Author Archives: Pierre Mitchell



About Pierre Mitchell

Pierre leads Spend Matters procurement research activities and has broader solution development responsibilities for intellectual property creation and firm strategy as Managing Director of Azul Partners. This includes spearheading efforts to build new types of interactive and social communities of interest within the procurement profession including overseeing the evolution of spendmattersnet.com, Spend Matters PRO, MetalMiner, and other digital assets within Azul Partner’s umbrella. Pierre has 25 years of procurement and supply chain industry and consulting experience, and is a recognized procurement expert specializing in supply processes, practices, metrics, and enabling tools and services. He is a regular contributor to business publications, a frequent presenter at industry events around the world, and counts himself fortunate to have served and interacted with so many CPOs and future CPOs. Prior to his positions in research and advisory, he led numerous operations and systems transformations at Fortune 500 organizations. Industry positions include manufacturing project manager at The Timberland Company, materials manager at Krupp Companies and engineer at EG&G Torque Systems. He holds an engineering degree from Southern Methodist University and an MBA from the University of Chicago. In the early 2000's, Pierre was the first supply chain practitioner to become a procurement "industry analyst" as the VP of supply management research at AMR Research (now part of the Gartner Group) where he provided trusted counsel to procurement executives, business leadership, IT, and the solution providers who serve them. Most recently, he was the head of procurement research and adjunct business advisor at The Hackett Group, where he helped expand Hackett's procurement benchmarks and research studies while growing the Procurement Executive Advisory Program into a gold standard membership-based procurement advisory service in the market today.


So You Want to Buy Spend Analytics — Beyond Spend Cubes (Part 2)

Analytics

In the first installment of this series, we outlined a handful of the key product differentiators that winnow the provider playing field down to those that can meet your needs. Today in the second part of this series, we’ll finish the discussion by moving into some extended spend analytics (i.e., beyond forensic spend history reporting) and broader supply analytics that are worthwhile to consider.

Why focus beyond basic spend analytics? The answer is simple: to find more value opportunities. And you don’t want to run out of runway with your current provider if you want to evolve your analytics journey beyond analyzing the “exhaust” of your value chain (i.e., spend).

But if you want to extract more value from your spend, you have to extract more insights around demand and from “supply” (i.e., categories, suppliers, costs and multitier value chains). With that, let’s dive into these areas.

Corcentric Acquires Source One: Transaction Analysis (Part 2) — Customer Recommendations, Selection Checklist and Procurement Consulting Market Update

Procurement consulting sector insiders might look at Corcentric’s acquisition of Source One as a rounding error representing what is most likely materially less than the revenue — both in terms of revenue contribution and valuation — that a single large client can bring to a Big Five strategy or operations firms over the course of a calendar year.

There’s likely some truth to this statement. But to dismiss the transaction along these lines would be to ignore the acquisition of one of the few remaining non-system integration procurement consultancies in North America of any scale. And perhaps more important, it would also require turning one’s back on a number of macro trends that are fundamentally shifting the dynamics of the procurement consulting, managed services and business process outsourcing sectors.

These trends matter for both for not only those interested in playing a part in sector consolidation (sellers and buyers) but also customers. This two-part Spend Matters PRO research brief provides insight into the transaction. Part 1 provided an overview of the acquisition and background on Source One. In Part 2, we explore Corcentric and Source One customer recommendations, provide a selection checklist for potential Source One customers to evaluate if the firm is the right "fit" and offer our analysis of what the transaction means for the broader procurement consulting and solutions market.

So You Want to Buy Spend Analytics — Beyond Spend Cubes (Part 1)

spend analytics

This is the second installment of our series focused on cutting through the noise and evaluating procurement solutions on the few key requirements that truly differentiate the providers in the marketplace today. Although it is easy to dive into the dense forest of detailed functional requirements and technical requirements of a solution area, it's critically important to pull back and strategically look at what you are really trying to accomplish with a solution.

This is particularly important in the area of spend analytics. In fact, just defining your overall analytics scope and strategy is half the battle in determining the class of solutions you should approach before even diving into the features and functions of individual providers. There are also other key considerations that focus on technical aspects of the solution relative to master data management, big data, market intelligence, AI and more that have a real business impact on procurement centers of excellence looking to drive more insight and value from not just internal spend but external supply data. Your strategy and approach in selecting providers is also crucial so that you can drive short-term results, while also giving yourself the option value to evolve to into new areas.

Icertis Finally Releases AI-Based Contract Analytics: Is The CLM Death Star Now Complete?

Pardon the “Star Wars” reference, but I’m excited about the new Han Solo movie. AI is one of the few critical differentiators within the CLM space, and there’s not a hotter CLM pure-play provider than Icertis. Eighteen months ago, we wrote a four-part series about AI in contract management that explained the various value propositions of AI in the CLM space. In the first installment, we mentioned Icertis, but had to add a caveat to the mention. As of Tuesday, however, we’re going to have to finally update that post, as Icertis has added two new AI-powered apps to its offering.

Spendata: Vendor Snapshot (Part 2) — Product Strengths and Weaknesses

data analytics

Spendata is one of the first third-generation spend analytics platforms that takes analytics out of the fixed data warehouse world and into the modern big data era, where you can do the analysis you want, when you want, where you want and how you want. As it runs in the browser, your only restriction is an OS that runs Chrome (which are 99% of the OS deployments). And you don't have to worry about whether or not the vendor is GDPR compliant, because the data stays on your machine.

This Spend Matters PRO Vendor Snapshot explores Spendata’s product strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should shortlist the vendor. It also offers a critique of the user interface. Part 1 of our analysis provided a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Bonfire in the sourcing technology area. The final installment in this series will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.

Spendata: Vendor Snapshot (Part 1) — Background and Solution Overview

There are two views one can take of spend analysis. The modern view envisions that all of the data needs to be centralized in a data warehouse, business intelligence (BI) or spend analysis tool in a single standardized hierarchy agreed upon by the entire organization. The belief is that there needs to be only one view into a single version of the truth before any (spend-related) progress can be made. This desire to find the be-all single spend taxonomy structure bolted onto a corporate data warehouse is a fool’s errand because there is no single hierarchical structure that represents the multi-variate richness of spend/supply data that category managers need to extract value. For more on this topic, see here.

Then there is the postmodern view, where success depends upon taking appropriate action on whatever data you can get, whenever you can get it, in whatever form it's in. Any intelligence is better than no intelligence, and any savings or value you can identify today is worth more than the hypothetically better savings that you might identify next week, next month, or, more likely next quarter or year (which is likely how long it will take to agree on a common schema, collect all of the data across the organization, categorize it, cleanse it and enrich it). And while more data can allow for the identification of bigger opportunities, it's often not worth waiting until you have it all to start the analysis and start pursuing those opportunities that are available today.

In this series we are going to talk about a new and disruptive spend analysis solution that adopts the postmodern view of spend analysis, where a practitioner should be able to take action on any data she can get her hands on whenever she can get her hands on it and take immediate action wherever and whatever. This includes the situation where the practitioner already has access to an enterprise data warehouse or business intelligence solution, because the data doesn't always get into that solution right away — and even if it does, it's not always the case that the schema of the data warehouse or business intelligence solution will support the type of analysis that the practitioner needs to do.

Oh, and it’s only $699.

Want to Buy a Contract Management System? Here Are a Few Questions You Need to Ask

Buying a Contract Lifecycle Management (CLM) application can seem daunting. There are so many stakeholders who touch contracts. We can’t imagine any more foundational commercial business application than contract management that affects so many stakeholders. And at the same time, there are so many market choices.

Trust us, we live these every day. We have over 50 functional requirements within our CLM SolutionMap evaluation database, and there are many requirements that are simply table stakes: version control, role-based access, contract renewal alerts, contract templates, and even basic clause libraries are becoming commodity functionality.

However, there are only a handful of decision points in the decision tree to get down to the few providers that will meet your needs.

First, you have to decide whether you need just pure buy-side capabilities or whether you also need sell-side capabilities and support for employee contracts as well (i.e., whether you really need truly enterprise-wide CLM). If you need strong sell-side functionality, then you’ll immediately be able to knock out some buy-side players, even some of the main procurement suite players.

Next, you’ll need to decide on whether to go with a broader suite or a “mini-suite” provider, or whether you only need just core CLM capabilities. A “mini-suite” can take many forms. Some providers combine CLM plus some sourcing functionality, and others combine CLM with supplier management capabilities (and some have even broader risk/compliance functionality). For practitioners that want to look at some custom combinations of providers, we now support custom SolutionMaps that cross multiple areas so that you can create a true custom SolutionMap rather than just our persona-based maps for various solution types. Contact me if you’d like to discuss this.

And there’s always the issue of whether your IT department prefers the solution to run on existing application infrastructure, whether it’s your ERP system or a SharePoint platform. Hopefully these aren’t hard constraints because there’s only so far that you’ll get with a document-centric approach! You can get to a certain level of capability by adding metadata to contract documents, but until you can model the contract data itself, you’re only going to get so far.

Finally, there’s a handful of unique detailed functionality that really separates the various players. Some of these areas will become more commoditized in the next few years, but others are not so easily solved by marching through the “Feature 500” list. Although the rest of this analysis is for Spend Matters PRO level members only, we welcome our Spend Matters Plus practitioner subscribers to contact us and we’ll send you a copy of this full analysis.

Intelligent Procurement Requires Intelligent Procurement Solutions: Defining Artificial Intelligence Capabilities to Expect from Software Providers (Part 1)

procurement technology

In this Spend Matters PRO analysis, we’ll cover a few dozen of our AI-related functional requirements extracted from more than 400 requirements (and growing) in our current SolutionMap database, which we use to evaluate many dozens of providers. If you’re a practitioner, you can infuse these requirements into your ongoing provider selections and into your own in-house capability development (e.g., within an analytics CoE).

Of course, if you use the capabilities from our “palette” of requirements, you also can augment your own solution provider intelligence and create your own custom solution maps (based on data science rather than just analyst “magic”) to massively shrink your RFI cycle times and grow your provider intelligence to drive a much more effective and strategic provider selection process.

If you’re a procurement technology solutions provider who has gone through our SolutionMaps, you’re likely painfully aware of this level of detail that we get to, and we’d like to again thank you for your trip through our proverbial MRI. But if you haven’t “gotten on the map,” you’ll hopefully still find this very useful to benchmark against. (Contact us if you want to benchmark yourself against the “full monty” of requirements in your area — if you’re part of any modules within the source-to-pay market, or now services procurement, too.)

I’m Afraid I Can’t Source That, Dave: Artificial Intelligence in Strategic Sourcing

Last week marked the 50th anniversary of Stanley Kubrik’s “2001: A Space Odyssey.” One of the great scenes in this landmark movie is when astronauts Dave Bowman and Frank Poole chat “in private” about shutting down HAL 9000, the omnipresent, artificial intelligence-based control system. Unfortunately, HAL’s vision system is able to read Dave’s lips through a small window and learns the crew’s intentions. To protect itself and thereby its mission directive, HAL sets out to kill the astronauts. Although the complex automated reasoning that HAL uses in its attempt to snuff out Bowman and Poole is a bit beyond current AI implementations, the procurement process-specific applications of machine learning are becoming quite real.

Tech Enabling Procurement Shared Services: SAP Ariba Begins the Journey

Procurement shared services organizations and centers of excellence (CoEs) are sometimes tasked with the operational management of source-to-pay technologies on behalf of the organizations they serve. But up until now, they have not utilized purpose-built solutions to improve their own operations. While many use core analytics, sourcing, contract management, supplier management, e-procurement and invoice-to-pay solutions in some capacity in the delivery of their services, the actual operational management of shared services organizations and CoEs themselves has been loosely integrated with underlying procurement technology at best.

In other words, there has not been an operational solutions layer specifically designed for procurement shared services and CoE groups that provides a single workbench to manage activities. This is true even though legacy SharePoint, business process management and workflow solutions often loosely hold some knitting together for these teams. SAP Ariba is hoping to change this with introduction of its Procurement Desk product, which Spend Matters PRO recently profiled, covering the solution’s current capabilities in its initial release and planned roadmap for the coming quarters.

This Spend Matters PRO brief explores how different procurement technologies enable the various roles that shared services organizations and CoEs assume — and the opportunity for an operational overlay on top of underlying procurement technology modules. As part of this analysis, we also consider how Procurement Desk may help meet the broader needs of shared services and CoEs, as well as opportunities for SAP Ariba and others to close the gaps that remain in developing purpose-built operational management solutions for these organizations.

SAP Ariba Procurement Desk: Shared Services and Center of Excellence (CoE) Enablement

category management

Procurement shared services groups can take different shapes and can add different sources of value. Shared services tend to focus on procure-to-pay (P2P) and accounts payable support, including supplier enablement, supplier master data maintenance, transactional purchasing, transaction processing, invoice automation and exception management. CoEs focus on both a classic shared services model (i.e., supporting processes on behalf of the business units) or a more transformational CoE model (i.e., giving business units tools, training and focused resources like third-party services). 

The former tends to focus on tactical buying like spot buying and tail spend management, and the latter tends to focus on strategic procurement areas such as analytics, sourcing, category and supply market intelligence, and contract management support. Increasingly, a number of CoEs are focused on both areas, whether run and administered internally or in an outsourced manner — sometimes only in part — by a business process outsourcing (BPO) partner such as Accenture or GEP.

Yet even with the help of these outsourced partners, procurement shared services teams and CoEs have not had up to this point a purpose-built technology solution to manage their own operations. SAP Ariba is hoping to change this with its new Procurement Desk product. Available in March to limited release customers and in the summer months to all SAP Ariba customers, Procurement Desk has big plans to improve the capability of shared services teams and CoEs to deliver value and drive continuous improvement.

Based on demonstration sessions, presentations and analyst discussions at SAP Ariba Live in March 2018, this Spend Matters PRO research brief introduces the initial release of Procurement Desk, explores some of SAP Ariba’s ambitions for future releases based on the product roadmap and offers our initial analysis of the new offering, along with recommendations for SAP Ariba customers. A subsequent PRO research brief will provide a generalized CoE operating framework spanning all areas that procurement shared services groups can address with SAP Ariba’s current and planned capabilities for targeting this market.

Getting Real with Artificial Intelligence in Procurement

Artificial intelligence (AI) is the hottest technology topic right now, and it’s certainly going to be the most disruptive business trend going forward. To be sure, there are other technology topics that are also hot right now. Blockchain, for example, will certainly be disruptive, but no CPOs I know are clamoring for distributed ledgers as a must-have enabler to meet their goals. But as big as AI will eventually be, it’s still overhyped right now, even within “cognitive procurement.”