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Saturday, July 24, 2010

HMMMMM: What's Bigger, 2% or 20%? Why Procurement Matters Big Time!













So, the person who is in charge of IT in an organization is automatically perceived to be far more important those in charge of procurement and supply chain operations, right? As ESPN's Lee Corso would put it, "not so fast my friend!"

OK, here's a question that even your 5 year-old could answer (well, simplified - maybe using pizza or a package of cookies - as they haven't yet started covering percentages in Kindergarten math, even trying to achieve higher math test scores :-).



Which would you want - 2% of something, or 20% of that same something? As Homer would say:

Doh Homer Simpson


Recently, my friend Kevin O'Marah, a GVP of Supply Chain Research for Gartner, opined on the overall status of supply chain management in organizations is his article:

Chief Supply Chain Officers are still rising, but what is the job?

O'Marah had a great observation comparing the relative importance of IT and supply chain:

Think about budgets. According to our research, IT budgets typically represent anywhere between 2%-5% of revenue depending on industry. Meanwhile, supply chain management—encompassing direct materials sourcing, manufacturing operations, packaging, handling, and transport—is likely to account for as much as 20% of revenue including not only technology like order management systems or planning algorithms, but machinery, buildings, freight contracts, and more. Big money is spent each year in bets that merge good old fashioned industrial technology like conveyor belts and forklifts with information age technology like sensors, inventory tracking systems, and web order forms.

So, in your own organization or agency, think about the potential cost savings that could be achieved through focusing on savings across all spend areas - 20% of your entire budget, and not just counting on the "price deterioration" in information technology to achieve incremental savings.



As you know, we here at the Reverse Auction Research Center: (http://reverseauctionresearch.blogspot.com/) believe that competitive bidding can bring not just cost savings, but improved efficiency and heightened transparency to procurement in most areas of corporate and governmental buying - including yes, especially in buying information technology wares (see You Can't Fight Moore's Law: Why Price Deterioration Means That Reverse Auctions Make Sense and Produce Savings in The Acquisition of Information Technology Resources).



So, if you would like to learn more about how to focus on achieving substantial savings across 20% - or more - of your budget, contact us today on how to develop a strategy to take a big bite out of your procurement - and your IT - budgets through strategic use of reverse auctions as part of your overall purchasing and acquisition strategy.

David Wyld,
Professor of Management
Southeastern Louisiana University


From the Reverse Auction Research Center: http://reverseauctionresearch.blogspot.com/

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16 Most Outrageously Misleading Hotel Ads (PHOTOS, POLL)



Wow! Want to see the magic of marketing - and the creative geniuses (mad men) - behind advertising. Click on the link below:

Read the Article at HuffingtonPost

Ethical? Unethical? Fair or foul? Post your comments here on the blog site.

Regardless, this is Exhibit A as to what the magic of staging, angles, timing, decorating, and - when necessary - photoshopping - can do for advertisers. Consumers beware - this is exactly why the review sites with REAL PEOPLE reviews - and picture - of hotels and resorts are so vital to check!

David http://wyld-business.blogspot.com/
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Top Ten Management on The Decision Making Process: An Overview of One of the Most Important and Necessary Things That All Managers Must Do

Influencer roles throughout the decision processImage via Wikipedia

This overview of the decision making process was prepared by Grace Nabasabala while a major of Health Education and Promotion in the College of Nursing and Health Sciences at Southeastern Louisiana University.





Introduction

This article talks about decisions and the process involved while making these decisions. There are eight steps in the decision making process that help managers in making a decision about a problem. These include: identifying a problem, identifying the decision criteria, allocating of weights to criteria, developing alternatives, analyzing alternatives, selecting an alternative, implementing an alternative and follow up to ensure effectiveness of the decision. Understanding these steps helps us deal with everyday problems. In order to become better decision makers, we need to learn from our mistakes, restructure thoughts and be rational when faced with difficult decisions.

The Idea in a Nutshell

Decision making is the ability of a person to mentally make decisions between several alternatives. People make decisions in every step of life, either consciously or unconsciously. Decisions have long existed as life itself. In the early century, people relied on dreams, poetic wisdom and instruction from leaders or prophets. However, technology today has made it easy for people to research information.
Every decision has a consequence. There are two types of decisions, simple and complex decisions. Simple decisions require routine procedures and less effort while complex decisions are uncertain and complex in nature and may require a lot of risk. Decision-making is important for management and leadership. That is why managers need to understand the decision-making process especially while dealing with complex situations.

 
The Top Ten Things You Need to Know About the Decision Making Process


  1. The decision making process is a reflective thinking approach that was developed by the philosopher John Dewey in the 1900’s. The first step is identifying the problem. Since every decision starts with a problem, we need to understand its nature or complexity. We can also consider what needs to be addressed and the importance of reaching a desired outcome.
  2. Gather information to help in solving the problem. Understanding the cost, risks and outcomes may influence people to make rational decisions when faced with relevant information. Managers must select appropriate criteria which may include the use of technology like the Decision Support System to help compile useful information to solve the problem.
  3. Assess the situation. Develop a ranking system that possesses a valued weight to identify each criterion by importance. The higher the ranking means the more importance the criteria and vice versa.
  4. Develop alternatives to come up with a possible option or solution. Brainstorm or write down all the possible alternatives and choices. These alternatives are only ideas and not tested.
  5. Analyze alternatives to select the best option. Consider, compare the pros and cons, and test the alternatives. Evaluate the value of each alternative using a decision matrix. Each alternative must be ranked in order of value.
  6. Select the best alternative. Choose the highest ranked alternative and follow up to ensure proper and effective implementation.
  7. Implement the solution. Decision making is a nonlinear, recursive process. That is, most decisions are made by moving back and forth between the choices of criteria. It’s important to include people affected by the alternatives in the implementation process in order to rally support for the change.
  8. Follow up to ensure the effectiveness of the decision. Evaluating the chosen alternative helps managers see if the decision achieves the desired result. If the decision doesn’t meet the desired outcome, managers should reassess the problem and find another possible solution. Bear in mind that not all desired outcome contribute to successful decisions. Many factors affect our decisions and a negative outcome may not necessarily be due to the final decision.
  9. Our personal instincts play a big role in decision making. Some studies show that the use of intuition leads to 80% of successful decisions. Many decisions must ultimately rely on or be influenced by intuition because of the remaining degree of uncertainty involved in the situation.
  10. Decisions can be based on our personal values. Values shape our behaviors as well as our choices. We learn our values as children and it’s very difficult to change later in life. This is why some people believe that our beliefs guide our behaviors.


The Video Lounge

This video talks about the importance of group decision making. Groups are more effective in making decisions. Factors that influence group decision making include a supportive group environment, members putting group needs ahead of personal needs, group members encouraging differences and collaborating with one another. The six step decision making process is essential in solving problems. These steps are discussed in details and the author explains how we can use them as we solve problems that occur in our daily lives.

Click on the link below to view:

http://www.5min.com/Video/The-Decision-Making-Process-169082939

My Take

The decision making process is still relevant today because of our changing environment. Decision making is an important part of management because making the right decisions differentiates one manager from another. Great decisions lead to positive outcomes and this may not only secure a manager’s job but also establishes confidence and self-respect. In decentralized organizations, managers play a big role in making decisions. On the other hand, employees may not be required to make the final decision at the work place but are also faced with decision making in their daily lives. It’s important that when faced with problems, they analyze the current situation and have the courage to make the final decision. Today companies empower employees to make decisions. This is referred to as employee empowerment. Employees are more responsible for their work performance. Those who continue making the right decisions are more likely to be given a pay raise or promoted to a better position.


References

Decision making. (n.d.). Retrieved from http://www.answers.com/topic/decision-making
Lopper, J. (2007, October 23). Development of personal values. Retrieved from http://personaldevelopment.suite101.com/article.cfm/development_of_personal_values#ixzz0t8rpBtO2
Introduction to decision making techniques. (n.d.). Retrieved from http://www.mindtools.com/pages/article/newTED_00.htm
Williams, R.B. (2010, February 11). What Managers need to know about decision-making . Retrieved from http://www.psychologytoday.com/blog/wired-success/201002/what-managers-need-know-about-decision-making.





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Contact Info

To contact the author of “Top Ten Management on the Decision Making Process,” please email Grace Nabasabala at Grace.nabasabala@selu.edu.


BIOGRAPHY

David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also maintains compilations of his student’s publications regarding management concepts (http://toptenmanagement.blogspot.com/), book reviews (http://wyld-about-books.blogspot.com/), international foods (http://wyld-about-food.blogspot.com/).


AN INVITATION TO WORK WITH US, TODAY!

If you enjoyed this publication, why not make one of your own with us! Are you a college or university student from anywhere in the world who would be interested in publishing your work in an edited online journal appropriate to your topic? Such a move can help put muscle into your resume and make a great impression on potential employers and graduate schools (and needless to say – and perhaps most importantly in the age in which we live – likely be the first thing that companies/universities view about you when “Googling” you)! If so, we can help you get that first publication for free (and more if you desire)! Visit Wyld Publishing Services (http://wyldpublishingservice.yolasite.com/) for details. We can work with you to publish your quality essays, research articles/papers, reviews, etc. – and even audio and visual media and PowerPoint presentations – given our network of edited publications and relationship with publishers around the world who want to work with you and your work. Contact us today to get your work published at dwyld.kwu@gmail.com.


Read More:
http://bizcovering.com/business/top-ten-management-on-the-decision-making-process-an-overview-of-one-of-the-most-important-and-necessary-things-that-all-managers-must-do/#ixzz0ubGWgZuG

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