The Politics of Performance Analysis

Spend Matters welcomes a guest post from Paul Blake of GEP.

The chemistry professor, comedian, songwriter, and all-around polymath Tom Lehrer once said: “I would like to expound briefly on a theory I have held for some time to the effect that the reason most folk songs are so atrocious is that they were written by the people.

More recently a British politician has increased his already significant notoriety by saying: “Britain’s membership of the EU is far too important to be put in the hands of the public.”

So, we’re not to be trusted.

In pretty much any field of human endeavor the “most popular” is rarely the best. In cinema, TV, music, literature, and art, the most sought after, the “favorites” are by-and-large…well truly dreadful.

Don’t get me wrong, this isn’t value-judgment, I am as guilty as the next person. It’s just that, in a sense, a benign government has as much responsibility for preventing the people having their way as enabling it. This becomes almost an imperative when the people now have such a historically unprecedented degree of influence.

You might ask what all this has to do with procurement, and specifically procurement technology. Well, here’s the thing. Without necessarily our being aware of it, technology is empowering the people like never before. We are “liking” and “following” other individuals, organizations, and even ideas in such a manner that those two verbs are beginning to take on whole new meanings. When a friend posts sad news on their social feed our only option is to “like” it, which we don’t of course, but that very word is now understood in a completely new context.

We now have the power to make or break a business. A tidal wave of poor reviews will close a restaurant. Who cares anymore what someone paid to eat there wrote in the newspaper?

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This all kicked off with a vengeance when buyers and sellers started peer reviews on auction sites. Now, a growing number of us are engaged in systematic supply chain performance analysis, even if we’ve never heard of such a thing. Companies and personalities and memes are proliferating and growing through electronic approvals and increasingly there is nowhere to hide for poor-performing service providers.

A country-wide referendum can be kicked off on the web in moments and our leaders are increasingly balanced on a knife edge between appeasing the masses with instant gratification and doing what, in the long run, is in their best interests.

It is only a matter of time before this mode of operation migrates into the procurement market. The trading networks of suppliers, when connected in some form of nexus will be open to wide-ranging, instant performance reviews. We’ll know how many followers our key suppliers have and what is being said about them.

Having to mine for that data, conducting complex analyses to ascertain how suppliers are behaving against your KPIs will no longer be an issue. What you will have to contend with will be far too much information. That, and knowing which data to trust.

When every man and his dog are raving about one of your suppliers (for good or ill) what are you to do with that information?

If your biggest competitor is giving five stars for performance to one of your apparently second-rate trading partners, what are you to make of it? Are they short-changing you, are your metrics out of whack, or are your reviewers being influenced in some way?

Ultimately the future of supplier performance management lies not in letting everyone have their say - that is coming, whether we like it or not. What will make a difference will be how we interpret the voice of the people and act on it for the greater good.

As a far more famous British politician said, in 1947:

“Democracy is the worst form of government - except all those other forms that have been tried.”

For more interesting ideas about procurement, visit the GEP Knowledge Bank.

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