Category Archives: rants

the doctor Goes Mental on Myths I: Collaboration & Knowledge Sharing

The elephants in the room and the barney deals aren’t the only problems plaguing our industry. Dangerous myths are constantly infecting the minds of those who will listen to the fear-mongers and the melancholics. Some of these myths are fairly well known, like the myth that once prices are locked in a contract after an e-Auction, those savings are guaranteed. But some of these myths have not been adequately exposed, which is not surprising as some myths are still being promulgated by the major vendors (like the myth that a “supplier network” has value in and of itself and that a supplier should pay for the privilege of just being a member).

Thus, in addition to exposing the elephants in the room, no matter how quiet they are or how hard they try to hide behind that floor lamp, I’m also going to tackle some of the more dangerous myths now and then. Today I’m going to make Skeptic, who apparently didn’t like my Feel-Good Friday post on Collaboration, happy and admit that collaboration and knowledge sharing doesn’t necessarily add value.

I know right now you’re probably still in shock from that statement, especially since I constantly promote how valuable collaboration and knowledge sharing can be, so I’ll give you a few seconds.

Okay. That should be enough time. That’s right, what should be among the most valuable activities you undertake does not necessarily add any value to what ever it is that you’re doing. The reality is that a collaboration initiative or knowledge sharing initiative, like any other initiative, is only valuable when done right.

Specifically, collaboration will only be valuable when it is undertaken with honest intentions and each side makes a genuine effort to make it work. Just like you can have a barney deal, you can have a barney collaboration project. Each side sits down at the table, says they’ll work together, but then goes their separate ways and rarely says two words to each other again. That’s not collaboration. That’s lip-service.

Collaboration requires both parties to work together as a team on a regular, often daily, basis. To jointly plan, implement, and monitor the project. To work together to identify a problem when it arises as well as its solution.

Similarly, knowledge sharing will only be valuable if real knowledge is shared that’s relevant to the project or problem. Simply sending over the contract that was struck the last time the project was undertaken with no accompanying explanation or twenty documents that may or may not be related to sourcing direct materials is not knowledge sharing. That’s nothing more than a data dump. And a rather useless one at that.

Knowledge sharing requires actual knowledge to be shared that is relevant to the project being undertaken. It requires the knowledge to be in a form that is digestible by the party that needs the knowledge. Furthermore, it requires the amount of knowledge to be appropriate. Too little knowledge and the recipient will be left more confused than before she started the project. Too much and the information overload will prevent the right knowledge from being appropriately absorbed.

Do you have any myths you’d like the doctor to go mental on?
Send them his way (the doctor <at> sourcinginnovation <dot> com).

the doctor Shall Also Remain Spaceless

While browsing the Supply Chain Management Review site recently, I stumbled upon the article “What Supply Management Can Learn From MySpace”, and I was scared. Although not as bad as Facebook, I still think of it as a time-sucking black hole filled with meaningless banter between teens, twenty-somethings, and the unemployed – with poorly designed pages that would burn a good designer’s eyes right out of their sockets to boot! (I did investigate it back when it was new – I signed up, looked around, quickly came to the conclusion that it was too much effort for too little return, and abandoned it.) The only thing it’s useful for, from a business perspective, is to discover new artists – which is only good for those looking for bands to book or labels looking for bands to sign. Not really supply management.

I read the article anyway, just to be sure they weren’t advocating its use and that my view of the SCMR as one of the better publications wasn’t misplaced, and it had a few good points. It noted that to succeed in this quickly changing tech-savvy world, companies must think, even “work”, differently. Which is true, but this doesn’t mean embracing every fad that comes along – it means finding new technologies and processes that actually improve productivity. The goal of business is to be productive and make money, not socialize with friends. (This may be the goal of most big business executives, but it’s not the goal of business. )

It also pointed out that communication, globalization, and on-demand collaboration is a good thing. I agree, but remembering that communication implies (a two-way) information exchange, I don’t often see much of that on MySpace. It’s not as global as you might think. And it doesn’t really enable collaboration the way that new sourcing and supply chain offerings from the leading on-demand vendors (like Arena, Iasta, Salesforce, etc.) do.

The article also pointed out a few technological trends that are important:

  • broader-based adoption of PLM technologies
  • emergence of CAD and PDM lite technologies
  • standardization of collaboration features
  • unilateral migration to service-oriented architectures

I agree that these are important, but I would question whether they are business equivalents of MySpace, for these achieve effective goals in the business world due to their differentiation from MySpace, not their similarities.

In short, while I will admit that the notion of examining new developments in social technologies as a means of drawing inspiration has merit, the notion of trying to create innovative business applications by creating something that is equivalent to a social networking sites does not. First of all, there’s no guarantee that it will bring any business value in terms of productivity or cost savings. Secondly, there’s no guarantee that it’s not a fad, and that people will want to use it by the time you have a business equivalent. Thirdly, you’re blurring the world between business and pleasure, which is a slippery slope to be sliding on.

So while I agree you should always be on the lookout for new and better technologies, I’d be cautious about jumping on the bandwagon of the next social network fad that comes along. Chances are that, in the long run, it will be nothing more than a drain on your time and resources. There’s a reason that a large number of organizations in the public and private sector have blocked access to sites like MySpace and Facebook. If I were you, I’d take the clue.

the doctor Says There’s Nothing Wrong With Fat Client

I recently read an article over at Knowledge @ Wharton on “Software’s Future” where they said that there is a drive toward hybrid desktop/webtop software, that there are limits to both approaches, and that the future for software may be a blend of the best features of both, that really got my attention.

The focus of the article was on the fact that Adobe Systems, Microsoft, and Google recently made new product announcements around advancements that they believe will be the future of software. Adobe with its buyout of Virtual Ubiquity that created a web-based word processor on Adobe’s new software development platform, the AIR, that can run on-line or off-line; Microsoft with its Office Live Workspace that extends Office and allows users to store and edit documents on the web and share them with others; and Google with its “Gears” that allows developers to create web applications that can also work offline. Based on these offerings, the experts at Wharton are predicting that the hybrid software model is going to emerge and take hold and be long-lived.

Furthermore, they are predicting that this new hybrid software model will develop in two phases. In the first phase, web-based applications that offer the same features as current desktop applications will become common. In the second phase, web applications and desktop software will co-mingle and the functionality advantage of desktop software will erode.

Well, this would be a great prediction – if it wasn’t for the fact that phase 2 exists today and has existed for a long, long time. It’s called Fat Client, or Thick Client, and some on-demand software as-a service providers, like Iasta, have been delivering software in this model for years! Now, you might say that it’s not the same because browsers are ubiquitous and fat clients tie you to a single platform, but that’s just not true.

First of all, there’s nothing stopping you from writing your fat client application in Java, which is as multi-platform as you can get. Secondly, should you decide you’re going to use Flash or Flex, you’re not even going to be compatible with every major web browser, yet alone every platform. The most popular browser is still IE and, guess what, that’s Windows only. Microsoft abandoned IE support on Mac years ago. Opera, still not that popular, even though it had most of the innovative features that you find in today’s browsers first, is only PC, Mac, and mobile. Only FireFox comes close to covering today’s common platforms, namely PC, Mac, and Linux, but don’t expect every plug-in or extension you commonly find on the PC to be available cross-platform. Basically, the web-browser is not universal, as not all browsers even support CSS fully and identically, and has no advantage over a well-designed Fat Client in Java.

Thirdly, and most importantly, whereas web-browsers and plug-ins are encapsulated from the underlying operating system and don’t give you a lot of control over local processing and no capability to save or cache data locally, Fat Clients give you the best of both worlds. You can work locally, or over the web. And since there are a number of open source browser projects out there, including the Mozilla technology base that FireFox is built on, there’s no reason a Fat Client can’t include a browser if that’s what you feel you need for that web experience.

Let’s face it, the web isn’t what you see through your browser, the web is a set of services that can be defined and encapsulated in protocols such as HTTP, FTP, SMTP, etc. that constitute the application layer of the internet and that run on TCP/IP. The browser is one way you can view data that is available over the web, but it’s not the only way.

So next time someone suggests “Fat Client”, don’t dismiss it as current generation technology or something that isn’t “web” enough. Done right, “Fat Client” is the hybrid future of software technology. It’ll let you work locally on a document or your own spend data set and then let you collaborate over the web and share your document or data in real time when you’re ready. It’ll let you use your local laptop resources when you’re on the plane and without internet connectivity and a remote server when you’re online. And you don’t have to worry about downtime due to internet failure. Let’s face it – even if you’re SaaS provider does have 99.999% up-time, that’s useless if your local city construction crew accidentally slices through your T3 internet connection and takes your internet connectivity down for a couple of days. So forget about the Thin phase – it’s time to get Fat!

the doctor’s Predictions on the Winner of the Talent War

I recently came across an article over on Global Services Beta that said “Talent War 2012: U.S.A. Set to Win”. Needless to say I was stunned – especially since the first paragraph ended on the U.S. labor market is set to become less open and flexible over the next five years amid fears of terrorism.

The U.S. has been winning the talent war not because it has been churning out the most skilled talent pool, but because it has been attracting the most skilled talent pool from around the world! Let’s face it, the US only has an estimated 301M people of the 6.602B people on the planet, or 4.56% of the world’s population. If we assume raw intelligence and capability is normally distributed throughout the world, which is a very reasonable assumption, that says that for every 100 of the best and brightest, the US can only expect to have 5. Now, it’s true that a great education system is often required to unlock a person’s raw potential, but that can be found in most of Europe, South America, India, South-East Asia, and South Africa. Furthermore, China has 1.322B to the US’s 301M and India has 1.130B. This says that China and India are likely to have four times as many people in any best and brightest list you care to come up with for every person the US has on that list. India already has a decent education system, especially in its richer provinces, and China has the cash to throw at the problem.

Of course, it takes more than bodies and education to build a great talent pool – it also takes the right culture – based in a free and open democracy where anyone with the talent, education, and the will to work hard and succeed (and make the country he or she is living in just a little bit better) is welcome. However, right now, the U.S. is more intent on building fences, preventing people from flying, and delaying permanent resident application processing until long after the original visas have run out – and this just doesn’t fit the bill. That’s not the culture that made the US one of the most admired countries in the world or the culture that attracted the best and brightest from all over the world to start new research programs and enterprises that put the US on the global map for everything from Astrophysics to Zoology, including the technology that launched the information age.

So, who will be the big winner? Although I’d like to say it will be a country like Canada and Australia, since they have the right education system and the right culture, I have to go with India. The fact of the matter is that with only 33M and 20M people respectively, countries like Canada and Australia do not comprise a significant percentage of world population.

What about the EU, you ask? Well, they’re too busy buckling under their own Euro-centric regulations that make it exceedingly difficult not to do business within the EU, or working 35 hour work weeks and complaining that even that is too much, to take a leap forward. It’s not just the US that is having problems being competitive (in “One Explanation for the Expanding US Deficit”).

Now I’m sure most of you disagree with this controversial opinion, and if you do, I’d love to hear yours. Just be sure to follow the comment rules and also indicate why you think I wrote this after drinking one too many Pan Galactic Gargle Blasters and getting Yakko‘s anvil dropped on my head.

the doctor Wonders Why The Elephants In The Room Are Often So Hard To See

This is sort of a continuation of last Monday’s blogologue where I wondered if the sourcing nation has a Prozac problem. While thinking about why the new solutions are being ignored when they should be the target of evaluations (and positive feedback, so that even if they don’t work for you today, they will tomorrow), it occurred to me that this is because there is a larger problem – the market is blind to what the true problems are, and most of the big vendors aren’t doing much on the user-education front. The reality is that if you don’t understand you have a problem, and in some cases a big problem, you won’t be looking for a new technology to solve it. Thus, the elephants in the room are often going unnoticed while the vendors focus your attention on the fuzzy bunnies.

In an attempt to make sure they don’t go unnoticed again, I’m going to pull down the blinds they’re hiding behind and expose you to three of the biggest elephants that your vendors might not want you to know about.

Optimization is not a set of reports that tell you the lowest cost supplier by unit cost or landed cost, the ability to calculate the cost of a random sample of award simulations and select the best one, or heuristically simplifying a model until you can run it in the framework provided to you by a third party provider that provides you with an engine – it’s the ability to allow an end-user to build a model that realistically models their situation, allows them to account for all of their costs and business constraints, and then solves that model using sound and complete optimization algorithms (such as those based on MILP) to come up with the optimal award across suppliers. Furthermore, it lets the user create multiple what-if scenarios to see what would happen if certain constraints were relaxed or new constraints were added and then lets the user compare those results side by side.

It’s not electronic invoice presentment and payment or supplier networks or e-Procurement that saves you time and money, it’s compliance – and that requires the ability to match invoices to items to contracts before an invoice is accepted and approved for payment. The fact that an invoice is from a vendor contracted to provide the items in question is not enough – office supplies distributors are notorious for overcharges and electronics vendors are notorious for not adjust pricing downward over time to insure their customers get the “best market price” that is in the contract.

Finally, when it comes to spend analysis, it’s the analysis! I don’t care how much cleansing, categorizing, and enrichment the latest product offers – it doesn’t mean diddly squat if you can’t do the analysis you need to do. Static top n vendors, top n categories, and top n commodity reports on one inflexible cube doesn’t cut it. You need to be able to build multiple cubes on the fly, on arbitrary dimensions of interest, and segment by range as well as rank. It’s not the top 10 suppliers with the greatest percent of spend, it’s the top 10 suppliers with the greatest variance in spend – chances are these are the ones overcharging you. It’s not the top 10 commodities with the greatest percentage of spend – it’s the top 10 commodities being bought off contract as this is where you need to curtail maverick spend first. It’s not the top 10 categories with the greatest percentage of spend, it’s the top 10 categories with the greatest variance in spend across departments or channels – as these are the ones that need better sourcing strategies.

So the next time someone tries to sell you a comparative reporting toolset on top of a simulation engine and pass it off as optimization, ask them these questions. The next time someone tries to sell you a supplier network or EIPP solution as the answer to all your procurement compliance problems, ask them how it automates three-way matching between invoices, goods receipts, and contracts and tags those invoices for human review that are questionable. And the next time someone tells you it’s all about the cleansing, say “no thanks, I’m looking for solutions, not religion“.