To help you put into real terms what Facebook’s recent actions on privacy really mean, here’s what would likely happen if Google took privacy lessons from Facebook. (A tip of the hat to SuperNews for this crystal clear analogy.)
Category Archives: Technology
More Reasons the Cloud is Not a Fluffy Magic Box
Soon after I told you that the cloud is not a fluffy magic box, I found this great post over on an Information Week blog on “3 things that could kill the cloud” which points out some more sobering realities of the cloud, which is just really an abstraction of the multi-tenant SaaS model where one provider provides the software and another provides the infrastructure the software runs on. The article has some good points that should be taken into account before you decide that the cloud is the answer. (Sometimes it is, sometimes it isn’t.)
- Scalability is not UnlimitedFirst of all, at any point in time, the infrastructure provider has a limited amount of hardware and bandwith available. When that is reached, you’re out of scalability until the provider ramps up. Furthermore, even if the provider ramps up, there’s still a practical limit dictated by the software. Most databases start to fail miserably when you get to the Terrabyte range. Most analytics applications fail miserably when you ask them to process millions of records in real time. Etc.
- Security is not AbsoluteThe cloud does not inherently provide more security as some vendors would have you believe. In fact, it might even provide less. In reality, the security of any platform comes down to the knowledge and vigilance of the provider’s people and how well they are at identifying potential holes, locking them down, and keeping up with patches. If the software vendor assumes a certain port will be locked down and the infrastructure provider leaves it open or if the hardware vendors assumes the software vendor will patch core applications and vice versa, security is weakened.
- Prices can be HigherWhile up front prices are quite cheap as you’re primarily paying for energy costs (to run and cool the CPUs) and bandwidth, and while the Cloud will be cheaper for small-scale applications, the reality is that for large scale, high-bandwidth, applications, the total costs can be more expensive than running your own data centre as most providers don’t yet have the scale and expertise to beat in-house costs. You have to do the analysis.
- Your application can disappear in a puff of smoke.Thanks to the Patriot act, if a drug dealer happens to be using the same multi-tenant provider, in the US the FBI can sweep in and seize *every* server in the data centre, regardless of what else is on the servers, shutting down the entire operation of the infrastructure provider for an unspecified time — like they did to Core IP Networks in April.
b-Pack: Packing It In for A Brave New World, Part III
Two weeks ago, in Part I, we told you how b-pack, hot on the heels of Ivalua, had decided to cross the Atlantic and join in the conquest to bring the bohemian revolution to the world of Procurement and P2P with their extensive solution suite that actually closes the P2P loop. Then, last week in Part II, we expounded on a few additional capabilities, which are relatively unique in the marketplace, that extended the basic value offering beyond what a standard P2P application delivers. Today, we’re going to dive into a few more value-adds, some of which are also relatively unique in the marketplace. But first, a recap of the story to date.
In Part I we described the base b-pack platform that takes you from the start of a traditional sourcing cycle (RFx), through a contract, to a requisition (which may be from a catalog), against a budget, to receipt of the goods (which can include asset tracking information), and the invoice, to payment, reporting, and supplier management. We dove into the basic P2P cycle and covered the requisition, approval, receipt, invoice, matching, payment, and reporting cycle in detail as well as the solution delivery options that are available to you.
Then, in Part II we detailed some of the integrated applications that build out the core capabilities to also provide the organization with expense and travel management, asset management, dispute resolution, and procurement business intelligence reporting.
Today, we’re going to address inventory management and its integration with asset management, budget management, fleet management, and internationalization. Then, in the fourth and final post of this initial series, we’ll tackle some of the advanced invoice management and viewing capabilities, document management, administration, and the supplier portal.
Inventory management, which is tightly integrated with asset management, allows you to track not only how much product you have at each (warehouse) location, but where the product is stored. The tool can handle multiple locations, which can each belong to a different (management) company, multiple rooms at each location, and assign multiple departments, managers, and clerks to each room. In addition to tracking the products (and counts) in each room, it can also track all of the inventory moves associated with each product into, within, and out of the warehouse. Like any good inventory management system, it allows for the creation of manual and automatic replenishment orders, which generate purchase orders against existing contracts and which are pushed through the appropriate approval channels if desired. The replenishment workflow is detailed and allows for multiple states, including fill, approval, standby, warehouse, in order, received, and shelved (put away) states. Finally, in addition to the basic inventory, asset, budget, and catalogue information, the user can also define custom fields, notes, and documents to track against each item.
Budget management is very powerful and allows the user to define budgets at the invoicing company, department, or user level and assign them to a manager and a chief. Each budget can be assigned a budget code, a group code, and a cost centre for accounting purposes and the administrator can define individual purchase authorizations, monthly purchase authorizations, and / or annual purchase authorizations. Approvals can be against global budget amounts, monthly budget amounts, individual purchase amounts, or always and automatic rejection rules can be defined for requests that are obviously unreasonable against the budget. Finally, budgets can be rolled up for reporting purposes.
Fleet management, their newest module, was built at the request of a customer who wanted a way to track their fleet vehicles in a manner that was tightly integrated with asset management and invoice management (to insure that vehicles were properly tracked, serviced, and that payments were at contracted rates). It lets you quickly retrieve vehicle records, fuel utilization statistics, and maintenance contracts and allows you do define alerts based on (fixed) budget utilization, kilometres, taxes, department utilization, preventative maintenance rules, and suspect expenses (with respect to predefined rules). It comes with a number of built-in reports, including total vehicles by type (gas, diesel, hybrid, electric), owned vs. leased summary, manufacturers and lessors, and make and is integrated into their global reporting engine that allows you to create your own reports. For each vehicle, it tracks the original order information, unique asset ID, VIN, type, category (sedan, SUV, truck, etc.), manufacturer, manufacturing location, make, description, grey card info, kilometrages, financing information, insurance information, fuel consumption, service history, maintenance schedule, trip history, and costs per kilometer as well as the division, department, and manager it is assigned to — and every field is searchable to allow you to quickly find the record(s) of interest. The detail of information that is tracked allows for a very deep analysis which will not only tell you which vehicles are the most expensive to operate, but why (fuel, insurance, service, etc.). This will allow you to make much better fleet decisions in the future.
With respect to internationalization, not only is the product multi-lingual and multi-currency, but the tool includes an integrated translation feature that allows text to be translated, automatically, between English, French, and a few other European languages. The buyer can define which currencies are supported, which countries they are supported for, the display properties, associated tax rates (at the country and state level), the conversion rates, and the (auto) update rules (when and from what data source).
In summary, b-pack provides a comprehensive P2P e-Procurement solution that also includes some very useful capabilities above and beyond the basic procurement cycle requirements that can provide significant additional value to many buying organizations, including the inventory management, budget management, and fleet management capabilities described in this post.
Use Johnson’s Business Model Tips to Get Your New System Approved
A few months ago on the HBR Blogs, Mark W. Johnson published a short piece on “A New Framework for Business Models” where he reviewed Drucker‘s definition for a business model which is nothing else than a representation of how an organization makes (or intends to make) money and noted that, in addition to specifying how a company (intends) to make money, it should also specify why a customer would want to buy from you.
Why a customer would want to buy from you is answered by your customer value proposition which identifies something that your customer needs and proposes an offering that meets that need. Specifying how you’ll make money is a bit harder. To answer this, you need to analyze your:
- Revenue Modelquantity times price
- Cost Structuredirect costs, indirect costs, and overhead
- Margin Modelwhat is the actual profit
- Resource Velocityhow much throughput can you achieve
When I read this, I couldn’t help but notice how appropriate the definition is to business cases in general and how you also have to clearly answer these four questions if you expect to get funding for that new supply chain system you need. For example, if you want a new e-Sourcing system, you need to define:
- Payback (Revenue) Modelexpected number of sourcing events times expected savings per event (on average)
- Cost Structuresoftware, hardware, support, etc.
- Margin Modelwhat are the real savings when the costs are taken into account
- Resource Velocityhow many more events will you be able to handle with the new system
Otherwise, you won’t have a solid business case that clearly outlines the ROI and why you should be allowed to buy it in the first place. Furthermore, if you can’t define the resource velocity, you can’t specify how it increased your customer value proposition, which, in the case of an e-Sourcing system, is increased event throughput to help other organizational units drive savings straight to the bottom line (as e-Sourcing can also reduce HR, Marketing, and Legal costs, for example).
The Seven Deadly Software Sins
Regular readers will notice that I regularly rally against a number of different software products and platforms. It’s not necessarily that I think they’re (intentionally) evil (well, at least not in most cases), but that they commit one or more of the seven deadly software sins and perpetuate myths over reality, which helps no one. So what are the software sins? And why are they dangerous? Let’s answer these questions once and for all.
- “Shrinkwrap” This is the notion that software can be “packaged”, sold, and never touched again. No software is bug free, no software can be configured for every possible platform, no integration works issue free out of the box, and every piece of software ever written has a shelf life, which gets shorter by the year. Thinking you can sell a piece of software, install it, and be done with it for however long finance says your customers can “amortize” the license cost is delusional. That’s why I like SaaS, and, more specifically, the pay-as-you-go software model. Especially in business, we have to start treating information technology as a utility, because that’s what it has to become to be truly useful.
- “The Cloud” This is the notion that the cloud is a fluffy magic box that will solve all our problems, which it’s not. It’s simply another delivery model, where the Software-as-a-Service (SaaS) provider outsources its infrastructure to an Infrastructure-as-a-Service (IAAS) provider who specializes in green data center management, leaving the SaaS provider to focus on its software strength.
- “Dashboards” They don’t call them idiot lights for fun! They call them that because dangerous and dysfunctional dashboards give you a false sense of security that the ship isn’t sinking when in fact it’s going down faster than Maury the Management Moron’s fraudulently expensed Thai “Masseuse” for his “stiff joint” because the idiot who configured the dangerous and dysfunctional dashboard thought that “pump performance” would be a better gauge than “water on board”.
- “Spreadsheets as BI” Business Intelligence is the deep insight that can only be derived through a thorough and detailed multi-dimensional analysis of all relevant data through a true data analysis tool, not a wimpy two dimensional spreadsheet that only allows for a small number of statistical calculations and bland graphs. That’s why Excel is not a supply chain solution. It was designed to be a simple accounting tool, and that’s all it is. Trying to use it for more is just asking for disaster, as demonstrated by the fact that 90% of spreadsheets have non-trivial errors in them. Get a real e-Sourcing, e-Procurement, or Trade Data Management tool.
- “Sizzle over Substance” It’s what the tool does, not how it looks. Just because the company in question hired a few Flash monkeys and integrated some animated charts and graphs doesn’t mean the tool does anything. In fact, if the capability is being promoted as a strong selling feature, I’d argue that the tool probably doesn’t do anything at all. Some of the best analysis tools in the space still use simple 8-bit Windows Interfaces built in Visual C and Visual Basic. They’re the best tools because, instead of wasting the last ten years redesigning the UI every year to look flashier, the developers spent the last ten years adding more analysis power, speed, and flexibility. If it sizzles, there’s no beef in that double cheese burger, just bacon. And you’ll be left hungry. Similarly, if the PowerPoint Rangers spent too much time on that presentation, ask yourself what the provider is trying to hide. If the solution is really great, the sales person won’t be able to get to the demo fast enough (because truly great software sells itself).
- “Social Networking” This is where you build your offering around, or attempt to integrate with, social networking where it makes absolutely no sense to do so. Business is business, not fun. Plus, let’s look at the definition of social. Seeking or enjoying the companionship of other people. People! Not computers. And definitely not bots. You say you can tell the difference? Are you sure? Some of the chat bots are so good that it’s pretty hard to tell the difference between them and a r34l g4m3r that’ll p4wn ur @ss. In fact, if you administered the Turing Test, you’d probably choose the chat bot. Secondly, where’s the “networking”? How are you “networking” by farming someone’s virtual fields in cyberspace? Or poking them? Or by reading time-lagged status updates? You’re not. Thirdly, and most importantly, as it stands now, “social” networks are nothing more than a useless time suck. And, as a bonus, if you’re on Facebook, all your privacies are belong to us“. (Pop Culture Reference) See SI’s previous posts on Facebook for details. The reality is that, where networking and companionship is involved, you’re better off playing a MMORPG and joining The Guild. In fact, you’ll even learn collaboration skills, cultural sensitivity, project management, time management, and economics whereas most social networks won’t teach you a damn thing.
- “Alert Communication” This is the asynchronous “communication” that Twitter purports to offer … but comments are not conversations! Furthermore, Twitter will make a twit out of you, literally, as a study has found that potheads are smarter than Twitterers. This also means that “sound bites” and pointless press releases add no value to your software.