Thanks to the tireless efforts of Sesame Workshop (formerly known as the Children’s Television Workshop (CTW) to us old-schoolers), I thought everybody knew the meaning of the word share. However, a recent visit to the good old ISM – or should that be the curmudgeonly old ISM, proved me wrong.

I found out that they had an article titled “Spread the Word – Sharing the Value of Supply Management” and was intrigued. However, and I really shouldn’t be surprised by this, the article is for paying members only. That’s not “sharing”. That’s “hoarding”.

To explain the concept, I’ve asked Elmo and Zoe, from the Sesame Workshop, to help me out. Take it away, gang.

Zoe : Hi Elmo! What’s that?
Elmo: That’s Elmo’s shiny new red ball.
Zoe : Can I see it?
Elmo: I don’t know. Elmo really likes it.
Zoe : I’ll give it back.
Elmo: Okay. Here you go.
Elmo tosses the ball to Zoe.
Zoe : Thank you. It’s a very nice ball! Catch!
Zoe tosses the ball back to Elmo.
Elmo : Yes it is! Catch!
Elmo tosses the ball back to Zoe.
Zoe : We’re playing ball!
Zoe tosses the ball back to Elmo.
Elmo: And we’re sharing!

There you have it. Pretty easy concept, isn’t it? And it makes everyone happy.

As a bonus lesson, the doctor is also going to tell the ISM about the word irony. The Unabridged Dictionary.com defines irony as “the use of words to convey a meaning that is the opposite of its literal meaning”. Alanis Morissette had a really good explanation of the concept, which can now be found on Youtube.

IBM is planning to buy Cognos for 5 Billion. That’s right — 5 Billion! Now I know that Cognos stock is trading at around $57 as I compose this post, that Cognos has a Market Cap that is somewhere around 4.76 Billion, and that Cognos’ annual revenue exceeds 1 Billion a year (1.02 Billion, actually) – but 5 Billion for a business intelligence (BI) solution?

According to Wikipedia, BI is a set of concepts and methods to improve business decision making by using fact-based support systems that is data-driven. Furthermore, BI systems provide historical, current, and predictive views of business operations, most often using data that has been gathered into a data warehouse or a data mart and typically will support reporting, interactive “slice-and-dice” pivot-table analyses, visualization, and statistical data mining.

Cognos, in particular, offers a business intelligence solution that includes reporting, analysis, score-carding, dashboards, business event management, and data integration. Functionality that, I’d like to point out, is offered by just about every major spend analysis company in the space – most with market caps well under $1B, and many with market caps closer to the 100M range. Ok, so Cognos also offers a “planning” solution to create plans and budgets – but there are dozens of shareware products that do that; a “controller” product that does financial reporting – like most accounting systems; and “performance applications” or ready-built reports, analysis, and metrics for key business functions – which you can get from any provider with a reporting application. They also support deep integration with major database and ERP platforms like Oracle, which I’ll admit takes quite a bit of work when you consider how extensive these types of solutions are and how they tend to change from version to version, and this has some value, but pretty much everything these days supports an XML interface – so as long as you can map the relevant parts of the XML schema they support to your schema, any BI tool will do from an analysis perspective.

Now, Cognos was one of the first, and in the early days, one of the best, of the original BI players, but when it comes to analysis, there are a number of other players offer that offer more-or-less equal capabilities from an analysis perspective. Furthermore, many modern players have built their tools for less than 1% of what IBM is proposing to pay for Cognos.

So why can’t IBM develop their own solution on a fraction of that budget? Are they afraid they’ll repeat the SAP fiasco, where SAP spent millions upon tens of millions upon probably hundreds of millions of dollars trying to build an enterprise level data warehouse and BI system, failed, and ended up buying Business Objects for 6.8B? Is it because they’re afraid it’ll take to long – and that SAP will get a big lead on them in the BI marketplace? If so, then buying a solution is the right way to go – but 5 Billion? Especially when there are other solutions that have the same amount of power that they could get for less than a tenth of that!

Maybe they are looking at it as a future revenue stream – at 1B a year, they’d get their money back in five years – providing that people keep paying for the solution at current prices. But what happens when their customer base realizes that there are alternative solutions which could meet their needs that sometimes go for a fraction of the cost?

Maybe they’re also looking at it as additional manpower in sales and marketing – Cognos is known for it in the BI space. But I think IBM’s doing fine in that regard.

Now I know you’re saying that they’re just playing the game and doing what it takes to be competitive, but I always thought IBM’s goal was to be the leader, not a follower. When they realized in the 90’s that if they didn’t fix their supply chain that they could soon be on the verge of collapse, they did it. When they realized that if they wanted to play in the chip market they had to go big or go home, they did it. And when they realized that the only way to survive in the SAN arena was to innovate, they did it. So why can’t they innovate here? It’s not hard – just build a small team of smart people, give them a decent budget and access to the best resources in the company, and, most importantly, give them the authority to make their own decisions (and not get crushed under the weight of the opinion of every director and his dog).

Now, I am a big believer in Business Intelligence, but I’m a bigger believer first and foremost in intelligence – and I just don’t see the intelligence in overpaying for a solution when that money could be better spent on true innovation. With the right team, they could spend a tenth of that, buy the up-and-coming player with the best technology, use the knowledge of the IBM Global Services AMS migration factory (who probably know more about data migration than all of the big 5 system integrators put together) to integrate with just about every major ERP and database platform under the sun, and spend the rest on innovating new capabilities that would knock-your-socks off.

That’s my opinion. Any shareholders of IBM want to offer a counter-opinion? (It’s essentially your money that IBM is spending.)

[Note:this was before the doctor gave in and became an independent analyst to show the world what an analyst should be — starting with an expert in the tech they are purporting to evaluate!]

Last week, on Spend Matters in “Listen to What Analysts Have to Say”, posted a couple of great comments that I am thrilled to reprint herein. The first comment went like this:

“What analysts know is what they’ve been told. And what they’ve been told on the product side is coming almost entirely from vendors who are paying them for time and coverage. I do agree that most analysts honestly try to do their best to balance what they’ve been told by vendor X against what they’ve been told by vendor Y, but so what. All that means is that they come up with some bizarre middle position between one marketing spin and another.

In order to understand what’s really going on, [the analyst has] to have a solid background in the industry, [the analyst has] to locate and interrogate innovative vendors and practitioners on [his] own dime, and [the analyst] has to understand the technology behind products so that [the analyst] is not buffaloed by marketing spew.

Someday, perhaps, we’ll see an analyst firm that hires experts and isn’t afraid to call it exactly the way they see it, in print as well as in private. It would be refreshing and different, and I’ll bet that firm would gain instant credibility and an instant following. Until then, all we have is the blogosphere.

The second comment ended as follows:

I’m afraid that the picture I see, for the most part, is analysts who are easily taken in by marketing pitches, who are unaware of new technical developments (and unable to evaluate them when they are aware of them), and who are largely ignorant of leading edge procurement thinking.

I don’t see the same magnitude problem in the blogosphere at all. I see a lot critical analysis and a good dose of solid technical competence. I see mistakes, too — and some chest-thumping from time to time by blogs that everybody knows are company organs — but the information sure is refreshing and a lot more useful compared to the homogenized pap that comes out of the analysts firms.

This was one of the best explanations of why the doctor was a blogger and not an analyst that he’s ever seen! About the only thing he’d add is that in order to truly be an analyst, you have to be able to do the job you’re ultimately analyzing. It’s the only path to true understanding. Analyzing a software vendor, then you should be capable of actually writing software. After all, how can you analyze something without truly understanding it. And how can you truly understand it if you couldn’t do it?

[And the doctor is now an expert analyst on advanced Sourcing Tech because he built advanced Sourcing Tech using his PhD in CS and Advanced Math degree, which those ex-operations people (if we’re lucky), economists, journalists and historians could never do.  And, yes, at the time of this post, it was scary how many “technology analysts” were from journalism and history backgrounds.  Truly scary.]

I’m not saying you need to be a master programmer to be able to analyze a software product, but you should know the basics of how software works, how it is built, what good architectures, standards, and protocols are, and why. Being able to turn on your computer, boot windows, log-in, fire up Excel, and write a macro just doesn’t cut it. On the other hand, if you could build an excel-like spreadsheet tool in a reasonably modern computing language, then that’s what I’m talking about! I’m not saying you have to know the language it was written in, but just understand what modern languages and development paradigms allow you to do. (For instance, if you know C++, then you have a reasonable understanding of OO and what people are doing with Java, Ruby, etc.) Otherwise, how do you know if what a certain program does truly is hard and difficult to duplicate, or if you’re being sold the snake oil of the week?

That’s why the doctor is different. the doctor can actually build very sophisticated software systems – and has built a number of them in his day. He may not code everyday, or every week, anymore but he fundamentally understands what modern languages and platforms can — and can’t — do. He understands technology, and understands when something is truly difficult, and truly isn’t. It’s also why the doctor is not impressed when a vendor wastes his time with a pointless Powerpoint presentation. Any slick salesperson who has mastered consulting doublespeak and the print-screen key can put together an impressive sounding presentation — which doesn’t necessarily have any correlation with what the product can — or can not — do!  (It’s also why he created a 10-slide max rule for a briefing that MUST include a live demo.)

(Consider this fair warning — the next vendor that wastes the doctor‘s time with a powerpoint “demo” will be mercilessly shredded! As will the next vendor who refuses to answer any question not already answered in the press release! As regular readers know, I’m more than happy to give you a fair shake, but I expect one in return.)

Now, when you also consider that the doctor has a solid background in the industry and seeks out, interrogates, and strives to understand vendors on his own dime — and pass that knowledge on to you, you’re probably wondering why this doesn’t make the doctor the perfect analyst. And you have a very good point — but I don’t want to be associated with an industry that allows any MBA or journalist with no real experience in the industry to become an analyst solely on the fact that they can ask a few questions and write. I’d like to think that being an “analyst” means more than that. But maybe I’m asking too much.

I’m a man of the land, I’m into discipline
Got a Bible in my hand and a beard on my chin
But if I finish all of my chores and you finish thine
Then tonight we’re gonna party like its 1699
   from “Amish Paradise” by Weird Al Yankovic

After talking to companies like Vinimaya [rebranded Aquiire, acquired by Coupa] and Co-exprise [rebranded Directworks, acquired by Ivalua] over the past few weeks and then reading the latest “press releases” to come out of companies like Ariba and Sterling Commerce, I can’t help noticing how appropriate that verse seems to be. It seems to me that too much of the sourcing nation is still stuck in 1999, which, relatively speaking, was the 1699 of e-Sourcing solutions, and, more importantly, that too much of the sourcing nation seems to be happy about it!

Let’s think about this. A major vendor comes out with a new release that is, more-or-less, rather ho-hum, but still it gets picked up on by every channel out there because the vendor is in a Gartner magic quadrant or a Forrester outlook report (the “bibles”), because that’s just what these publications do (the “discipline”). It’s then accepted by the current customers (the “men of the land with the beards on their chin”) as the next big thing, put in the implementation queue (the “chores”), and when the implementation is completed, it’s celebrated (the “party”).

Meanwhile, when someone like Vinimaya comes along with a new solution to a problem that is, in some ways, down-right revolutionary and starts to actually solve a problem that was never really solved before, you barely hear a peep. It’s put in the closet with the skeletons when it should be put on display in a trophy case. Meanwhile, new offerings that are merely incremental improvements of previous offerings that never really solved the problem anyway continue to get the limelight. Sourcing Nation, we need to stop this!

Now, I know we can’t put all of the blame on the analysts. After all, the analysts have to spend a lot of time talking to the vendors that fund the company they work for, and, unfortunately, many of these innovative new vendors are a lot better at building the solution than communicating what the solution does, the problem it solves, and the value it offers. But still, it doesn’t mean we shouldn’t try to understand what the new vendors are doing and why it’s important.

I do know that many of the new solutions aren’t perfect, but then again, no solution is perfect, and at least some of the new, innovative, vendors are trying to solve real problems and taking risks – something that more companies need to do if they want to ever truly achieve innovation. And sourcing innovation is something the sourcing nation needs to achieve as a whole if it’s going to take its rightful place as the driver of the modern business world! (And you can’t even spell sourcing innovation without a sourcing nation to support it!)

So the next time an old-school vendor hands your colleague a cup o’ kool aid, do him a favor – test it for fluoxetine before you let him drink it – just to be sure it’s free of antidepressents. (It’s not an expensive test – fluoxetine reacts with hypochlorite variants, and that’s basically bleach.) After all, don’t we all deserve real happiness?