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.

What Does The CFO Think Of Procurement? Why Aren’t We Asking About Finance’s Impact on Procurement?!

Pay-Off There’ve been numerous studies that have asked finance executives to rate procurement effectiveness, with a focus on the credibility of the procurement-cited savings and whether the results are dropping to the bottom line (I even led such a study over 5 years ago). Not surprisingly, there are clearly some capability gaps here. But, is this really the right question to be asking finance folks? First of all, you have to consider why these gaps occur at all. We take a look at this issue in this post and also will be conducting a study in partnership with ISM on the topic.

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Maverick Spend Analysis, How to Re-Plumb Your Spend and Savings Flow – 50 Shades of Pay: Shade 14

industry-pipe-white-2455 (1) In our last edition of the 50 Shades of Pay series, we touched on how to analyze maverick spending and patch a few of the “savings leaks” through reporting and through a fail-safe P2P system. But this is only a stopgap measure, especially if there are no systems that can be set up to “guide” the requisitioner to a specific product from a specific supplier. Why? Even if the preferred supplier meets the need, people are often too busy to look for a contract or read the memo and will generally go back to buying what they want when if they feel procurement has stopped watching over their shoulder. They want to be effective. And if the product from the preferred supplier doesn't meet the need, they will continue to bypass the system at every opportunity, especially if the closet procurement person in them wants to play the “beat the corporate price” game. You can certainly allow this (hotel rooms and rental cars are a good examples) and even have “meet-or-beat” clauses with your suppliers, but most don’t want to deal with the hassle and cost of managing this. The real solution is to identify why they are doing it and then fix it.

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Dismantling the Pantheon of Procurement Myths

X42222FEL1 In the first part of this multi-part series, we will begin to methodically dismantle the myths and lore that have been tribally developed over the years within procurement that have now become “common wisdom.” No, this will not include something as obvious as dispelling the myth of “procurement is all about reducing vendor prices.” There are many more than that – at least 25 of them, actually. Some you may know. Some you may not. And some you may not agree with it. But, it is important to have the discussion because complacency and the lack of awareness is the real risk.

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We Are Who We Are: Top 5 Procurement Personalities – Part 2

OX253EDR6R In the last edition of this multi-part series, we started drilling into the top 5 personality styles for procurement. In this edition, we’ll finish off the analysis and discuss a few implications. Coming into the No. 2 spot is the ENTP (Extroversion, Intuition, Thinking, Perception). Approximately 12.1% of procurement professionals in a recent personality study were ENTPs (compared with only 3.2% of the general population!). The ENTP, typified as the Visionary or Debater, is defined as ”quick, ingenious, stimulating, alert, and outspoken. Resourceful in solving new and challenging problems. Adept at generating conceptual possibilities and then analyzing them strategically. Good at reading other people.”

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Alibaba is Now Selling eProcurement Apps

- April 1, 2015 5:47 AM | Categories: eProcurement / Procurement, Industry News

queeee Last year, we wrote about Alibaba partnering with Coupa in what appeared to be the Barney partnership of the year. The hookup was said to “provide Coupa customers with an easy way to find and source from suppliers on Alibaba.com. Coupa customers will have immediate, easy access to millions of additional global suppliers from Alibaba.com.” Fast-forward and Alibaba is taking multiple P2P wives, or so it would seem. Anyway, to get back to the title of this article and find out all the eProcurement applications that Alibaba is selling, all you have to do is check out the Alibaba site – which scares us a bit; read on to find out why.

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Top 5 Procurement Personalities Revealed and Why Some Will Surprise You – Part 1

activity-aviation-fly-2302-825x550 When I was originally formulating this simple personality poll, I was expecting one personality style would prove dominant in procurement. It indeed came in at No. 3 on the list of 16 different possible personality types, but the rest of the top 5 were more surprising. I wrote about the top personality style already, but wanted to give a little more detail on the top 5 styles that actually make up more than 60% of procurement professionals, based on the nearly 2,000 that we polled. I found the results somewhat surprising and will offer some insights to these generally frustrated and overworked leaders.

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M&A News: Lexmark Acquires Kofax – Initial Market Analysis

- March 26, 2015 4:47 PM | Categories: Industry News, M&A

Businessman hand touching M & A on virtual screen - merger & acq Earlier this week, Lexmark announced it was acquiring Kofax. The Deal reports that the transaction will add, “$300 million in 2014 sales from a base of more than 20,000 global customers … [and] will boost its enterprise software sales to $700 million.” Spend Matters believes the transaction will further fuel valuation levels in the enterprise software sector (Kofax is now trading at over 3X top-line at the time of publication of this post – up over 25% over the pre-deal multiple) given that the firm competes in the somewhat stodgy world of accounts payable automation, inclusive of OCR services, among other areas.

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Procurement’s Personality Revealed! And it’s a Clear Winner

- March 25, 2015 8:37 AM | Categories: Learning / Research, Procurement, Procurement Research

circle-colorful-colors-2091 It's important to understand personality types in any procurement organization. It's personally beneficial, too – self-assessing your personality traits can help you gain self-awareness into your behaviors and how they might impact your job performance. But no one had measured such a thing in procurement before, so I teamed up with The Institute for Supply Management to survey this, and the results are in! We had an overwhelming response, with nearly 1,800 participants. Check out what the top personality type in procurement is!

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Building a Business Case for Addressing Complex MRO Spend in Asset-Intensive Industries

Brick-Wall-10211351BDAC83D7 Asset-intensive industries such as mining, energy (including oil & gas), utilities, chemicals, heavy equipment, construction and related sectors can meet, exceed or miss earnings expectations based on the availability of key assets and facilities in their portfolio, from plants to rigs. To maximize up-time and availability and to minimize the time to overhaul specific assets, many have invested in specialized solutions to manage plants and other facilities. Yet in the vast majority of cases, organizations have not prioritized specialized procurement solutions that could drive substantial savings, risk reduction and other benefits, sitting alongside asset and facility solutions including Maximo/IBM, SAP PM/MM, IFS, Ventyx, ABB, Oracle Asset Management, Intentia, Infor EAM and others. This Spend Matters PRO brief, the second in a series, explores MRO-specific e-procurement use cases for specialized investment in this area. Today’s analysis centers on building the business case for specialized investment in this area and provides recommendations to organizations on how to get started.

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Who You Gonna Call? Procurement MythBusters!

android-calling-dialer-3071-364x550 I go to a lot of conferences and have facilitated a lot of CPO panels, and what I always find surprising is not just how many of the same challenges exist, but also the extent that the same conventional wisdom gets bandied around. Perhaps it shouldn't be so surprising. When procurement leaders are looking for approaches or solutions, they will turn to their peers or to traditional sources of knowledge such as consulting firms, membership organizations and so forth. Stay tuned for a multi-part series on SpendMatters Plus that begins sharpening (or discarding) the “old saws” and conventional thinking that are worth re-visiting.

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Addressing True MRO in Asset- and Capital-Intensive Industries

- March 23, 2015 2:45 AM | Categories: eProcurement / Procurement, P2P, Vendor Snapshots

bank-notes-bills-buy-2114 As the e-procurement sector has matured, industry- and category-specific innovation has left a significant amount to be desired. The vast majority of e-procurement and P2P solutions today are generic rather than specialized, leaving unmet needs in the market. As one example, mining, energy, oil & gas, utilities, chemicals, heavy equipment, construction and related sectors collectively spend tens of billions of dollars per year on maintaining existing facilities (let alone capital expenditure to build new ones), which are not addressed effectively by traditional e-procurement solutions in MRO and related areas. This Spend Matters research note shares some of the innovations that one decade-old name in the sector, jCatalog, is bringing to e-procurement through addressing complex MRO and plant/facility buying scenarios.

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Maverick Spend Analysis, How to Plug the Leaks – 50 Shades of Pay: Shade 13

- March 18, 2015 2:38 AM | Categories: Analysis, Spend Analysis

03F8A942C5 In the last 2 editions of our 50 Shades of Pay series, we tackled how to turn the hands of time forward to “spend planning” rather than forensic spend analysis. Yet, before we get even more forward-thinking and strategic, we’re going to explore a few shades in the realm of the present, namely, making sure that hard-fought savings are getting realized. So, one of the ways that spend analysis can be used here is to tie the spending data to contract data for the purposes of maverick spending analysis. Let’s also put in the language of cost. In procurement, cost is still king, and costs can certainly increase in many ways.

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