(12/4/2014) New Book Available - Supply Market Intelligence for Procurement Professionals: Research, Process, and Resources
In the late 19th century, J.P. Morgan invested heavily in Thomas Edison’s direct current (DC) model for electricity. Nikola Tesla, one of Edison’s former employees, invented a competing model called alternating current (AC). Morgan was a cautious investor, and he asked Edison if the competitive threat from AC was real. Edison disregarded AC as unsafe and assured Morgan that his own invention would be the prevailing technology. As a result of Edison’s assurances, Morgan continued to make sizeable investments in DC. Unfortunately for both men, Edison was wrong. In a series of bids where the two technologies competed head to head, including the 1893 World’s Fair in Chicago and the 1895 installation of an electric power generating plant at Niagara Falls, AC was selected as the preferred form of electricity, and remains the standard to the present day.1
J.P. Morgan received non-objective, inaccurate intelligence from Edison and acted on it in a series of decisions that cost him in excess of $83 million in today’s dollars. The scientific details regarding how the AC and DC systems operated, along with their respective advantages and shortcomings, did not directly motivate Morgan’s investments. It was Edison’s interpretation of the competitive threat from AC as minimal and fleeting that served as the intelligence behind Morgan’s decision to invest. Although Edison was far from objective, his expertise in the emerging technology of electricity qualified him as a source of supply market intelligence. Had there been a less involved third party available to validate the information and Edison’s analysis and recommendations, Morgan might have made a different decision.
This historical example demonstrates the difference between information and intelligence. It also serves as a cautionary tale for creators of supply market intelligence and those who rely upon it.
Kelly Barner, Managing Editor of Buyers Meeting Point, has co-authored a book with Jeanette Jones (Cottrill Research): Supply Market Intelligence for Procurement Professionals (J. Ross, 2014). The book provides procurement professionals with the process, skills, and resources to develop a supply market intelligence program that will deliver value to the organization as a whole. We will clearly explain each of the concepts we introduce and then provide the background and steps required to make their execution possible. Developing the skills required to build and use supply market intelligence has value to the organization through its positive impact on current supply management activities. It also improves executive level regard for the procurement function by demonstrating a market-driven perspective of the company.
Part I outlines how to design a supply market intelligence program that meets the needs of the organization while integrating with existing procurement team structures and processes. Building internal capabilities makes it possible to maintain the benefits of supply market intelligence without making long-term investments in consultants with specific category expertise. If decisions are to be supply market intelligence driven, it is critical to ensure that the information gathered is accurate. Proper governance is required to continually review the veracity of sources and the recommendations made as a result of them.
Part II is detailed listing of resources available to procurement professionals looking to perform research in order to create supply market intelligence. It is organized by source type and industry and highlights the best available resources, always with an eye for value and with the understanding of the crucial role that quality information plays in the decision-making process. For professionals new to research and the discipline of creating supply market intelligence, Part II will prove to be a trusted guide to a seemingly endless pool of resources, as well as a targeted quick reference for more experienced researchers.
1. “The Men Who Built America: J.P. Morgan,” ValuesandCapitalism.com, Accessed June 25, 2014.