Category Archives: rants

It’s The End of TechCrunch As We Know It

It’s The End of TechCrunch As We Know It
It’s The End of TechCrunch As We Know It
It’s The End of TechCrunch As We Know It
And I feel fine

That’s great, it starts with a web-shake, noobs and trolls,
get terrified – the doctor is not afraid.
Eye of a hurricane, listen to the web churn,
bloggers serve their own needs, dummy serve your own needs.
Feed it off an aux speak, grunt, no, strength,
The ladder starts to clatter with fear fight down height.
Wire in a fire, representing seven games, entrepreneurs for hire and a lagging site.
Left of west and coming in a hurry with the furries breathing down your neck.
Team by team reporters baffled, trumped, tethered cropped.
Look at that low playing!
Fine, then.
Uh oh, overflow, population, common news, but it’ll do.
Save yourself, serve yourself.
Web serves its own needs, listen to your heart bleed
  dummy with the rapture and the revered and the right – right.
You vitriolic, patriotic, slam, fight, bright light, feeling pretty psyched.

It’s The End of TechCrunch As We Know It
It’s The End of TechCrunch As We Know It
And I feel fine

Last Friday, TechCrunch ran a post that asked Where the Hell Are All the Rants? that noted that ever since some of its most prolific writers left the blog game to either a) become entrepreneurs or b) become investors, the tech blogosphere has been quiet — too quiet. And by quiet I mean so noisy that it’s difficult for anything of any substance (or signal) to come through. And the doctor agrees. Lately, he’s been reading TechCrunch less and less. Heck, this week it was almost indistinguishable from TUAW with all the me-too Apple coverage. I have to say I miss the TechCrunch of old where the bloggers asked How the Hell is This My Fault because not only did those posts have substance, they had character. You can find bland coverage on any old site. But you can’t find deep thought, real opinions, and the willingness to call out the elephant in the room and call a duck a duck (when it looks, walks, and quacks like a duck) on any old site.

To cut to the chase, no rants, no real opinions and willingness to make them known. No real opinions and willingness to make them known, no individuality. No individuality, no point. And that’s why it just may be the end of TechCrunch as we know it.

SAP bought Ariba. What Should You Do?

 

Don't Panic

 

With one hand, pick up your copy of The Hitchhiker’s Guide to the Galaxy, with your other hand grab a Pan Galactic Gargle Blaster, have a seat, and read a few random entries while you have a nice relaxing drink. And definitely don’t panic.

In fact, don’t even give the acquisition a second thought right now. Why? Despite what every e-Procurement, e-Sourcing, and Supplier Network vendor seems to be implying with their comments (as summarized by Peter Smith over on Spend Matters Europe), press releases, etc., the reality of the situation is that, for the time being, nothing is going to change and you don’t have anything to worry about.

Since no one else is going to spell it out for you, the doctor is.

  • Ariba was the largest pure-play vendor in the Sourcing/Procurement space
  • SAP is one of the largest ERP vendors in the space
  • Large Companies are slow moving
  • Large Companies have high overheads
    (and can’t afford to sacrifice revenue streams without replacements)
  • SAP has a Fusion road-map through 2020

When you put all this together, and consider what has happened with past acquisitions in both companies, the following picture quickly emerges:

  • SAP is going to slowly merge Ariba products into its suite(s) through Fusion
    but this is going to take years and in the meantime
  • SAP is going to continue to sell and support Ariba as-is in the interim
    because it needs to not only make its money back, but support the high overheads until it is in a position to absorb Ariba into it’s core platform and do away with needing to maintain a separate suite.

In other words, you have a few years to come up with a backup plan if the way SAP merges Ariba’s suite into their platform isn’t to your liking or if the renewal costs when it happens are too rich for your blood. The only people who need to panic now are SAP partners where a significant percentage of their business came from SAP referrals as SAP will no longer be referring anyone with Sourcing, Procurement, or Supplier Network needs to third parties. (Companies like Hubwoo might be in this boat.)

Now, depending on where you are in terms of a renewal, or how much data you have in the system, or how much you use the system, you might not want to wait a few years to start thinking about moving off of the platform if you are worried about it meeting your future needs, but you don’t have to rush into a decision. And you certainly don’t have to panic. Time is on your side.

Who’s in Worse Shape? The USPS or Royal Mail?

According to this recent article on Accounting Madness in the Economist, Royal Mail has racked up a £10 Billion deficit in unfunded pension liabilities alone. Wow! The USPS, which is about $15 Billion in debt, only racked up 5 Billion in underfunded pension liabilities. And we thought they were doing well, as they saved over 300 Million pounds in the first phase of their Procurement Transformation and expect to save over 600 Million pounds in the second phase. Too bad they don’t understand that contingent liabilities are still liabilities and that, if ignored, will just come back to bite you in the thigh, repeatedly, like your friendly neighbourhood boghog.

Who came up with the National Accounts rules anyway? The pension liabilities of unfunded pension plans are contingent liabilities and are therefore not recorded as liabilities in the National Accounts or public sector finances. How can you count the assets, and say you have a £16.5 Billion Surplus, but not count the liabilities, especially when the reality is that you are in a deficit of £10 Billion? It’s just insane.

How much credibility would your Supply Management organization have if you only counted savings and not cost increases? Specifically, if you counted the $10 Million you saved on temporary labour on the balance sheet when reporting your successes to management but ignored the extra $20 Million you spent on oil because you didn’t lock prices in for the long term? Not much. Nor would it be wise to do so. Ignoring losses takes the focus away from where the organization, and cost management, should be focussed. It’s time for good GAAP to be accepted around the world, and, in particular, a GAAP standard that doesn’t allow such big gaps to go unnoticed for so long!

Amazon is Not a Threat to Best Buy, but Amazon, Walmart, & Target Are!

Best Buy is having problems. It’s closing 50 stores and, according to some analysts, could close over 200 stores in the next few years. For some stores, the best they can hope for is that they are mistaken by Chuck’s enemies for a BuyMart in off hours and blown up so that they can at least collect the insurance payout. For others, they are going to find out what Circuit City found out when their circuits started frying.

Why is it having these problems? According to recent articles, including this one in Forbes which says that Amazon is Not a Threat to Best Buy, there is speculation that Amazon, and other big web stores that are offering the same brand name consumer electronic devices at greatly reduced costs are stealing sales and stealing Best Buy’s customers and profits. And while this may be the case for accessories (like USB drives), phones, MP3 players, and even netbooks and laptops, where shipping fees are small (compared to the total cost of the purchase), it’s definitely not the case for larger appliances and electronics product because:

TV profitability is minimal and getting worse online. Shipping costs go up, TV prices go down, and accessories are hard to sell online. This does not make for a profitable business. We continue to believe third party sellers are not selling big ticket on Amazon like they were because they are losing money. Some categories remain great, like cameras and headphones, but ultimately, pick up in store to avoid shipping will work and only become more prevalent post the sales tax arbitrage is over.

Unless I want a previous generation big-screen HDTV and can get a kick-ass clearance deal, I’m not ordering a TV online because the shipping charges will probably be $100 or more, and if something is wrong with the TV, I might have to pay the same again to send it back. It’s not worth saving $50 on the purchase price if I have to pay $200 in shipping. And while the average consumer might fall for a red tag sale where you inflate the base price so you can take 30% off instead of 10%, they’re going to see the grand total and also balk at an online purchase of such an item.

However, this doesn’t make the case for buying that new big-screen HDTV at Best Buy. Sure, they have a bigger selection than most other stores on the showroom floor and it’s usually the case that they have at least one employee per department who knows more about the products than anyone at a big-box department store is going to know about the same product, but, in today’s marketplace where everyone wants to GroupOn the TeamBuy, debt is high, income is flat, and the possibility of losing your job is always around the corner, no one wants to spend more than they have to for a commodity item. So, now that they can see something in the store, decide they want it, check Target’s mobile website, see the same product is 10% cheaper in the Super Target down the street, why would they get it at Best Buy? Especially if they are not purchasing an extended warranty? And if they happened to see that same product at Walmart last week 15% cheaper? Plus, the fact that it’s probably on Amazon for 10% cheaper tells them that if they don’t want it today, at least one big-box department store is going to have it cheaper. So, while Amazon on its own is nothing to fear from Best Buy’s perspective, Amazon & Target or Amazon & Walmart combined are.

Until Best Buy can offer a better buying experience at the same price as these big box stores on all the big (ticket) items they sell, the incentive to buy at best buy is not going to be there. Especially given the state of customer service at these stores recently. Consider the plight of a customer at the Greenville, South Carolina store who was subjected to porn when visiting a best buy store, or the doctor who was repeatedly ignored AFTER indicating he was there to purchase a $200 product at that store on that day. In fact, when I think about it, if they don’t fix their customer service issues, they probably won’t survive long enough for the Amazon-Target or Amazon-Walmart tag-team to take ’em out. Especially since you can’t buy more than one item through their Canadian web store at a time! It’s a shame. They used to be great. Now …

Bravo to CPO Agenda for Pointing Out That Charging Suppliers to Bid is a Really Bad Idea!

As I’ve told everyone who has ever asked, charging suppliers to bid is a really bad idea. Not only does it generate ill-will, but as this recent article over on the CPO Agenda that gave “tips for understanding why charging suppliers to tender is a bad idea” noted, it could even be illegal. But let’s take the tips one-by-one because it seems that this practice, which started rearing its ugly head at the start of the recession, is still trying to push through.

  • It is Counter-Productive
    It reduces the expressions of interest from time-wasters and quality suppliers alike. This is what goes through the head of a serious bidder with a quality product: “I know my product is quality, and so do my happy customers, so why should I pay $1,000 just for the opportunity to submit a bid? I’m not even guaranteed my product will be evaluated. I’m going to bid on these four other RFxs instead.” So, what you’ll end up with is a set of suppliers who are desparate for your business. But why are they desperate? Maybe their sales team can’t sell worth a damn, or, maybe (and the doctor leans this way) their products just aren’t as good as their competitors, or if they are, they are not able to produce them as cost effectively. Do you really want inferior products or unnecessary premiums for quality?
  • Suppliers with No-Pay-To-Play Policies are Out
    Not only will you likely knock out most of the quality suppliers in your potential supply base who, while quite willing to bear the costs of providing you with product samples, etc, are not willing to pay just to bid, but you will definitely knock out any supplier with a no-pay-to-play policy that prohibits them from bidding on any contract that requires a bid fee. These could be the best suppliers in the world.
  • There’s no Rationale for it
    The logic is that it takes time to collect, verify, and analyze a bid, and while this is true, with modern e-RFx / e-Auction software, you can collect, verify the completeness of, and compare a bid to a benchmark in less than a second. You will likely only need to analyze the Top 5, accoring to your weighted metric, in detail at the end of the day. And, since you can now buy unlimited use of these systems for less than what a single project used to cost, it doesn’t cost any more to collect fifteen bids than five bids.
  • It is Unethical
    There is way too much opportunity for corruption or the perception of favouritism. (In simple terms, you are sending this message: We value suppliers who bribe us for our business.) Plus, there is always a chance that this restriction could be illegal, in breach of fair competitive practices, or public procurement law. Oops! Can you say “class action lawsuit”?
  • It Says Your Company Is An Ass
    Okay, so the original article said it sends a strong message to the supply base you need to connect with that you are actually uncooperative and uninterested in building a relationship that will benefit both parties, but this sums it up nicely. Unless your organization has a monopoly, and can get away with being a self-centered smug corporate ass, just don’t do it.