Category Archives: Technology

The Enterprise 2.0 Emperor Has Nice Looking Threads …

… but they might not keep you dry and warm if a storm blows in!

Allow me to explain. Intelligent Enterprise recently asked if “the enterprise 2.0 emperor has no clothes” because, when it comes to collaboration:

  1. it’s already going on in enterprises, just as it always has and
  2. it’s not that interesting if it doesn’t impact the core business processes of the intended users.

The new tools may look great, and may streamline the processes with their aerodynamic properties, but the fundamental fact remains that if the users aren’t using them regularly with the intent to collaborate, then the tools won’t help when it comes to identifying small problems that can quickly escalate into full blown supply disruptions, or when it comes to working together to make sure the disruptions never happen. Just like a stylish polyester jumpsuit isn’t much help when a cold, heavy, rainstorm blows your way.

So before you go buying an Enterprise 2.0 solution (like those offered by Hiperos, Rollstream, etc.), make sure you have your processes and culture in order. Otherwise, you’ll never realize the benefits that these systems have to offer (which, if you’ve read the SI reviews, can be numerous) and are better off sticking with your tin-can communication system as modern technology is useless if you aren’t ready for it and won’t use it properly.

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Will Apple Save You More on Print and Marketing than Negotiation Ever Will?

As I mentioned in my recent post on how marketing is a huge savings opportunity, last year, the Marketing Supply Chain Institute released “Define Where to Streamline: Making Marketing Supply Chains More Efficient, Agile, and Enviro-Friendly” (registration required) that noted that, with good visibility, an average marketing organization can easily find 20% to 25% savings with Procurement’s help.

About ten pages in, the report lists the top five areas where the marketing supply chains could realize sustainability gains (which are the ultimate key to long term savings). These are:

  • print, production, warehousing, and delivery
  • transportation and logistics (of material)
  • packaging and material
  • meetings, user conferences, & events
  • merchandising & point-of-sale displays

And they all have one thing in common: printed paper. First you print the fliers and brochures and inserts and then you transport them to your facilities and events and points of sale for distribution and use. If you could reduce your paper costs, which aren’t ever going to go down as wood becomes more precious, and printing costs, which are going to stay as high as the price of ink, you could substantially increase your savings.

Thanks to Apple, and the iPod, iPhone, and iPad madness, you can now do just that! 3 Million iPads in less than eighty days, and sales are still going strong. Pre-orders for the iPhone 4 racked up to 600,000 units so fast that the providers had to stop taking them. And there are over thirty million iPod Touches in the wild already. (With many more on their way now that Apple has a promotion that students get a free one with a new Mac.)

Thanks to Apple, the paperless world of ST:TNG is almost here and it won’t be long before everyone has their own personal electronic pad (be it an iPhone, an iPod touch, or, more likely, an iPad). And if you take advantage of it (like other early adopters), you will save a fortune in the long run. (Many conferences have already put their schedules and proceedings on Apple’s iPlatform, including the 2010 International Builders’ Show, Social Media Week Toronto, and the GameHorizon Conference 2010.) If you’re an organizer, you can choose to go i and dictate no printed materials. If it’s a large conference, you can negotiate with Apple for an “educational” discount and anyone who doesn’t already have an iMobile can have the price of one included in their conference fees.

But events aren’t the only opportunity for saving on printed paper — the boardroom is another great opportunity. How many bales of paper does your organization print out each day, only to see it used for a single meeting before it goes to the shredder? Considering that the average employee in the US uses 10,000 sheets of printer & copy paper every year, if we take an average blended per-sheet cost of just 5 cents, that says that your average employee is using at least $500 worth of paper each year. If we’re talking executives and predominantly colour print-outs, we’re looking at a minimum of $1,000 worth of paper each year. A 16 GB WI-FI iPad, which will hold all the documents they need at one time, is $499 (+ $99 for 2 years of Apple Care). If you institute a zero-printing policy for the boardroom (and meeting rooms), and buy a stack of corporate iPads that can be quickly loaded with whatever documents are needed for the meeting, you can reduce your internal printing costs by at least 50% (as there will be no costs in year two), even assuming you always upgrade every two years when AppleCare runs out. (Many of the devices will probably last three or four years, considering Apple’s track record of quality hardware, so you can sell the old devices at this time and recover some green if you wish. Or you can be a good corporate citizen and, after having the batteries refurbished, donate them to a needy school!)

Think about it. Paper + Ink + Printers + Energy to Print + Transportation + Shredding & Recycling is costly. e-Printing is almost free, as it’s just the cost of the e-Reader, which is much more energy efficient than a printer!

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Finance Needs Spend Analysis and e-Procurement, Part II

In our last post, we noted that Basware recently released its annual “Cost of Control” study for 2010 and pointed out that Finance’s top 10 challenges could be easily solved with good, modern, spend analysis and e-Procurement solutions. The study also outlined the top 10 strategic finance priorities for 2010 … which can also be addressed by the adoption of good spend analysis and e-Procurement systems. For example:

Spend Analysis would address:

  • Increasing Profits and Top Line PerformanceProfit = Cash In - Cash Out

    Spend analysis reduced cash out.

    Therefore, spend analysis improves profit margins.

  • Maintaining or Improving Profit MarginsSpend analysis allows you to consolidate spend among fewer suppliers and fewer SKUs. This reduces overhead and increases profit margin.
  • Planning, Budgeting, and Revenue ForecastingOnce you know your actual year-over-year spend, volume trends, and market trends, your forecasts and budgets improve greatly.
  • Risk AnalysisAugment the data with (financial) risk information and quality/performance metrics, and you can quickly see which suppliers likely pose the greatest risk to your operations.
  • Regulatory ComplianceYou know what suppliers you’re spending on and how much is going to socially responsible suppliers and how much isn’t. Augment the product data with carbon emissions spending and you know if you’re within limits or not. Etc.

E-Procurement would address:

  • Reduce Overall PurchasingA modern e-Procurement system with approvals, checks, and balances would insure nothing is bought that isn’t approved, on-contract, and within-budget without managerial exception.
  • Cash Flow and Working Capital ManagementYou can see how many purchase orders are outstanding, how many invoices are upaid, what discounts are available to you if you pay early, how much cash is actually free, and even take advantage of receivables financing.
  • Improving Short and Long Term Operational EfficiencyYou can cut DPO and DSO in half, eliminate paper processing, and make your team 80% more efficient. Over the long term, you can reduce the headcount devoted to tactical “paper pushing” and increase the headcount dedicated to strategic spend analysis and sourcing, which increases organizational savings per employee.
  • Environmental PracticesNo paper. Spending to environmentally irresponsible suppliers can be denied. Etc.
  • Accessing CreditIf you know what you have, and you can demonstrate the reliable payment history, even if the banks turn you down, you can get receivables financing.

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Trade Extensions Trades Up its UI … Again

Last fall, I provided you with an update on Trade Extensions and how they traded up their UI across their sourcing suite, making it easier to use while making it easier on the eyes. Well, barraged by constant feedback from users who wanted it to be easier still for the creation of “simple” optimization models, as they transitioned from a “full-service” to a “supported” to a “self-service” model, Trade Extensions decided to trade up its optimization UI again, especially around rule generation and scenario creation.

The Trade Extensions UI and platform was impressive because it’s constraints, or “rules”, are template-based, which permit them to be saved, copied, and applied to any relevant scenario and because it’s filters, which can be used restrict application of the rules, can be defined on bidders, lots, bids, plants, lot fields, and any other defined dimension in the system. Unlike many platforms where the buyer is limited to fixed constraint templates, the Trade Extensions UI allowed the buyer to build her own. However, defining a complex constraint and adding it to the scenario could be a complex multi-step process. For example, if you wanted to restrict allocation to European suppliers to 40% of the total award in Europe and Asia, the buyer would have to:

  1. go to the filters screen
  2. add a new filter that defined the European suppliers
  3. add a new filter that defined the European and Asian locations
  4. go the rules screen
  5. create a new allocation rule that restricted total supply by volume to Europe and Asia by European suppliers to 40% by selecting the rule type, defining the limit, and selecting the filters
  6. go to the scenario screen
  7. add the newly created allocation rule

While certainly doable, the process was cumbersome for simple constraints like “limit the award to The Wonderful World of Widgets to 40%” or “spilt the award between 3 suppliers such that no supplier gets less than 20%”.

In the new UI, which is based on a lot of ingenuity and even more AJAX, you can define the constraint and add it to the scenario from the scenario screen, which lists all the currently associated rules, which can each be enabled or disabled with a single checkbox. Clicking the “New Rule” button brings up a new Rule Creation screen for the scenario which allows you to define a constraint by:

  1. selecting a constraint template from the drop down, which organizes constraints by category
  2. specifying the bounds
  3. adding or defining any required filters on the fly
  4. selecting any required modifiers by way of a drop down

So, in our example above, to define the constraint you’d:

  1. click the “New Rule” button
  2. select the “Allocation (%) to Specified Suppliers is at most X
  3. select the “European Suppliers Filter”
  4. fill-in-the-bound with 40(%)
  5. add the “Restrict To Lot” modifier
  6. select the “European and Asian” lots Filter
  7. save the constraint

Then you’re returned to the scenario screen, with the new rule at the bottom of the list, where you can edit the parameter and filter selections on-screen, as well as turning the rule on-and-off. It makes the creation of even moderately complex rules quick and painless. And if your constraint is complex, or not accounted for in one of the dozens and dozens of pre-defined templates, you still have the classic method where the complexity of the constraint is limited only to the confines of your consciousness.

They’ve also traded up their reporting as well. In last fall‘s post, I told you how they had just released the ability to view scenario results in their new OLAP engine, which is the basis of their spend analysis offering. In the current release, the entire reporting framework has been shifted over to the OLAP engine which not only allows the buyers to slice and dice the award scenarios any way they like, but, with the new report builder, build pretty much any cross-tab, pivot-table, or roll-up report they like on both award dimensions and derived dimensions (which can also be exported to Excel if the buyer so desires).

The UI for defining a new report, which is also based on AJAX, is as simple, and powerful, as the new rule creation UI. To create a new report, the user:

  1. gives the report a name
  2. specifies the bidders, lots, and bids to use, possibly by way of filters (from existing rules) (which can be inverted)
  3. selects the associated dimensions (which can include any associated dimension from the RFX, Auction, etc. such as brand name, division, and historical spend for the lot; name, location, and number of allocated bids for bidders; base currency, date, and bid number for bid)
  4. defines the facts (derived dimensions), such as total spend by supplier; year-over-year savings by category; etc.
  5. selects the scenarios and/or phases to include (which can range from 1 to n), depending on the type of (comparison) report

Plus, the user can also create reports by joining one or more report definitions. If the user wanted to see payment and savings by allocated bidder and the user had a Payment and Savings report and a Allocation per Bidder report, the user can simply run both reports at the same time. The system will calculate the appropriate union of bidders, lots, bids, dimensions, and facts and create the appropriate report.

Finally, they are converting all of the standard reports to templates that can not only be used to run the standard canned reports, but copied and modified to serve your buyers’ needs. It’s an impressive improvement in usability such a short time-frame.

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