In the white paper, What defines complex sourcing – and why does it matter?, my colleague Peter Smith makes a number of convincing arguments about why procurement professionals and consultants should take a hard look at complexity as an overall driver of sourcing and supply management strategy, opportunity and engagement. But to ultimately embrace complexity, we must first understand it.
Category Archives: Complex Categories
Earlier this year, my colleague Peter Smith, who serves as managing director of Spend Matters UK/Europe, wrote an outstanding paper we somehow overlooked on this side of the Atlantic. The topic of his analysis: What Defines Complex Sourcing – and Why Does It Matter? Let's dive into the salient ideas.
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We have covered some of the individual sessions on Spend Matters UK/Europe, but for PRO we’ve pulled together the learnings from a number of the key presentations (and some personal experience) to come up with six best practice suggestions for CPOs or marketing services procurement leads to consider. We previously looked at three recommendations around category strategy and suppler management. Today we’ll take a look at three more that focus more on the procurement function and individuals in it, how they align with marketing colleagues, and the skills they need to succeed in this area.
Today we bring you a category case study. The CPO at a large Massachusetts-based discount merchandising retailer (that we will refer to as “J-Mart” in this article) joined the new firm with a mandate to modernize its procurement function in print and marketing amongst other areas.
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 […]
Take for instance the fact that the rise of truly integrated end-to-end solutions is finally here. These are providers like Ivalua, b-pack and Zycus, whose sourcing, supplier management, contract management and related modules (and in certain cases, P2P) are built on a single data model and are fully integrated. There is a strong case for these integrated suites in certain situations, especially for procurement organizations that are looking to structure and manage centralized processes and data in a decentralized transactional and sourcing environment across the source-to-pay process flow.
Stand-alone Travel and Expense (T&E) - minus travel booking - is a somewhat quirky stepchild in the world of corporate spend buying, tracking, and compliance. In general, the experience of T&E tools has improved dramatically for typical frontline users in the past decade. Anyone who was forced to use an earlier version of Concur, Ariba, or others in the earlier procurement days will testify to the fact the applications were disenchanting (to put it mildly) for users – they made compliance time-consuming. The tools were as onerous, mean, and cumbersome as the surly folks behind the procurement scenes tasked with T&E policy and approvals. Both were, well, mean.
Plan for due diligence processes and transition phase. Don’t hand-over to a totally different contract management team. Be an intelligent, informed customer; don’t over- or under-manage the contract and supplier.
We’re now into recommendations around the execution of outsourcing projects, dividing the recommendations into three sections – strategy (last week), implementation and ongoing delivery. As we said last time, we can’t cover every aspect of outsourcing good practice here, and for many experienced procurement professionals, some of what follows may appear somewhat obvious. But we hope even readers in that category will find something of value.
In Part 1 and Part 2 of this research series, we discussed some of the drivers in how procurement services are increasingly consumed in the market. In this next installment, we will evaluate the market itself and the spectrum of service types/sectors within it. Defining a market is not a one-dimensional activity. Markets are segmented along multiple variables, which we discussed in the previously mentioned research, but there are a few key dimensions worth exploring. We will not look at the traditional dimensions such as spend magnitude, market complexity, business impact, level of market fragmentation, etc. We assume that the practitioner has a fairly good understanding of major segments of management like consulting, outsourcing, contingent labor, etc.
To assist procurement organizations (and providers) in this regards, we will define some “market maps” to help highlight how provider segments both interact with each other and how we think they will evolve based on some interesting trends and examples of providers who are starting to disrupt their individual market segments. Before we do that though, it’s important to first understand the market drivers that will shape the market evolution.