Please enjoy this Boxing Day gift from our Canadian correspondent and resident rap aficionado.
This here's a jam for all the buyas
Tryin' to scry what those vendors tell us
Get shot down 'cause we're so attentive
Try to be smart, and reps get inventive
O.K., Buy-O, go to a trade show
Reps are everywhere and givin' demo
Your pal walks by, you wish you could ask her
But you're tied to the seat like you was just captured
And more...
In this missive, Spend Matters analyst and futurist Michael Lamoureux argues that you must master the procurement basics before artificial intelligence can help you. He says, "We're not downplaying the usefulness of RPA, ML, or AI (it can automate and eliminate the majority of tactical work), of advanced analytics (which can identify trends, opportunities, or outliers), or supplier networks (as improved supplier discovery is valuable in a crisis), but noting that none of these would have prevented the supply chain disasters and associated sourcing and procurement challenges that resulted from the pandemic — and that organizations that don't put in place the proper foundations to manage spend, organizational data, and risks, will be doomed to repeat their failures the next time around."
Editor’s note: This post from Michael Lamoureux, aka the sourcing doctor, answers Jason Busch’s counterpoint to Michael’s original post (Optimization is not optics — it’s obligatory!) that both published last Friday.
Vendors have every right to make money from buying organizations just as buying organizations have every right to make money off their customers. And vendors should make top dollar from top offerings with top ROI, but they won't unless there is a demand for those top offerings. And right now, despite the widespread need, and unequivocal value, the market is bottomed-out because there is just no demand.
And the reason there is no demand, is the vendors have not created it!
What almost all of the sourcing optimization vendors have continually failed to understand is that selling advanced tech first requires creating a need for it.
Optimization is making a resurgence for the third time, with a number of suite vendors recently implementing or expanding their capabilities, but will this time be the charm? It should be, especially considering the COVID-19 disruption.
In this point-counterpoint article, Spend Matters analyst Michael Lamoureux argues for optimization. And Jason Busch, Spend Matters' Founder, argues that vendors shouldn't be giving it away.
In this counterpart article, Jason Busch argues against giving away optimization.
My colleague’s proposal is to give away optimization, when it is, in fact a form of differentiation for providers in the sourcing space. Until optimization becomes as “expected” as RFI/RFX or reverse auction capability in sourcing, I, personally, would actively discourage providers from simply tossing it in. But what I would deploy is clever marketing, channel, business model and go-to-market approaches to capitalize on the asset, if I had it.
This post asking “Where’s the Beef?” isn’t about the beef supply chain, or the purity of the beef that you source, but yet another post about the pitch. We’re latching onto Wendy’s classic catchphrase because its message is easy to remember and one that you should never, ever forget! Especially when you are being sold something that sounds better than it is, or what you are being sold is better than what you expect from the organization providing it.
Why must we talk about this again and again? Because it’s too easy to get suckered into a deal that is too good to be true or without substance.
Four years ago, during the last big M&A frenzy, I published a post on my Sourcing Innovation blog on The First 4 Questions to Ask During Any Mega-Acquisition that is still just as relevant today as it was four years ago.
And while it was very direct and maybe even a bit confrontational, sometimes it’s a good idea to be direct because sometimes you need to let the new vendor know you’re not in the mood for any shenanigans. The reality is that while some mergers and acquisitions are with the intent of creating a better combined company that can better serve the respective customer bases, not all mergers and acquisitions are done for this reason. Some are done just to eliminate competition, and others are arranged by investors for the sole purpose of a short-term money grab (which will be accomplished by a short-term PE sale or initial public offering once the balance sheets are puffed up and the overhead reduced).
So, without further ado, let's get to the four questions you should ask to find out whether you and your new vendor are on the same page.
By now, many of you will have already started your Labor Day weekend. Plenty of folks will have plans for the weekend, but I wonder how many of us will be thinking about the meaning of Labor Day? Very few, I suspect, even the workforce management or procurement professionals among us. I’m not trying to guilt anyone here. I’m just asking the question: Should we be thinking about it?
Pause for a moment to consider how adept the NFL has proven itself at proactively addressing logistics and risk management. Whether we’re talking facilities, security, transportation or emergency services, there’s obviously a lot more behind the curtain than we know about. Suffice it to say that little imagination is required to accept that the NFL sets an interesting, if not teachable, example — not just in terms of how to pull off a mega-event but how to react to most anything that could possibly go wrong. It expects problems and is prepared for them.
What’s your current Uber rating as a passenger? Probably in the 4.5–5 range, right? Most people I know confirm that range. Indeed, my friends and I once compared scores when Uber first granted passengers the ability to see their ratings. We went around the room: 4.9, 5.0, another 5, 4.8, and some ridicule for the guy at 4.6. Now imagine my horror when I was greeted with a paltry, miserable Uber rating of 4.2. An outlier, for sure, but I assumed it wasn’t all that bad. Still, the low score was vexing. I had to figure out what had cut me down so far.
Many of us will recognize this quote from Shakespeare’s Romeo and Juliet: "What's in a name? That which we call a rose/By any other name would smell as sweet." But you may be wondering: Who is this fool, and what hath this to do with contingent workforce and services procurement? But then you may think about it a bit and ask: Are we talking about engaging several recommended, expert flower arrangers for a major event? Or are we contracting with florists in three major metro areas to continuously keep our offices in each location fragrant and cheerful? Ay, there’s the rub. Now we are closer to the core issue.
"Deep Procurement Throat" forwarded us a Coupa marketing email that we found humorous. It’s for a download of a recent IDC report on the sector. We won’t opine on the veracity of the report, as we don’t know anything about IDC’s methodology. But what we will call your attention to is that Jaggaer is listed in the report in multiple areas: Jaggaer, Jaggaer Advantage (BravoSolution) and Jaggaer Direct (Pool4Tool). That’s in the report. The landing page for the download tells another story — at least on part of the page!