Category Archives: rants

We Need Better Events!

This will probably get me blacklisted by half the events in the space, but I don’t care … especially since I have no interest in going to half the events in our space anyway. (Now, are both sets the same? Probably Not. Am I blacklisting myself from events that might be worthwhile? Probably. Do I care? Well, if you’ve been reading the doctor‘s rants for eighteen (18) years, you know the answer … it’s getting to the truth that matters!)

This is something I’ve been thinking about for a while, but a recent article by Gaurav Sharma on how his buyer’s mindset is bugging him on a point, along with recent conversations on LinkedIn, have convinced me it’s time to write it.

Most of today’s big events are a complete waste of time and money for practitioners and vendors alike! And I’m dead serious.

Why?

Vendor: You’re paying 50K to 100K for that event. When you consider the cost of the booth display materials (5K to 10K); the booth, equipment and services rental (30K+); giveaways and fancy dinners (5K to 10K+); getting and housing a small team there (20K to 40K); etc., it’s a lot of money. And for what? A chance to hock your wares to a small (less than 50%) set of attendees who are also being shouted out by 50 to 100 other vendors? At least half of whom have no decision or spending authority at the end of the day? Besides the ability to say for three (3) days: “look at us, we made it“?, what do you get? Maybe a handful of leads if you’re lucky? With each of those leads costing you 10K+. And nothing if you aren’t so lucky!

For each 10K you spend, you could have an expert write a piece of content that could be part of a year-long educational campaign that could be used to generate real leads through sign-up downloads, webinar sign-ups, follow-up conversations and downloads (when someone contacts you to learn more, and thanks you for educating them vs. just shouting marketing soundbites at them), etc. For the 80K you would spend on a glitzy event, you could get 4 custom pieces of content, 4 webinars, and a year-long educationally oriented marketing campaign that you’d be thanked for.

Practitioner Organization: It will cost you 7.5K to 10K for each senior lead, director, and CPO you send to a 3-day event. You’re probably budgeting 25K to 30K to send a small team. And what are you getting for it? A bunch of high-level presentations on various topics by a bunch of people you don’t know, usually not much different than the presentations you saw two years ago on the same topics by different people you don’t know, which aren’t deep enough to teach you anything (except re-emphasize important areas you need to drill down deep on).

A bunch of discussions with random vendors, many of whom won’t be relevant to you, while you completely miss the chance to talk to those vendors who would be because there was no way you could get to them all and without good pre-vetting and education, you were just rolling the bones and engaging randomly (or, if you were hungry, with whatever vendor rep offered you the most tantalizing dinner option).

For that same 25K, you could have an expert from a niche mid-sized consultancy come in and give your team a 1 to 2-day course on a specific problem or area of relevance — i.e. what do modern e-Procurement systems do, how do you select the right one, and who are five vendors that are commonly used by your peers; what regulatory changes are coming in global e-Invoicing requirements over the next two years, and what will we have to do to keep up; how can we address carbon accounting reporting requirements while embedding better carbon management into our supplier development and supply change management; etc. And let me repeat — your whole team, not just 3 people where 2 of them are responsible for multiple areas (or everything) and have no time to train anyone else or oversee the process, program, or technology that needs to be put in place.

The only people who get their money’s worth at these events are:

1. Consultants who don’t sponsor, don’t stay at the overpriced event hotel, but just go and spend their entire time talking to vendors they don’t know (to engage with them firsthand on fact-finding and relationship building) and Directors/CPOs (to find out what the common themes are that they should market too) and come away with verified/renewed focus and new options to sell to their clients.

2. The Organizers who get the fame and the fortune (as they collect a cut of all money coming in).

But does this mean all events are, or have to be, bad?

No. An event would be very worthwhile if:

  • it didn’t try to be everything to everyone (and ended up being nothing to anyone),
  • instead focussed on a market niche (market size – geography – problem or process), and
  • kept the size down, the balance appropriate, and the value up.

Let’s dive into this.

Focus

For an event to be truly valuable, it has to address a relevant problem or technology for a (similar) group of organizations which have a similar problem or need. By this, I typically mean market size (small to mid-market, mid-market and above, large mid-market through global enterprise), region(s) with similar market dynamics (North America and Western Europe, Central and South America, India, China, etc.), and a focus on a technology (Procure to Pay, e-Procurement, I2P/AP, Supplier Management, Direct Sourcing, etc.) or problem (Carbon Regulation and Accounting, Data Management and Predictive Analytics, etc.). This allows organizations to self select as being interested, or needing insight, in this problem or technology, vendors with appropriate technology to come forward (and be vetted by the event organizers as relevant), and the event to ensure value will be received by all attendees — practitioners will get relevant talks and panels (as all the sessions will be appropriately oriented) as well as a chance to learn about solution providers who provide solutions relevant to their peers (and possibly them) and vendors will know that the practitioners are actually interested in the type of technology they are offering, and leads will be real (and more plentiful).

Balance

There should be considerably more practitioners than vendor reps. At least 2 to 1, and preferably 3 to 1. The event organizer can limit vendor registrations based on attendees, as well as the number of reps a vendor can send. This helps the vendors (by ensuring there are more than enough practitioners to go around, which means they will spend more time talking to practitioners than each other) as well as the practitioners (by not only ensuring they aren’t overloaded by irrelevant vendors but by ensuring they have a lot of peers to talk to for insights as well).

Size

A good event is big enough to ensure there is enough variety in vendors and in peers to talk to, but not so big you get lost in a sea of people. In the doctor‘s view, it’s 50 to 500-ish, depending on whether:

  • you’re narrowly focused on one specific (emerging) problem and want to only talk to senior peers: in which case you’re looking for a round table event, 50-ish senior practitioners, 3 to 5 vendors with 2 reps each, and a single large meeting room at a hotel
  • you’re focused on acquiring or upgrading a best-of-breed module to solve a small set of problems such as data analytics, supplier management, or strategic sourcing: then you will want 200 to 300 people, 5 to 10 vendors with 2-3 reps each, a lot of common sessions, and a few breakout sessions on particular problem types or advanced solution features (predictive demand modelling, sourcing optimization, supplier development program implementation, etc.)
  • you’re interested in upgrading your sourcing or procurement capability across the board and/or learning about the current advancements, best practices, and issues in the space in which case you’d want a slightly larger event focused on your market size and geography, with maybe two to three dozen vendors with 3-4 reps each, 500+ (but < 1000) participants, and multiple tracks … still capable of being held at a large, but affordable, hotel

And since all of these events are smaller, it shouldn’t cost an attendee more than 5K in the worst case for 3 days of valuable information and vendor discovery or a vendor more than 20K for a low-cost booth and valuable leads (+ rep costs). And while this is still a sizeable amount of coin for a smaller procurement organization to send 3 people or a vendor to have a both and send 3 reps, it’s still less than half the cost of a bigger event for both parties for considerably more value.

This was the direction I’d hope a certain new event organizer would take when it started a few years ago as a smaller event focused on smaller players and newer tech, and the direction I’m hoping the next new event org will take. Not one big event that tries to be everything to everyone and instead ends up being just a sea of noise, but a series of smaller events across the Americas and Europe that are focused, give more affordable opportunities to more smaller, relevant players, and much more value to the attendees.

Will it happen? History has repeatedly shown it won’t, but if it ever does, the value will be unparalleled to all the attendees.

 

For those curious, the doctor‘s original response to Gaurav on “better events” was the following:

Instead of oversized, overpriced, events pretending to be everything to everyone we need smaller, more focused events that focus on particular problems or technologies for particular markets for (dedicated) Senior Leads, Directors and CPOs only.

T: Sourcing for the Mid-Market in North America and Western Europe
(Primarily EN business, similar processes)
T: e-Procurement for Mid-Market and Large Enterprise in Central and South America
(lots of e-Invoicing Regs, all Spanish or Portuguese)
T: Supply Chain Logistics for India and China
(where we’re still buying everything from)
P: Carbon Management for the modern LMM or Large enterprise in the Americas or Europe
(relevant supply management, carbon accounting, etc. tech for enterprises facing regulations)
P: Procurement Maturity for the growing Mid-Market
(focusing on maturity models, emerging best practices, and new category / knowledge management tech)

Then, when a CPO spends her 5K to go and discuss, she’s focused on a relevant topic, learning something, and seeing demos from vendors with appropriately focused solutions on one or more aspects of the problem (vetted by the organizer). Everything is relevant. For 10K, she can take the lead or director who will be charged with the program and system implementation. Money well spent.

And if she’s in a larger organization, she can take that 10K she saved and invest it in a startup fund, which could also be present at the event, that is collecting funds to seed various startups in S2P+ disciplines and direct that the money be invested in a startup focused on tech to solve her biggest problem. (And this foreshadows an upcoming article.)

Cost Savings is NOT Cost Cutting …

… and we need more articles that hammer this point home!

A recent article over on the Supply Chain Management Review (SCMR) focussed on how strategic cost savings differ from cutting costs, highlighted a recent survey from Boston Consulting Group (BCG) that found that while 65% of executives are prioritizing supply chain and manufacturing costs as the biggest levels for organizations to pull for cost savings, 52% [are still focussed on] labour and non-labour overhead costs. OUCH!

Most Supply Chain / Procurement Departments are understaffed and/or under platformed due to lack of talent and lack of available budget. They’re also a very small part of the organizational headcount, which in many organizations is now a small part of total spend. As a result, labour is not the problem. External spend is.

And kudos to the SCMR and Laura Juliano from the Boston Consulting Group for pointing out that strategic cost control is the right approach.

If you’re spending 100M on a category, you should be doing a lot more than just a 3-bids-and-a-buy RFX, cutting a PO, and paying an invoice. A lot more. And looking at more than just the unit cost — at the very least the total cost of ownership from initial acquisition through warranty/repair and eventual disposal, if not full total value management which also looks at brand value, bundled services, etc. Even well managed direct categories usually have 3% or more savings opportunities, and those that were not well managed can have two to three times that (in the 6% to 9% range). In other words, giving one person the time to properly source one category, even if it takes 3 months of man effort, can save 3M. Even if the fully burdened resource costs your organization 240K a year, that’s an ROI of 50X on the proper use of that one resource’s time.

This one example surfaces the key point of strategic cost control. It requires strategy and strategy requires PEOPLE with real HUMAN INTELLIGENCE (HI!). (Not hallucinatory Gen-AI like “chat, j’ai pété”). People who can analyze the situation, the available data, case studies from similar (historical) market situations, suppliers, products, and make the overall best decision(s) for the organization. And, preferably, people who can also consider the sustainability of their decision (and the implications with respect to any regulations in laws in countries they source from and sell to). (Senior Procurement leaders can’t ignore any sustainability requirements they are subject to [40% are], they definitely can’t be unaware of legislation that could affect them [37% are], and they definitely can’t be making awards to suppliers and/or for products that might just disappear in a year or three.)

In other words, you can’t reduce headcount. (You may need to replace people if you initially hired people who thought strategic procurement was catalog comparison or invoice verification, of which 95% to 99% can be fully automated, but never, ever reduce the number of people in Procurement.)

Which Solution Provider Do You Want To Work With? NONE OF THE ABOVE!

In a recent LinkedIn Post, THE REVELATOR asked:

Under which category does your solution provider demo fall?

  1. ? Selectively Stealth With A Reason
  2. ? Smoke And Mirrors
  3. ? Courageous Dreamers

And, more importantly, which one would you, as a practitioner, prefer to work with?

the doctor, who has reviewed over 500 solutions in our space over the last two decades (and interacted with considerably more vendors than that) answered for you:

  • ???? ?? ??? ?????!

a) Selectively Stealth vendors are either

  1. considerably overrating their solution against the market (usually due to lack of homework) or
  2. hiding their solution because they know there is absolutely positively nothing unique about their offering (which is NOT a bad thing if it is easier to use, quicker to implement, better supported, and cheaper than competitors, but if that was the case, why would they be stealth?)

b) Smoke and Mirrors are

  1. greatly overselling a significantly underperforming solution (and usually trying to gouge you with a high price tag while they are at it)

c) Courageous Dreamers are

  1. selling you on a vision they may realize someday, but are usually doing so while trying to sell a woefully inadequate solution (or, a solution with one new great capability but none of the critical baseline functionality)

So what type of vendor do you want?

e. Open, Honest, and Informed

Even if they don’t have anything explicitly unique.

As SI has noted before, a good vendor is one who will be focussed on

  • a particular market size
  • one or more related industries
  • a subset of functionality where the founders / core team have strength

In addition, it will consult with organizations in that niche, analysts and consultants who serve that niche, and third party experts to get feedback during design, development, initial implementation, etc. and take all that into account in order to design a solution that will solve the problems of the aforementioned identified market niche in a manner that will be usable, and used by, the market they are going after.

It’s not about who has the most features, who has the best bells and whistles, who has the coolest sounding tech under the hood, …

IT IS ABOUT WHAT SOLUTION WILL WORK FOR YOU!

It’s the solution that will solve the 80% of your problems, that will contain all the functionality to do the tasks you do every day (not every quarter or every year), that will make those daily tasks more efficient and effective, that will be used in the majority (not the minority), that will be affordable for a business of your size, and generate an ROI.

And, sometimes the best solution is the NO-AI inside solution with nothing new, but the solution that was form fit for companies of your size in your industry, that streamlines your daily processes, that is easier to use than avoid, that solves the problems you wanted solved, and does so at a fraction of the price of the mega-suite that is just complete overkill with respect to what you are looking for.

Some of the vendors that received the best coverage here on SI are those that didn’t contain a single capability the doctor hadn’t seen ten (to one hundred) times before, but came from vendors who designed a solution for an underserved market niche, made it valuable for that market niche, and were completely honest about what they had and who they were selling to. That’s what the market needs.

AND THAT IS WHAT YOU NEED!

the doctor explains the Procurement Alphabet

I would say that you approach them with caution
You should not let them overwhelm you with cheer
Pays to know what you’ll find
To understand their kind
’round here

Drawing their lines,
they look so radical
Tracking their curves
I get so lacrimal
Something deep down reveals they’re tragical

I think I’ve had enough …

It’s a strange alphabet
That’s what I know
But it’s a strange alphabet
We’ve got to follow …

Seventeen years ago I explained the whole numbers. Steve Martin explained the alphabet (but not the Procurement alphabet), and who better to explain the whole numbers than a trained mathematician.

But lately I’m seeing a lot of glossaries and “complete sourcing/procurement guides” that are anything but … so I thought I’d fill in a few basics for you …

A is for Analyst, who pretends to understand
B is for Buyer, with cash in hand
C is for Contractor, lost in Legal land
D is for DEI, now on the witness stand

E is for Equity, where can it be found
F is for Finance, who pay by the pound
G is for Goods, which make the supply chain go round
H is for Hedge, on currencies sound

I is for Insight, desperately needed
J is for Jazz, the hope has been seeded
K is for Kanban, its use exceeded
L is for Legal, its advice unheeded

M is for MRP, technology ancient
N is for Negotiate, done in plainchant

O is for Onboard, suppliers aplenty
P is for Purchase, multiples of twenty
Q is for Quality, often absent-ee
R is for RFX, created by cognoscenti

S is for Supply, critical to success
T is for Tariff, always assessed
U is for UNSPSC, classification coalesced
V is for Vendor, marketing obsessed

W is for Warranty, never enough
X is for Xennial, weary and gruff
Y is for Yardmaster, full of chuff
Z is for Zealotry, Procurement tough

… just to make it clear that the depth and breadth of the space is well beyond what a short glossary or guide can ever hope to address. The Procurement alphabet is not a character alphabet, or even a phonetic or syllabic writing system, it’s a logographic one. One that takes years, if not decades to fully master with all of its global dialects.

But that doesn’t mean you shouldn’t try.

Before You Get All Excited To Learn About Trends for Fall Conference Season

Read SI’s Expose on “Future Trends” from a decade ago, which exposed these “future” trends as artifacts from the past that are polished annually and presented to you on a silver platter.

As per our post last week, with the exception of:

  • Gen-AI being the new fluffy magic cloud
  • Fake-take (sorry, intake) being the new dangerous and dysfunctional dashboards

Very little has changed in the past decade. As a result, do you need to be spending 5K to 7K on a conference to hear the same old, same old that you can read about here on Sourcing Innovation and over on Procure Insights for free?

And if you just want a vacation, take one. You can take a much longer, and better, one if you don’t go to an overpriced conference at an overpriced hotel in the center of an overpriced city.