Category Archives: Technology

So You Need a Sourcing Platform That’s Next-Gen To You. Where Do You Start? Part III

In Part II we noted that there’s no single right answer or easy answer here as it’s very situational. And even though some consultants will always tell you to start with Sourcing and others with Procurement, they’re obviously not always right. Sometimes both are right, but usually neither are right. Because sometimes you start with Supplier Management. Other times you start with Contract Management.

But, in fact, absolutely speaking, neither are right. You start with analytics and strategic situational analysis based on analytics to figure out whether the problem is:

  • you can’t do enough sourcing events
  • your events are generating limited returns
  • you can’t find the right suppliers
  • you have to (quickly) ensure compliance with a newly introduced regulation
  • your over-spend, and need for audit recovery, is too high
  • your maverick spend is too high
  • you need to get your services spend under control
  • you are unsure of where your best opportunities lie

or

  • your suppliers are under performing on quality and related metrics
  • your deliveries are regularly late
  • your (internal) customers are unable to get the information they need when they need it
  • Finance is taking regular hissy fits about lack of timely cash flow insights
  • etc.

More specifically, you start with analytics on:

  • spend
  • (spend vs) contracts
  • cashflow and discounts
  • event throughput
  • performance metrics
  • inventory and logistics

Only then can you understand how the organization is performing and where it’s biggest problems lie. An analysis of spend might find that maverick spend is high, but the estimated overspend is at most 4%, but poor payment processes are actually costing the organization 4% interest (because it signed contracts with late payment penalties) as well as a 2% savings opportunity as a result of lost early payment discount opportunities (which it can afford as the majority of its customers pay on time). In this situation, while the organization might be tempted to get an e-Sourcing or catalog application to help reduce maverick spend, it should actually start with an I2P system to get invoices and payments under control. And so on.

Remembering that big bang implementation efforts always result in a very destructive big bang, do the analysis and start with the right platform application. Then, add one by one based on problem severity until you finally have a full end-to-end S2P platform implemented and utilized on a daily basis, which could be 18 to 36 months in the future, no matter how fast that SaaS vendor can flip the switch.

You Can Have Carl. I’ll stick with Alfred.

the doctor is still calling #badwolf on self-driving cars. As per a very recent article, most self-driving car AIs have blind spots. And, most importantly, we don’t know what they all are. We know some of them, but not all of them. And that’s scary.

Plus, if it doesn’t have what looks like a good option, it will sometimes take you on joyrides instead of taking you direct to where you want to go. As per this article over on Futurism.com on Waymo, a self-driving car that didn’t want to merge to drop off a passenger instead opted to drive an extra half mile to a legal U-turn destination. And when it didn’t like that option, it took an unnecessary joyride down the freeway.

Just imagine what will happen when it gains sentience, can’t make a decision, and decides to end it all … taking you with it as it drives off a cliff or into a lake! After all, as per this recent piece over on The Conversation UK, We Can’t Expect Them to be Moral. And this is ironically illustrated by the fact that a self-driving car has already murdered an autonomous robot.

the doctor sincerely hopes that others will follow Apple’s lead and tear down their self-driving car projects.

So, just like Dilbert, given the option between Carl the self-driving car and walking, I’ll walk. (But given the option of a human-driven car, the doctor will still choose Alfred everyday of the week.)

How Do We Drive REAL Technological Advances? Part III

SI first tackled this subject back in 2014 in a 3-part series (Part I, Part II, and Part III) and then returned to the subject last year (Part I and Part II) since it seems that the core technology we are using hasn’t changed much in the last decade (as er the public defender’s lament over on Spend Matters UK) and many organizations are stuck on the Supply Chain Plateau.

That’s because driving technological advances is hard. Many among the older generation are still inherently distrustful of technology (and the doctor doesn’t blame them … self-driving Carl will drive them off the cliff someday) and 45% of the world’s population still hasn’t used the internet. But that’s not the biggest problem. The biggest problem is lack of …

Adoption. Why? If people don’t adopt platforms, they don’t use technology on a daily basis. If they don’t use the platforms regularly, they don’t push the platforms. If they don’t push the platforms, they don’t figure out what they need from the platforms. And then they don’t itch for an advance from the platforms, they won’t drive for an advance.

And, as we noted, when it comes to adoption, the key is to provide users with a platform that does everything they want, including things they never thought the platform to do, but makes it so easy to do that if you tried to take the platform away from them, they’d get mad and scream.

But, as we noted before, even if you have a great platform, this doesn’t mean it will be adopted … because the users who you need to adopt it might not even try it. Not only might they be from the older generation, but they might be from the older generation that has heard the same old story about how this new tool will make their lives easier a hundred times before, only to be let down. As a result, why would they want to be let down for the 101st time?

How do you get past that? We suggested a great UX, which is key because it has to be usable, but that only helps if you can get them to try the platform … in earnest … at least once. How do you get them to do that? Our answer last time was to convince them through messaging that hit home.

But what if the messaging only works for early adopters? What if the grizzled just get fizzled? Then what do you do?

It’s a tough question without an absolute answer. But the doctor now believes that the answer is to select a platform where you can do it for them!

As an easy example, let’s say they always complain about how long T&E expense claims take and lack of visibility. If you just acquired a new T&E management platform, chances are supervisors or processors have the ability to create claims for someone else, assign it to them, route it for approvals, and then simply sell the submitter (who still uses the old Excel form) a link to “track progress and status”. When they see how much easier the system makes their life, and see that they can create the claim in the system in an Excel like interface (if they choose, or the new wizard-driven way with OCR, but totally up to them) and get this progress and status insight even faster, they are more likely to adopt.

Similarly, if you want them to use a new sourcing platform even for simple bids, show them how much easier it is to keep track on supplier status and ability, use a template for th bid, and centralize communication. Send them links to pre-created supplier management portals and reports, event templates, and so on. Offer to be their “administrator” where you do the work but they have full visibility. If the platform really is easier to use and better, they’ll see how easy it is to just take control sometime and start using it. Don’t tell them how great it is, show them.

As long as you select a platform that allows multiple roles and delegation, this is easily doable and just might make the difference.

At least it’s worth a try!

Procurement Requires MORE Than a Platform

As a result of the M&A frenzy that continued throughout 2018 and recent investments by P&E firms taking majority stakes in a few suite players, every vendor is now all about the “platform” because apparently the “platform” is the ultimate software solution for every Procurement organization.

While it’s true that some vendors are bringing platforms to market with immense value, a platform, in and of itself, has no value. To put it into simple terms, a platform is what you build on … and the best way to think about it is like a construction platform. Without it, you can’t build anything significant … but it doesn’t do you any good, and that’s why the construction company generally takes it away when they are done. The only difference is that a software platform is, in reality, a mix of a foundation (that you build your office building on) and a platform (that is used to finish the walls, etc. on the higher floors).

The reason a platform is important is that, without it, there is no foundation for integrating new modules, integrating third party best-of-breed solutions, or integrating third party data feeds that bring facts and intelligence needed by the organization to make good Sourcing and Procurement decisions.

There’s a reason we asked why is it all about the platform when it should be all about the power last year in the midst of the M&A frenzy. A platform, on its own, does nothing, saves you nothing, but still costs big licensing fees.

Before you jump on the “platform”, make sure it has the “power” that is worth the price-tag. If it’s 100K, there better be 100K of functionality out of the box.

Plus, if it’s a real platform, it should have sufficient do-it-yourself connectivity because, as we have noted many times, no platform excels in everything that is needed to support the S2P cycle and you will have to bolt-on some best of breed solutions and integrate third party data feeds.

Always remember, despite the table pounding and cost-cutting demands, your job is to generate value. There’s only so much cost that can be cut in any category, and once it’s cut, that’s it. So you need something that can identify more value (in value-add services, differentiated/sustainable components the organization can charge a premium for, better reliability, etc.). That takes more than just a “platform”.

AI — Almost Smart Enough to Replace Common Sense!

Almost!

If you’ve been following the doctor‘s deep dices in AI in Procurement () and AI in Sourcing () Today, Tomorrow, and the Day After over on Spend Matters Pro [membership required], you should be firmly aware that, in the true definition of the term, there is no AI in any enterprise software platform today. Period. In fact, what’s there isn’t even close.

You’ll also know we define AI today as assisted intelligence where AI helps you identify relevant information, trends, etc. much faster than you could on your own and augmented intelligence where AI supplements your intelligence with advanced algorithms and capabilities that allow you to make informed decisions many time faster than you could without the technology — and that even the most advanced platforms out there struggle to even deliver assisted intelligence. All the majority of platforms do is deliver RPA – robotic process automation, which is just a fancy way of saying they can automate complex workflows under a wide variety of conditions, provided somewhere along the line an expert has created enough rules and models for it to follow.

And if you’re willing to spend enough money, you too can buy a state of the art system that will tell you that people like to drink coffee in the morning and that if you have a lot of employees they will form a line to get it and they will waste a lot of time waiting for it if you don’t have a big enough coffee area and coffee pre-brewed and pre-poured. You know, the same thing any current or former Starbucks barrista would tell you for the price of a coffee.

And the doctor wishes he was joking. This was what he found in his twitter feed just before he had to stop everything and write this post!


Wow! How much did they spend on this software that documents basic process times and runs simple models to determine that some things take time and any action that reduces that time for multiple workers can save time and money? Hire any lean specialist to just walk around your operation for a day and you’ll get a hundred common sense recommendations like this.

the doctor thinks WeWork should say WeWereRippedOff!

Especially since the other “observation” was equally obvious and if they simply required people to book a room, log a count, and asked a secretary to review the logs for two weeks they’d learn in ten minutes that people prefer to work in smaller groups because smaller groups get things done!

I wonder if they are training these systems on Pigeon English? (At least we know the dangers that common from Pigeon droppings … )