The Procurement Systems & Architecture Category

Program Management: The Missing Link in Procurement Technology Modules and Suites (Part 2 — Functional Building Blocks) [PRO]

Program management is an integral component of source-to-pay (S2P) activities that is no longer optional for high-performing procurement organizations. In short, program management is a set of processes that manage specific projects and broader project portfolios that focus on higher-level processes and composite processes that cross the traditional linear flow of sourcing, contracting, purchasing and payments. These programs can be ancillary to core processes (e.g., M&A-related activities or globalization efforts) or transformational in nature to implement enterprise-level programs (e.g., working capital programs, risk programs, sustainability programs, digital programs, ERP upgrade programs, Lean/Six Sigma programs).

The problem is that, generally, program management is poorly automated and stovepiped within functions or subfunctions. Within procurement, there may be savings tracking for strategic sourcing processes displayed in a "CPO dashboard” but not much visibility and collaboration beyond that. This is a problem because as procurement is collaborating with stakeholders on ever broader processes and reaching deeper into stakeholder processes, supplier processes and external customer processes, there needs to be a cross-functional management capability. The emergence of collaboration tools like Slack and others have shown the enterprise desire to manage fast-paced mobile communication on the ground that is tied back to strategic objectives.

This Spend Matters PRO series defines what effective program management capabilities are from a design, platform and functional perspective that puts the user first. We explore both what represents best-in-class program management components today, what users should expect tomorrow and what we hope technology providers have on their roadmaps to build. We also explore some solution building blocks for effective program management, including best-of-breed project management, goal management, program auditing/audit trails and prepackaged initiative enablement. (Don’t forget to read Part 1 of this series to first understand the design principles on which effective program management technology is based.)

Clarifying Robotic Process Automation: What It Is (and Isn’t) for Procurement

Robotic process automation has become a buzzword most procurement professionals can’t escape. But despite its seeming ubiquity, RPA still tends to produce just as much head scratching as efficiency gains. Taken out of context, RPA can seem like yet another disruptive technology to keep track of alongside machine learning, blockchain and the like. Really, RPA is a single element of an overall procurement digital transformation strategy, and one of the more readily accessible technologies, in fact.

GDPR: Basic Facts, Company Preparedness and Gaining a Competitive Advantage

May 25 will be one of the most significant dates this year for many companies, for that is when the EU’s General Data Protection Regulation (GDPR) kicks in. Any organization that holds or uses personal data on a EU citizen, regardless of where the organization itself is based, should have a plan of action. But a number of reports and surveys from the past few months have shown that few companies consider themselves ready for GDPR, and some do not think they will be ready by the May deadline.

51% of C-Suite Executives are Dissatisfied with Their Procurement Operating Model

There is a lot of hype in the procurement world around digital technology and talent, but a report from consultancy Ayming put the focus on something more elemental: the procurement operating model. Ayming’s survey of C-suite executives from across the globe revealed a mixed picture. More than half of respondents said that they do not consider their procurement operating model to be effective.

20 Questions to Ask Stakeholders Before Implementing Your New Procurement System [PRO]

Implementing new procurement technology is like implementing anything. There is a ton of change management involved, and if you don't get stakeholder input upfront, you are asking for trouble. This is especially true with modern procurement systems that can enable new practices on process redesigns that may be disruptive to the status quo. So, you need to get input from a myriad of stakeholders:

  • C-level versus lowest-level end users
  • Procurement users versus internal stakeholders and supplier stakeholders
  • Functional partners such as IT and finance who are “special” stakeholders because they are both spend owners and have a key role in the overall implementation
  • Visionary stakeholders looking to drive change versus stakeholders just wanting to keep their jobs and keeping efforts to a minimum
But what questions should you ask your stakeholders? Fear not. We have written a list of 20 key questions for you to consider.

You may be in procurement. Or you may be in IT. Or you can be a technology provider or consultant. Regardless, these 20 questions will help you tease out key requirements, intelligence and downstream barriers that you want to identify as early as possible. Just as spend influence is best done as early as possible, spend management transformation is also best informed as early as possible.

Unpacking the Digital Transformation Buzz in Procurement: A Framework to Consider [Plus+]

I had a large energy firm ask me about my thoughts recently on “digital transformation” and “digital business strategies,” given that senior management was looking to keep up with the Joneses and get a digital strategy in place. I jokingly mentioned that they probably had multiple management consulting firms trawling through their hallways looking to sell a digital strategy and transformation project. They laughed and said the consultants were indeed already clamoring to do this work.

Don’t get me wrong: having a c-level initiative du jour can be a powerful force to use for “organizational judo” within procurement. It’s the proverbial burning platform (or at least smoking platform) that can be used to light a fire and drive some change. The “digital” phenomenon is replete with buzzword phrases right now, and that’s a shame, because the impact of new digital technologies — and the new processes, strategies and operating models that they enable — can have a profound effect on procurement and the stakeholders it serves.

So before you go hiring that big consulting firm, you may want to read this “dummy’s guide” to procurement digital transformation. I’ll introduce a graphical framework and then unpack the drivers to explain how procurement can use these issues to make all of this digital stuff real. There are a few dozen specific trends and associated capabilities in play, and although not all of them will be in force for you, it’s worthwhile to work through and see which ones are most relevant and hold the most opportunity.

The Procure-to-Pay User Experience (Part 1) [PRO]

The history of enterprise software systems is fraught with implementation failures. This is especially true in the ERP and MRP space, which have contributed to some of the biggest supply chain failures in history (including Hershey Foods, Adidas and Foxmeyer). But not all failures are catastrophic. The majority are just the result of (significant) project overruns in terms of time and money or the inability to deliver critical features or functions in the original system specification. And this is more common than one may think. Some estimates put the rate of project overruns in IT as high as 85%. That's problematic.

Why are there so many failures? The reasons are many. Some are the result of poor change management; others are the result of the selection of inappropriate process automation for the company; and still more are the result of limited or low-quality information. If one goes through the list of possible reasons, we see there is one commonality across the majority of failures: the user experience. Poor change management leaves users confused. Inappropriate process selection frustrates users as it increases time and effort (rather than decreasing it), and low-quality information makes users question why they are migrating to a new system at all. (And when significant system features or functions fail to be implemented at all, that's the worst user experience.)

That's why the user experience (UX) is important, and why Spend Matters has dedicated so much time to this topic (first on sourcing, and now on procurement). The reality is that if users does not use a solution to do their jobs, the solution does not generate value. And the ultimate key to adoption is often the user experience.

Can the Latest Supplier Relationship Management Tools Deliver the Clinically Integrated Supply Chain?

On healthcare’s supply side, you’ll meet some of the most sophisticated procurement practitioners you’ll find across industry. On the buy side, talking specifically now about acute care providers, however, you have a group that has carried the reputation of “laggard” for as long as anyone has paid attention.

Contract Lifecycle Management (CLM) — Low-Hanging Fruit

contract

I’ll never forget the reaction of my sales manager when I brought him news of my first significant piece of business. “Congratulations, Tom, but you need to know that the real sales process begins after you get the P.O.!” The review and preparation of contracts central to any business relationship involves a myriad of complexities that rely on legal expertise and oversight. All of those meetings, followed by the work to author “the agreement,” require detailed and sophisticated legal understanding of the applicable laws. Is this still the case? For one-off, special arrangements, there’s no question about it. But for the vast majority of supplier contracts, the effort has been reduced to an increasingly obvious and unnecessary waste of time.

Contract Management is Finally Taking Center Stage

Many procurement executives have told me their tales of change management and innovation to elevate the procurement function, from adopting spend analytics and category management to tackling indirect, services and long tail spend — all innovations enabled by technology previously not available to procurement professionals. That got me thinking, "What’s next?" To me, the most glaring oversight in a procurement organization has been the lack of strategic contract management.

Sustaining Value From Oracle Procurement: After the First Wave

In an earlier installment in this series on getting value from Oracle procurement applications, we explored where to focus on if you want to move fast with Oracle technology. Contrary to what many might believe, it is now possible to get Oracle technology to move at whatever speed you need it to — at least in select areas. But once you get past the “first wave” of savings and value generation from Oracle procurement technology, where should you turn next? That’s the topic we’ll explore in this article in more detail, as well the implementation and deployment nuances that Oracle — by nature of being Oracle — creates relative to its peers.

Everything Procurement Should Know About Payments (Part 3): Challenges and Opportunities for Payment Operations [PRO]

e-invoicing

As anyone tasked with extending and integrating a procure-to-pay (P2P) system to fully support the second “P” has no doubt learned, corporate payment processes and systems are highly complex — perhaps even more so than transactional purchasing activities. This Spend Matters PRO series provides a procurement-centric introduction to the topic of payments, offering a look into the payments lifecycle and how it integrates with core P2P processes and workflows.

Earlier installments (see Part 1 and Part 2) explored the invoice-to-reconciliation process, internal and external parties involved in core payments workflow and P2P technology best practices. In Part 3, we turn our attention to the nitty-gritty of managing core payment operations, examining a full list of the challenges companies face in confronting payments today, as well as the financial and operational costs of managing payments sub-optimally. We also provide an overview of shared services environments for payment operations while also exploring the many challenges companies face in attempting to drive payment process and system centralization generally.