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.


Business Process Management for Procurement: A Spectrum of Choices

category management

BPM stands for business process management. If the business process is procurement (i.e., a collection of processes), then the concept is about managing procurement processes — including process design/definition, performance management (e.g., process outputs/KPIs, monitoring) and resource management. Of course, in the IT world, BPM has its own body of knowledge regarding the topic, focused mostly on “process workflow/integration on steroids.” This is the “system of process/interaction/engagement” that may sit on top of multiple systems of record (e.g., ERP, source-to-pay suites).

In this Spend Matters Plus article, we define BPM components and offer practical ways for applying BPM to procurement, keeping the topic on a business level and issuing both warnings and best practice tips for companies deploying or considering BPM technology adoption within the function. But how can you approach this topic without your eyes glazing over? Wikipedia does a good job explaining the concept, but we will try to define an evolution that procurement organizations can use to start doing IT-enabled BPM in a simple way, and then get more sophisticated.

Merging Jaggaer and Pool4Tool: Strategy Analysis and Questions Customers Should Ask

Jaggaer announced Monday it would merge with Pool4Tool. The combination raises a number of questions, primarily from a strategy perspective, beyond just providing expanded distribution to a niche provider and the validation of a new technology segment (manufacturing-centric procurement solutions) in North America. Rather, it raises the broader notion of whether a mutual fund-type holding company structure — regardless of capitalization structure — can help the fortunes of each “member” (and customers) beyond a certain point.

There's no question the two firms are better together than apart. Both “members” can immediately cross-sell and gain certain scale advantages. They can do this because of customer goodwill and the ability to get in the door and deliver. No doubt the professionalism that a private equity-held software firm brings, along with professional services know-how and reach to drive sales and implementations, will be key contributors to initial momentum as well. Jaggaer brings these two areas to Pool4Tool — and then some. But this only goes so far.

Longer term, real technology integration models, including a supplier network and platform-as-a-service (PaaS) strategy, need to be spelled out. While our colleague Tom Finn appreciated Jaggaer and Pool4Tool’s honesty around the topic of integration, strategically, to maximize customer (and likely shareholder) value, our esteemed colleague may not be right. Which brings us to the strategic technology questions Jaggaer and Pool4Tool should be asking as well as those which customers and prospective should zero in on as well.

Freeing Yourself From the Chains of the DPO Stretch: An Empirical and Experiential Analysis

Before on Spend Matters, I highlighted an analysis where, in 12 of 14 manufacturing industries I analyzed, I found negative correlations between Days Payable Outstanding (DPO) and enterprise performance (e.g., debt you may incur to raise cash to invest in high payback initiatives such as B2B trade financing where early payment discounts and/or supply chain finance programs are established). In this Spend Matters Plus article, I’ll dive into the industry details and also provide some additional insights based on some research that we conducted with the Institute for Supply Management (ISM).

Commodity Management: Drilling into the Supply Chain and the Technology Landscape

My colleague Jason Busch and I have written earlier about how, with the exception of a few top procurement organizations, procurement is failing to deploy the right sets of strategies, tools and tactics to bridge commodity management, sourcing and broader procurement activity.

In this Spend Matters Plus article, I want to dive into some of the details around commodity management and its relation to the broader supply chain, as well as the different solution approaches being used to tackle it. In a value-chain mega chart in the article (which basically follows a design > source > plan [supply] > deliver [inbound] process flow from left to right), I’ve outlined the various processes (brown rectangles) and some supporting solution types (blue ovals) for commodity management.

A Guidebook to the Rise of Industry-Specific Procurement Technologies: Related Markets, the Why and the Where

By Spend Matters estimates, over 80% of dollars spent on procurement technology in recent years has been for standard source-to-pay products (e.g., spend analytics, sourcing, contract management, supplier management, e-procurement and invoice-to-pay) that were not specifically designed or configured — prior to deployments — to support industry-specific requirements. Granted, there have been some notable deviations to the rule (which make up the 20%), such as healthcare-centric solutions, certain areas of public sector, supplier compliance in regulated industries, supporting specific collaboration requirements, manufacturing requirements and so forth. But these have been exceptions rather than the norm.

Something new is afoot, however. There are a number of signposts which point to the pending rise of industry-specific solutions more generally for procurement technology — i.e., those solutions which are either designed from the start or come pre-configured to meet the specific needs of a given market.

This Spend Matters PRO research series provides a guidebook for organizations that are interested in this change, the drivers behind it, and some trends and examples that we’re seeing in the field. It explores when industry specific procurement technologies are likely most appropriate (or not), what technologies are likely to be affected, lessons from related markets (e.g., finance/treasury, supply chain, supplier and third-party management) and provides a summary and analysis of recent news from Jaggaer, Ivalua and SAP Ariba detailing their emerging approaches to verticalization. It also provides recommendations to procurement organizations, solution providers and consultancies that are looking to take advantage of this shift (or not get left behind by it).

The Collective Intelligence of Supply (Part 2): The Evolution in 10 Steps

tech

In Part 1 of this series, I outlined its intent and why procurement and supply chain organizations should understand how the evolution toward a digital “collective intelligence” within supply chains and supply markets will affect them.

If you think about the Star Trek series from the 1980s (not the 1960s), the “Borg” was a collective of cybernetic beings that were part of a “hive mind” that would assimilate humans and other species into their collective digital intelligence. Now, consider the ecosystems being built by companies like Google, Amazon, Facebook, Apple, Microsoft, IBM and others. They are becoming commercial collectives, of sorts, that seek to assimilate you into their walled gardens and extract maximum information from you in order to personalize their services (and those of the suppliers that your information is sold to) for you. You don’t just buy their products — you often are the product.

This trend certainly isn’t a bad thing on the whole in terms of the digital services that consumers now enjoy, but it’s traveling up the supply chain into B2B in a big way. So, the question becomes how can you create your own benevolent Borg that creates a collective intelligence with/about your customers, within your organization (think knowledge management on steroids), and, of course, to your upstream suppliers and supply chain. You want to be a platform, and not just a pipe. We’ve written extensively about platforms on our site, but platform/network effects are just a piece of the puzzle.

In Part 1 of this series, I did a quick general outline of the series and also included 20 domain areas that are key to this evolution. Even so, I didn’t really “tell the story,” and it basically is a story told in 10 discrete evolutionary steps. Once procurement organizations understand these 10 key progressions, they will be able to understand digital evolution in a more straightforward way that ties to business fundamentals while also bringing in newer operating models.

EcoVadis: Vendor Snapshot (Part 3) — Competitive and Summary Analysis

Upwork Pro

In this Spend Matters Vendor Snapshot series, we have been analyzing EcoVadis, a provider of a cloud-based corporate social responsibility (CSR) and sustainability rating and monitoring “Solution” (with a capital “S” to denote a solution that transcends software) for your critical supply chain suppliers. The supplier and buyer friendly platform allows suppliers to self-register, complete a profile customized to them based on their UN ISIC industry code (and country and size), upload all relevant documentation and get assessed/rated for a 12-month period. As we wrote in our last installment of this series: 

“The EcoVadis CSR rating is not a formal certification from a regulatory agency, but the criteria is interestingly built up as a "best of breed" superset of requirements from existing CSR standards such as Global Reporting Initiative, the United Nations Global Compact, and the ISO 26000. This relevance helps improve attractiveness and adoption by organizations who don't want to re-invent the wheel and can use a single rating to also help comply with the other certifications that are in force within their supply chain.”

This final installment of our multipart Spend Matters PRO Vendor Snapshot series covering EcoVadis offers a SWOT analysis, competitive assessment and comparison with other similar and “crossover” providers in the supplier management market which also address ratings, CSR, risk and related initiatives. It also includes a user selection guide and summary evaluation and selection considerations. Part 1 and Part 2 of this PRO research series provide a company and deep-dive solution overview, product strengths and weaknesses and a recommended fit analysis for what types of organizations should consider EcoVadis.

ISM 2017: Talent, Procurement Zen and a CPO’s Warning About Technology

I attended a Q&A session with a handful of the “30 under 30” winners in supply management at ISM 2017, and all I can say is that these young professionals from firms like GE, Johnson & Johnson and Coach are indeed impressive (see some of our interviews in the links below). The competition for the designation is increasing, and the winners are increasingly interested in supply management from the get-go. In the first year of the program, only 17% of the winners came into the industry proactively with a supply (chain) management degree, but 40% of winners this year (the third year) were supply management graduates and practitioners.

The Collective Intelligence of Supply (Part 1): Introduction

As you may have guessed by the title, this blog series is not going to be a tactical how-to guide for implementing low-level procurement techniques or comparing software providers. Rather, I’m writing this as the supply strategist’s guide to digital business.

There is a lot of content out there on digital “disruption,” including for procurement, but I personally find most of it laden with jargon, and not very instructive on what to do about it. This is a shame, because the fundamental transformation and evolution of value chains offers so many opportunities that supply professionals can seize upon if they understand the changes and how to harness them.

This series will be written as a series of short essays that will (hopefully) help readers understand these detailed drivers behind this digital evolution and what that means from a supply chain and supply management standpoint. Most important, I’ll try to give some practical insights and recommendations on how to best tap these innovations as we all evolve toward higher levels of machine intelligence.

Before we dive in, it’s important to realize that the “collective intelligence” story isn’t about artificial intelligence (AI) per se but really about a convergence of methodologies, strategies, techniques and technologies that are converging.

Read on to see this series’ outline on the successful supply professional’s journey to this collective intelligence that’s being built in the supply chain and how to begin preparing for it.

ISM 2017: Initial Impressions? Great!

Eved

The Spend Matters team has descended on Orlando for the ISM 2017 conference. This year’s event is shaping up to be a great one. I got in Sunday but didn’t get a chance to attend a behind-the-scenes tour of Disney World, which looked fascinating. There’s a metaphor for supply management here, I think: “How is procurement able to generate 10X returns on investment in the function? It must be magic!” Well, like Disney, it’s a lot of hard work, customer focus, innovation, creativity and technology.

Coupa Inspire 2017: Product Impressions and Dissecting R18

VMS

Today’s coverage of Coupa Inspire 2017 will go deeper than our first dispatch, as we we zero in on product. The biggest news to come out of Coupa’s customer conference Thursday was the general availability release of R18. Although “just a scheduled release” may seem boring, procurement transformations are inherently evolutionary, and the 50 major new features and capabilities were well received by the customers — and generally by us, too.

There’s more than just “evolution” to the product set in R18. In this PRO brief, we discuss the good as well as the gaps in Coupa’s latest release as we unpack the latest from the cloud spend management provider. We’ll also point to the future and explore some areas where Coupa may head later in 2017 and 2018 based on what we’ve heard from customer needs (external) and signposts around product innovation (internal), as well.