As a self-admitted recovering consultant (okay, admittedly we still do some on the side), I can’t help but every once in awhile open an article or report distributed by the likes of my former employer (Deloitte Consulting) or a competitor such as McKinsey. But I have been irritated of late by the use of some “terminology — I say terminology because I don’t understand the business value behind the nomenclature — and have struggled to see how it relates (if it relates at all) to metal buying organizations. Let’s start with my favorite of the day: “The Cloud. I tend to ignore such “nomenclature” for the most part until everyone starts using it and then I say, “What’s that? So at a recent sourcing/procurement round table event I recently attended, the subject of “The Cloud came up as real or marketing gimmick in terms of the next wave in sourcing and procurement.
I refer to this post from Spend Matters that customers or rather recipients of the “The Cloud marketing message also seem somewhat confused. A very smart chap that I know who develops software for a living explained it to me this way, “In this case people selling things or providing services stand in for extra nodes of computing power and computing services on the web. So in his model [here is the link to a video from a large procurement/sourcing vendor describing the cloud] a VC (venture capitalist) who could provide funding is kind of like a database service offered on a cloud. A source of iron ore is kind of like a source of Linux instances. The analogy breaks down because for example on such a cloud you should be able to ramp up your funding from $2 million to $10 million immediately as needed. Then he goes on to conclude: “In short if “Cloud Computing” is to have a reasonably specific meaning then this guy [the video] makes no sense. So we’re not sure “The Cloud has a whole lot of intrinsic value for procurement/sourcing organizations but we’re open to persuasion to the contrary.
Now in all fairness to McKinsey, their report, “Top Ten Business Trends to Watch, offers several interesting potential trends. Here is the total list and we will highlight the ones we feel have the most relevance to metal buying organizations.
After reading through the paper, the two that really resonated with us as it relates to metals markets involve the trends of “Collaboration at Scale and “The Age of the Multi-Sided Business Model. We think “Collaboration at Scale which essentially involves using collaboration tools such as web conferencing, video conferencing and seeks to answer the question “Where did you get that information from? actually has quite a bit of merit for metals buyers. We can see in our own data and tracking that webinar attendance has increased and in our last webinar, we received the feedback that we should seriously consider streaming video webinars. The point here more and more organizations seek information in a collaborative fashion be it in the form of a steel market update webinar or an online discussion etc.
Many manufacturing organizations will have or are currently deploying numerous strategies that leverage some of these ten trends. We know of a large manufacturing organization that has developed an extensive internal sourcing knowledge base leveraging the trend, “Making the Network, The Organization. The other compelling one to us involves our own business here at MetalMiner where we have deployed “free content” to create a large community of metal buyers and sourcing professionals in which we have flipped the model on its head. Rather than having individuals pay via subscription, we make the content free and instead have pursued a strategy of adding sponsors (which you will see a new one on these pages tomorrow) who are interested in engaging with a highly relevant and target business audience hence “collaboration at scale.
We’re curious to know which of these ten trends apply to your metal buying organization. Leave a comment!