Enterprise Performance Management - Data is First Priority

This week I came across an interesting report from a leading player in startegic sourcing and spend analysis - Zycus titled "Zycus path-to-procurement-excellence A CPO’s complete reference guide to sustainable performance improvement through strategic sourcing and procurement management ". A long name but a crisp document to guide you on practices and processes around strategic sourcing. An impressive work done by purchasing magazine and Zycus. It not only talks about the step by step process - a multi year one - to reach to startegic savings goal but also puts up process maturity maps to measure different factors at each step. I will recommend every consultant to surely read and learn from this.

And I opologies for it. Yes I took off for few days from blogging. I had lot of topics to discuss about, had a list of things to put opinion about, as data management industry and specifically spend classification industry is buzzing - new products, new methods, new people and customer is looking at spend analysis like never before. But I had to consoldiate my inputs, put a thought process and then thought about posting lot of things. So here I am ... In next few days/weeks I will be posting all those subject posts here .. so watch the space ...

The current economic scenario (even if it’s started looking little bit good now) demands every CEO, CFO to look for a way to save money from whatever way it comes. Supply Chain, Procurement, Strategic Sourcing are, Supplier Relationship Management are always major focus area for optimization. Spend visibility is one such area in Enterprise Performance Optimization – EPO - which gives a promise to identify potential savings. Now everybody knows there are too many products and players in the industry which claims to provide spend visibility. Sales people always claims to give you moon and pitch products in a way like – “you put the data from this side and see the 10% savings on the dashboard on the other side”. But as we know, in every data sensitive engagement it’s a process behind the product that needs to work on your data before you really gets that dashboard – but that’s not the point for today. The point is do you know what to look for when you see those jazzy reports and dashboar

These days everybody talks about cost cutting, increasing revenue, how the depression, recession affecting company margins and how the job losses are imminent and so on and so forth. All this is true and real and no doubt everybody is looking at new avenues to struggle with the numbers. Though there is no magic recipe to alter the scenario overnight, lot of people, lot of companies are failing to see optimization chances within the organization and chance of increasing revenue – data in their own systems. What data – everything – right from suppliers, customers, materials. What to look for – Data Quality. The surveys done by few companies in the area estimated that the by managing the data quality one can increase revenue by 66%. Now let’s take that as marketing gimmick on the face, but then assume its half of that – still there is a chance of revenue increase of 33% - do you want to believe that? I do. My experience with large global enterprises in the data area points me to bel

Last week after I posted third part of my Supplier diversity series of - What Why and How, I got an question from my esteemed senior colleague Ashok Pai, Who works in Supply chain industry worldwide for decades and a Client Partner with Bristlecone, asking "When are you writing about WHO aspect of this?" I replied saying I never thought of that angle, as my basic assumption was that supplier onboarding process is part of strategic sourcing and procurement department chain so those are the people who will be implementing it. And then he mentioned to me that "Look at it from supplier onboarding angle, which is a major pain area for US industry". As I started thinking and researching from that angle, I realized that as a part of diversity implementation its easy to say that run the diversity program in industry, capture supplier attendtion, get the diverse suppliers registered and start doing business with them - its hard to implement. Its really hard to get a new su

In last two articles we discussed two questions about supplier diversity. Basic one like WHAT is Supplier Diversity and its types , Second most important one for business decision WHY? What are key business drivers to implement supplier diversity? Now the third important question is HOW? What are my key parameters to make this decision on implementing diversity program? What are the steps? How should I determine what are my organizational needs? What is an assessment criterion? Key steps or parameters for your decision matrix would be – 1. Define scope and set your goal – link it to organizational goal so you have good business case 2. Build the internal database; connect with suppliers, make the data complete. 3. Run a diversity program 4. Audit, Monitor and upgrade Understanding your requirements and goal setting is first and important steps for implementing supplier diversity. This will not only enable you to asses and quantify the things for assessment and monitoring your progr

Last week in a related article we discussed about diversity definitions and what each type means. Now the real question that procurement managers in a enterprise needs to answer when there is a talk about implementing supplier diversity is “Why should we implement Supplier Diversity?”. Once (s)he knows answer to this question, then comes the turn of how to implement it. Today let’s look at the key drivers behind the supplier diversity initiative and how one can not only justify but also build a business case around it to take organization along with you. The basic premise here is - A supplier diversity program will partner your company with businesses that are owned and/or operated by women; African, Hispanic, Asian and Native Americans; gay and lesbian individuals; and veterans. It will also connect you with companies that may have been overlooked because of their size as well as those located in economically distressed areas. Now all that is fine, but do these connections make a bus

Last month I have written an article on supplier diversity titled Supplier Diversity have you checked your Supplier base? it gathered lot of interest among industry players in the topic. So I thought of having a one comprehensive article to cover all aspects of Supplier Diversity, what is it, its importance in supply chain etc is. So here are my 2 cents – So what’s the definition of Supplier Diversity worldwide? In the United States of America diversity suppliers are defined as businesses that are at least 51 percent owned, operated and controlled by one or more persons who are: • A racial or ethnic minority, including African American, Asian Indian American, Asian Pacific American, Hispanic American and Native American • Female • Gay, lesbian, bi-sexual or transgender • U.S. veteran or U.S. service disabled veteran Additionally, businesses certified as Small Disadvantaged Business (SDB) or Historically Underutilized Business Zone (HUB Zone) by the U.S. Small Business Administration

Recently I come across a good article on procurement leaders blog, talking about real simple but fundamental question if supplier risk reasearch is waste of time Its quite interesting and simple question that David explained by taking 2 CPO examples where one thinks in going in details and then plan, whereas one just belives in plans rather than analyzing too much. Nice to read. I am yet to dive down risk lane. So will come up with detail article sometime next week to talk about this.

Last week when i was reading articles about AIR India issues and how company is making huge losses I wrote an article saying If Satyam can become Mahindra Satyam why Air India cannot become TATA AIR? I think all great mind thinks alike including indian government and corporates. Just now indian avaition ministry came up with a news about having TATA group head to be at the helm of restructuring affair of Air India. In my opinion thats the feasible and best way to get air india out of mess, run it like a corporate company rather than a government run PSU and make it leaner, cleaner, greener and profitable. You can post your comments here or you can mail me pmendki(at)gmail(dot)com Thanks -Prashant

There is a second part to Big Strategic Confusion that we started discussing some time back. Lot of consultants advice to have a good dashboards, good slice and dice capabilities and how their products can help enterprises to save money by having a good spend analysis capabilities of their Business intelligence product. No doubt you need to have a good tool - but question is even if you have world class tool with nische capabilities - does your investment make sense if the underlying data is not good? answer is NO. I also started working on this thread on the blog BI is not just a dashboard . Let me know your comments on pmendki(at)gmail(dot)com -Prashant

Team of AMR research consultants – Phil Fersht, Mickey North-Rizza along with Ruby Jivan, BP's Procurement Operations Director will discuss about the latest market dynamics in supply management business process outsourcing. Visit the article and registration link for the webcast here A good webcast to attend if you can. I am looking forward to have different perspectives on the supply chain outsourcing areas from industry watchers. The argument that Phil had in his last article about the Supply Chain BPO space getting overheated is still fresh, so need to see if he is getting validated from industry experts.

Today Patni Computer Systems launched Inventory Liability And Risk Management Dashboard in collaboration with SAP. Detail news released says that "The solution, built on top of the SAP Supply Network Collaboration (SAP SNC) application and leveraging the SAP BusinessObjects Xcelsius Enterprise software, helps enterprises calculate in near real time the monetary value of the inventory which is at risk at any given point across the supply chain." "“Built on top of SAP SNC and leveraging SAP BusinessObjects Xcelsius Enterprise, the solution addresses a key challenge faced by high-tech OEMs in the current economic environment,” said Holger Fritzinger, vice president, industry business unit high tech, SAP Labs LLC. “By deploying this solution, high-tech OEMs will be able to exercise better visibility and control of their critical inventory and suppliers.” Still to watch demo. Let me dig this some more and I will come back with an opinion. -Prashant

Satyam had seen phenomenol growth in last few years, worldwide customer base, soaring share prices, large scale investment plans, big company size, multi million dollar contracts and what not. Everybody saw it crumbling down the day Raju announced mis deeds, and everybody thought its all gone - some foreign media even termd it as INDIAs ENRON. So picture was like enron is gone so satyam will. Today satyam is still there, up and running with new thoughful leadership of mahindras, solid organizational backup, people willing to do business. Whatever will happen to culprits, debts and lawsuits - its still there - firm and solid. Question is WHY? Because in its first few weeks of problem - it got able leadership of indutry czars, a clear governance model setup and steering through indian government, a process to get it out of all negatives and providing it new owner. Now another question is - Why the same cannot happen to AIR INDIA. The situation is same. Nobody - not any single person - di

The webinar that I mentioned about in one of my post earlier, Bristlecone Webinar where Jason, Naresh and Padmini explained how the risk is important factor to look for, how a Supply Chain consulting company like Bristlecone can help you in managing supplier risk and provide you a solution that SAP came up with. It was a indeed very good conversation to listen. You will see more in coming days on this blog about supply chain risk and how people should be doing that in bad times like this. Those who missed this webinar should visit this link here and click on view archive button. The entire event is available on windows media player. -Prashant pmendki(at)gmail(dot)com

Since last one week there is a interesting conversation going on in the blogsphere - not in general - but the procurement, strategic sourcing areas - between Jason Buch of Spendmatters and Debbi Wilson of Gartner . Its all started with Jason writing an article how gartner abandoned a blog taking a dig at debbie,and debbie answered it here . Though I am enjoying most of the readings and comments and counter comments here , I think this more than between Jason and Debbie. Its good that they brought a biggest question in this industry where so called big analysts and advisors are influencing and driving decision making in the industry. I am not sure to what extent all this can be avoided as vendors try to be close to these analysts to get the opinion in favor and industry leaders look for them to get the "good" advice. So in between analysts fetch too important and decisive role to play with both. Now one has to keep in mind that these analysts are human naturally driven

Recently blackenterprises.com published their list for 2009 Best Companies for Diversity , listing companies who are doing business with different diversity groups like employee base, board of directors, senior management and suppliers. From strategic sourcing initiative its very important to identify the diversity status of your supplier, have visibility towards your diversity supplier base. Its not just legal apsect but social and economic aspect as well. You should be able to see and analyze how much of your vendor base is governmant certified small business, is it minority owned, hispanic, asian owned, woman owned, is 8a certified, hubzone certified.......There might be a individual certified business. To have this visibility, you need to have your data in correct and updated shape. How many IT guys or business people care about this? You might have done this updation once, but what if EXIT DATE of the certification is crossed and vendor no more belong to that category? Or what

Purchasing Magazine, Bristlecone and SAP getting together to bring you very good discussion on supplier risk management. Webinar will be held on June 24, 2 to 3 PM eastern Time, USA. Contributors are - Paul Teague from Purchasing magazine , Jason Buch from spendmatters , Naresh Hingorani from Bristlecone - Supply chain leader company and Padmini Ranganathan from SAP. As we always talk about spend visibility, data issues, strategic sourcing - these distinguised speakers will bring out more strategic views to the table on how all this can be achieved to analyze your business risks better, upfront. You can register for event by accessing this link and register See you there.

This is the series that I would like to publish over this week - the big strategic confusion. The confusion within the industry managers, sourcing and procurement professionals and IT managers who deal with these systems. The confusion on "yes we want to save, we want to start a strategic plan, an approach to save money in longer term - but what is that plan? what should I look into? How to start, what to start, whom to approach, who are the vendors - what do I need at the end of the day" I know this is inherent confusion for customers as well as providers. As customers doesnt know what they need as there are too many service providers in different layers of the pyramid - including nische as well as end to end, service providers are also in a confusion as to what should they provide? to whom they should approach, should it be overall package on end to end solution or just one services on premium rates. This I call big Strategic confusion. So what is the industry space we are

Recently I had a blog conversation with Phil Fersht from AMR research Supply Management BPO on the verge of overheating He was really having a good point on how the overall supply chain management market is heating up in a BPO space. More and more companies are transferring their supply chain jobs to offshore locations just like a IT support jobs and when there is no real process strengthning the things are failing down the line. He has a valid point there. In a bad time like this people may think that by just moving a job to offshore will save them money what they want right now. But when the job function is tighly coupled with the business process - if companies do not really look into changing the technology, look into the change within, just offshoring will add to the mess rather than helping out.

A good read by Jason Buch on spend matters on bristlecone SAP relationship on spend analysis. Though I dont agree with him that bcone is just "no ideas only low cost" statement. In todays industry low cost is more of "executing good quality work in a low cost manner" so its strength. But anyway i am curious to know industry players coming into this. Bristlecone has already gone through successful implementation of more than 10 customers in this space with more than 2 years of overall experience with the established team. So its hard to crack. Work watching.

This is a common question that I see people asking in the industry. The next question usually they ask - I already have my data in good shape - why should I pay for cleansing it. My question to all these answers is - YOU DONT KNOW HOW IS YOUR DATA. Why I say that? Because while I am playing with lot of enterprises data in last 5 years i come to know from interactions with customer or people who are maintaining the data this fact. Especially if there are multiple departments handling all kind of data and they dont have a cohesive mechanism to deal with the data as a single form of truth. Now whatever be the reason for your company - its indeed true that data is not in a good shape that it should be. How it effects - you dont have visibility towards your spend properly / by commodities / by supplier groups / by geographies or by negotiating power that you are carrying and last one is risk that you are maintaining. To get this visbility you need a dashboard which gives you analysis power.

Was ist Taxonomie? Wenn Sie das Wörterbuch nachschlagen, Taxonomie bedeutet „die Wissenschaft oder die Technik der Klassifikation ". Wikipedia gibt ausgedehnteren Informationen über - „Taxonomies oder taxonomischen Entwürfe“, bestehen aus den taxonomischen Maßeinheiten, die als Taxa bekannt sind (einzigartiger Taxon) oder den Arten der Sachen, die häufig in einer hierarchischen Struktur geordnet werden. Gewöhnlich werden sie durch die subtyp-supertyp Verhältnisse bezogen, auch genannt als Eltern-Kind Beziehung. In solchen einem subtyp-supertyp Verhältnis hat der Subtyp die gleichen Begrenzungen wie der Supertype, auch hat der Supertyp eine oder mehrere zusätzliche Begrenzungen. Z.B. Ein Auto ist ein Subtyp des Fahrzeugs. So jedes mögliches Auto ist auch ein Fahrzeug, aber nicht jedes Fahrzeug ist ein Auto. Folglich muß eine Sache mehrere Begrenzungen erfüllen, als ein Auto zu einem Fahrzeug zu sein. „ So jetzt kennen wir Grundlagen - es ist eine hierarchische Struktur, mit einer B

We discussed taxonomies last time. Depending on your goal - whether its sourcing optimization or master data management or just spend analysis you can decide on what taxonomy you want to use - either global one like UNSPSC or your own or something available through service provider. Based on that taxonomy your service provide can run the engine and give you data classified. The delivery mechanism comes next. You need a dashboard kind of solution to slice and dice your data so your analysis give you information. So you got it. You can identify negotiable vendor set and go for savings. Thats one way of looking at it. If your goal is sourcing optimization and master data management then you need something additional - data attribute enrichment. What does that mean? You have material master with you at different plans, site and systems. Do you know whether its in good shape? Does it contain only 1 record for each material or there are many? Your system might be capable of doing search of s

In last 10 days, after I wrote an article on spend analysis, supplier normalization and classification using taxonomies, I got number of responses on how to create a taxonomy, how to use it, what it should contain etc. I am responding everybody one on one, but thought I will also write some generalistic thoughts that will help somebody to get good idea to start with... So here it is - What is taxonomy? If you look at the dictionary, it says taxonomy means"the science or technique of classification". Wikipedia gives much broader information about it - "Taxonomies, or taxonomic schemes, are composed of taxonomic units known as taxa (singular taxon), or kinds of things that are arranged frequently in a hierarchical structure. Typically they are related by subtype-supertype relationships, also called parent-child relationships. In such a subtype-supertype relationship the subtype kind of thing has by definition the same constraints as the supertype kind of thing plus one or