By now, many Spend Matters readers are probably familiar with a story of at least one Fortune 500-size company that's taken the green leap. From Wal-Mart to Toyota to P&G to Tesco, it's hard to not read at least one headline each day about a new corporate greening program. But did you know that there an increasing number of small and middle market organizations taking the green leap as well? According to a recent IDC study on the subject, "there is a growing level of commitment among both small and midsize firms toward the adoption of applications that would support more environmentally friendly supply chain initiatives." The IDC press release on the study notes that "even among the smallest of the supply chain companies surveyed (those with 20–99 employees), there is a clear indication that support for green initiatives is emerging."

Fortunately, from a Spend Management perspective, green is not just about doing right by our planet and neighbors -- it's about saving money. But how can smaller organizations take advantage of green cost savings opportunities? Besides the obvious (e.g., changing light-bulbs out for more efficient types), companies of all sizes can save money through green programs by reducing internal consumption and redesigning how products (and even services) are packaged and delivered. Some companies are even moving to new green headquarters that take the notion of green savings and practices to entirely new levels.

- Jason Busch

AMR's Mickey North Rizza recently wrote a thorough and excellent brief (registration and membership required) analyzing SAP's current and planned SRM product roadmap (including procurement, sourcing, spend analysis, and contract management, among other areas). It's not at all an analyst puff-piece, as some might expect given the exorbitant sums that SAP spends with the likes of AMR and Gartner. Rather, it talks about some of the real challenges that SAP customers face and will have upgrading to the emerging solutions not to mention SAP's historical "track record of delays" and challenges meeting customer expectations in the SRM area. Personally, I'm bullish on SAP's long-term SRM prospects if they can roll-out SRM in timely manner. But I agree with Mickey that SAP's efforts in the space come with lots of baggage that best of breed vendors still have a window to capitalize on. Indeed, the ERP SRM game is far from over.

- Jason Busch

I'm thrilled to announce that Next Level Purchasing has become a sponsor of Spend Matters Navigator and the first learning / education advertiser on Spend Matters. For those who don't know Next Level Purchasing, the organization represents what I believe to be the fastest growing certification, training and education provider in the overall Spend Management market. Founded only in 2000, Next Level Purchasing has experienced tremendous growth out of the gate. Charles Dominick, President of Next Level Purchasing, shared with me that his organization has achieved a growth rate of 900% over the last three years and 7,160% over the last five years.

Perhaps this growth is attributable to the strong need for better training and education in the Spend Management market. Regardless, Next Level Purchasing is already making a name for itself alongside other educational and certification organizations which have been around for nearly one hundred years. Next Level Purchasing's SPSM certification celebrated its four-year anniversary this month. During those four years, employers from over 70 countries throughout the world have enrolled their procurement teams in the Senior Professional in Supply Management Program. So far, purchasing professionals in 33 of those countries -- including the USA, Colombia, India, England, Zambia, Saudi Arabia, Australia, and Singapore -- have completed the program and earned the SPSM Certification.

Please join me in offering a warm welcome to Next Level Purchasing. If you're curious to learn more about Next Level Purchasing and their educational and certification offerings, I'd strongly encourage you to visit their site to learn more. And for an independent analysis of their material, check out what Sourcing Innovation had to say after looking at their course materials (scroll down to the bottom of the post for the aggregated links to the module reviews).

- Jason Busch

The Strategic Sourceror recently highlighted a WSJ article that talks about how school districts across the country are going over budget, thanks to the cost of putting fuel in their big yellow buses. As an example for a strategy of mitigating the impact of cost increases, the post references the cast of one school district "who has chosen a fixed rate of $4.33 a gallon out of fear that fuel prices will continue to rise." Much of the rest of the article discusses how schools districts are cutting back in other areas to pay for the cost of fuel as well as dealing with lower revenue from property taxes that in some areas have turned South for the first time.

In my book, there might be a huge silver lining in the situation from a Spend Management perspective. For far too long, schools have been given what amounts to a blank checkbook to spend money (within reason) without the same level of fiscal discipline as the private sector. They've also awarded teachers and administrators with ridiculous pensions paid for by taxpayers -- over $80,000 per year in the case of one of my family members -- far beyond the average of what they made when they worked. This type of behavior must end, and the current oil boom is as great a reason as any to cut costs across the board in primary and secondary education, slaying sacred cows that have little or no impact on the quality of teaching and test score performance as well as tackling out of control teacher and administrator pensions.

- Jason Busch

E-Sourcing Place's Alan Buxton recently penned an excellent little number that details the procurement blogs that he reads on a regular basis. Tops on the list is Sourcing Innovation and Spend Matters (thank you, Alan, for the plug). I would certainly second Alan's suggestion that companies turn to both blogs for pragmatic insight, not to mention analysis (and even entertainment, in this blog's case). But what is more interesting to me are some of the others that made his cut that many companies might not be aware of yet. To this end, I'd also second his suggestion that manufacturers read MFG.com's blog, among a number of vendor sponsored sites. Other vendor blog suggestions that you might not know of include 2sustain, Tim Albinson's blog on green and sustainable supply chain issues, IBX's blog, Purchasing Transformation, and SourceOne's blog, Strategic Sourceror.

In a later post, I'll explore some of Alan's recommendations around non-vendor sponsored blogs. But the great news in this part of his analysis is that software companies and consultants are finally getting religion when it comes to the power of blogging. Ariba/Procuri and Iasta were the first to recognize the power of blogging in the space when they launched Supply Excellence and E-Sourcing Forum, respectively, two more top blogs in my book. But now other providers have joined in the fray, offering pragmatic advice on a daily basis. This is great news from the market, as I've always thought that there's a wealth of information inside providers in the space just waiting to get out without communications-types clouding the way.

- Jason Busch

I'd like to welcome Lisa Reisman to Spend Matters this morning. Lisa usually writes for Spend Matters affiliate blog MetalMiner. I asked her to contribute her thoughts about lessons that we can all draw from the current sourcing environment in the metals industry and categories. In full disclosure, Lisa is also the wife of Spend Matters Editor, Jason Busch.

Rising metals prices, commodity volatility, and a declining dollar could make some purchasing professionals throw their hands up in the air. But for some, trying times make for new opportunities. Here are a few strategies successfully deployed in recent months with excellent results:

The first strategy involves the re-evaluation of global sourcing decisions. Companies are out qualifying new suppliers and re-engaging in conversations with suppliers whom they previously did not award business. Total cost build-up models and landed cost models are en vogue as a means of comparing FOB bids. The variables are moving quickly... duties, export tariffs, currency exchange rates, freight and logistics costs etc. A price that appeared not workable 12 months ago may be within striking distance now on a total landed cost basis. The quoting and re-bidding process is in full gear for many firms.

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The year before last, I had the chance to sit next to Quentin Roach at an ISM award dinner for the Richter scholarship. What struck me most about him at the time was how rounded he was. Here was someone who understood sales and account development as much as procurement and supply chain. He had also learned lessons from what happened when his earlier bosses beat suppliers into a pulp -- observations he made during his initial procurement career in the US auto industry. But at the time I met him, Quentin had transcended his automotive past, and was running Global Customer Strategy and Process Management for Bausch & Lomb (he had previously run their procurement and supply chain teams). I've always believed that sales and procurement are really two sides of the same coin -- and that those that excel at either could competently lead-up the flip side. Perhaps this explains in part why Quentin was recently named Bristol-Myers Squibb's new CPO and SVP. His appointment suggests to me that procurement executives should not just view themselves as supply chain, manufacturing or negotiation experts. Rather, those who truly succeed at the highest Spend Management levels excel most at building relationships with -- and getting to know the rest of -- the business versus simply becoming expert in a single area.

- Jason Busch

In the most recent issue of CPO Agenda, there's a lengthy piece from Hackett's Chris Sawchuck and Pierre Mitchell that provides significant benchmarks and advice for organizations looking to improve their procurement returns. While there's not enough room to get into all the details here -- I'd strongly suggest you check out the article for yourself -- one of the challenges they outline is that procurement organizations often fail to innovate when it comes to their own processes and capabilities to "help the rest of the organization to tap the power of supply markets more efficiently and effectively to support broader corporate innovation efforts." And it's not because companies don't want to innovate. According to a recent Hackett study, "28 percent of procurement executives rank innovation as a 'top three' priority for procurement," but "it is a top three issue at the enterprise level twice as often -- 56 percent." There's certainly a relationship between innovation and influence. And all too often, procurement organizations are signing to a different tune than those executives in the rest of the company. So while "procurement may claim high spend influence numbers -- a 'quantity of influence' metric -- the 'quality of influence' measured by early procurement influence during specification is less than 50 percent."

The rest of the article tackles benchmarks, models and ideas to help procurement executives think through organizational design, influence and structure in risk and CSR, among other areas. Overall, I've got to hand it to Hackett for coming up with pragmatic advice that goes far beyond merely interpreting the numbers contained in their benchmarks. This is one of the shames right now of Aberdeen, in fact. I've been more closely monitoring some of their "fact-based" research -- I'll profile a few pieces in the coming weeks -- but there's so little expert analysis. In contrast, Hackett more than swims in the data -- they surf in it. I suppose that the old adage of "you get what you pay for" more than applies here. Still, I hold out hope that Aberdeen will get more expert and analytical in their analyses as well. We'd all be the better for it, as relying on Hackett data alone is not enough.

- Jason Busch

At the prodding of Spend Matters readers, I thought I'd share a few thoughts on the run-up in Ariba's stock price. Picking and analyzing stocks is not a core competency of mine, nor do I think stock prices should have any bearing on a company's decision to use a vendor's products or services, provided that the balance sheet is relatively clean. Still, I can't help but wonder if the interest in Ariba stock is a proxy for growth in sector overall. Consider that Ariba has finally broken through a number of price points where it has had significant resistance for well over a year -- and stayed there. Why is this?

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A couple of weeks ago, an executive at a vendor politely took me to task for butchering an explanation of supply chain finance. I'll admit, even though I got most of it right, I could have been more explicitly clear in certain areas. If you're looking for a more specific definition of what supply chain finance is and what it involves, I'd strongly suggest you check out a recent edition of CPO Agenda, which published a byline titled Supply Chain Finance 101. Succinctly put, the article suggest that supply chain finance "looks for cash tied up in inventory, payment terms and days payable outstanding (an indicator of the average length of time it takes a company to pay its suppliers) and seeks to change processes that are using unjustified amounts of cash."

In a nutshell, with supply chain finance, "A buyer uses its company's high credit rating to get cheaper finance for its supplier and inject cash into the supply chain. The lender/factor (bank or financial institution) checks your business credit information and calculates the credit risk on your organization, rather than your supplier. Since the cost of financing for a large company is much lower than for a small supplier located in an emerging market, sourcing becomes financially efficient."

In addition to providing a good explanation of what supply chain finance involves, the author, Catherine Truel, opines that supply chain finance is growing, in part, thanks to the need for global banks to refresh their solution portfolio. To this end, historically, banks enjoyed healthy margins on letter of credit designed to facilitate the exchange of goods and services in developing markets while protecting buyers. But given the cost, many companies have moved to open book dealings with global suppliers. Now, "because an estimated 85 per cent of world trade is now done on open account, banks have responded to this shift by improving their SCF services." Bingo. Another way to line the bank vault with more bullion or Euros (who wants to hold dollars these days, anyway) ...

- Jason Busch