The Procurement Systems & Architecture Category

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.

Procurement as a Service (PRaaS) — Part 4: Assembling Third-Party Services

supplier network

In our previous installment of this series, we discussed how an industrialized procurement as a service (PRaaS) model is critical to not just running procurement more efficiently and effectively but also buying and embedding cloud services better, as well as tie procurement into broader digital business strategy efforts. The notion of procurement as a “prosumer” (producer and consumer) of procurement services is both the DNA of modern procurement itself and of global business services.

Procter & Gamble is a great example. P&G was one of the pioneers of the global business services (GBS) model, and its current capabilities here are impressive. What’s also interesting about P&G was when its CEO drove the “connect and develop” program of open innovation to tap supply markets for product innovation and looking beyond internal R&D.

So, if R&D can do that for itself, shouldn't procurement be able to do the same? And isn't it even more important for procurement to do so when considering that nearly all supply market innovation tied to supplier spending is in play? Wouldn't it be important for procurement to lead by example in aggressively adopting such third-party services and also to share best practices around how other internal stakeholders in various spend categories are doing the same? You bet. This makes procurement an innovation gate opener rather than a policy gatekeeper.

Procurement as a Service (PRaaS) — Part 3: Unpacking the Services Stack

digital

In Part 1 of the series, we delved into why procurement should run itself as a services business, and in Part 2, we shared how procurement can learn from other types of professional services businesses to bring more rigor and value to its internal customers and even external customers. On this last point, organizations such as GE, IBM and others have been masterful at industrializing various services internally, and then using themselves as success stories to externalize those services to new customers. In doing this, they are trying to establish themselves as digital platforms that will be the underlying architecture of emerging digital value chains.

So, what does this have to do with procurement? Many things:

  • As we discussed in Part 2, procurement and other stakeholders must understand how supply markets are fundamentally shifting as this digital transformation occurs. Such disruption is not just the “Amazoning” or “Ubering” of the supply chain, but services, too. For example, consider the mind-blowing transformation that Infosys is embarking on with its Mana platform and its Zero Distance approach to innovating service delivery.
  • Procurement can use this trend to its advantage to bring some leverage to relationships with large incumbent providers that may be threatened. This is also a great time to be a “customer of choice” and use strategic supplier management to capture innovation from your incumbent suppliers while also testing out emerging digital services providers.
  • It’s also critical to understand the implications of signing up on someone else's platform and what that means to switching costs down the road, as well as to what extend today’s suppliers don’t become tomorrow’s competitors.
  • Finally, if your company is going through a digital transformation to execute a new digital business strategy where your firm may also be positioning as a “platform,” then it’s important to understand platform-based business models and also cloud-based architectures (i.e., an XaaS model that lets you deliver these services scalably over the web) to more easily plug and play supplier XaaS services (see IBM cloud reference architecture as an example) into your procurement services.

The IBM architecture diagram can be a little overwhelming, so, let me show you a slightly simpler procurement version of this “aaS” architecture and give some examples of some innovative services. Actually, it’s not simple either, but it’s as simple as it can be while explaining the fundamental design of the PRaaS model in one diagram.

Defining Blockchain For Procurement (Part 1): Background and Use Cases [PRO]

blockchain

For procurement, finance and supply chain organizations, blockchain has the potential to revolutionize different areas of supplier engagement, collaboration, traceability and management. But how (and when) it ultimately changes the way we use technology in such areas as supplier networks/supplier enablement, supplier management, contract lifecycle management, payables (and trade financing) and commodity management, among other areas, remains to be seen.

This multipart Spend Matters PRO series aims to both demystify (and explain) blockchain architectures while putting it in the context of procurement, providing a roadmap for practitioners to consider as they think about adopting the technology in the years to come.

Part 1 of this series starts by defining and explaining blockchain for a “non-technologist” and providing use cases for procurement organizations as they consider how they might adopt blockchain alongside their existing applications and supplier connectivity solutions. Part 2 and 3 will provide additional insight into early blockchain deployments and how providers, including both vendor upstarts as well as established providers such as SAP Ariba, may include blockchain as an integral component (or alongside) existing application and network architectures.

Tackling Procurement’s Digital Transformation Capability Gap

Technology is a double-edged sword. Or at least according to the executives surveyed in the 2017 edition of The Hackett Group’s annual Key Issues Study. While most procurement organizations think that the “march to digital” will bring fundamental changes to the way their services are delivered, few consider themselves prepared. In addition, executives cited cybersecurity as their top business risk for 2017 — and they expect it to get worse.

Data Center and Cloud Adoption in Europe: Why, What and How (Part 1)

Spend Matters welcomes this guest post form Kaushik Yathindra, business consultant, procurement analytics, at HSBC.

This article is the first of a series exploring the data center/cloud-based infrastructure market in Europe. The first part focuses on the primary question organizations are still looking to understand why procurement organizations need to move to cloud or invest in data centers, and provides insights on why organizations today are faced with the task of including cloud-based solutions in their IT strategy.

Disruptive Technology Meets Strategic Procurement: Short-Term and Long-Term Outcomes

digital business transformation

Blockchain. Robotics. Internet of things. Big data. Peer-to-peer connectivity. These are some of the newest and most talked-about technologies that Spend Matters expects will prove disruptive to the spend analytics, sourcing, supplier management and contract lifecycle management markets. They are collectively referred to as strategic procurement technologies in The Impact of Disruptive Technologies and Solutions on Strategic Procurement Technologies (Analytics, Sourcing, Supplier and Contract Management), a new research paper from the Spend Matters analysts.

IT and Procurement: The Ultimate Power Couple

IT

Spend Matters welcomes this guest post from Andrew Durlak, co-founder and vice president of operations at Scout RFP.

IT and procurement are two star players. Combine the expertise of both and you get a true power couple. It’s a proven fact that effective and collaborative synergy between the two departments pays off — quite literally. Here’s how fostering the relationship between this power couple can improve overall success for your business.