The Procurement Systems & Architecture Category

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.

2017 Prediction of the Moment: How Big Blockchain Will Be in Sourcing and Supplier Management

blockchain

It’s no secret that the Spend Matters team has been geekily excited about the procurement implications of blockchain for years — seemingly right on the heels of the Dark Web, TOR and Silk Road becoming a thing. What is far more important to the world of procurement — and for that matter, the world of broader supply chains and global trade — is that blockchain brings the potential to become as important to our technology lives as the spreadsheet, ERP/MRP systems and source-to-pay technology suites that we use everyday, as Spend Matters Founder Jason Busch puts it.

ERP or Best-of-Breed (BoB)? Here’s How to Quickly Settle That Whole Thing

Even though Spend Matters declared the "ERP vs. Best-of-Breed" debate dead way back in 2014, the issue has a funny way of rearing its head. Sure, IT organizations are still somewhat biased towards ERP suites and business units/functions still prefer BoB solutions that will help them accomplish their goals, but asking "ERP or BoB?" is fundamentally a losing proposition. Why?

Coupa and Spend360: Spend Analysis Background and Product Analysis [PRO]

Tradeshift Baiwang

Coupa’s acquisition of Spend360 brings an immediate set of capabilities to Coupa customers — and the basis of a broader, disruptive and embedded offering integrally linked to Coupa’s cloud solution. But what is spend analytics (and spend classification, specifically) and why should customers care? What types of reports should you be able to run? And more narrowly, what specific capabilities does Spend360 bring and how are these different than alternative approaches (e.g., AI/machine learning vs. rules-based classification).

There’s also the question of what Spend360 will ultimately enable Coupa to achieve by applying an AI-driven approach to the firm’s broader source-to-pay platform, including guiding users to better decisions based on insights their own data can provide, a broader topic Coupa’s CEO, Rob Bernshteyn, hinted at during a talk earlier this year. But we’ll leave this specific topic to a longer exploration after we’ve had the chance to delve into the “so what” for customers from the acquisition.

This Spend Matters PRO research brief provides a product-centric analysis that will help Coupa customers and prospects get beyond the headlines of the announcement and understand, on a comparative basis, what spend analytics really is, how spend classification works and how Spend360 stacks up to others.

Oversight Systems: Vendor Snapshot (Part 3) — Competitive and Summary Analysis [PRO]

Procurement fraud comes in many forms and types. Recent front-page news stories can involve multi-million dollar frauds managed at the P&L level by suppliers, such as Pfizer’s recent complex overbilling scheme with the NHS. But procurement and payables fraud most often takes place on a smaller level, with varying degrees of sophistication. Oversight Systems provides an analytics managed service (and front-end software) capability for procurement and finance organizations to fight procurement fraud, whether perpetrated by suppliers, internal participants or both. It also provides similar capabilities to monitor for regulatory compliance (e.g., FCPA violations) as well as detect overpayment errors. Its solution is a complement to procure-to-pay (P2P), travel and expense (T&E) and various audit recovery solutions and approaches in the market today.

This third and final installment of this Spend Matters Vendor Snapshot covering Oversight Systems provides an objective SWOT analysis of the provider and offers a competitive segmentation analysis and comparison. It also includes recommended shortlist candidates as alternative vendors to Oversight Systems and provider selection guidance. Finally, it provides summary analysis and recommendations for companies that can best take advantage of Oversight Systems’ capabilities. Part 1 of this series provided an in-depth look at Oversight as a firm and its specific solutions, and Part 2 gave a detailed analysis of solution strengths and weaknesses and a review of the solution’s user experience.

Tracing the History of the Procurement Software Market: From Tools to Value

computer

This three-part series traces the evolution of the procurement software market with a focus not on modules and applications, but on the ways in which we actually use technology to generate value. I will explore how solutions have progressed over time, not only as technology has gotten more sophisticated but also as the procurement function has evolved and new expectations have been placed on it by the business and shareholders alike.