Category Archives: Commentary

Private Equity and Procurement: Context and Introduction

Jason Busch - May 24, 2013 3:09 PM | Categories: Commentary

At Sourcing Interest Group’s Spring Summit, Welsh, Carson, Anderson & Stowe’s (WCAS) Jeff Gallant gave a fact-packed, fast-paced hour-long introduction to the world of private equity and procurement in a talk titled Procurement as critical resource: creating value through private equity portfolio management. I came away from the presentation with a strong appreciation for the opportunities of a relatively new position that is emerging for former CPOs and procurement leaders: serving as operating partners within the private equity world. However, the lessons that Jeff shared are not just relevant to those transitioning into the world of leveraged buyouts – they are [...]

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Leveraging Memorial Day: How We Spend Our Precious Time

William Busch - May 24, 2013 1:24 PM | Categories: Commentary

As we enter an extended U.S. holiday weekend to honor those whose lives were cut short in defense of their nation, we needn’t dwell upon the politics of war, but rather the value of life. Let’s also set aside the metaphysical and spiritual components and take a more strategic and quantitative approach to our life ROI – one that fits neatly with our daily business practice. One of my very close friends, Harry, and I get together about two times a month without a specific agenda over coffee, wine or a light meal. Our conversation typically segues from work and family [...]

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The Start of Summer: Soldier Field 10, G&Ts and Reverse Auctions

Jason Busch - May 24, 2013 8:29 AM | Categories: Commentary

ginandtonic I’m running a 10-mile race tomorrow, hoping to dash to a personal best (“PR” among the racing obsessed) during the Soldier Field 10. For those in Chicago, this race is truly awesome. Not only is it not over-crowded (a field of just over 10,000 or so, and you pick up your race packet at a running store, not the massive McCormick conference center) you start next to Soldier Field, and you actually finish on the fifty yard line. And you honor the memory of those who served (and for which the stadium is named after) before the starting gun goes [...]

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When You Find Yourself In a Software Hole, Stop Digging!

Thomas Kase - May 24, 2013 6:47 AM | Categories: Commentary

Bad software is rolled out all the time, perhaps because business clients have poorly defined use cases, ad hoc processes – or because software firms cut corners and let programmers take off without proper supervision. Then there’s also good ol’ incompetence (of course). Executive ego around how customers “should” go about their business in the solution is sometimes an issue as well – even though “educating” the marketplace to correct the errors of their ways is usually a horrible foundation for a business plan. Many software firms learned this the hard way during the dot.com days. Instead of hanging out [...]

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E-Sourcing: What’s Changed in the Past Five Years (Part 2)

Thomas Kase - May 23, 2013 3:08 PM | Categories: Commentary

In the first installment in this series, we talked a lot about the changing e-sourcing landscape based on observations from a deep dive sourcing analysis we’re currently working on. Today we’ll share some of the remaining “gotchas” to bring our subscribers up to speed on what’s changed in the past five years. But first, here’s a summary of our initial points: Non-western expertise and sourcing suites gain stature The rise of truly integrated end-to-end solutions is finally here (in certain cases) Optimization (i.e., flexible and alternative bidding submissions, application of buyer constraints, scenario analysis) has finally gotten easy to use Larger [...]

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P2P Channel Strategy Spaghetti: Pasta that Will Keep Your Company Lean!

Guest Post - May 23, 2013 1:26 PM | Categories: Commentary

Spend Matters welcomes a guest post from Michael Eckstut and Len Prokopets of Archstone Consulting. A commonly held view by most top managers today is that simplifying processes and taking a “lean” approach to all business operations is the golden path to business success. We have seen over and over again companies successfully re-engineering their business processes to take out complexity and become more effective and efficient, better able to compete in the marketplace by meeting customer service and quality goals while driving down costs. However, there are times when simplifying processes can go too far and little “messiness” is [...]

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BravoSolution’s Customer Event: Procurement Health and the Dangers of WebMD!

Jason Busch - May 23, 2013 10:43 AM | Categories: Commentary

Bravo’s Mickey North Rizza facilitated a great discussion yesterday with the metaphor of “health” as a means for diagnosing the state of today’s procurement patient. The entire discussion was a backdrop for introducing Bravo’s new procurement benchmark, diagnosis, and improvement program (more on this later). In the meantime, her points that compare patient health to procurement organizational health are worth sharing – and spot on. Live at the BravoSolution Event Mickey began by questioning how we know whether procurement is healthy or unhealthy in our companies: sourcing, procurement, supplier relationship management, risk, quality, transactional/compliance activities, etc. Some audience members suggested [...]

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BravoSolution’s Customer Event – Learning To Drive Fast

Jason Busch - May 23, 2013 9:01 AM | Categories: Commentary

When people purchase anything but a boring econobox of a car – or the Prius, which is really just Toyota’s excuse to find a way to charge close to $30K for something that without the eco-weenie component should cost half, judged on performance – it’s unlikely that they’ll ever drive the thing near the limits. Yet even my trusty Honda Odyssey is capable of doing some pretty spectacular things if you know how to push it. This is true of so many procurement tools as well, especially on the sourcing side. One common theme at Bravo’s customer event so far is that a number of the [...]

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Analyze This! – Supplier Performance Management Based on Real Data

Thomas Kase - May 23, 2013 8:01 AM | Categories: Commentary

To drive change and improvements, it is critical that internal stakeholders and suppliers rally around good data based on a uniform set of definitions. The challenge for most organizations, especially those with a global footprint, is the consistently drive processes and definitions across the whole organizations. Making the analysis timely, effective and efficient sets up another challenge in the form of minimizing the touching of data – no rekeying – and as little manual entry as possible. Only then can the right solution consolidate and present users with a dashboard and data that is still actionable. Nobody wants to read [...]

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BravoSolution’s Customer Event — Touching Down

Jason Busch - May 23, 2013 5:57 AM | Categories: Commentary

new-orleans I touched down in New Orleans yesterday morning to attend the BravoSolution customer conference. I confess I missed the “procurement history walking tour of the French quarter” in order to do one final set of intervals on the treadmill before a race this weekend. Alas, the running/racing lifestyle is somewhat in opposition to the culture of New Orleans – unless of course you want to sip a Hurricane to continue last night’s buzz while running at a 10.0 pace with your plastic “to go” cup sitting where the water or Gatorade bottle should go on the treadmill cup holder. Not [...]

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Sourcing Validation as a Best Practice

Guest Post - May 22, 2013 1:14 PM | Categories: Commentary

Spend Matters welcomes another guest post from Jeff Muscarella of NPI, a spend management consultancy focused on eliminating overspending on IT, telecom and shipping. In the last decade, enterprises have been subjected to a long list of financial regulations and compliance mandates that aim to create transparency and eliminate corruptive business practices (e.g. Sarbanes-Oxley). Along the way, these mandates have had an impact on public companies’ sourcing practices. As part of organizations’ path to compliance, they must maintain visibility into significant areas of spend in order to make verifiable determinations about future financial commitments. This requires having visibility into supplier/vendor [...]

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Transactional Data Interchange: The Large/Small Company Disconnect

Jason Busch - May 22, 2013 10:01 AM | Categories: Commentary

KPMG’s 2013 Global Manufacturing Outlook features a diagram that immediately caught my attention when I saw it. It shows the variance of how large (companies over $5B in revenue) and smaller companies (companies under $5B in revenue) transact and share information with supply chain partners. Note: the data contained in the study is based on a survey conducted with The Economist with a decent sample size (300+ companies). KPMG’s findings suggest that the dominant form of data-sharing for large companies are web-based partner portals (coming in at 40%) when it comes to transmitting information across the supply chain. 39% of [...]

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Hackett’s P2P Performance Study: The Best Freemium P2P Benchmark in the World

Pierre Mitchell - May 22, 2013 6:04 AM | Categories: Commentary

ribbons My alma mater, The Hackett Group, has launched their bi-annual Purchase-to-Pay benchmark study. Unlike other free “benchmark studies” in the market which are 20-30 minute survey polls with sketchy data quality, the Hackett P2P benchmark study is in fact a “freemium” version of its full P2P process benchmark that uses the same general methodology as the flagship Hackett procurement functional benchmark that generates the venerable Hackett “world class” benchmarks, except that in this case it’s a “top performer” peer group that is essentially world class for just P2P performance. What this means is that you get: A true apples-to-apples comparison [...]

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Supercharging Procurement’s Buying Leverage

Guest Post - May 21, 2013 1:09 PM | Categories: Commentary

Spend Matters welcomes a guest post from Jim Kiser of GEP. In today’s competitive business environment, companies are under pressure to increase their profit to achieve higher shareholder value. Companies can raise prices and risk losing market share or cut costs and become more competitive. It is imperative to find ways of increasing buying power to leverage greater value and reduced costs from suppliers. Organizations can develop internal negotiation power by having various departments collaborate on key supplier spend projects that benefit the whole company. Sharing employees and best practices of various departments allows a company to potentially reap benefits [...]

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Kimberley-Clark on Metrics and Adoption with Ariba

Jason Busch - May 21, 2013 8:18 AM | Categories: Commentary

Earlier this month at Ariba Live, Kimberly-Clark’s Richard Roe (Project Lead for e-Invoicing and Ordering) gave some background on his company’s supplier enablement and connectivity program. Kimberley-Clark’s goals are pretty much in line with industry norms – improve cycle times, reduce errors, avoid unnecessary human involvement in the A/P and invoicing process, reduce supplier inquiries when self-service code suffices, etc. From a metrics perspective, Roe noted that their goals are to drive 90% e-invoicing and 98% electronic purchase order adoption by 2015. In terms of scaling their volume with Ariba during this time frame, the company is hoping to put [...]

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Technology Gives Fresh Take on Supplier Performance Management

Thomas Kase - May 21, 2013 7:35 AM | Categories: Commentary

Join us for Good Data: Spend Analysis Tactics to Attack Supplier Performance Management on Thursday, May 30 from 10-11am Central. FMC Technologies is an oil and gas industry company with over 18,000 employees, $6.5B in revenue, and a $13B market cap. Like most businesses, they stand and fall with the performance of their key strategic suppliers. The company’s major headache comes from lack of consistent data, terms, SLAs, etc. across the globe: how can they accurately benchmark anything? How do you uniformly define concepts like quality and on-time delivery, for example? The question is as much centered on process and [...]

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