Change Management Content

Defining AP Automation Functional Requirements (Part 1): Core Invoicing (Set-Up, Creation, Submission and Receiving) [PRO]

AP Automation is getting a lot of attention recently from multiple angles. This includes both finance/procurement organizations considering these solutions independently or as a component of broader invoice-to-pay or procure-to-pay investments. And it also counts the investment community, which continues to throw support behind a broad range of providers (just recently MineralTree raising $50 million).

As we’ve noted before, from a breadth perspective, AP automation technology can encompass the following functional areas on the highest level, which include electronic invoice capture, paper/PDF invoice capture (scan/capture), core invoice processing, invoice validations/matching (e.g., match to a PO or goods receipt), invoice approvals, supplier portal, supplier enablement services, systems integration, pre-onboarded suppliers payment integration and payment.

As part of our continuing coverage of AP automation, this Spend Matters PRO series will explore the functional requirements that finance and procurement organizations should look for in a solution with “foundational” and “advanced” capabilities.

Part 1 takes our first look at the core invoicing requirements for AP automation and some of the criteria that Global 2000 and middle market organizations should consider when selecting solutions (i.e., invoicing set-up, paper scan/capture support and e-invoicing). Subsequent briefs in this series will analyze other AP automation requirements that customers should look for in a solution.

Procurement’s Digital Transformation Goals Not in Sync with Development Priorities, Hackett Study Finds

Digital transformation is making it easier for procurement organizations to “do more with less,” according to newly released research from The Hackett Group consulting firm. However, as bluntly stated in its 2019 CPO Agenda: Building Next Generation Capabilities report, “Procurement’s transformation agenda is poorly aligned with its most critical development priorities.”

The procurement industry, according to the report, remains under pressure to act on its critical development priorities for 2019, including improving analytical capabilities, aligning skills and talent with business needs, leveraging supplier relationships, enhancing agility and achieving true customer-centricity.

Q&A on Digital Procurement’s Role in Sustainability, Ethics and Compliance [PRO]

As supply chains get increasingly externalized and globalized, the broad scope of operations is subject to equally broad regulatory oversight and supply risk. Meanwhile, as consumers increasingly demand transparency and ethical behavior by value chain brand owners, supply chain organizations at those brands (and also at their suppliers), are having to increasingly respond to these demands. Procurement organizations, for their part, are trying their best to support this externalization on all fronts, but they are so busy with strategic sourcing and P2P execution that even the “basics” of supplier qualification, certification and on-boarding are suffering — never mind having time for more strategic activities in supplier innovation, advanced risk management, digital transformation and other areas.

So, what’s the solution? Well, procurement must first practice what it preaches by tapping supply market innovation for itself, and this innovation is taking many forms. In an everything-as-a-service (XaaS) world, procurement must not only take a leadership role in robustly contracting for these diverse cloud services, but also:

— identifying how various providers beyond cloud applications can help procurement execute much more efficiently — at the cadence of the business.
— embedding the best digital supply market innovations into its own service delivery in order to expand its own influence and brand within the enterprise.
— enabling and empowering functional partners in GRC, IT, Finance, Legal, HR, Risk/Audit, etc. to enable their own service value (increasingly in a cross-functional GBS environment) and integrate the disparate services together much more coherently.

For example, consider the question: Who is responsible for establishing the single face to the supplier when we digitally on-board and manage them to not only transact with them in a compliant manner, but also ensure that they’re operating securely, ethically and transparently more broadly? It’s not just procurement, but rather a combination of procurement, IT, GRC and various centers-of-excellence that should be working tightly together. Unfortunately, misalignment is the norm, but not because of outright conflict or malfeasance, but because functional folks are too busy just trying to execute within their own silos. And they’ll never extricate themselves from that situation unless they have drastically new capabilities to deploy.

This is where procurement organizations need to make smart choices on how they apply digital strategies and tools/services to this area of sustainability, ethics and compliance.

I was recently catching up with an industry colleague of mine named Tomas Wiemer on the topic (he’s a former procurement transformation leader from Nokia and Alcatel-Lucent). He is very deep into this area and typical of leaders at European firms who are definitely in the vanguard here. Tomas is considering some career changes right now, primarily with some emerging tech players who can have a dramatic impact in the industry. Tomas reminds me a bit of a European version of Roy Anderson, who just joined Tradeshift (here’s part 3 of an interview that I did with him), and I think that Tomas will do similarly well when he lands somewhere. He’s doing some interim work for a client, and I agreed to let him interview me for my inputs, but given my role, I asked him for the questions in writing so that I could fully respond in kind and publish it to our subscribers. The questions are below:

How do you view topics as compliance and sustainability in the procurement digitalization landscape?
Do you foresee a convergence/harmonization of sustainability/compliance requirements toward suppliers thanks to the rise of S2P platforms/marketplaces?
What do you believe is the greatest added value of procurement digitalization / AI for compliance and sustainability?
What do you think are the key conditions/requirements to enable the emergence of sustainability/compliance topics in digital procurement?

What’s interesting is that this topic is very hot right now. My business partner Jason Busch just attended the recent EcoVadis conference in Paris, and the buzz (beyond the buzz from the sustainably grown coffee that was undoubtedly served there) was palpable. Part of the reason is that the topic is giving many procurement organizations new ways to engage the business and the suppliers alike in a way that drives much more meaningful value across the value chain beyond just price-centric cost savings. And it also engages a new generation of procurement professionals who want to have a meaningful impact on value chains rather than just being deal-makers and “firefighters.”

Anyway, the questions above are big ones, and require very thorough answers, so without further ado, let’s get to answering them ...

CRO-to-CRO Video Series: Episode 2 Explores the Evolving Role of Procurement

Procurement has come a long way from the 1980s, when it was simply a transactional function, up until today, when talk of artificial intelligence, blockchain, RPA, process mining and rapid self-service are all the rage.

Recently, Pierre Mitchell, chief research officer of Spend Matters, had a chance to sit down with his old friend and former colleague Michel Janssen, chief research guru of Everest Group, a research and management consulting firm based in Dallas, Texas.

In this second episode of their video series, watch as both CROs explore how the role of procurement has changed over the years, from buying at the lowest price, to total cost of ownership, to ever more complex layers of risk mitigation & value creation — and what it all has to do with "Minority Report."

CRO-to-CRO Video Series: 2 Veteran Chief Research Officers Dig into Digital Procurement Transformation

What happens when two chief research officers of two esteemed research firms sit down together for a video series chat? The viewer is in for a treat — an insightful series of video discussions on digital procurement transformation and the state of procurement overall. Recently, our own Pierre Mitchell, chief research officer of Spend Matters, had a chance to sit down with his old friend and former colleague Michel Janssen, chief research guru of Everest Group, a research and management consulting firm based in Dallas, Texas.

At ISM 2019, Janet Yellen and Carly Fiorina See the Supply Chain as a Force for Change

Supply chains get the spotlight at ISM conventions, of course, but businesswoman Carly Fiorina and former Fed Chair Janet Yellen put them in perspective, giving them credit for driving change, addressing tariffs and uncertain trade policies, as well as keeping inflation at bay. On Tuesday at ISM 2019 in Houston, Yellen discussed global economic issues, had an upbeat outlook ("I see a decent year this year; I don’t see a recession”) and said the work of supply chain professionals can drive down inflation, which is key to maintaining growing economies. Fiorina spoke Monday about leadership and how supply chain teams can drive change for their companies.

UX, Blockchain, IoT: The Future of Procurement Technology Unfolds at BearingPoint Speakers’ Series

Imagine ordering a replacement part with your camera, or having your IoT devices order supplies themselves, or just telling your chatbot assistant to assess and restock your inventory while you work on another project. Those digital-assisted feats aren’t futuristic. They’re already happening — but we’ll be seeing more uses of them in procurement as the digital transformation continues to evolve, according to speakers last week at a daylong discussion called Digital Procurement: Beyond the IT Landscape. Subjects ranged from blockchain and the internet of things (IoT) to process mining and best practices for digital implementation.

Latest Procurement Technology Not Adopted Very Fast, LevaData Finds

Procurement executives may understand how key technologies like data analytics, artificial intelligence (AI) and machine learning (ML) can significantly improve their processes, but they don’t always turn that understanding into actionable adoption of those tools, according to a recent webinar on LevaData’s Cognitive Sourcing Study.

Digital Transformation Disrupts the CPO Role — Adding Pressure and Opportunity

The role of the chief procurement officer as a strategic business partner has taken on a new shape in recent years as organizations aim to better focus on changing business landscapes and keeping up on tech developments. A recent ProcureCon study, “Examining the Role of the CPO as a Catalyst for Digital Transformation in a Time of Disruption,” suggests that the role of the CPO must now assist its organization by navigating the global business environment’s opportunities and changes.

McDonald’s Supply Chain May Set Bar on Sourcing Antibiotic-Free Beef, Expert Says

cows

In December, McDonald’s Corp. said it aims to rid its global beef supply of antibiotics, putting a new fast-food trend on the radar, and in an interview, a professor details what it takes to implement the supply chain shifts that McDonald’s is seeking and how that might affect the fast-food industry. On its website, McDonald’s says that although the company does not raise its own animals, its supply chain includes beef and dairy cattle, pigs and chickens. “We understand and acknowledge the significant responsibility we have to help ensure these animals experience good welfare throughout their lives. Good welfare is also necessary to guarantee high-quality products,” the company states.

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Ensuring a Positive Return on Technology Investment

Global Risk Management Solutions (GRMS)

A recent Efficio survey of 225 procurement leaders found that technology is driving significant activity in their organizations. Indeed, 63% of survey respondents admitted to completely rethinking their procurement approach as a result of new technologies, while 78% believe digital transformation should be a boardroom priority. Transforming processes with technology was also the single most popular procurement objective in 2018, indicating the level of focus currently on digitalization.

The same survey revealed that 82% of organizations prefer to make better use of existing technologies before investing in new ones. This implies that the benefits of technology investments made to date are yet to be fully realized and that, so far, technology is failing to meet expectations. In our view, companies can take a number of steps to ensure they get the best return from their technology investments.

Streamlining Supplier Management to Scale Globally: A Case Study of Geosyntec Consultants and AdaptOne

MRO as a service

Geosyntec Consultants, an engineering and consulting firm, needed to upgrade its supplier management system so it could streamline and improve its business. The Florida company works with public and private sector clients across the U.S., Canada, Malaysia and the U.K. It employs more than 1,200 consultants (engineers, scientists, technical personnel) and manages more than 8,300 suppliers, many of which require stringent safety certifications and compliance requirements that come from their clients.

As Geosyntec expanded its practice, it looked for a supplier management solution that could streamline its manual and disjointed processes, all while maintaining needed organizational accountability. Find out what it learned in the process and how it made its choice: AdaptOne.