Tree map infographics for spend data
Thanks to Flowing Data for linking to another great graphic from the New York Times.
This type of graphic falls into the category of tree maps which, along with the bubble chart, are my favourite tools in my data analysts toolkit. The tree map and the bubble chart allow the relationships between multi-dimensional data sets to be grasped at a glance. If a picture is worth a thousand words, a good tree map is a thesis and comic strip rolled into one.
The tree map to the right is of particular interest to procurement professionals because it breaks down consumer spending into categories and sub-categories. If you showed your spend data in this format, your boss would either think you’re a star, or that you have way too much time on your hands!
The secret of good system design
Designing a new system? The single most important question to ask is what do I not need?
Apple asked how few controls do we really need to operate an mp3 player and the iPod was born. Asus asked what does a user really need to surf the net and the eee pc burst onto the market. Oztent asked does a car camper really need their tent to fit into a tiny bag and the RV tent is the result.
When you are designing your processes and systems, ask yourself what you are trying to accomplish and what is the least functionality required to accomplish that objective. Back to the iPod example, an mp3 player needs to play mp3s so it needs a play button. You may also need to pause your mp3 player and scroll through your music collection. Apple asked “Why does that require more than one button?”
Likewise, with procurement systems, if you’re designing a procurement system, does it need anything more than a way of delivering approved requisitions to a supplier? Probably. But how little more can you get away with?
The Medium is not the message
I love a good infographic (For those who don’t know, ‘infographic’ is essentially a wanky term for ‘chart’).
Each year infographic tools get better and publishing gets easier. We use Tableau extensively but a large number of tools exist (A couple of years ago, I predicted MS would have bought Tableau by now, but they haven’t yet – don’t know why not).
A good infographic can convey an incredible amount of information in an unbelievably short amount of space and time. As an example, take a look at this incredible visualisation from the New York Times showing box office receipts over the past 22 years. It’s a great visualisation because every dimension communicates an additional piece of information.
Colour shows total box office receipts, height of each movie indicates receipts at any point in time, height of the entire stream shows receipts from all movies at that point in time. Brilliantly conceived.
Let’s look at a counter-example. Consider this effort from the Financial Times to emulate the brilliance of the New York Times infographic team. The infographic below has only a single dimension – size of loss – yet displays this across four dimensions of bubble size, x-axis, y-axis and colour. Why they didn’t use a bar chart is beyond me.
FT Infographic
Now that tools are available to bring infographic creation to the masses, we’ll be seeing the full spectrum of visual display from the brilliant to the ridiculous.
I still have days when I’m reminded of how hard this can be and how fucking horrible it could turn out. The old me would have still opted to transition knowing the outcome (so far), but I also have to admit he wasn’t so wrong to be afraid all those years. There’s a comfort in hiding this part of you away. In a lot of ways that’s easier, and certainly a lot less risky.
via Mr Toad’s Wild Transgendered Ride: Cost/Benefit Analysis.
How does Kelly Sonora make money?
I, and many other procurement bloggers, have just received an email from Kelly Sonora informing us that we’ve made the top 100 list:
Hi Doug,
We just posted an article, “Top 100 Blogs For Small-Business Cost Cutting Inspiration” (http://www.webdesignschoolsguide.com/library/top-100-blogs-for-small-business-cost-cutting-inspiration.html). I thought I’d bring it to your attention in case you think your readers would find it interesting.
I am happy to let you know that your blog has been included in this list.
Either way, thanks for your time!
Kelly Sonora
The link takes you to a list of procurement and cost saving / efficiency blogs. The site itself appears to be a search engine for web design schools. It carries no advertising.
A blog search for Kelly Sonora turns up another email to thefantasyblogger.com, a fantasy football site, saying that Kelly has compiled a list of the top 100 armchair quarterback blogs. The site appears to be a search engine for sports management colleges and seems to sit on the same code base as the web design school search engine. Curiously, the linked article was written not by Kelly Sonora but by Kelly Kirkpatrick (leading me to speculate that Kelly Sonora married, changed her name to Kirkpatrick, and has now sadly divorced Mr Kirkpatrick and returned to her maiden name).
A blog search for Kelly Kirkpatrick and Kelly Sonora turns up over 70 references to lists ranging from inspiring lectures, space and astronomy, ancient history, chick lit, libertarianism, iphones, food, mental health, Christian relationships, positive thinking and my personal favorite:
Kelly Sonora presents Beyond Blood Diamonds: 5 Other Products That Are Soaked in Violence posted at Organicasm.
Curiously, this article appears to be written not by Kelly Sonora but by Jessica Merritt (leading me to speculate that Kelly, distraught from her recent divorce, has opted for an entirely new identity – however she still can’t kick her compulsion to create and post lists online).
Jessica is particularly prolific. Adding her name to our blog search now returns 150 results.
How does creating lists and driving traffic to sites without click-through advertising generate revenue for Kelly, Kelly and Jessica (or perhaps more accurately “Kelly”, “Kelly” and “Jessica”)?
Resampling Stats
Good online resource on Monte Carlo simulations and resampling techniques useful in estimating the probability of outcomes with small samples or a number of variables with a broad range of potential values.
“Resampling: The New Statistics”
by Julian L. Simon
Second Edition published October 1997
This text grew out of chapters in the 1969 edition of Basic Research Methods in Social Science by the same author, and contains the first published example of what was later called the bootstrap. Simon is best known for his research in demography, population and the economics of natural resources, and gained fame when the noted biologist Paul Ehrlich selected five commodities and bet Simon that scarcity would drive their prices up over the period of the bet (in fact, their prices all dropped). Resampling: The New Statistics contains a number of examples in Resampling Stats, a computer program originated by Simon, but can be read on its own without the program.
via Resampling Stats.
Unintended consequences of measurement: Boomerang Measurements
Donald Gray posts a good example of measurement gone wrong. A software development team manager implemented a measurement system that penalised the team if they had unfinished work at the end of a work cycle, even if the reason they had unfinished work was that they finished their existing work early and started the next phase of the project.
… Hoping to point to some future perfect day where the team was burning down faster than anticipated I added, “It’s just like when the sprint burns down faster than estimated. You pick the next story from the Product Backlog and start work on it.”
George replied “We’d never do that. We get graded on how well we complete our stories. If we have unfinished work it counts against us.”
via Integrating People, Projects, and Processes : Boomerang Measurements.
Agile in Practice – Procurement in practice
I believe there’s a lot purchasing professionals can learn from agile software development; which values iterative development and process adaptability over large-scale, long-term locking down of requirements – imagine a vendor relationship that is actively managed and can be easily dismantled vs a 15 year outsourcing agreement.
The theory is that the additional effort that directed to managing the process on an ongoing basis is more than compensated for by the reduction in time and effort required to get the project off the ground and the reduction in the risk of getting it wrong and having to write off the entire project.
But it is important to keep in mind that any methodology that you adopt must be continuously evaluated for suitability to your company’s culture.
Attivio is a strong supporter of agile development yet they are quite willing to divert from pure agile development to suit their circumstances.
We all need to be as flexible – we need to keep abreast of the cutting edge thinking in procurement but we also need to adopt it to fit our corporate culture. But, like the Attivio quote below, we need to not be ashamed of diverging, we need to be proud of it and, if it works, to view it as ‘best-practice’ in our corporate context.
Note: While many of our approaches aren’t “pure” Agile, we believe we’ve created a best- practices process that embodies the “spirit” of Agile in that it has been developed iteratively, with the constant input of the engineering team based on key Agile principles.
Unit testing procurement performance measurement
I’d like to see an study showing the percentage of performance measurement initiatives that last longer than a year. I bet it’s not high.
My working theory is that the designers of performance measurement initiatives are too ambitious at the outset and set up measurements that never get used and therefore eventually stop getting collected and reported.
This scenario is analogous to building features into software that never get used.
To combat the tendency to over-design, techniques such as agile development are gaining acceptance in the software development community and serve as excellent models to assist us in developing better performance measurement systems.
One of the mantras of the agile methodology is to write unit tests for each component developed. This ensures that every single component built actually works before you attempt to put them together.
A recent article reports that a study of software development projects contained the following finding:
Key message: “measuring a [SIC] over 20 projects: if you have a large number of unit tests your code will be an order of magnitude less complex.”
The key message for designers of performance measurement systems is to start small when developing and implementing measurements, test them with your audience to ensure they serve business needs, and then move on to the next set of measurements.
The approach may seem pedestrian but you’ll be further ahead a year down the road.
Help wanted: Senior country buyer
Looking for a change of roles? Up for an exciting new challenge? The Maldives’ newly elected President, Mohamed Nasheed, has opened the door for a potential new procurement category: the country buyer.
The Maldives are poised to be one of the first countries submerged by rising seas and are looking to buy a new country. In the President’s words,
“We can do nothing to stop climate change on our own so we have to buy land elsewhere”
Could this be the first of many such roles? The Economist thinks so. They think that now may be the time to pick up a bargain and suggest that Iceland may be going cheap.
And who better than a procurement professional to lead the sourcing exercise. Anyone who thinks the creation of Israel had unresolved change management issues has never transitioned in a new ERP vendor.
