The Procurement Systems & Architecture Category

E-Procurement, The Chicago Way

Chicago

Depending on whom you ask, Chicago Mayor Rahm Emanuel and his administration may not have the best track record for providing transparency to the public, even though his official communications channels — and even the Mayor himself — like talking it up. The latest stop on the Transparency Train, as it happens, is right up Spend Matters’ alley: an announcement that the City of Chicago’s Department of Procurement Services (DPS) will adopt a new e-procurement approach to do better business with its myriad vendors and suppliers.

Extending Procurement Information Architecture to Provider Ecosystems (Part 3) [Plus+]

Infrastructure and related platforms delivered as a service (i.e., IaaS and PaaS) are becoming the new battlegrounds for the mega vendors who want to own the platform ecosystems that create the cloud applications and the business networks that connect the applications. SAP has clearly tossed more than just its hat into the ring wanting to capture as much territory as possible in the competitive land grab that is just beginning in this area. Over time, the emergence of integrated capabilities and interoperability will be good news for technology buyers, because they will help standardize and better manage the flexible procurement information architectures that we are advocating. Yet in the short term, this bottoms-up infrastructure overhaul isn’t of much use. So, many vendors are taking a leadership position in certain aspects of such infrastructure or focusing on the top-most business process aspects of such platforms.

Procurement Agility is a Pipe Dream Without Intelligent Transformation and Procurement as a Service (PRaaS)

In a previous post, I discussed the three critical focus areas that are foundational to procurement excellence: customer/stakeholder focus, performance and transformation. They seem straightforward, and indeed they are. Unfortunately, it's hard to get them all at the same time, and get them aligned.

It’s like the old adage about buying a bike where you want it strong, light and cheap — but you can only pick two. Here’s an example to make this clearer, using tail spend management.

Take the 80% of purchases that represent 20% of your spend and you will likely find that the requestors want their stuff (or services) delivered quickly and easily. You as a category manager want that too, and don’t want maverick spending, but you’re also focused on big sourcing deals and can’t get bogged down here, nor have the time to transform your thorny tail spend problem. So, you sacrifice transformation and simply work harder within your current processes, systems and metrics.

But if you’re a more advanced firm and have sourced all of your major spend areas a few times, you may have to lower your procurement involvement spend thresholds, wean yourself off of p-cards and figure out a way to improve your stakeholder satisfaction scores when they find you and your complicated systems and policies a barrier to engaging with you more meaningfully.

So, you need to transform your processes, policies and systems to re-engineer this deceptively toxic and disparate amalgam of spending that is in the tail. More problematic, you need to revisit your procurement KPIs and SLAs (if you have them) to reflect this — especially since you also want to free yourself up to do more strategic innovation and SRM/SCM work.

Extending Procurement Information Architecture to Provider Ecosystems (Part 2) [Plus+]

Let’s recap where we ended up with conclusion of the first installment in this series. A range of application vendors are trying to build out native platforms or sit on top of others flexibly. For example, Coupa hedges its bets by building on top of AWS, but also partnering with IBM (on SmartCloud) and showing up on SuiteApp.com. Providers are also trying to develop healthy B2B ecosystems that are creating B2B activity and, as a result, “liquidity.” There’s no way to better monetize that liquidity than from B2B e-commerce networks for source-to-pay (S2P) on the buy side and both attract-to-order and order-to-cash on the sell side. All this talk of liquidity reminds us of a different time and place in the procurement and supply chain world: the “marketplace era” from the late 1990s and early 2000s. This time, however, there are many technology differences that will make the vision of liquidity a reality faster than many will imagine. But not without a key application rub that should be top of mind for all procurement and IT organizations.

Making Sense of Dirty Data and Spend Classification Components: With Oracle and Others

Next week, I'm participating in a webinar, Oracle and Procurement Analytics: A Deep Dive Into Oracle’s Spend Analysis and Data-Driven Procurement Solutions, with the Data Intensity team. For those that do not know Data Intensity, the firm acquired Enrich in 2016. In various discussions with the Data Intensity team in preparation for the webinar I realized that Oracle has largely flown under the radar in spend analytics compared with many other procurement technology providers, especially independent specialist vendors. Still, Oracle has quietly built a solid set of capabilities in the spend classification area (and, more broadly, spend analytics).

Are Your Supply Chain Peers Already Implementing Blockchain?

Last summer, our sister site Trade Financing Matters’ David Gustin wrote: “I guess someone must have told ‘American Banker’ and many other publications [that] you put blockchain in the title and people will at least open the article.” We admit to having no shortage of enthusiasm for writing about blockchain technology and its exciting implications for supply chains here on Spend Matters. As we wrote back in 2015, “Certainly you’ve heard of bitcoin. But do you know about blockchain, the technology behind bitcoin? If not, you should. We believe it has the potential to be one of the top technologies in the supply chain.”

The Collective Intelligence of Supply (Part 2): The Evolution in 10 Steps

tech

In Part 1 of this series, I outlined its intent and why procurement and supply chain organizations should understand how the evolution toward a digital “collective intelligence” within supply chains and supply markets will affect them.

If you think about the Star Trek series from the 1980s (not the 1960s), the “Borg” was a collective of cybernetic beings that were part of a “hive mind” that would assimilate humans and other species into their collective digital intelligence. Now, consider the ecosystems being built by companies like Google, Amazon, Facebook, Apple, Microsoft, IBM and others. They are becoming commercial collectives, of sorts, that seek to assimilate you into their walled gardens and extract maximum information from you in order to personalize their services (and those of the suppliers that your information is sold to) for you. You don’t just buy their products — you often are the product.

This trend certainly isn’t a bad thing on the whole in terms of the digital services that consumers now enjoy, but it’s traveling up the supply chain into B2B in a big way. So, the question becomes how can you create your own benevolent Borg that creates a collective intelligence with/about your customers, within your organization (think knowledge management on steroids), and, of course, to your upstream suppliers and supply chain. You want to be a platform, and not just a pipe. We’ve written extensively about platforms on our site, but platform/network effects are just a piece of the puzzle.

In Part 1 of this series, I did a quick general outline of the series and also included 20 domain areas that are key to this evolution. Even so, I didn’t really “tell the story,” and it basically is a story told in 10 discrete evolutionary steps. Once procurement organizations understand these 10 key progressions, they will be able to understand digital evolution in a more straightforward way that ties to business fundamentals while also bringing in newer operating models.

3 Reasons Why E-Sourcing Providers Have Failed Procurement

Gigster

Many procurement practitioners know the basic components and capabilities of an e-sourcing solution. Yet getting users to fully adopt e-sourcing still remains a perennial challenge in procurement organizations large and small. Many organizations are using their e-sourcing platform on only 25% of applicable events, according to one CIPS study. How can this be, when the technology and purported benefits are anything but new? For several reasons, the provider community at large has failed procurement when it comes to designing sourcing solutions. Here are three reasons why they’ve gone astray — and how to fix it.

How to Justify Spend Analysis to Finance/IT When There’s No Clear ROI (Part 2) [Plus+]

funding

Yesterday, we discussed the first five of 10 possible strategies to justify a spend analysis initiative to finance/IT despite the catch-22 that comes from not knowing the potential value that may come from the initial investment. Today we pick up with recommendations six through 10 and close with some final remarks and recommendations.

How to Justify Spend Analysis to Finance/IT When There’s No Clear ROI (Part 1) [Plus+]

finance

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)! This article is designed to help you overcome this catch-22. We've prepared 10 strategies to help you get the ball rolling with IT and finance (even if the ROI isn't clear).

SAP Ariba’s Joe Fox Breaks Down Blockchain Adoption Hurdles and Benefits (Part 2)

hurdle

As I explored in yesterday’s post, blockchain is starting to see early use cases in several industries, and there are many cases that should give procurement reasons to be excited to learn more about this disruptive technology. Still, that doesn’t mean starting blockchain programs will be easy, either. In Part 2 of this Q&A with SAP Ariba’s Joe Fox, we discuss adoption roadblocks, industries that stand to benefit most from blockchain and which providers procurement should keep an eye on.

Getting On Board With Blockchain: A Q&A with SAP Ariba’s Joe Fox (Part 1)

blockchain

The blockchain may be the biggest new technology to “know of” in 2017. But how are companies using it now, and how do these current use cases apply to procurement? To learn more, I sat down with Joe Fox, senior vice president, business development and strategy, at SAP Ariba, to see how SAP Ariba is approaching blockchain, discuss emerging use cases and discuss what elements of this disruptive technology procurement should be most excited about.