Category Archives: Technology

O.M.G. R.O.T.F.L “D.T.I.:E.D.I.S.C.S.P.U.C.R.T.A.” … W.T.F? Y.M.H.S? *

* Oh My God! Rolling on the floor laughing! “Distinguishing the Indistinguishable: Exploring Differences in Supply Chain Software Packages Using Centering Resonance Text Analysis” What the f*ck? You mean he’s serious?

One of the presentations I just had to sit in on at the 5th Annual International Symposium on Supply Chain Management was called “Distinguishing the Indistinguishable: Exploring Differences in Supply Chain Software Packages Using Centering Resonance Text Analysis” because I had to figure out whether it was real, or the organizer’s attempt at introducing some comic relief into a symposium that can get a little heady without a break once in a while.

Here’s the abstract: Distinguishing among large supply chain management (SCM) software packages is difficult due to the complexity and breadth of the software. In this paper, we use text mining tools to perform a comparative analysis of documentation covering the seven most popular supply chain software packages (from SAP, i2, Oracle, PeopleSoft, Manhattan Associates, IBS, and Manugistics). Concept maps created for each of the packages indicate a high degree of similarity among the 20 most influential concepts, yet significant differences exist beyond the top 20 concepts. This suggests that any distinguishing features are deeply buried in the documentation, while at a surface level all seven vendors address the same concepts. The resultant concept maps contribute a more precise understanding of the similarities and differences between SCM software packages. Guidelines for using this knowledge to make more rational and informed software selection decisions are discussed.

Before continuing, you should read it again just to make sure you read it right. (Because I know you’re wondering if you did.)

Now you should take thirty to sixty seconds to process the shock of what you just read. The resultant concept maps contribute a more precise understanding of the similarities and differences between SCM software packages. I don’t know if I should laugh or cry. However, having attended the presentation, and, more importantly, found out that ( a ) this paper is getting published and ( b ) some of the audience members thought that this is a fantastic idea, I now know I should be instilled with fear!

The reality is that I can barely wrap my head around everything that is wrong with the abstract, let alone the presentation, and, more importantly, the paper that the presentation is backed on. However, knowing me as you do, you know I’m going to give it my best.

  • There is not necessarily any correlation between documentation about any given platform and the platform itself. The documentation could be help documentation, which might have a moderate correlation, but could just as easily be position papers, analyst reviews, or “what’s missing” analysis that does not necessarily have to have any correlation with the software.
  • Even if the documentation is limited to help documentation, the documentation is still going to focus on how to use the system and not how it solves your supply chain problem. Thus, the most common terms could be “drop-down” and “dialog” and “field” … not at all useful.
  • There is not a one-to-one correlation between a word and a concept or a concept and a word. Let’s take the word order. It could be referring to order placement or order management or order fulfillment or to the ordering of options in a text-box. Also, let’s take the concept of order fulfillment. It could be called order fulfillment or it could be called customer delivery.
  • There’s no guarantee that two products that implement the same features will document them with standard terminology, or even document the features at all! Thus, two products with high correlations in capability are not at all guaranteed to have any correlation at all in documented capability.

I could go on, but you can see that the statement that the resultant concept maps contribute a more precise understanding of the similarities and differences between SCM software packages is absolutely ludicrous, even if centering resonance text analysis did what many researchers claim it can do. (It really can’t, but hopefully the linguist at the conference who also had more problems with this presentation and paper than I can easily count will chime in with a comment on everything I missed.)

Now, apparently, after heated discussions with one of the researchers (and presenter) in question (who will not be named to protect the guilty), I have it all wrong, and what I’m assuming is being stated is not being stated at all, but I believe I have a relatively high degree of comprehension of the English language, and I just do not understand how any rational human being could interpret it in any other way.

“It’s the thought that counts … and so far I’m up to zero.”
  Stephen Colbert, The Colbert Report, Sept 25, 2007

Vendor of the Week

Vendor of the Week is a SI exclusive that runs through the end of the year, or until the first two sponsors sign up, whichever comes first.

The following vendors have been selected as vendor of the week:

Week Vendor
October 22, 2007 Coupa
October 29, 2007 Provade
November 05, 2007 Co-exprise
November 12, 2007 Vinimaya
November 19, 2007 Aravo
November 26, 2007 Next Level Purchasing
(now the Certitrek NLPA)
December 3, 2007 Global Data Mining
[acquired by CUSTOMS Info,
acquired by Descartes)
December 10, 2007 BIQ (acquired by Opera Solutions,
rebranded ElectrifAI)

Vendors of the Week are selected randomly at the sole discretion of the doctor. The vendor of the week is a company that is doing something the doctor considers to be truly innovative and relevant to sourcing and procurement.

Coupa + Amazon EC2 = Energized Procurement!

One of the great things about the blogsphere is we don’t have to wait for them to stop the presses to get a great story in at the last minute. We just type, save, publish – and presto! – you get the latest news as soon as we get it, as it happens, and, when you’re really lucky, before!

Tomorrow, the latest press release from Coupa will blanket the wire, traditional e-Procurement companies will cringe, and new age technophiles will rejoice. For tomorrow, the world’s simplest e-Procurement system will be available on-demand to enterprises of all shapes and sizes at a fraction of the cost of traditional e-Procurement systems. Just like SalesForce.com revolutionized the CRM world, Coupa is revolutionizing the e-Procurement world – and then some! By basing their new services on Amazon’s EC2 Virtual Grid Computing Cluster, they are ensuring that they’ll always have the computing power required to ensure rapid response times, regardless of how many users decide to use the system at exactly 4:55 p.m. to get that last order of the day out before they leave.

Normally it takes a big merger, acquisition, or introduction of a brand-spanking-new technology to shake-up a market – but Coupa has achieved puree with nothing but open source and a revolutionary pricing model. They don’t know it yet, but I’d say at least three quarters of the e-Procurement companies I track over on the resource site are in dire straits once procurement professionals realize everywhere that it doesn’t cost in the high six, or even seven, figures for basic enterprise e-Procurement anymore – and that it doesn’t require a six month roll-out plan either! Specifically, I predict that any company trying to make a living just selling decade old order management, e-RFX, e-Invoicing, and catalog management technology is headed for extinction. Unless they are also providing advanced payment solutions, supply chain finance, inventory visibility, or other advanced service offerings – they’re going to have a very tough time competing with a true multi-tenant on-demand e-Procurement platform with unlimited scalability and exponentially decreasing costs on a per-user basis as your organization grows.

This brings us to their transparent four layer pricing model – the first of its kind – that is designed to make the Coupa e-Procurement system affordable to even the smallest 3-guys-in-a-garage start-up while simultaneously making it best-value for your large enterprise who’s still struggling to embrace the 21st century and just needs a basic e-Procurement system. How affordable? How valuable? Although the exact prices won’t be available until tomorrow, I have it on good authority that a 10-user organization can get started for as little as 3K a year (and maybe a little less)! And – you better be sitting down for this one – a 1000 user organization can get started for under 50K per year! That’s less than $50 / user / year! And the enterprise package also includes their new “Quick Start” program which gives you a dedicated solution delivery expert, guidance on collection of key company information, and assistance in configuring your Coupa-On-Demand instance – including chart of accounts, users, suppliers, contracts, catalogs, approvals, and integration advice.

Coupa has also been working hard since their last release to extend their functionality, and now supports a number of common office supplies and electronics vendors using punch-out and cXML order delivery (including Office Depot, Office Max, Dell, and VWR), direct quickbooks order import via Traxian for small businesses, and an integration web services layer that automates the movement of data in and out of Coupa-On-Demand using XML and an open API that supports seamless integration with accounting systems and ERPs.

And I’m sure there’ll be goodies aplenty on their newly designed web-sites that will be live tomorrow. That’s right – Sites! In addition to Coupa.com, there’ll also be a new Coupa.org site as well that will provide a dedicated home for Coupa Express, the world leading open source project for e-Procurement that has already surpassed 9,000 downloads and will probably pass the 10,000 mark before the month is up!

So watch the wire – and check out Coupa*! The e-Procurement revolution is at hand!

And, for those of you still wondering, this post fits in perfectly with the Sustainable Sunday theme : On-Demand e-Procurement that uses Amazon EC2 Virtual Computing Grid to only consume as much resources (and energy) as is required to support your needs and keep your costs low helps you sustain your procurement initiatives!

*Wouldn’t Coupa make a great sponsor of Sourcing Innovation? They’ve been pretty innovative lately.  Feel free to leave any comments – including dissenting ones! – below. I know they read this blog from time to time.

There’s More to Ketera than Connect

The big news this month with Ketera was their recent Connect conference in California, but back in July they put out a good whitepaper on “Supplier Catalog Management: Avoiding an Expensive SAP SRM Migration” in the context of supplier enablement.

The white-paper starts by noting that SAP SRM customers are in a big dilemma with regards to their current Requisite implementation (which is no longer supported) – either they migrate to CCM, which will in turn require another migration when the customer upgrades to SRM 6.X down the line, or they migrate to MDM Catalog, which is young, buggy, unproven in large deployments, and has a non-trivial cost of migration. However – there is a third option – and that is to migrate to a third party solution. Of course, the solution proposed is Ketera’s Supplier Content Management (KSCM) solution, but the central idea is valuable – why rely on an inefficient and costly solution with a poor migration path when you can instead use an efficient, cost-effective, and extendible third party solution that can meet your needs.

The white-paper also outlines what such a solution should look like. It should be on-demand, streamline the content/catalog development and update process, allow suppliers to easily upload, validate, and manage catalogs and related content using tools they are familiar with (such as MS Excel templates), enable multi-party workflows that bring together suppliers, buyers, and external service providers, and make all catalogs immediately available for use by SAP SRM once they are created.

Furthermore, the solution should support at least two deployment modes: Supplier Managed, Vendor Hosted and Supplier Managed, Client Hosted. In both cases, the supplier provides all the product data and is responsible for keeping it up to date, but in the first case the vendor manages the implementation and IT support and integrates into SAP SRM via punch out while in the second case, the buyer manages the implementation and the buyer’s IT team handles the bulk of support. And, if the supplier or buyer wishes it so, the Vendor should be capable of managing the catalog on behalf of the Supplier.

Now, I know this isn’t as glamorous as the financial supply chain solutions discussed by Jason Busch over on Spend Matters (Ketera Connect Dispatch 2), as innovative as the cost-baslining and modeling solutions I suggested back in a July post, or as appealing to a CFO – but it’s important nonetheless, since the more efficient a procurement professional is, the more time they have to seek out, find, and capture true savings.

When it comes to data migration, there’s no need to be a sap.

What’s the Key to Effective Purchasing?

CAPS Research latest Practix, “The Key to an Effective Purchasing System: Is It Technology or Supplier Relationship Management?”, by Keah Choon Tan asks whether sophisticated and often expensive information technology is the only solution to improve competitiveness in response to the tremendous pressures of globalization and increasingly demanding customers. The study describes the lean but highly efficient supply management system of a world-class casino-hotel chain that emphasizes strategic supplier relationships over implementation of sophisticated information technology and that has developed a supply management system founded on a contemporary management philosophy that stresses long-term, mutually beneficial relationships, trust, and sole sourcing.

The goal of the article was to demonstrate that an effective supply management policy can be the key to managing the supply function effectively. The policy emphasizes the formation of strategic alliances to achieve the lowest total acquisition cost, rather than forcing suppliers to bid on each purchase – since this approach tend to focus on short term measures such as unit price. Once the strategic alliances are formed, the best suppliers are selected for each item based on quality, reliability, delivery, and total acquisition costs and blanket orders are issued. Furthermore, to update and continuously improve centralized blanket orders, the company has processes in place to enable suppliers to solicit new business and chefs to request and receive samples and pricing information.

In addition to sole sourcing, the company also employs supplier performance monitoring, continuous evaluation, and competitive bidding when a new product, or source, is needed. The company also has well-defined, rigid, supplier selection criteria which include competitive pricing, quality standards, reliable services, processes, and delivery, the ability to provide niche product and design concepts, financial stability, provision of warranties, insurance and bonding, proven performance standards, and excellent service and support.

The study then deduces that implementing an appropriate process is the key to solving business challenges, and information technology is merely a tool to facilitate the process. Furthermore, the study notes that the process has led to time savings, cost savings, accuracy, waste elimination, and improved control without the support of much in the way of information technology.

Although I’d have to agree that the process is key, I don’t think the study stresses enough that it was based on the restaurant services arm of a casino hotel chain that has only eight locations, all of which require essentially the same items. This is not very sophisticated supply management. For an operation of this size, good processes backed by Excel and Access are pretty much guaranteed to get results (but not necessarily great results, especially from an efficiency standpoint).

Thus, although it’s a good report – it’s also a dangerous one. There’s no way this would work for a major fast food chain if it did not have good sourcing and procurement systems to back such a strategy up. Although tools alone do not a successful sourcing process make, without tools, the supply management team of any chain of even just a few dozen locations would quickly become swamped under information overload and be unable to keep track of who is supposed to ship what where, whether or not performance is acceptable, whether or not quality is acceptable, and whether or not they are truly getting the best price. Although a sole source strategy backed up only by good supplier management is often a great approach for a small business, without good technology to back it up, it just doesn’t scale!

A fool and his money are soon parted … don’t be a fool!