Author Archives: Peter Smith

A Better Month for the Spend Matters Stock Portfolio (Even Blur Group Moves Up!)

- September 2, 2014 10:28 AM | Categories: Industry News, Procurement Financials, Solution Providers

We move into the start of a new academic year in many parts of the world, children try on their new school uniforms, and summer inexorably turns into autumn. And the thoughts of procurement people turn to matters of great import – such as whether the Proactis share price can keep rising and why Hubwoo’s just doesn’t seem to move at all.

Yes, another month has gone by, and it is time to review Spend Matters' virtual stock portfolio, made up of 21 stocks in firms that have a procurement content to their portfolio. Peter Smith and Jason Busch have been tracking them all through 2014 in this Spend Matters Plus series to get a sense of where the market for firms in this industry is going. They then chose their preferred portfolios from those stocks, using an imaginary $1 million initial fund each. Jason focused on just eight firms; Peter spread his risk with 14.

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Do Marketing Services Buyers Have the Best Jobs?

earbuds If I had to choose a spend category to be responsible for, what might that be? Well, I recently met someone who has what might just be my dream procurement job. Richard Kirstein runs Resilient Music, based in London. It is a small advisory and (in a sense) procurement outsourcing firm that advises and helps their clients buy music rights. So when you see a TV advert, or some fancy YouTube viral video campaign for a trendy fashion or drinks brand, and there is some music playing in the background, someone has purchased the rights to use that music.

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Proactis 2014 Overview: A Source-to-Pay Provider Uses Acquisitions to Move Up a Gear

- August 22, 2014 1:29 PM | Categories: M&A, Solution Providers

It has been a busy year for Proactis, the source-to-pay software provider based in Wetherby, a town in the fine northern English county of Yorkshire. Of all the firms in our European procurement solution provider market, Proactis has been the busiest from an acquisition point of view – certainly compared to company size. The firm has basically doubled in size (revenue) as well as moving in new strategic directions via three acquisitions in this calendar year. In this Spend Matters Plus research brief, Peter Smith (managing director of the UK/Europe site) provides a recap on those transactions, as well as takes a quick look at their half-year figures released in a trading update on August 12th, ahead of the full results announcement.

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Insight for CPOs: How Might CEOs Address Procurement’s Failings?

- August 20, 2014 2:11 AM | Categories: Procurement Strategy & Planning, Supplier Management

In Part 1 of this series, Peter Smith, managing director of Spend Matters UK/Europe, discussed the new Proxima graphic e-book titled "Drowning not waving – how Corporate Virtualization has got business leaders out of their depth... And where the real opportunities lie." Peter believes that the empowerment of the budget holder and business stakeholder, giving them a greater role in the overall procurement process, and the emergence of a consequent stronger commercial capability across the organisation, will be the most significant development in the procurement world over the next 10 years (in terms of strategy and organization at least). That of course will have some major implications for procurement functions and people - but it's a topic for another day. In this Spend Matters Plus research brief, Peter gives four reasons why he is confident in his prediction.

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Insight for CPOs: Proxima Lays Out Procurement’s Failings, But Are the Answers Here?

- August 15, 2014 2:31 AM | Categories: Procurement Strategy & Planning, Supplier Management

Procurement outsourcing specialist Proxima deservedly received a lot of coverage with its Corporate Virtualization study that was published last year. As you may remember, it analysed the accounts of large firms and discovered that on average 70 percent of their revenues were spent with third-party suppliers. That was more than most of us steeped in the industry expected, and compared with just 13 percent going on staff costs. Given those statistics, that raised a whole host of interesting questions about why procurement doesn't have a higher profile. Surely senior executives can see how vital it is for that 70 percent to be spent well? Now Proxima has produced a “graphic e-book” titled “Drowning not waving – how Corporate Virtualization has got business leaders out of their depth... And where the real opportunities lie.”

Spend Matters UK/Europe managing director Peter Smith was CPO for three large organisations covering both private and government sectors before he moved into advisory work and – eventually – running the UK/Europe site. In a new series for Spend Matters Plus, he will be writing regularly about key strategic – but non-technology related - issues of interest to the CPO, procurement director or other senior people in the profession. If you're a CPO but not a Plus subscriber, contact us to inquire about a free trial

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Spend Matters Procurement Stock Portfolio: Good Thing Jason Busch Has a Day Job

- August 1, 2014 9:04 AM | Categories: Industry News, Procurement Financials, Solution Providers

So now we move into the dog days of August. The UK has been sweltering, by our standards at least, in hot, humid weather, punctuated by the occasional biblical thunderstorm. And with that note of foreboding and doom, it is time to return to the Spend Matters stock portfolio challenge for the year of 2014. Regular readers will know that we identified a portfolio of 21 shares 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 Peter Smith then chose their preferred portfolios from those stocks, using an imaginary $1 million initial fund each. Jason focused on just eight firms; Peter spread his risk with 14. It's not been the best of months. Peter Smith, managing director of Spend Matters UK/Europe, provides an update on which firms are doing well and which ones less so in the latest installment of this Spend Matters Plus series.

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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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