Category Archives: rants

Procurement Has a Long Way To Go if Being a Doorstop is a Measure of Success

A few months ago, the CPO Agenda published the transcript for its roundtable in London in May 2010 on “budgeting for a wider influence”. While this post is not going to summarize the transcript as it really doesn’t say anything that this blog hasn’t been telling you for years, buried within the transcript is a very interesting quote by David Noble, the Chief Executive of CIPS.

If we do not have the ability to get in there and hold the door, we will lose it and be back to where we were 10 years ago.

In other words, a current measure of success is your ability to hold a door, i.e. your ability to act as a doorstop!

It’s sad, but at many companies, it’s still true. Just like there are at least five companies that haven’t tried e-Sourcing or e-Procurement for every one that has, for every best-in-class company where Supply Management has influence and/or control over the majority of the organizational spend, there are five companies where Supply Management doesn’t have influence or control over the majority of organizational spend.

So how do you get more spend under your control and move up from door-stop to door-person? You kick-ass on some major projects and get more and more support from the C-Suite. So how do you get those big projects? You start by speaking the language of finance, because once you get the CFO on your side, the CEO will follow and then you’ll have the credibility you’ll need. Start with Bob’s great posts on Speaking Like a CFO (Part I and Part II). Then review the quick introduction to finance posts (Part I, Part II, and Part III). Make sure you understand what the Z-Score really is. Then bookmark Investopedia. It will be your best friend. Its dictionary on finance more than rivals Wikipedia’s.

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No Wonder Procurement Has No Credibility at Some Companies: Squillion is Not a Number

I was astounded to find that a Chief Procurement Officer of a major electrical retailer used the word “squillion” in the CPO Agenda Executive Roundtable this past May in London on “budgeting for a wider influence”. In order for Procurement to get a seat at the table, it has to first impress the CFO. To do that, it not only has to speak the language of finance, but use real numbers!

In North America, and in the general scientific community, these are the units of the Base 10 number system. Note that squillion is NOT on the list!

Unit Term
1 One
10 Ten
100 Hundred
1,000 Thousand
1,000,000 Million
1,000,000,000 Billion
1,000,000,000,000 Trillion
1,000,000,000,000,000 Quadrillion
1,000,000,000,000,000,000 Quintillion
1,000,000,000,000,000,000,000 Sextillion
1,000,000,000,000,000,000,000,000 Septillion
1,000,000,000,000,000,000,000,000,000 Octillion
1,000,000,000,000,000,000,000,000,000,000 Nonillion
1,000,000,000,000,000,000,000,000,000,000,000 Decillion
1,000,000,000,000,000,000,000,000,000,000,000,000 Undecillion
1,000,000,000,000,000,000,000,000,000,000,000,000,000 Duodecillion
1,000,000,000,000,000,000,000,000,000,000,000,000,000,000 Tredecillion
etc. etc.

Now you know. (And don’t make me tell you again! Or I might give Wacko back his industrial strength mallet.)

What Happens When You Use Walmart Consultants

Today on Dilbert, Scott Adams uses Dogbert to effectively illustrate what happens when you use a Walmart consultant.

What you have to remember with consultants is that you get what you pay for. If you pay a cut rate, you get a job with corners cut, as illustrated today in OverboardĀ …

… and you get the pleasure of the consultant blaming you for their incompetence!

When hiring a consultant, it’s important to remember that it’s all about the value they can deliver, directly or indirectly. For example, a consultant with the skills and to help you devise a new business strategy that ends up increasing your sales by 30% is worth his weight in platinum. You should gladly fork over a few thousand a day for that kind of expertise as it will end up netting your company millions in the long run. A consultant who can help you select the right optimization or data analysis system for your business that can help it save an average of 10% on corporate buys is worth her weight in tantalum. And a technical resource who can adhere to a schedule and get the job done right the first time is worth his weight in gold — and it still amazes me that in 2010 the vast majority of companies haven’t figured this out! Everyday I hear another example of a company that went with the lowest bid and either got a system that didn’t work (and had to be scrapped) or, after exceeding the schedule and budget by 50% to 150% got a system that only did most of what it was supposed to do and required timely, and costly, manual workarounds. So, instead of paying 30% more for skilled resources who could do the job right the first time within the quoted timeframe and budget, the company spent 50% to 150% more for unskilled resources who delivered a shoddy product with a higher operational cost.

So stop hiring Walmart consultants, especially when, all things considered, Expert Advice is Cheap!

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Demos Don’t Teach You Much … Unless … (Part I)

Sheesh is Right! The average analyst doesn’t have a clue how to properly evaluate a technology offering. But what should you expect considering most of these individuals come from a liberal arts background and think “C” is for Cookie? And if you don’t believe me, maybe you should read those tragic quadrants, graves, and benchmarking futiles more carefully … because the reality is that an evaluation scheme based on chicken-with-its-head-cut-off bingo would likely be just as accurate as the rankings in the average analyst report these days.

But back to the point. Recently, over on Spend Matters, Jason Busch decided to tackle the issue of product demonstrations (Part I and Part II). In his first post he said that you should be prescriptive where the demo is concerned and that, except in a few rare cases, you should focus on ease-of-use. I disagree.

In the words of commenter “Sheesh” [italics in the rest of this post], Jason’s points are true if the analyst knows what to ask. If all you do is focus on “usability”, you’ll end up choosing the solution with the most flash. Problem is, there’s always a trade-off between flash and substance. A software company only has so many development hours before it runs out of cash and has to sell something. This means that the more hours it spends on creating a razzle-dazzle UI, the fewer hours it has to spend on actually building useful functionality. Remember, we’re talking about enterprise software, not end user entertainment.

Jason’s followed with a second post where he proposes a series of demonstrations based on specifically prescribed scenarios.

The problem is that, as Sheesh says, you’re not a tech expert and you shouldn’t [even] attend the demo unless you bring one with you. The “business scenario” approach assumes that the ability to address “business scenarios” is a useful measure of anything. Typically “business scenarios” are crafted from melted-down aggregations of vendor marketing messages and feature lists, combined with some business problem that the vendor has already got a pat answer for unless he’s a complete idiot. If he’s on the ball at all, you won’t discover anything interesting; or if you do, it will be something on the order of Debbie Wilson’s mouse clicks. ‘OMG this vendor takes seven mouse clicks and that one takes twelve!!!!!’ Not at all useful!

Sheesh continues, You have to go deeper than chin-stroking about a suite of standard reports and baked in transaction processing flows for “business scenarios.” What’s behind the curtain? What if you want to write your own report, or modify one of theirs? What if you want to change the way the transaction processing works, fundamentally? If you find a solution that’s extensible in those dimensions, then it’s tons better than any canned solution, by definition. Because you can make it do whatever you want it to do.

Furthermore, the software procurement process shouldn’t try to find a “best fit” in a shoe store that doesn’t carry your size. Rather, the software procurement process should focus on finding a solution that can be easily extended and adapted to your needs, on as many dimensions as possible. If the solution can be extended and adapted, it really doesn’t matter what it does out-of-the-box, in terms of canned reports, canned transaction flows, canned sourcing and optimization templates, or canned demos — or what its relative performance might be on business scenarios that encompass what you think you need today, but tomorrow might fail miserably at characterizing your needs. If the solution is extensible, then it can solve a universe of problems rather than a small subset of them.

As the commenter stated, there are lots of such questions that need to be asked, but they need to be asked with the aid of a technical resource.And there’s really no excuse not to have an expert technical resource on hand. Expert advice is cheap, especially compared to what you’d pay to some analyst firm, or waste on some solution that compares well on an analyst checklist, but is actually hopelessly inflexible. In the long run, it’s probably a few tenths of a percentage point of what you’ll spend on the “enterprise” solution (which won’t be a solution at all if it sits there, on the “shelf”, unused).

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Would You Go To Work If Cockroaches Ruled Your Office?

If you looked up and saw this, would you put up with it?

And if you saw this swarm of locust coming toward you, would you stay put and let them swarm all over you?

What about a swarm of killer bees? Would you still just sit there?

I’m guessing the answer is no, hell no, and get me the flamethrower!

So why are you still letting spreadsheets run your life?

Given that 80% and 90% of spreadsheets contain serious non-trivial errors, that could cost you millions, and land your corporate officers in legal jeopardy, you should be doing everything you can to remove these pests, which can be said to be the technological equivalent of cockroaches, from your company. You should not be treating them as your most beloved pet. Like capuchins and pit bulls, these deadly critters can turn on you.

Needless to say I was foaming at the mouth when I saw this recent article over on CIO that said BI Vendors Finally Embrace the Spreadsheet. Simply put, if the tool is attempting to unlock, extract, and aggregate data from an uncontrolled proliferation of spreadsheets, it’s not business intelligence. Spreadsheets are about as unintelligent as you can get. It’s one thing to allow input through and export to a spreadsheet (as spreadsheets are good for initial capture of matrix friendly data and for users who want to toy around with a copy of the data without corrupting the data store), but it’s another thing entirely to think you can extract life from a plague of spreadsheets. Plagues kill!

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