The Procurement Commentary Category

So You Want to Buy Strategic Sourcing? Key Differentiators to Consider [PRO]

In our previous installments of this series, we focused on some of the key differentiating aspects of contract management and spend analytics solutions. As you may recall, rather than focusing on the features and functions that most providers deliver, this series is focused on highlighting areas that pop up as differentiators in the eyes of the more progressive practitioner organizations that we speak with. The idea is to help separate the wheat from the chaff even though we don’t know what exact flavor of bread that you’re baking.

Within the sourcing area, we will also take some additional liberties by highlighting some key functionality that might perhaps better fall into an “extended sourcing” category that transcends just traditional sourcing strategy and execution. For example, project portfolio management, savings management, performance management, stakeholder management, and other processes clearly transcend just sourcing, but from a pragmatic “on the ground” standpoint, these are often prioritized by sourcing and category management teams. They are trying to drive short-term value while trying to scale their efforts with a form of knowledge management that will support their longer-term transformation outside of episodic sourcing events and into a more end-to-end lifecycle view of progressive category management.

There are also some provider-level differentiators that transcend software feature-function nuances, and we’ll highlight these as well. OK, let’s dive in.

5 Reasons to Bet For and Against Coupa (Part 1: The Virtuous ‘Cloud’ Prince) [PRO]

One of the best validations of the procurement technology sector is to see irrational exuberance from those who know comparatively little about it as they begin to speculate more aggressively on who is going to win in the market. Hearing Cramer call Coupa the “Cloud Prince” was but one example of the dozens I’ve heard both publicly and in one-on-one conversations in recent weeks from those outside the procurement solutions world.

These days, it seems everyone has an opinion on Coupa. Sometimes this speculation and soap-boxing grates on me because, in theory, it could mislead those within procurement and finance from making the best decisions if they get wrapped up in the noise. But it’s a price worth paying. Every insider — including everyone on the front lines of procurement, every tech vendor, every consultant, every analyst — should welcome every minute of attention Coupa gets. Why? Because it means there is going to be plenty of cash to fund the next generation of innovation for the sector.

Procurement is red hot right now, and honestly, shouldn’t saving money always be hot? But just how hot is Coupa? While I have real work to do providing a final set of eyes on some 250+ pages of draft copy for the Q2 SolutionMap Insider publications this week, I thought I’d procrastinate and share my own prognostications on Coupa and the arguments I’d make on betting both “for” and “against” the new crown prince — and also offer some fantasy sports commentary on just whom I’d combine Coupa with from the comfort of my lazyboy to conclude things (and luckily our SolutionMap framework lets us mix and match providers in different combinations — something that some of our early adopter practitioner clients are starting to explore in their evaluations).

Today I’ll start with five reasons I’m bullish on Coupa for procurement organizations — the company, not the stock, which is an important distinction as I have no opinion on share prices — by sticking with Cramer’s “prince” analogy. Of course I can’t help but think back to a philosophy class in 11th grade with Dr. Morinelli where we learned and debated Machiavelli's “The Prince.”

Virtuous princes, as Wikipedia translates and paraphrases Machiavelli, “rise to power through their own skill and resources (their ‘virtue’) rather than luck … [even though comparatively they] tend to have a hard time rising to the top, once they reach the top they are very secure in their position. This is because they effectively crush their opponents and earn great respect from everyone else. Because they are strong and more self-sufficient, they have to make fewer compromises with their allies.”

How is Coupa the virtuous [resourceful] prince for procurement? Read on as we explore the five reasons I’d bet on Coupa’s continued success at the same levels of the past.

The State of Procurement (Part 2): The Process of Selling into Procurement

“How did you like selling to procurement?” Another dimension to this question, which I discussed in Part 1 of this series, is related to the unique situation that the end customer is also the anointed steward of the best practice for purchasing technology. Don’t get me wrong: all the traditional sales and relationship development approaches and strategies still matter. Have you built trust? Do you understand their decision criteria? Have you mapped the competitive, stakeholder and points of influence? Despite all of those points of insight, however, more often than not you will end up on a scored, side-by-side evaluation matrix that removes emotion, influence and trust from the equation. And that’s just fine.

The State of Procurement (Part 1): People First, Starting with the CPO

“How did you like selling to procurement?” This has been one of the most frequently asked questions I have received since stepping away from BravoSolution, following our acquisition by Jaggaer in November 2017. People usually ask in a tongue-in-cheek way, expecting the response will be negative — comments about outdated and non-business-focused processes, burdensome and often overlapping or conflicting checklists, constant demands for discounts and the like. To be honest, there is some of that. But there is also so much more. Selling to procurement is to know procurement today. And it’s a complex being.

Wanted in HRM and SCM: Modern Hiring Personas

interview

Following an interesting conversation I had with a notable human resources guru this past weekend, I reread a recent post of mine entitled “Millennials Will Transform Procurement — Not by War but Attrition.” I did so to check myself, as she took issue with some of what I considered to be the article’s safest assumptions. Amidst all of the optimism surrounding the impact of millennials on procurement, my friend questioned how seriously we should take such projections if significant improvements aren’t made to the way we recruit and develop talent.

Millennials Will Transform Procurement — Not By War, But Attrition

Although barely dry, all that ink covering 2017’s “procurement trends and predictions” will soon give way to a conspicuous rehash of the same stuff for next year. You can set your watch on it. Apparently, some things never get old (e.g., risk, collaboration, transparency, finance and globalization). So with four months left to go, I figured I’d put my safest, long-term prediction on the table. Driven by the certainty of death, it’s an absolute lock.

Does Marketing Procurement Deserve a Bloody Break? Our Q&A with Tina Fegent

marketing spend

In our series Ask Spend Matters, we recently answered this question: Do other areas of procurement get as much negative press from suppliers as marketing procurement do? We had the chance to chat with our question asker, Tina Fegent, who lives near Oxford, England, via Skype as we kicked off our reporting process. Here are select excerpts from that initial conversation. (Read the full piece to see where it all went.)

Traditional or Nurturing? 2 Methods for Recruiting Procurement Professionals

Spend Matters welcomes this guest post from Zelim Suleymanov, chief executive of PrECA.

It is not easy to find a top-class procurement professional. On the one hand, purchases require best practices expertise, and on the other hand, they need unconventional thinking and a creative approach. Highlights and challenges of up-to-date recruiting techniques with a focus on procurement can be found in a number of resources. Among them is procurement talent management and related issues described by Charles Dominick of the Next Level Purchasing Association.

I would suggest two possible headhunting models that can be used either individually or in combination when recruiting employees. They are what I call traditional and nurturing methods.

Catching Up with a Marketing Maven and Talking Vertical Procurement Solutions

Last week, I had the chance to sit down with Jaggaer’s Steve Lundin at our office in Chicago, to talk verticalization in regards to procurement solutions. As Steve said, “I've been dabbling around the supply chain space for years, and know that software companies have dipped their toes in an out of developing targeted products. What's happening now, with industry targeted vertical procurement solutions, reflects what we've seen in the consumer market, with B2C being the tail that wags a B2B dog."

A Guidebook to the Rise of Industry-Specific Procurement Technologies: Related Markets, the Why and the Where [PRO]

By Spend Matters estimates, over 80% of dollars spent on procurement technology in recent years has been for standard source-to-pay products (e.g., spend analytics, sourcing, contract management, supplier management, e-procurement and invoice-to-pay) that were not specifically designed or configured — prior to deployments — to support industry-specific requirements. Granted, there have been some notable deviations to the rule (which make up the 20%), such as healthcare-centric solutions, certain areas of public sector, supplier compliance in regulated industries, supporting specific collaboration requirements, manufacturing requirements and so forth. But these have been exceptions rather than the norm.

Something new is afoot, however. There are a number of signposts which point to the pending rise of industry-specific solutions more generally for procurement technology — i.e., those solutions which are either designed from the start or come pre-configured to meet the specific needs of a given market.

This Spend Matters PRO research series provides a guidebook for organizations that are interested in this change, the drivers behind it, and some trends and examples that we’re seeing in the field. It explores when industry specific procurement technologies are likely most appropriate (or not), what technologies are likely to be affected, lessons from related markets (e.g., finance/treasury, supply chain, supplier and third-party management) and provides a summary and analysis of recent news from Jaggaer, Ivalua and SAP Ariba detailing their emerging approaches to verticalization. It also provides recommendations to procurement organizations, solution providers and consultancies that are looking to take advantage of this shift (or not get left behind by it).

A 21-Question Health Check to Score Your Procurement Scorecard (Part 3) [Plus+]

As the old business adage goes, “what gets measured gets done.” This is certainly true in procurement. If you want to do the right things for yourself and your stakeholders, you need to measure the right things and do it efficiently. You also need to ensure that you are measuring what your stakeholders want and what you are in fact delivering. It’s a foundational competency. In fact, in the most recent Hackett Group procurement key issues study, “value contribution visibility” ranked third in terms of procurement key capabilities that were viewed to be major or critical. This is the last post in a three-part series providing a 21-question “health check” for your procurement scorecard, this time covering questions 16-21.

CRM for Procurement: Lessons from the Sell Side [Plus+]

In a world where everything is quickly becoming a service (XaaS), perhaps the single most important differentiator is being customer-focused and aligned in order to allow you to deliver value to them over the long run. It is a simple principle, but procurement is not so easy to implement. Everybody who spends money in the enterprise has the potential to get more value from their spend and is a potential “customer” for procurement to help. Given procurement’s limited resources, adopting and adapting CRM principles, practices, and tools can help. As we get started, note that CRM for “supply” and suppliers is not the buy-side of “SRM” or supplier management – it’s a much bigger, hairier, and more encompassing beast.

So who are the customers? And should they even be called customers?

Many procurement organizations do not like the term “customers.” Some use the term “clients,” and others use the term “stakeholders.” Still others use the term “internal partners.” It doesn't really matter as long as the organization defines the nomenclature that works best for them. That said, it is important to understand who all the various stakeholders are within the procurement process, so that they can be appropriately targeted to drive more value out of the process. In fact, if you think of the term "stakeholders," it means anyone who has a stake in the process and who consumes the outputs of that process: information, materials, services, cash, goodwill, etc.

So, to be a stakeholder in a procurement process means to be a customer of that process. This means that procurement needs to be explicit in defining and working with 10 key stakeholders – and reconciling which of these will get the most attention.

Let’s get to the list (and beyond that, 14 critical areas of CRM begging to be addressed).