To say that services procurement is becoming a top procurement initiative would be an understatement in most organizations. In fact for some companies, services procurement is procurement if you consider either the absolute dollars spent on it or the strategic value to the business. Some companies (e.g., Accenture) have even helped refine their core business model in certain markets based on their ability to look at the management of non-permanent labor from a buy/sell, almost trading-company-like perspective.
Here at Spend Matters, we often get mired in the weeds of services procurement – how does one VMS differentiate from another, what do specialized category solutions look like, what is inherently incorrect about the way typical MSP ecosystems look at the broader opportunity, and so forth. But in this Spend Matters PRO research brief, Jason Busch, founder and managing director of Spend Matters, takes things up at least one level, introducing 10 overall strategies that companies can take to reinvigorate their services procurement and contingent workforce programs. Today, we consider the first five strategies.more ▸
Earlier this month, Procurement Leaders published a blog post titled: Has The Cloud-Based Solutions Market Turned A Corner In 2014? Citing the case of a relationship between Accenture and SAP/Ariba to deliver “a new cloud-based solution … designed to transform the delivery of procurement and finance and accounting (F&A) business services to its customers,” PL then raises the question of whether “the hype around the cloud signaled a wider shift in the market.” But the cloud isn't so simple. There is a range of vendors (including SAP/Ariba) selling solutions that can be configured in a hybrid manner in which data is stored and delivered through different applications in a virtualized manner.more ▸
Right around the time that the Spend Matters analyst tasked with covering the intersection of purchase-to-pay, order-to-cash, trade financing, and payments left the country for a few weeks, President Obama and his team had the nerve to fast-track what is perhaps the most important thing to happen to procurement in decades in terms of government guidance. Earlier this month, the White House unveiled SupplierPay, a corporate program designed to get cash flowing more effectively throughout the supply chain. It's not a technology or mandate. Rather, it is a non-binding private/public partnership to encourage industry to improve the speed with which actual dollars move from big companies to small.more ▸
Are we becoming a victim of our own supply chain policing, in that regulatory requirements are driving us to make sub-optimal decisions? In a must-read column in Sourcing Journal Online, Stephan Lamar, executive vice president at the American Apparel & Footwear Association (AAFA), presents the case for how the avoidance of one material in shoes and apparel led to potential non-compliance in another areas.more ▸
Building a successful public sector spend capability requires similar core capabilities as found in those sold to the private sector, as well as additional ones. But more so than simply checking the feature/function box as a vendor – or in software/solution selection processes as a user – implementing the right public sector spend analysis approach requires taking a slightly but critically different mindset compared to what is tried and true in the private sector. In Part 2 of this Spend Matters research series (see the first installment here), Jason Busch, founder and managing director, continues to explore what these unique motivations, requirements, and approaches are.
The final installment of the series (Part 3 – forthcoming) will continue to profile one of the specialist vendors in the sector, Spikes Cavell, which appears to have cracked the code on what federal, state, and local organizations most value in understanding their expenditures, reporting on activities, and tying data to actual programs to drive better constituent outcomes. There are clearly lessons in this regard for public sector procurement organizations and overall leadership (employees and elected officials), other technology and solution providers expanding their public sector presence, and, surprisingly perhaps, the private sector as well.more ▸
In a Sourcing Journal Online column that’s a must-read for any industry, Stephan Lamar, executive vice president at the American Apparel & Footwear Association (AAFA), frames the costs and hassle of conflict minerals legislation for the industry he represents. As he writes, “although [the legislation] was aimed at the electronics industry, which is a massive user of these materials, the broad reach of the regulation has ensnared our industry as well. For the past 18 months, U.S. footwear and apparel companies have spent thousands of dollars and hundreds of man hours in a desperate effort to come into compliance.”more ▸
Is Dodd-Frank really necessary (and if it was wouldn’t it have been implemented yet)? Why do most of the most successful supplier diversity programs we can point to have little focus on adhering to requirements for government contracting and more on doing what is right by customers and growth market segments? And perhaps most serious of all, why does China care about REACH/ROHS and even clean energy when they can’t police their state-owned companies? Nor can they go after suppliers that these organizations purchase from for behavior that would be aberrant in more civilized countries – labor practices, counterfeit and often dangerous materials/substances, theft of IP and other trade secrets, and just about any other supply chain risk infraction you can point to in recent news headlines.more ▸
It would be great to have a supply chain risk silver bullet that highlighted specific suppliers that present riskier prospects. That would be financial risk variables, broader supply chain exposure, political risk (of site/factory/host countries), and more. Short of this risk management panacea or expensive one-off analysis, the 2014 FM Global Resilience Index is a fascinating starting point, at least as it pertains to both country specific risk and the overall factors that contribute to supply chain risk.more ▸
FM Global recently released their Global Resilience Index of countries covering supply chain risk elements associated with geographies. As they call it, the index is “an equally-weighted composite of nine core variables that affect business resilience to supply chain disruption.” In other words, the study is not just about supply chain risk itself, but the ability of countries (and organizations) to withstand the shock of supply chain risk.more ▸
What Makes Public Sector Spend Analysis Different: Lessons From Spikes Cavell in the US and UK (Part 1)
Spikes Cavell, a spend visibility provider perhaps best known in the UK for serving public sector clients with a broad-based spend classification and analytics offering, has spent significant time and effort expanding on a growing beachhead in US public sector procurement at the state and local level. This research brief begins to explore the basics behind Spikes Cavell’s approach to public sector spend analysis and what makes serving this challenging sector of the market different. In this first of a two-part Spend Matters PRO series, Jason Busch, founder and managing director of Spend Matters, also examines what unique spend visibility approaches and attributes are useful and/or required depending on specific public sector dynamics, based on lessons from Spikes Cavell and other experts in public sector procurement – as well as private sector takeaways and lessons from these situational requirements.more ▸
My Trade Financing Matters colleague David Gustin has been talking quite a bit about the convergence of financial and physical supply chains. But there’s both hype and reality, as he points out in a post titled "The Hype of Physical and Financial Supply Chain Convergence." Still, the value of business networks that operate between companies in such scenarios is indisputable. And they’re becoming even more so as supply chains operate in a globalized context.more ▸
I was recently at an analyst event for a software company and sat across the table at a breakfast with a technology researcher who covered the market for insurance companies. I asked the analyst, who had spent over 20 years in the industry, what it was like to look at solutions from an outsider’s perspective and what trends she sees as shaping the market. Almost on cue, the topic of discussion shifted from underwriting and claims management to that new topic of general procurement and finance interest: supply chain risk management. Given her generalist insurance background, I had no idea what to expect when I queried her on the subject, but what I heard back was as expert – or more – than anything I’ve heard from a non-insurance perspective.more ▸