… and, in the same breath, F*CK CONSULTANCIES THAT ONLY PUSH SAVINGS!

Recently there’s been a big push by some parties, including Procurious, to lead Procurement into the future, and in Procurious case, it was through an online Big Ideas Summit where they convinced a number of individuals to webcast to digital attendees on the same day on Procurement topics. But Procurement is not going to go anywhere until we first deal with the number one problem, and that is our continual focus on savings because of management’s continual mis-focus on savings.

the doctor is as appalled as the public defender (who blogged his dismay in “Bain Company Insights”) to find out that yet another big consultancy, in this case Bain & Company, recently published an article on Unearthing the Hidden Treasure of Procurement that classified the value of Procurement as the good old consultant’s snake-oil of basic spend aggregation, consolidation, and tough-negotiation to find savings.

Which is another crock of bullsh!t. (Seems we’ve been blogging about those quite a bit lately! But I guess someone has to!) The value of Procurement is cost-control (not savings), demand management, product-and-service-normalization, and overall value generation and maximization. NOT SAVINGS! First of all, there is no such thing as savings — “savings” just means you are paying more than you should. Secondly, anyone who applies proper Procurement principles to a category for the first time can quickly get prices down (near) to market pricing. Thirdly, and most importantly, as the public defender points out, there is no such thing as savings anyway as all savings, and especially those savings that resulted from bringing initial prices below market average, will be clawed back by suppliers, or the [the] new supplier / product [will] turn[s] out to be unsuitable, or oil prices [will] rise or something else happens (like a disruption from new supplier / carrier unreliability).

And this brings us back to our secondary thesis, not only do we have to F*CK SAVINGS but F*CK CONSULTANTS THAT ONLY PUSH SAVINGS! Only two types of consultants push savings, those that don’t know any better (and will not help your organization grow over the long term) and those that have learned the best way to make easy money is to just push the savings agenda because that means that you can re-source the same category every two or three years and if you split the categories appropriately, you will have re-sourcing work negotiating savings on the same categories forever more (because, as costs rise, new, fake savings opportunities will re-appear)!

The only way to move Procurement forward is to shift the focus from cost savings to value creation, with a focus on cost-control (and avoidance, but not savings), demand management, appropriate value-add selection, new supplier identification, and joint product/service innovation — where the real organizational savings will come from. And, as we indicated at the beginning of this post, the only way this will happen is if Procurement forces the conversation away from savings and towards value, regardless of the cost and how many big consultancies we have to tell off in the process!

… and MUCH MORE than just a minor version number!!! Soon after the doctor and the prophet published the first part of their UIX guide, the doctor received a copy of a mass email from a vendor claiming that they couldn’t agree more and that their new release, X.Y+0.1 now met that requirement. Pretty bold claim!

As we haven’t yet reviewed the current release, we can’t comment, but we imagine that it would not be that much different than X+Y, which we did see. Now, we’re not saying in this case that X+Y wasn’t good, it was, or that the vendor won’t be a leader if it participates in the upcoming solution maps, as it has as good of a shot as anyone else, and probably better in some ways, but UI and UIX doesn’t change over night, and definitely doesn’t change much on a minor, almost quarterly, release cycle.

And a bold claim like this, especially a bold claim coupled with a minor release, can cause the vendor more harm than good as it can lead to unrealistic expectations in the mind of analysts and, more importantly, potential customers that might then hold it to an unrealistic standard when evaluating the solution than the analysts, and more importantly, customers would otherwise convey upon the solution. This could cause the vendor’s solution to be scored lower than it should be, and even lower than an inferior solution from a competitor (as compared against the customer’s specific needs) which would then be, incorrectly (with respect to the customer’s specific needs) chosen.

Moreover, a great UI / UIX does not need to be sold — one look and the UI/UIX and it sells itself. All a vendor with a great UIX needs to do is promote all of the great things the solution can do and all of the processes that it solves and get in front of the potential customer. That’s it.

Remember, as Scotty always said, under-promise, over-deliver. After all, how else do you expect to get a reputation as a miracle worker?