The Cost Management Category

Year-end ‘Dash for Cash’ — 7 Steps to Free Up Funds Without Resorting to Tricks

It’s the end of the year, time for New Year’s Resolutions, a little vacation time and Christmas Party hijinks. But the Hackett Group, a business consultant and digital transformation specialist, is cautioning against year-end fiscal shenanigans, where money is shuffled around to make it appear that the company has hit the finish line in full stride. A new paper from the group lamenting the yearly “dash for cash” argues that you can look for sustainable, healthy ways of freeing up cash at the end of the year without pulling any three-card-monty tricks. According to the paper on working capital, many companies think it’s too late at the end of a quarter or year to free up significant cash. But it suggests 7 steps you can still use.

T&E Benchmarks: How Does Your Company’s Technology Compare on Handling Travel & Expense Reporting?

Oversight Systems

Companies in the U.S. spend hundreds of billions of dollars annually on travel and entertainment — and a study from Certify Inc., an expense report software company, surveyed executives and finance leaders to get a snapshot of how many still use manual methods versus how many have upgraded their T&E management technology. In the study, officials note that travel and entertainment costs can be a significant part of companies’ budgets, which means efficiently managing employees’ expense reports can greatly affect a company’s profits. Since 2013, the “Expense Management Trends Report: Annual T&E Outlook and Benchmarks” by Certify has worked to help companies of various sizes recognize best practices to consider in travel and entertainment reporting and as methods to benchmark such companies’ current processes against their peers.

‘I Think Demand Management Is the Bigger Play,’ Roy Anderson Touts Visibility into Spend, Risks of Not Buying In (Part 2)

“I saved you all $5 million,” procurement veteran Roy Anderson tried to tell one CFO he worked for. “To this day, he’s never totally believed that.”

In Part 2 of Anderson’s conversation about his career and digital changes in the industry, he talks about change management, demand management and how he did convince another CFO that Anderson’s team had saved him $150 million.

Anderson, now at Tradeshift, sat down with another procurement veteran, Pierre Mitchell of Spend Matters, to share some laughs and lessons about how the industry has adapted to technology over the last 40 years.

The following is the second of three-part series of their conversation, which has been edited for clarity. Part 1 ran Monday, and Part 3 will run Friday.

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Spend Analysis Requires Human Expertise for Data Optimization, Data Visualization

From recent conversations during this fall conference season, it’s clear many procurement teams are still struggling with poor-quality spend data. Combined with the challenges of data lakes, corporate changes from mergers and acquisitions, and an overall pressure to get more savings year over year, procurement leaders are finding it difficult to align their talent and technology strategies for their digital transformation efforts.

Whether it be companies in the market for spend visibility for the first time or those looking to focus on spend analysis and visibility to engage digital transformational efforts, organizations will, for now, still need to get the basics of spend analysis right with human interaction and expertise combined with innovative technologies that will evolve and improve over time.

How to Inspire a Cash Flow Revolution: Insights from Taulia’s Working Capital Summit

Investors, CEOs and suppliers are pushing procurement and finance organizations to improve working capital performance, and this renewed interest in the state of the balance sheet is poised to create a revolution in how businesses approach cash flow, according to Taulia, a provider of financial supply chain solutions. There is $14 trillion in annual spend volume trapped in global supply chains, and for every $1 billion in revenue, working capital programs can create improvements totaling as much as $70 million, Taulia said last week at its 2018 Working Capital Summit in Chicago.

Tradeshift: Vendor Snapshot (Part 1) — Background and Solution Overview [PRO]

Tradeshift is a cloud platform that connects buyers and suppliers with the goal of digitizing supply chain relationships, processes and information, while also enabling everyday procure-to-pay activities. Its capabilities span the buying of goods and services through to financing and payment — and significant capability in between, especially in the invoice-to-pay area.

In addition to providing its own procure-to-pay modules, Tradeshift offers an open integration framework that allows other technology firms (and customers) to integrate and/or development third-party “apps,” primarily centered on supplier connectivity, transaction enablement and collaboration. Tradeshift can even integrate alternative procure-to-pay providers in cases where specific enabling capability is desired.

This Spend Matters PRO analysis provides an introduction to Tradeshift, both as a platform-as-a-service (PaaS) provider and also as an e-procurement and invoice-to-pay technology vendor. It is designed to provide facts and expert analysis to help procurement and finance organizations make informed decisions about whether they should consider Tradeshift for both traditional “in-the-box” procure-to-pay requirements as well as unique marketplace/platform type digital initiatives.

Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Tradeshift as a complement to other procurement and finance solutions. The remaining parts of this research brief will cover product strengths and weaknesses, competitor and SWOT analyses, and insider evaluation and selection considerations.

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Here’s Why You Should Conduct Price Benchmark Analysis for Every IT Purchase or Renewal

If you remember nothing else about this blog post, remember this statistic: 5%. Those are the odds that enterprises are paying a fair price for any given IT purchase or renewal if they are not performing IT price benchmark analysis. In the first half of 2018, only 5% of the IT purchase quotes reviewed by NPI were priced at fair market value based on market benchmark comparisons. That number is dangerously lower than what it was just a few years ago when “fairly priced” IT purchases and renewals hovered around the 30% mark.

Spend Management Versus E-Procurement: Is There a Philosophical Difference?

Editor’s note: This is part of the Ask Spend Matters series, where readers send in their burning questions about procurement and supply chain.

What is the difference — philosophically — between spend management software and e-procurement software? One of our readers recently posed the above question, noting the amount of noise out there over spend management and the general sense of confusion as to what constitutes spend management and what constitutes e-procurement. We’re always fond of these fun philosophical questions, so we asked our own Spend Matters analysts and editors for their opinions on this one.

Why E-Commerce Trends Necessitate the Adoption of Automation and Analytics Tools in the Retail Industry

In November 2017, the popular online retailer ASOS introduced a new “try before you buy” service. The scheme, as the name suggests, allows customers to order multiple items — say, the same shirt in different sizes, or different items altogether — and try them on. Then customers can return the items they do not want, and ASOS charges only for the items they keep. This flexibility may be helping e-commerce businesses win market share, but for many retailers, the inevitable flood of returns make for a growing risk, a report from Brightpearl finds.

Bringing Procurement Rigor to Merger Integration

Spend Matters welcomes this guest post from Bernard Gunther, co-founder of Spendata.

Mergers are rationalized by the expectation of post-merger synergies, a major one being cost reduction. However, cost savings opportunities that are routinely exploited by procurement are rarely a focal point for “clean teams” in pre-merger scenarios, or by the merged organization in the key 100 days of post-merger integration (PMI). In fact, the majority of mergers rarely deliver all of the expected cost savings.[2] In contrast, procurement can play a crucial role in planning for and delivering cost savings typically overlooked during the pre-merger analysis.

Group Purchasing Organizations: Supplier Perspectives and the Evolving GPO Landscape [PRO]

Joining a GPO is like getting a Costco membership. You know you’re not going to get ripped off, so you probably won’t put much thought into joining. But therein lies the rub for GPO members. Like Costco, a GPO is a one-size-fits-all marketplace where you may overbuy when you get there or underbuy by not getting there at all.

In an increasingly Amazon-dominated world, however, this model is not the only available option.Today, the assortment and pricing of items available to consumers are tuned to the user and monetized most efficiently by intermediaries that can source better and optimize for lowest total landed costs better than individual buyers. Procurement organizations are now looking to bring this experience to the complex world of B2B purchasing. And where GPOs fit into this more sophisticated equation is not a simple answer (many are still trying to figure it out themselves). 

But that doesn’t mean GPOs will go the way of the 1980s big box retailer. Instead, GPOs will have to take on a role beyond the race to the lowest price. This multipart Spend Matters PRO series explains what motivates GPOs and helps procurement organizations best decide when and how to engage them. In this second installment (see our initial GPO introduction), we explore GPOs from a supplier perspective and offer recommendations for vendors working through GPOs to make these relationships more successful. We also explore how GPO options and capabilities are evolving and segment the GPO market by model and type and provide case example looks at different GPO business models. These include vertical/industry independent, member-owned, horizontal, affinity, category-specific and procurement technology led GPO models. 

An Introduction to Group Purchasing Organizations (GPOs) [PRO]

purchasing

Group purchasing organizations (GPOs) are not a new idea. Agricultural cooperatives aggregated the buying power of farmers hundreds of years ago. That said, GPOs have evolved quite a bit, and the infusion of new digital capabilities is taking that evolution to an even higher level. This evolution also means that procurement organizations must go in “eyes wide open” to best utilize this important tool in the procurement tool belt.

Not all GPOs (or GPO models) are the same. Understanding the differences will make you a more educated, and thus likely more successful, buyer. Therefore, we’ve decided to delve a little deeper into this obscure sector of the procurement provider market and shed some light on how to best extract value from it.

This multipart Spend Matters PRO brief is designed to demystify GPOs and put procurement organizations on the same information playing field as the GPOs attempting to sign them up, expand their utilization of contracts and sell additional services. Within this series, we will explore GPOs by type, as there are several business models in play, and by industry segment, as GPOs are heavily embedded in certain markets and are little more than a supply option in others.

This first installment in our GPO coverage:

  • Defines what GPOs are (and are not)
  • Explains how GPOs operate
  • Explores GPO “spend coverage and fit”
  • Analyze the GPO market segments and how to engage them
  • Offers tips and tricks for engaging GPOs based on their own constraints/models
  • Provides both basic and advanced takeaways for procurement organizations that are thinking through GPOs as an alternative supply option
  • Offers a checklist of activities to consider when sourcing GPOs