Blast From the Past: Good Advice for CEOs, Good Advice for CPOs

SI originally ran this post six years ago today. It’s as relevant now as it was then!

Chief Executive posted a good article on why you should simplify and clarify your business. According to the article, knowing where to concentrate the effort is critical. A business should focus on where it earns money now and, even more importantly (in the doctor‘s view), where it will earn money in the future (as business, and demand, is constantly changing). To help you do just that, the article presented an approach to Keep it Short and Simple (KiSS) that it believes will help a CEO do just that:

  1. Clarify and communicate what the business is, does, and delegate down the line.
  2. As CEO, aim to remove yourself as much as you can from the dayt-to-day operational business and concentrate on strategic areas.
  3. Aim to reduce meetings and have a clear (and simple) outcome for those that do take place.
  4. Reduce the number of people involved in those meetings.
  5. Communicate, communicate, communicate.

This is also great advice for CPOs.

  1. A good CPO clarifies what procurement does for the business and how it meets the strategic objectives.
  2. A good CPO empowers her people to do their jobs and focuses on the big picture.
  3. A good CPO doesn’t waste her days in meetings … she spends them charting paths to procurement success.
  4. A good CPO only includes people who need to be there in meetings … and empowers those who are there to disseminate the information as required.
  5. Not only does a good CPO communicate, communicate, communicate, she also collaborates, collaborates, collaborates.

Organizational Damnation 54: Marketing

So far we’ve tackled the organizational damnations of Logistics and Legal, but these are just the beginning. Today we’re going to tackle one of the biggest organizational damnations of all: Marketing. Like Legal, Marketing is one of those evils that the organization can’t live without, but Supply Management often can’t live with.

While it’s true that marketing is usually necessary to create demand for the products and services the organization produces, which in turn necessitates the demand for the raw materials, components, and services that Supply Management exists to source, it’s also true that sometimes when marketing creates that demand they use advertisements that are misleading as to the capabilities of what is being sold or promises that are unrealistic and, sometimes, those advertisements are outright lies and those promises are impossible to keep.

For example, let’s say the organization is selling a new phone. Marketing might claim it runs on a faster network (when, in reality, none of the carriers that support your phone support the faster network protocols), has a processor that is 30% faster (even though every independent benchmark only has it 10% faster and the design specifications indicated that the expected performance improvement was only 20%), and uses next generation RAM because it supports a faster MHz (even though it’s current generation RAM).

In this example, marketing is being almost realistic by stretching the truth with only a few small lies. If the organization is not as lucky, marketing might have the gall to say that your organization’s product is an effective cure for the common cold (because no one in the study caught a cold during the one year preventative trial), even though there is no evidence to that effect. (If the control group happened to be in an isolated community and were selected because they were the fittest of the group, it’s a biased study.) This is an example where marketing did not even attempt to be realistic in their claims.

But it might not stop there. Marketing might promise functions that are full of bugs, features that are still in development, and delivery schedules that would be unrealistic even if the design was complete, all the R&D was done, the team was fully staffed, and all of the resources that are required are available. As a result, Engineering will be freaking out and demanding that Supply Management find it better materials, new suppliers that can complete the work that is required in the time-frame that is available, and more talent to fill its ranks. This could be a very tall order on a very short notice.

Moreover, it’s an order Supply Management will have to fulfill for the organization to meet its obligations, maintain its brand integrity, and stay profitable. As if Supply Management’s job wasn’t hard enough to begin with.

Statess Wants to Stabilize Your State of Flux Part III

In our last two posts we introduced you to Statess and their SRM solution. With eleven years of SRM consulting behind it, and six years of Global SRM research, the platform hits the mark and provides the solution that many companies need to manage their supplier performance, development, and relationships. In today’s post we’re going to cover some of the key features of a few of the core platform modules.

As indicated in our last post, the platform is easily configured to provide a 360-degree view of a supplier and from the supplier homepage, a user can quickly access the overview report, profile data (which can be used to build a complete Supplier Information Management, or SIM, solution), performance data (collected internally and from third parties), the risk profile, associated contracts, tracked innovation efforts, Corporate Social Responsibility efforts undertaken by the organization and/or the supplier, current projects, supplier accreditations, 360-degree surveys (by the supplier of the organization), existing reports, and all dashboards that correspond to the supplier. In addition, if available (via 3rd party plugins), the buyer can also access trading information related to the supplier and its products, news feeds on the supplier, and the supplier’s media portal. Whereas some SRM solutions scatter supplier data throughout the different modules, the Statess solution, which allows for data entry and maintenance throughout the different modules, allows for the easy creation of centralized views by supplier so the organization, and a buyer, always has all of the relevant information through one common access point.

The system supports very extensive supplier profiles. In addition to basic HQ, Finance, and Contact information, the system can also store information on the supplier’s organizational structure as well as information on the supplier’s mission, vision, corporate objectives, and sustainability commitments (used in the CSR module). Furthermore, it can store extensive governance information that includes all of the individuals responsible for the relationship on both the supplier side and the organizational side, a complete stakeholder map, necessary actions, governance plans, planned meeting dates, and the minutes and reports associated with those meetings. Actions are implemented as project tasks and have owners, states, and status. This, in turn, provides a strong foundation for performance management and development programs.

At its core, the platform supports a very powerful generic survey mechanism that, like a good RFI solution, allows multiple types of surveys to be built with multiple sections, different response types (checkbox, numeric fields, free text, etc.) for each question, and automatic weighting mechanisms. This allows the organization to prepare the appropriate internal performance surveys and external 360-degree surveys that form the basis of good performance, CSR, Risk, and Relationship management programs.

Projects, which can correspond to the different types of efforts that can be managed in the system (including, but not limited to, risk management, compliance management, supplier development, innovation, and sustainability), can be associated with a business unit, optionally associated with one or more contracts or bids, and contain multiple stages or tasks, as they are defined in accordance with the traditional, well understood, project management methodology.

Performance reviews are built on KPIs (Key Performance Indicators), one or more KPIs can be built for each area (risk, compliance, CSR, contract, etc.) of interest, and the review can be broken down by key area. Year-over-year changes can be automatically calculated and the data can be imported from external systems or the ERP in supported data formats. Color-coding and drill-down views allow an organization to quickly pinpoint problem areas and then launch development initiatives off of the relevant area or KPI. KPIs have an extensive definition in the system (which includes categorization, associated business units, organization and supplier owner, input/import method, update frequency, default reporting frequency, tolerance levels, etc.) and, when properly defined, become a powerful performance measurement and management tool.

Risk tracking is also quite extensive, allowing the organization to categorize risks in different categories and track them using external data feeds (or manually entered data), define and store supplier contingency and business continuity plans, and integrate Lexis Diligence in real-time against the supplier and identified risks of interest.

Contract Management tracks all of the contract meta-data that you would expect, supports versioning, stores default templates, tracks contracting entities, and even allows for the definition of sibling (related) and child contracts so a buyer can not only quickly retrieve a contract for a product or service, but determine if there are any other contracts of relevance if she is sourcing a category or thinking of dealing with an entity wholly owned by the supplier.

The innovation module serves two primary functions. First of all, it allows an organization to centralize tracking and management of supplier projects focussed on innovating (a new product design or service). Secondly, it allows the organization to track public challenges that it issues on sites such as Innocentive. This is a useful capability that many software solutions overlook.

In summary, the new Statess solution is a very extensive SRM platform that makes a great entry point for any company wanting to get their SRM under control.

Statess Wants to Stabilize Your State of Flux Part II

In our last post we introduced you to Statess, a relatively unknown solution provider in the SRM space on this side of the pond even though they were conceived from State of Flux who have been producing leading SRM research reports for six years, in business for eleven, and are a leading provider of SRM consulting in the UK.

We discussed how they offer a SRM suite focussed on performance, contracts, risk, innovation, relationship, and sustainability management with over fifty sub-modules that address dozens of facets of performance, risk, and relationship management. We also noted how the platform could, if needed, be used for category management in addition to contract management, CSR management, and even the management of overall supplier development programmes.

The first thing to note about the Statess SRM platform was that it was designed to be modular, flexible, and adaptable. This means an organization can not only choose only the functionality that they want from such a platform, but can configure it how they want and even customize the terminology used in the UI. Even if an organization could use all of the functionality, sometimes a staged roll-out with limited functionality is best at first as this allows training to be focussed and prevents users from getting overwhelmed and avoiding the system. (And if the organization has systems with some of the functionality and wishes to keep using those existing systems, disabling duplicate functionality makes sure that the users don’t get confused.)

The next thing to note is that this web-based platform is highly configurable. Not only can the user define and customize reporting dashboards, as one would expect from any modern tool, but the user can design and customize their home page and the view for the entry point to every module they have access to. Basically, not only do all reports have overview widgets, but all action types have summary widgets, particular to what the user can see and do, that can be shown or hidden, rearranged as the user sees fit, and customized from a look-and-feel perspective. This allows the user to create a page that focusses on upcoming and overdue actions, quick access to artifacts (such as contracts, audits, certifications, etc.) stored in the system that they need to review on a regular basis, and entry points for key tasks that the user performs on a regular basis instead of just a shiny dangerous and deadly dashboard (which is where most systems stop).

After this, the next most important thing to note is that the user can create views from both an organizational perspective and a supplier perspective. The latter allows them to focus on a 360-degree view of a single supplier, as opposed to just an organizational view from a performance, relationship, or contract perspective and even replicate what the supplier will see based on what information they choose to share (with the supplier). Furthermore, from this view they can create or access any data or system artifact that relates to the supplier, regardless of the module it lives in as well as initiate new survey, innovation, or development programmes. The system maintains the necessary multidimensional relationships between the different data elements to enable the buyer to rapidly configure and access multiple views. Just like the best insights in a spend analysis project often come from looking at the data in unconventional ways, the best insights into supplier performance and, most importantly, development opportunities often come from looking at the supplier (data) from multiple perspectives. Statess realized this and built a tool that could support these multiple perspectives.

And the last point we are going to note in this post is that the platform, while quite extensive, is still looked upon as an early stage solution and is being actively, and aggressively, developed and more (and deeper) functionality will materialize over time, as well as more integrations to third party systems and data sources to shorten the average implementation timeframe and progress towards even more of an “out of the box” solution.

In our third, and final post in this initial series on Statess, we’ll overview some of the key capabilities of a few key modules.