and standard rates for those as you may, if the option exists, expand your requests during the final RFQ / negotiation phase (as you want to be above board during the entire process).

In other words, a project is only too big when it exceeds the ability of your current team to manage it simultaneously. If the numbers involved makes someone fidgety, then it’s time they shape up or you find someone with a stronger backbone. If the tool you are using says it’s too big, then it’s time to get a new tool. It’s not too big if it doesn’t exceed your current potential, which for many leading sourcing organizations is well beyond what they think it is (as a result of sourcing providers with limited skill sets assuming that just because they can’t handle it that their client can’t handle it). There are teams out there that can handle Billion Dollar sourcing projects and tools that supper them. That’s about as big as it gets.

So, as Big Data Promoters like to say, Think Big!