Category Archives: Procurement Strategy & Planning

LeanLinking Brings Social Media Principles to Procurement and Supply Management

We've been talking for some time on the different Spend Matters sites about how social media principles and approaches will inevitably make their way into the business and procurement world, yet progress has in reality been pretty slow. The innovative Rollstream has been assimilated into GXS, now itself part of OpenText, and seems pretty low-profile these days. However, there are signs that things are changing. Sourcemap is a more recently established firm that has an interesting approach, including some aspects of supply chain collaboration with a social media slant. Mark Perera, one of the founders of Procurement Leaders, is involved in Old Street Labs, whose new Vizibl platform is in its testing phase (we'll feature it as soon as you're ready, Mark). The platform looks to use some of the core social media principles in a business environment. And now we have LeanLinking starting to make a splash. This Spend Matters Plus research brief, by Peter Smith (managing editor of Spend Matters UK/Europe), looks at what LeanLinking has to offer and which organizations would benefit from the technology.

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In Defense of the Signed Document

Many people refer to ERP systems (notably master data stored in them) as the “system of record," which is interesting terminology. Think about supplier master data entered in the buyer’s ERP system that immediately can become “stale” the moment it’s entered. Let’s even take a better example of the penultimate document of record between the trading parties: the contract. A buying organization can use a contract lifecycle management solution that is fully integrated with an e-sourcing solution and even Microsoft Word documents that can be used as the user interface of sorts in contract authoring. Data is tracked at a detailed data element level and built up from low-level clause libraries. Yet when it comes time to seal the deal, the buyer and supplier print the contract and then start scurrying around for the final signatures, usually hand-written and faxed, only to then be stored and scanned so that the document image can be attached back to the CLM/ERP system. In today's Spend Matters PRO research brief, Pierre Mitchell makes an argument for the need of systems to accommodate the data types and user types across the source-to-pay continuum.

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What Do You Mean, a Coed Sauna? On Sourcing Activity Synchronization and Customers

Screen Shot 2014-07-23 at 5.03.41 PM Art van Bodegraven, managing principal of Van Bodegraven Associates and founding principal of Discovery Executive Services, is back with another essay for Spend Matters. As we look for better ways to integrate and synchronize sourcing and procurement activities intelligently within the greater supply chain, it is easy to become confused about who and where the customers are. You know, the ones we are supposed to be delighting? This is a burning question in both the B2B and the B2C worlds. And the obvious answer is not always the complete answer. For example, when a company's customers are the ones actually paying the bills, and the sales and marketing mission is to get them to buy as much as can be rationalized, plus some extra “just in case,” we cannot afford to overlook sales and marketing as an internal customer, whose needs and demands we must at least recognize.

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Provider Strategies in Asia: Country-Specific Trends and Considerations (Part 2)

- July 22, 2014 11:35 AM | Categories: Procurement Strategy & Planning

This is the second in a two-part Spend Matters Plus series from Thomas Kase, VP of research, on strategies for providers to deliver procurement solutions and services in Asia. This second installment covers specific trends and recommendations for Singapore, Japan, Korea, China, Thailand, Vietnam, the Philippines, and Malaysia. So what should a company looking at an Asian expansion do? If this is a topic that interests you and you're not a Spend Matters Plus subscriber, contact us to inquire about a free trial.

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Provider Strategies: Delivering Procurement Solutions and Services in Asia (Part 1)

- July 21, 2014 10:56 AM | Categories: Procurement Strategy & Planning

“Asia” is obviously an impossibly broad label, covering so many countries, with such a range of cultures, languages, and political, ethnic, and demographical issues that we have to paint with broad, sweeping strokes. That said, there are definitely procurement culture traits worth pointing out. Depending on a solution provider’s strengths and capabilities, we think the region is ready for a more serious look – consider it hedging your bets, since everybody is already slugging it out in the U.S. and Europe. So the question is, what are you doing in Asia, the region that outgrows Europe and the US at a rapid clip? In this first of a two-part series on Spend Matters Plus, VP of Research Thomas Kase gives a backdrop on regional issues to know.

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Trojan Rabbits and Project Portfolios: Procurement Market’s Freemium Applications and Services (Part 1)

The old Trojan horse trick has its place in the procurement market. This Spend Matters Plus research brief, by Chief Research Officer Pierre Mitchell, covers the good, bad, and ugly of “freemium” technology for different types of procurement solution providers across the solution spectrum, from technology providers to membership-based advisory firms. Pierre then makes some recommendations for not just solutions providers, but also practitioners who themselves are providers in their own right. If you are not yet a Plus subscriber and are interested in this topic, contact us to inquire about a free trial.

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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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Purchase Price Variance (PPV) in Procurement and Savings Strategy: Limitations and One Potential Use

There are many reasons why purchase price variance (PPV) is not the best metric to track procurement performance. In last week’s Spend Matters PRO research brief, Why Purchase Price Variance (PPV) Should Be Banished From Procurement Measurements and KPIs, Jason Busch (Managing Director) and Pierre Mitchell (Chief Research Officer) gave 10 reasons why PPV can be misleading and how smart procurement organizations in the market have long since moved past it. These reasons include the fact that declining and rising cost variables outside of a buyer’s control can have a significant effect on individual part costs not reflected in the actual performance of a procurement manager and the fact that PPV fails to measure true lifecycle costs. In today’s Spend Matters PRO research brief, Jason and Pierre start by providing a summary of the first analysis and then explore a scenario where PPV may actually be a useful means of measurement, courtesy of Tungsten’s new network analytics capability.

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Who Said Procurement and Marketing Can’t be Friends?

- July 8, 2014 3:22 PM | Categories: Guest Post, Procurement Strategy & Planning

Companies spend millions of dollars every year running multi-channel sales promotional campaigns for their brands encompassing online, TV, gift with purchases, point of sale, coupons, and so on. Marketers usually enlist the help of sales promotions agencies to create and run these campaigns on their behalf. The main focus of a sales promotion is to increase awareness and drive trials of the company’s products, ultimately leading to an increase in sales. This makes the results of sales promotion campaigns much easier to quantify than with some other forms of marketing activities. Performance can be measured by the increase in sales, giving a much better idea of whether your campaigns are working or not. Sales promotion agencies typically manage all of these touch points on behalf of the client and organize everything from creating the overall concept right down to sourcing the promotional items that will be given away to consumers.

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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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2014 Trends in Procurement Services – Strategy Firms Slum It

- July 2, 2014 10:32 AM | Categories: Commentary, Industry News, Procurement Strategy & Planning

Quick, what do venerated strategy consulting firms such as McKinsey and BCG as well as the streets of Brazil outside the nicer spots have in common? They’re both slumming it (although the type of procurement one might do in the back streets of Brazil crosses into categories that we don’t think have ever been professionally sourced). OK, bad joke. But there’s an unmistakable trend in the market at the moment concerning firms that are better known for corporate strategy work building very significant practices in the procurement and operations area.

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Gamification in Procurement – Looking Beyond the Technology

Gamification is a topic that has garnered some interest over the last few years, and I thought it would be a good topic to explore a little more deeply in terms of its application to enterprise procurement and supply chain. This is an interesting technology area that a few enterprises have sought to transplant from the mobile B2C world over to enterprise processes to help improve relationships with customers and with internal employees. For example, some progressive HR organizations are setting up wellness programs that reward employees to exercise and use mobile game apps to help motivate them. Similarly, some sales organizations have used it to create contests that let sales reps compete with each other for additional bonuses and recognition. In this Spend Matters Plus research brief, Chief Research Officer Pierre Mitchell looks at how gamification can be used in procurement, as well as where the benefits stop.

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