Category Archives: Friday Rant
When Supply Risk and Big Brother Policy Cancel a Half Marathon
I'm back from the UK, having just missed being able to watch this Sunday's London Marathon (I might run it one day myself, but this year I'm focusing on a personal best for the flat and fast Chicago course). But one topic that came up in multiple conversations was actually the Sheffield Half Marathon, which was thwarted by procurement problems. Even though people continued to run, the race was technically cancelled in the middle because “the original water order was not delivered” to meet the needs of an official race requirement to have an “appropriate amount of water” available for participants every three miles.
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Could SAP, Ariba Build a New ‘Services Network’ with Fieldglass?
SAP/Ariba's acquisition of Fieldglass has provided plenty of fodder for the Spend Matters crew for the last couple of weeks, but in today's rant we take on a somewhat inquiring perspective. What does the future of networked services procurement hold? Extending the application capability of the Fieldglass VMS to a network-based model targeting new types of value could change the procurement discussion entirely.
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When Purchase Price Variance Turns Deadly
Don't be a slave to PPV! What has the fallout from GM CEO Mary T. Barra's recent testimony on Capitol Hill taught us? That the challenge of measuring total costs and defining a balanced scorecard of supply is daunting, yet crucial. It's essential to align that scorecard to corporate/customer objectives rather than an old-school purchasing-led focus on just one of those metrics.
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Home, Rental, and Vacation Property MRO: Project Photos Equal Big Savings
I've spent decades maintaining, repairing, and rehabbing houses. And when it comes to working on pre-existing structures, no two are ever alike. Building codes change continuously, a great deal of past work is performed by do-it-yourselfers (DIY), handymen and even general contractors are frequently not licensed in all trades, and all too often time-saving shortcuts are taken before infrastructure work is closed up. So if the job gets accomplished at the right price, why does any of this matter? Because future problems are unlikely to occur within the first year or two following completion.
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Long Live Services Procurement! The World is Made Up of People, Not Widgets
With the announcement of the Fieldglass acquisition this week, SAP has clearly put its hat into the services procurement ring in about as serious a manner as possible. We’re incredibly excited for this move because we think it has the potential to give the buying and management of third-party services the attention it deserves. Now more than ever, services are what make the global economy go around. People matter more than ERP has ever cared to imagine (if it did at all) – until now.
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Supplier Management: “Real” or “Desperate” Procurement Housewife in 2014?
I’m not a huge fan of reality TV. There’s a reason studios exist, in my view—to create Game of Thrones, True Detective, and House of Cards, duh. But the truth is that reality TV calls it as it sees it. As “scripted” as it can be, it’s untamed and rough around the edges, lacks manners, can’t do small talk well, and generally leaves a negative impression (we’re looking at you, Honey Boo Boo and Mama June). Such is life outside of Hollywood. The same is true of supplier management inside most companies. Like most reality TV, it’s not ready for primetime - or if it is, it’s something of a sh*t show.
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Forget the PowerPoint: B2B Sales are Quickly Migrating to Tablets
The future of business is quickly moving to a tableted future, and in the B2B arena, we are seeing this as well - just not perhaps as fast as in consumer-oriented markets. Tablets are becoming not just an accessory for sales representatives, but rather a vital tool that can be used in imaginative ways to enhance their interactions with procurement professionals. While anecdotally we have seen this trend developing for some time, it has accelerated over the past year in particular as prices for tablets have come down dramatically (well, except for one Cupertino -based company’s offerings), a new study provides interesting insights into how tablets can and are being used effectively - and imaginatively - by the sales forces of B2B companies.
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Rant: Singapore’s Taxicab Problem and Lack of Modern Payment Systems
Gleaming, polished buildings, well maintained landscaping, even slick subway stations with swipe cards that are a pleasure to use—the last one clearly not a Ventra design. You can find food from all over the world and see high-end fashion both in store display windows and paraded about on smartly dressed people everywhere. Singapore is a cleaner version of New York, with thinner people in a Tokyo designed setting with a bit of Hawaiian greenery incorporated. But expect to be frustrated if you need a cab between the hours of four and six in the afternoon.
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Total Cost of Independent Schooling: Indexed Tuition, Limited Diversity, and Mental Health
To say that the quality of U.S. public schools varies tremendously is the understatement of our times. But most families with school age children – given that the country's median annual household income (with two wage earners and two children) is about $50,000 – are more or less locked in to sending kids to their local public school. And the pure economic argument that we can all vote with our feet and relocate to a neighborhood where the schools are above average -- as is the cost of housing and real estate taxes that largely fund the schools -- is specious and unrealistic.
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Irrational Exuberance and Tech Valuations in B2B: Tradeshift, Tungsten, and Blur Group
I’ve come to believe that from an investment perspective we’re in the early to middle stages of a tech bubble in the procurement, supply chain, and B2B sector. This is a topic from a research perspective we’ve covered extensively on Spend Matters and Plus/PRO already (and been a part of behind the scenes, helping analyze and structure a number of deals in recent years). Today, I offer my shoot-from-the-hip market take on the valuations and potential of Tradeshift, Tungsten and Blur Group – three companies caught up in the high valuation time in which we find ourselves, albeit for different reasons.
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Friday Rant: Olympics Drama and Allegiance for Hire
Hyun-soo Ahn was one of South Korea's most decorated short-track speed skaters (five World Championships and three gold medals at the 2006 Olympics), so why did he change his name to Viktor Ahn and now skates for Russia? What the author of this NY Times article failed to understand is that sports federations in South Korea are like mini-mobs, if not worse. There have been allegations of abuse of power, misappropriation of funds, physical mistreatment of athletes, etc.
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Facebook & WhatsApp, The M&A Bubble, and Valuing B2B Companies With New Metrics
Looking at Facebook’s $19 billion acquisition of WhatsApp, I’m getting a sneaking feeling like it’s 1999 all over again. As with the last Internet bubble, consumer-centric tech companies with stratospheric valuations are leading the charge in buying smaller firms with, well, stratospheric valuations. And the metrics being used to gauge acquisition value – the number of users and user growth rates – seem eerily similar to non-financial valuation metrics from last time around (eyeballs, anyone?). That is, when Mary Meeker and Henry Blodgett ushered in an era where discounted cash flow analysis was taught only to business school students and had no place in the bubble M&A world.
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