Category Archives: Procurement Research

Beware Ariba’s Patent Treasure Chest: Sourcing and eProcurement (Part 2)

This is the second in a multi-part series on Spend Matters Plus. Read Part 1 here.

As our exploration of Ariba’s extensive and deep patents continues, we turn our attention to three specific patents tied to sourcing and eProcurement. Ariba’s stash covers a broad range – and a good deal of provider companies in the market can't avoid being in violation. That said, to us, many patents appear to cover either features used prior to the filing date – prior art, as the legal term goes – or be overly broad or otherwise fairly trivial. However, if and when Ariba decides to release their legal hounds, a good number of companies will likely be dragged in. Some providers might have struck licensing deals, and for those with IP portfolios of their own there is always a mutual cross-licensing arrangement to be made. In this Spend Matters Plus research brief, Thomas Kase, VP of research, discusses the following Ariba patents: auction bid and visibility restrictions; eProcurement (“figuring out if your supplier is on the Internet”); and supplier connectivity.

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Procurement Provider Net Promoter Study

- July 17, 2014 11:11 AM | Categories: Analytics, Commentary, Procurement Research

We’re launching the first round of an ongoing “benchmark” survey that gauges procurement provider satisfaction scores for six different procurement process areas. In each, we measure importance, level of automation, currently selected vendors (as well as current/planned technology approaches), and of course the satisfaction score used to generated a promoter score. Depending on the answers to the questions, we also ask a few follow-on questions (e.g., what were the biggest reasons for low promoter scores) and finish off with some questions on major gaps with existing provider offerings (in addition to emerging technology areas). The first 100 qualified practitioners to participate get their choice of three incentives!

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Beware Ariba’s Patent Treasure Chest: An Arsenal of Intellectual Property (Part 1)

Intellectual property rights and patents are big business. And they are, of course, also competitive tools for companies. Witness how many years ago Ariba derailed Emptoris – now part of IBM – as a competitor for a number of quarters and forced a sale of the company based on a patent dispute. But the patent is more than just a tool for vendors to bash competing vendors. They are sometimes open to legal disputes. To the average consumer, the recent Apple vs. Samsung lawsuit over cell phone design and operating system features is probably the most widely recognized legal mess. In May, an Oracle vs. Google dispute concluded with a win for Oracle, with award amounts unspecified (Oracle originally wanted $6 billion).

Patents are powerful tools in the procurement solution software market as well, not just for warding off competitors, but even for generating considerable “income” for the successful parties when push comes to shove. Within the procurement sector, Ariba has amassed an incredibly impressive array of patents (if measured by the yardstick, at least), covering what some might construe as many of the basic elements of the source-to-pay process, including supplier connectivity and collaboration. In Part 1 of this Spend Matters Plus research series, Thomas Kase (VP of Research) provides context for past patent litigation in the sector and begins to cover a number of Ariba’s patents that could affect competitors and customers of competitors down the line. This analysis will attempt to get beyond the legalese with layman’s interpretations of each patent.

Today’s research brief looks at the following three Ariba patents: “supplier/buyer network that provides catalog updates,” “system and method for conducting electronic auctions with multi-parameter optimal bidding,” and “maintenance of a company profile of a company associated with a supplier/buyer commerce network.” If this is a topic of interest to you and you're not a Spend Matters Plus subscriber, contact us to inquire about a free trial.

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Getting the Most Out of Your Procurement Analytics Process

- July 3, 2014 10:22 AM | Categories: Analytics, Learning / Research, Procurement Research

Procurement Analytics: How to Plan (and Optimize) Your Process is a free downloadable paper from Pierre Mitchell (Chief Research Officer). Here's an excerpt: “The key thing to remember is that analytics is really a business capability – not just about technology. It’s about supporting the process called 'analyze' (i.e., the ‘A’ in the DMAIC (Define, Measure, Analyze, Improve and Control) continuous improvement methodology) that needs to be embedded into every strategic procurement discipline.”

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Why Purchase Price Variance (PPV) Should Be Banished From Procurement Measurements and KPIs

One of the biggest challenges to overall program impact and improvement in all but the most advanced procurement organizations are the raw elements that many procurement organizations measure themselves against: key performance indicators or KPIs. One of these, purchase price variance or PPV as it is often known, is particularly obnoxious in all but certain cases. PPV measures the difference in price paid for across a range of purchases for a similar SKU, part, or service.

There are many reasons why PPV can be such a misleading figure.

In this first of a two-part Spend Matters PRO research series, Managing Director Jason Busch and Chief Research Officer Pierre Mitchell explain why precisely PPV is a KPI that procurement organizations should stop measuring internal and individual performance against. Part 2 will present the one case in which it might be helpful to police suppliers more accurately (courtesy of a new, real-time network approach to gathering spending data from Tungsten based on actual line-level invoice information that we believe will eventually become standard across many supplier networks).

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Business Process Management (BPM) for Procurement: A Spectrum of Choices

BPM stands for Business Process Management. If the business process is procurement (i.e., a collection of processes), then the concept is about managing procurement processes – including process design/definition, performance management (e.g., process outputs/KPIs, monitoring), and resource management. Of course, in the IT world, BPM has its own body of knowledge regarding the topic, focused mostly on “process workflow/integration on steroids.” This is the “system of process/interaction/engagement” that may sit on top of multiple systems of record (e.g., ERP, source-to-pay suites). But how can you approach this topic without your eyes glazing over? In this Spend Matters PRO research brief, Chief Research Officer Pierre Mitchell and Managing Director Jason Busch define BPM components and offer up practical ways to apply BPM to procurement, keeping the topic on a business level and issuing both warnings and best practice tips for companies deploying or considering BPM technology adoption within the function.

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Get the Most Out of Your Procurement Analytics Process

The key thing to remember is that analytics is really a business capability – not just about technology. It’s about supporting the process called “analyze” (i.e., the “A” in the DMAIC (Define, Measure, Analyze, Improve and Control) continuous improvement methodology) that needs to be embedded into every strategic procurement discipline. At most large and progressive procurement organizations, Centers of Excellence (CoEs) have been created to support the diverse requirements of analytics and intelligence of procurement and its stakeholders.

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Procurement Centers of Excellence (CoE) – What’s in Them and How to Set Them Up

Nearly all progressive organizations have some sort of Procurement CoE (Center of Excellence). A Procurement CoE is an internal entity that performs internally facing knowledge-based services on a one-to-many basis to procurement (and to broader stakeholders) in order to drive scale, repeatability, and best practice. What we’re talking about is the industrialization of the Procurement portfolio of services. In this Spend Matters PRO article, we will investigate 14 procurement competencies that are being enabled and improved in a Procurement CoE. We will evaluate the relative priorities across these based on some recent research and provides insight on how a Procurement CoE can not only make procurement processes more effective, but also align with broader enterprise services delivered in a “Global Business Services (GBS)” environment.

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Get Ready For Contract Lifecycle Management 2.0

In a recent Spend Matters PRO report, Selectica and Iasta -- Mapping the Future of Procurement, Contract Management, and Customer Engagement, Pierre Mitchell and Jason Busch examined and fleshed out a number of scenarios for how companies could use contract lifecycle management (CLM) in new ways in the future as technology capabilities advance. From exploring the linkage of supplier management, corporate social responsibility (CSR) and governance risk and compliance (GRC) more closely to contract management to enabling purchasing contracts that are triggered contingently on a sell-side contract that align risk and profit, the brief suggests a future in which contract management becomes as essential to procurement and sourcing – let alone the broader business – and category management are today. But what will the underlying technology capabilities look like (beyond the basics) to enable these capabilities? In this Spend Matters PRO analysis, Thomas Kase and Jason Busch provide a perspective on contract lifecycle management (CLM) building blocks.

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Navigate the Spend Analysis Conundrum After Reading This Downloadable Paper

Analytics are all the rage. And spend analysis is Procurement 101. So, getting some reasonable investment shouldn't be a problem, right? Wrong. The problem with analytics is that the identified value is all ‘option value.’ You don't know how much value opportunity you will uncover with the analytics until you actually perform them (and implement the identified opportunities)!

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Improving Government IT Procurement: Encourage Risks and Reduce Burdensome Requirements

A detrimentally risk-averse culture doesn’t apply to the whole public sector, however, as seen in the following example that a new report from Public Spend Forum and Censeo provides: “When Jonathan Reichental, CIO of Palo Alto, started his job, the city’s website overhaul had been stalled for years. Stakeholders resisted launching the site because of the fear that not all features would meet all user needs, which would open the city up to criticism. Rather than further delaying the program, Reichental labeled the site as a ‘beta test’ and pushed forward with the release. The result: the city received enormous feedback from citizens that it then used to improve the site.”

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Learn How to Get the Most Out of Your Procurement Analytics

- June 9, 2014 10:22 AM | Categories: Analytics, Learning / Research, Procurement Research

Hot off the press! Download "Procurement Analytics: How to Plan (and Optimize) Your Process," a new paper from Pierre Mitchell (Chief Research Officer, Spend Matters). Here's an excerpt: “I will not focus on the ‘why’ and the ‘what’ of supply analytics, but will direct the reader to some in-depth coverage of the topic that I wrote in Supply Chain Management Review in 2012. However, let me merely reiterate here that the scope of business process is massive – and so is the scope of technology used for supply analytics, including not just spend cubes and OLAP tools, but also things like combinatorial optimization (e.g. shipping lanes, vendor award allocations, production planning), data mining, AI/pattern matching, statistical analysis, simulation/scenario planning, etc.”

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