Author Archives: Peter Smith

LeanLinking Brings Social Media Principles to Procurement and Supply Management

We've been talking for some time on the different Spend Matters sites about how social media principles and approaches will inevitably make their way into the business and procurement world, yet progress has in reality been pretty slow. The innovative Rollstream has been assimilated into GXS, now itself part of OpenText, and seems pretty low-profile these days. However, there are signs that things are changing. Sourcemap is a more recently established firm that has an interesting approach, including some aspects of supply chain collaboration with a social media slant. Mark Perera, one of the founders of Procurement Leaders, is involved in Old Street Labs, whose new Vizibl platform is in its testing phase (we'll feature it as soon as you're ready, Mark). The platform looks to use some of the core social media principles in a business environment. And now we have LeanLinking starting to make a splash. This Spend Matters Plus research brief, by Peter Smith (managing editor of Spend Matters UK/Europe), looks at what LeanLinking has to offer and which organizations would benefit from the technology.

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The Spend Matters Stock Portfolio — Half Year Round-Up

- July 7, 2014 2:32 AM | Categories: Solution Providers, Spend Humor

We are halfway through 2014, and we're halfway through our Spend Matters stock portfolio challenge. Regular readers will know that we identified a portfolio of 21 companies with a procurement content and interest in order to track their performance and get a sense of where the market for “our” firms was going. Jason Busch and I then chose our own preferred portfolios from those stocks, each using an imaginary $1 million fund. He focused on just eight firms; I spread my risk with 14. So how was June? Relatively uneventful, if I’m honest, compared to some months when we’ve had major price movements.

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ProcureCon and Marketing Services Procurement: What We Agree On, What We Don’t

Peter Smith of Spend Matters UK/Europe attended the recent ProcureCon marketing event in London and found it to be a success in terms of number of delegates, sponsors, and quality of the sessions and subsequent debates. In this article for Spend Matters Plus, Peter discusses the state of marketing services procurement and breaks down the areas where speakers were in agreement and the less clear-cut issues. Not a Plus subscriber yet? Contact us to inquire about a free 30-day trial.

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Is “Fairness” a Reasonable Basis for Price Negotiation and Supplier Management?

- June 17, 2014 2:25 AM | Categories: Commentary, Conferences, Supplier Management

At a recent ProcureCon Marketing event in London, many agencies and buyers opined that “agencies need to make a fair return” from their work with clients. Speakers suggested that collaborative, strategic relationships were unlikely to be developed and sustained if the buyer is continually attacking the agency's margin. One impressive speaker said, "There’s nothing wrong with an agency making profit margins of 10 or 15 percent, just as a major FMCG (fast moving consumer goods) client with strong brands would look to make." This leads up to the sixty-four million dollar question - what exactly is “fair”? Peter Smith, Executive Editor of Spend Matters UK/Europe, discusses the subjectivity of the definition of fairness and how it plays into supplier management.

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May — A Difficult Month for Many Procurement-Related Stocks

- June 3, 2014 10:19 AM | Categories: Commentary, Procurement Strategy & Planning

We’ve just seen a very poor month for procurement related equities – it’s all going wrong for our stock portfolio! Well, not all of it, but overall May was not good news. Back at the beginning of the year, we came up with a portfolio of stocks (shares) representing firms that have an interest in the procurement solutions business, from giants like SAP and IBM, for whom procurement is a small but still important part of their portfolio, to those such as SciQuest or Blur Group for whom it is their very raison d'être. We weighted the portfolio and decided to track the performance of it month by month. Then Jason Busch and I each choose our own portfolio, allocating a theoretical $1 million across our chosen firms. Jason was more selective then me, putting his cash into just eight of the firms. I was more promiscuous with my favours, choosing 14 out of the 21 firms overall. And it all started so well! Read on for which firms did well and which ones not so well.

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Direct and Indirect Spend — A Wholly Pointless and Useless Classification

- May 12, 2014 3:55 PM | Categories: Commentary, Spend Analysis, Spend Management

Almost anyone in business will understand the difference between direct costs and indirect costs, and likewise in the procurement world, the terms "direct spend" and "indirect spend" are widely used. We see job titles such as “Head of Indirect Purchasing.” ProcureCon runs very successful “indirect spend” conferences, and articles are aimed at buyers of “indirects.” And yet, it is a classification that arguably not only has no value or purpose to procurement, but can also lead to sloppy and misinformed procurement strategies, activities, and approaches. In this Spend Matters Plus post, Peter Smith, Executive Editor of Spend Matters UK/Europe, explains why the "direct/indirect" split doesn't work for procurement.

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A Sector in Turmoil? Procurement in the Financial Services Industry Face a Range of Challenges

Remember to register for our webinar tomorrow titled "A Sector in Turmoil? Challenges for Procurement in the Financial Services Industry," sponsored by the procurement software and solutions provider SciQuest. That’s this Thursday, May 8 from 9 to 10 am CDT (mid-afternoon of those of you in Western Europe). Along with SciQuest’s Lindsay Sloan, I’ll be looking at the issues and challenges for procurement in the sector and proposing some steps procurement professionals might want to consider.

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Spend Matters Stock Portfolio – A Black April (Especially for Jason Busch)

- May 2, 2014 2:26 AM | Categories: Industry News, Spend Humor

Another month has gone by, and I write this on the morning of May Day, a historical English spring festival and of course the international day for celebrating the labour movement, communism, and all things not particularly capitalistic. So it’s ironic perhaps that this is when we’re taking our monthly look at our stock (shares) portfolio of publicly quoted businesses with a significant procurement element. Just as in March, the (imaginary) Spend Matters Stock Portfolio has gone backwards. It lost around 4.5 percent of its value and now stands at just 1.4 percent above where it started on January 1st. After at one point being almost 10 percent up, we’re almost back to square one.

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When Should You Fire a Non-Performing Supplier?

When is the best time to fire a non-performing service provider? Should we take action as soon as serious problems become evident? Once they've had a chance or two to sort out the issues (but have failed in those initial attempts)? Or only as a very last resort, after a lengthy period during which they can try to rectify errors? There are a number of key issues to be considered here. Read on for what these are, as well as for supplier management lessons that can be extracted from soccer clubs and their hiring and firing of managers.

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The Spend Matters Stock Portfolio – April Update

- April 3, 2014 11:17 AM | Categories: Industry News, Procurement Commentary, Spend Humor

We're three months into our stock portfolio exercise and for the first time Jason and Peter's joint portfolio has lost a little ground. Despite still being up 6 percent on the year, they're down 3 percent from March. In the individual portfolio race, Peter is now showing a 13.4 percent gain whereas Jason is at 9.6 percent. For now it appears as though Peter's decision to spread his portfolio out among almost double as many firms as Jason was a good move. Who knows what these April showers will bring, though.

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A Note of Caution about Ethics in the Supply Chain (Part 2)

- March 25, 2014 2:29 AM | Categories: Supply Chain Management, Supply Risk Management

Procurement must not get too far out of step with our organisations. Of course we always have the option of saying no, as I would to a tobacco firm. But the profession generally needs to make sure that we support our organisations as well as these wider ethical goals. Therefore, institutes like CIPS need to tread carefully. It is right that they seek to educate the profession, but they face a tricky balancing act. Take too much of a “holier than thou” stance, and they may be seen as anti-business and misaligned. But go easy on ethical issues, and they may be accused of pandering to corporate clients.

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A Note of Caution About Ethics in the Supply Chain (Part 1)

- March 17, 2014 3:15 PM | Categories: Commentary, Public Sector, Supply Risk Management

Corporate social responsibility has of course been a huge area of growing interest for businesses over the last 20 years or so, and many organisations have quite rightly put significant time and effort into it. This is all very admirable and we are not suggesting for one moment that procurement – and indeed businesses – should ignore or de-prioritise these areas. However, in the usual Spend Matters style (challenging, counterintuitive, and contrarian), I want to sound two notes of warning, identifying where procurement executives need to exercise some caution as they address these issues. First off, many of these issues are more complex than they may first appear.

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