Category Archives: rants

the doctor On Technology RFPs: Don’t Put The Cart Before The Horse!

I’m not sure what the reason for this is, maybe it’s the “Free RFP Templates” for e-Sourcing (RFPs & e-Auctions), Supplier Management, Contract Management, and Spend Analysis brought to you by Procuri & Co., maybe it’s an over-inflated sense of technical knowledge, or maybe it’s just plain stupidity – but more and more I’m hearing about buyers looking for spend and supply management solutions that are putting together ridiculously over-specified and complex RFPs that are often eliminating all but the worst solution one could possibly imagine before the first response is even received.

The fact of the matter is that, when you are looking for a solution, there’s more than just one correct architecture, the number of features isn’t important, multiple deployment models may be satisfactory, advanced payment models and complex SLAs may not be necessary, and the processes you assume you need may not be the right processes for your business.

If the solution works on your current platform, does it really matter if its written in J2EE, C++, or Ruby on Rails (as long as it was put together properly)? Does it really matter if one solution has 800 “features” and another solution has 1000 “features” if all you need to support your processes are 200 “features”? And more importantly, do the features even address the critical functions you need to get the most out of the solutions? Although on-demand SaaS has advantages over ASP, and ASP has advantages over localized deployments from TCO perspectives, from a security and control perspective, assuming you have a crack IT team in house that knows what they’re doing, arguments can always be made in the other direction. (However, most non-technical companies don’t have crack IT teams, regardless of what they think, and that’s why I’m such a proponent of the on-demand SaaS model.) Not everyone uses the complex payment models pioneered by Oracle and SAP – some vendors use very simple pay-as-you-go models – especially on-demand vendors who charge you one fixed fee a month for the license, including maintenance, and one variable fee a month for how many days of consulting you utilize, easily calculated as number of days * resource rate. Finally, have you taken the time to evaluate your current processes from an efficiency and effectiveness standpoint? Maybe they are not optimal – in fact, if you haven’t reviewed them lately – chances are they are not optimal and a good time to change them might be upon implementation of a new system that can support the processes you should have, versus the processes you have today.

Thus, when constructing your RFP, if you’re not an expert in technology, and unless you’re an IT company – you’re not, don’t pretend you are. If you’re not an expert in what today’s solutions can do – and unless you’ve spent a significant amount of time researching large and small vendors alike – you’re not, don’t assume feature function lists, and definitely don’t assume that one vendor’s template is the best feature function list that’s out there. And definitely don’t use a template provided by a vendor being invited – that template was written to make them look good from a comparison perspective with their primary competition – which may not have any correlation to the solution you actually need.

Leave the technical and feature specifications open-ended. Instead of describing a proposed solution, describe the problems you’re having and the problems that you expect the solution to solve and let the vendors describe how their solution could meet your needs. And if you’re worried about the responses being too apples-to-oranges to make a decision, do a two-stage RFP. Issue a preliminary, open, RFP that describes the type of solution you’re looking for, the problems you want it to solve, and asks the vendors to describe how their solution meets this need and what key functions it offers and tell them that the best submissions will be invited back for round two, which will be closed.

Review the submissions to the initial RFP, invite clarifications and demonstrations (on the grounds that price and terms will not be discussed), flesh out your requirements, and then issue a closed RFQ with more detail on any architecture or deployment restrictions, the core functions you desire, your minimum SLA requirements, and your criteria for scoring the responses and selecting a solution. (For example, saying you can’t do on-premise Linux because you don’t have the tech resources is good, unlike saying that only on-premise Windows works when in fact you could consider on-demand with Windows Thick client. Saying you need a centralized contract repository as part of your CM solution, once you understand what that is, is fine, whereas saying you want a repository that uses Oracle 10.X, because that’s what you have a license for, when in fact the solution might come with a built in database or license for the database it uses, is overly restrictive.)

If you’re smart about the RFP process, then the solution you end up with will surprise you in its effectiveness and efficiency. However, if you just follow the herd, then you might find that you add to the statistics that say at least 70% of all IT-based projects are at least partial failures, because the system will likely not live up to your expectations of it. I guess what I’m saying is, don’t be an RFP-lemming. (As a reader of this blog, I know you’re smarter than that – but I need you to help spread the word!)

the doctor Says Duh! (Of Course Leadership is Crucial in the Retention of Talent!)

I recently stumbled upon an article over on the European Leaders Network that was titled “Leadership Crucial in Retention of Talent”. Needless to say, I was a little shocked. How much more obvious can you get? Come on! I don’t know about you, but I’ve never heard anyone say “My boss is a a**h0l3! I work nine hours, he tells me I should have worked ten. I do my job and his job, and then he asks if I can do the administrative assistant’s job as well so she can accompanying him on that Bermuda trip. I arrive five minutes late because I was honestly stuck in traffic due to a six-car pile up on the interstate, and I get my head chewed off for the next forty-five minutes. He arrives forty-five minutes late for the all-hands meeting he scheduled, and then gets a big bonus later that day. Of course I love working here and would never think of leaving, even it was for a job where I would get treated like a real human being!”

But it gets better – it’s based on a study by US-based Kenexa Research Institute who, apparently, had to survey workers in six countries to find out that those [senior management] teams who demonstrate a strong emphasis on customers, an unwavering commitment to ethical behavior, and who keep employees informed about the direction the company is headed, are the [senior management] teams who build more highly engaged workforces and outperform their competitors. It makes you wonder what type of hypothesis they started with – did they honestly think it was the companies who hired trained chimpanzees to manage their workforces that succeeded?

You don’t even have to pay me my not-insignificant day rate to get this consulting advice from me. I’ll give it to you for free! After all, it’s just the old adage of treat others as you would want to be treated yourself (unless, of course, you’re a masochist who revels in pain and mental anguish – then simply treat others as you would not want to be treated).

the doctor On Dashboards: They’re Dangerous and Dysfunctional

A colleague of mine recently remarked that the whole dashboard concept is stupid beyond belief and just a lot of malarkey and I have to agree. “Dashboards” as they exist today are completely useless, and, in general, the concept is mostly useless.

As my enlightened colleague would say, a single metric on a dashboard is like saying one idiot light is better than the combination of oil pressure, water temperature, and battery voltage gauges. Sorry, it’s not. And, guess what, you can’t see the relationship between oil pressure and water temperature, so you could have a “TEMP” light that’s going off because oil pressure is nonexistent and you’re scraping the metal off the cylinder walls! It’s useless.

The fundamental flaw is that today’s dashboards are marketed as a snapshot view of how well your organization is doing. A dashboard can not tell you how well you’re doing. To do that, it would have to know everything you’re not doing well, determine how much that is impacting your overall performance, and report that. However, the best it can do is capture the data it’s been programmed to capture, roll-up the metrics it’s been programmed to roll up, and do the built in calculations of efficiency based on those roll-ups.

Just because it reports 90% of spend “on contract” does not mean 90% of your spend is “on contract”. Maybe 10% of your total spend on a commodity under contract has been misclassified under the wrong commodity code, and all of this spend is off contract, meaning that only 82% of your spend is actually on contract. Just because it says on-time supplier delivery is 95%, does not mean that you’re doing a fantastic job of managing your suppliers and that only 5% of shipments are late. Maybe it’s only recording shipments late if they don’t arrive on the designated day and not taking into account the time of arrival – which could be a consistent 2 to 4 hours late. Since this could require a lot of overtime by your warehouse crews who arrive early with nothing to do for the first two hours, this costs you. And so on.

A dashboard can only provide an upper bound on how well you’re doing, and this is useless. Saying my efficiency is at most 98% when it is in fact 92% is useless and unactionable. I can say your efficiency is at most 100% and always be correct – and I don’t need an overpriced software hack to tell you that!

The most a well designed “dashboard” could do, if the goal was reversed from trying to tell you how well you are doing, which it cannot do, to how poor you are doing, is give you a lower bound on how poor you are currently performing. Whereas “my efficiency is at most 96%” is not useful, “my inefficiency is at least 4%” is useful. That tells you that not only are you not performing at 100%, but that the system, even though it’s unable to identify all sources of inefficiency, has found 4% inefficiency that is immediately actionable. Whereas “at most 88% of spend is on contract” is not useful, “at least 12% of spend is off contract” is useful because it identifies some low hanging fruit that should be immediately tackled to improve spend compliance within your company. Of course, this is assuming that the process used to compile the data and calculate the metrics isn’t fundamentally flawed (which it very well could be in some of the dashboards out there).

Of course, this is still nowhere as useful as a good spend analysis or business intelligence tool that allows a seasoned analyst to construct some well formed cubes and drill around as she desires – as such an analyst would find anything the “dashboard” would find in about five minutes of drilling into the “spend cube” or “efficiency cube”. Furthermore, even if you covered an entire wall with dashboard displays, you still wouldn’t get close to all the perspectives you could come up with by drilling around a couple of well formed data sets.

Basically, all today’s dashboards do is present a pretty picture of a rather useless report. And I don’t want to hear any arguments that they’re “flexible” or “configurable” or “customizable” and that they can do whatever you want them to do – they can’t – they can only be “customized” or “configured” to the extent that they were built to be “customized” or “configured” by the development team – who probably had little understanding of your business, your data collection methodologies, your processes, and the information you really need to understand your business – and, in my experience, that’s usually not nearly as “configurable” or “customizable” as they would need to be to be useful even to the limited extent they could be if they were designed properly.

So next time someone tries to sell you a “dashboard”, thank them for the offer, and instead ask them about their analytics engine. That’s what you really need!

the doctor Wonders If The Age of American Innovation Is Coming To An End

Recently, I predicted that India would be the eventual winner of the talent war. This is because they have the people, the culture, continually increasing capital inflow, education, the will, and an increasing amount of openness – in contrast to the US, which is more intent on keeping just about everyone out than letting innovators in.

I’m not going to make a prediction as to who’s going to win the innovation challenge, because innovation takes more than just talent, but I am willing to predict that, the way things are going, it’s not going to be North America. (I’m also excluding Canada because, these days, you can’t be Prime Minister unless you’re willing to take your lead from the US President, whomever that happens to be.)

Basically, I agree with John Kao, as quoted in The Age of Mass Innovation. I think America will lose its global lead and become “the fat, complacent Detroit of nations“, even with Silicon Valley. As Mr. Kao points out, America’s under-investment in physical infrastructure, its pitiful public schools, and frostiness towards immigrants – even though immigrants built North America into what it is today – is the first step on the road to complacency.

Furthermore, as pointed out in Revving Up, China now makes half the world’s motorcycles and India’s Tata Motors is working on a “people’s car” that might radically change the process of design, manufacturing, and distribution in an effort to achieve its target price of no more than $3,000. Today, China is the country that’s pioneering new types of management techniques – that’s a long way from the low cost country we still like to think it is. The fact is, developing countries now have higher levels of “early stage” entrepreneurship than just about every country in the developed world.

And let us not overlook the fact that, as pointed out by Diana Farrell and quoted in The Fading Lustre of Custers, the real problem holding back innovation in many developed countries is too much government in the form of red tape and market barriers. These days, the government has to regulate everything – including the things it knows nothing about.

Considering that we’re full-tilt into the “knowledge economy”, with manufacturing down to a fifth of economic activity in rich countries, it’s down to innovate or die.

the doctor Is A Blogger!

A couple of weeks ago, I told you the doctor is not an analyst!. This inspired a counter-post from the one and only Jason Busch (in “Analyst vs Bloggers Continued”), which in turn inspired a plethora of comments, including some that argued against what the comment authors hallucinated I said (which, of course, makes for good entertainment value, so you should consider checking the comments out as well as the post).

In this post, I’m going to summarize some of the finer points made by myself and others, left out of my first post, as to why I think it’s better to be a(n independent) blogger.

Independent bloggers don’t have to write about anything we don’t (fully) understand.
As an analyst, if a company is paying your company for a piece about them or their software, chances are you have a publication date you have to meet. Maybe that’s enough time to get a good grip on what the company and / or product you’re writing about does, maybe it’s not. Either way, you have to hit the deadline or risk repercussions. As an independent blogger, I can choose whether or not I want to write about something. If I don’t think I understand something well enough to write a decent post, I can sit on it for a while.

Independent bloggers can choose whether or not we want to respond to events “almost in real time” and whether or not we want to write a “report”.
Needless to say, when I posted the above comment, at least one reader hallucinated that I said “independent bloggers don’t write about anything they don’t (fully) understand”, which is obviously not the same thing. It doesn’t take much surfing to figure out that many bloggers are compelled to respond to events almost in real-time and quite happy to publish their initial half-baked half-wit thoughts on whatever just hit the newswire. However, just because an independent blogger chooses to do so, doesn’t mean he or she has to do so. (Note that I keep saying “independent blogger”. Bloggers who work for publications often have daily blogging as part of their job requirements and, like journalists and analysts, have deadlines to meet. Thus, they may not have the choice as to whether or not they respond to events almost in real time.) Also, there’s nothing stopping us from writing a “report” if we so choose – and publishing it all at once or as a well thought-out multi-post series.

With respect to software, in order to perform a deep and accurate analysis, you really need to to understand what code and architectures can – and can not – do, and this holds true for bloggers as well as analysts.
Eric Strovink summed it up best when he said that what the Excel power user would not be able to evaluate, though, is a new technology for spreadsheets that could have downstream implications far beyond the external functionality of Revision One Point Zero – for that sort of insight, you do need a reviewer with a strong technical background. While I will admit that it is true that an Excel power user is perfectly capable of reviewing a competing spreadsheet product with respect to functionality and usability, it’s not necessarily true that such a reviewer would be able to understand the capabilities, merits, and applicability of an entirely new type of spreadsheet product – or a spreadsheet 2.0. In the sourcing context, if you’ve only ever been exposed to e-Auction products as a means of collecting bids and allocating awards, would you be able to adequately review a combo RFQ-Optimization product? Would you even understand what it was? And, more importantly, if it was implemented correctly? You really need a strong technical (and, in this, also a strong mathematical) background to review such a product.

However, even more important than these comments,
Independent Bloggers can say what they truly think of a new product offering (within reason) – whereas analysts can’t completely shred a product if said product is made by a company paying their company hundreds of thousands of dollars a year for research and analysis pieces.
If I think a new product is a piece of junk, as long as I express that as my opinion (hey, even bloggers can theoretically be sued for defamation or libel if they present their opinion as a statement of fact – especially if they reside in the US), I can say I think it’s a piece of junk. Now, to be fair, one should also indicate why one thinks something is a piece of junk, because it’s mean to trash anything without a reason. Unless, of course, one thinks the reason is obvious, in which case they can just resort to satire ( which is protected speech ).