As we rapidly approach the end of the year, and as the witches and wizards appeared on our streets in October and the nights lengthen, can our three Spend Matters stock-pickers turn their performance around and beat the market over the final months of the year? We’re talking about our portfolio of procurement-related stocks, of course, and whether myself, Jason Busch and Nancy Clinton can beat the overall weighted portfolio that contains all 24 of the firms with a procurement interest. We had a reasonable month of October, with our portfolio following the market and up some 7%, although it is still some 8.5% below where it started on Jan. 1.
Category Archives: Procurement Financials
September was a quiet month overall in terms of our Spend Matters Stock Portfolio and most major global stock markets. The Spend Matters portfolio of all 24 firms lost about half a percent of its initial Jan. 1 value during September. Our portfolio follows the progress of quoted companies that operate in whole or part in what we call the procurement solutions market. We are tracking the performance of these shares on various stock markets from Helsinki to New York via Paris and London. Check out the full post to how these procurement companies performed last month.
A few weeks back, I participated in a Spend HQ webinar, The Spend Visibility Curve: Where Do You Stand. During the discussion, I introduced a spend visibility maturity model that I’ve been thinking about for some time – and which I’ll introduce today and cover in more detail in subsequent posts in this series. At the core of the model is more of a definitional question itself: What is the difference between spend analytics and spend visibility?
Join us Tuesday, September 29, at 10 A.M. CDT for the webinar, Procurement Savings We Promise You've Missed. We will be joined by Tungsten for a tutorial on the significant savings opportunities located in purchase order and invoice information. Transactional data is the key to unlocking it all. You will also learn how to complement traditional spend visibility and audit recovery approaches, how to quantify your exact opportunity based on live data and business case examples and much more. Register now!
Spend Matters welcomes this guest article by Kunal Shah, manager in the operations advisory practice at KPMG.
As we emerge from the recession, companies are holding a record amount of cash. This has resulted in an increase in cash deployment through investments and acquisition made by corporations to improve and expand their business. In the continued effort to increase cash available and provide liquidity to make strategic decisions, a company must properly manage its working capital.
Spend Matters welcomes this guest article by Jim Wright, vice president of sales at Corcentric.
One of the biggest changes in midsize firms across corporate America has been a shift toward a procurement-centric buying process. Yet surprisingly, many companies don’t necessarily have sophisticated procurement departments to handle this efficient way of doing business.
The impetus behind this paradigm shift is the cost savings that can be realized when moving to a purchase-order based system. Relying on new technologies, companies can now automate the procurement process by putting rules in place that govern purchasing decisions throughout the organization.
Beyond Transactional P2P: Exploring Buy-Side and Sell-Side Trade Financing Techniques For Supplier Early Payment
When it comes to the intersection of purchase-to-pay (P2P) and financing options, there is no shortage of available techniques to address early payment programs to suppliers. As David Gustin notes in the Trade Financing Matters research paper, Accelerating Early Payment: Techniques and Approaches for Accelerating Cash in the Supply Chain, these techniques can be generally segmented into buy-side and sell-side categories. Buy-side approaches suggested include: p-cards, dynamic discounting, static discounting and reverse factoring, commonly called supply chain finance. Further, “On the buy-side, large and mid-sized corporates want to optimize payment terms and maximize their working capital, while not punishing suppliers by making sure they have options to liquidate their receivables. Buy-side solutions require an approved invoice from the company to release cash.”
Supplier collaboration platform Tradeshift hasn't been well known for finance outside of accounts payable. It has offered dynamic discounting, to be sure, but the feature has been used by only a handful of clients. That approach is about to change, however, as explained in a breaking article on Trade Financing Matters. As of Tuesday, Tradeshift will partner with C2FO, giving it access to the financial technology company's working capital market as an internal app. It’s clever on the surface, analyst David Gustin and Xavier Olivera explain, but how will the partnership work in practice?
There’s a tremendous library of technology vendor-sponsored drivel regarding the supposed alignment of A/P and procurement. This nonsense talk often has the people involved in purchasing more closely linking transactional procurement activities to accounts payable automation. Despite the simplistic rhetoric, the unfortunate reality inside the majority of companies is that A/P and procurement are far from being connected, and any tech initiatives to date around A/P automation and e-procurement have largely happened more through happenstance than coordination. This begs the question: What can be done to bring A/P and procurement – and by extension treasury and other aspects of finance teams – closer together when it comes to purchase-to-pay, payables and working capital programs?
Over on Trade Financing Matters, my colleague David Gustin makes a rather astute observation when he notes in his post titled "It's a Fallacy that Procurement Manages ALL Spend", that “in very few organizations does procurement have total control of spend.” David gets his procurement mojo on – especially for a trade finance guy – when he further observes that: “[W]ho is best to understand the compliance issues around a complex bill of materials?…Take this one step further and how do you manage the connected commerce world for direct spend? We know EDI and EDI integrators have been doing it for decades – shout out to companies like GXS/OpenText, Sterling, etc. ..." Read on to see further insight from David and our analysis on this issue.
Spend Matters will hold another Ask the Expert webinar this Friday at 10 a.m. CDT. Ask the Expert: Helping Finance Help Procurement to Help the Business (Part 2) will feature Spend Matters Chief Research Officer Pierre Mitchell taking participants through provisional results of research conducted by Spend Matters and the Institute for Supply Management on the alignment between procurement and finance. This is Part 2 of this webinar series, based on the SM/ISM poll. Register today!
A couple of weeks back, I had the chance to sit through a great presentation from Chris Lynch, CFO of Rio Tinto, in London. Chris spent a good deal of time on his view of procurement and procurement success – and how to make it a success. But more generically, what can finance do to influence procurement? Perhaps the best place to start is where procurement and finance organizations are today. In a recent Spend Matters/ISM snap poll, we asked the question: What is finance’s role related to influencing procurement?