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The Stimulus and Procurement Reform

Ever since the stimulus package was announced I have been asking friends in the supply chain community as to whether the stimulus package will create new jobs in supply chain and procurement. Logically if you are sourcing stuff, you need managers to both buy (supply chain) and sell (B2B).There were two opinions on this - one was that you can always get contractors to do more if you have a rate contract already set-up. The other opinion was that many local governments will ask for fresh bids . In fact, asking for fresh bids  could really cut down supplier quotes by as much as 45% , given the slow economy. This could in turn free up money for additional projects.

Yesterday, President Obama talked about bi-partisan  procurement reform primarily for the Department of Defense. Any reform means more work for supply chain and procurement management professionals and more jobs for for both B2B marketers and supply managers. Good news as far as this blog is concerned !

Small Business, Google AdWords and B2B Marketing in a recession

If you think about it, most jobs,innovation and entrepreneurship is in the small sector. Strangely textbooks and academic work in  B2B,Supply Chain and Innovation focuses on large organizations- perhaps because large organizations are potential employers for students who read textbooks  and have been traditionally employed by large organizations. The current economic situation has many major organizations in disarray with employment being uncertain for existing managers and on hold for fresh recruits.

Students at my B2B (Organizational) Marketing class at University of New Haven are participating in the Google Online Marketing Challenge (GOMCHA). They have a presentation scheduled on April 8, Wednesday and the University announcement is here.

The students have been doing a great job and have focused on creating AdWords for B2B marketing in a recession for the seven area businesses. Google AdWords puts power in the hands of a small business who can start with a very small budget- unlike other traditional advertising. The GOMCHA itself is supported by Google who have given $200 of ad credit to each student team.Students add the Internet Marketing expertise to their resumes and I think several of them will become entrepreneurs. The student chapter of the American Marketing Association is managing the event.

The Stimulus Package, Recovery and Diffusion of Innovations

Innovation is about change, change in a product, in a service or process. However, no matter how appropriate the innovation is it takes an understanding of innovation diffusion to get the target market to adopt it.

The stimulus package is an innovation to deal with the recession and hopefully most pieces will work. The "diffusion" of each initiative will take time.And every time you get stuck in traffic because of lanes closed due to repair think positive ! Maybe it's the stimulus package making its way to your town or commute....

Local Governments should consider  putting  up signs at construction locations that are funded by the stimulus - so that drivers feel more upbeat as they get through traffic congestion.

Some visible and physical signs will also start reducing the fear that people feel in a recession.

What types of B2B and Supply Chain jobs will the stimulus package create ?

I have been trying to figure out the kind of opportunities that might come up from the stimulus package - particularly in the B2B  and Supply Chain  areas. I think there will be plenty of opportunities in these areas if you start looking at what the stimulus is planning to do. For example, in the procurement space as towns and communities start re-building infrastructure purchasing skills should be in demand. Now the question is whether ongoing contracts will be expanded i.e. existing contractors will be given more work and they would hire or there might be more new contractors entering the infrastructure. A friend in the purchasing community thinks that new bids will have to be prepared, in record time, but there may not be new supply management jobs in the public sector, although some additional hands may be needed to develop and execute the contracting of all this work. If you are a professional looking for work  in these areas checking with the local Government- may be a good idea.

Then there is the construction supply chain ( I was recently reviewing this literature for an academic paper review ) and herein lies an opportunity for all those sub-contractors out there. They should really start gearing up their B2B marketing with both towns and well established contractors so that they are ready to execute projects. There are a whole lot of displaced professionals (IT , finance)  who have taken up temporary work like painting etc. and this is the time to put your name out there and start lining up your work force.

The stimulus funds would probably be spent at the town level and there is some talk of a deadline of spending the money say within one year and this calls for a  speedy effective local project selection ( which school to renovate  ? - probably a separate blog on this ), contractor and subcontractor selection and off course the direct workers on these projects.  Probably discussion will move to execution aspects of the stimulus as we move forward.....

Why Search Advertising like Google AdWords should work better in tough times

In tough times like these, Ad budgets tend to get cut across  swathes of industries and company sizes. "Tough times get the tough going," is the old adage- so what can tough advertisers do?  Some money on search advertising  may be a good bet.

 As David Ogilvy said “Ninety-nine percent of advertising doesn't sell much of anything,” and Ogilvy was referring to traditional advertising like TV, print,bill boards and so on. Traditional advertising  identifies target markets  and then follows a media plan that matches media to target market. Beer ads during the Super Bowl is a good example where the target audience and product match and sales spikes occur. However, other than Super Bowl where people actually watch the ads we have TiVo, channel flipping that really diminishes "push" traditional advertising.

Things change during Internet searches, you are no longer sitting in front of the TV passively but actively looking for specific stuff. At  this point you will click through on ads that are directly relevant to whatever your search is. The technique of writing effective Internet search ads is tough business - if you want to precisely match your ad to what an individual may be looking for. Search Ads like Google AdWords , Yahoo Search Marketing or Microsoft Search advertising typically charge the advertiser when someone actually clicks the Ad.

Imagine only paying for those prospects who saw your TV or print ad !  The Internet allows two way communication and is much more effective than an expensive   1800 number on TV when you want a prospect to contact you and you want "action." In these difficult times, you need to get "action" from customers and do so with cut Ad budgets. Trying search advertising may not be a bad idea.....

In fact, my students in my B2B Class at University of New Haven  are trying just that , as part of the Google Online Marketing Challenge. Will report more on this as things develop....

Green in Beijing 08-08-08

The question of air quality at Beijing has assumed center stage as the Summer Olympics start in less than 10 days. Athletes are worried that the air quality will affect performance. Every fraction of a second counts for athletes at the Olympics and many athletes are planning to arrive hours before their events to avoid performance issues that may arise due to poor air quality. The Chinese authorities, on their part have closed  down air polluting factories and have taken millions of cars off the road and if necessary will take all cars off the road if necessary.

The focus on air pollution at the games will bring attention to air quality issues worldwide and that is a great thing. Some years ago New Delhi's air was unbreathable and then the Delhi Transport Corporation decided to convert all buses to compressed natural gas (CNG) and things improved dramatically. Taxis, auto rickshaws and many cars also moved to natural gas or the more riskier liquid petroleum gas (LPG) partly because of  laws but mainly motivated by significant  lower costs.

I guess cities worldwide will take a cue from the Beijing situation as will industry. This is a good time to examine air pollution issues in whatever organization's buy,produce or sell. Whatever reduction one can do will be good for business and the environment. A Win WIn !

Winning brings us back to Beijing and I am sure this will be a great Olympics as they open at 8.08 pm on 8-8-08 as this blog started counting about a year ago.

Global B2B strategy and 4th of July

Last year this blog had wished readers a cheery 4th of July celebration and this year I do the same. This despite the media gloom of high gas prices,towns cutting fireworks and Starbucks closing stores I feel hopeful that we'll see a new Global B2B approach emerging. Let me explain, gas and other cascading prices have gone up all over the world and India reports 11.63 % inflation and China inflation is about 7.7% with both countries saying that inflation is at a 12 year high. However, the internal boom in these countries might slow down, only slightly.

On the other hand I predict that B2B collaborations between American businesses and global suppliers and global marketing partners would rise. So what's new ? Well the partnerships should rise between smaller businesses because telecom and Internet is being increasingly adopted at the small business level and businesses are opening up in thinking about global opportunities for both buying and selling.

Wishing everybody Happy 4th of July!

Small business,gas prices and the Internet

Luckily for bigger organizations Internet adoption had come before the -$4/gallon gas prices. Since last year I was hearing about major organizations cutting empty office space because most people did knowledge work and preferred to work from home and come in for meetings. Yesterday the small Gloucester Township, New Jersey was reported to be considering closing municipal offices on Fridays to save 35000 $ in heating and cooling costs. I guess Gloucester City can manage most service activities from its website or at least get more applications on-line. Both citizens,employees and the town administrators would be happy so long as the town tax for next year is contained !

Small businesses, like your neighborhood plumber,on the other hand are extremely hard hit.Most rely on traditional advertising including painted vans (that move with gas) to spread their marketing message. A majority do not have websites and those that do -have no real system to keep track of inquires or sales leads and just can't afford fancy customized back-end databases to provide customer service. However, this very large engine of  the American economy is realizing the potential of saving gas and costs  through transferring some of  its business functions on-line. A day may not be far when your plumber gives you a recorded message to fill up a web form with your job details or check progress on-line on an ongoing project!

Booming choices in CRM,SCM,ERP- executing "benefit of the benefit"

When I walked through the exhibitor booths at the ISM conference, I was struck by the rather large number of software vendors who were trying to explain how their software would "solve" the problems of procurement,bidding,contract,supplier relationship and add "visibility" to the supply chain. Many of these solutions could speak to your legacy systems and most of them were web based and did not involve buying software and all the challenges that are involved in getting a system started. This was a sudden but clear change from earlier exhibitions I have been attending where "mega" ERP companies would be intimidating visitors by the daunting task and budgets involved in actually getting these systems to work and realizing the benefits that the system promised.

And now I saw that there is one more CRM system launched. This one is from Sage Software and is aimed at the small and medium enterprise and does many ERP functions as well.

The question is : where does all this lead the manager of a large enterprise or the owner of a small one in these tight economic times ? Adoption of these systems should be much easier than the early ERP systems but a clear and compelling articulation, for every customer that adopts these systems, would help the customer in quickly capturing the cost savings or revenue growth that these systems promise. Does this happen during the sales cycle for the system? It probably does  in the presentation slides of the software sales teams - but the challenge for the buyer is to capture the "benefit of the benefit" during the sales and buy process of the software and try to articulate  it to the  functional goals of the "owner" department. The luxury of the disconnect between why you acquire a system and what you can do with it might be somewhat reduced this way.

Michigan Auto Industry is changing

Somehow Michigan fascinates me for its auto industry and what it has given to the study of management,innovation and the wrong way to manage buyer seller relationships. When I heard on the radio about the leading rate of job losses and foreclosures in Michigan, I felt bad for the folks in Michigan. But this may be changing......

The news report that "suppliers learn collaboration and innovation" gave me hope. However, it is not the suppliers who need to learn collaboration but the auto industry who need to. In fact this blog has commented on the difference between US and Japanese auto and the long but vain scholarly research that has brought this out to an unresponsive auto sector.

But now, suppliers are no longer willing to cut prices to oblivion but are diversifying their customer portfolio and are not totally depending on the Auto industry but trying out opportunities in office furniture,food and appliance where a reverse auction type of mentality has started changing several years ago. Now the auto industry is changing, rationalizing the supply base and becoming more collaborative and driving innovation with its suppliers. I was particularly impressed with the take of Amerikam CEO Stephanie Leonardos on how long and painful this realization has been for Michigan Auto. But read the last few paragraphs of the interview here.