Top 5 must haves for Procurement

After you are done with applying all of the best practices with base procurement and sourcing functions and everything is within either one SAP like system OR part of a best of breed multi-vendor landscape, it’s time to go the next level in the game. It’s time to enforce some process changes. Here are my top 5.

1) Closed loop actionable Spend Analysis
2) Visibility into risks associated with strategic Supplier and categories, and impact on score carding
3) Supplier negotiations based on score carding
4) Tighter control on off-contract spend
5) Integration of Procurement functions into the overall Supply Chain

A recent IBM survey of 2500 CIO’s lists BI as one of their top priority. This is not surprising at all. Now that all of the transactions have been digitized, and everything is “in the system” for all organizations (beyond a certain size) the next logical step is to be able to find patterns of opportunities in all of that data for being effective, efficient and agile. The same extends into the procurement domain. Having a global view on all of your procurement data (with a unified and normalized supplier and category/item master view) and being able to take business actions based on that analysis is priceless.

Ever had a supplier, who couldn’t supply a critical sub assembly because of a fire in the Supplier’s plant that you were not aware of. The reason could be fire, bankruptcy, unionized strike, natural disasters… on and on. But the impact on your business is the same – devastating. Would you have been able to neutralize or atleast lessen the impact if you had the right info as soon as the event occurred?
Well, there are ways to stay on top. There are text analytical services which trap events like your supplier’s fire/strike/bankruptcy from the unstructured data heap of public news domain. There are structured info providers like Coretra and DnB which can feed with you all kinds of risk information. This information can not only be used to feed into proactive decision making but also as a +/- ve input into the Supplier’s score card.

The remaining three are not really new, but nevertheless they still round up the top 5. Some of these can get operational and a tad bit boring making it easier to lose focus on them. There needs to be an investment in continued and persistent focus.

The Top 5 Series

I will be posting a set of top 5 series. The focus must be on the 5 must haves for any component of the Enterprise Software. Every post of this series would address one specific area (like procurement, accounting etc).

Do we need Enterprise Software? – Part II

Core Functions

/this is an unfinished posting/

My thoughts on the NetSuite ad

This is a hilarious parody ad by NetSuite. I am referring to the previous posting. Kudos to their marketing/advertising partner for delivering a very entertaining piece and missing the whole point at the same time. It’s a very innovative copy (no oxymoron intended) of the Apple vs PC ads.

Now, beyond it’s laugh factor, I am not sure what else to make of it. The whole argument from the NetSuite guy goes something like cloud, cloud, cloud and more cloud. Cloud by itself has no intrinsic value to the customer. Please allow me to explain. The “cloud” no doubt allows for a lot of wonderful things that the customers would ultimately benefit from, these are already well known. Some examples are the on demand model with no set up investments, pay for usage, no upfront costs, no maintenance/upgrade headaches, potentially unlimited expansion etc. But all of the aforementioned benefits need to enable the business solutions, inorder for the customer to see any benefits from the cloud. The cloud is a means to an end and not the goal itself (unless you are the Amazon or the Google cloud). As a consumer of the ad I don’t get any info on how their magical cloud by itself will  help solve business problems.

It kind of reminded me of another statement I had heard about 8/10 years back or so at a javaone conference in San Francisco “EJB is going to kill SAP” (I am paraphrasing). The premise of that argument was that the EJB with all of its technical advantages would compete with SAP and ultimately lead to its demise. That hasn’t exactly panned out (and that was not the intended goal of the old java owners, although I am not so sure of the new ones). Technology by itself does not help the customers. Customers are helped by the solutions that the technology enables. And those solutions (that are brought about by the cloud) are not discussed at all.

Another interesting twist is that SAP has stated firm support for the cloud, unlike Larry Ellison’s stand on NetSuite’s water vapor. If anything, it should have been a Oracle guy in place of the SAP guy. Ofcourse, this decision to mock SAP instead of Oracle had nothing to do with Larry owning 51% of NetSuite .

They even choose and interesting original to “innovate” upon, Apple vs Microsoft ads. They probably don’t realize that both of these industry giants use SAP to run their businesses.

I guess the part that I had the most issues with were the portrayal of the SAP guy. It’s a German accent all right but that’s not at all how Germans behave. I should know, I have interacted closely with Germans for over a decade.

So NetSuite, I am looking forward to more ads from you which showcase what you really have to offer, in terms of solutions, instead of an endless harp of the cloud mantra.

Pointlessly hilarious NetSuite dig at SAP

Hasso on Hasso

I always thought that SAP toned down its ads purposely, the ads always seemed to wear a three piece suit. This one caught me by surprise, its edgy, entertaining and extremely well done.

This is Hasso interviewing Hasso on in memory databases. Link

Do we need Enterprise Software? – Part I

This is part one of a five part series. It seemed appropriate to start this blog with the need and the genesis of Enterprise Software.

In Part I (this post) we will examine the history of Enterprise back office and the birth of Enterprise Software. Part II will deal with core functionality like accounting, finance, sales, human resources, payroll, productivity and communication (also a little bit of operating systems and databases). Part III will discuss Enterprise needs sliced off by size (large, medium and small sized enterprises). Part IV will shed some light on technology (from main frames to the cloud) and the future and finally Part V will conclude the series with pro/con styled arguments directed towards the blog title, with the cons as challenges and opportunities for improvement.

I have no intention of turning this post into a history lesson (full of data points and detailed time-lines), there are plenty of infobanks on the net that do just that, instead I will keep the discussion abstract with broader strokes and keep the focus on the need for Enterprise software. If you are interested in the data points, a summarized view can be found at this link. I will also refrain from throwing hardware and non enterprise software into the mix.

In the 60s the notion of packaged software started to emerge, where the space that was generally either make to order or pre-bundled freebie with the hardware. In the 70s this packaging concept moved into new territories of Enterprise software. At one end were the likes of IBM and DEC and at the other were the new kids on the block SAP, Microsoft, Oracle etc who would provide software that would run on many different target hard-wares. But what was it that was driving it? What was the pull?

Through out the history of Business, the various business functions (accounting, logistics etc) were strictly manual in nature. The General Ledger actually had a physical existence (it still does in many of the business of the third world countries). What made these core functions to speak in bits and bytes? And that too so rapidly. Throwing away thousands of years of tradition of the paper in a time line comprising of less than 5 decades?

I guess this is at the heart of the question, Do we need enterprise software? And I will try to answer that as we progress thru this series.

SAPPHIRE starts soon

One of the biggest Enterprise Technology events SAPPHIRE starts in Orlando, FL on the 16th of May.

sapphirenow.com

why me

I plan to use this blog to share my views (and strictly my personal views) on Enterprise Software and Information Technology in general.

My focus will be business solutions, TCO, performance, security, cloud computing, database technologies, SaaS, mobile and more.

Regards
Rajesh