Category Archives: Technology

One Hundred and Ten Years Ago …

The second remote control was demonstrated by Leonardo Torres y Quevedo (a Spanish engineer and mathematician) in the port of Bilbao in Spain, when he used his Telekino to guide a boat from the shore. The Telekino was a robot that executed commands transmitted by electromagnetic waves. (The first remote was Tesla’s patented “teleautomation”.) Even though this was the second example, it was the most important as it was built on Quevedo’s principles for wireless remote control operation that are still in use to this day.


What do you think LOLCat?

Don't Touch My Remote!

I Luv My Remote! I Evenz Sleep With It! Thank you Quevedo!

Want an Exceptional Supply Management System? Do NOT Forget the Supplier!

Exceptional results come from the right intersection of exceptional talent, exceptional technology, and exceptional transformation. The three T’s.

And while each piece is important, and no piece can be ignored, the importance of good technology is often overlooked, and, more importantly, key factors that differentiate good technology from great (and exceptional) technology are almost always overlooked — and this is one reason why there are so few true best in class Procurement organizations (and why the Hackett top 8% is the top 8%).

So what makes a great Supply Management System?

Factors include, but are not limited to:

  • ease of use as even a junior buyer should find it natural
  • customizeable workflow as it should fit the transformed organizational processes
  • data import/export as data will need to be imported from ERPs and predecessor systems and exported to successor systems
  • templates and template customization so that RFXs/Auctions/Orders/etc. can easily be created, customized, copied and reused ad infinitum
  • multi-currency support as most Procurement organizations have to deal internationally

And each and every one of these factors should be considered, and included in the evaluation of the supply management system, and systems that do not score well against each and every one of these factors tossed aside, but is this enough to insure you get a great system? Of course not!

First of all, it has to contain all of the specific functions required of the system you are evaluating. For example, if the organization is looking for strategic sourcing, then the organization needs optimization-backed RFX and Auction capability as well as analytics and spend analysis. For Procurement, requisition management, approvals, budget integration, automatic (split) PO creation, good receipt management, invoice acceptance and m-way comparison, etc. And so on. If all functions are there, and all work well, it could be a great system — for the organization.

But will it be an exceptional one? Not necessarily. Exceptional systems need lots of data — and use — to produce exceptional results. Some needs to come from the organization. Some needs to come from third parties. And some needs to come from suppliers. And typically that data is needed in (near) real time. Which means you need suppliers to use the system — which is something they are only going to (want to) do if it’s easier for them to do it in the system, than do it outside the system (and bitterly complain if they are forced to use it to submit invoices to get paid).

This means that the system also needs to be designed for the supplier — something many first, and even second, generation systems were not, even if they had a supplier portal.

Not only should the system be as easy to use for the supplier as it is for the buyer, but it should enable their workflows, provide them with templates, make data import and export as easy for them as it is for the buyer, offer them full multi-currency support as well, and support the internationalization necessary for all of your suppliers in the countries you do business with to use it in their native language.

For example, if you want a supplier to respond to each and every RFX and auction, make it easy for them to manage their catalogs and quickly select the relevant products, update price lists, define volume discounts, and define what you get to see — and don’t get to see. If you want a supplier to use it for e-Invoicing, make it easy for them to upload, create, manage, and track invoice status not just of invoices sent to you, but of all their invoices (as chances are their AR system or sales system doesn’t do that). Make sure they have the same rights to create user accounts, set permissions, and delegate work (especially with respect to RFX responses) to the right people as you do. Let them toggle between languages. And, most importantly, before they submit, let them see what you see the way you see it.

And if the system is truly exceptional, you’ll easily be able to see what they see (with a toggle view) before you send it. Suppliers are your supply chain, so it’s as important to support them as it is to support you — and an exceptionally designed system will do that.

Technological Sustentation 91: Proprietary Madness

Not only do you have to deal with IP and Patent Madness, which we recently discussed, again, but you also have to deal with proprietary madness that is likely to drive us all mad (and may someday push the doctor over the edge, into the land of the crackpot, where at least one blogger in the space is already dwelling).

Just what is proprietary madness? It’s mega-corporations, especially in software and electronics, taking the rights of ownership to extreme. Started, and continued, by the current and former Technology heavyweights, including the likes of IBM, Microsoft, and SAP, it’s not only the creation of company specific standards for software and hardware interfaces, its the restriction of the specification of those interfaces to approved partners and suppliers, limiting the supply of support services and related products to a handful of vendors. This not only drives up the price of those products and services to well above the market average price for support services for software and products with open and published specifications, but can make it difficult, if not impossible, to get support when demand is high or related products if one of the few vendors who can produce products shuts down.

Those of you with SAP know exactly what we’re talking about. Unlike Oracle, which publishes its core schema, and does not change it between minor versions, SAP does not publish its score schema, does not guarantee any stability between bug updates between minor versions, such as between 4.7.1 and 4.7.2, instead requiring you to go through its proprietary NetWeaver interface, which you will, of course, have to acquire to actually support any customizations (and likely build applications in the Portal). And learning the portal is no easy task. One of the most complete books on it is 700 pages alone! And that’s just the beginning …

And while there is nothing wrong with proprietary technology, as a company needs some assets in order to survive, the lengths at which some companies go to keep it secret and protect it, in a world where data needs to be shared and products need to be utilized in conjunction with other products makes development (and the supply chains that rely on that development), a nightmare.

So what can you do?

1. Make Open Source / Open Systems a priority.

When doing your weighted evaluation of a provider, penalize any provider with proprietary systems, and severely penalize providers with highly guarded proprietary systems that cannot be maintained by anyone but the provider. Give this a weighting of three times more than your gut thinks it should be weighted.

2. Demand the ability to do full data dumps to an open standard, such as XML, or a text format, such as CSV, whenever you want.

And do them at least quarterly, if not monthly, and do incremental full data backups at least weekly, if not daily. If the system stops working for you, you need to migrate, and even if the system does work, you will still need to integrate that data into your (virtual) data warehouse to support analysis and other processes.

3. Migrate away from proprietary vendors at first opportunity.

It doesn’t matter how much you paid, or how bad you think you will look by trying to replace the solution that was the right solution when you bought it, because it will always cost you more in the long run — with costly maintenance, custom development, and manpower to manually integrate data dumps into third party solutions — and that’s worse than admitting there’s a better solution than what you have. Moreover, chances are when you bought that big, monolithic, proprietary solution, there wasn’t a more open alternative, so you didn’t really do anything wrong and a good Procurement department always looks for ways to improve processes and platforms.

Technological Sustentation 81: Social Media

While there may be a dirty dozen of risk categories that we need to address in order to adequately address the Procurement Damnations we have willingly placed ourselves in as we try to collectively forge a new frontier, the largest category of risk that we need to address is that of Technology. Almost one fifth of all damnations that plague us fall into the technology category. This is the latest technology damnation that we are going to address. Even though it’s difficult.

As we mentioned when we penned the original damnation series, social media might be the most damning of them all. Besides the obvious facts that we collectively as a society waste enough time on a single video to double the size of Wikipedia (Source), that social media is literally making us stupid (Source), and that every marketer and their dog is doing their best to convince you that your company has to be on every social network in existence (including the dozen that are literally here today and gone tomorrow as Facebook and Twitter have pretty much won the social media war in the English speaking world for the time being), there is the simple fact that social media takes more than it gives.

So how do we survive? How do we deal with the fact that despite the fact that social media was designed for people to be social with each other, and not for businesses to sell wares to consumers, and certainly not for businesses to sell goods to each other, we are constantly bombarded by social media firms that tell us we can use social media to conduct important, strategic, operations.

And if having to deal with the outside pressure isn’t enough, you are constantly bombarded with requests from marketing for information about your supply chain efficiency, corporate social responsibility, sustainability, or other operations and practices that can be used to boost corporate image, brand reputation, or product differentiation on these outlets. You’re working hard to define and implement proper category management techniques on dozens of strategic and high-value categories but all marketing cares about is which supplier will get the organization the most free press, whether the “in vogue” corporate social responsibility practice of the day is getting enough attention, or if the new product being sourced will have enough bell-and-whistle features to allow for one dozen unique messages for each social media channel of interest. It’s inane, insane, and both.

And then, to make matters worse, rather than use your supplier portal, your suppliers want to message you on the social network they are signed into 24/7, your partners are checking the never updated Facebook company page instead of the official contact directory, and eliminated vendors keep messaging your organization’s Facebook and Twitter accounts asking marketing why they are no longer being considered, rather than read the detailed explanation in the vendor management portal you provided them.

So What Can You Do?

1. Refuse to answer meaningless marketing inquiries and instead change the conversation.

When marketing asks if the new product being sourced will have lots of features to wrap messaging around, simply state that the product is being sourced to corporate specifications, and that full details will be provided.

When they ask about CSR practices, simply inform them that you have vetted all suppliers using a third party and that they should read the appropriate reports.

And when they ask if you use twitter, simply point out that is their job. Don’t get distracted.

2. Adopt Procurement tools with integrated messaging, message boards, and social media like features in the communication portal.

If your Procurement portal gives the suppliers what they want, then they won’t be constantly asking to message you on Facebook, Twitter, or the platform de jour.

3. Help Marketing select the right CRM and social media monitoring platform.

Even though it’s the last platform you should touch, it is marketing’s livelihood – so it’s critical to make sure that if they are going to be using such a platform, that they are at least using the best one available. And if you can find one that meets all of their needs, maybe they will spend all of their time on it instead of bothering you.

It’s not a perfect solution, but it will at least allow you to survive, if you are strong enough. (Because only the strong survive.)

Technological Sustentation 90: Open Source

Open Source, which not only gives us free software, but some of the best software out there, should be a great thing, and it is, but from a Procurement point of view, it’s a damnation. Why?

  • How do you cost it?

    There’s no free lunch when you have to wash the dishes — for the entire Bawabet Dimashq Restaurant — and there’s no free software. It has to be customized, maintained, and supported. This takes people, and that costs money.

  • How do you defend against it?

    Chances are you will find that the software doesn’t quite do what you need, and then you will need to augment it. But under open source terms, you have to release those modifications. And that will be helping your competitor, won’t it?

  • How do you defend your investment against it?

    When a purveyor of proprietary software comes through the door and offers you its SaaS platform for half of what IT thinks it will cost to maintain your platform, how do you convince the CEO the customized open source software you want is the right way to go?

Now, in our world, it’s not usually the case that open source is the way to go, as modern providers of SaaS platforms, or at least those that aren’t too greedy, have made them such that they can offer better, faster, and cheaper alternatives than in-house open source. But that doesn’t mean proprietary will solve all of your platforms. Every organization is unique, and while SI expects there is a proprietary platform that can be configured to meet the majority of your needs, there might be a situation where something custom is needed, and the best way to build it is on open source technology. So how do you deal with the organizational pushback?

1. Know Your Unique Needs.

The first question is, why do you need it. There has to be a reason besides you want it, you like it, you think it will be cheaper than the alternative, or you think it will be the most flexible. If you’re gravitating towards open source, there should be one or more unique requirements that only open source can meet, these should be well understood, and you should be able to clearly convey why.

2. Know the Risks … and Have a Game Plan to Address Them.

Open Source brings unique advantages, but it also brings unique risk. Who is going to support the platform day to day? Maintain it and fix the bugs? Add new functionality and integration capability as the organizational platforms change? And how can you be sure someone didn’t sneak something proprietary in there, either on purpose or by accident, and you won’t be accused of IP theft or a license infringement and have to tack legal costs onto the bill (as there is no provider to indemnify you)? All of this is addressable, and controllable, but you need to be aware of all the risks, and have a game plan to mitigate them up front, or getting any open source project approved in an organization that still wants a one vendor platform and “one neck to choke” (that is outside the organization) will be an uphill battle.

3. Know the Costs … and the Value of the benefits.

Make sure to understand all of the costs of the solution, both hard and soft, as well as an expected value of the unique benefits that the open source solution brings, and add those to the cost equation of the best non-open source alternative. If the open source will allow for a drastic reduction in the manpower required to complete a workflow, allow for the organization to harvest a lot of market insight without paying for costly, marked up, data subscriptions, or provide some other cost saving, that is extremely relevant and the value ratio of the solution could even out when compared against the best proprietary solution. And having these value models worked out can go a long way to mitigating the “but it costs more for IT to maintain” dissension.