Observation as the Fall Conference Season Winds Down

In the past few months, I've spoken at around a dozen different events, and attended two others. What a crazy fall travel schedule it's been! I even got to eat chicken feet, jellyfish and some type of unidentifiable insect this time around in China, not to mention making a fool of myself trying to sing KTV. My stomach -- not to mention the ears of some of my colleagues -- is still recovering. In all of this speaking and non-project related travel, I've learned that even though I don't like being away for extended periods, whirlwind circuits like this do prove fruitful for blog fodder, not to mention the degree to which they help shape my perspective on the Spend Management adoption trends. While I'll be sharing these thoughts with a number of my clients and colleagues in the coming weeks regarding specific buying trends and interest areas, I'll jot down a few of the good and bad highlights for the Spend Matters community below.

First, the bad. Clearly, at many of the events I spoke at or attended, supplier performance and risk management was a topic on many people's minds. But I also learned that few organizations had made any material strides when it came to implementing processes and technologies to address it. Seriously, licensing a vendor scorecard or performance management module without quantifying the cost of quality or supplier performance is not supplier performance and risk management. And deploying or piloting such a capability to only a handful of folks internally -- who in turn only deploy it to a subset of their suppliers -- will do little to help achieve the total cost returns that are possible through proactive supplier performance and risk management. Will the recent quality and supplier performance issues from China to Boeing to the Gap help build awareness for making the right set of investments and not just paying lip service to this area? I certainly hope so, but the answer is not just a yes or no question.

Now I'll move onto two more optimistic observations. The first is how many companies I spoke with are really starting to get a more proactive handle on thinking through many of the total cost factors involved in global sourcing. In some cases, this is entirely the result of getting burned from poorly structured arrangements and incorrect assumptions and strategies in the past (more often than not in fact). But in other cases, companies are really starting to think through the implications of global decisions beyond just finding suppliers capable of matching the "China" price.

The second optimistic observation is how companies are realizing how much more is possible from a results perspective, even leveraging their existing investment. In some cases, this means figuring out cost-effective ways of on-boarding and managing more suppliers within the procure-to-pay process. In others, it often involves reaching down into the business to build better relationships to gain access to additional spend -- and in some cases, entirely new spend categories -- which were previously off the table.

The third and final positive observation that I'll leave you with is I'm sensing a new interest in evaluating options that might not have previously been on the table such as exploring outsourcing opportunities and pushing up against IT's drive for vendor rationalization on the technology front (SAP's cancellation of the SRM 6.0 general release is certainly adding fuel to this fire).

Jason Busch

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