Category Archives: Sourcing Innovation

The UX One Should Expect from Best-in-Class e-Sourcing, Part I

As we continue our series on what makes a good UIX (to follow our posts on Smart Systems and Mission Control Dashboards), we go from generic Source-to-Pay system wide requirements to specific e-Negotiation, specifically e-RFX and e-Auction, requirements.

As the co-authors of this series, the doctor and the prophet, laid bare in our next deep dive on “What You Should Expect from Best-in-Class E-Sourcing User Experience and Functionality” over on Spend Matters Pro [membership required], creating an RFX or Auction from scratch is a lot of work. A lot of work. At a minimum:

  • Define the basic need that consists of products, services or bill of materials
  • Define the requirements for those products
  • Define the requirements for doing business with the organization
  • Define the information needed from the suppliers
  • Select (or define) the suppliers
  • Select (or define) the contacts
  • Set up the timeline (and milestones)
  • Send out the RFX invitations or launch the Auction
  • Receive responses back
  • Verify completeness and correctness
  • Evaluate, collaborate with teammates
  • Make an award

If all of this has to be done, from scratch, for every RFX or Auction, very few will get done. Considering that real benefits from these platforms only materialize if a lot get done, obviously this has to be as quick and easy to do as possible — and the platform will, thus, only have a good U(I)X if it is as quick and easy to do as possible.

So, what are the core requirements? Many, but in this post, we’re only going to focus on one of the core requirements — easy template creation. Given that the basic needs for a category don’t change much from event to event, the supply base doesn’t change much from event to event, the business and insurance requirements don’t change much from event to event, and so on. Thus, the ability to quickly and easily define templates that can be used over and over again is key. What should this template creation look like? Check out the doctor and the prophet‘s latest piece on What You Should Expect from Best-in-Class E-Sourcing User Experience and Functionality over on Spend Matters Pro [membership required]. (Vendors, this is the best description you’re ever going to get.)

What Makes a Good UX? Part III “Mission Control Dashboards”

Last week, after singing Bye, Bye to Monochrome UIs, we posted part II of what is to be a rather lengthy series on what makes a good UI, and more importantly, a good UX in a modern Sourcing or Procurement System. (Lengthy in that, after tackling the basics, we are going to dive into all the major components of your average Source to Pay system, and some of these components will require multiple posts on their own!)

In our first post (on What Makes a Good UI) where we noted that the full series is being published over on Spend Matters Pro [membership required], as it is the result of a deep long-term multi-blogger collaboration (led by the doctor and the prophet) and sponsored by Spend Matters, we outlined some of the fundamental requirements of a UI/UX for any Supply Management application which included, but was not limited to, integrated guidance, context awareness, “touch-less” automation, mobile support, and messaging as a competitive advantage.

Then, in Part II, we began our deep dive into what all of this means, starting with “Smart Systems” that drive integrated guidance leveraging new “AI” techniques -— better termed automated reasoning (AR), as software isn’t truly intelligent —- that adapt and learn over time. These systems mix semantic technology, sentiment analysis, key-phrase driven expert systems and other machine learning techniques with history to determine what the user is doing and what the user wants to do and offer appropriate guidance. But that’s just one aspect (and the full Spend Matters Pro article on “Smart Systems and Messaging, Chat, and Collaboration” also dived into critical MCC aspects among other things.

Yesterday, over on Spend Matters Pro [membership required], the prophet and the doctor released the next part of their UX Series, “Advanced Mobile and “Mission Control” Dashboards” where we dove deep (and I mean deep, Mariana Trench deep) into two more key requirements of modern Sourcing or Procurement application, namely advanced mobile enablement (which is way more than just e-mail, FYI) and what we are terming “mission control dashboards”.

The real key here is “mission control dashboards”, and not just plain old first generation dashboards (which are very dangerous and dysfunctional) which, if present, should result in the application under consideration being banned for life from your organization.

You see, whereas static first generation dashboards give you useless (and I mean useless) reports (which, at best, show a stoplight indictor with no description or backup data that lulls you in to a false sense of complacency or urgency), a modern mission control dashboard replaces those static widgets with modern fully enabled GUI widgets that allow users to drill down, initiate, and execute relevant actions such as data retrieval, workflow kick-off, or collaborative corrective actions. They can embed “apps” and “portlets” and allow a user to get what they need, and where they need, in 3-clicks, without missing anything important. They are the customizeable interactive views that applications have been missing. But, again, this is only the case for truly modern dashboards. First generation dashboards still belong in the dung-heap. For a truly deep dive into what these are, what they can do, and how they are used, check out the Pro piece [membership required].

P.S. Again, if you are a vendor invited to the Sourcing, SRM, CLM, or Spend Analysis Solution Map, this is a series you do NOT want to miss!

What Makes a Good UX? Part II “Smart Systems”

A couple of months ago, after we sang Bye, Bye to Monochrome UIs, we indicated that we were beginning a series that chronicles what makes a good UI, and more importantly, a good UX (User Experience) in a modern Sourcing or Procurement system. This is critical because systems that are not useable do not get widely adopted, and systems not widely adopted never deliver the promised value.

In our first post on What Makes a Good UI where we noted that the full series was being published over on Spend Matters Pro [membership required] as it is the result of a deep long-term multi-blogger collaboration (led by the doctor and the prophet) designed to identify what should be (and not what ay given vendor will try to promote based on what they have), and sponsored by Spend Matters, we outlined some of the fundamental requirements of a UI / UX for any Supply Management application which include, but are not limited to:

  • integrated, pervasive, guidance
  • … that is based on true expertise and historical use
  • “touch-less” automation wherever possible
  • extremely context aware
  • mobile support and mobile first in the field
  • messaging as a competitive advantage

(And if you want deep coverage on these topics, see the first instalment of our full series on “Measuring the Procurement Technology User Experience: More Than Just a Pretty Screen” over on Spend Matters Pro [membership required].)

But, as we stated, these were just the absolute base-line requirements. In Parts II and III of our full series, we outline the next set of core functionality that should be pervasive across any Supply Management platform that you acquire. And in future articles, we dive into e-Negotiation, e-Auctions, Optimization, Spend Analytics, SXM, CLM, Requisitioning and Shopping, Procurement and Catalog Management, and Invoicing … just to start. But we’re getting ahead of ourselves.

One of the core requirements we reveal, and dive deep into, in Part II in our article on Smart Systems and Messaging, Chat, and Collaboration is smart systems.

As per our article, smart systems drive integrated guidance leveraging new “AI” techniques -— better termed automated reasoning (AR), as software isn’t truly intelligent —- that adapt and learn over time. They do this by mixing semantic technology, sentiment analysis, key-phrase driven expert systems and other machine learning techniques with history to determine what the user is doing and what the user wants to do.

For example, a smart system in sourcing will detect if there has been a full event/process before run by a user or similar peers in an organization, and allow the user to instantiate a new instance (by copying the template or previous event). Or, in the case of one-time requisition in which competition could benefit the outcome, a smart system can detect an automated spot-buy event that can be run against prequalified suppliers hands off, which the system suggestions.

And that’s just the beginning of what a smart system could, and should, do for you. For deep insights into not only where the bar is today (as leading providers start to release first versions of these guided systems), but where the bar will be by 2020, check out our post, which also dives deep into the Messaging, Chat, and Collaboration functionality [MCC] that a modern system should support. [Hint, more than just integrated e-mail or first generation chat!]

And stay tuned for the next part, coming later this week, on the final set of core requirements that we feel a modern Supply Management System cannot be without!

P.S. If you are a vendor invited to the Sourcing, SRM, CLM, or Spend Analysis Solution Map, this is a series you do NOT want to miss!

Manual = Money

Yes, technology costs money and five and six figure technology purchases look expensive, especially if a vendor is asking for payment up front, but it’s often the case that not having an automated technology solution as a mid-size or large organization is costing your organization even more. The reality is that anything not automated has to be done by someone, and having that someone do a task costs you a lot of money. Even if that someone is a (near) minimum wage resource. Remember, it’s not just the $15 an hour, $120 a day, $600 a week, $30000 a year that resource costs, but it’s all the overhead associated with that resource. Benefits. Training. Office space. Equipment. Opportunity cost of NOT having them work on more strategic tasks. Etc. When you do the math, that $15 an hour / $30000 a year resource is likely costing you closer to $30 an hour / $60000 a year. If the solution costs less than 30K a year, and replaces one FTE that’s not only a savings, but another resource you can reassign to value identification and generation (which never comes from doing tasks that can be automated).

But in Supply Management, the solution can often replace 3, 6, 10 or even 50 FTEs with very little incremental processing power required. A great, and often repeated example, is invoice processing with m-way (typically 3+) way match and auto-return to supplier for completion of missing information and correction of (potentially) incorrect information. These systems can review these invoices 100% and often, through auto return and correction, reduce the number of invoices that need human review to less than 2%. For an organization that receives 50,000 or more invoices a year, with dozens (or hundreds) of line items per invoice, where a team of 3 people can only fully review 20% and spot check a few lines on 20% more, this system, if in the 50K price range, has an ROI 10X its cost as it allows all invoices to be fully reviewed and verified before being paid — something that would otherwise take a team of 10 people, who are more error prone than the system and will still miss issues that need to be reviewed.

But it’s not just invoice review in Procurement that takes a huge amount of time, and never gets finished. It’s data entry and maintenance. Catalogs. Supplier Masters. Approved products and bill of materials. Preferred products. An average organization has tens of thousands of records that need to be created and maintained over time. Larger organizations have hundreds of thousands. And the annual maintenance of each record is so time consuming that the cost to accurately maintain this data (and keep it up to date) is literally in the hundreds of thousands of dollars, if not millions. (the doctor once read a thesis that estimated the average annual cost at about $2 a record, and with the increased rate of data change, that actually seems to be on the low side). But a system that allows suppliers to maintain their data, automatically updates the data from one central, verified, repository (provided by the supplier or vendor), etc. can greatly reduce this cost while increasing the accuracy.

And it’s not just tactical Procurement that requires a lot of manual effort. It’s also, believe it or not, Sourcing. A lot of categories that should be strategically sourced can be mostly automated. Especially the lower value, market-driven, and non-strategic categories. Often, the best strategy is just a winner-takes-all auction or a 60/40 split between the two best RFPs, where the bidders can be limited to pre-approved suppliers (and products) in the first case (with ceilings) and pre-approved suppliers in the second. These events could be automatically configured and, once reviewed by a buyer, automatically launched and executed and, once the results reviewed, automatically awarded. The entire process, which often takes days in some platforms, could be accomplished in an hour or two, freeing the buyer up to focus on truly strategic and large value categories and new types of supplier consolidation / part standardization / raw-material unification analyses that might yield previously unknown savings opportunities.

In other words, never balk at the cost of a solution until you calculate the true ROI, which is often many times the tactical manpower cost you are replacing (as its often the case the manual effort isn’t doing a complete job). The ultimate goal is to allow your team to focus on value identification and capture, and they can’t do that if all they are doing is manual data entry and review that can be (almost) fully automated.

Platform? Bah Humbug!

Earlier this week, the medic pointed out that Jaggaer is taking the contrarian approach (in “Jaggaers merger Pool4Tool taking contrarian role around integration”) and almost scoffing at the idea of an integrated, unified, code base and instead pointing out that its customers want problem fixes and business solutions, and integration isn’t a concern.

And to an extent, they have a point. Not everything has to be on one cohesive code-base with one cohesive UI if some parts of the solution are only used by a few individuals or designed for a different department or the usage is disparate from the rest of the platform and/or rare. For example, you’re not typically doing opportunity spend analysis in the middle of a sourcing project (although you may want to do pricing trend and outlier analysis on submitted bids after initial RFP responses before starting an optimization). And the people doing day to day tactical buying are not doing serious advanced direct sourcing projects and so on.

That being said, if you are a sourcing pro, you are likely building direct material RFPs, analyzing responses, running optimization events, negotiating contracts, accessing and updating supplier information, managing supplier relationships, and tracking milestones. The last thing you are going to want to do is log in and out of 5 different systems on a daily basis (Spend Analysis, RFX, Optimization, SXM, CLM) — especially if they all have different UIs and UX.

Sometimes you need integration and consistency, and sometimes you don’t. But one time you really need it is when your users are not very technical and have a lot of work to do, especially of the tactical variety. Coupa would never have gotten where it is if each function was a different module with a different UI. It’s design to make end-to-end work easy for its average user is how it won. And if it can do that with sourcing (and find a way to integrate its recent acquisitions and extend them with the few pieces of missing functionality) and give sourcing pros the same experience, it will win there too. However, this is one place where Jaggaer, with a lot more experience in strategic sourcing and sourcing support, could pull ahead. If Jaggaer could seamlessly integrate Spend Radar, CombineNet, AECSoft, Upside Software and Pool4Tool into one coherent platform it would have 3 capabilities that the Spend 360 / Trade Extensions union lacks: advanced Contract Management, Advanced Supplier Performance Management, and, most importantly, advanced BoM management from the RFX down to the VMI. On paper, its one of the most impressive suite of capabilities on the market for manufacturing, pharmaceutical, aerospace, electronics, and other direct-heavy industries, but, in the end, it will be the usability that decides the ultimate winner.